Food Stamps: More Benefit to Big Food Than to the Poor?

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The federal government is spending millions to encourage more Americans to apply for food stamps, or rather the Supplemental Nutrition Assistance Program (SNAP), which replaced food stamps. Ads paid for with tax dollars are asking more people to enroll in SNAP even though the program has dramatically expanded in recent years: Roughly 46 million Americans now get SNAP benefits, up from just 17 million in 2000, and the costs associated with the program have risen from $17 billion in 2000, to $30 billion in 2007, way up to $78 billion last year. While those receiving benefits must be happy with the program’s growth, there’s another group that might even be more pleased: corporations that make or sell junk food.

Sure, poor Americans who get food on the table for dinner, partly with the assistance of SNAP, must appreciate the program. But major corporations and food groups, including Pepsi, Kraft Foods, Kroger, Coca-Cola, and the Corn Refiners of America, also warmly embrace SNAP. All, in fact, have lobbied Congress and/or various states to expand SNAP and make sure that recipients have the most freedom possible in deciding how to use their allowances, including the unlimited purchase of soda and junk food.

Could it be that these powerful interest groups are supporting SNAP simply because they want to end hunger and help the poor? Or is Big Food supporting SNAP because it benefits the food industry just as much as it does those individuals who directly receive SNAP assistance?

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The idea that the food stamp program is essentially a corporate subsidy sounds like it could have been cooked up by the Tea Party or a libertarian, anti-tax group. But this argument has lately coming from very different quarters.

Michele Simon, a public health expert in Oakland, Calif., doesn’t want SNAP funding cut, nor does she want to snip societal safety nets for the poor. But she does want taxpayers to consider the possibility that, as she puts it, “SNAP represents the largest, most overlooked corporate subsidy” in the 2012 Farm Bill now being considered by Congress. Simon, who runs the watchdog group Eat Drink Politics, published a report last month entitled “Food Stamps: Follow the Money,” which demonstrated that not only do the likes of Walmart, Mars, Kroger, and Coca-Cola benefit from SNAP, but so do large banks such as J.P. Morgan Chase, which receives tens of millions annually from states in exchange for operating SNAP Electronic Benefits Transfer cards given to recipients. Among the findings in the report are that:

Companies such as Cargill, PepsiCo, and Kroger lobbied Congress on SNAP, while also donating money to America’s top antihunger organizations.


J.P. Morgan Chase has contracts for Electronic Benefits Transfer (EBT) in half the states, indicating a lack of competition and significant market power.

Despite her problems with SNAP, Simon argues that funding should be maintained at its current level. But, at the very least, her recommendations include that the “USDA should grant states waivers to experiment with health-oriented improvements to SNAP” (several proposed bills to improve the health of beneficiaries by restricting what they can buy have been shot down), and that “Congress should require USDA to collect data on SNAP product purchases” (surprisingly, this data isn’t gathered already).

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Simon is not alone in proposing that we’re overdue to reexamine how food stamps and SNAP are administered, who is truly benefiting, and who may be getting hurt. In a San Francisco Chronicle story featuring Simon’s point of view, another expert, Marion Nestle, NYU professor of nutrition, notes that it is “time to consider the idea of limits”:

“Obesity was not a problem when food stamps started. Now it is. The WIC program limits purchases that can be made with vouchers.” Food stamp recipients, she said, “could still buy what they like — just not with taxpayer dollars.”

Another mainstream putdown of SNAP was recently issued by USA Today’s editorial board. The growth of SNAP, the editorial maintains “is being driven by politics as usual,” rather than any humanitarian mission to put an end to hunger in America. The methods by which the program has expanded have sometimes been alarming, the piece states:

Large families have been able to get higher amounts of assistance. States have been given greater flexibility to manage the program, which often means ignoring federal guidelines limiting the assistance based on recipient income or assets. States also have been given cash bonuses from Washington for signing up more people.

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In order to “save taxpayers a lot of money while restoring faith in the mission,” the editorial suggests, now is the time to start nudging the number of beneficiaries and amount of money spent on SNAP “back toward where they were in the mid-’90s.” But again, in recent months, the USDA is openly encouraging the opposite to happen. As CNN Money reported, “the federal government wants even more people to sign up for the safety net program,” and the USDA has been spending millions of dollars on radio ads to meet its goal. The nation’s largest grocers and food manufacturers must be pleased.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.