A “Buy American” executive order that President Joe Biden signed in January has prompted the Agriculture Department to take a closer look at how its current rules on buying domestic products for school meals are being enforced.
USDA’s Food and Nutrition Service recently put out a request for information about the effectiveness and challenges of the Buy American provision — a measure added to the National School Lunch Act in 1998 that, under most circumstances, requires school districts to buy products made and processed in the United States. Several agricultural groups claim that two exemptions to the requirement have allowed schools to sidestep the rules and buy foreign products.
“The USDA's interpretation of this for really quite some time now has been any cost differential means the schools are sort of free to purchase whatever it is they want,” Chuck Conner, the president and CEO of the National Council of Farmer Cooperatives, told Agri-Pulse.
While the first exemption allows schools to buy commodities like bananas or pineapples that aren’t widely produced in the United States from foreign sources, the second allows schools to choose foreign commodities when the same domestic products are “significantly more costly.”
Some farm groups worry that schools have been using this exception to buy foreign products over American ones because the FNS leaves it up to schools to determine what dollar amount constitutes as “significantly more costly.”
Chuck Conner, NCFC
“From the standpoint of the domestic producers, they see that to be a big problem because, from their perspective, there's no real standard in place,” Roger Szemraj, a principal at Olsson Frank Weeda law, a D.C.-based firm specializing in food and agriculture, told Agri-Pulse. “All you're looking at is who may be offering the best price and the best price is not necessarily a significant price differential.”
In a 2018 letter to lawmakers, the coalition of 61 organizations — which includes the American Farm Bureau Federation, the National Council of Farmer Cooperatives and the Western Growers Association — said over 80% of the apple juice purchased by schools is from China and that 60% to 70% of the fish sticks served in schools are made from fish caught on Russian vessels and processed in China. Schools in more than half the country also have purchased Chinese canned peaches.
“I'm watching some of the markets for California's cling peach growers go away,” said Rich Hudgins, president and CEO of the California Canning Peach Association. “The Chinese product is always going to be cheaper than product produced in the U.S. The cheaper Chinese product obviously is produced under different environmental and food safety regulations as well.”
Both the California Canning Peach Association and the National Council of Farmer Cooperatives want to see the USDA remove the cost differential exemption.
However, School Nutrition Association spokesman Diane Pratt-Heavner told Agri-Pulse that her organization sees both exemptions as important for school food programs with tight budgets, especially during a time when wildfires and supply chain issues make it difficult and expensive to buy American food.
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“Serving American-grown foods, that’s the first priority, but we do need to make sure that those exceptions remain in place,” she said. “Unfortunately, our members are having to use a lot of those exceptions right now, in particular, because of the supply chain disruptions that are really problematic for back-to-school time.”
Pratt-Heavner said the School Nutrition Association, which represents more than 50,000 members across the U.S. who plan, prepare and serve school meals, supports having the Buy America requirements in place but wants the USDA to preserve the exemptions. It is waiting to draft comments to submit to the Federal Register until after its board and public policy committee meet later this year.
“Right now our members are dealing with, pretty much, a supply chain crisis,” she said. “We need to make sure that moving forward that the regulatory requirements support efforts to maximize American-grown foods, but also continue to nourish students with a wide variety of fruits and vegetables and healthy food options.”
According to Pratt-Heavner, USDA foods account for 15% to 20% of the food served with school meals. The rest comes from distributors or manufacturers that schools contract with directly.
Conner said many schools buy what they think are U.S. products from food distributors, but the food turns out to originate in other countries. This makes it hard for schools to comply.
“The key is it’s got to be differentiated by the distributor in the distribution network that exists out there for the schools and right now that is just marginally the case,” he said.
According to the FNS, if schools want to use an exception, they must keep documentation justifying their use of the exception. However, there is no requirement to request a waiver from the FNS or the state governments overseeing the programs.
The significant cost differential was put in place by USDA regulations, so USDA has the authority to amend or remove it. Connor said Ag Secretary Tom Vilsack is “keenly aware of the interests that the White House and Biden administration have in the Buy America Provisions.”
In addition, it is likely Celeste Drake, a Biden appointee and the nation’s first director of the Made in America office at the Office of Management and Budget, will play a significant role in determining the future of the provision.
Changes could also come through Congress. Hudgins said legislation on the issue could be incorporated into a child nutrition reauthorization bill.
An additional solution USDA may weigh, as indicated by a question in its request for information, is creating a defined list of commodities that are classified as “excepted” items. This list would likely contain the hard-to-find U.S. items that schools are allowed to purchase from foreign sources.
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