The pandemic exposed vulnerabilities and weaknesses in the global food system, highlighting the critical need for upgrades and new technology to increase resiliency. These kinds of innovations don’t come without a cost — new technology is expensive. So, how can agriculture and food-related businesses, especially those in rural and under-served areas, raise much-needed capital to solve food insecurity issues in the U.S.?
One answer is through the USDA’s Rural Development agency, which offers a variety of government-guaranteed loan programs that enable lending organizations to arrange flexible funding for companies and initiatives that probably would not have access to traditional financing that meets their needs. In fact, the USDA recently announced the Food System Transformation framework, which is designed to strengthen the food system across the entire supply chain.
One example of a business taking advantage of these loan programs to address food security issues in the U.S. and strengthen supply chains is Northline Seafoods, a seafood processing company that shortens the supply chain between catch and customer by utilizing technology that freezes fish faster and colder than traditional methods. They turned to Greater Commercial Lending to coordinate a $40 million loan through the USDA Food Supply Chain Guaranteed Loan Program to develop a state-of-the-art salmon processing barge in Bristol Bay, Alaska.
Another example is AppHarvest, which recently utilized $50 million in USDA-guaranteed loans, arranged by GCL, for a high-tech, sustainable berry farm in Somerset, Kentucky that will grow affordable fruits and vegetables at scale.
When new or existing food projects are supported by these types of government-guaranteed loan programs, there’s a myriad of benefits. For example, local communities benefit from increased employment and a larger tax base, which better supports community needs. Additionally, these projects provide more options for consumers. Increased regional capacity equals more purchasing choices. And, of course, there’s job creation and the boost in economic activity.
In sum, food insecurity had been a critical issue during the pandemic, and it continues to be a concern in post-COVID America. Healthier foods that are produced and delivered faster, more efficiently, and at a better cost, must be a priority. We must build a more resilient and sustainable food system that can withstand future shocks and disruptions so that we’re prepared when the next crisis hits.
If you’re interested in reading more, see GCL executive vice president Jeremy Gilpin’s Forbes article through the link below.