Tom Vilsack, Agriculture Secretary, announced $2 billion in new funding to support food supply chains that have been hard hit by the pandemic. This will cause food shortages and higher prices.
This move is in line with a series past investments made by the Biden administration that aimed to help small meatpacking factories and local foodbanks grow in order to better serve their customers. The March 2021 COVID relief package and the American Rescue Plan, as well as other relief legislation, make the new funding available.
Vilsack stated Wednesday that the pandemic and subsequent inflation due to supply chain disruptions and Putin’s war against Ukraine highlighted the difficulties of providing nutritious and healthy food for all when markets are disrupted. “The pandemic revealed for us how many food pantries and food banks had difficulty accepting fresh fruits and vegetables due to a shortage of refrigeration and warehouse space.”
The pandemic highlighted significant bottlenecks in food supply chains. Meatpacking plants had to close, slow production was due to sick workers, and the transportation industry experienced additional labor shortages. Farmers also saw an increase in input costs.
The Biden administration took action against the four major meatpacking companies aEUR” Tyson Foods JBS, Cargill, Cargill, and National Beef aEUR” blaming them all for driving up grocery store prices. USDA established new loan and grant programs to support small meatpacking plants. These programs were designed to allow them expand, hire workers, and transport their products. Meanwhile, the big meatpackers argue that the administration ignores other causes of inflation.
All food prices have risen: In April, they increased by 0.9 percent, marking the seventeenth consecutive monthly rise, according to the Consumer Price Index.
Vilsack stated that the pandemic highlighted our weaknesses in processing capabilities when we had such a small number of processing facilities. We created this highly efficient system. It needed to be resilient. One way to achieve that is to ensure that we have a regional and local system that is complementary to, and to some extent, competitive with, a larger national processing effort.
Past investments include $1 billion in loans to finance projects that address supply chain expansions at small and medium-sized meatpacking plant.
Vilsack said Wednesday that $2 billion in funding is available. This includes $300 million for an Organic Transition Initiative, which provides comprehensive support to farmers in transitioning to organic production. $75 million will be used to support urban agriculture. $100 million will support a meat processing workforce. And $600 million in financial aid to help support food supply chain infrastructure.
Vilsack stated that USDA will also invest $100 million in a program called the Healthy Food Incentive Fund. This fund will be focused on partnerships between schools and the food industry to improve nutrition in school meals.
He stated, “I don’t think anyone, even the biggest farm or the most successful farmer in America wants a situation that we have only large farms.” “I believe that farmers of all sizes in rural America and farm country would love to be able to keep their businesses afloat and make a profit.
