UNITED STATES DEPARTMENT OF AGRICULTURE
Food and Nutrition Service

Statement of Eric M. Bost, Under Secretary
Food, Nutrition, and Consumer Services
Before the House Committee on Education and the Workforce

October 7, 2003

Good afternoon, Mr. Chairman and Members of the Committee. I am Eric M. Bost, Under Secretary for Food, Nutrition and Consumer Services (FNCS) at the U.S. Department of Agriculture (USDA). I appreciate this opportunity to join you once again as you review the Department’s commodity nutrition assistance program and consider how this vital program can be enhanced as it relates to the National School Lunch Program (NSLP). As you know, the Child Nutrition reauthorization process gives the Administration and Congress the opportunity to support local schools, parents, and communities to move toward a nutrition environment that values and fosters the health of our children. 

The Department of Agriculture is very proud of its commodity programs and the role they play in supplementing and supporting our other nutrition assistance programs. USDA commodities are used in school meals in over 98,000 schools nationwide. In Fiscal Year 2003, USDA provided schools with over $705 million in entitlement commodities and $79 million in bonus commodities for their school meals programs. Nationwide, over 28 million lunches are served each day in the National School Lunch Program. Of course, the commodity programs are equally important to American farms and ranches because they provide the Department with a means to stabilize agricultural markets. 

I would like to begin today by saying a few words about the nutritional aspects of our school meal programs. There has been considerable attention paid to the fat, sodium, and sugar content of these meals. I would like to assure the Committee of our continuing and abiding concern in this area. The Department has reviewed and modified the recipes, commodity specifications and other materials that support compliance with the Dietary Guidelines for Americans. 

USDA has worked with schools to more closely align the meals they serve with the Dietary Guidelines. Today, over 80 percent of NSLP schools offer meals that are consistent with good health. We have worked hard to improve the quality, variety, and nutritional content of the commodities we provide to schools and will continue to make improvements in the future. At the same time, we are strongly encouraging schools to offer more nutritious choices to students and we are providing food service workers with the training and technical assistance to help them prepare more nutritious and appealing meals.

As many of you recall, back in the 1990’s, the Department became aware of a growing gap between the way we were delivering our commodity support to schools and the way States, schools and industry could most efficiently and safely produce, deliver, store and serve a quality product. We asked our partners in industry, the State, and local agencies for their suggestions in order to identify how we could close this gap, and we incorporated these recommendations, along with our own, into a report entitled, “Food Distribution 2000,” and used it as a blueprint for change.

Recognizing and Responding to a Challenge

The Food Distribution 2000 Report identified numerous ways in which USDA’s commodity program for schools was overly cumbersome and burdened with red tape. Commodity ordering was handled by seven different regional offices, rather than centrally at USDA’s Food and Nutrition Service headquarters. Orders were submitted on paper, not electronically. 
The Department’s program was significantly out of step with commercial practices. Vendors were required to use USDA labels on commodities, which entailed running separate production lines and no interchangeable products. The Department required States and recipient agencies to maintain separate inventories for USDA products and account for them aside from commercial products. Specifications for USDA commodities often deviated from the specifications commonly used for commercial products. The vendor contracting process—short-term lowest cost contract awards—made USDA the customer of last resort and created inconsistent and unpredictable product quality and service.

Other key issues the report addressed were how USDA agencies could better coordinate their efforts, improve food safety protocols, and promote fresh fruits and vegetables.

I am pleased to report that USDA has addressed each of the issues raised by the Food Distribution 2000 Report, took action, and has now implemented most of the Report’s recommendations, some of which I would like to share with you this afternoon.

Making Commodity Programs More Responsive to Customer Needs

To make our commodity programs more responsive to our customers, USDA has implemented an Internet-based commodity ordering system called the Electronic Commodity Ordering System (ECOS). This new system provides greater access, speed and transparency to the food distribution process at the Federal, State, and recipient agency levels. States can now place, cancel, or modify food orders online that previously were handled by paper transactions. We plan to roll the system out to schools, at the State’s option, beginning next year.

