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Food Stamp Cuts Take Bite Out Of Grocery Stores, Rural Areas Likely Hurt Worst

The millions of Americans who don’t make enough money even to eat are facing their first Thanksgiving since 2009 with reduced food assistance, since the $5 billion cut in SNAP (Supplemental Nutrition Assistance Program) benefits that took effect Nov. 1.

Under the American Recovery and Reinvestment Act of 2009 — better known as the stimulus package —funding for SNAP aka “food stamps” was increased, but that hike has now expired.

But while the program obviously provides much-needed assistance for families and children to get the food they need, and the 47 million Americans who need help affording food will now struggle, there is another group already suffering from the cutbacks: supermarkets.

Food retailers in rural areas are having an especially hard time, because according to stats compiled by the U.S. Department of Agriculture, which is in charge of SNAP, food stamp use is on the rise in the countryside, but on the decline in cities.

"In many rural areas around the country, we do have, proportionately, maybe higher participation in the SNAP program," food economist John Anderson told National Public Radio. "And a lot of that gets spent locally, obviously, because that's where it can be spent, in those local grocery stores."

With the cuts, money spent in rural food markets will also be cut, putting food sellers there in a precarious position.

John Elliot, of the nation’s largest grocery chain, Kroger, is remaining calm. He expects families to tighten their belts elsewhere before they cut back on food.

"What I think they'll likely do is cut discretionary spending first. And I realize for many households, they may not have a lot of discretionary funds," Elliot speculated. "But they'll still have to reshuffle priorities. And I suspect that purchases for food will continue to be a priority."

Though the program has been maligned by conservatives since the era of President Ronald Reagan, whose fabricated and racially loaded stories of “strapping young bucks” who use food stamps to buy “T-bone steaks” helped reinforce erroneous notions that people on food assistance are high-living freeloaders, food stamps not only help people eat, they boost the economy.

According to statistics from the Center for Budget and Policy Priorities, every five dollars of food stamp value spent generates nine dollars in ecnomic activity.

For every $1 billion spent on food stamps, 3,300 farm jobs are created.

Also, by helping to relieve food insecurity, SNAP benefits leave families with more money to spend in other areas, which not only spreads money around the economy, it helps poverty-stricken people get back on their feet, reducing their need for public benefits overall.

In fact, in terms of “bang for the buck,” food stamps are the best form of economic stimulus that exists, according to a 2008 study by the financial firm Moody’s. The beneficial economic ripple effect created by food stamp dollars is more pronounced than any other method of boosting the economy .

Unemployment benefits are the second-best form of economic stimulus, Moody’s found.

SOURCES: NPR, Mother Jones, CNN


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