Exploring the Rationale For and Role of Public Financing for Food Hubs

Graduation date: 2013Food hubs are a key solution to advance local and regional food systems by providing aggregation, storage, and distribution services to small and mid-sized farmers and thereby help them to access local and regional markets. By performing these functions, food hubs produce valuable services to not only farmers but to the public at large. To foster the societal benefits that food hubs produce, the United States Department of Agriculture (USDA) and other public agencies have funded some food hubs. This paper examines public funding as a set of interventions to overcome “market failures”, or instances in which the market is providing less than the socially desirable levels of specific services. \ud \ud While existing studies report that many food hubs obtain government funding, they do not examine the role of public funding for food hubs. Through in-depth interviews with food hub operators, this study explores food hubs’ use of public funds and their experiences with government grant programs. Analysis of data collected from these interviews identifies whether, how, and in what ways business structure, age, and break even status influence food hubs’ acquisition of public funds. This study then provides recommendations based on these results to improve future public financing of food hubs