Ecotrust in the News

Pamplin Media Group
August 13, 2009
By Peter Korn

New law puts locally produced foods on menu

Buyers get leeway to acquire costlier foods from Oregon

Consider the ramifications of the lowest-acceptable-bid policy used for government purchasing. Kat West, sustainability manager for Multnomah County, did, and she thinks it's way behind the times.

Sure, West says, requiring public agencies that are purchasing goods and services to accept low bids has encouraged transparency and economic use of state and local government dollars. But in today's world, West says, there are other criteria to consider beyond cost. The one she cares about is sustainability.

Last year, West discovered that public agencies in Oregon had not made a great effort to buy local goods, primarily because they were not supposed to. What they were supposed to do was find and accept the lowest responsive bid. If the prison system can get apples cheaper from New Zealand than from Hood River, those were the apples prison purchasing staff were supposed to buy.

What wasn't calculated in those bids, West says, are the environmental costs – such as carbon emissions – of transporting New Zealand apples to Portland. In addition, West says, public agencies buying local goods keep those dollars in the local economy. And food purchases made from local farmers helps keep local farms viable.

In the long run, West says, the lowest possible bid may be the most expensive, when you consider all the costs.

So, working with the Portland/Multnomah Food Policy Council, a citizens advisory panel, West last year decided to take on the state purchasing code. The result was House Bill 2763, which takes effect in January.

The bill amends state purchasing requirements so that public agencies can favor locally produced foods. Public agencies can buy locally grown or produced food even if it is as much as 10 percent more expensive than food from outside.

Individual agencies get to define local and can even adjust the premium they will pay – for instance, a school district may decide to pay 10 percent more for food grown within its county, and only 5 percent more for food grown within the state.

"This is a tool to allow local agencies to be more sustainable," West says. In time, she says, considering a product's origin will become standard practice for public agencies.

Re-localize the economy

But HB 2763 is notable for what it doesn't contain, as much as for what it does. It allows agencies to buy local at a premium, but it does not require them to do so. And it doesn't provide an incentive.

Most public agencies are cash-strapped these days, and can't afford to pay more, or much more, for local foods.

The Oregon Department of Corrections feeds more than 13,000 inmates each day. Without a financial incentive and with a tight budget, the department is not going to change its buying choices because of the new legislation, says Jan Lemke, purchasing and contracts manager for the corrections department.

Still, Lemke says she can see buying local food if it's a little more expensive.

The bill's legislative sponsor, state Rep. Brian Clem, D-Salem, says his attempts to produce a companion bill to require local purchasing met resistance from the state's Department of Administrative Services.

The incentive that many hoped would accompany HB 2763 was House Bill 2800, known as the Farm to School bill. That bill, co-sponsored by Clem, didn't pass. It would have directed state lottery funds to provide 15 cents per lunch to help Oregon schools purchase more expensive local foods.

Schools purchase even more food than prisons. Portland Public Schools, for example, serves 20,000 lunches and 13,000 breakfasts a day. Right now, $2.35 in federal money goes to pay for each school lunch in an Oregon public school. More than half of that goes toward overhead costs, such as paying cafeteria staff and washing dishes.

School districts are left with $1.09 per lunch to purchase food. That isn't enough for schools to pay a premium for locally produced food, says Deborah Kane, vice president of Food & Farms at Ecotrust, a nonprofit conservation organization in Portland.

"If you want (agencies) to buy local products, you're going to have to incent them or provide additional resources," Kane says.

Gitta Grether-Sweeney, assistant director of nutrition services for Portland Public Schools, says that extra 15 cents per meal from state lottery funds would indeed have been enough.

Portland schools already try to buy as much local as they can, Grether-Sweeney says, even paying a little bit more in some circumstances.

"With us it's not necessarily always the bottom line," she says.

In a pilot project last year funded by Kaiser Permanente, Portland schools were given an extra 7 cents per public school lunch to spend on local foods.

The extra money allowed Portland schools to replace national brand chili with healthier Truitt Brothers chili from Salem. The local chili costs 11 cents more per serving. Portland schools are going to continue to use the local chili, Grether-Sweney says, because it clearly was a better product.

But locally made Zenner hot dogs were part of the pilot project as well, and Grether-Sweeney says without the subsidy, they will have to be dropped in favor of cheaper, national-brand hot dogs this year.

"We're fighting for pennies," she says. "It (the new legislation) was a nice thought, but without some teeth to it, it was a nice thought."

Shawn Cleave, the Oregon Farm Bureau's government affairs specialist, says the new legislation might not have an immediate effect, but when the economy picks up, agencies will probably find it more useful.

"This is a great first step," Cleave says.

Sustainability manager West says she's certain in the long run the new legislation will help change the way public agencies purchase food. In fact, she has her sights set on more than just food purchases.

West envisions all public agencies eventually favoring locally produced products in all their purchases – even if they're a little more expensive. She hopes to prod Multnomah County to lead the way.

"I think we need to re-localize the whole economy," West says.

Policy raises fair trade questions

If there's a rotten apple in the barrel represented by new legislation encouraging public agencies to buy local, it's embodied in the words "trade war."

House Bill 2763 allows Oregon agencies to pay up to 10 percent more for foods grown in Oregon. So if Portland Public Schools is purchasing apples, and apples from Washington are cheaper than the smaller crop that comes from Hood River, the school district can still buy the Hood River apples.

But what happens when that farmer in Hood River wants to sell pears to a Washington school district?

Oregon public contracting code includes a reciprocity clause that says the Washington agency can penalize the Hood River grower up to 10 percent, to make up for the 10 percent advantage the farmer received when selling apples in Oregon.

But Kat West, the Multnomah County sustainability manager who wrote the new legislation, says she thinks she's got that covered. Most public agencies don't buy directly from farmers, West says. Instead, they use purchasing agents and wholesalers, who then deliver large quantities of a variety of foods to the public agencies.

So if a wholesaler buys those more expensive apples from the Hood River farmer and delivers them to Portland Public Schools, along with green beans from Salem and potatoes from Idaho, Washington state farmers won't easily be able to lodge a reciprocity claim.

"Nobody buys from farmers," West says. "That's the key."

Ecotrust in the News

New law puts locally produced foods on menu

Buyers get leeway to acquire costlier foods from Oregon

Re-localize the economy

Policy raises fair trade questions

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