The coronavirus pandemic has triggered the closure of meat processing plants and delayed shipments to grocery stores. This, in turn, triggered shortages and higher consumer prices.
So the US Department of Agriculture plans to make the food supply chain more resilient by supporting loans to build meat and poultry processors of different sizes to better absorb problems if a large business is in crisis.
Agriculture Secretary Tom Vilsack said Monday his agency would spend $ 100 million on loan guarantees to address various vulnerabilities in industries that produce, process and deliver meat to grocery stores. The loan money is intended to make it easier for processors to open new facilities, expand the capacity of existing sites, and improve other supply chain issues, such as adding more processing sites. cold storage.
“This will create a sense of trust in the supply chain, which will hopefully over time, along with the increased processing capacity, also translate into fair returns for our producers and fair prices at the checkout.” , said Vilsack.
The money will reduce the risk for bankers to grant loans to small and medium-sized businesses looking to expand, especially in the areas of mobile processing, cold storage capacity and the creation of producer cooperatives. for production, marketing and packaging efforts.
“Banks may not be familiar with the risk associated with this stuff,” Vilsack said. “These loan guarantees are important to bankers.
This funding is the latest in a series of USDA programs aimed at improving meat and poultry supply chains. Previously, the ministry had committed $ 55 million to help the country’s smallest producers increase their capacity and $ 100 million for overtime expenses for processors who remained open during the pandemic and took on extra work. .
The eligibility rules and the procedures for applying for the last round of funding will be published by the end of October.