USDA Program Supports Local Food Systems

USDA Program Supports Local Food Systems

USDA makes $78 million available for development of local food production and marketing.

FAQ: USDA is making a historic investment in programs supporting the entire local food supply chain. As a producer of vegetables and other produce on our small farm, I'm interested in how the 2014 Farm Bill will deliver this support?

Answer: USDA is making a historic $78 million investment in local and regional food systems, including food hubs, farmers markets, aggregation and processing facilities, distribution services, and other local food business enterprises.

HISTORIC AMOUNT: USDA is making a historic investment of $78 million in local and regional food hubs, farmers markets, processing facilities, distribution and other local food business enterprises.

"The 2014 Farm Bill has given USDA new tools, resources and authority to support the rural economy," said U.S. Agriculture Secretary Tom Vilsack, in a recent press release. "Consumer demand for locally-produced food is strong and growing, and farmers are positioning their businesses to meet that demand. As this sector continues to mature, we see aggregation, processing and distribution enterprises across the local food supply chain growing rapidly. These historic USDA investments supporting local food give farmers more market opportunities, provide consumers more choices and create jobs in rural and urban communities."

What specific programs will USDA offer?
Vilsack says $48 million in loan guarantees for local food projects is now available through USDA's Rural Development's Business and Industry Guaranteed Loan Program, and $30 million is available through competitive grants via the Ag Marketing Service's Farmers Market and Local Foods Promotion Program.

The 2014 Farm Bill requires USDA to set aside at least 5% of Business and Industry (B&I) program loan guarantees for projects that focus on local food business enterprises. Details on how to apply for local food funding through the B&I program are available on the Rural Development website. Applications are accepted on a rolling basis. The B&I program has the authority to fund local food infrastructure in urban areas as long as the project supports farm and ranch income and expands healthy food access in underserved communities.


Rural Development's B&I program provides financial backing for rural business development in partnership with private-sector lenders. It is one of several USDA programs that help finance local foods projects. In 2013, Rural Development supported more than 170 local food infrastructure projects from food hubs, to scale-appropriate processing facilities, to cold storage and distribution networks. Entities eligible for B&I loan guarantees include cooperatives, non-profit organizations, corporations, partnerships or other legal entities, Indian tribes, public bodies or individuals.

Where is funding to support the programs coming from?
The 2014 Farm Bill tripled funding for marketing and promotion support for local food enterprises by creating the Farmers Market and Local Foods Promotion Program, administered by the Agricultural Marketing Service (AMS). This new program makes $30 million available annually to farmers markets, other direct producer-to-consumer venues, and other businesses in the local food supply chain.

Under this program, $15 million is now available for marketing and promotional support specifically for local food businesses, including food hubs, delivery and aggregation businesses, and processing and storage facilities along the local food supply chain. Another $15 million is for marketing support for farmers markets and other direct-to-consumer outlets.

Since 2009, AMS, which administers this program, has funded nearly 450 projects totaling $27 million to support direct marketing efforts for local food. More information about how to apply is available on the AMS website.

Find out more about supporting locally produced food
These funding opportunities are cornerstones of the USDA's commitment to support local and regional food systems. USDA's Know Your Farmer, Know Your Food Initiative coordinates the department's policy, resources, and outreach efforts related to local and regional food systems The Know Your Farmer, Know Your Food Compass maps nearly 3,000 local and regional food projects supported by USDA and eleven other federal agencies.

Vilsack identifies strengthening local food systems as one of the four pillars of USDA's commitment to rural economic development, along with production ag (including expanding export markets and improving research), promoting conservation and outdoor recreation opportunities, and growing the biobased economy.

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