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Guaranteed loan program would expand capacity of food supply chain

The Biden administration will provide up to $1 billion in loan guarantees to expand capacity “in the middle of the food supply chain,” with the end result of fairer prices for farmers and more consumer access to healthier foods, said Agriculture Secretary Tom Vilsack.

The application window for the Food Supply Chain Guaranteed Loan Program opened on Thursday and is expected to run through Feb. 7, or possibly longer.

Eligible projects would involve the “start-up or expansion of activities in the middle of the food supply chain — particularly the aggregation, processing, manufacturing, storage, transportation, wholesaling, or distribution of food — to increase capacity and help create a more resilient, diverse, and secure U.S. food supply chain,” said the USDA.

Projects would be limited to guarantees of up to $40 million.

Vilsack said $100 million in USDA funds would support the $1 billion in loan guarantees.

Under such programs, the USDA promises repayment of a large part of a loan if the borrower fails to retire the debt. Loan guarantees are expected to result in more favorable terms for projects.

The $100 million is in addition to $500 million already committed by the USDA to expand meat and poultry processing capacity.

“The pandemic exposed vulnerabilities and created extreme disruptions in America’s food supply chain,” said Vilsack. “The reduction in meat processing capacity is just one example of the supply chain bottlenecks that affect small and midsize farmers.”

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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