US government to invest US$1B in supporting expansion of meat processing capacity

USA – The US government has pledged to invest approximately US$1 billion to expand independent meat processing capacity in the North American country.  

The investment which is mainly aimed at combating the consolidation of the industry will come from the American Rescue Plan that was signed into law in March 2021. 

The US Department of Agriculture will provide financing grants up to US$375 million in two phases as part of the program.  

Phase I will see up to US$150 million allocated to about 15 projects that are considered to have the greatest near-term impact.  

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The remaining US$225 million will be deployed in phase II to support additional projects in which will take place in summer 2022. 

Additionally, the USDA will work with lenders to make more capital available to independent processors that need credit. Up to US$275 million will be deployed as part of the program.  

The Biden administration also said it will support private lenders that invest in independently owned food processing and distribution infrastructures like processing equipment and cold storage. 

The US government also plans to invest an estimated US$50 million in technical assistance and research and development to help independent business owners create new capacity or expand existing capacity. 

It also plans to provide US$100 million in reduced overtime inspection costs to help small and very small processing plants keep up with demand.  

With bipartisan support in Congress, the USDA is reducing the financial burden of overtime and holiday inspection fees for small and very small poultry, meat, and egg processing plan, according to the administration. 

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The current pledge follows President Biden July 2021 executive order to promote competition in the agriculture, labor, health care, and technology sectors.  

The order directed the USDA to develop a plan to “increase opportunities for farmers to access markets and receive a fair return.” 

This included plans to support alternative food distribution systems like farmers’ markets and developing standards and labels so that consumers can choose to buy products that treat farmers fairly. 

The agency also was tasked with making it easier for farmers to “bring and win claims” under the Packers and Stockyards Act, related to how farmers are paid to protect them from retaliation when famers “speak out about bad practices.” 

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