{"id":63532,"date":"2025-04-16T01:00:28","date_gmt":"2025-04-16T08:00:28","guid":{"rendered":"https:\/\/civileats.com\/?p=63532"},"modified":"2025-07-15T13:57:46","modified_gmt":"2025-07-15T20:57:46","slug":"usdas-regional-food-business-centers-caught-in-federal-funding-freeze","status":"publish","type":"post","link":"https:\/\/civileats.com\/2025\/04\/16\/usdas-regional-food-business-centers-caught-in-federal-funding-freeze\/","title":{"rendered":"USDA\u2019s Regional Food Business Centers Caught in Federal Funding Freeze"},"content":{"rendered":"

July 15, 2025 Update:<\/strong> The USDA announced today<\/a> it has cancelled the Regional Food Business Centers program.<\/em><\/p>\n<\/div>

For the past five years, Patra and David Wise have been growing their farm business, Native Wise<\/a>, to sell vegetables, wild rice, and honey to their local community in Northeastern Minnesota. In 2021, they added a herd of bison on family land they had acquired within the Fond du Lac Reservation, a step they were particularly excited about since it represented the first time bison were returned to the tribal lands in about 150 years.<\/p><\/div>

\n

However, processing the animals in order to sell the meat locally has been a challenge: The couple currently has to haul the animals to a slaughter facility about four hours away, which is both time-consuming and hard on the bison. So, they\u2019ve been working toward setting up their own local processing.<\/p>\n

Last year, they got a boost when the North Central USDA Regional Food Business Center<\/a> awarded them a $50,000 Business Builder Grant to pay for crucial pieces of equipment. So far, they’ve purchased an industrial cooler-freezer combo that will allow them to store meat for customers until they come to the farm to pick it up.<\/p>\n

\u201cWe wouldn’t be able to do the farm-to-consumer processing without that type of a freezer,\u201d said Patra Wise, adding that it would have been nearly impossible for them to afford such an expensive piece of equipment without the grant.<\/p>\n

“You sign a contract and then you\u2019re trusting the government that they\u2019re going to honor their end.\u201d<\/p>\n<\/div>\n

Wise was about to purchase a few smaller pieces of equipment with the remaining grant funds, which farmers and entrepreneurs receive by requesting reimbursements, when she heard, at the end of January, that all payments were on hold. She was shocked, she said, because the grant had already been awarded.<\/p>\n

\u201cYou sign a contract and then you’re trusting the government that they’re going to honor their end,\u201d she said. \u201cFor a small farm, that’s life or death, basically, for the business.\u201d<\/p>\n

Like many other U.S. Department of Agriculture (USDA) programs that support local and regional farms, the Regional Food Business Centers have been put on ice<\/a> since the Trump administration took office.<\/p>\n

In May 2023, the USDA awarded grant funding to local organizations like nonprofits and universities to run the business centers. The centers use that funding to support the local food economy, including by issuing smaller sub-grants to farmers and food businesses like Native Wise.<\/p>\n

With $360 million awarded<\/a>, the Regional Food Business Centers program represents a small slice of USDA spending, so has attracted less attention than bigger projects like the Partnerships for Climate-Smart Commodities<\/a>. (USDA canceled that program<\/a> this week, but is allowing some projects to continue if they meet new criteria.)<\/p>\n

However, the 12 centers<\/a> have a wide reach, since they were set up to be hubs of business development activity within rural communities across the country. With funding paused, partnerships they\u2019ve formed to provide technical assistance to farms and food businesses have been disrupted, as have grant dollars promised to local farmers and food businesses like Native Wise.<\/p>\n

Because the projects were intentionally crafted to build the connective tissue that local supply chains rely on, a break in the chain has larger ripple effects. For example, one of the North Central Regional Food Business Center\u2019s other grants went to a kitchen facility in Fargo, North Dakota. Until payments were paused, the facility was using its grant funding to expand its kitchen space, which would have enabled more farms and small food businesses to cook and process there to bring products to market.<\/p>\n

