Federal Funding Void Challenges School and Grower Partnerships

As students return to school for the fall, millions of families will be relying on school lunches to provide a healthy, nutritious meal for their children. Whether their children will receive one is dependent on the state they reside in, as well as what type of response the state implemented as a result of the cancellation of funds for the pandemic-era programs that helped schools ensure they could provide lunches to students.

When the COVID-19 pandemic hit back in 2020, and many schools moved to a virtual format, the consequence of losing access to these meals was profound” Only 15 percent of low-income families with children who qualified for free or reduced lunch actually receiving them. In 2021, over 50 percent of all schoolchildren ages 5 to 17 received free or reduced-cost lunch in the previous 12 months, highlighting how the disruption in school attendance impacted students in more ways than just missed education.

That same year, the U.S. Department of Agriculture responded by launching the Local Food for Schools Cooperative Agreement (LFS) and Local Food Purchasing Assistance Cooperative Agreement (LFSA) programs. The LFS program was designed specifically to, according to its website, “strengthen the food system for schools and childcare institutions by helping to build a fair, competitive, and resilient local food chain.”

Expanding upon that mission, the LFSA program aimed to “maintain and improve food and agricultural supply chain resiliency,” by “provid[ing] funding for state, tribal and territorial governments to purchase foods produced within the state or within 400 miles of the delivery destination to help support local, and regional producers.”

Many states saw these two programs as a synergistic complement to one another — by procuring foods locally, communities could support their regional producers and provide fresh, nutritious food to schools and students.

Both voluntary programs had over 40 states participate and engage in implementing these federal funds to strengthen and support their local food systems, each in their unique way.

Then in October 2024, the USDA announced that there would be an additional $1.13 billion in funding for these two programs, and nearly all states that had participated in the original round of funding opted to continue their participation.

The additional funding was promised, according to then-USDA Under Secretary Jenny Lester Moffitt, as a means to “reaffirm our commitment to bolstering local economies, ensuring food security, and fostering resilient agricultural communities nationwide.”

Generally considered successful programs, in March of this year, the USDA then decided to cancel these programs and rescind the funding, leaving schools, producers, and parents of schoolchildren relying on these meals to be confused, worried, and anxious about what the consequences of this cancellation would be.

Depending on how integral states made these funds to their program, significant challenges can result from these lost funds, including millions of children losing access to free meals at school, at a time when food inflation (and therefore cost of food) is higher compared to previous years.

With the cancellation came a flurry of mixed responses from states, with some decrying the cancellation and pressing for reinstatement of funds, while others stepped in with state-led funding to fill the gap.

In Vermont, the state’s approach to spend the initial funds was through partnering with food hubs to enhance distribution.

Food hubs are a unique business model growing in popularity across the nation in bringing growers and suppliers closer, offering their own trucks, refrigeration units, warehouse space, or other resources to growers. Oftentimes, these food hubs operate as nonprofits, directing their procured food to hunger relief organizations and food banks/pantries for distribution.

Food hubs can also serve as an aggregator of products for small to mid-size growers, amplifying their capacity to fulfill wholesale or larger-sized demand.

Green Mountain Farm Direct was one of four hubs that coordinated with the state pf Vermont to distribute the funds and do the on-the-ground work.

Becca Perrin, who is the account manager for Green Mountain Farm Direct, explained how the state approached the hubs with their vision of a coordinated team collaboration to ensure all schools could access these funds and procure locally produced food through these hubs.

Through this model, schools purchased foods procured locally by these food hubs, enabling them to diversify their options and ensure availability to students. The food hubs were the ones that held the funds and handled the accounting of the funds, so schools were not burdened by additional administrative logistics and able to more freely purchase foods the hubs made available to them.

Perrin made it clear that the state understood that this originally was only meant to be one-time funding.

“Our understanding was that we shouldn’t expect this to roll over. … This was a unicorn situation, this money, so we really made an effort to prepare schools for that,” she said.

Perrin noted that something that “helped” was that the initial funds weren’t very much.

“It ended up being, like, very small, a small amount … but [schools] had fun with it!,” she said. “They bought items that they wouldn’t necessarily buy otherwise. … They were just ordering for fun.”

