new white paper from our colleagues at the Council of Development Finance Agencies (CDFA) looks at how traditional community development finance tools, including incentives, can be applied to support local and regional food system development. Food systems here refers to:

  • Social enterprises that strive to increase access to healthy food or pursue other socially beneficial objectives such as sustainability
  • Agriculture (rural & urban)
  • Entrepreneurs starting a food-related business
  • Industry actors involved in food production and distribution
  • Institutional buyers, such as schools or hospitals, that make large purchases
  • Infrastructure that allows for production, processing, storage and distribution of food

The report provides a useful overview of set of targeted financing tools that have been successfully applied to food systems.

Tax increment financing can be appropriate for projects that require development on a specific site. Examples include a parking lot for a new grocery store, renovations to create a food hall, or improvements to support a commercial kitchen or food business incubator.

Special assessment districts generate funding from assembled business and neighborhood groups. Examples of initiatives financed by this mechanism include storefront improvements, small business support programs, or place-making investments that can support several types of food-related businesses.

Property assessed clean energy (PACE) financing supports energy efficiency upgrades on commercial properties. Both the cost reduction and the improved energy efficiencies can benefit a wide range of food system activities.

Tax abatements that reduce tax liabilities can be made applicable to food-related businesses and projects.

Be sure to check out the eighteen case studies from across the US that describe in practical terms how these financing tools have been used successfully in rural and urban communities. 

For more information see Food Systems and Targeted Tools, part of the CDFA Food Finance White Paper Series from the Council of Development Finance Agencies and funded with support from the W.K. Kellogg Foundation