- The Republican-led House Committee on Agriculture released recommendations for changes to the Supplemental Nutrition Assistance Program (SNAP) — also commonly known as food stamps — on Wednesday after a two-year review, The Wall Street Journal reported.
- Potential changes include adding sugary beverages — which received 9.25% of all expenditures of food stamp money, second only to meat — to the list of items consumers cannot purchase with food stamps, allowing food stamps for online grocery purchases, and creating policy measures to prevent food-stamp fraud and loopholes.
- SNAP has expanded more than threefold since before the economic recession to $74 billion in 2015, though the unemployment rate has dropped in that time. Last year, more than 45 million people received food stamps, averaging about $126.83 per person each month, an increase over 3 million people in 1969 who received an average inflation-adjusted $42.82 each, per the U.S. Department of Agriculture (USDA).
Concerns about the food-stamps program revolve in part around these and other benefits' potential ability to discourage consumers from accepting job offers. Their potential hourly wages or salary may end up being less than what those consumers could receive from federal assistance, which legislators have argued could perpetually keep consumers on food stamps.
This angle is tricky for retailers. Grocery stores benefit from the sales and foot traffic that food stamps provide from consumers who may otherwise be unable to purchase groceries. That's in part why retailers tend to resist changes made to SNAP. However, if some of these consumers were able to earn money through work, their potential earnings over the long term could be more than their monthly food-stamps stipend. A healthy environment for consumer spending is also optimal for retailers.
As for specific issues, one of the most concerning for manufacturers and retailers alike is the potential removal of sugary beverages from permitted goods food stamps can cover. USDA data shows that for at least one major retailer, food stamps users tended to spend more on sugary beverages than consumers that do not use food stamps. Sugary beverages have been at the heart of debates over improving public health in recent years, hence the multiple cities that passed so-called soda taxes in the last election cycle.
Debates on granular issues aside, legislators will have to include any changes made to SNAP in the sweeping 2018 Farm Bill, which oversees policy and regulates spending for the food and agricultural industries. It's unclear at this point what types of changes President-elect Donald Trump's Administration or the GOP-dominated Congress will be after, particularly because Trump has yet to appoint the future leader of the USDA.
Any and all of these changes could become part of the 2018 Farm Bill or be nixed altogether, so it's probably premature for retailers to make any changes before then.