“[Schools] ordered a lot of cheese curds, a lot of pickles, a lot of fun produce that they wanted to experiment with … things that they were replacing within their normal meal service, with higher quality ingredients,” Perrin said.

Vermont in its initial procurement of LFS funds received just over $330,000, which Perrin said all School Food Authority (SFAs), the entities responsible for food procurement in schools, participated in. Last fall, Vermont was slated to receive nearly $1.2 million in the second wave of funding that was then canceled this past March.

“It was really fun to do [this work], but also sad at the same time, because at that time, we thought that once that money’s gone, it’s gone forever,” she said. “So then last fall when it was announced that the second round of money was coming out and there was going to be way more money this time, nobody was expecting it. … There was a lot of excitement.”

Perrin’s understanding was that this second wave of money was to be administered the same way as the first round of funding was, and she discussed how the state and food hubs planned to distribute the funds over a two-year period as to give schools time to plan how they wanted to spend that amount of money, and not overwhelm the supply chain from the producer’s side of things.

“We were just about to get ready, in the early months of [2025], we were just getting ready to meet to decide how we would administer it, when it was canceled,” said Perrin.

The funds were canceled as part of the administration’s efforts to reduce government spending, and the programs were cited as “no longer effectuat[ing] the goals of the agency,” said a USDA spokesperson.

“There were so many cuts to programs at the federal level, that pretty much everybody was knocking on the state’s door, [and] the legislature was very open to back-funding all these federal programs that were cut,” Perrin said.

Fortunately, the legislature was able to step in and provide some assurance, for now.

“We advocated within the Vermont budget during this most recent budget season and got a one-time allocation of $500,000 to replace these LFS funds, ” she said.

“These funds will be replicating the LFS model where this money will be flowing through the food hubs as a crediting program that schools can access,” Perrin said. “This was a huge accomplishment for our little group of hubs and advocates.”

While Perrin commended the state’s responsiveness and willingness to provide a stopgap measure, she knows that not all states have the budget or willingness to do the same.

When asked whether she felt that food programs like this were better supported through federal or state provided money, Perrin acknowledged that it is a state-by-state case basis.

“In Vermont, the farm to school movement is so strong, keeping it local might be preferred. But in other states, the federal dollars have had such a big impact,” she said.

Even with their own state-led program, Perrin recognizes that different school districts have differing levels of capacity and resources to access programs, and providing multiple programs would help address these differences.

“In other states that maybe just have a burgeoning farm-to-school movement, or a burgeoning local food movement, these federal dollars can be really significant for them,” said Perrin. “I don’t want to write off the impact that those federal dollars must have had for them, and how many cool projects, programs, and models were triggered by the original LFS money that was then halted.”

In Iowa, which was originally awarded over $2 million, the state agency awarded their federal funds to nonprofits such as Practical Farmers of Iowa and Iowa Valley RC&D which then distributed these funds to food hubs and pantries to purchase locally produced food from growers. Growers selling their products to these food hubs and pantries were able to receive a check directly from the hubs and pantries, which then were reimbursed by these nonprofits.

In the second wave of funding, Iowa was slated to receive over $11 million, which, when canceled, had negative ripple effects, particularly on the growers supplying the produce to the hubs and pantries.

Emma Johnson of Buffalo Ridge Orchards (BRO) was one of the many producers selling her produce to a food pantry that provided her crop to schools in the state. A fifth-generation farmer, Johnson grows a diversified crop rotation, with about half her acreage held in conventional grain production growing corn and soybean, and the rest in specialty vegetables such as potatoes alongside fruits like apples and pears.

Approximately half of her specialty vegetable sales are direct to consumers through CSAs, a farm store, and a farmer’s market, and the other half is direct wholesale to hospitals, schools, and other larger institutions. BRO has been marketing and selling this way for over 13 years. They began selling their produce to a local food hub in 2018, allowing the operation to expand its sales across the whole state.

“The food hub essentially is aggregating products from multiple farmers, and that aggregation and purchasing power [of the hub] really expanded with the LFS and LFPA program,” Johnson said. “That was where we saw a huge increase in what we were selling wholesale … and that made us feel pretty sure that we could continue to expand some parts of our vegetable and apple production.”