\u201cSo, it’s not just about the awardee, it’s about everyone around them, too,\u201d said Candice Zimmerman, a regional development planner at Region Five Development Commission, an economic development organization that runs the North Central Center, which serves Minnesota, North Dakota, and South Dakota.<\/p>\n

Last week, nine of the 12 organizations running the centers sent a letter to members of Congress highlighting the impact of the work they\u2019re doing, explaining that they are not getting reimbursed for money already spent based on their USDA contracts, and pleading for help. The letter was shared with Civil Eats.<\/p>\n

\u201cIf there ever is a program that really deserves bipartisan support across the spectrum, it\u2019s this program,\u201d Paul Freedman, the director of the Appalachia Regional Food Business Center, which supports food producers across seven states from Pennsylvania to Tennessee, told Civil Eats. \u201cOur middle name is business. Our goal here is to help businesses bring food to market so that it\u2019s available at a fair price and so that producers, processors, and farmers can actually make a living doing this.\u201d<\/p>\n

A Biden-Era Project<\/strong><\/h4>\n<\/div>

In response to increasing food-system consolidation and the supply chain shocks of the COVID-19 pandemic, President Biden\u2019s USDA created a suite of new programs<\/a> with the intention of building back what policy wonks call the \u201cmid-tier\u201d of the food system. It\u2019s the landscape of farms and food businesses that support regional wealth and that have been the most hollowed out over the past several decades as corporate consolidation has pushed for<\/a> a \u201cget big or get out\u201d farm economy.<\/p><\/div>

\n

\u201cIf there ever is a program that really deserves bipartisan support across the spectrum, it\u2019s this program.”<\/p>\n<\/div>\n

Biden\u2019s USDA wanted to put some of the work of building back those regional markets onto local organizations that might better understand each region\u2019s unique needs. A former USDA official who worked on the program\u2014who did not want to be identified because of current policy work she is engaged with\u2014used an analogy: Just like the local agents of USDA\u2019s Natural Resources Conservation Service helped growers understand their particular soil profiles, the Regional Food Business Centers<\/a> would help farmers understand, access, and build local markets.<\/p>\n

The USDA tasked the centers with coordinating regional food efforts, offering comprehensive technical support, and providing small financial grants to further build local food capacity. \u201cSuccess will be if we\u2019re able to create additional market opportunities so that mid- and small-sized operators still have a chance of staying in the business,\u201d former Secretary of Agriculture Tom Vilsack told Civil Eats<\/a> at the time.<\/p>\n

Five-year grant agreements to 12 centers were finalized in 2023. In an October 2024 progress report<\/a>, the USDA reported that as a result, 2,800 individuals received technical assistance, 1,500 new partnerships were formed, and 287 businesses reported increased revenue.<\/p>\n

In the letter to lawmakers, the Northwest and Rocky Mountain Regional Food Business Center\u2014which serves Colorado, Wyoming, Montana, Washington, Idaho, and Oregon\u2014reported that in its first year, its technical assistance programs helped establish 30 new companies, and 50 farms and businesses that worked with the center reported increased sales. The center cited its support of the development of Wyoming\u2019s Food Freedom Markets<\/a>, which one dairy farm reported enabled it to increase sales four-fold.<\/p>\n

Because the Northwest Center is run by Colorado State University, it is continuing its work and honoring contract payments despite the current lack of USDA reimbursement, with staff hoping funding will resume soon.<\/p>\n

Impacts of the Freeze<\/strong><\/h4>\n<\/div>

When the Trump administration took office, the USDA stopped paying Regional Food Business Center grantees for any work done after January 20. For the North Central Center, the freeze has been devastating.<\/p><\/div>

\n

\u201cWe’re not getting paid, and we’re not being told when that review will be done,\u201d said Cheryal Lee Hills, executive director of the Region Five Development Commission.<\/p>\n

