October 14, 2013
A recent announcement by the U.S. Department of Treasury’s CDFI Fund of its financial and technical assistance awards includes CDFI recipients who plan to focus their efforts on improving both healthy food access and local and regional food systems.
Of a total of $172 million in CDFI Fund awards to 191 organizations, 10 awards totaling more than $22 million were allocated through the Healthy Food Financing Initiative (HFFI).
HFFI is a tri-agency program administered by the Departments of Treasury, Healthy and Human Services, and Agriculture (USDA) to increase the availability of healthy food in low to moderate-income under-served communities (rural, urban, and suburban) through the creation and expansion of healthy food retail outlets such as grocery stores, farmers markets, and coops.
Since 2011, the CDFI Fund has awarded HFFI financial assistance awards to CDFIs around the country, who in turn provide grants and loans to healthy food retail projects. In addition to retail projects, the CDFI Fund’s HFFI program allow for up to 25 percent of an award to be used for healthy food access projects that are not specifically retail – such as food hubs that provide aggregation, processing, and distribution of local food.
One new HFFI award recipient, NCB Capital Impact (CI), is using its $3 million award to support the Michigan Good Food Fund, a first-of-its kind initiative for Michigan that will expand access to healthy food for Michigan residents in under-served areas by connecting local food production with local retail. Founded in 1983, CI is a certified CDFI with nationwide reach that provides financial and development services through the financing of health centers, grocery stores, farmers markets, schools, affordable housing and long-term senior care.
Working with Michigan partners Fair Food Network, W.K. Kellogg Foundation, Michigan Food Policy Council, Michigan State University’s Center for Regional Food Systems, AFPD, Growing Hope, and MOSES, CI plans to fund projects that will provide additional marketing opportunities for local farmers and other producers by providing value-added equipment grants and loans for local dairy farmers and facilitating the creation, improvement, and expansion of aggregation, processing, and distribution channels, in addition to grocery and other types of healthy food retail. The program plans to launch in early 2014, and will be open to producers, nonprofit organizations and other operators of food hubs, and commercial grocers. Grants will range from $50,000 to $150,000 and loans will start at $250,000.
Having been involved with the development of healthy food retail projects such as grocery stores, coops, and farmers markets since its inception and as a previous recipient of HFFI financial awards, CI’s experience in providing more equitable food access has led to the support of innovative projects that seek to serve not only consumers, but local producers and others in the local food value chain. HFFI has given CI the flexible funds it needs to work with both large and small food enterprises that are bringing new, creative solutions to the problem of limited food access in their communities.
“There is incredible entrepreneurship stimulating the good food movement, nationally and here in Michigan,” said Dr. Oran Hesterman, president and CEO of the Fair Food Network. “The Michigan Good Food Fund will be a powerful way to harness flows of capital while increasing access to healthy food, supporting farmer viability, and growing strong, local economies.”
On the other side of the country, the Colorado Enterprise Fund (CEF) is leveraging its $800,000 HFFI award to pioneer the Colorado Healthy Food Fund, the first Colorado-focused fund providing affordable financing for businesses in the full range of the food system: food production, mid-tier food enterprises (to include processing, value-adding, and distribution), retail outlets, and food-waste management services (such as composting and recycling). CEF is a 37 year-old certified CDFI and Colorado’s largest nonprofit lending institution. It specializes in loans up to $250,000 to support small businesses in the Denver metro area and throughout rural and urban areas across the state.
CEF is building on previous food-business and grocery lending experience, its 2012 HFFI award, and its partnership with the Colorado Fresh Food Financing Fund to grow its focus on healthy food access to encompass local and regional food system development. The Colorado Healthy Food Fund will provide loans ranging from $1,000 to $250,000 for equipment, real estate, and working capital to start up and expand healthy food businesses.
“Colorado is known as much for its healthy lifestyle as it is for business innovation. We want to be a resource for access to capital for businesses in all segments of the food value chain to foster a local healthy-food economy in our State,” said Ceyl Prinster, President and CEO of Colorado Enterprise Fund. “Our CDFI-HFFI Awards help propel our efforts with not only financial assistance but public momentum that is extremely valuable in raising the profile of both the problem of food access and the ideas to address it. It is one government program that will have positive multipliers in health, economic development and community well-being.”
Mid-tier value chains such as food hubs provide much needed infrastructure and marketing opportunities for local food produced by small and midsized producers. Initiatives such as HFFI ensure the development of these innovative models that can provide more healthy food options and opportunities to build up the local economy.
Both the House and Senate versions of the Farm Bill provide for the creation of a Healthy Food Financing Initiative within USDA. For the first time, the Farm Bill would create a legislatively mandated grant and loan program for healthy food retailers to expand access to healthy, fresh foods in low-income, under-served communities and create and retain local jobs. Both versions of the Farm Bill provide discretionary funding for HFFI and set several priorities, among them, the support of regional food systems and locally grown foods. With the House moving forward toward a Farm Bill conference, NSAC is encouraged to see bipartisan and bicameral support for a program that will strengthen the growing local and regional food system, bolster local economic development, and improve access to fresh and healthy foods in communities around the country.