A USDA paper examining the implications of proposed changes to the Food Stamp Program (FSP) has concluded that they may force prices higher for healthy foods, and discourage participation in the program.
It has been proposed that food stamps should only be allowed to be used for purchasing healthy foods in order to combat obesity amongst the poor, who are disproportionately overweight compared with American society as a whole.
Included on the list of foods suggested for inclusion in the program are wholegrains, fruits and vegetables, pulses, low-fat dairy, lean meat, fish and poultry. Excluded are high-fat dairy, breaded and fried fish products, and ready-prepared or frozen meals, unless they adhere to US dietary guidelines for saturated fat, salt and whole grains.
The Food Stamp Program – recently renamed the Supplemental Nutrition Assistance Program (SNAP) – is available to households with incomes at or below 130 percent of the poverty line. It is used by 28m Americans each month allowing an average of $200 worth of assistance and, according to the paper’s authors, the program is now the largest part of the USDA’s budget.
Higher price for health
The authors have raised concerns that by increasing demand for healthier products, prices would necessarily rise to reflect tighter supply. Alongside this, the authors argue that lower demand for unhealthy foods would depress prices, therefore increasing their affordability.
However, it is estimated that at least 70 percent of the program’s beneficiaries supplement the stamps with cash-bought food. Therefore, although people might be likely to use more of their food stamps for healthy foods, they could feasibly continue to buy unhealthy options. In addition, the authors suggest that if people are not allowed to buy the foods they prefer under the scheme, they may choose not to participate at all.
The authors’ final point is that given the size, variety and changeability of the US food market, “determining which foods should be on the list of allowable purchases may substantially increase the administrative costs of the FSP.”
They wrote: “While reforming the FSP may indeed lead to better diets among participants, it is likely to be an ineffective and inefficient instrument for bringing about desired nutritional outcomes unless accompanied by additional policy instruments.”
Although the authors said there could be a gradual decrease in obesity for program participants, they add that increased costs for healthy foods could cause an increase in obesity for the 25m American poor who do not participate.
The FSP was devised to increase energy intake amongst the poor and to consume surplus farm commodities, while the proposed changes are intended to reduce energy intake and improve nutrition.
“An important lesson from economics is that if policy has more than one objective, we should use more than one policy instrument,” the authors wrote.
Source: ‘Likely effects on obesity from proposed changes to the US food stamp program’
Food Policy (2008), doi:10.1016/j.foodpol.2008.10.013
Authors: Alston, J.M., Conner C. Mullally, Daniel A. Sumner, Marilyn Townsend, Stephen A. Vosti