Investing in food hubs and wholesaler supply chains

California Farm to School Incubator Grant 

Some mention of organic

Some mention of increasing access 

KEY FACTS 

• Location: California, USA 
• Initiated: 2021 
• Owner: California Department of Food and Agriculture  
• Type: Grant – Approximately $25.5 million available  
• Aim: To foster connections between local producers and school districts for climate-smart practices. 
• Mechanism: The programme offers four funding tracks, with opportunities for K-12 school districts, early care and education centres, agricultural producers, and farm to school partnerships to receive funding. 

BENEFITS 

CHALLENGES 

Support for food systems: fosters connections between local producers and school districts, supporting local food systems.

Promotion of climate-smart practices: encourages climate-smart agricultural practices through funding preferences.

Community health benefits: aims to improve community health by integrating local, nutritious food into school meals.

High demand vs. funding: high demand for the program compared to available funding, making selection competitive.

Sustainability of impact: ensuring that funded projects have a sustained impact on the local food system beyond the grant period. 

ENABLERS

OUTCOMES

Growing demand: high demand for the program demonstrates its relevance and potential for impact.

Continued support and funding from government agencies for farm-to-school initiatives: as of 2022-23, California has made the largest investment of any state in the country in farm to school programs, allocating approximately $100 million over three years.

Supports other policy goals: the California Air Resources Board's 2022 Scoping Plan aims to increase organic agriculture to twenty percent of cultivated acres. This objective aligns with the Farm to School Roadmap's goal of using school purchasing influence to encourage environmentally sustainable agricultural practices, including organic systems, through a market-based approach to public procurement. 

Improved access: enhanced procurement of local, nutritious food for schools.

Improved engagement between local farmers and schools, benefitting both: these projects represent 1,489,364 students, 163 school districts and educational entities, over 50 farms, and four food hubs.

Increased popularity: the 2022 grant cycle received over $58 million in application requests and triple the number of project proposals from the previous year, highlighting the growth of farm to school across the state.

Relevant examples: 

Tahoe Truckee Unified School District
Award Amount: $138,657.60 (2022)

It will expand its partnership with the Tahoe Food Hub (TFH) to implement a climate smart farm to school program. The project will align local food for school meals with educational opportunities that focus on the important role that regenerative agricultural and locally grown foods have on the environment.

Spork Food Hub
Award amount: $488,601.88 (2022)

The Spork Food Hub will build connections between local producers implementing climate smart practices and local school districts by aggregating and delivering fruits and vegetables for school meals. Spork will provide services and training for farmers wanting to serve schools and for school food service interested in working with farms.

OPPORTUNITIES FOR BTG 

This example showcases the potential of foods hubs for procurement into schools. Food hubs can be used as an intermediary between organic farmers and schools, enabling local sourcing.  

Shared Prosperity Fund 

No mention of organic

Some mention of increasing access 

KEY FACTS 

• Location: UK 
• Initiated: 2022 
• Owner: UK Government  
• Type: Grant – $2.6 billion for local investment by March 2025  
• Aim: A central pillar of the UK government’s ambitious Levelling Up agenda and a significant component of its support for places across the UK.  
• Mechanism: All areas of the UK will receive an allocation from the Fund via a funding formula rather than a competition. Places will be empowered to identify and build on their own strengths and needs at a local level. Grants will be delivered through three investment priorities: communities and place, local businesses and people and skills. 

BENEFITS 

CHALLENGES 

Flexible terms: the fund can be used to attain investment for food hubs and wholesale supply chains.

Equitable allocation: the funding formula ensures that all places receive funding.

Empowering local supply chains: the scheme emphasises local solutions and allows local authorities to identify their own needs.

Potential concerns include:

• sustaining the program's impact over the long term,
• ensuring ongoing funding and support, and
• preventing dependency on the fund. 

ENABLERS 

OUTCOMES 

Financial support: every place in the UK has been allocated a share of the UKSPF, with even the smallest places receiving at least £1 million. 

Predictable funding: funding is confirmed for three financial years — £400 million for 2022-23, £700 million for 2023-24 and £1.5 billion for 2024-25, providing predictable baseline local growth funding. 

