The Business Council of New York State opposes the “Buy from the Backyard Act” (S. 978 Libous / A.5051 Peoples-Stokes) which would require all agencies that make food purchases to procure at least 20% that were grown, produced, harvested or processed in New York State.
The Business Council believes that enacting such a provision would be detrimental to New York State agricultural and manufacturing businesses that might contract with other states because of retaliatory reciprocal preference laws that we and a majority of other states have. Retaliatory reciprocal preference laws are designed to promote an open, fair competition and to prevent preferential treatment based solely on where a business is located. An open, competitive procurement process ensures fairness to the vendor community and that bids are evaluated on cost and quality for the benefit of taxpayers. In-state preference laws can be detrimental to a business trying to expand their market because their bids would be devalued by the rate of preference their resident state gives them during the evaluation process, in this case by 20%. Laws like this might also prohibit a new business from locating to New York State because their prospective market would be limited to the boundaries of this state.
New York State finance law does encourage state agencies to establish food contracts with New York grown or produced foods and food products but it does not require it. The state finance law was also recently amended to allow agencies to buy New York State food products using their discretionary funds. This allows them to circumvent the formal competitive procurement process and purchase food products from New York State resident businesses without triggering any retaliatory reciprocal procurement laws. “Buy from the Backyard Act” would mandate state agencies to purchase 20% of their total contracts for food from within New York State and would also limit these same businesses from opportunities outside of this state.
The purpose of this legislation is to promote the use of New York State businesses in the contracting process. There are other ways to achieve this goal that neither requires any statutory change nor would negatively impact these same businesses. Agencies can make certain specifications or requirements in their bid documents that would be more beneficial to an in state business (e.g. transportation). New York and 36 other states have a retaliatory reciprocal preference laws in place. Enacting the “Buy from the Backyard Act” would be detrimental to New York's agriculture and manufacturing industry and would hurt New York's business climate more than it would help by severely limiting business opportunities.
For these reasons, the Business Council opposes this legislation.