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1220 1221 1222 1223 1224 1225 1226 1227 1228 1229 1230 1231 1232 1233 1234 1235 1236 1237 1238 1239 1240 1241 1242 1243 1244 1245 1246 1247 1248 1249 1250 1251 1252 1253 1254 1255 1256 1257 1258 1259 1260 1261 1262 1263 1264 1265 1266 1267 1268 1269 1270 1271 1272 1273 1274 1275 1276 1277 1278 1279 1280 1281 1282 1283 1284 1285 1286 1287 1288 1289 1290 1291 1292 1293 1294 1295 1296 1297 1298 1299 1300 1301 1302 1303 1304 1305 1306 1307 1308 1309 1310 1311 1312 1313 1314 1315 1316 1317 1318 1319 1320 1321 1322 1323 1324 1325 1326 1327 1328 1329 1330 1331 1332 1333 1334 1335 1336 1337 1338 1339 1340 1341 1342 1343 1344 1345 1346 1347 1348 1349 1350 1351 1352 1353 1354 1355 1356 1357 | IMPROVING THE QUALITY AND EFFICIENCY OF COMMODITY DISTRIBUTION TO FEDERAL CHILD NUTRITION PROGRAMS HEARING BEFORE THE COMMITTEE ON EDUCATION AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS FIRST SESSION October 7, 2003 Serial No. 108-36 Printed for the use of the Committee on Education and the Workforce ( Available via the World Wide Web: http://www.access.gpo.gov/congress/house or Committee address: http://edworkforce.house.gov 90-141 PDF WASHINGTON : 2004 U.S. GOVERNMENT PRINTING OFFICE For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 H:\DOCS\90141.SF EDUWK PsN: NNIXON COMMITTEE ON EDUCATION AND THE WORKFORCE JOHN A. BOEHNER, Ohio, Chairman Thomas E. Petri, Wisconsin, Vice Chairman Cass Ballenger, North Carolina Peter Hoekstra, Michigan Howard P. ‘‘Buck’’ McKeon, California Michael N. Castle, Delaware Sam Johnson, Texas James C. Greenwood, Pennsylvania Charlie Norwood, Georgia Fred Upton, Michigan Vernon J. Ehlers, Michigan Jim DeMint, South Carolina Johnny Isakson, Georgia Judy Biggert, Illinois Todd Russell Platts, Pennsylvania Patrick J. Tiberi, Ohio Ric Keller, Florida Tom Osborne, Nebraska Joe Wilson, South Carolina Tom Cole, Oklahoma Jon C. Porter, Nevada John Kline, Minnesota John R. Carter, Texas Marilyn N. Musgrave, Colorado Marsha Blackburn, Tennessee Phil Gingrey, Georgia Max Burns, Georgia George Miller, California Dale E. Kildee, Michigan Major R. Owens, New York Donald M. Payne, New Jersey Robert E. Andrews, New Jersey Lynn C. Woolsey, California Rube´n Hinojosa, Texas Carolyn McCarthy, New York John F. Tierney, Massachusetts Ron Kind, Wisconsin Dennis J. Kucinich, Ohio David Wu, Oregon Rush D. Holt, New Jersey Susan A. Davis, California Betty McCollum, Minnesota Danny K. Davis, Illinois Ed Case, Hawaii Rau´ l M. Grijalva, Arizona Denise L. Majette, Georgia Chris Van Hollen, Maryland Tim Ryan, Ohio Timothy H. Bishop, New York Paula Nowakowski, Staff Director John Lawrence, Minority Staff Director (II) VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 H:\DOCS\90141.SF EDUWK PsN: NNIXON C O N T E N T S Hearing held on October 7, 2003 ............................................................................ Statement of Members: Boehner, Hon. John A., a Representative in Congress from the State of Ohio ............................................................................................................ Prepared statement of ............................................................................... Hastings, Hon. Doc, a Representative in Congress from the State of Washington, prepared statement of ............................................................ Kildee, Hon. Dale E., a Representative in Congress from the State of Michigan ........................................................................................................ Miller, Hon. George, a Representative in Congress from the State of California, prepared statement of ................................................................ Statement of Witnesses: Bost, Hon. Eric M., Under Secretary for Food, Nutrition, and Consumer Services, U.S. Department of Agriculture ................................................... Prepared statement of ............................................................................... Response to questions submitted for the record ..................................... Cockwell, Paula, Manager of Nutrition Services, Adams County School District #14, and Food Service Director, Mapleton Public School Dis- trict ................................................................................................................. Prepared statement of ............................................................................... Heaney, Dr. Robert P., John A. Creighton University Professor, Professor of Medicine, Creighton University ............................................................... Prepared statement of ............................................................................... Joslin, Robinson W., President, Ohio Soybean Association .......................... Prepared statement of ............................................................................... Slavin, Dr. Joanne L., Professor of Nutrition, University of Minnesota ...... Prepared statement of ............................................................................... Stenzel, Thomas E., President and CEO, United Fresh Fruit and Vege- table Association ........................................................................................... Prepared statement of ............................................................................... Yates, A.J., Administrator, Agricultural Marketing Service, U.S. Depart- ment of Agriculture ....................................................................................... Prepared statement of ............................................................................... Additional materials supplied: American Commodity Distribution Association, Statement submitted for the record ....................................................................................................... Barnard, Dr. Neal D., President, Physicians Committee for Responsible Medicine, Statement submitted for the record ........................................... Additional statement submitted for the record ....................................... Foster, Nancy E., President and CEO, U.S. Apple Association, Statement submitted for the record ............................................................................... The Humane Society of the Unted States, Statement submitted for the record ............................................................................................................. Keith, Dr. Jeanette Newton, Assistant Professor of Medicine, Attending Physician, Nutrition Support Service, The University of Chicago Hos- pitals, Section Gastroenterology/Clinical Nutrition, Statement sub- mitted for the record ..................................................................................... Savaiano, Dr. Dennis A., Professor of Foods & Nutrition, Dean of Con- sumer and Family Sciences, Purdue University ........................................ Wittrock, Donna, President, American School Food Service Association .... Page 1 1 3 69 4 68 6 8 69 35 37 56 59 51 53 46 48 39 41 11 13 71 73 75 76 78 79 81 82 (III) VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 H:\DOCS\90141.SF EDUWK PsN: NNIXON VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 H:\DOCS\90141.SF EDUWK PsN: NNIXON IMPROVING THE QUALITY AND EFFICIENCY TO OF FEDERAL CHILD NUTRITION PROGRAMS DISTRIBUTION COMMODITY Tuesday, October 7, 2003 U.S. House of Representatives Committee on Education and the Workforce Washington, DC The Committee met, pursuant to call, at 2 p.m., in room 2175, Rayburn House Office Building, Hon. John A. Boehner (Chairman of the Committee) presiding. Present: Representatives Boehner, Petri, McKeon, Norwood, Biggert, Tiberi, Keller, Osborne, Wilson, Kline, Carter, Kildee, Payne, Holt, McCollum, Grijalva, and Majette. Staff Present: Julian Baer, Legislative Assistant; Kevin Frank, Professional Staff Member; Parker Hamilton, Communications Co- ordinator; Kate Houston, Professional Staff Member; Sally Lovejoy, Director of Education and Human Resources Policy; Stephanie Milburn, Professional Staff Member; Deborah L. Samantar, Com- mittee Clerk/Intern Coordinator; Denise Forte, Minority Legislative Associate/Education; Alex Nock, Minority Legislative Associate/ Education; Joe Novotny, Minority Legislative Assistant/Education; and Lynda Theil, Minority Legislative Associate/Education. Chairman BOEHNER. A quorum being present, the Committee on Education and the Workforce will come to order. We are meeting today to hear testimony on Improving the Qual- ity and Efficiency of Commodity Distribution to the Federal Child Nutrition Programs. Under Committee rules, opening statements are limited to the Chairman and Ranking Minority Member of the Committee. There- fore, if other members have statements, they may be included in the hearing record. And with that, I ask unanimous consent for the hearing record to remain open for 14 days to allow members’ state- ments and other extraneous material referenced during today’s hearing to be submitted in the official hearing record. Without ob- jection, so ordered. STATEMENT OF HON. JOHN BOEHNER, CHAIRMAN, COMMITTEE ON EDUCATION AND THE WORKFORCE Good afternoon. Let me thank all of you for coming today, espe- cially those of you who will serve on your panels today. This is an important hearing on Improving the Quality and Efficiency of the (1) VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\DOCS\90141.SF EDUWK PsN: NNIXON 2 Commodity Distribution Program to the Federal Child Nutrition Programs. These programs are central to providing the Nation’s needy children with access to safe, affordable, and nutritious food. This marks the first Full Committee hearing to help prepare members of this Committee for the upcoming reauthorization of the Child Nutrition Act and the Richard B. Russell National School Lunch Act. There is general agreement on the importance of good nutrition for everyone, especially growing children. And while par- ents obviously bear the first responsibility for ensuring their chil- dren eat well and exercise regularly, programs authorized under the Child Nutrition Act and the National School Lunch Act play a positive role as well, helping to provide disadvantaged children with access to nutritious meals and snacks. Programs such as the National School Lunch and Breakfast Pro- grams, WIC, the Summer Food Service Program, and the Child and Adult Care Food Program are helping many of these children achieve full physical development and success in school. The Fed- eral child nutrition programs were conceived to offer wholesome meals and snacks to children in need and to support the health of lower-income pregnant women, breastfeeding mothers, and their young children. These programs represent a huge national investment totaling more than $12 billion per year. And while these programs have been generally heralded as successful, this Committee is seeking new ways to improve access to safe, healthy, and affordable meals and to better serve all program participants. Today’s hearing will focus on a critical component of many Feder- ally funded child nutrition programs: commodity distribution. The U.S. Department of Agriculture provides commodity support for the School Lunch Program, the Child and Adult Care Food Program, and the Summer Food Service Program as well. Last year, the United States Department of Agriculture provided commodities to these programs valued at more than $700 million. The Department of Agriculture has two major objectives in its mis- sion to provide food products to schools. One objective is to pur- chase products as part of the Department’s price support and sur- plus removal program. The second is to provide schools with high- quality nutritious foods so that children have access to meals that are both healthful and appealing. Now, these objectives are frequently at odds, which poses an on- going challenge for the Department. And because the Department is charged with stabilizing agricultural markets and children’s pref- erences, food quality and nutrition must frequently compete with economic factors when the Department decides which commodities to purchase and supply. In 1999 the USDA undertook a broad evaluation of its com- modity procurement and distribution systems to improve food dis- tribution to schools and other beneficiaries. The Department’s ulti- mate goal was to better serve producers and consumers by improv- ing both the efficiency of the distribution process and the quality of the foods delivered. USDA convened a blue ribbon panel, Food Distribution 2000, which included representatives from industry, schools, and State commodity distribution agencies as well. The result was a report VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 H:\DOCS\90141.SF EDUWK PsN: NNIXON 3 that made many valuable recommendations for improving USDA’s food distribution systems. Since that time the Department has cre- ated a number of pilot programs and other initiatives to improve upon the current system. However, additional efforts are needed and several recommendations have yet to be implemented. Last month I sent a letter to Agriculture Secretary Ann Veneman requesting information about the Department’s efforts to implement the recommendations of the Food Distribution 2000 panel. I look forward to working with the Secretary, Under Sec- retary for Food and Nutrition, Eric Bost, Ag Marketing Services Administrator, A. J. Yates, and our partners in the food industry and school food service providers to continue the good work that has been started to make meaningful reforms in the commodity distribution system. Today we will hear from experts who will help us shed light on the commodity distribution to child nutrition programs, what works well, what needs improvement. Several of today’s witnesses will tell us about progress made by the Department to act upon the rec- ommendations of the Food Distribution 2000 report and how Con- gress can help. I am certain all of our witnesses today will offer unique perspec- tives on child nutrition and program operations that will be helpful to the Members