The food supply chain is a fragile ecosystem. We don’t have to tell you that food prices at the grocery store remain high and that everyone would like to see them come down. However, a variety of factors have contributed to the high cost of food, and the food supply chain is right in the middle of it. From the pandemic to global wars, and in many parts of the world, climate change, easy access to food doesn’t exist right now.
A growing swath of the globe—a full quarter of the earth– is sitting in drought conditions. It has slowed the number of ships passing through the Panama Canal, impacting supply chain costs. It has shrunk the supply of rice, one of the world’s leading food staples, in India. When you layer this on top of already disrupted food supply chains and shrinking supplies of foods like wheat from war-torn Ukraine, it’s easy to see how companies often have no choice but to pass the costs along to consumers.
Strengthening the Food Supply Chain
In an effort to help offset those costs, the U.S. Department of Agriculture’s Regional Food Business Centers Program is creating 12 hubs around the country to help build a more resilient food supply chain. The idea is to help small- and mid-sized farms scale up their operations. Funding will come out of the 2021 American Rescue Plan to the tune of $400 million. The plan is for the centers to serve 11 different geographical regions around the United States, its territories, and tribal lands.
The plan is to develop hubs that will connect the farmers with processors, aggregators, and distributors and offer technical assistance to help them scale, along with other resources and monies. Each center will be managing awards ranging from $15 to $50 million. Each center is assessing the communities in which they will serve and determining what programming is needed where. Farmers and other food producers will be able to connect with local advisors who understand the food system and provide them with tools and training. There will also be smaller awards of up to $100,000 to assist with business planning, supply chain coordination, and product development.
Each hub will have a different feel and purpose, depending on its region. In the Northeast corridor, for instance, the hub will help support some urban agriculture along with the traditional rural farming approach. For an Appalachian-based hub, the assistance might look like helping cultivate new specialty products that haven’t been widely introduced or had a chance to gain traction. There could be a focus on chiles in the Southwest as another example.
At the end of the day, the old adage of giving a person a fishing pole—rather than the fish itself—is what these hubs will do. By arming farmers with the resources they are able to grow and modernize, the nation will have a better chance of returning to some of its agricultural roots. That will shorten food supply chains and hopefully mitigate the many global disruptions that have plagued the food system in the past few years.
Food supply chain logistics planning defines strategic service levels, identifies mission-critical performance metrics, and develops tactical methods to integrate sales, marketing, and supply chain operations elements (S&OP). Exceed customer expectations and achieve your ROI goals. LEARN MORE >>>
