Farm bill's new SNAP incentive: Don't celebrate just yet

Some local food advocates are applauding the new Food Insecurity Nutrition Incentive program in the finally-passed farm bill. The idea is to provide cash incentives to participants in the Supplemental Nutrition Assistance Program (aka food stamps) for healthy eating. But a closer look reveals the celebration may be premature at best.

 The SNAP incentive concept was pioneered at farmers markets in Maryland, New York City, and California. Up until now, incentive programs have given SNAP shoppers bonus funds when they purchase fresh fruits, vegetables, food-producing plants, and other farmers’ market items. This way, SNAP participants would increase their fresh produce consumption while providing more support to local family farmers. Incentive programs have proliferated in farmers markets nationwide over the past decade, funded by private philanthropies and local governments who can determine the rules of their programs to their own liking.

Congress’ version will provide $100 million of grants, spread over five years, to provide incentives to encourage produce purchases. But before any money gets doled out, the law must go through the rulemaking process. Rulemaking determines the specifics of how the incentive program will be implemented. If you think the sausage-making in Congress is bad, the regulatory process can be even worse, as corporate interests jockey to get in on the action.

The politics of rulemaking can also cause years of delay. The Obama Administration has delayed regulations in such important food issues as food safety, menu labeling, and school food. Speaking of school food, remember the “pizza is a vegetable” debacle? That was thanks to the politics of rulemaking.

In the meantime, here are some reasons, based on the language in the farm bill, to be skeptical that this federally-funded incentive program will look anything like the grassroots farmers market SNAP incentive programs. (See full text of the farm bill or relevant pages in PDF.)

1) The program does not favor local or even American-grown produce. Note that Congress named its version the “Food Insecurity Nutrition Incentive,” not the “Farmers Market Nutrition Incentive” or the “Local Food Incentive Program.” The following language lays out the specific criteria the USDA can choose from to determine grantees. Note the important placement of the word OR as opposed to AND at the end of the list. Local food is simply one of several criteria, and “local” is not even defined:

"In awarding grants under this section, the Secretary shall give priority to projects that:

- maximize the share of funds used for direct incentives to participants;
- use direct-to-consumer sales marketing;
- demonstrate a track record of designing and implementing successful  nutrition incentive programs that connect low-income consumers and agricultural producers;
- provide locally or regionally produced fruits and vegetables;
- are located in under-served communities;
    Or
-  address other criteria as established by the Secretary."

Such selective and open-ended criteria could mean prioritizing almost anything containing fruit and vegetables, such as sugary canned peaches, apples imported from China, or Naked Juice (owned by PepsiCo). Clearly, local or even U.S. farmers are not guaranteed to benefit from this program. Indeed, a 2008 report to Congress by the Government Accountability Office warned that in federally-funded incentive programs “selection of foods to promote could be controversial and challenging,” because:

"Various interests—such as food manufacturers, nutritionists, participant advocacy groups, and states—may have differing opinions about which foods should be targeted for promotion and which should be excluded. Food manufacturers may want the targeted foods to include a wide variety of products because they could see financial gain, nutritionists may not agree on which foods are the healthiest, and advocacy groups may not want FSP [Food Stamp Program] participants to be restricted in their food choices. States may also advocate for locally grown or produced foods to be targeted for promotion… State officials we interviewed commented that if fruits and vegetables were the targeted foods, they should be eligible in any form—canned, frozen, and fresh—because fresh produce may not be equally available throughout the year or throughout the country."

2) The program is not just for farmers markets. Listed as “eligible entity:”

- nonprofit organization
- agricultural cooperative
- producer network or association
- community health organization
- public benefit corporation
- economic development corporation
- farmers’ market
- community-supported agriculture program
- buying club
- retail food store participating in the supplemental nutrition assistance program
- State, local, or tribal agency; and
- any other entity the Secretary designates.

Because any SNAP retailer can apply for and receive incentive grant funding, some of these incentive program dollars may end up at gas stations, convenience stores, and Walmart. These retailers are far less likely to focus their inventory on local produce and healthy eating. And a much smaller portion, if any, of the incentive dollars will end up supporting family farmers.

3) Despite some media reports and Senate Agriculture Committee chair Debbie Stabenow referring to the program as “doubling” produce purchases, the actual language is silent on the incentive amount. The previous USDA Healthy Incentive Pilot program provided just 30 cents for every dollar spent on supermarket produce, for example. Here is the actual language:

"…would increase the purchase of fruits and vegetables by low-income consumers participating in the supplemental nutrition assistance program by providing incentives at the point of purchase."

4) The program is competitive and applicants must contribute 50 percent of the funding, either cash or in-kind. This may create a serious financial barrier for local governments, nonprofits, and farmers markets to even apply. Moreover, grant-writers do not usually work for free. Getting any grant money from USDA will require spending money.

So before celebrating, there are still a lot of details to be ironed out through the administrative process and the grants that get awarded. Some people are already under the wrong impression that all SNAP purchases made at farmers markets will be incentivized. Finally, under the program, the funding averages $20 million a year (for five years) in an $80 billion annual program with more than 47 million participants. If every SNAP participant were included, that would amount to less than 50 cents of incentives per person – for the entire year – barely enough to buy an apple.