President Trump's new 2019 budget proposal would make some significant changes to the SNAP program, which may not bode well for grocers.
In what USDA Secretary Sonny Perdue called a "bold plan" when speaking Sunday before the National Grocers Association (NGA) event in Las Vegas, the proposal would combine "traditional SNAP benefits with 100% American-grown foods provided directly to households."
In its current state, SNAP provides low-income households with electronic benefits that allow them to purchase groceries at supermarkets and other authorized retailers.
Under the new proposal, found in the section entitled "Reforming the Supplemental Nutrition Assistance Program (SNAP)," households receiving $90 or more per month in SNAP benefits would have a portion of their benefits sent to them in the form of a USDA Foods package, which would include items such as "shelf-stable milk, ready to eat cereals, pasta, peanut butter, beans and canned fruit, vegetables, and meat, poultry or fish." The remainder of their benefit would go on the SNAP Electronic Benefit Transfer (EBT) card for use at approved grocery retailers, according to the proposal.
Food Marketing Institute (FMI) Chief Public Policy Officer Jennifer Hatcher says the budget proposal "certainly makes major changes, but not changes that SNAP-authorized food retailers see as positive or even efficient," adding that FMI and its members have worked with the House and Senate Agriculture Committees and the USDA over several decades to build a national system that utilizes the existing commercial infrastructure to create the most efficient and low-cost system possible.
"As we understand the proposal in the president’s budget to create a USDA commodity foods box of staples, each of these achievements would be lost," Hatcher said. “Perhaps this proposal would save money in one account, but based on our decades of experience in the program, it would increase costs in other areas that would negate any savings. As the private [sector] partners with the government ensuring efficient redemption of SNAP benefits, retailers are looking to the administration to reduce red tape and regulations, not increase them with proposals such as this one.”
Greg Ferrara, NGA EVP of advocacy, public relations and member services, said the association is "extremely concerned with the president’s budget proposal, as it abandons the proven free-market model on the ill-advised assumption that the government can purchase and provide food more efficiently than its current private sector partners.”
Ferrara urged that America’s independent supermarket operators are "often considered the backbone of their community," and have long been indispensable partners in the SNAP food delivery system, serving millions of people in need.
"SNAP is one of the most efficient federal social safety net programs because retailers are the linchpin of a successful public-private partnership. Fierce competition in the food retail industry drives consumer prices down, therefore benefiting those on a limited food budget more than anyone," Ferrara said.