Local Foods Purchasing Bill: What I did at work today

Local Foods Purchasing Bill
Rural Vermont- 2011

Senator Anthony Pollina approached Rural Vermont at the beginning of the 2011 legislative session for assistance in drafting a local procurement bill. This bill is meant to encourage state entities, and institutions that contract with the state, to purchase local food from small farms. In effect, the bill would provide a monetary incentive to purchasing local food, probably in the form of an applied percent advantage for local bidders (around 10%.) This document shows what other states have done, as well as lays out some language surrounding the bill.


Thirty-five states have reciprocal laws that require public contracting agencies to buy from the lowest bidder, and to give preference to local bidders in the bidder's home state. And although reciprocal laws have proved contentious, the courts have ruled in favor of local preference statutes, especially when these laws will directly improve local economies (http://static.newrules.org/drdave/1-localpref.html). Several state contractors currently purchase local food: correctional facilities, state hospital, Vermont Veteran’s Home, Woodside Juvenile Rehabilitation Center. Act No. 38 (H.522), an act relating to the viability of agriculture within Vermont, set into motion much of this purchasing. In section 4 of the Act, a study is established: “within the agency of agriculture, food and markets, the agency of administration, and the department of buildings and general services to develop a system of local food and dairy purchasing within state government and government-sponsored entities.”

A Vermont Local Foods Bill
Under the market-participation exemption, states are permitted to mandate or provide incentives for the purchasing of locally grown food (food within a certain geographical boundary.) State entities, and related contractors, such as jails, schools or other institutions, are all subject to the bill we propose for Vermont. For the purpose of this bill, local food is defined as Vermont-grown farm produce. The product receiving incentive must be grown, harvested and produced within state bounds. In addition, products receiving incentives must be grown, harvested and produced on small farms. The Economic Research Service of the USDA defines small farms as farms with less than $250,000 in sales annually (http://www.ers.usda.gov/briefing/farmstructure/glossary.htm#typology).
Purchasing local food re-circulates money into the economy and helps to ensure a quality product. A study in Arizona found that using local independent suppliers for state contracts results in three times the economic benefit of bids fulfilled through national chains. The study’s findings were published in 2007 in an article entitled: “Procurement Matters: The Economic Impact of Local Suppliers.” (http://localfirstaz.com/downloads/procurement-matters.pdf)
What Other States Have Done:
Below are a few of the states that have procurement preference bills. Some states have assigned percent incentives (Indiana and Louisiana); while others have more broad statutes (http://www.oregon.gov/DAS/SSD/SPO/reciprocal_detail.shtml).
Indiana
-15% preference is awarded to small businesses (independently owned and operated)
-1-5% preference for all other local businesses depending on the size of the contract

Louisiana
Agricultural or forestry products, including meat, seafood, produce, eggs, paper or paper products shall be granted a 10% preference (does not have to lower bid price).
-Produce shall be produced in Louisiana and produce products shall be produced and processed in Louisiana.
-Eggs shall be laid in Louisiana and egg products shall be processed from eggs laid in Louisiana.
-Meat and Meat products shall be processed in Louisiana from animals which are alive at the time they enter the processing plant.
-Seafood shall be:
-Harvested in Louisiana seas or other Louisiana waters
-Harvested by a person who holds a valid appropriate commercial fishing license issued under statute
-Products produced from such seafood shall be processed in Louisiana. Domesticated catfish shall be processed in Louisiana from animals which were grown in Louisiana.
-Paper and paper products shall be manufactured or converted in Louisiana.
All other agricultural or forestry products shall be produced, manufactured, or processed in Louisiana.

Massachusetts
-Gives first preference to locally produced goods which are sold within the commonwealth, and then to goods manufactured and sold domestically


We propose:
Vermont
-10% preference to small (less than $250,000 annual sales) farm products, grown, harvested and produced within state bounds
-Economic costs and benefits (relating to the state budget and the rural farm economy) shall be analyzed two years after implementation and reported to the general assembly