by Marion Nestle
Jun 13 2012

Who benefits most from food stamps? Follow the money!

While Congress is fussing over the farm bill, Michele Simon’s new report, Food Stamps: Follow the Money, identifies the businesses that most stand to gain from the $72 billion spent last year on SNAP.  This program, formerly known as food stamps, gave 46 million Americans an average of  $134 per month to spend on food in late 2011.

Just as health and anti-obesity advocates are working to bring agricultural policy in line with health policy by getting the farm bill to promote production of healthier foods, they also are looking at ways to encourage SNAP recipients to make healthier food choices.  At present, SNAP recipients have few restrictions on what they can buy with their benefit cards.

In contrast, participants in the Women, Infants, and Children program (WIC), which is not a farm bill program, can only use their benefits to buy foods of high nutritional value.  The idea of requiring SNAP recipients to do the same has split the advocacy community.

Anti-hunger advocates fear that any move to restrict benefits to healthier foods, or even to evaluate the current food choices of SNAP recipients, will make the program vulnerable to attacks and budget cuts.  They strongly oppose such suggestions.

Follow the Money explains some of the politics behind efforts to maintain the status quo:

  • Food industry groups such as the American Beverage Association and the Snack Food Association teamed up with anti-hunger groups to oppose health-oriented improvements to SNAP.
  • Companies such as Cargill, PepsiCo, and Kroger lobbied Congress on SNAP, while also donating money to America’s top anti- hunger organizations.
  • At least 9 states have proposed bills  to make health-oriented improvements to SNAP, but  none have passed, in part  due to opposition from the food industry.
  • Coca-Cola, the Corn Refiners of America, and Kraft Foods  all lobbied against a Florida bill that aimed  to disallow SNAP purchases for soda and junk food.
  • Nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP dollars in one year.
  • Walmart received about half of the billion dollars in SNAP expenditures in Oklahoma over a 2-year period.
  • J.P. Morgan Chase holds contracts in 24 states to administer SNAP benefits.
  • Banks and other private contractors are reaping significant windfalls from the economic downturn and increasing SNAP participation.

The point here is that banks that administer SNAP have a vested interest in keeping SNAP enrollments high and makers of junk foods have a vested interest in making sure that there are no restrictions on use of benefits.

Another point: data on use of SNAP benefits exist but are either proprietary or not made available.

The report concludes with these recommendations:

  • Congress should maintain SNAP funding in this time of need for millions of Americans;
  • Congress should require collection and disclosure of SNAP product purchase data, retailer redemptions, and national data on bank fees;
  • USDA should evaluate state EBT contracts to determine if banks are taking undue advantage of taxpayer funds.

I’ve not seen this kind of analysis before and this report deserves attention.  At the very least I hope that it will encourage Congress to make sure that the poor get their fair share of SNAP benefits.

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  • Five years ago, the USA stopped requiring fingerprinting for food stamp recipients. But at Mayor Michael Bloomberg’s insistence, it allowed New York City to continue to do so. After a 45-day comment period, the city will be forced to stop this stigmatizing process that deters struggling families from getting the help they need. Now Mr. Cuomo needs to push legislators to end fingerprinting for welfare applicants, which is still required by state law.

  • Melissa Hinch

    While it would be nice if healthier food choices could be made, fresh fruits and vegetables and low fat meats are more expensive than junk food. If we are going to require participants to buy certain foods, we will need to make sure they have the resources to do so. Arizona has a program that lets politicians try to live on a SNAP budget for a week. I think it should be a requirement for politicians before they can take office.

  • John

    Food stamps certainly provide downstream revenues for the food industry. The macroeconomics in M1 money supply are ideal for fiscal and monetary stability. Money flows in and is quickly distributed downstream to grocers, workers, producers – that is a considerable M1 tool benefiting stability during periods of recession or pending recession, not a black hole.

    The idea of creating a food formulary, or black list is contrary to free markets, and common sense. The purpose of the program is to provide food, not expanding it to healthcare dietary restrictions for the poor. If we mandate, it must be for everyone and for everything. Manipulating one demographic while ignoring everyone else is obscene.

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  • Food bussiness is about money. See codex alimentarious

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