of this Committee as we work to improve these programs, and we look forward to all of your comments. Now, I would yield to our Ranking Member today, my good friend from the State of Michigan, Mr. Kildee. [The prepared statement of Chairman Boehner follows:] Statement of the Honorable John A. Boehner, Chairman, Committee on Education and the Workforce Good Afternoon. Thank you for joining us today for this important hearing on im- proving the quality and efficiency of commodity distribution to federal child nutri- tion programs. These programs are central to providing the nation’s needy children with access to safe, affordable, and nutritious food. This marks the first Full Com- mittee hearing to help prepare Members of this Committee for the upcoming reau- thorization of the Child Nutrition Act and the Richard B. Russell National School Lunch Act. There is general agreement on the importance of good nutrition for everyone, es- pecially growing children. While parents obviously bear first responsibility for en- suring their children eat well and exercise regularly, programs authorized under the Child Nutrition Act and National School Lunch Act play a positive role as well, helping to provide disadvantaged children access to nutritious meals and snacks. Programs such as the National School Lunch and Breakfast Programs, WIC, the Summer Food Service Program, and the Child and Adult Care Food Program are helping many of these children achieve full physical development and success in school. The federal child nutrition programs were conceived to offer wholesome meals and snacks to children in need, and to support the health of lower-income pregnant women, breastfeeding mothers, and their young children. These programs represent a huge national investment totaling more than $15 billion per year. While these pro- grams have been generally heralded as successful, this Committee is seeking new ways to improve access to safe, healthy, and affordable meals and to better serve all program participants. Today’s hearing will focus on a critical component of many federally-funded child nutrition programs—commodity distribution. The U.S. Department of Agriculture provides commodity support for the National School Lunch, the Child and Adult Care Food, and the Summer Food Service program. Last year, the United States De- partment of Agriculture provided commodities to these programs valued at more than $700 million. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6621 H:\DOCS\90141.SF EDUWK PsN: NNIXON 4 The Department of Agriculture has two major objectives in its mission to provide food products to schools. One objective is to purchase products as part of the Depart- ment’s price-support and surplus-removal programs. The second is to provide schools with high quality, nutritious foods so that children have access to meals that are both healthful and appealing. These objectives are frequently at odds, which poses an ongoing challenge for the Department. Because the Department is charged with stabilizing agriculture markets, children’s preferences, food quality and nutri- tion must frequently compete with economic factors when the Department decides which commodities to purchase and supply. In 1999, USDA undertook a broad evaluation of its commodity procurement and distribution systems to improve food distribution to schools and other beneficiaries. The Department’s ultimate goal was to better serve producers and consumers by im- proving both the efficiency of the distribution process and the quality of foods deliv- ered. USDA convened a blue ribbon panel, Food Distribution 2000, which included representatives from industry, schools, and State commodity distribution agencies. The result was a report that made many valuable recommendations for improving USDA’s food distribution system. Since that time, the Department has created a number of pilot programs and other initiatives to improve upon the current system. However, additional efforts are needed and several recommendations have yet to be implemented. Last month, I sent a letter to Agriculture Secretary Ann Veneman requesting information about the Department’s efforts to implement the recommendations of the Food Distribu- tion 2000 panel. I look forward to working with Secretary Veneman, Under Sec- retary for Food and Nutrition, Eric Bost, Agriculture Marketing Service Adminis- trator, A.J. Yates, our partners in the food industry, and school food service pro- viders to continue the good work that has been started in making meaningful re- forms to the commodity distribution system. Today, we will hear from experts who will help shed light on commodity distribu- tion to child nutrition programs—what works well and what needs improvement. Several of today’s witnesses will tell us about progress made by the Department to act upon the recommendations of the Food Distribution 2000 report and how Con- gress can help. I am certain all of today’s witnesses will offer unique perspectives on child nutrition and program operations that will be tremendously helpful to the Members of this Committee as we work to improve these programs. We look forward to their comments. With that, I would like to recognize the Committee’s distinguished Ranking Mem- ber, Mr. Miller. STATEMENT OF HON. DALE KILDEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN Mr. KILDEE. Thank you, Mr. Chairman. Thank you very much for having this very important hearing. I have been involved with child nutrition since about 1954, when I became a teacher. I see people are there in the background that I have known since I have been here in Congress, 27 years. It is certainly a very, very impor- tant program. Some people forget that the program really began after World War II when it was discovered that many people entering the mili- tary in the draft at that time were physically unable to enter the military because of poor nutrition. Of course, many of them had grown up during the 1930’s, when we had the Great Depression. So it really became apparent to the Federal Government, Franklin Roosevelt, and before him, Harry Truman, that nutrition was very, very important for the long-term health of young people and for the long-term health of this Nation. I have been through every permutation that this program has gone under, cash in lieu of commodities, everything, every per- mutation of that. But generally speaking, the Federal Government has kept its commitment. There are times when we had some prob- lems with trying to call ketchup a vegetable and things like that, which we do muse about from time to time. But generally, all of VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 5 the Administrations have been aware of the fact that this is a very, very important program. One of the programs I visited recently in my district—Congress established a vegetable pilot program in four different States and one Indian reservation. That was very important. One of the States happened to be Ohio, the other was Michigan. I am not sure how we got in there. But I visited the program in