Thursday, January 21, 2016

A bi-partisan agreement on school meals policy

Alan Bjerga and Erik Wasson at Bloomberg yesterday report that a bi-partisan agreement in the Senate Agriculture Committee this week preserves key parts of the First Lady's school nutrition goals, while still allowing all sides to claim victory.
After half-a-decade of trying to dismember Michelle Obama's signature effort to make school lunches healthier, Republicans compromised with Democrats to preserve much of what the first lady wants while loosening rules in ways that benefit major food companies.
Bjerga and Wasson quote me with a favorable opinion on the Senate Agriculture Committee proposal:
"School nutrition policy can't thrive with just part of the country behind it," said Parke Wilde, a nutrition-policy professor at Tufts University in Boston. "Even if some of the compromises were painful, it seems hugely beneficial for the kids involved to have bipartisan legislation moving forward. This still is better off than where we started."
To give some background for this viewpoint, here is a commentary that a Friedman School graduate student, Mary Kennedy, and I contributed to Choices Magazine a few years ago. Characterizing the School Food Authorities that actually serve the meals as businesses, we considered the conditions that would allow these not-for-profit businesses to provide healthier school meals without going broke.
If we think of the school food service as a business, we need to understand the costs and revenues for different food and beverage offerings, and to understand how nutrition quality improvements affect both costs and revenues. Surprisingly, there is promising evidence to suggest that more healthful choices can be provided while costs are kept in check. According to the results of the California-based Linking Education, Activity and Food (LEAF) program, increased costs associated with greater fruit and vegetable purchases, packing, and storage were offset, in large part, by increased meal sales and other measures that increased the efficiency of the food service operation (Woodward-Lopez et al., 2005).
We argue, as do many others, that serving healthy meals through the federal meals program may require policies to address less healthy food from other sources in the school environment.
These limitations on competitors may seem like a strange policy prescription. Who ever heard of an agricultural economist tacitly endorsing limitations on consumer choices? Certainly, the nutritional and economic advantages of such policies must be weighed against the real welfare value of allowing children to express their own food preferences at school, as they do outside of school. The Just and Wansink article in this theme warns against unintentionally increasing the appeal of unhealthy products by banning them outright. Nevertheless, placing some reasonable limits on competitive food is not really economic heresy. For centuries, economists have admired markets as a coordinating tool for economic decisions in communities composed of households, but economists have always acknowledged beneficent non-market decision-making within households. Schools are not marketplaces but educational institutions responsible for the welfare of their charges. If schools are expected to respond to the current epidemic of childhood obesity by improving the school food environment, and taxpayers are reluctant simply to provide more resources, then there is some merit in considering measures to enhance the relative competitive position of healthy meals served through the National School Lunch Program and School Breakfast Program. 
A key part of the politics behind the Senate compromise this week was support from the School Nutrition Association (SNA), which serves in part as a trade association for the School Food Authorities. The SNA had concerns about previous child nutrition reauthorization proposals, but -- when its concerns are addressed -- may yet be a source of political support for policies that preserve improvements in nutrition standards. In the long run, it would undermine the SNA's reputation and political influence if it were considered a more fundamental opponent of policies to improve the nutrition quality of school meals for America's children.

In the Bjerga and Wasson article yesterday, I commented on the tough challenge faced by the local organizations that the SNA represents:
"Simultaneously offering healthy meals that are highly desired by kids, at a low price, while meeting school-nutrition standards is challenging. This is a truce rather than a final peace," he said. "But a truce is still pretty good news."


Anonymous said...

Fascinating thought process in crafting a workaround for excessive costs to source and serve fresh fruits and vegetables in school meals, predicated on a solitary study:

"...increased costs associated with greater fruit and vegetable purchases, packing, and storage were offset, in large part, by increased meal sales and other measures that increased the efficiency of the food service operation "

If the study is to be believed, the critical control point in managing these new school meal menus is increasing meal sales.

