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Organic Consumers Association

SNAP Benefits Important to Economic Recovery

Nationwide participation in the Supplemental Nutrition Assistance Program (SNAP) rose to another record level in June 2009, with over 35 million people – more than one in nine Americans – receiving SNAP or food stamp benefits.  More than 700,000 people joined the program in May, bringing total June caseload to 35,122,123.

Between June 2008 and June 2009, participation increased more than 22 percent across the country.  Program growth continued to be fueled primarily by Western states, with an increase of 46.3 percent in Utah, 45.1 percent in Nevada, 45.0 in Washington, and 40.6 percent in Idaho.  The average participant received $133 in food stamp help that month; the average household got $293.

SNAP benefits are an important element of economic recovery. The economic stimulus bill enacted earlier this year included an approximate 13 percent increase in SNAP assistance, generating about $80 a month more for low-income households since April of this year.  That legislation, coupled with other program improvements and increased access, helped pump more than $8.6 billion in SNAP funds into the economy in June.

Benefits go to poor families short of grocery money and consequently, almost all these stimulus dollars are spent immediately and go directly into circulation.  The U.S, Department of Agriculture (USDA) reports that 80 percent of benefit funds are spent within two weeks of receipt and 97 percent are expended within a month.  Plus, there is the economic multiplier effect:  every food stamp dollar spent generates at least $1.84 in economic activity.

Grocery and food retailers as well as low-income families are benefiting. Target, which had accepted SNAP benefits at some of their stores, decided in June 2009 to accept them at all 1,700 outlets nationwide.  Dollar General stores, calling SNAP “a significant opportunity for us,” recently reported an 18 percent rise in SNAP sales between March 2008 and March 2009.  

Likewise, the Family Dollar chain noted a 6.2 percent increase in sales in the second quarter of 2009, led by higher numbers for food and beverages.  “Food stamps [are] part of a larger and longer strategy for us,” noted Ken Smith, Family Dollar’s chief financial officer.

SNAP underutilized in cities:  In its annual analysis of food stamp usage in urban areas in the United States, the Food Research and Action Center (FRAC) in Washington, D.C. estimates that one-third of eligible people failed to participate in the program in 2007, causing cities to lose out on more than $1.6 billion.  Of the 24 cities examined, San Diego scored the lowest, with only 35 percent of eligible people enrolled.  Philadelphia was the highest in participation at 93 percent.

“The biggest losers are low-income households when there is underparticipation in the program.  But, local communities lose as well – they are missing out on millions of dollars that can benefit their economies,” said Jim Weill, FRAC President. “SNAP/Food Stamps is the nation’s most important direct defense against hunger and one of the most effective ways to stimulate the economy.  It is also the nutrition program that can do the most to eliminate childhood hunger, a goal the President has set for achievement by 2015,” he added.  The FRAC report may be found at:
http://www.frac.org/Press_Release/09release_urbanfoodstamps_report.htm

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