In addition to not being able to reimburse grantees like Native Wise for work done under already-signed grant contracts, Hills had to cancel 31 subcontracts to organizations working with the center to provide technical assistance across Minnesota, South Dakota, and North Dakota. That assistance might look like helping farmers market their foods, meet food safety requirements, or access capital to grow.<\/p>\n

Some of those organizations have had to lay off staff as a result, Hills said. Now, with more than three years left on their contract, the organization is essentially treading water and isn\u2019t getting any information from the USDA as to what might happen.<\/p>\n

The USDA did not respond to questions about the freeze, its impacts, or whether the Regional Food Business Center program might be cancelled.<\/p>\n

\u201cI don’t have a good answer of how long we can hold out,\u201d Hills said. \u201cI’m hoping that they just either pay us . . . or terminate the thing so that we can all move on with our lives, because right now, it\u2019s like we’ve been cut by a knife, and we don’t know how bad we’re going to bleed or for how long.\u201d<\/p>\n

One of the explicit aims of the project was also for the USDA to reach farmers and food businesses that historically had trouble accessing its programs and services. That could mean small, diversified farms that don\u2019t fit the commodity mold, or Black farmers who faced past discrimination. With the pause and confusion, Hills said, many of those who are new to working with USDA grants are now demoralized, and even for those who have long accessed USDA\u2019s services, confidence in the agency is plummeting.<\/p>\n

When the Trump administration took office, the USDA stopped paying Regional Food Business Center grantees for any work done after January 20. <\/p>\n<\/div>\n

\u201cI don’t think I’m ever going to apply for another USDA grant,\u201d she said.<\/p>\n

The Appalachia Center was not as far along in its work. Last fall, it closed the first round of its Business Builder Grants, selected 62 as awardees, and then sent the list to the USDA early this year for approval. Among those on the list are grain farmers who want to sell more of their grains directly to their communities and a food business working to more effectively process pawpaws<\/a>. Now, they\u2019re all in limbo.<\/p>\n

Since the grants hadn\u2019t been finalized, none of the farmers have spent money yet, so are not waiting for payments. Still, Appalachia Center Director Paul Freedman said the grants are time sensitive. Many of the applications included detailed cost estimates that depend on equipment pricing that changes over time. And the farmers are starting the season without knowing, now, if they\u2019ll be expected, later, to start the projects and honor the contracts. Freedman has also paused a second round of Business Builder Grant applications and has stopped paying the Center\u2019s 17 partner organizations for technical assistance.<\/p>\n

\u201cThe longer it goes, at some point, more and more staff and more and more [of those] partners fall off,\u201d he said. In other words, the longer his center is unable to get reimbursed for its work, the harder it is to keep supporting local farms and food businesses\u2014who may have to call it quits on working with the center. Freedman said that moment feels imminent.<\/p>\n

It’s a shame, he said, because one of things he thinks makes the Regional Food Business Centers effective is that each region is able to come up with its own \u201cunique solutions to unique problems.\u201d<\/p>\n

In Ohio, that might mean helping an orchard get into cider production to boost revenue. On tribal lands in Minnesota, it might mean building the infrastructure to process bison.<\/p>\n

What the centers have in common, said Freedman, is that they\u2019re all working to counter the extractive forces like corporate consolidation that have long pushed farmers<\/a> to hang up their hoes. \u201c[The Regional Food Business Centers help] to overcome that and make small farms viable, and by doing so you’re getting more local food, which makes us more resilient, whether there\u2019s a natural disaster, another recession, another\u2014heaven forbid\u2014a pandemic. It isn’t a blue or red issue.\u201d<\/p>\n

April 17, 2025 Update:<\/strong> This story has been updated to include the status of the Northwest and Rocky Mountain Regional Food Business Center\u2019s work.<\/i><\/p>\n

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July 15, 2025 Update: The USDA announced today it has cancelled the Regional Food Business Centers program. 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