BTG-specific outcomes are difficult to measure at this stage.

Relevant example:

Lancashire Council and FoodFutures North Lancashire 
Award amount: £269,000 

Lancashire Council successfully obtained funding to acquire a community farm, develop a local food hub, and conduct a review of allotment facilities.

OPPORTUNITIES FOR BTG 

Bridging the Gap could advocate for/create guidance that support local authorities to capitalise on this fund for food hubs.

Bridging the Gap could also advocate for similar funds to be made available specifically for local supply chains.

Value-Added Producer Grant (now part of the Local Agriculture Market Program)

Some mention of organic

No mention of increasing access  

KEY FACTS 

• Location: USA 
• Initiated: 2000 
• Owner: USDA 
• Type: Grant 
• Aim: To support agricultural producers  
• Mechanism: Provides grants to help agricultural producers, including those producing organic foods, adding value to their products through activities like processing, distribution, and marketing. 

BENEFITS 

CHALLENGES 

Strategic benefits: Food hubs can utilise VAPG funds for planning and implementing value-added processes, such as feasibility studies, marketing strategies, and business plans, enhancing product value and marketability.

Incentive: one of the eligibility criteria is producing agricultural commodities in a manner that enhances their value, encouraging sustainable practices, including organic farming.

Sustainable growth: overcoming the challenge of sustaining growth beyond the funding period, especially for start-ups, and ensuring the long-term success and viability of value-added initiatives.

Limited Duration Grants: adapting to the limitations of one-year grants or project-based funding and strategising for continued growth and success post-grant period. VAPG is a one-year grant that prohibits re-application for the same project. 

ENABLERS 

OUTCOMES 

Working capital: offers working capital funding that can be utilised by food hubs for processing, packaging, marketing, and certain administrative expenses.

Inclusivity: offers support to a variety of entities, including new entrant farmers, socially disadvantaged farmers, cooperatives, and value chains (10 percent of funding reserved for them).

Innovative ways of utilising existing funding streams: VAPG is not a grant meant specifically for food hubs but with the right guidance, it has been used to support these initiatives. 

No organic outcomes available.

Relevant examples: 

Farm Fresh HQ Coop Association 
Award amount: $44,943;

VAPG capital to finance business start-up costs for a Regional Food Hub to serve northeast Kansas, northwest Missouri, and the Kansas City metropolitan area.

Wisconsin Food Hub Cooperative
Award amount; $150,000

Used funds to assist in the start-up of a regional fresh produce food hub and packinghouse that was created to enhance access to wholesale markets for the local farm economy and create private-sectors jobs. The food hub will aggregate local produce sold under the Wisconsin Farmed brand. 

Growers Collaborative Food Hub (2004) (failed because of lack of sustained funding).
Award amount: $210,000

Set up by Community Alliance with Family Farmers (CAFF) as a local food hub in which farmers work together to aggregate their product.

OPPORTUNITIES FOR BTG 

This example highlights the importance of considering the sustainability of food hub projects during funding proposals. Grants may be more useful for existing food hubs to upgrade their infrastructure/ increase their scope.

The central question revolves around how to assist farmers and other stakeholders in constructing this necessary infrastructure. It's advisable to explore funding approaches that span multiple years, incorporate progressive evaluations, and include a long-term strategy as an integral part of the application process. Additionally, promoting community land ownership (community buying), offering long-term leases by local councils, and using public spaces (like schools) as pick-up and drop-off sites for produce should be considered as strategies to empower the local community.

Local Food Infrastructure Fund 

No mention of organic

Some mention of increasing access  

KEY FACTS 

• Location: Canada 
• Initiated: 2019 
• Owner: Government of Canada  
• Type: Grant – 5-year, $70 million initiative until March 31, 2024   
• Aim: Created as part of the Government of Canada's Food Policy for a healthier and more sustainable food system in Canada to help increase food security  
• Mechanism: Investments in infrastructure needs for community-based, not-for-profit organisations. 

BENEFITS 

CHALLENGES 

Investing locally: addresses food insecurity by investing in local food systems. 

