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IMPORTANCE
Both the United States Department of Agriculture and the U.S. Department of Defense have been active in purchasing agricultural commodities. USDA’s Commodity Distribution Program has been a benefit to American agriculture since its inception by successfully stabilizing commodity markets while supplying much-needed food to government-sponsored feeding programs such as the school lunch program. The Commodity Distribution Program is the only program where the Secretary of Agriculture can make volume purchases of commodities to stabilize markets for non-price supported commodities such as pork.
BACKGROUND
The U.S. government has been a long-time purchaser of agricultural commodities, including pork. Annually the U.S. Government purchases 32.41 million pounds of pork valued at $42.37 million by the USDA for various food programs. Commodity distribution to schools was initiated in 1935 under legislation that made funds available in an amount equal to 30 percent of the gross receipts from duties collected on imports during the preceding year. These “Section 32” tariff receipts were used to remove price-depressing surplus agricultural commodities while encouraging domestic consumption of these commodities through donations to schools. In 1946, the National School Lunch Act was passed, permanently authorizing the school lunch program, establishing a basic meal pattern requirement, requiring schools to serve free or reduced-priced breakfasts and lunches to children in need and providing for the continuation of commodity distribution to schools. In the late 1970s, a Commodity Letter of Credit (CLOC) system evolved because some local school districts were dissatisfied with the commodity distribution system as it was run at that time. CLOC allowed schools to buy commodities from any vendor. In recent years, pork producers have been active in working with the school feeding programs. The Pork Producers Volunteer Direct Program with schools began in 1990. Recipes were developed for the school lunch program and nutrition information was provided. Producers also urged local school feeding offices to request pork from USDA’s Agriculture Marketing Services (AMS). AMS and USDA’s Food and Nutrition Service also purchase commodities under specific programs intended to furnish important food products to families in need. These include programs for the elderly, school
Food service, needy mothers and small children, summer feeding programs and Indian reservations. The Commodity Distribution Program has been particularly effective in providing relief to the pork industry during times of natural disaster, such as during the droughts of 1988 and 1989. By purchasing ground and canned pork in large quantities, and frozen hams in somewhat lesser amounts, USDA was able to stabilize prices and to provide increased quantities of highly nutritious products to schools and other outlets. Prices also can be stabilized by donations through international food aid and humanitarian assistance programs. In the past, pork has been used as a form of humanitarian assistance under the Food for Progress Program, which initially was authorized in the 1985 Farm Bill. This program provides opportunities to use U.S. food resources more effectively in support of countries making commitments to introduce or expand free enterprise elements in their agricultural economies.
NPPC POSITION:
NPPC strongly supports USDA’s Commodity Distribution Program and will continue to ensure that pork products meet the needs of various assistance programs. NPPC is opposed to legislative initiatives that would give school districts the option of receiving Commodity Letters of Credit in lieu of commodities purchased by USDA for the school lunch program. NPPC believes it is in the best interest of agricultural producers and recipients of USDA’s domestic commodity programs to retain the traditional commodity purchase programs and that international humanitarian assistance should focus on the use of high-value agricultural products, such as pork, whenever possible.
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