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No More SNAP?

New restrictions on SNAP could bring hardships for retailers and the low-income customers who rely on the program.

​By James Scott

The ability of convenience stores to accept benefits under the Supplemental Nutrition Assistance Program (SNAP, or food stamps) is being threatened on parallel fronts in Washington, with both the Congress and the U.S. Department of Agriculture (USDA) considering rules that could limit the eligibility of some establishments (such as convenience stores) to participate in this program.

This may not mean much to convenience stores in affluent areas where food stamp purchases are rare, but in inner cities and rural areas where access to supermarkets is limited, new restrictions could bring hardships for both retailers and the low-income consumers who rely on the program the most. Lost in the rhetoric in Washington about cost cutting, nutrition and fraud, is the state of hunger in America today.

Congress has been taking aim at food stamps for years, calling the program bloated and beset by fraud. And in their zeal to reform the program, some lawmakers are suggesting changes that would ultimately block retailers from redeeming food stamps. If restricted items like tobacco and alcohol make up significant shares of a businesses’ sales, retailers could be prevented from accepting SNAP benefits. At the same time and separately, the USDA also is considering establishing restrictions.

“Convenience stores offer a wide range of items that meet USDA requirements under the Supplemental Nutrition Assistance Program, everything from milk and eggs, to fresh fruit and vegetables. And for many Americans, convenience stores are the only local option,” said Lyle Beckwith, NACS senior vice president of government relations. “Convenience stores are the only lights on in Wyoming County, Pennsylvania, when Procter & Gamble’s third shift leaves work, and we are the only retailer in Salt Lake County, Utah, when Inline Plastics second shift comes off.”

Beckwith continued: “The backers of these plans say they want the program to provide better nutrition and to reduce fraud, but, in fact, these misguided proposals would have the opposite effect. If we’re trying to reduce hunger, we need to make sure people have access to food.”

If a convenience store, or any retailer, offers nutritious prepare-at-home foods, why should it matter what else it sells? What if a fresh market is set up by a small businessman to sell his fresh grown produce alongside his wine shop? Should SNAP consumers be banned from  shopping there? Or what about a retailer located near the border of states where tobacco taxes make up a significant difference in price. The store in the lesser-taxed state may sell a huge volume of cigarettes, but does that make his fresh fruit any less nutritious?

If enacted, these new rules would mean SNAP beneficiaries might no longer be able stop in their local convenience store to pick up things like milk, eggs, bread, fruit and cheese with their benefits. When the convenience store is the only light on in the neighborhood, these people may have to go without.

The USDA says 23.5 million Americans live in so-called “food deserts,” a census district in which at least 20% of the residents are below the poverty line and 33% live over a mile from the nearest supermarket. More than 18,000 convenience stores are located in these food deserts nationwide. For these consumers, finding stores that accept food stamps is a challenge.

The Congressional Black Caucus (CBC) argued recently that limiting the number of SNAP-eligible retailers would be especially hard on low-income city dwellers. In a letter to Representatives Frank Lucas (R-OK) and Collin Peterson (D-MN), the chairman and ranking member of the House Agriculture Committee, the CBC said convenience stores are the only local source of food for some people.

“Many of us represent urban areas, which are oftentimes labeled ‘food deserts’ because large grocery store chains are less likely to locate there. Thus, bodegas, convenience stores and locally owned corner stores are often the only food providers in the region and thus a place for our constituents to redeem their SNAP benefits to purchase eligible food items,” said the letter, which was signed by 25 House members.

The letter goes on to say that if the restrictions are enacted, “small establishments would not respond by selling less alcohol or tobacco — instead, they would respond by turning away needy Americans hoping to purchase food with their SNAP benefits.”

SNAP is an $80 billion per year initiative that has helped feed underprivileged Americans for decades. It means billions of dollars in annual sales to convenience stores.

According to the USDA’s Food and Nutrition Service (FNS), at the end of fiscal year 2012, more than 246,000 retailers were authorized to redeem SNAP benefits, an increase of almost 100,000 since 2005. Some 82% of all benefits were redeemed at large grocery stores and superstores. Approximately 18% of benefits were redeemed at smaller stores, including convenience stores, small grocers and farmers’ markets.

