Social Enterprise (addressing scarcity) – Within the food system, an organization or initiative that works to support social objectives such as increasing access to healthy affordable food, sustainable food, or other socially beneficial food objectives.
Agriculture (rural & urban) – Within the food system, all of the steps and systems which include the cultivation and harvesting of primary consumable food products (plants, animals and their byproducts). The acquisition and management of agricultural land, research & development, production, support, operations, etc. regardless of physical location or scale are part of the agricultural sector.
Entrepreneurs – Individuals who create and operate businesses in the food system, such as creating or expanding capacity in culinary, technology, distribution, agriculture or processing businesses, in order to meet market needs and gain profits from the business.
Industry – In the food system, industry is the broad range of actors who contribute to/facilitate the process of food production and distribution to consumers. This may include food retailers, food service, processors, packagers, distributors, producers of related inputs, and more.
Institutional Buyers – Public or private institutions, such as schools, universities, hospitals, prisons, etc., that purchase (often wholesale), prepare, and serve large amounts of food to meet internal demand within the food system.
Infrastructure – Within the food system, infrastructure is the physical facilities and organizational, technological, and relationship networks that allow for the production, processing, storage, distribution, transportation, transfer, and retail of food.
* Research assistance provided by The Ohio State University, Knowlton School, City & Regional Planning 5890 course of spring 2017.
Industrial Development Bonds – Thousands of industrial development bonds (IDBs) have been issued for small food industry related manufacturers over the past several decades. IDBs are authorized in every state and provided low-costs tax-exempt financing for small to mid-sized manufacturers. The California Enterprise Development Authority (CEDA) uses industrial development bonds to finance food processers and wineries
501(c)3 Bonds – Development finance agencies regularly issue bonds on behalf of 501(c)3s for infrastructure related to their operations. Hospitals, YMCAs, museums, cultural centers and community centers prime examples. A handful of 501(C)3 bonds have been issued for food related operations such as community kitchens, food pantries and other social enterprise related food access efforts.
Aggie Bonds – Over 20 states operate First Time Farmer Aggie Bond programs which provided tax-exempt financing to support investments in new and beginning farmers. The program has been in existence for decades and is heavily used in agriculture driven states like Minnesota, Iowa, Montana, South Dakota, North Dakota and Kentucky.
Tax Increment Finance – A dozen plus tax increment finance (TIF) districts have been established to help finance food access related projects such as grocery stores in food deserts and food/entertainment driven economic development projects. In addition, a number of communities have used TIF to fund industrial parks that house food related enterprises. In Cleveland, TIF funds have been used to fund a mixed-use development that included a local grocery store.
Special Assessment – Nearly every state has one or more special assessment tool in place to facilitate development. Several communities have used this tool to drive targeted food/entertainment district development. In Ohio, agriculture districts are used to preserve valuable farm land.
Tax Credits – Hundreds of projects with a food system component have been financed using the New Markets Tax Credits program. In addition, a few noteworthy projects have utilized Historic Tax Credits to revitalize old buildings into restaurants and grocery stores. NMTCs have been used to fund culinary training buildings, healthy food hubs, and grocery stores.
Access to Capital Tools
Revolving Loan Funds – Development finance agencies operate thousands of revolving loan funds (RLFs) nationwide covering a wide range of qualified borrowers. However, very few exist that specifically address food entrepreneurs and small businesses. The shining examples of RLFs dedicated to food systems, such as the Colorado Fresh Food Financing Fund, Michigan Good Food Fund and the California FreshWorks Fund have all shown great promise as a driver of the lending component of creating a food system asset class.