Academic journal article Agricultural and Resource Economics Review

Sustainable School Food Procurement in Large K-12 Districts: Prospects for Value Chain Partnerships

Academic journal article Agricultural and Resource Economics Review

Sustainable School Food Procurement in Large K-12 Districts: Prospects for Value Chain Partnerships

Article excerpt

Many scholars and activists are interested in the potential for school-based childhood nutrition programs to positively impact the U.S. agri-food system. This paper explores efforts of a national K-12 school food collaborative to procure more sustainably grown and healthful food products. After a review of literature on transaction cost theory and school food procurement, the paper examines the potential of strategic partnerships in a value chain framework to meet procurement change goals. Results from a qualitative study of two participating school districts suggest that partnerships can offer potential solutions to recurring procurement barriers found in previous research.

Key Words: school meals, supply chains, transaction costs

Many scholars and activists are interested in the potential for school-based childhood nutrition programs to positively impact the U.S. agri-food system. Interest in school food is rooted in the dual objectives of the National School Lunch Program (NSLP) and other school-based childhood nutrition programs: (i) to provide adequate nutrition for children, and (ii) to support markets for U.S. farm products (Ralston et al. 2008). These programs are a vital source of nutrition for U.S. children, particularly low-income children. Given the government's expenditure on school food-$13.8 billion in fiscal year 2010 (USDA 2009)-sales to schools can potentially be an important market for farmers. Furthermore, these goals align with USDA's recently launched "Know Your Farmer, Know Your Food" (KYF) initiative, which aims to create linkages between local consumers and local producers (USDA 2010).

This paper discusses efforts of a national K-12 school food collaborative to achieve more sustainable and healthy procurement practices. It is an exploratory study specifically focusing on two districts engaged in intensive efforts to investigate and share strategies for change. The next section will review selected literature on transaction cost theory and supply chain models. Then we examine an emerging model in agri-food studies-the values-based supply chain or value chain-by contrasting it with the conventional supply chain model. We then discuss ongoing barriers in school food procurement and the potential of value chains to address them.

Selected Literature

Supply Chain Models

Numerous studies discuss the role of supply chain partnerships in guiding firms' procurement decisions. Transaction cost economics suggests three principal models for procurement (Dyer 2000, Hobbs 1996, Ritter 2007). At one end of a continuum is vertical integration or hierarchy, where a firm produces its needed inputs in-house, or otherwise exerts a great deal of control over the process. At the other end of the continuum is the use of arm's-length spot markets, where the firm shops for the best price each time it purchases inputs. In the middle of this continuum is a range of possible means of coordinating economic activity, including partnerships, where the firm buys from a limited number of preferred suppliers and builds long-term strategic relationships with them.

The literature on transaction costs and economics suggests circumstances when each model will prevail (Dyer 2000, Hobbs 1996, Kumar 1996). The vertical-hierarchy model is called for when inputs are of high differentiation or quality, and/ or when the means to deliver them are highly specialized; control over inputs is needed to ensure quality and ensure repeat use of specialized infrastructure. Spot markets are used for frequent and highly routinized transactions of homogeneous or low quality inputs. The same input is available from many places, so the buyer can simply choose the one with the lowest cost.

Strategic partnerships occupy a middle ground in this continuum. Partnerships are best used when vertical-hierarchical arrangements are too slow to adapt and innovate, but arm's-length suppliers are not willing to invest in equipment or share information needed to achieve needed innovation (Dyer 2000, Kumar 1996). …

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