American manufacturer of food for malnourished babies lays off staff amid USAID funding upheaval

CBS News

21-03-2025

Edesia Nutrition was among the fortunate few whose USAID agreement survived
a whipsaw couple of months
that saw the cancellation of more than 80% of the agency's foreign assistance contracts.
Despite that, the Rhode Island manufacturer of a life-saving paste for severely malnourished babies last week had to lay off 10% of its workforce. Edesia's founder and CEO, Navyn Salem, said even though her contract is active, her company's invoices to USAID have been rejected twice this week.
The delay in promised funds halted her production line, as well as payments to her largely American supply chain, including farmers who cultivate ingredients for the paste product's key ingredients.
The layoffs were "the hardest thing I've ever had to do," Salem said.
"The people here are like part of my family. I've been to their weddings. I've been to their family's funerals. I know their grandchildren. We're an interconnected family," Salem said.
As
Elon Musk
, the richest person in the world and others who work for President Trump have targeted
the State Department agency USAID
, a variety of global health nonprofits have faltered amid dramatic supply chain disruptions.
Musk himself weighed in on March 2, posting on his social media site that Edesia's contract would be spared.
At the time, a vital USAID payment system had yet to be restored. Salem said it was restarted recently, but on Tuesday and Wednesday she heard from USAID that at least two of her invoices had been rejected. One was denied because her goods had not yet shipped, while the other was denied even though it was for a batch that had shipped. She said it's not clear why that one was rejected.
In the meantime, bills are piling up.
"There's still payroll and the lights to turn on and the peanut farmers to pay," Salem said.
A spokesperson for the State Department replied to questions about the agency's payment systems. The agency did not immediately reply to questions about Edesia's invoices.
The spokesperson said a review of the agency's grants and programs ordered by Secretary of State Marco Rubio "exposed serious flaws in the legacy systems used to approve and issue payments at USAID."
"This has caused significant unforeseen delays and prompted the Administration to take unprecedented steps to implement more streamlined processes," the spokesperson said. "USAID has 27 payment and finance systems, all of which have been found to be inefficient, broken, and built to intentionally make communication with other systems in the federal government impossible."
Those unforeseen delays have rippled out beyond Edesia, Salem said.
"You have American farmers, American commodities brokers, American manufacturers, American shippers, and the NGOs, the American organizations…..if one of those goes down, the whole system stops," she said.
Edesia's prescription food, called Plumpy'Nut, had been feeding children in Africa, including South Sudan—a country currently experiencing extreme famine—when the delivery was disrupted.
Plumpy'Nut
is a ready-to-use therapeutic food, prescribed for the treatment of severe acute malnutrition in children as young as six months old.
Salem said her production line is capable of making food for 415 babies per hour, but her warehouse is filling up. In the meantime, as it responds to USAID's sudden upheaval, Edesia is itself working to be more efficient, Salem said.
"We've just changed from a company that's been here for 16 years to being like a startup, to being more scrappy, we need to change the way we're doing everything," Salem said. "I am endlessly optimistic and hopeful. I believe in the mission we have. I believe that the majority of Americans believe in feeding children, everywhere."
Dan Ruetenik
contributed to this report.