Linden, Michigan and was very, very much impressed. I know we always have to go through changes and new ideas. But this program is really one of the great programs, and I would hope that that pilot program would be expanded and that the De- partment look at that. When Secretary Veneman announced the award of that $6 million, and that Michigan was one of those, I was determined to go out and visit the programs. You have done a very, very good job in that program and I commend you for it. When I taught school, we had no such thing as a formal break- fast program for students. As a matter of fact, there was a great deal of controversy when the breakfast programs started, the idea that that might weaken the family. But the breakfast program has been very, very important. Having taught school, I could recognize the students who arrived at school not having had breakfast and how that did affect their learning. I started the first breakfast program for one student, at— you have heard me tell that story many times—at Flint Central High School. I had noted that every day in my homeroom, some- one’s lunch was being stolen. Very often students packed their lunch and brought it to school. It was being stolen. And I was raised in a family where stealing was a very, very—. Chairman BOEHNER. Mr. Kildee, nobody attempted to ever steal my lunch. eye on it. Mr. KILDEE. Very good. Well, you probably kept a very watchful Chairman BOEHNER. I would have gladly given it to them. Mr. KILDEE. It was the quality then, right? But I finally caught the young man who was stealing the lunch. And stealing was not only considered a very serious crime in my family, but a sin. So I was going to turn him into the principal who would have suspended him for several weeks. But I found out that his mother was in no position to get him a breakfast in the morn- ing. And whenever he got to school, his first task was to find some- thing to eat. But then he said to me, he said, Mr. Kildee, I never steal the same lunch from the same person in the same week. And I figured, this kid has ethics. So I took him down to the cafeteria where we had no breakfast program, and said to Mrs. Pelkey, who was in charge of the cafeteria, ‘‘Mrs. Pelkey, Robert will be coming down here every morning for breakfast, and you get him something for breakfast and then send me a bill.’’ Well, he got breakfast for 3 years, and I never got a bill. But since then, of course, we have es- tablished breakfast programs in many schools. So I look forward to your hearing today. You are involved in something so important. Nutrition is so important. And the Federal Government has a great responsibility in this area. I look forward to your testimony. Thank you, Mr. Chairman. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 6 Chairman BOEHNER. Thank you, Mr. Kildee. I want to introduce our first panel of witnesses today. Our first witness will be the Honorable Eric M. Bost, who is the Department of Agriculture’s Under Secretary for Food, Nutrition, and Consumer Services. As Under Secretary, he is responsible for the administra- tion of the Department’s 15 nutrition assistance programs, includ- ing the Food Stamp Program, the National School Lunch Program, the School Breakfast Programs, and WIC. Before his appointment, Mr. Bost served as Commissioner and Chief Executive Officer of the Texas Department of Human Services. Our next witness will be Mr. A. J. Yates, who is the current ad- ministrator of USDA’s Agriculture Marketing Service. Mr. Yates oversees more than 50 programs designed to maintain a stable marketing environment for the benefit of America’s farmers, ranch- ers and consumers. Prior to his appointment, he served as both the Deputy Secretary and the Under Secretary for the California De- partment of Food and Agriculture. He has been actively involved in providing leadership to a variety of organizations supporting ag- riculture and education. For those of you that may not be aware, in addition to chairing this Committee, I am also the Vice Chairman of the House Com- mittee on Agriculture. So I am glad to have both of these gentle- men here. Mr. Bost, with that you may begin your testimony. STATEMENT OF ERIC M. BOST, UNDER SECRETARY, FOOD, NU- TRITION, AND CONSUMER SERVICES, U.S. DEPARTMENT OF AGRICULTURE Mr. BOST. Good afternoon, and thank you so very much, Mr. Chairman and members of the Committee. I am Eric Bost, the Under Secretary for Food, Nutrition, and Consumer Services at the United States Department of Agriculture. I appreciate this oppor- tunity to 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. 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 an environment that values and fosters the health of our children. The commodities are used in school meals in over 98,000 schools nationwide. Over 28 million lunches are served each day in the National School Lunch Program. In fiscal year 2003, USDA provided schools with over 705 million in entitlement commodities and $75 million in bonus commodities for their school meal programs. Of course, the commodity programs are equally important to American farms and ranchers because they provide the Depart- ment with a means to stabilize agricultural markets. There has been considerable attention paid to the fat, sodium, and sugar content of school meals. I would like to ensure the Com- mittee of our continuing and abiding concern in this area and share a few of the things that we have done to address this. The Department has, one, reviewed and modified recipes, com- modity specifications, and other materials that support compliance with the dietary guidelines. We have also worked with schools to VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 7 more closely align the meals they serve with the dietary guidelines. We are working hard to improve the quality, variety, and nutri- tional content of commodities we provide the schools, including of- fering reduced-fat meat and cheese products, reducing the salt con- tent of canned vegetables, and reducing the sugar added to canned fruit. We have also strongly encouraged schools to offer more nutri- tious choices to students and provide food service workers with the training and technical assistance to help them prepare more nutri- tious and appealing meals. Today, over 80 percent of these Na- tional School Lunch Program schools, we believe, offer meals that are consistent with good health. We have also asked our partners in industry and State and local agencies for their suggestions in order to identify how we can im- prove the delivery of the commodity programs to States and schools. Earlier the Chairman made reference to the Food Distribu- tion 2000 report that we use as a blueprint for change. There are a couple of things I would like to say about what we have done to address many of the recommendations, we believe, all of the recommendations that were noted in that report. We have implemented an Internet-based, commodity-based ordering system called the electronic commodity ordering system. This new system provides greater access