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Email Content: Poultry Industry News, Comments and more by Simon M. Shane

Iowa Awards Grants to Small Packaging Plants


The Iowa Economic Development Authority has awarded 15 grants from the state Butchery Innovation and Revitalization Fund. Grants ranged from $40,000 to $50,000 per applicant. And were intended to allow small-scale meat processors to expand their operations and to conform to acceptable standards of slaughter and processing. The program funded with a $750,000 allocation by the Iowa Legislature requires a 50 percent match by recipients.


Using public funds to support businesses is acceptable if the state receives either a direct or indirect return.  If the individual projects for which there were 54 applications, provided the possibility of a return, commercial finance institutions concentrating on the agricultural sector would have been willing to extend facilities.  Given the fact that the state must use public funding to support commercial enterprises suggests a high risk.  It will be interesting to learn how the state of Iowa or for that matter any other state or the USDA assess the return from similar grants. 


A secondary consideration will be the actual effect on increasing the supply of red meat at a competitive price.  Since the 2020 disruption in supply of red meat as a result of COVID among workers in large plants, politicians have recognized the potential for constituent support by questioning the integrity and value of consolidation and economies of scale in red-meat packing. There is a current movement within the USDA to attempt to create an alternative product stream by establishing and expanding small-scale processors that would otherwise have been non-viable.


The Iowa Economic Development Authority has the obligation to justify the expenditure of public funds to support small-scale enterprises by publishing periodic progress reports and subjecting programs to review by disinterested agricultural economists.


Copyright © 2024 Simon M. Shane