With over 8,000 apple trees in her orchard, Johnson said that the food hub assured her that the demand for apples was there to stay, and that the money to purchase those apples was solid. This was why she felt confident in making the leap to expand her production capacity and plant more apple trees. Since apple trees don’t begin producing apples right away, this year is the first year that those newly planted trees will produce any fruit for sale.

“With that partnership we made with the food hub, that partnership is really reliant on the fact that these programs, if we’re really successful with them, will continue to give us money,” said Johnson. “If you prove that it’s successful, if you prove that you brought money to rural Iowa, then no one is gonna want to see it fail.”

“It takes a lot of people to expand our type of farming in Iowa,” Johnson said. “We can’t just have the retail end where we sell direct-to-consumer, that’s not how we can get local food to everyone’s table, or how we grow production [scale]. … If we want to see more fruit and vegetable production in Iowa, we need to expand the markets.”

The way to do that is to have everyone take the jump at the same time. In order for large institutions, for example the University of Iowa, to purchase wholesale apples produced locally, they need to see that growers can meet the demand for it to be a consistent supply.

By building the aggregator’s capacity to source across the whole state, that would pave the way for growers to expand their fruit and vegetable operations while guaranteeing that they have a buyer ready to purchase their product.

“It’s hard, which comes first, as far as the chicken or the egg… and I really felt like the LFS and LFPA programs gave the purchasing power for everyone to expand,” said Johnson. “The food hub could expand their infrastructure, their connection with other food hubs, and for farmers to expand.”

Johnson also understood that this program was never intended to be in perpetuity.

“The point of this program was not to be forever funded, but to provide enough funding so that all of those supply chains could be at a level where [farmers] could go after these big fish, where we could really start supplying the larger institutions with local food,” she said.

Buffalo Ridge Orchards considered itself successful in growing the infrastructure of its operation in the past two years and in moving a lot of produce. With the announcement of additional funding last October, Johnson said that it made sense to her, because that would enable growers to solidify their expansion so that local food could be an option for larger institutions across the state.

“I think the economic impact that local food production can have in rural areas is big, and that’s what the first round of [LFS] funding did [here in Iowa],” said Johnson. The operation spans 80 acres and employs six full time staff (not counting the four co-owners), which Johnson says, “is kind of crazy, when you compare it to grain production.”

When the second wave of funds were canceled in March, the state of Iowa announced that it would be investing $70,000 in the Choose Iowa pilot program, a state-led local food purchasing program, with individual schools eligible up to $1,000 for food purchases.

“That felt like pennies [for schools]”, said Johnson. “A thousand dollars will not go very far in feeding a lot of kids.”

Johnson and other growers went to the state house to lobby for more money for Choose Iowa but was unsuccessful in acquiring more money for the program, in part because “Iowa is strapped for cash,” she said, as the state had to dip into its reserves to balance its budget this year.

Despite all this, Johnson said she doesn’t feel like it was the wrong decision to expand her operation by planting 1,600 more apple trees.

“Even with these cuts, we’re still working with our food hubs on finding ways to make our logistics more efficient, because they have less staff now, bringing our price point down even more so they can move more boxes. … We’re all in it in trying to hustle,” said Johnson.

When asked whether she felt that food programs like this were better supported through federal or state provided money, Johnson indicated that she’d be happy to see either provide the financial foundation but that the loss of LFS and LFPA funds was unfortunate since it was already an established program.

“There was already an infrastructure put in with the admin and food hubs that seems like it’s being circumvented with the state, so it sort of feels like we’re reinventing the wheel so we’re going to lose momentum that we didn’t need to lose,” she said. “However, if the state wants to do their own program, I’m happy to see that.”

Liza Thuy Nguyen served as the 2023 American Farmland Trust Agriculture Communications Intern at AGDAILY. Liza is originally from Anaheim, California, and attended the University of California, Davis, as a first-generation college student. She received a bachelor’s degree in genetics and genomics and went on to earn a master’s in horticulture from Penn State.