We have reached the halfway point in 2020 and what a year it has been. The coronavirus has wreaked havoc with our daily lives, our work, our industry, etc. and now we have major civil unrest throughout the country resulting from the shooting of a black man in custody over the Memorial Day holiday in Minneapolis. The National Guard was called up in more than half of our U.S. states and counter demonstrations occurred across the pond in many other countries. It is all extremely frustrating and not to have leadership from the White House is even more upsetting. Let us hope leadership from other high levels of our federal and state governments combined with constructive guidance from local community and religious leaders brings us closer together as we must find ways to stop these serious ills that are disrupting our society. It is not that things will get better. It is that things MUST get better. Yes, I am upset, and you should be too.
Okay, I am getting off my soapbox now and back to the business of bringing you up to date on legislative and regulatory happenings in the Nation’s Capital that impact the food industry.
SNAP Movement
The pandemic continues to be the focal point of a lot of hearings and legislative and regulatory activity occurring on the Hill. Certainly, the impact on the food industry has been widespread and much of it will be long lasting. One of the major changes for food retailers will be the ability to accept the Supplemental Nutrition Assistance Program (SNAP) benefits online. The Department of Agriculture has done a good job in the past few months to permit low income families and individuals in most states to use their food benefits online. But in a letter to USDA Secretary Sonny Perdue, House member Sanford Bishop (D-GA) said that USDA needs to approve more online retailers with a presence in rural states and communities with limited access to grocery stores. Presently only a handful of companies that meet certain e-commerce requirements can accept SNAP benefits online. In most states, Amazon and Walmart are the only options as I have previously reported.
“While the number of states participating is increasing, the vendors remain primarily in the northeastern area of the U.S.,” wrote Bishop, chairman of the house appropriations agriculture-FDA subcommittee. Thus, while currently USDA has approved about 37 states to participate, accounting for 90 percent of SNAP households, Perdue commented that USDA has plans to expand the program to include more “independently owned and operated retail stores.” And Congressman Bishop went further to say that dollar store chains could also offer online SNAP purchases to low-income families.
Using SNAP for Hot Meals
In mid-May, the House passed a $3 trillion “Heroes” pandemic relief bill. The legislation contained relief for state and local governments, hospitals, and a wide range of assistance programs, including SNAP. In addition to increased funding for SNAP, the bill also allows the temporary use of benefits to purchase hot meals in either restaurants or supermarkets. It is unlikely the new relief legislation will pass anytime soon in anything close to its present form, but it is possible that the hot meals provision will survive at least until the pandemic retreats.
Seafood Industry Boosted
The seafood industry has been severely damaged by the nation’s response to the pandemic. As restaurants and hotels in every state closed to prevent the spread of COVID-19, the market for fresh seafood dried up. To help address this, the president signed an executive order instructing federal agencies to work to expand sustainable seafood production. The order focuses on deregulating the permitting process for aquaculture, speeding up other regulatory reforms and making $300 million available to fishermen and seafood businesses hurt by COVID-19.
Meat Industry Problems Continue, But A Ray of Hope Exists
The meat industry continues to struggle with the impact of COVID-19 on its facilities and its employees. Employee infection rates have grown and remain high, facilities continue to close and re-open, the industry is changing how it operates and is spending millions revamping its plants and still production continues to lag. Major newspapers including the Washington Post and the New York Times have written major stories recently on this matter.
Nevertheless, according to Politico, meat supplies are rebounding, and spot shortages of meat products should let up in the coming weeks as wholesale prices fall slowly and supplies tick up just as it would normally be at peak grilling season. After a slew of plant closures, beef and pork processing plants are now, at press time, operating at over 80 percent capacity, Bloomberg News reported.
Yet, according to an item I noted in the publication Business Insider, business is booming for butchers and local meat processing operations that have not faced the same coronavirus shutdowns as massive slaughterhouses across the country. The sudden demand for local meat processors comes after a long period of decline, with many smaller businesses squeezed out by larger chains.
Food Box Contracts – Questionable
To get food to those in need, USDA swiftly created plans to distribute boxes of surplus food to needy individuals and families. Great idea! However, government watchdogs have cried foul, stating that multimillion-dollar contracts to distribute the food boxes have gone to companies that appear to have little to no experience working with food banks or even farmers. And Politico even mentioned that food industry experts have been quietly grousing about whether many of the quickly hired firms can pull off the task of buying up a variety of perishable food items, packing them in boxes, and then distributing them to food banks. The cost of the box food distribution program is more than $1.2 billion!
The House agriculture subcommittee on nutrition, oversight and department operations issued a statement saying they “are concerned that contracts were awarded to entities with little to no experience in agriculture or food distribution and with little capacity to meet the obligations of their award” and wants answers quickly. Is this another very wasteful exercise in government good intentions gone bad? We shall see. Some of the contracts to prepare and distribute the food boxes went to such firms as an event planning firm that specializes in weddings; a firm that sells lotions and other wellness products at airports; and a California firm that offers “business finance solutions.” Go figure.
Organic Or Not?
If it is grown in water can it be called “organic”? You may recall that I have previously commented about this issue as last March the Center for Food Safety filed a lawsuit challenging the National Organic Standards Board’s decision to allow hydroponically grown produce to be certified organic. The produce industry publication The Packer reports that the Department of Justice has intervened asking the court to dismiss the suit. The Justice Department’s action was praised by the Coalition for Sustainable Organics. Whether it is grown hydroponically or in good old dirt, if it is not sprayed with chemicals, I would say it is truly organic!
Dietary Guidelines
I have tried to keep readers up to date on the roll-out of the Dietary Guidelines. Keep in mind that the all-important Dietary Guideline’s main purpose is to form the development of federal food, nutrition, and health policies and programs. Compare it to that of constructing a building. The Dietary Guidelines are the foundation. The guidelines are a critical tool for professionals to help Americans make healthy choices in their daily lives to prevent chronic disease and enjoy a healthy diet. The next critical step comes this month when the Dietary Guidelines Committee draft conclusions will be announced. Then after taking comments and suggestions, the advisory committee will publish a final scientific report that will advise USDA and HHS as they craft the 2020 Dietary Guidelines.
The guidelines, once completed and approved, will then become a document with a five-year lifespan for use by both the public and private sector in lots of ways such as for educational purposes as well as for marketing tools. However, as often expected, the long road to completion of the 2020 Dietary Guidelines, like any major and controversial project of this nature, often runs into roadblocks. Why? Simply because in this case a diverse list of organizations has been closely watching every single step of the drafting process. Now, just as the drafting nears completion, Politico reported that a group called the Nutrition Coalition has written to USDA and HHS asking to delay the release of the Dietary Guidelines Advisory Committee’s conclusions. The group alleges that some “whistleblowers” from the committee have come forward with “serious concerns” about the process. Concerns have been mentioned along several fronts including from not having enough time to complete scientific reviews to leaving out dozens of low-carb clinical trials, etc. “The federal government cannot ignore these allegations and should delay publication of the Dietary Guidelines advisory committee’s expert report to address and potentially remediate them,” said Nina Teicholz, executive director of the Nutrition Coalition. We doubt if this whistleblower report will delay the draft report but in government circles, one never knows which way the wind will blow. Watch for my additional updates next month.
Have a great summer. Stay safe.
Barry Scher is associated with the public policy firm of Policy Solutions LLC and may be reached at [email protected]