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School Food, Inc.: The Contracting of America’s National School Lunch Program and its Nutritional Consequences

An Article by Robyn Ziperstein

“No nation is any healthier than its children or more prosperous than its farmers.”

– President Harry Truman


If President Truman’s vision is the goal of the National School Lunch Program (NSLP), then the program is in need of changes. Small farmers are struggling to compete with larger food providers. Government subsidies favor large corporate farms which can achieve economies of scale. These larger producers favor less nutritionally dense foods due to ease of production and cost effectiveness. As a result, one-third of American children are overweight and obese.

The lunch program began with propitious intentions. The federal government began to subsidize school lunches as a way to manage giant farm surpluses, while simultaneously supporting a suffering population. Since then, the school lunch program has become dominated by a few large food contractors designed to feed a population suffering from a lack of resources, without catering to its basic health needs. Without sufficient changes, this nutritional deficit will continue to contribute to childhood obesity and big businesses will continue to dominate distribution of goods.

This paper is constructed in four sections. It begins with an overview of the school lunch program and its changes over time. The discussion will then turn to contracts and how they affect the outcomes of school lunches. Next, problems and controversies surrounding the school lunch program will be examined including financial contract abuses by large companies, nutritional deficiencies, and lack of clean facilities. Lastly, this paper will explore potential solutions to the school lunch programs shortcomings.


Overview of the National School Lunch Program

Harry Truman signed the National School Lunch Act in 1946 to provide low cost or free school lunch meals to qualified students through government subsidies and surplus agricultural provisions. The subsidies were intended to safeguard the health and well-being of the nation’s children and encourage the consumption of domestic agricultural commodities.  About 7.1 million children participated in the program by the end of its first year. By 1970, 22 million children participated, and by 1980 there were 27 million participants. Since the program began, more than 219 billion lunches have been served. Nearly all schools participate today. The program began at a time when malnutrition due to poverty was a major concern. While poverty is still an issue inAmerica, underweight children are rare, and overweight children are becoming a majority, especially among the poor. Policies originally designed to ensure adequate food consumption by the poor have instead contributed to obesity rates by encouraging recipient students to eat excessively at school. Overeating occurs because school meals are required only to achieve a calorie target under the NSLP. This provision is called “offer versus serve.” No matter what is served, the food must contain a certain number of calories. This provision allows children to decline certain parts of the meals while dining, but children generally eat the whole meal and consume more calories than they need.

Additionally, regulatory standards specify that school lunches should provide one‐third of the RDA for protein, Vitamin A, Vitamin C, iron, calcium, and calories. However, the meals often do not meet these desired standards. Local school food authorities make decisions about what foods to serve and how those foods are prepared. Ill-defined nutritional guidelines, limited funds, and lack of understanding and motivation contribute to the poor quality of food production and supply in the school economy. Accordingly, some critics say recipients may be better off receiving income rather than food as children have diverse nutritional needs, making implementation and construction of a single policy that benefits everyone difficult.


Contracts with the Big Three Companies and their Role in the NSLP

The US food service contracting industry has been centered on three source companies: Aramark, Compass Group, and Sodexo. With a combined annual revenue of about $43 billion in 2009, the school lunch sector is highly concentrated and dominated by these three giant multinational companies. In total, the eight largest companies hold 75 percent of school contracts. These companies do not strictly provide food services to schools.  Aramark is not only the world’s third largest contract food service provider in theUnited States, but also the second largest uniform supplier. Ten percent of school lunch providers have 100 or more employees, compared with two percent of the entire food service industry. The equally concentrated supply chain for food products magnifies the size and power of these companies.

Historical developments in agricultural products have given large agribusiness and foodservice firms most of the power. Global marketing of new agri-chemicals after World War II helped shape emerging industrial markets, particularly for grain companies. The Green Revolution development of special hybrid seeds in the 1960s and 1970s helped globalize agribusiness and standardize the school lunches by providing a solitary supplier of grains to an abundance of schools. Technological achievements by these businesses have reduced the cost of food products, which has in turn made cheap food more abundant. Since the NSLP operates on surpluses, agricultural subsidies have pumped school lunches full of less expensive, less nutritionally dense ingredients. Generally, healthier food tends to be more expensive to produce, and agribusiness makes it easier for contractors to construct unhealthy meals at a low cost.

