A new report criticizes the food industry for reaping much of the benefit of food aid funding. Despite that, ordinary Americans are still the biggest beneficiaries of the program.
When I was growing up, my family was never the beneficiary of food stamps. Not because we didn't qualify, but because my parents were too proud or ashamed to apply. My dad, an unskilled laborer, was often laid off during the winter months, and periodically at other times of the year as well. My mother's unremarkable teacher's pay barely allowed our family to scrape by during these periods and often my parents had to make sacrifices between paying for the house, buying heating fuel, and/or food.
Life's experiences shape us all, and it is mine that causes me to agree with some of Michele Simon's recent report, " Food Stamps: Follow the Money." I went on to earn a doctorate in public health nutrition, and then to work for the food industry before becoming a private consultant to large food companies and retailers.
So I certainly agree that food stamps are essential. However, I take great offense and object to Simon's primary message: banks, retailers, and food companies benefit more than the many millions of children, families, and elderly receiving these benefits. While the report focused on "big business," it lacked focus on the most important constituent group in this discussion -- the millions of Americans struggling with poverty. The recent House Agriculture Committee recommendation that the next farm bill cut $16 billion in food benefits makes the question more urgent. And it makes a clear-sighted examination of the economic and social costs of food stamps even more necessary.
It is no secret that we are living in a bleak economy and for millions, the worst ever experienced. In any given month during the first three months of 2012, 22.2 million households and 46.6 million individuals participated in the Supplemental Nutrition Assistance Program (SNAP) -- still referred to as food stamps in 22 states. In March of 2012, 1.8 million more Americans participated in SNAP compared to the same month in 2011. Maryland, Hawaii, and New Jersey saw increases of more than 10 percent between these periods.
During this 2012 period, the average cost per month to taxpayers was $6.5 billion, which included $6.1 billion in benefits, $237 million in state administrative costs, and $67 million for nutrition education). The average benefit per person was $133 per month or less than $550 for a family of four. It seems hardly significant to most, but for a family that is choosing between housing, heat, medicine, and/or food, it is very significant. The majority receives benefits for less than a year and the program provides a safety net to families during transitional economic times.
The majority of SNAP participants are children and older adults. In 2010, 76 percent of SNAP households included a child under the age of 18 or an adult 60 or older. This consumed 85 percent of all benefits. Many households and individuals represent the "working poor" (having earned income). According to the Food Research and Action Committee (FRAC), high rates of unemployment and underemployment are significantly contributing to increased need. In 2010, 41 percent of all SNAP participants lived in a household with earned income. Just 15 percent of SNAP households had incomes above the federal poverty guideline ($22,050 for a family of four). Almost 20 percent of beneficiaries had no cash income of any kind.
According to recent US Census Bureau and USDA Food and Nutrition Services (FNS) reports; SNAP is working as intended. It is helping to lift families out of poverty and decrease the number of food insecure individuals and households. 3.9 million people, including 1.7 million children, were lifted above the poverty line in 2010 according to the Census Bureau's latest report on poverty and income in the United States. In many states, SNAP benefits lifted a significant percentage of households above 101 percent of the poverty level including New York (33.5 percent), Vermont (26 percent), Rhode Island (25.1 percent), and Massachusetts (23 percent).
Simon's report would have one believe that SNAP participants have diets that are far inferior to that of the average American. In fact, according to the USDA's April report, "Building a Healthier America," SNAP participants have diets that are similar to those of higher-income Americans. The Healthy Eating Index scores released by the USDA show that no group is demonstrating a stellar performance with regard to diet quality.
While SNAP purchasing data are not widely available to all of those who would love access, the USDA has reported that vegetables, fruits, grain products, meat, and meat alternatives account for most of the money value of food used by SNAP households. In fact, these food groups account for nearly three-quarters of their at-home food spending. Further, while Ms. Simon's report points out that $4 billion is spent annually on soft drinks by SNAP participants, it fails to point out that milk and water are the number one and two purchased beverages, respectively, measured in units (which is more significant than $). These beverage-purchasing trends are reflective of the U.S. population at large. So, remind me -- why does the report recommend institutionalizing restrictions on American's that already feel marginalized in our society?
The report states that one in seven Americans is currently receiving benefits; however, what is not stated is that an estimated 30 percent of those eligible for SNAP are not accessing benefits. This is particularly pronounced for the "working poor." At 60 percent, the participation rate was lower than the rate for all eligible persons (72 percent) in fiscal year 2009. In no state was the rate for the working poor significantly higher than the rate for all eligible people. One of the top five reasons cited for non-participation is the stigma attached to participation. SNAP is a safety net program and we have millions of Americans falling through the cracks because of the perception attached to the program.
Although big business benefits from SNAP, according to the USDA the trickle down impacts of SNAP are also significant in this country. In the USDA's Building a Healthier America report, the agency concludes that for every $1 in new SNAP benefits up to $1.80 is generated in economic activity. Big business surely benefits but it also benefits their employees, the truck drivers delivering the food, plants making the food, and the farmer who produces the food. The USDA estimates that for every $1 billion increase in SNAP benefits, 18,000 full-time equivalent jobs, including 3,000 farm jobs, are maintained and/or created. I didn't see any of this referenced in Ms. Simon's report.
What I would really love to see? I would love to see the large retailers being more creative in coming up with ways to enroll the millions of individuals, particularly children and elderly, who are eligible for benefits but currently not participating. Additionally, I would like to see retailers create mechanisms for re-enrollment reminders. I would love to see families, children, and the elderly who are struggling to become more food secure not have to make trade-offs every day between food and other necessities.
Regarding the report's recommendations, I agree that "Congress should not cut SNAP benefits in this time of extreme need" -- but our agreement stops there. I would like to better understand the cost involved to collect product-specific data, and to monitor, analyze and make that data available. Once the cost is clear, the next steps are understanding who will pay for the retailers' (especially small ones) reprogramming of their point-of-sale systems; who besides banks will transact the benefits (should we go back to paper and pencil?); who will actually pay for these recommendations--will the costs will be tacked on to existing program costs, or passed on to consumers by retailers in the form of increased food costs; whether the recommendations will affect the programs' efficiencies and scale; and, most importantly, what may be the possible unintended economic consequences to our country and to SNAP participants.
I don't know the answers to those questions. But I do to the big one: Do companies benefit? The answer is yes. Do they benefit more than the millions of families and individuals who are lifted out of poverty and able to feed themselves and their families? Absolutely not.