Access: supports community-based organisations in improving food access. 

Infrastructure: enhances infrastructure for community kitchens, gardens, greenhouses, refrigeration, and food storage.

Progressive priorities: the initial grant in 2019 was aimed at small community-based organisations to allow them to improve their infrastructure and purchase equipment directly related to the accessibility of healthy, nutritious and, ideally, local foods within their community. The second intake also included more complex, multi-year projects that strengthen local food systems. The fourth intake (2022) focused on projects that either created (or expanded) a portion of a food system or implemented an entire food system.

Limited scope: some organisations suggest allowing funding for salaries, staff training, and operational costs for long-term project success (currently only for infrastructure). There have also  been calls to expand the list of eligible applicants to include schools.

Match funding required: some organisations are unable to meet the 50% match funding requirement. The need for multi-year funding was highlighted.

Lack of partnership working: there have been suggestions to permit collaborative work with other organisations.

Low-income areas not prioritised: applications in more vulnerable regions are not prioritised.

ENABLERS 

OUTCOMES 

Government support: continued support and funding from the government, showcasing commitment to a sustainable food system. The grant has also been incorporated into the government’s food policy. 

Positive reception from participants: most organizations found the Local Food Infrastructure Fund to be a timely and meaningful way to address food security and help Canadian populations at risk. 

Results: since 2019, the LFIF has committed $35.7 million to support over 801 food security projects across Canada. 

Examples of projects include community gardens and kitchens, refrigerated trucks and storage units for donated food, greenhouses in remote and Northern communities, and more. 

Relevant examples:

British Columbia
Award amount: $89,651

Strengthening of local & regional food hub support — purchasing a forklift, pallet jack, racking and shelving units.

New Brunswick Village Food Hub
Award amount: $30,000 

Purchase a refrigeration unit, sinks, worktables, shelving units, and processing equipment.

OPPORTUNITIES FOR BTG 

This example highlights the importance of infrastructure support. Food hubs, in their inception phase, will require support to set up their basic infrastructure. Such a fund can form part of a larger package of support for food hubs.

The Common Market 

No mention of organic

Strong mention of increasing access 

KEY FACTS 

• Location: USA 
• Initiated: 2008 
• Owner: Started by Tatiana Garcia-Granados and Haile Johnston (NGO) 
• Supporters: USDA and regional government, along with private funders 
• Type: Network   
• Aim: To connect communities to good food grown by sustainable family farmers  
• Mechanism: They aggregate, distribute, and market local, healthy food from family farmers, ranchers, and producers distribute it to institutional partners located throughout four regions: the Mid-Atlantic, Southeast, Texas, and Great Lakes.

BENEFITS 

CHALLENGES 

Community engagement: connects communities to local, sustainable food, promoting community engagement.

Support for farmers: provides support and market access to local family farmers and producers.

Health promotion: contributes to improved public health by supplying healthy, fresh food to various institutions.

Supporting good agricultural practices: one of their goals is to support resilient agriculture and to move away from industrial supply chains. 

Dependence on grants: reliance on grants for sustainability due to low-profit margins. However, they are grant-dependent by choice. As a not-for-profit enterprise, they are eligible for government and other grants which enable them to keep their markup low.

Competitive market: markups need to be carefully managed to compete effectively in certain markets.

Non-specific: does not specify organic produce.  

ENABLERS 

OUTCOMES 

Strategic partnerships: collaborations with various stakeholders and organisations for collective impact.

Grant funding: leveraging grants to support operations and growth.

Efficient supply chain: establishing an efficient supply chain for aggregating and distributing local products. 

Increased access: improved access to healthy, local food in underserved communities.

Sustainable farming: support for sustainable family farmers and ecological agriculture.

Community health: positive impact on public health through access to nutritious food.

In 2022:

5,017,185 healthy meal equivalents distributed; 

$13,000,000 invested in local economies through food purchases; 

118 family farms supported, 20% representing BIPOC growers.

OPPORTUNITIES FOR BTG 

Bridging the Gap may want to advocate for networking support to be given to existing initiatives (NGOs/ social enterprises) to enable them to bridge the gap from farm to fork.