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The big business of food stamps

Posted by on Jun. 15, 2012 at 4:15 PM
  • 59 Replies

In 2011, a record 46 million people - or 1 in 7 Americans -- participated in the Supplemental Nutrition Assistance Program (SNAP), better known as Food Stamps.

The increased use of Food Stamps is a huge social and political issue for America, and it's also big business. In 2011, the U.S. government spent $72 billion on Food Stamps.

Among the beneficiaries, food producers such as Cargill, PepsiCo. (PEP), Coca-Cola (KO) and Kraft (KFT), as well as retailers like Wal-Mart. Of course, Wall Street gets a cut too, led by JPMorgan Chase (JPM), which administers the SNAP benefits in 24 states.

In the accompanying video, I discuss the (big) business of Food Stamps with Marion Nestle, professor of Nutrition, Food Studies, and Public Health at New York University and author of several books, most recently Why Calories Count.

Generally speaking, Nestle is a supporter of the program, calling it "the only safety net we have left for the poor."

However, with obesity rates rising among the poor -- and obesity a huge factor in rising health-care costs -- Nestle and other health experts wonder whether there should be restrictions on what kind of foods can be purchased with Food Stamps.

Currently, there are few restrictions on what can be purchased with Food Stamps, other than alcohol and prepared foods.

Here's Where the Profits Come In

"Here's where the profits come in," Nestle says. "A vast percentage of Food Stamps' money goes into the pockets of soda companies and snack food companies...and also the stores that sell these foods."

Wal-Mart "gets a large fraction of Food Stamp dollars," which contributes 25% to 40% of revenue at select stores, according to Nestle. "These companies, therefore, have a vested interest in making sure Food Stamps are allowed for any purchase at all."

Funding for Food Stamps comes from the Farm Bill, which is currently being debated in Congress. "You can bet the food companies like it just the way it is and they are lobbying" to prevent restrictions on how Food Stamp dollars are spent, Nestle says.

Citing a recent report by public health lawyer Michele Simon at EatDrinkPolitics.com, Nestle recently made the following observations on her blog about "some of the politics behind efforts to maintain the status quo":

  • Food industry groups such as the American Beverage Association and the Snack Food Association teamed up with anti-hunger groups to oppose health-oriented improvements to SNAP.
  • Companies such as Cargill, PepsiCo, and Kroger lobbied Congress on SNAP, while also donating money to America's top anti-hunger organizations (who fear any changes to the Food Stamps program will result in benefit cuts).
  • At least 9 states have proposed bills to make health-oriented improvements to SNAP, but none have passed, in part due to opposition from the food industry.
  • Coca-Cola, the Corn Refiners of America, and Kraft Foods all lobbied against a Florida bill that aimed to disallow SNAP purchases for soda and junk food.
  • Banks and other private contractors are reaping significant windfalls from the economic downturn and increasing SNAP participation.

"The point here is that banks that administer SNAP have a vested interest in keeping SNAP enrollments high and makers of junk foods have a vested interest in making sure that there are no restrictions on use of benefits," she writes.

As you'll see in the accompanying video, one other thing stands out when discussing these issues: There is no public data available on how Food Stamp funds are being spent.

"If there are data on what Food Stamps are spent on, they are proprietary data the companies have and either the government doesn't know, doesn't have access or isn't saying," Nestle observes.

Whatever you think of the program or whether there should restrictions on Food Stamps, we have a right to know how (and where) these taxpayer funds are being spent.

by on Jun. 15, 2012 at 4:15 PM
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Replies (1-10):
survivorinohio
by René on Jun. 15, 2012 at 4:53 PM
1 mom liked this

I guess we havent talked about foodstamps in a while huh :|

Veni.Vidi.Vici.
by on Jun. 15, 2012 at 4:53 PM
2 moms liked this

Last week when I was in Walgreens I walked down the candy aisle to get to the pharmacy. I saw big red tags under every other candy display that said "WE ACCEPT SNAP CARDS HERE". I rolled my eyes, shook my head and considered at that point that I probably spend WAY too much time on CM.

smile

survivorinohio
by René on Jun. 15, 2012 at 4:55 PM

Laughing out loud!

Quoting Veni.Vidi.Vici.:

Last week when I was in Walgreens I walked down the candy aisle to get to the pharmacy. I saw big red tags under every other candy display that said "WE ACCEPT SNAP CARDS HERE". I rolled my eyes, shook my head and considered at that point that I probably spend WAY too much time on CM.

smile


How far you go in life depends on your being: tender with the young, compassionate with the aged, sympathetic with the striving and tolerant of both the weak and strong.  Because someday in life you would have been one or all of these.  GeorgeWashingtonCarver


Tanya93
by on Jun. 15, 2012 at 4:55 PM
3 moms liked this

Or it is about the business of it and how everyone on here who bitches about corporations but also about not enough welfare need to know how entwined they are.


It was an article.   If I wanted to bitch about foodstamps, I would have no problem starting that thread.

Quoting survivorinohio:

I guess we havent talked about foodstamps in a while huh :|


survivorinohio
by René on Jun. 15, 2012 at 4:59 PM
8 moms liked this

I read it and I think it will boil down to the same conversation.  I am not surprised at all that Kraft and Cocacola are active lobbyists on the issue.   It goes back to what a lot of us have said.  Many corporations have a vested intest in America eating poorly.

Quoting Tanya93:

Or it is about the business of it and how everyone on here who bitches about corporations but also about not enough welfare need to know how entwined they are.


It was an article.   If I wanted to bitch about foodstamps, I would have no problem starting that thread.

Quoting survivorinohio:

I guess we havent talked about foodstamps in a while huh :|



How far you go in life depends on your being: tender with the young, compassionate with the aged, sympathetic with the striving and tolerant of both the weak and strong.  Because someday in life you would have been one or all of these.  GeorgeWashingtonCarver


chocolat-smiles
by Member on Jun. 15, 2012 at 5:01 PM

interesting!!!

elisesmom922
by on Jun. 15, 2012 at 5:02 PM

I think they SHOULD be able to say what can and can't be bought with FS. I have seen too many just buy junk with them.

Daisypath - (ywCW)Ticker id: wxXo
Roxygurl
by Bronze Member on Jun. 15, 2012 at 5:05 PM
1 mom liked this
Do you have the link op? I want to see the video thats mentioned in the article.
Posted on CafeMom Mobile
12hellokitty
by Platinum Member on Jun. 15, 2012 at 5:08 PM
Nutra system advertises their meals cost @ $2.00. Perhaps people on GA need less choices so that they can learn to make better choices?
Posted on CafeMom Mobile
Tanya93
by on Jun. 15, 2012 at 5:09 PM

here you go


http://finance.yahoo.com/blogs/daily-ticker/marion-nestle-big-business-food-stamps-where-profits-164228337.html

Quoting Roxygurl:

Do you have the link op? I want to see the video thats mentioned in the article.


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