Aligning Commodity Programs with Commercial Practices

To bring our commodity programs more in line with commercial practices, USDA now:

• Allows vendors to use commercial labels on USDA commodities in lieu of USDA labels;

• Permits recipient agencies to maintain single inventory records, instead of requiring separate accounting for USDA commodities and commercial products; and

• Reviews all USDA commodity specifications, and improves/modifies them when feasible, to better align them with commercial specifications.

We have revised regulations to allow for full substitution of all commodities, with the exception of beef and pork, and with limited substitution for poultry products. Substitution allows processors more flexibility in scheduling production. Through the use of the Standard Yield Program, schools can now obtain seamless distribution of commodities and commercial purchases. 

We have also initiated long-term contracts for certain commodities, including cheese, some fruits, frozen chicken and turkey products. This procurement method brings consistency and predictability to the commodity program. “Best value”, as opposed to “lowest cost” contracts are also being tested to focus on overall product quality and service.

Improving Food Safety Protocols 

To ensure that the commodities we offer to schools are safe as well as nutritious, all meat and poultry product specifications are reviewed and/or amended in consultation with the Department’s Food Safety Inspection Service (FSIS).
Ground beef suppliers must operate under new process control protocols similar to those required by large volume commercial buyers of ground beef. 

USDA has also established and implemented written procedures and time frames to address commodity holds and/or recalls resulting from safety concerns. This initiative reduces the hold time on commodities, removes product quickly from schools and other outlets, and expedites product replacement/reimbursement. As with other Food Distribution 2000 initiatives, this was a joint effort by FNS, the Agricultural Marketing Service (AMS), the Farm Service Agency (FSA), and FSIS.

Promoting Fresh Fruit and Vegetables

As many of us here today recall from our own school days, the National School Lunch Program of the 1950’s and 60’s served canned fruits and vegetables almost exclusively, and in keeping with the tastes and nutrition knowledge of the times, they were often flavored with plenty of salt and heavy syrup. Since those days, and in keeping with our Dietary Guidelines, we have established much more healthful standards for canned fruits and vegetables offered in our nutrition programs. The sodium specifications for the vegetables we offer to schools are the minimum amount possible that still assures palatability of the products. Canned fruit is packed only in natural juice or light syrup. 

Recently, the Department has embarked on a major effort to increase and encourage the purchase and consumption of fresh fruits and vegetables for the school lunch program.

USDA has successfully teamed up with the Department of Defense (DoD) Supply Center of Philadelphia to deliver high quality fresh produce to school children and Indian tribes. Under this program, participating schools nationwide order fresh produce directly from DoD prime vendors. In FY 2003, USDA purchased $50 million worth of fresh produce for schools and the program has proven to be very popular in the 41 States that took part in it last year.

Improving USDA Inter-Agency Coordination

Food Distribution 2000 has been a collective and unprecedented effort of four USDA agencies. Together, FNS, AMS, FSA, and FSIS have forged a partnership to eliminate inter-agency barriers and work together to bring about major structural changes to the commodity programs our Department administers. The success of these commodity improvement initiatives is due to the commitment, support, and considerable effort put forth by each agency at every level.
I am proud to announce today that one of our inter-agency partnering goals has resulted in the creation of a one-stop USDA Commodity Food Network (CFN) website. This website—which goes “live” this afternoon—allows our customers to go to a single portal for all USDA Commodity Program needs. It is an e-government resource designed to provide a wealth of information about the purchase and distribution of USDA commodities. This portal combines the resources and information from all four agencies, and other partners in the commodity distribution network, into “one-stop shopping” for our customers. It is no longer necessary to understand the role of an individual USDA agency in order to obtain commodity information.

The website enables schools, community feeding sites, State agencies, Native American Tribal Organizations and others to have instant access to information about USDA’s commodities and distribution programs. CFN also provides direct links to other commodity distribution partner websites, such as the American Commodity Distribution Association and the American School Food Service Association.

Conclusion

Mr. Chairman, USDA would be pleased to work with you and this Committee as we embark on reauthorizing the Child Nutrition programs to ensure the continued improvement and success of our nutrition programs for the nation’s children and the continued success of our commodity programs. 

Mr. Chairman, this concludes my testimony. I would be happy to answer any questions.

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