Administration Provides Details on Healthy Food Financing Initiative

The Obama administration has revealed specifics of its over $400 million Healthy Food Financing Initiative, which aims to open healthy-food retailers in underserved urban and rural communities, also known as “food deserts,” across the United States. Treasury Secretary Tim Geithner and Agriculture Secretary Tom Vilsack made the details public in Philadelphia while visiting Philadelphia with First Lady Michelle Obama, who is heading up the “Let’s Move” anti-childhood obesity campaign.

A partnership among the Departments of Treasury, Agriculture, and Health and Human Services, the Healthy Food Financing Initiative will promote a range of interventions to expand access to nutritious foods, among them developing and outfitting grocery stores and other small businesses and retailers selling healthy food in communities that now lack these options.

Through the initiative and by working with the private sector, the Obama administration will work to eliminate food deserts across the country within seven years. In the first year of funding, the initiative will leverage enough investments to begin growing healthier food options into as many as one-fifth of the nation’s food deserts and create thousands of jobs in urban and rural communities.

Further, to help community leaders find the food deserts in their areas, USDA has rolled out a Food Environment Atlas (

“Our effort to improve access to healthy and affordable food is a critically important step toward First Lady Michelle Obama’s goal to solve the challenge of childhood obesity within a generation,” noted Vilsack. “The Healthy Food Financing Initiative will enhance access to healthy and affordable choices in struggling urban and rural communities, create jobs and economic development, and establish market opportunities for farmers and ranchers.”

“It’s been a tough year for America, but for our middle-class and distressed communities it’s been a tough decade,” added Geithner. “We’re here to make sure that in America, where a child grows up doesn’t determine whether they have access to a better —healthier — future. By introducing powerful incentives for private investors to take a chance on projects — like a new, healthier grocery store — we can make that difference for America’s children, while creating new jobs and services in their communities.”

“Encouraging people to choose fresh, nutritious food is important,” noted Health and Human Services Secretary Kathleen Sebelius. “But to achieve that goal that kind of food must be available, and in far too many parts of our country — both urban and rural communities — that's not the case. This collaborative initiative is a creative way to help solve that problem, while at the same time working to strengthen the economy of low-income communities through business development and job creation.”

Through the joint initiative, which was included in the president’s 2011 budget, the cabinet departments would make available over $400 million in financial and technical assistance to community development financial institutions, other nonprofits, and businesses with workable strategies for meeting communities’ healthy food needs. The initiative will offer a combination of federal tax credits, below-market rate loans, loan guarantees, and grants to bring in private-sector capital that will more than double the total investment. Federal funds will back such projects as the construction or expansion of grocery stores, as well as smaller interventions like installing refrigerated units for fresh produce in convenience stores.

Each of the three partners brings a special expertise and set of resources to the initiative:

—The Treasury Department will support private-sector financing of healthy food options in distressed urban and rural communities. Through the New Markets Tax Credit (NMTC) and financial assistance to Treasury-certified community development financial institutions (CDFIs), Treasury has already expanded access to nutritious foods by catalyzing private-sector investment. The initiative will provide $250 million in authority for the NMTC and $25 million for financial assistance to CDFIs dedicated to helping finance healthy food options. Treasury’s CDFI Fund has long supported such investments, including providing funds for the Pennsylvania Fresh Food Financing Initiative, which has opened 68 grocery stores in underserved communities and is the template for numerous programs across the United States, as well as the federal effort.

—The Department of Agriculture specializes in improving access to healthy foods through nutrition assistance programs, creating business opportunities for U.S. farmers, and promoting economic development in rural areas. USDA’s proposed funding level of $50 million will support over $150 million in public and private investments in the form of loans, grants, promotion, and other programs that can provide financial and technical assistance to boost access to healthy foods in underserved communities, grow demand and retail outlets for farm products, and enhance the availability of locally and regionally produced foods. USDA has supported successful farmers’ markets, and has also invested in grocery stores and creating agricultural supply chains for them.

—The Department of Health and Human Services (HHS) concentrates on community-based efforts to improve the economic and physical health of people in low-income areas. HHS will dedicate up to $20 million in Community Economic Development (CED) program funds to the initiative. Through CED, HHS will award competitive grants to Community Development Corporations to support projects that fund grocery stores, farmers’ markets, and other sources of fresh, nutritious food. These projects will serve the double purposes of easing access to healthy food options while creating job and business development opportunities in underserved communities. HHS has previously backed fresh food projects.

In addition to its other worthy aims, the initiative is part of the administration’s efforts to revitalize neighborhoods and communities by using place-based approaches, that is, strategies targeting the prosperity, equity, sustainability and livability of places.
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