and speed in food distribution processes at the Federal, State and recipient agency levels. States can now place, cancel, or modify food orders online that previously were handled through paper transactions. We plan to roll the system out in schools, at the State’s option, beginning next year. We have also done some things to align the commodity programs with commercial practices. To bring our commodity programs more in line with commercial practices, we have now allowed vendors to use commercial labels on USDA commodities in lieu of USDA la- bels; permitted recipient agencies to maintain single inventory records, instead of requiring separate accounting for USDA com- modities and commercial products; and reviewed all USDA com- modity specifications and improving or modifying them when fea- sible, to better align them with commercial specifications. In addition to that, we have also revised regulations that allow for full substitution of all commodities with the exception of beef and pork, and with limited substitution for poultry products, which allows processors more flexibility in scheduling their production. In addition to that, we have also initiated a long-term contract for certain commodities, including cheese, some fruits, frozen chick- en and turkey products, bringing 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. There is also a concern to ensure that the food that we serve as a part of this program is also safe. So we have worked very closely with the De- partment’s Food Safety and Inspection Service to ensure that that occurs. We have established and implemented written procedures and timeframes to address commodity holds and/or recalls resulting from safety concerns. This initiative reduces the hold time on com- modities, removes products quickly from schools and other outlets, and expedites product replacement and/or reimbursements. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 8 As with other Distribution 2000 initiatives, this was a joint effort by us, the Food and Nutrition Service, the Agricultural Marketing Service, the Farm Service Agency, and the Food Safety Inspection Service. In keeping with the dietary guidelines, we have estab- lished helpful standards for canned fruit and vegetables offered in our nutrition programs. We have also worked to ensure that we in- crease and encourage the purchase and consumption of fresh fruits and vegetables for our School Lunch Program. We have successfully teamed with the Department of Defense Supply Center of Philadelphia to deliver high-quality fresh produce to school children and Indian tribes. Under this program, partici- pating schools nationwide order fresh produce directly from DOD prime vendors. In fiscal year 2003, USDA purchased $50 million worth of fresh fruit produce for schools, and the program has prov- en to be very popular and is currently in about 41 States. With Food Distribution 2000, we have worked cooperatively, as I noted, with all four of the agencies, and I am very pleased to an- nounce that today, later on this afternoon, we will go live with a USDA commodity food network Web site, which allows 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 infor- mation about the purchase and distribution of USDA’s commod- ities. This portal combines the resources and information from all four agencies and other partners in the commodity distribution net- work into a one-stop shopping for our customers. It is no longer necessary to understand the roles of each of the agencies individ- ually, but you are able to go to one place and receive information about how the commodity program works. In 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. Of course, I am happy to answer any questions that you or the Committee Mem- bers may have. Chairman BOEHNER. Mr. Bost, thank you for your testimony. [The prepared statement of Mr. Bost follows:] Statement of Eric M. Bost, Under Secretary of Food, Nutrition, and Con- sumer Services, U.S. Department of Agriculture, Food and Nutrition Serv- ice 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 val- ues 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 pro- grams. USDA commodities are used in school meals in over 98,000 schools nation- wide. In Fiscal Year 2003, USDA provided schools with over $705 million in entitle- ment commodities and $79 million in bonus commodities for their school meals pro- grams. Nationwide, over 28 million lunches are served each day in the National School Lunch Program. Of course, the commodity programs are equally important VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6621 H:\DOCS\90141.SF EDUWK PsN: NNIXON 9 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 serv- ice 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 sub- mitted on paper, not electronically. The Department’s program was significantly out of step with commercial prac- tices. Vendors were required to use USDA labels on commodities, which entailed running separate production lines and no interchangeable products. The Depart- ment 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 con- tract 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 co- ordinate 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 after- noon. 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: labels; • Allows vendors to use commercial labels on USDA commodities in lieu of USDA • Permits recipient agencies to maintain single inventory records, instead of re- quiring 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 VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 H:\DOCS\90141.SF EDUWK PsN: NNIXON 10 the use of the Standard Yield Program, schools can now obtain seamless distribu- tion 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 op- posed 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 con- sultation 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 ini- tiative 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 encour- age 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 fiscal year 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 dis- tribution 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 Com- modity 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. