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School Lunch Subsidy Could Boost Local Economies

If New York state lawmakers were to provide a subsidy of 5 cents per school lunch just one day per week for the purchase of local fruits and vegetables, it would likely provide a financial boost for New York farmers and local economies.

The finding is according to a recent report, "The Economic Implications of Using New York State Farm Products in School Lunches," from the Community and Regional Development Institute in Cornell's College of Agriculture and Life Sciences.

For example, a hypothetical "Thursday is Eat NY Day" program will cost taxpayers $2.8 million per year, but if it increased the purchase of local fruits and vegetables by 50% one day a week, it could generate up to $9.2 million in new revenue for vegetable farmers and up to $5.3 million for fruit producers and businesses that support these industries. Such a program would also generate between 80 and 150 new jobs in the state, according to the report.

"Our analysis considers a range of potential outcomes that might result from a program that provides incentives to increase offerings of New York state fruits and vegetables in school lunches, and the most likely scenarios indicate that the economic benefits that would accrue to farms and related businesses would outweigh the costs of funding and administering the program," says Brad Rickard, PhD, the Ruth and William Morgan Associate Professor of Applied Economics and Management, and coauthor of the report. Other coauthors include Todd Schmit, PhD, an associate professor in the Dyson School of Applied Economics and Management, and Pamela Weisberg-Shapiro, PhD, RD, a lecturer in the division of nutritional sciences.

All the food for school lunches in New York state costs more than $366 million for 281.6 million lunches per year, or about $1.30 to $1.40 per meal. The cost of the program at 5 cents per lunch would be $2.8 million per year.

Food service directors are increasingly encouraged to buy locally produced foods but aren't required or given incentives to do so, according to the report. At the same time, food service directors operate on tight budgets, and locating and buying local foods can cost more than foods shipped from elsewhere and centrally distributed.
The researchers note these directors may be encouraged to buy more local foods if they're financially reimbursed to offset the added costs.

In the report, the researchers focused their analysis on fruits and vegetables because one fruit or vegetable is required to be served with each lunch; a large portion of dairy used in lunches is already locally sourced, so adding an incentive for purchasing local dairy probably wouldn't add to local purchases; and when it comes to local protein and whole grains in school lunches, New York state produces small quantities of these products, making it challenging for food service directors to locally source these products once a week.

The researchers calculated benefit-to-cost ratios for five scenarios based on the amount of new demand for local products potentially created by the incentive program. They found that in each of the scenarios where demand increased by at least 25%, there was a net benefit to local farms and economies under the incentive program.

— Source: Cornell University