Doing stimulus while doing good

by Editorial Staff
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As the recession deepens and unemployment rises, public officials are scrambling to put together a stimulus package to get the economy moving again. The food industry should lend its voice because there is a tool ready at hand that would "do stimulus" while also "doing good." It is food stamps — now called the Supplemental Nutrition Assistance Program (SNAP).

No new program needs to be crafted; we just need to get everyone who is eligible to participate. The need is real; there is a "food gap" right here at home to plug. And any additional use stimulates the economy; each dollar of purchases triggers substantial additional economic activity in the community. Let’s look closer at each of these benefits.

Enrollment, not enlargement

SNAP is an entitlement program: anyone living at or below 130% of poverty — certainly not an overly generous threshold — is eligible. But even with this modest cutoff, the program is underutilized. In 2005, the national participation rate was only 65%. A 100% participation rate would pump an additional $10 billion of federal funds annually into state and local spending.

To get there does not require new programs, just more efficient enrollment. Currently, states and counties are responsible for determining eligibility. As in so many cases of government programs, fear of abuse has resulted in paperwork and bureaucratic procedures that make the process of establishing eligibility cumbersome at best. What may be needed is a new mindset: instead of ensuring that no one who is ineligible gets a benefit, the program goal should be to ensure that everyone who is eligible receives the benefits to which they are entitled. Perhaps the food industry could ask President Barack Obama’s new chief performance officer to make full utilization of SNAP "job one."

The food gap

Second Harvest Heartland (S.H.H.) here in my home state of Minnesota conducted a study recently of the "food gap." It found that hungry Minnesotans get food through: (1) direct purchases from their own earnings — 61%; (2) SNAP and other public programs (e.g., school lunch and breakfast programs, the Women, Infants and Children program, etc.) — 22%; and (3) food shelves and other charitable feeding initiatives — 5%. Add it up and 12% of meals are missed for lack of means. A meal skipped is consumption that is just plain lost. It is a need that never made it to economic demand.

Not many of us would like to skip eating four days per month, which is what a 12% meal gap roughly means. But foregone nutrition means much more than that as well. It means: less learning going on in classrooms when children’s attention is diverted by hunger; stunted mental and physical development of undernourished infants, toddlers and children; more frequent and severe illnesses, often resulting in more expensive health care; and more expense for assisted care of the elderly weakened by inadequate diets.

All of this adds up to one simple fact: adequate nutrition is an investment, not an expenditure. It returns the dollars spent on it through improved wellness. S.H.H. estimates that full participation in SNAP alone would reduce this food gap to 2% from 12%. That would put ending hunger in America within our reach, with a generous return in the form of a more active, educated and engaged citizenry.

Eating as stimulus

Reaching full participation in SNAP is not just a good thing to do. It’s not just a smart way of avoiding unnecessary school, health and assisted living expenses. It is economic stimulus. U.S. Department of Agriculture studies show that a dollar of food stamp purchases generates $1.84 in business activity. During congressional testimony on the 2008 economic stimulus package, a Moody’s economist stated that food stamp expenditures would generate the highest and fastest rate of economic return to stimulus spending.

That is more domestic demand for what American farmers produce. It is more jobs in transport, handling and processing of foods. And it is more money to spend on the Main Streets of our cities and towns. It is, in a few words, "doing stimulus while doing good."

This article can also be found in the digital edition of Milling and Baking News, January 27, 2008, starting on Page 26. Click here to search that archive.

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