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 H:\DOCS\90141.SF EDUWK PsN: NNIXON 11 Mr. Chairman, this concludes my testimony. I would be happy to answer any questions. Chairman BOEHNER. Mr. Yates, you may begin. STATEMENT OF A. J. YATES, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE, U.S. DEPARTMENT OF AGRICULTURE Mr. YATES. Mr. Chairman, members of the Committee, thank you for the invitation to appear before you today to discuss the role of the Agricultural Marketing Service, AMS, in the National School Lunch Program. I am A. J. Yates, Administrator of AMS, and I am pleased to be here with Under Secretary Bost. While USDA’s Food and Nutrition Service administers the National School Lunch Program, AMS is responsible for purchasing many of the commodities for this and other domestic food assistance programs. We support the National School Lunch Program, providing nutritious, high-quality food to school children through our purchases of red meat, fish, poultry, eggs, fruit and vegetable products. USDA’s Farm Service Agency purchases flours, grains, peanut products, dairy products, oils and shortening. All of these purchases help to stabilize the agricultural market by balancing supply and demand, thus helping domestic farmers and ranchers. Let me briefly describe the purchase process and AMS’s role in it. The process begins long before AMS announces that it plans to purchase particular food items. AMS specialists knowledgeable in food processing work with potential vendors, Food Nutrition Serv- ice, and food safety officers in developing specifications for each item that will be purchased. Many of these items are similar to the popular commercial items. Other items are developed specifically to meet the special nutri- tional needs of our recipients. The specification provides details on product formulation, manufacturing, packaging, sampling and test- ing requirements and quality assurance provisions. By coordinating the development of specifications with specialists from all aspects of food processing, AMS ensures the purchase of high-quality, wholesome, appealing products that meet recipients’ needs and Federal standards for nutrition. Prior to conducting any purchase, AMS economists assess market conditions and determine the availability for commodities the agen- cy is considering buying. During this time, AMS also works closely with Food Nutrition Service to determine recipient preferences. Or- ders are taken by FNS and provided to AMS so that purchases can be made. Although weekly meal patterns must meet Federal standards, local school authorities make the decisions about what specific foods to serve and how they are prepared. Moreover, USDA’s com- modities comprise less than 20 percent of the food products put on school childrens’ plates. AMS and FSA are responsible for issuing and accepting bids and awarding and administering contracts. FNS is responsible for taking commodity orders from States, monitoring purchases and entitlements throughout the year, and the overall administration of the commodity nutrition programs. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 12 Actual purchasing begins with AMS and Farm Service Agency notifying specific industries, through press releases and other means, of their intent to purchase particular food products. These agencies invite bids under a formal advertised competitive bid pro- gram. These invitations give specific details on when bids are due for a particular purchase. All products must be US-produced and of domestic origin. Under Federal acquisition regulations, vendors must be deemed responsible prior to participating in the program. For instance, they must have a satisfactory performance record and adequate financial resources to demonstrate their ability to produce and deliver the product within designated timeframes. It is essential that USDA-purchased food products arrive on time, as recipients depend on it. Bids are received from responsible vendors, analyzed, and contracts are awarded by AMS or Farm Service Agency. Contracts are then administered by the agencies to make sure that the terms and conditions are followed. All products purchased by USDA are produced in compliance with applicable food safety—Federal food safety laws and regula- tions. Red meat, poultry, and egg products must be processed under USDA’s Food Safety and Inspection Service regulations. And all fruit, vegetable and fish products are subject to Food and Drug Administration regulations. FSIS and FDA ensure that such products are wholesome and that processing plants operate under sanitary conditions. In addi- tion to FSIS inspection, AMS inspectors are present during produc- tion and shipping of all red meat and poultry items to ensure com- pliance with all specification requirements, including those for raw material processing, packaging, and testing. Plants supplying processed fruit and vegetable products undergo a survey by AMS inspectors to ensure compliance with FDA re- quirements, including that agency’s good manufacturing practices. Additionally, fish products are produced in facilities operating under the National Marine Fisheries Service voluntary seafood in- spection program. For certain types of products, such as ground beef, egg products and fruit juices, additional product handling and testing protocols are required. AMS also works with FSIS to distribute educational materials for food service professionals about proper handling and cooking techniques. These materials are available both in Spanish and English, and are designed to assist food service professionals in every school participating in the National School Lunch Program. As you know, in 1998, USDA policy officials met with representa- tives of the American School Food Service Association and the American Commodity Distribution Association, with the aim of im- proving the commodity procurement and distribution process. AMS played a key role in developing and implementing the initiatives contained in the ‘‘Food Distribution 2000—USDA’s Reinvention Plan for Change’’ report. Some of the key initiatives contained in this report that AMS has implemented include the expanded use of long-term contracts with proven suppliers; expanded use of best-value contracting; revised product specifications to align them with commercially available products; purchase of commercially labeled products; use of com- mercial and commodity products interchangeably by further proc- VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 13 essors in the manufacture of fruit and vegetables products, and, on a more limited basis, poultry products; implemented formal com- modity product hold and recall procedures for use by State and local authorities; and relaxed truckload delivery requirements al- lowing multiple stops within a State or city. Mr. Chairman, AMS is proud of the role it plays in providing food products to this Nation’s school children. We are proud of the relationship we have built with other Federal agencies, State agen- cies, and the school food community to carry out this most impor- tant responsibility. We look forward to working with you in any way that we can as the Child Nutrition Act and Richard B. Russell National School Lunch Act reauthorization process continues. This concludes my statement, Mr. Chairman, and I would be pleased to respond to any questions that you may have. Chairman BOEHNER. Mr. Yates, thank you for your testimony. [The prepared statement of Mr. Yates follows:] Statement of A. J. Yates, Administrator, Agricultural Marketing Service, U.S. Department of Agriculture Mr. Chairman and Members of the Committee, thank you for the invitation to ap- pear before you today to discuss the role of the Agricultural Marketing Service (AMS) in the National School Lunch Program. I am A. J. Yates, Administrator of AMS, and I am pleased to be here with Under Secretary Bost. In 1946, Congress