A U.S. Department of Agriculture memo last year reminded school nutrition directors about the importance of the long-standing “Buy American” provision for school meals. However, there remains confusion about when exceptions to the rule are justified and if the new focus on the provision could discourage fresh produce purchases.
The June 30 memo, which said served to “reinforce the importance of the Buy American provision” to the U.S. economy, said exceptions are justified only if:
- The food product is not produced or manufactured in the U.S. in sufficient and reasonably available quantities of a satisfactory quality; or
- Competitive bids reveal the costs of a U.S. product are significantly higher than the non-domestic product.
However, the USDA does not specify an amount or percentage that is considered “significantly higher.”
“It is the school food authority’s responsibility to determine the threshold,” the USDA said in its guidance.
The Buy American provision applies to school districts who use school lunch program funds to buy food. Schools also obtain domestically grown food from USDA-provided commodities, and also use USDA Foods dollars for fresh produce buys through the Department of Defense Fresh Program.
With greater scrutiny of the issue by the USDA, Phil Muir, president and CEO of Utah-based Muir Copper Canyon Farms, said school districts seem to be paying more attention to compliance the “Buy American” provision than in the past.
Beyond the availability and cost of the commodity itself, he said freight costs can play a role whether domestic produce is significantly higher in cost than imported produce.
Confusion over the provision could cause some school foodservice leaders to avoid fresh produce all together, said Mollie Van Lieu, senior director for nutrition policy at the United Fresh Produce Association,
“What we are afraid of right now is that they are not buying fresh produce because they are scared they are not going to comply with (the provision),” she said.
Van Lieu said the USDA could help school foodservice leaders by more precisely defining what constitutes a “significantly higher” cost for domestic food over imported food is.
“At a minimum, we would like to see a definition of what ‘significant’ is and then we will go from there,” she said. “This flags a larger conversation that needs to happen between all the stakeholders.”
The renewed emphasis on the Buy American provision has caused school nutrition directors to step up conversations with produce suppliers, said Amy Droegemeier, director of nutrition services for the Gardner-Edgerton School District in Kansas, said,
While she sees how the extra focus on “Buy American” could cause some districts to back off produce, Droegemeier said that is not the case for her district.
“We have a broadline supplier that also supplies our produce, and so (we) are just making sure they understand, first and foremost, that we obviously want to buy from the U.S. as much as possible,” she said. The district hasn’t modified its menus to eliminate produce items.
“It is about setting expectations up front with suppliers, putting that back on them to carry that burden of proving why that produce is domestic or why it isn’t,” she said.
The supplier sends out a weekly report on produce availability and market trends, detailing what growing districts the produce is coming from.
The district keeps those reports as documentation and also keep price documentation on what produce it buys.
“We plan our menus seasonally so we can best maximize the majority of our produce being domestic,” she said. For example, the school doesn’t bring in watermelon in February.
Even so, weather events such as hurricanes or freezes create opportunities for imports. “We are not going to stop offering tomatoes, so it is just a little bit of work on our end to document that information,” she said.
Droegemeier said “unfortunately” there is no hard and fast rule on what accounts for a “significant” price difference between domestic and imported produce. Even a relatively small difference in price, such as 50 cents per carton, could translate to a lot of money for the district if district schools use 1,000 cartons a month.
“We keep that information on hand and when time comes for an audit, we will share that,” she said. “I feel comfortable that we are being the best steward of the taxpayer money while not sacrificing the quality of produce we are offering to our kids.”
The USDA said records and documentation must be retained justifying any exception to the rule to buy domestic. The memo also suggested contract language to be used for procuring food from suppliers.
“School food authorities can maintain documentation of exceptions for domestic foods that are prohibitively costly or not available in sufficient quantities and present this during reviews by the State agency,” the USDA said in its guidance.
When reviewing compliance with the Buy American provision, the memo said that state agencies could take “fiscal action for repeat or egregious findings” on a case by case basis, with approval by USDA Food Nutrition Service officials.
School nutrition directors had numerous questions for USDA officials about policies on buying U.S. products during the School Nutrition Association’s Legislative Action Conference in Washington on March 5, said Diane Pratt-Heavner, director of media relations for the association.
“People were trying to seek clarification on exactly how (USDA) anticipates the enforcement to be across the board,” Pratt-Heavner said. “A lot of questions come from the fact that various USDA regulations can be interpreted differently from one state to the next.”
School foodservice officials had questions about what documents they needed to justify exceptions to the Buy American provision, she said.
“I recall USDA specifically making the suggestion that if you are finding the domestic price is much more expensive than (imported product), then print off that price report and make a notation of it,” she said. USDA officials urged school foodservice officials to keep detailed records so they can justify their purchases when audited by state agencies during the school district’s administrative review.
Some states require schools to file an exemption request for bananas every year, even though bananas are not grown in the U.S.
“When you have got that kind of documentation required in the administrative review and enforcement process, that’s where these questions come in,” Pratt-Heavner said.
School foodservice officials asked USDA officials about the threshold of what is a “significantly higher” price is, but USDA officials didn’t give any specific guidance.
“Our members are dealing with a lot of different rules and trying to follow them as closely as possible,” she said. “Of course they are trying to buy American grown foods to begin with, but they want to make sure in the case of a legitimate exemption that they are not going to get into trouble in their administrative review process.”