History and Background - Section 2
Section 32 of the Agriculture Act of 1935 (P.L. 74-320)
To bring stability into the marketplace, Congress passed P.L. 74-320 on August 24, 1935. Section 32 of this act made available to the Secretary of Agriculture an amount of money equal to 30 percent of the import duties collected from customs receipts. The sums were to be maintained in a separate fund to be used by the Secretary to encourage the domestic consumption of certain agricultural commodities (usually those in surplus supply) by diverting them from the normal channels of trade and commerce. The object of this legislation was to remove price-depressing surplus foods from the market through government purchase and dispose of them through exports and domestic donations to consumers in such a way as not to interfere with normal sales.
To utilize the foods purchased with Section 32 funds, eligible categories of recipients were established. This law provided the basis for donating surplus commodities (and later funding) for federal domestic food programs. USDA originally defined eligible outlets for these commodities, which included schools (for lunch programs), nonprofit summer camps for children, charitable institutions, and needy families.
Essentially, it was the donations of these surplus foods that initiated the school lunch and other child feeding programs. During the Depression, commodity donations were the primary source of support for school lunch programs. During World War II, food shortages and transport problems limited commodity shipments to schools and Congress authorized the use of Section 32 funds to provide financial assistance to schools and child care centers to provide food for lunch programs. In 1943, State agencies took over full administrative and financial responsibilities of the donated food program at the State level (became “distributing agencies”).