Speaking at the Annual Convention of the National Farmers Union in San Francisco, Secretary of Agriculture, Tom Vilsack, announced $90 million in financing for startups and extension of enterprises involved in processing red meat and poultry. This initiative follows the Administration policy of establishing a “more competitive market place in accordance with the Action Plan for a Fairer, Competitive and Resilient Meat and Poultry Supply Chain.
Vilsack stated, “Today’s investments and actions to back the startup and expansion of independent processing capacity and boost market fairness in meat and other key agricultural inputs will promote competition, support producer income, strengthen the supply chain and increase economic opportunity in rural communities.”
The current allocation was additional to the 2022 series of awards amounting to $75 million extended to eight nonprofit lenders in seven states.
Grants in 2023 will include $15 million to the Alabama Agricultural Development Authority for 12 new processing facilities. Coastal Enterprises in Maine will receive $8 million to establish livestock and poultry processing in New England states. The Lewis and Clark Development Group will receive $5 million to support expansion of meat and poultry processing in North Dakota.
Given that the grants are anticipated to generate 400 projected new jobs, it is estimated that each new position will require the capital investment of federal funds approaching an average of $250,000 per position.
The USDA and the Administration refer to distribution of taxpayer money as an “investment”. Giveaways can only be characterized as investments if they show a return on the capital expended in establishment and long-term functional and viable businesses. At some time in the not too distant future, the USDA should provide an accounting indicating how federal funds were expended and whether the principal was returned to the Treasury. Unfortunately, when the time to quantify results occurs, neither Tom Vilsack nor his acolytes in the USDA will be around to provide explanations of how funds disappeared and to explain why the “investments” “were essentially giveaways. As both a taxpayer and a shareholder in public-quoted agribusiness companies, this commentator objects to quarterly IRS payments to be used to support non-viable enterprises to facilitate social engineering, and indirectly compete with established and efficient producers.