Bread and butter free from New York (3)
I believe the answer is:
nan
'bread' is the definition.
(variant spelling of naan)
'butter free from new york' is the wordplay.
'butter' becomes 'nanny' (I've seen this before).
'free from' indicates named letters should be taken away.
'new york' becomes 'ny'.
'nanny' with 'ny' taken away is 'NAN'.
'and' is the link.
(Other definitions for nan that I've seen before include "Indian bread - older relative" , "Darling dog" , "Gran" , "woman from an earlier generation" , "A relative (colloq.); unleavened bread" .)