That is logical, and an ordinary economist or CEO or Head of Marketing might look for traditional methods of goosing sales: enhancing value by controlling costs and reducing retail price; providing premium ingredients at static retail price; improving flavor, texture, palatability to entice return buyers; improving presentation of the product and/or ease of access...basically make the product, in this case a kid's meal, more attractive at the point of sale and more desirable as a repeat purchase.

Not surprisingly, however, given your bias toward more autocratic approaches to food policy, and given your leanings toward organic and affiliated food system philosophies you cast aside ideas of product enhancement in favor of diminishing competition in the market. This has been the classic approach of organic agriculture and, so, it is no doubt comfortably familiar to you.

In the case of school meals a couple of important questions arise relative to your prescribed approach, that of competition control:

Which competing products or services do you identify as most in need of control, that is, which are most critically impeding your success?

How will winners and losers be chosen now and in the future -- what are the selection criteria and who decides?

When will a competing product be considered sufficiently threatening to trigger action against it?

What strategies are endorsed for minimizing competition? Are select competing products to be banned outright by rule of law? Are select competing products to be taxed or surcharged into subjugation? Are select products merely to be vilified through counter advertising to create fear, thereby damaging their marketing appeal? What is the playbook for de-marketing the competition?

Will de-marketing campaigns be directed against individual products or will they assail entire categories of products? Will individual competing firms be targeted?

Will educational protocols in the classroom be biased to facilitate the de-marketing strategies?

How much squelching of competition will be enough? Are formulas or algorithms in place to curtail further de-marketing when satisfactory results are attained?

What if previously selected losers alter their strategies, adopting a fresh fruits and veggies approach -- will these competitors be welcomed back among the winners?

These are just a few questions that leap to mind. If you could address them, please, that would greatly improve our understanding of your proposal.

Thank you in advance for your kind attention!

usfoodpolicy said...

You're welcome. I always read your comments in detail, and appreciate that you share them in this forum.

You offer more questions than I can answer in full this evening, but here is the dilemma:
-- it would be possible to serve healthy food with great student appeal, at a higher per meal price point;
-- it would be possible to serve healthy food at a low price point, without losing participation in the federal program, if we accept limitations on competitive foods (kids all around the world prefer eating simple inexpensive food to going without food);
-- it is possible to serve food with few nutrition rules, and a low per meal reimbursement, but this status quo motivates school food program to provide nutritionally barren meals in the midst of high rates of childhood overweight and chronic disease.

You are hard on my post as usual -- you *do* keep me humble -- but you don't let yourself get pinned down on where this logic goes astray. Have some courage. Take a position. If you think there should be no nutrition standards, and no limitations on competitive foods, then say so frankly, and let's contemplate the consequences.

Anonymous said...

Posted a response earlier but it seemed to vanish, Here's a quickie stand so maybe you can "pin me down" good, real good.

I suspect your problem may indeed be with competition; not too much competition but too little.

The alternative foods you would prefer to serve students are expensive. To some extent they are expensive by design -- they are fashioned to satisfy conspicuous consumers of premium priced products in restaurants, bodegas, farmers markets, some supermarkets. The school meal program, vast and lucrative as it is, lacks the conspicuous consumption cachet, it does not feature the premium pricing upon which alties have depended. You need to stimulate competition among these alternate suppliers to bring their product prices in line with your school budgets. There is an immense opportunity here for educating and innovating to be done by concerned bureaucrats. Heroic personalities could emerge and be recognized.

Attempting to reduce competition in a low margin market like the school meal program actually defeats your purpose. If your preferred meals are unprofitable, the more meals you sell the more money you lose. If by forcefully eliminating current products and supply chains serving the market you are successful in filling the void with your unprofitable alternatives you have only hastened the bankruptcy (economic and moral) of your Samaritan philosophy. Isn't this where modern bureaucrats increasingly find themselves when tampering with goods & services markets? You risk setting bureaucrats up for more derision as meddling tax and spend boondogglers.