February 15, 2012
Non-profit, community lenders get involved in healthy food supply chain
by guest bloggers Nessa Richman, Brightseed Strategies and Patty Cantrell, Regional Food Solutions
Loan funds, credit unions, community development corporations—these mission-driven organizations traditionally provide credit and financial services to poor and underserved urban and rural areas. Yet food and farming rarely registered on their radar screens; until recently, only a few made food and farming a part of their mission. Now, however, the prospect of growing jobs and food security through more local and regional food systems has drawn the attention of a national corps of proactive nonprofit lenders, known as Community Development Financial Institutions (CDFIs). Sustainable agriculture is part of the healthy food supply chain they are now focused on supporting as part of the U.S. Treasury’s Healthy Food Financing Initiative (HFFI).
CDFI interest spans the farm-to-table world of producers, processors, distributors, rather than only the retail end of the supply chain. Each individual CDFI makes decisions about what types of businesses to finance. For example, CDFIs, with special funding from HFFI, have invested in healthy food businesses that include: Appalachian Community Enterprise in rural Cleveland, GA, which will use its 2011 HFFI award to finance healthy food providers across 10 counties; the ASI Federal Credit Union in the small town of Harahan, LA, which will use its award to strengthen the healthy food distribution network serving New Orleans; and the Low Income Investment Fund in New York City, which will finance grocery stores in low-income neighborhoods across the city.
CDFIs can enroll in a national training program for healthy food financing that includes sessions on mid-tier value chain enterprises, farm production, and healthy food retail. CDFIs involved in the Opportunity Finance Network have many opportunities to get involved by attending these workshops, applying for an HFFI award to engage in healthy food financing, or including local food initiatives to their usual applications for financial assistance.
Sustainable agriculture and local food system organizations across the country should contact regional CDFIs to make the farm-to-retail connection. Finding local partners and regional food system expertise is the priority for CDFIs that are currently thinking about adding healthy food financing to their portfolios. Meeting local farmers, ranchers, value-added processors, and other food system entrepreneurs can help a CDFI decide to shape its finance products and technical assistance programs to serve these potential borrowers.
Community advocates can educate CDFIs about their ability to help locally with forming sustainable, healthy food supply chains, connecting farms to regional food hubs, and developing new retail opportunities. Meeting face to face with a new ally in the finance department could be the first step towards both a fruitful relationship and powerful future solutions.