Writing for the New York Times, Lucy Komisar, an investigative journalist who specializes in uncovering corporate misconduct, claims about a quarter of the National School Lunch Program has been privatized, much of it outsourced to food service management giants who work closely with food manufacturers like the chicken producers Tyson and Pilgrim’s to exploit the system.
The National School Lunch Program, which services 32 million U.S. children each day with lunch at participating schools, uses agricultural surplus to feed children.
Komisar estimates that about 21 million of these students eat free or reduced-price meals, a number, says Komisar, that has surged since the recession. The program, which also provides breakfast, costs $13.3 billion a year.
Komisar explains one way the corporate fleecing of schools works: “The Agriculture Department pays about $1 billion a year for commodities like fresh apples and sweet potatoes, chickens and turkeys. Schools get the food free; some cook it on site, but more and more pay processors to turn these healthy ingredients into fried chicken nuggets, fruit pastries, pizza and the like. Some $445 million worth of commodities are sent for processing each year, a nearly 50 percent increase since 2006.”
The USDA doesn’t track spending to process the food, but Komisar notes school authorities do. So for example, the Michigan Department of Education gets free raw chicken worth $11.40 a case and sends it for processing into nuggets at $33.45 a case. The schools in San Bernardino, California, spend $14.75 to make French fries out of $5.95 worth of potatoes.
In the mean time, food service management giants like Aramark, based in Philadelphia, Sodexo, based in France, and the Compass Group, based in Britain, receive hefty secret rebates from food processers in return for contracts in which they charged the full price.
Komisar cites research conducted in 2008 revealing that Michigan schools hiring private food-service management firms spent less on labor and food but more on fees and supplies, resulting in negligible savings.
So as school authorities jettison the responsibility to create and manage real kitchens, management companies rake in easy profits by not having to employ kitchen workers — everybody wins but the schools and their students.
“Children Pay the Price”
Roland Zullo, a researcher at the University of Michigan, found that privately managed school cafeterias offered meals higher in sugar and fats, as well as junk food snack items like soda, cookies, and potato chips.
Linda Hugle, a retired school principal in Oregon told Komisar that when her district switched to Sodexo, “the savings were paltry.” She added, “You pay a little less and your kids get strawberry milk, frozen French fries and artificial shortening.”
Zullo determined privatization was associated with lower test scores, and concluded high-fat and high-sugar foods served by the companies might be the cause.
Privatizing school meals eliminates the possibility of unionized kitchen positions that would otherwise have paid unemployed locals in the community a decent wage with benefits — when school workers are laid off they become an economic liability.
And as Komisar points out, local residents that may have potentially served as school kitchen staff, have children in public schools and care about their well-being.
Additionally, the national food manufacturers rebate deals take potential income away from “local farmers and small producers like bakers, who could offer fresh, healthy food and help the local economy.”
In 2010, Andrew Cuomo won a $20 million settlement involving Sodexo’s receipt of secret rebates. Komisar says other states are following New York and investigating the rebates, along with the USDA who initiated its own inquiry last summer.
In order to circumvent the closer scrutiny now surrounding secret rebates, Komisar claims food service company rebates have been replaced with an accounting trick called “prompt payment discounts,” under a USDA loophole.
These so-called prompt payment discounts are really rebates under another name. New York State requires rebates to be returned to schools, but the Sodexo settlement shows how raggedly the ban has been enforced.
Corporations Lobbied Congress to Block New UDSA Rules
The USDA proposed new rules this year that would set maximum calories for school meals, require more fruits, vegetables and whole grains, and limit trans fats.
But the corporations that profit from supplying high-fat and high-sugar JUNK steadfastly opposed the rules. Aramark, Sodexo and Chartwells, as well as food processing companies like ConAgra, wrote letters arguing, among other things, that children may not want to eat healthier food.
Major food corporations, including Coca-Cola, Del Monte, Schwan’s and other manufacturers of processed foods objected to USDA proposed regulations, claiming they would raise costs and mandate food children would only end up throwing away in the trash.
“Any increase in fruit and vegetables might result in plate waste, wrote Sodexo. And Aramark claimed a protein requirement at breakfast would hamper efforts to offer popular breakfast items.
“Profit, not health, is the priority of the food service management companies, food processors and even elected officials,” writes Komisar. “Until more parents demand reform of the school lunch system, children will continue to suffer.”