The food service management company contracted by a school is responsible for the preparation and management of the school meal program. In vended meal contracts, the contractor’s only responsibility is to provide the meals, meaning foods are pre-packaged and pre-plated. This does not include management of the program or final preparation or service of the meals. If the contract becomes a food service management contract (FSMC), it is no longer considered a vended meals contract. Vended contracts are ones in which the contractor manages some aspect of the school food service program, usually preparing and serving the meal and/or managing the school meal programs. The school codes concerning FSMCs vary between states.

When a SFA contracts with a food service management company, the state agency is required to review each contract annually to make sure all regulatory requirements are satisfied. Moreover, each state must conduct a thorough on-site review, once every five years to ensure compliance. The National School Lunch Program allows a SFA to contract with a management company (such as Aramark, Sodexo, or Compass Group) to manage school food service operations; however, it is the SFA’s responsibility to ensure its food service operation complies with the proposed agreement under the program. The SFA is responsible for ensuring that cost limitations are secure, including the use of nonprofit food service funds to pay only allowable costs, verifying eligibility of children for free and reduced price meals, ensuring only reimbursable meals are included on the claim for reimbursement, and not allowing accrual of all income and expenses to the FSMC. Specific procedures must be followed to ensure validity of all meals and claims at the school under the jurisdiction of the SFA.  If the SFA finds any problems, the school must take corrective action, after which the SFA conducts a follow-up to determine if the problem has been resolved. The SFA manages these procedures, regardless of whether the SFA operates food services itself or uses a food service management company.


Problems and Controversies: Compliance, Safety and Health Issues

Congress’ Government Accountability Office opened an investigation into potential contract abuses by food service management companies involved with the National School Lunch Program, and found that the process of contracting has several issues. There was concern about possible overcharges and food vendor rebates to contractors that were not given to client agencies, against federal requirements. The investigation probed whether companies carried out their responsibilities and abided by the terms of their contracts. Sodexo agreed to a $20 million settlement in July for failing to pass on rebates to several school districts inNew York. Rosa DeLauro, Representative of Connecticut and Chair of the House Agriculture Appropriations Subcommittee, wrote a letter toUSSecretary of Agriculture Tom Vilsack asking for a general investigation into the National School Lunch Program. She wrote to alert the state education and agriculture agencies that a review of the settlement between Andrew Cuomo and Sodexo for overcharging the New York School districts would reveal questionable practices and corruption by the Sodexo Corporation, which dominates school lunch contracts. The investigation revealed Sodexo had earned rebates from suppliers that were not passed on to schools. Contracts with school districts often require savings to be shared, and withholding them is a violation of federal law. In response, Sodexo hired its first outside lobbyists this year at Gephardt Group Government Affairs and Trammell and Company to help with its troubles. It spent $70,000 on lobbying fees between these two firms, and $470,000 total in 2010.

A 2009 report by USA Today found that the safety standards of the Agricultural Marketing Service (AMS), a part of the USDA that buys meat for school lunches, were lower than the standards of the average fast food restaurant in the country. It found instances where the AMS bought ground beef that retailers and fast-food chains rejected because of high amount of indicator bacteria, which indicates an increased probability that the meat contains insidious pathogens. It also found the AMS testing procedures for ground beef substantially deficient. For 100,000 pounds of ground beef, the AMS may only test one sample. By comparison, many fast food chains take samples of their ground beef every 15 minutes and test each sample every couple of hours. The fast food restaurants test their ground beef ten to fifteen times more often than the USDA tests school lunch beef. The report also revealed that the School Lunch Program purchases chicken for schools that KFC and the Campbell Soup Company would not use. The chicken bought by the USDA would have gone to compost or pet food if it were not being eaten by schoolchildren.

Communication problems with the FDA have resulted in repeated use of suppliers with a long history of food safety violations. As a result of a salmonella outbreak in 2008, hundreds of thousands of pounds of beef from Beef Packer Inc. were recalled. During the recall, the government bought four orders from the company for the school lunch program, one of which tested positive for salmonella. The other three orders were used for school lunches. Since then, Beef Packers Inc. has continued to supply beef for school lunch contracts despite the outbreak and past suspensions because of repeated salmonella contamination. According to the Center for Disease Control, at least 23,000 children were made ill from eating school lunch from 1998 to 2007. One of the problems is that school kitchens are ill equipped for food preparation. Meals are delivered by contractors in prepackaged containers to be reheated and served on site.

