Warm Southern Breeze

"… there is no such thing as nothing."

Is SNAP (formerly “Food Stamps”) an Economic Boost?

Posted by Warm Southern Breeze on Thursday, July 19, 2012

You betcha’!

Research performed by the United States Department of Agriculture at the request of then-President George W. Bush shows that for every $1.00 spent on the Supplemental Nutrition Assistance Program, $1.84 is put into the economy. In fact the report says that, “every $5 in new SNAP benefits generates as much as $9 of economic activity.”

You want jobs?

The research shows that the “jobs impact estimates from the FANIOM model range from 9,000 to 18,000 FTE-jobs plus self-employed per $1 billion of SNAP benefits.”

It should be borne in mind that the median household income in 2006 was slightly over $50,000/year.

Read on for more “shocking” economic good news!

The report in it’s entirety may be downloaded here.
8/27/20 NOTE: The official USDA report site has ceased, and the report may be downloaded from this site – WSB. The Food Assistance Nation Input-Output Multiplier (FANIOM) Model & Stimulus Effects of SNAP

The Economic Case for Food Stamps

By Michel Nischan

Jul 18 2012, 3:09 PM ET

Congress is planning to cut up to $16 billion from low-income food aid over the next five years. But research shows that every dollar spent on assistance pays for itself and grows the economy.

In its current form, the House Agriculture Committee‘s version of the farm bill proposes draconian cuts to food stamps, also known as the Supplemental Nutrition Assistance Program (SNAP). The ill-thought-out proposal would deny food assistance to millions of people, many of them children. Speaking as a chef and CEO of a national nonprofit that supports small and mid-sized farmers who make fresh fruits and vegetables available to everyone regardless of income, I’m obviously alarmed.


Grace Blackburn, Susan Noyce and Mary Claire Geyer (L-R) set out fruit for sale at the Westmoreland Berry Farm stand at the Arlington Farmers’ Market in Arlington, Virginia in this picture taken June 28, 2008. While price hikes are rippling through farmers’ markets across the United States, they are doing little to deter shoppers looking for local produce. Cherries and berries for sale at the Westmoreland Berry Farm stand at the Arlington Farmers’ Market in Arlington, Virginia (Jonathan Ernst/Reuters)

The Senate’s version of the farm bill would reduce overall funding by $23 billion, with a reduction in food stamps of $4.5 billion over five years. The House Agriculture Committee is proposing to cut funding by $35 billion — with nearly half the overall cut coming from reductions in food stamps by $16 billion over five years.

Those who believe in cutting SNAP funding as a cost-saving measure should know that food stamps boost the economy — not put a strain on it. Supporters of federal food benefits programs including President George W. Bush understood this, and proved the economic value of SNAP by sanctioning a USDA study that found that $1 in SNAP benefits generates $1.84 in gross domestic product (GDP). Mark Zandi, of Moody’s Economy.com, confirmed the economic boost in an independent study that found that every SNAP dollar spent generates $1.73 in real GDP increase. “Expanding food stamps,” the study read, “is the most effective way to prime the economy’s pump.”

It is important to point out that SNAP benefits go to those who need them most. USDA’s Amber Waves recently wrote that 54 percent of food stamp recipients live below 50 percent of the poverty line, and 34 percent live at a level between 50 percent and 100 percent of the poverty line. According to the Health and Human Services Poverty Guidelines for 2011, the poverty line for a family of three is a combined income of $18,530. As with most federal money that goes directly into people’s hands, the poor are likeliest to spend what they receive rather than stashing it somewhere safe, as higher-income families tend to do with windfalls.

Most voters support the food stamp program. The American public has long supported legislation that helps low-income families put food on the table. Polls taken as early as 1939, the year the food stamp program was first launched, found that 70 percent of Americans approved of it. That approval rating has remained consistent during the years, and has recently grown.

Despite the House’s unacceptable proposed cuts in food stamps, the chamber’s bill contains a few diamonds in the rough. Here are a few of the key provisions that would provide significant safety nets for both family farmers and those struggling with poverty and hunger. The bill:

• Establishes “nutrition incentive” programs to make local fresh fruit and vegetables more affordable for families pummeled by the recession

• Expands the Farmers Market Promotion Program, which helps local and regional food businesses give small farmers a way to market healthy local produce to school children

• Increases funding for specialty crop block grants. Fruits and vegetables should be eaten five times daily, but are considered “specialty crops” and receive little to no federal support.

While these provisions represent a refreshing shift in traditional ag-policy views, the House could learn from the Senate’s bipartisan leadership, which instead of proposing to slash food stamps, preserves 99.5 percent of current funding. The Senate targeted its savings on so-called loopholes that add up to about $4 billion — a far cry from the $16 billion in cuts the House is proposing.

As Americans are becoming more aware of the importance of eating fresh fruits and vegetables, it is not surprising that a recent W. K. Kellogg Foundation survey found that 93 percent of Americans said they believe it’s “important” to “make sure all Americans have equal access to fresh fruits and vegetables.” In fact, 75 percent said they support national nutrition incentive programs that would double SNAP benefits at farmers markets.

For many Americans, the farm bill wasn’t something we learned about in high school civics class. Knowing what we do now about how critical the legislation is to vulnerable people struggling to feed their families, and to small and mid-sized farm businesses working hard to grow healthy food for us all, perhaps we should have.


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