Edesia Nutrition was fortunate enough to maintain its USAID agreement despite a tumultuous few months that led to the cancellation of over 80% of the agency’s foreign assistance contracts.
However, the Rhode Island manufacturer of a life-saving paste for severely malnourished infants had to lay off 10% of its workforce last week. Founder and CEO Navyn Salem stated that even though the company’s contract remains active, its invoices to USAID were rejected on two occasions this week.
This delay in expected funding has stalled her production line and affected payments to her primarily American supply chain, which includes farmers who grow ingredients for the paste.
“The layoffs were the hardest thing I’ve ever had to do,” Salem shared.
“The people here are like family to me. I’ve attended their weddings, been to their family funerals, and I know their grandchildren. We’re an interconnected family,” she expressed.
In light of Elon Musk, the wealthiest person globally, and other associates of President Trump targeting the State Department agency USAID, several global health nonprofits have struggled due to significant supply chain disruptions.
Musk responded on March 2, stating on his social media platform that Edesia’s contract would not be affected.
At that point, a crucial USAID payment system had yet to be restored. Salem mentioned it was recently restarted, but on Tuesday and Wednesday, she learned that at least two of her invoices had been rejected by USAID. One was deemed invalid because her goods had not yet shipped, while the other was rejected despite being for a batch that had already shipped. She noted the reason for that rejection remains unclear.
In the meantime, expenses are accumulating.
“There’s still payroll to manage, the lights need to stay on, and the peanut farmers must be paid,” Salem stated.
A spokesperson from the State Department responded to inquiries regarding the agency’s payment systems but did not immediately address concerns about Edesia’s invoices. They mentioned that a review of the agency’s grants and programs, ordered by Secretary of State Marco Rubio, revealed significant issues in the outdated systems used for payment processing at USAID.
“These issues have resulted in considerable unforeseen delays, prompting the Administration to undertake extraordinary measures for implementing more efficient processes,” the spokesperson explained. “USAID has 27 payment and finance systems, all of which have been found ineffective, broken, and designed to make communication with other federal systems nearly impossible.”
These unexpected delays have affected not only Edesia but many other parties, according to Salem.
“You have American farmers, commodities brokers, manufacturers, shippers, and NGOs—all American organizations… if one part fails, the entire system stops,” she said.
Edesia’s therapeutic food, known as Plumpy’Nut, had been supplying nourishment to children in Africa, including South Sudan—a nation currently facing severe famine—when the deliveries were interrupted.
Plumpy’Nut is a ready-to-use therapeutic food formulated for treating severe acute malnutrition in young children, starting from six months of age.
Salem reported that her production line can produce food for 415 babies every hour, but her warehouse is quickly filling up. Meanwhile, in response to USAID’s sudden upheaval, Edesia is striving to enhance its efficiency.
“We’ve transitioned from a company that’s been around for 16 years to operating like a startup—leaner and more agile; we need to reevaluate our entire approach,” Salem mentioned. “I remain endlessly optimistic and hopeful. I believe in our mission, and I am confident that most Americans support the goal of feeding children everywhere.”