Contracts also have direct negative consequences on nutrition. Growing numbers of school districts are entering into exclusive “pouring rights” contracts with soft drink corporations, namely Coca-Cola Company and PepsiCo in exchange for direct payments to support schools funding needs. It is estimated that $12 billion per year is spent on junk food advertisements to school children, as well as products in vending machines that act as school sponsorships. Coca-Cola lobbyists have blocked state bills that prevent their products from being sold in schools and have gained control over most of the school vending market. Consequently, school districts are selling only one company’s products in the vending machines at all school events and during lunch. Contract conditions include prominent display of advertising and marketing paraphernalia on campus, and often, incentive payments for increasing sale of their products at school sites.  One reason for so many of these contracts is because the extra income helps to pay for chronically underfunded basic education and management.

Consumption of soft drinks has tripled in the last seven years among teenagers, and 13 percent of their calories come from carbonated and non-carbonated soft drinks. They contain large amounts of sugar, providing the average 12 to 19 year old boy with 15 teaspoons of refined sugars a day, and 10 teaspoons for girls, the government’s recommended limits of teens’ sugar consumption from all foods. These empty calories are contributing to serious long-term health problems, particularly weight gain and obesity. The sugar and acids in the soda also increases the risk of osteoporosis, tooth decay, dental erosion, kidney stones, and heart disease.  Many soft drinks add caffeine, a mildly addictive, stimulant drug. It increases the excretion of calcium and promotes attention-deficit hyperactivity disorder in some children. The yellow no. 5 can cause hives, asthma, and other allergic reactions.

Food providers do not typically offer full balanced meals for students. As Janet Poppendieck writes in Free for All: Fixing School Food in American Schools, the new paradigm of school lunches is a business model where students are treated as customers whose business is to be won by the top few food corporations selling genetically modified fat laden food.  Typically, fast food operations and vending machines products are provided through exclusive contractual agreement between school districts and food companies. School districts do not have the funds to change the system, and consequently, the system remains the same.


Potential Solutions

In order to accomplish the changes necessary to address the nutritional deficit of the NSLP and the negative effect corporate contracts are having on the health of schoolchildren, there must be institutional and lifestyle changes. A key institutional solution is to stop selling soft drinks, candy, and other junk foods in school hallways, shops and cafeterias, in exchange for healthier alternatives. State and local Boards of Education can provide a healthier environment by eliminating marketing contracts between school districts and soft drink companies. The San Francisco Board of Education passed an exemplar policy, the Commercial Free Schools Act, in 1999. The policy prohibits schools from entering into exclusive contracts with a soft drink or snack food company. It also includes a statute for active incorporation of healthy drinks and snacks into student meals.

There are also new initiatives to lay the groundwork protecting children from obesity and diabetes. Whole Foods is now working with the Lunch Box website to help parents design healthier meals through online donations and collaborative support. Revolution Foods Bay Area Company is also one of the emerging companies producing high quality school lunches. They do not focus on local sourcing, but they do focus on organic and highly nutritious food. InNorth Carolina, an organization known as Farmer’s Daughter offers enrollment to parents for daily delivery of natural, organic meals to the school. It does not compete with the on-site food service. It is offered as an optional, waste-reducing choice to parents.

Some states are actively trying to modify school meals. The Florida House of Representatives passed a resolution in 2006 as “Healthy School Lunch Year” inFlorida. The resolution is a response to the fact that one-fourth ofFlorida’s schoolchildren are overweight or obese, and thus recommends a vegetarian entrée option in school lunches each day. Three other states:California,New York, andHawaii, have similar resolutions as well.

Farm to school programs are alternatives that incorporate fresh school lunches, and are unique to each school. These programs have been in existence for the past 10 years, but have recently gained popularity. They afford fresher produce for meal programs, increased opportunities for hands on nutrition education in the classroom, and new markets with stable revenues for local farmers. Not only do they connect schools, from kindergarten through the twelfth grade, with healthy meals, they also provides agriculture, health, and nutrition education, waste management programs, composting, gardens, demonstrations, and farm tours.

