Congressional potato purchase request finds controversy

Adding spuds to school lunches a matter of timing

Potato purchase request debated

A request from Congress to the United States Department of Agriculture to purchase potatoes is finding a little bit of controversy.

Twenty-seven members of Congress recently wrote USDA Secretary Ann Veneman requesting assistance in making additional purchases of potatoes and potato products under the "bonus buy" provisions of the Section 32 program.

The letter emphasized soft demand for potatoes and potato products, and the negative trade balance in potatoes and imports to the U.S., while Canadian trade restrictions significantly limit U.S. access to their markets.

"This has been something that has happened in several of the most recent years, where potatoes have been in somewhat of a surplus situation," said John Keeling, executive vice president and CEO of the National Potato Council.

He said that Congress makes funds available to the USDA to use in making bonus buy purchases of commodities, which are then distributed for use in feeding, school lunch and hunger programs and to get the commodities off of the market and help support producer prices.

Section 32 bonus buy purchases are fresh, processed or dehydrated potatoes, depending on what is determined to be in surplus or can easily be used in the programs, Keeling said.

"We initiate the request in response to growers' request or relative to growers' input based on the market conditions that they are experiencing," he said. "Undoubtedly, the interest in fad diets that are focused on no or low carbohydrates has certainly had an impact across the board on potatoes."

Keeling said that the amount of potatoes consumed per person has not been rising for a while, which is why the U.S. Potato Board is also involved in a campaign to present good information about the nutritional value and benefits of potatoes.

But the bonus buy movement is finding some opposition.

Dennis Conley is legislative liaison for dehydrated potato processor Basic American Foods, and recently sent in a letter to the USDA outlining the company's opposition to the purchase.

Conley's concerns include the timing of the request, as the 2003 fall potato crop is approaching the end of its normal storage life and the fact that the USDA has already supported the industry earlier in the crop year.

"The bid process used by USDA to process this requested purchase will take 30 to 45 days, so the first possible award would be in late June or early July," Conley's position statement said. "Most growing areas will not have any quality 2003 potatoes remaining and the 2004 potato crop will be soon available for the market."

Conley said that Section 32 is limited to where they can use the funds. They will either go into Food for Needy programs or into school lunch programs.

Conley stressed that there is no problem with the USDA purchasing for the Food for the Needy program, and added that his comments are limited to dehydrated potato products.

Regarding school lunches, Conley said that commercially-purchased potato products spent lots of time designing its products to fit the needs of the program, with value-added nutrients and vitamins.

"Our concern is that if the USDA comes in and buys commodity dehydrated potatoes, they replace our sales into that lunch program," he said. "At the end of the day, school lunch people tell us that (they) are not going to serve more mashed potatoes whether it's given to them or they buy them through normal channels."

Conley said that growers want the program to increase consumption of potatoes, but through the school program, the same amount would be being served.

"My point is, I'm not so sure, long-term, it's so good to be exposing young, future consumers to less than the best product that we have out there," he said.

Keeling said that the NPC has communicated with the people that have concerns, and relayed those concerns to the USDA.

"USDA is evaluating those and is going to make a response to the industry, and also we'll look at ways in which they could, when they put out the bid, ensure that the concerns are addressed," he said. "We're certainly going to work with the segments of the industry that have concerns over the Section 32 buys to make sure that they do not have a negative impact on their particular operations or the industry as a whole."