passed the National School Lunch Act, providing a healthy lunch to millions of schoolchildren. Over 55 years later, the program continues to help improve the health of children, especially those at nutritional risk. While USDA’s Food and Nutrition Service (FNS) administers the National School Lunch Program (NSLP), AMS is responsible for purchasing many of the commod- ities for this and other domestic food assistance programs. We support the NSLP by providing nutritious, high quality food to schoolchildren through our purchases of red meat, fish, poultry, egg, fruit, and vegetable products. USDA’s Farm Services Agency (FSA) purchases flours, grains, peanut products, dairy products, oils, and shortenings. All of these purchases help to stabilize prices in agricultural markets by balancing supply and demand, thus helping domestic farmers and ranchers. Let me briefly describe the purchase process and AMS’ roll in it. The process begins long before AMS announces that it plans to purchase par- ticular food items. AMS specialists knowledgeable in food processing work with po- tential venders, FNS, and food safety officials to develop a specification for each item that will be purchased. Many of these items are similar to popular commercial items. Other items are developed specifically to meet the special nutritional needs of our recipients. The specification provides details on product formulations; manu- facturing, packaging, sampling, and testing requirements; and quality assurance provisions. By coordinating the development of specifications with specialists from all aspects of food processing, AMS ensures the purchase of high-quality, whole- some, appealing products that meet recipients’ needs and Federal standards for nu- trition. Prior to conducting any purchase, AMS economists assess market conditions and determine the availability for commodities the Agency is considering buying. During this time AMS also works closely with FNS to determine recipient preferences. Or- ders are taken by FNS and provided to AMS so that purchases can be made. Al- though weekly meal patterns must meet Federal standards, local school authorities make the decisions about what specific foods to serve and how they are prepared. Moreover, USDA commodities comprise less than 20 percent of the food products put on schoolchildrens plates. AMS and FSA are responsible for issuing and accepting bids and awarding and administering contracts. FNS is responsible for taking commodity orders from States, monitoring purchases and entitlements throughout the year, and the overall administration of the commodity nutrition programs. Actual purchasing begins with AMS and FSA notifying specific industries through press releases and other means of their intent to purchase particular food products. The agencies invite bids under a formally advertised competitive bid program. These ‘‘invitations’’ give specific details on when bids are due for a particular purchase. All products must be U.S.-produced and of domestic origin. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 H:\DOCS\90141.SF EDUWK PsN: NNIXON 14 Under Federal Acquisition Regulations, vendors must be deemed ‘‘responsible’’ prior to participating in the program. For instance, they must have a satisfactory performance record and adequate financial resources to demonstrate their ability to produce and deliver the product within designated timeframes. It is essential that USDA purchased food products arrive on time as recipients depend on it. Bids are received from responsible vendors, analyzed, and contracts are awarded by AMS and FSA. Contracts are then administered by the agencies to make sure that terms and conditions are followed. All products purchased by USDA are produced in compliance with applicable Fed- eral food safety laws and regulations. Red meat, poultry, and egg products must be processed under USDAs Food Safety and Inspection Service (FSIS) regulations, and all fruit, vegetable, and fish products are subject to Food and Drug Administration (FDA) regulation. FSIS and FDA assure that such products are wholesome and that processing plants operate under sanitary conditions. In addition to FSIS inspection, AMS inspectors are present during production and shipping of all red meat and poultry items to ensure compliance with all specifica- tion requirements—including those for raw materials, processing, packaging, and testing. Plants supplying processed fruit and vegetable products undergo a survey by AMS inspectors to assure compliance with FDA requirements, including that Agency’s Good Manufacturing Practices. Additionally, fish products are produced in facilities operating under the National Marine Fisheries Service voluntary seafood inspection program. For certain types of products, such as ground beef, egg prod- ucts, and fruit juices, additional product handling and testing protocols are required. AMS also works with FSIS to distribute educational materials for food service professionals about proper handling and cooking techniques. These materials, avail- able in both Spanish and English, are designed to assist food service professionals in every school participating in the NSLP. As you know, in 1998, USDA policy officials met with representatives of the American School Food Service Association and the American Commodity Distribu- tion Association with the aim of improving the commodity procurement and dis- tribution process. AMS played a key role in developing and implementing the initia- tives contained in the ‘‘Food Distribution 2000—USDA’s Reinvention Plan for Change’’ report. Some of the key initiatives contained in this report that AMS has implemented include: • Expanded use of long-term contracts with proven suppliers; • Expanded use of best-value contracting; • Revised product specifications to align them with commercially available prod- • Purchase of commercially labeled products; • Use of commercial and commodity products interchangeably by further proc- essors in the manufacture of fruit and vegetable products and, on a more lim- ited basis, poultry products; • Implemented formal commodity product hold and recall procedures for use by State and local authorities; and • Relaxed truckload delivery requirements allowing multiple stops within a State ucts; or city. Mr. Chairman, AMS is proud of the role it plays in providing food products to this Nations schoolchildren. We are proud of the relationships we have built with other Federal agencies, State agencies, and the school food community to carry out this most important responsibility. We look forward to working with you any way we can as the Child Nutrition Act and Richard B. Russell National School Lunch Act reau- thorization process continues. This concludes my statement, Mr. Chairman. I would be pleased to respond to questions from the Committee. Chairman BOEHNER. USDA’s commodity distribution program really has two objectives. One is to stabilize the agricultural mar- ketplace, and, second, to provide high-quality nutritious foods to Federal nutrition programs. And I am trying to—wearing both of my hats of interest—trying to understand what really drives this process: what is good for the nutrition programs in terms of what the schools want; or is it the economics of the marketplace in terms of the stabilization of certain commodity markets? So I would like to ask both of you, just help me understand which objective wins when it is all said and done. