USDA Cuts Funds for Local Food Purchasing

Export-oriented commodity farmers brace for retaliation after President Trump levied sweeping new tariffs on Wednesday. In March, Trump took to social media to encourage farmers to sell more goods inside the U.S. The White House has also hinted at another bailout for farmers cut off from global markets – the previous Trump administration spent $61 billion paying farmers during its first trade war.

Just as the Trump administration may spend big to help the largest farms, it pulled back support for smaller farms selling food to local schools and food banks. In early March, the Trump administration canceled $1 billion in grants for schools and food banks to buy local food. A few weeks later, USDA also canceled this year’s round of Patrick Leahy Farm to School grants, which would have distributed $5 million to help schools develop and implement local food purchasing programs or school gardens.

Cutting these programs shuts small farmers out of a critical market and denies school children and food-insecure families healthy local foods. Farmers, school food service staff, and food systems advocates are perplexed and disappointed by the sudden loss.

“It’s very shocking and devastating for our farmers, our kids, and our communities that they decided to cancel this promised funding,” says Erin McKee, who leads the community food systems program for the Institute for Agriculture and Trade Policy. “The thing that’s odd about this decision is everyone loves farm-to-school; it’s a bipartisan issue.”

Nick Olson grows vegetables in Litchfield, Minnesota, and took the first opportunity to sell food to three nearby rural school districts, including the one his kids attend. Olson works with beginning farmers and believes that local food purchases from schools, and other institutions that feed rural communities like elder care facilities, could help support a new generation of farmers and boost the local economy.

“These programs could put more farmers on the land and put more income in rural communities,” Olson says, “We have all these farmers that want to farm and then we had this big influx of federal funding to expand farm-to-school, this seemed like one of those opportunities that could be a tipping point to make a huge difference. And that’s the hardest thing on my end, that’s not there now.”

A study of Minnesota’s farm-to-school program found that every dollar spent on local food generated an additional dollar of economic activity in the state. Selling to schools or food banks can help smaller-scale farmers break into wholesale markets and diversify their business.

“These weren’t just programs that opened the door for great food access in our schools and food shelves, but they were a real engine of economic development,” says Theresa McCormick, executive director of the Good Acre food hub. “The numbers are there that these programs punched way above their weight.”

Supporting small and mid-sized farmers also supports consumers by diversifying the food supply chain and improving resilience. “I keep thinking back to 2020 and how much our food system was shaken then, and it was our local farmers and our local communities that really stepped up,” says McCormick.

Olson says greater food system resilience is particularly important in rural communities, which may have a lot of farms growing crops for export markets but not a lot of fresh food access. “You can see the potential of rural communities growing their own food,” Olson says. “This federal cut is a hit to that potential.”

Schools also enjoy working with local producers to teach students about agriculture and encourage them to try new, healthy foods. “We are bringing in foods that the kids don’t necessarily recognize,” says Julie Udelhofen food service director for Clear Lake Community School District. “The kids are tasting it, they are eating it, they are expanding their palates, and I fully believe that we are affecting their lifetime eating habits.”

Despite all these benefits, schools still struggle to afford local foods, and local farmers struggle to compete in complicated public food contracting systems. This is where the government stepped in.  

The Biden administration created the Local Food for Schools (LFS) Cooperative Agreement Program and the Local Food Purchase Assistance (LFPA) Cooperative Agreement Program in 2022 to give money to schools and hunger relief organizations to buy more food from local vendors and improve supply chain resilience in the wake of the COVID-19 pandemic. The first round of funds distributed $200 million to schools and $900 million to hunger relief programs. The second round, announced in October 2024, would have distributed more than $590 million to schools and childcare facilities and $471 million to hunger relief programs.

While the program structure varied from state to state, for the most part, these funds went through state agencies to directly reimburse schools or food banks for local food purchases. Karen Spangler, national policy director for the National Farm to School Network, said this investment helped a lot of school nutrition directors kickstart local purchasing. In Minnesota alone, McKee says the first round of funding more than tripled the buying power of an existing state-level farm-to-school program and helped grantees buy from over 400 farms.

When asked why these programs were canceled, a USDA spokesperson told Politico “These programs, created under the former Administration via Executive authority, no longer effectuate the goals of the agency.” President Biden’s USDA indeed created these programs through a New Deal-era vehicle called the Commodity Credit Corporation, which meant they were never permanent. However, advocates do not understand why they do not align with the Trump administration’s goals, which include promoting domestic markets for farmers.

“This is a game-changing amount of money for us at the state level, but I don’t think this cut at the federal level is helping them save that much or balance the budget,” McKee noted.

The Trump administration’s cancellation is disruptive for schools and farmers, many of which had already signed agreements with USDA and made plans for the next round of funding. While USDA can always cancel cooperative agreements, Spangler says she has never seen such a mass contract cancellation.

“We know of a not insignificant amount of farmers that had planned for these funds and made equipment decisions and other capital investments into their business” to sell more to schools, Spangler says. She worries that this experience will make risk-averse farmers think twice before participating in government programs again.

The cuts also hurt food banks when hunger is on the rise. In addition to the loss of Local Food Purchase Assistance funds, the Trump administration canceled $500 million in funds for the Emergency Food Assistance Program, depriving food banks of as much as $1 billion in all.

The LFS program, LFPA program, and TEFAP program are all funded through the Commodity Credit Corporation, the same pot of funds that the first Trump administration tapped to pay farmers during the last trade war. In this way, the Trump administration may be taking money from the hungry and local farmers to fund a bailout for large commodity crop farmers hurt by the administration’s trade policy.