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USDA to tag $4 billion for U.S. food supply chain improvements

This follows a $1 billion initiative announced last week for food security. measures.

The USDA plans to throw $4 billion toward the strengthening of the U.S. food supply chain system.

In a press release Tuesday, the governmental agency cited lessons learned from the COVID-19 pandemic and recent supply chain disruptions as reasons to invest in efforts to strengthen the food system, create new market opportunities, tackle the climate crisis, help communities that have been left behind, and support good-paying jobs throughout the supply chain. 

The USDA will pay for the program with funding from the American Rescue Plan Act and earlier pandemic assistance such as the Consolidated Appropriations Act of 2021.

Also, the USDA announced Tuesday that Secretary Vilsack was named co-chair of the administration’s new Supply Chain Disruptions Task Force. The Task Force will provide whole-of-government response to address near-term supply chain challenges to the economic recovery. The Task Force will convene stakeholders to diagnose problems and surface solutions — large and small, public or private — that could help alleviate bottlenecks and supply constraints related to the economy’s reopening after the administration’s historic vaccination and economic relief efforts, according to the press release.

“The COVID-19 pandemic led to massive disruption for growers and food workers. It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing, and preparing our food are earning less each year in a system that rewards size over all else,” Secretary Tom Vilsack stated in the press release. “The Build Back Better initiative will make meaningful investments to build a food system that is more resilient against shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds. I am confident USDA’s investments will spur billions more in leveraged funding from the private sector and others as this initiative gains traction across the country. I look forward to getting to work as co-chair of the new Supply Chain Disruptions Task Force and helping to mobilize a whole-of-government effort to address the short-term supply challenges our country faces as it recovers.”

The funding announcements under the Build Back Better initiative will include a mix of grants, loans, and innovative financing mechanisms for the following priorities, each of which includes mechanisms to tackle the climate crisis and help communities that have been left behind, including:

Food Production: Food production relies on growers, including farmers and ranchers, workers, and critical inputs. But a diminishing share of the food dollar goes to these essential workers. USDA will invest in the current and future generation of food producers and workers throughout the food system with direct assistance, grants, training, and technical assistance, and more.

Food Processing: The pandemic highlighted challenges with consolidated processing capacity. It created supply bottlenecks, which led to a drop in effective plant and slaughter capacity. Small and midsize farmers often struggled to compete for processing access. USDA will make investments to support new and expanded regional processing capacity.

Food Distribution & Aggregation: Food aggregation and distribution relies on people working together throughout the food system and having the right infrastructure to gather, move, and hold the food where and when it is needed. This system was stressed during the pandemic due to long shipping distances and lack of investment in local and regional capacity. USDA will make investments in food system infrastructure that can remain resilient, flexible, and responsive.

Markets & Consumers: The U.S. spends more on health care and less on food than any other high-income nation; yet the U.S. has higher rates of diet-related illness and a lower life expectancy than those nations. At the same time, many socially disadvantaged and small and mid-size producers do not have equitable access to markets. USDA will support new and expanded access to markets for a diversity of growers while helping eaters access healthy foods.

USDA will continue to make announcements through the Build Back Better initiative in the months to come, according to the press release. 

Today’s announcement is in addition to the $1 billion announced last week to purchase healthy food for food-insecure Americans and build food bank capacity, putting the total announced thus far at more than $5 billion, according to the USDA.

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