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 15 Mr. BOST. Mr. Chairman, let me take a stab at it. I don’t know if it is a question of which objective wins. I think what we have attempted to do in the Department is to ensure that there is a bal- ance, and that essentially they balance one or the other out in terms of us making some decisions that are going to address both entities. On the one side, of course, what the farmers and ranchers produce and they want us to buy; and on the other hand, a very important consideration that we have to give—we are interested in giving to ensure that we provide nutritious, healthy food to the 29 million children in our schools. And also the other issue of dealing with the bonus buys that are out there. So we try to bring all of those to the table and balance them out in terms of some decisions that we make. Interestingly enough, that is why there are essentially two com- ponents of the program. One, of course, is entitlements. There are 143—145 items on that list that schools are actually able to order from. The other is bonus buys. The bonus buys afford the Depart- ment a great deal of flexibility in terms of when and what they buy and how much. And so that tends to be somewhat of a lever, because it affords us an opportunity to attempt to balance all of those things out, a challenge. It is a major challenge for us. Because there is a great deal of pressure coming, of course, from one side on occasion, say- ing ‘‘Well, I want you to buy X.’’ It could be peaches, it could be tree nuts. It could be, ‘‘Well, I want you to buy more beef.’’ . On the other hand, it could be, we are interested in ensuring that the foods that we do buy, one, that we can afford to buy them; and, two, that they are going to meet the nutritional needs of school children. And, most importantly, that even when we do buy them, that the children are going to eat them. We have people who come to see us who are interested in, say, two of my favorites, as- paragus and brussel sprouts. You know, there are not too many second graders that that is at the top of their list, you know, in terms of interest and taste. So we try to ensure that we balance all of those things out. Chairman BOEHNER. Mr. Yates. Mr. YATES. Mr. Chairman, it is a balancing act. And we at AMS work very closely with FNS. We will have a number of different ag- ricultural commodity groups come before us in a period of time with a statement that our commodity is in surplus, we are having a difficult time. And the first thing that we always do, is we go to FNS and we say, here is what the industry has out there in sur- plus. Can you use it in any of the school lunch programs? Are the recipients interested in this type of product? It is a very close relationship that we have with FNS in this re- gard. And as the Under Secretary said, some of these commodities are wanted much more than others. And we look for ways of put- ting nutritious items together, even if it is a dried fruit mix, that would allow us to use certain commodities that by themselves might not be so appealing to an individual, a young student, but by combining these nutritious dried fruits together, it provides something that was very popular last year in the purchases that we made and the deliveries to the schools. VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON 16 Chairman BOEHNER. In Food Distribution 2000, the panel rec- ommended that specifications be written to resemble, as close as possible, the specifications used in commercial food system procure- ment. I know the Department has reviewed some of these. But how are we coming in terms of the implementation of all of those rec- ommendations? Mr. YATES. Well, I think we have been very successful in imple- menting most of those. One of the issues that the Under Secretary and I both stated in our testimony is the substitution issue in re- gards to fruit and vegetables. It is fairly broad in substitution there. And it is limited when it comes to poultry and to beef and pork products. For the poultry products, if our inspectors are in the facility where we have continuous inspection, the company can be making either commercial or school product, and actually we allow them to use their own label on the product. And so if it has passed under AMS inspection, those products can be interchanged. With beef, with the new beef specifications that we put in place last spring dealing with microbial testing, we allow no substitution because the health of one of the most at-risk groups of people we have in the country, the young people in school, we are going to assure to the best of our ability that we deliver a product that is safe and healthful. And so there—our testing begins at the carcass. And it goes through the boneless beef, on to after-processing. What we are looking at now in addressing the issue I think that you had raised is that we would entertain delivering on time to a processor, chilled, boneless beef for further processing that has gone through our inspection process and microbial testing. And I believe that that would provide a product that is more economical, and also a fresher product for school children. Chairman BOEHNER. I can see my time has expired. We will come back to that after all of the members have had a chance to ask their questions. Mr. Kildee. Mr. KILDEE. Thank you, Mr. Chairman. We understand that the Department has conducted studies to determine how to reduce overcertification of eligibles. Do you believe that these—that there are program safeguards built into your proposal to reduce overcer- tification that protect children, and to make sure that we aren’t dropping those that should still be in? And what are these safe- guards? I have in mind, for example, that I have taught at an inner-city school. We had homeless kids. We had illegal immigrants. We had migrant workers. We had children in barely functional families, if not dysfunctional families. We had really a cross-section. How have you built safeguards in to make sure that in your zeal to reduce overcertification that you weren’t really dropping those who legiti- mately need program? Mr. BOST. I think it is real important to note that, first of all, it is not necessarily just overcertification. We are interested in en- suring that every eligible child is able to participate in the pro- gram, because we have a significant number of eligible children, that for whatever reason, are not participating. So it is just not overcertification, but it is ensuring that those children that are eli- VerDate 0ct 09 2002 09:18 May 18, 2004 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6602 H:\DOCS\90141.SF EDUWK PsN: NNIXON |