The assault on retailers began last year when a provision was included in a version of the Farm Bill passed by the Senate that would limit where SNAP benefits can be redeemed, banning their use in establishments that derive
45% or more of their revenues from combined sales of hot food, tobacco and alcohol — this includes most convenience stores. Fortunately that legislation died at the end of 2012.

However, this year, the Senate version of the Farm Bill contains language that would give USDA new power to restrict retail participation in the SNAP program based on sales of items not eligible to be purchased with food stamps. In September of this year, the House voted to cut $40 billion from the program over the next 10 years, but did not include the Senate’s language in the House version of the Farm Bill. The fate of the legislation rests with a House-Senate conference committee that will iron out the differences between their respective measures, with observers giving it no better than a 50/50 chance of passing this year.

As Congress moves toward action on the Farm Bill, meanwhile, the FNS is seeking information that could lead to administrative restrictions on retailers, including changes to how much SNAP-eligible food they must have in stock on any given day. Part of their info gathering has included listening sessions across the country. At each session, NACS members have been present and have shared the importance of SNAP to their communities and their businesses.

To qualify as an authorized SNAP retailer, stores must carry at least three food items for home preparation and consumption from each of the four food groups and perishable items in at least two of these categories. That means fresh, frozen or refrigerated products from the four categories of staple foods — breads and cereals, dairy products, fruits and vegetables, and meat, fish and poultry. Chips and pizza alone just won’t do.

The point of SNAP is to help recipients pay for these foods, not to make sure they are available in endless varieties. If an establishment sells apples, bananas and grapes, should it matter if it doesn’t also stock cantaloupe? A minimum number of items, like the current 12, ensures consumers are given a reasonable choice of products from the designated food groups, without putting the government in charge of deciding what products make the most sense for businesses and their customers.

But in its request for information, published in the Federal Register in August, the FNS appeared to make a false link between retailers who carry small quantities of SNAP-eligible items and fraud.

“FNS is concerned that there are a large and growing number of authorized retailers that do not provide healthful food offerings to SNAP recipients and that engage in fraud. These retailers represent a management challenge for the program that must be balanced against the need to ensure effective access to healthful, nutritious food for SNAP households,” FNS wrote.

But in areas with limited access to SNAP-eligible retailers, banning convenience stores from accepting benefits could actually promote fraud by prompting recipients to seek to trade their benefits for money they can spend locally on anything.

The argument that limiting the number of retailers eligible to redeem SNAP benefits will somehow reduce fraud — like other arguments for restrictions — ignores the plight of America’s hungry.

In its 2013 report, “Supplemental Nutrition Assistance Program: Examining the Evidence to Define Benefit Adequacy,” the National Academy of Science’s Institute of Medicine and the National Research Council said the ability of SNAP to meet is goals hinges on individual household and environmental factors including “barriers to accessing food outlets.” It says nothing about what other products SNAP-authorized retailers should be allowed to sell and in what quantities.

“SNAP touches the lives of millions of people in the United States. One in seven people in the United States currently receives SNAP benefits, which underscores the importance of assessing the science and evidence base for defining the adequacy of allotments,” the report said.

According to the report the ability of consumers to make good use of their SNAP assistance is affected by their ability to purchase and prepare foods, how much food costs, and how recipients spend their household dollars. And, of course, their ability to get to places to buy food. If anything, the report suggests there should be more SNAP-eligible retailers — not less.

“There are the limitations experienced by low-income households in getting to supermarkets and other food stores that offer a variety of healthy foods at a lower cost. Low-income minority populations are more likely than others to have limited access to stores selling a variety of healthy foods at a reasonable cost,” the report said.

Hunger in America has its most severe impact on families with children, according to “Food Hardship 2008-2012: Geography and Household Composition,” a report by the Food Research and Action Center (FRAC), a nonprofit organization that works to improve public policies to fight hunger.

“In the surveys conducted continually between 2008 and 2012, an average of 18.2% of all households in the U.S. had experienced food hardship within the prior 12 months, but the rate leapt to 23.5% for households with children. Households without children still had a high food hardship rate, with 15.1% saying they struggled to afford enough food,” the report said.

The SNAP program was established in 1964 as a way to help meet the nutritional needs of low-income people and their families. It’s stated purpose is to “promote the general welfare and safeguard the health and well being of the nation’s population by raising levels of nutrition among low-income households.”

Limiting access to convenient sources of food products goes in the opposite direction.

James Scott is a freelance writer based in Washington D.C.