Farm-to-school programs — which provide healthy meals to children and support economic development for rural areas and local farms, among other benefits — are actually working economically in at least one school district in upstate New York, according to new research of Cornell.
An in-depth analysis of such a program in the Buffalo City School District, the second largest in New York state and the largest eligible for a state lunch reimbursement program introduced in 2018, showed that the program not only pays for through increased gross domestic product (GDP), there was actually a slight return on investment.
Todd Smith, MS ’94, Ph.D. ’03, Charles H. Dyson Professor in the Charles H. Dyson School of Applied Economics and Management, in the Cornell SC Johnson College of Business, is the senior author of “Evaluating the Economic Impact of Public Incentives to Support Farm-to-School Food Purchases,” which was published on October 21 in the journal Food Policy.
Co-authors are Shayna Krasnoff, MS ’22, now a senior analyst at the consulting firm Resonance Global; and Cheryl BilinskiMPA ’11, local food systems specialist and farm-to-school presenter Cornell Cooperative Extension.
Key finding: In addition to a clear shift in food spending categories (including exponentially more fruits, vegetables, and beef from local farms), increased reimbursement from school district government was more than offset by an expected increase in GDP due to increased demand of locally sourced food.
That is, for every dollar of GDP spent by the state to support the program, $1.06 of GDP was expected to be returned. But that comes with a caveat: Increasing local food spending depends on the expansion of the associated agricultural and food industries—not on redirecting existing supplies—to meet that demand.
“I think that’s really important,” Schmidt said. “In the long term with a new market – like in schools – we would expect the overall demand to grow so that everything is new (supply) because there is a new market for these products.” But we need to consider these net effects instead of just the gross effects.
Bilinski co-chairs the Cornell Farm to School Program task force and participated in the New York Department of Agriculture and Markets’ 30% initiative, introduced in 2018, which significantly increases school lunch reimbursement if school districts purchase at least 30% of their ingredients as New York Food Products (NYFP). An item qualifies as NYFP if it is grown, harvested, or produced in the state, or if the item contains at least 51% agricultural inputs grown, harvested, or produced in the state.
School districts that purchase at least 30% of their food ingredients as NYFP qualify for enhanced school lunch reimbursements – 25 cents per lunch, instead of 5.9 cents.
“Sherrill reached out to me to say, ‘Is there a way we can measure the success of the program from an economic standpoint, the impact of the increase in local purchases made by a very large school district?'” Schmitt said. “Essentially, do the extra reimbursement dollars they get for hitting a local purchase goal make economic sense?”
The researchers chose to analyze Buffalo because it is the largest of the few school districts that qualify for the program, serving more than 29,500 lunches per day compared to an average of 1,900 lunches per day for the other districts.
Krasnoff, who was a master’s at the time, reviewed vendor invoices from the 2017-18 and 2018-19 school years to detect any change in purchases since the enhanced reimbursement program began. “It was very intensive data collection,” Schmidt said.
The big takeaway for Schmidt: Whoever came up with the 19.1-cent increase in lunch reimbursement got it right, almost to the penny, in terms of GDP ROI.
“It was kind of remarkable to me that it was actually recruited to this level,” he said. “What if it wasn’t 19 cents, but 29 cents, and you ended up with the same shopping results? It would then cost the state more for the same level of benefit.
“Maybe it was a fluke,” he said, “but maybe some very smart people figured out how much that extra recovery should be.”
This work was supported by grants from the Local Food Promotion Program to the USDA Agricultural Marketing Service and the New York State Department of Agriculture and Markets.