Federal nutritional standards for school meals should be updated and the nutritional quality of USDA commodities provided to schools should be improved upon. The USDA needs to revise the requirements for NSLP and Breakfast Programs based on nutritional standards that comply with medical dietary guidelines not government guidelines. Commodity support programs reducing fat, sodium and sugars has helped provide food for schools that are more nutritious than in the past. The USDA continues to implement improvements from commodity suppliers that met updated standards.

The repetitious donations of the same commodities increase and influence food content of the meal. Some studies show, however, that schools can reduce the fat content of meals while maintaining revenue and NSLP participation levels by exposing students to new foods, updating menus, changing the way food is presented, and offering educational resources. The USDA has assisted schools through its Team Nutrition Initiative, including low fat food donations.

A $25 million campaign has been organized to influence kids to eat carrots by branding them like junk food.  The campaign includes repackaging carrots for school vending machines in bags that resemble Doritos chips. Carrots are also being grown naturally in different colors, such as white, yellow, red, and maroon. Additionally, scientists have genetically engineered the new “super carrot,” which has 41% more calcium and could ward off brittle bone disease and osteoporosis. Genetic engineering is also being used to develop potatoes with more starch and less water so they absorb less oil when fried, which will produce healthier chips or fries. These modifications are the beginning of a healthy food makeover.
The USDA’s work with stakeholders combined with behavioral economists’ research to develop innovative ways to encourage students to make healthier choices offers a new strategy for change. The Cornell Food and Brand Lab has already started working on a “Smarter Lunchroom Initiative” under Dr. Brian Wansink to encourage healthier eating in the lunchroom. The lab has made a new tray design with special compartments to fit milk instead of soda, and smaller portions of sides to avoid easy placement of foods like pizza or French fries. The researchers have also encouraged elementary school cafeteria workers to use an apple slicer rather than providing whole apples to students because studies have shown that kids are more likely to eat “apple fries” rather than whole apples. Making children feel like savvy consumers rather than obedient children is a simple strategy to help them make better decisions.
Another effective change would be to reassess the contractual obligations schools have to meet caloric requirements, and instead reform those guidelines to promote nutritional requirements instead. If we cannot change what is served, at the very least we can change how much is served. Students are receiving too many calories and not expending enough energy to compensate. By offering less quantities of food, perhaps we may eventually have the option of providing better quality food for the same cost or even less.

In addition, if schools are given the option of contracting with independent food service contractors, instead of the few major options that are currently available, the quality and price of the food may be modified to a higher standard. Allowing students to become more involved in the creation and preparation of the food they eat makes them more invested in their health and increases their willingness to continue healthier behaviors.

There is no reason to ignore the problems with school lunches. Food service providers are feeling overworked, and children are not happy with the quality of their meals. Lunch programs around the world are providing quality meals for the same cost as the food provided in American cafeterias. Why not use the example of successful providers and try out new strategies that might help make the American School Lunch Program excel and perform at its greatest potential? The program has the potential to succeed, we just have to be willing to change.



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5 Responses to “ School Food, Inc.: The Contracting of America’s National School Lunch Program and its Nutritional Consequences ”

  • French School Lunch Compared to American School Lunch: Money Matters | BrightonYourHealth

    […] Let me give you an example. After the USDA first proposed the new nutritional guidelines for school lunch, Congress prohibited USDA from limiting French fries and other potato products and permitted school lunchrooms to continue counting tomato sauce on pizza as a vegetable. (C’mon, really?) The recent school lunch nutritional outcomes finally compromised because the food industry lobbies could see the economic writing on the wall. Here is a full story on this, Food companies fight to keep potatoes on school lunch menus in place of more fruits and vegetables. But the hand in hand collaboration of the food industry and school lunch go way back. Things didn’t just change overnight. Here is a good summary: History of American School Lunch Program, Contracting out with Food Service Companies. […]

  • Calderon

    Good information, very useful post. Thanks for sharing this. I definitely learned something valuable.Must bookmark this blog so that I could come back for more future readings.

  • Brocky

    That’s great information.Health is important for students.This is an article with a lot of useful information. Thanks

  • fouldlairity

    amazing post

  • Sheila Putry

    Thank you for the information

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