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Food Stamps? Follow the Money by Michelle Simon

Food Stamps? Follow the Money by Michelle Simon

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From EatDrinkPolitics.com, asks the question "are corporations profiting from hungry Americans?"

An investigation by the advocacy group Eat Drink Politics found banks and businesses have reaped multi-million-dollar contracts from the government to administer food stamp programs at the state level. Yet, the U.S. Department of Agriculture, which oversees the Supplemental Nutrition Assistance Program (SNAP), doesn’t make public how much profit the banks and other businesses earn by acting as government agents for the program.
From EatDrinkPolitics.com, asks the question "are corporations profiting from hungry Americans?"

An investigation by the advocacy group Eat Drink Politics found banks and businesses have reaped multi-million-dollar contracts from the government to administer food stamp programs at the state level. Yet, the U.S. Department of Agriculture, which oversees the Supplemental Nutrition Assistance Program (SNAP), doesn’t make public how much profit the banks and other businesses earn by acting as government agents for the program.

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Published by: Russell Lawrence Benford on Jun 15, 2012
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06/15/2012

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FOODSTAMPS
 
Follow the Money
Are CorporationsProting romHungry Americans?
Michele Simon
JUNE2012
 
Food Stamps: Follow the Money
Are Corporations Proting rom Hungry Americans?
2
This report examines what we know(and don’t know) about how oodmanuacturers, ood retailers, and banksbenet rom the Supplemental NutritionAssistance Program (or SNAP, ormerlyknown as ood stamps). The nation’slargest ood assistance program, SNAPexpenditures grew to $72 billion in 2011, uprom $30 billion just our years earlier, andis projected to increase even more i theeconomy does not improve.Right now, Congress is debating the2012 Farm Bill
and some politicians areproposing massive cuts to SNAP at a timewhen more Americans than ever needthis important lieline. Meanwhile, somehealth experts are raising questions aboutwhether it makes sense to allow SNAPpurchases or unhealthy products suchas soda and candy. Advocates are alsolooking or ways to incentivize healthyood purchases. While much attentionhas ocused on how arm subsidies uelour cheap, unhealthy ood supply, SNAPrepresents the largest, most overlookedcorporate subsidy in the arm bill.
Our research ound that at least threepowerul industry sectors benet romSNAP: 1) major ood manuacturers suchas Coca-Cola, Krat, and Mars; 2) leadingood retailers such as Walmart andKroger; and 3) large banks, such as J.P.Morgan Chase, which contract with statesto help administer SNAP benets.Each o these sectors has a critical stakein debates over SNAP, as evidenced bylobbying reports, along with importantdata being kept secret.
Key fndings about corporate lobbying on SNAP:
• Powerful food industry lobbying groups
teamed up to oppose health-orientedimprovements to SNAP
• The food industry also joined forces with
anti-hunger groups to lobby against SNAPimprovements
• Companies such as Cargill, PepsiCo, and
Kroger lobbied Congress on SNAP, whilealso donating money to America’s top anti-hunger organizations
• At least nine states have proposed bills
to make health-oriented improvements toSNAP, but none have passed, in part due toopposition rom the ood industry
• Coca-Cola, the Corn Reners of America,
and Krat Foods all lobbied against a Floridabill that aimed to disallow SNAP purchasesor soda and junk ood
Key fndings about how muchmoney retailers gain rom SNAP:
• Although such data is readily available,
neither USDA nor the states make publichow much money individual retailers makerom SNAP
EXECUTIVE SUMMARY
 
Food Stamps: Follow the Money
Are Corporations Proting rom Hungry Americans?
3
• Congress does not require data collection
on SNAP product purchases, despite suchdata being critical to eective evaluation
• USDA told a journalist in Massachusetts
he was not allowed to make public data onretailer redemptions rom SNAP—ater hereceived the data
• In one year, nine Walmart Supercenters in
Massachusetts together received more than$33 million in SNAP dollars—over our timesthe SNAP money spent at armers marketsnationwide
• In two years, Walmart received about
hal o the one billion dollars in SNAPexpenditures in Oklahoma
• One Walmart Supercenter in Tulsa,
Oklahoma received $15.2 million whileanother (also in Tulsa) took in close to $9million in SNAP spending.
Key fndings about how much money banks gain rom SNAP:
• USDA does not collect national data on
how much money banks make on SNAP
• J.P. Morgan Chase has contracts for
Electronic Benets Transer (EBT) in halthe states, indicating a lack o competitionand signicant market power
• Contract terms vary widely among states,
indicating a lack o eciency and standards
• In California, a 7-year contract worth
$69 million went to Aliated ComputerServices, a subsidiary o Xerox
• In Florida, J.P. Morgan Chase enjoys a
5-year contract worth about $83 million, or$16.7 million a year
• In New York, a 7-year deal originally paid
J.P. Morgan Chase $112 million or EBTservices, and was recently amended to add$14.3 million—an increase o 13%
• States are seeing unexpected increases
in costs, while banks are reaping signicantwindalls rom the economic downturn andincreasing SNAP participation.
KEY RECOMMENDATIONS
• Congress should not cut SNAP benets at
this time o extreme need
• USDA should make data on SNAP retailer
redemptions available to the public
• Congress should require USDA to collect
data on SNAP product purchases
• USDA should collect data on SNAP bank
ees to assess and evaluate national costs
• USDA should grant states waivers
to experiment with health-orientedimprovements to SNAP.
This report was written by Michele Simon, public health attorney and president o Eat Drink Politics, anindustry watchdog consulting group. Contact her at: (510) 465-0322 or Michele@EatDrinkPolitics.com.
ACKNOWLEDGEMENTS
Thanks to Christopher Cook or superb research and writing, Brandy King, Susan Miller, Sarah Pearlman, and Amy Wong or expertresearch assistance; to Siena Chrisman, Andy Fisher, Nick Freudenberg, Anna Lappé, and Ben Lilliston or helpul eedback onearlier drats; to Haven Bourque and Lena Brook or top-notch media outreach; and Ross Turner Design or proessional layout.© 2012 Eat Drink Politics

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