>>23789621
Unless members of Congress intervene to prevent it, the food stamp program—also known as the Supplemental Nutrition Assistance Program (SNAP)—will be suspended beginning November 1. If the federal partial “shutdown” ends before then, the program will likely send out the usual billions of dollars to the nation’s 41 million recipients on schedule.
Needless to say, lobbyists and activists who favor the food stamp program have been working furiously to make sure that the program is not interrupted.
Much of the narrative around food stamps has focused on the fact that millions of low-income households receive more than eight billion dollars in food stamps per month in the United States. The narrative usually works well given that total spending on food stamps has risen significantly in recent years with total inflation-adjusted spending up by nearly 100 percent since 2008, and up by six percent over the past twelve months.
While the media narrative has focused on low-income recipients, it often ignores the role of corporate and industry lobbyists who work to increase food stamp spending and to ensure the program remains permanent. Farmers, “Big Ag,” grocery retailers, beverage companies, and other industry players are very active in lobbying members of Congress to ensure that food-stamp dollars keep flowing.
This should not surprise us when we consider that food stamps subsidize food and drive up demand for the sorts of products manufactured and sold by a variety of food-related industries.
Consequently, food stamp programs enjoy support from a well-funded alliance of industry lobbyists and “anti-poverty” pressure groups that ceaselessly push for ever larger amounts of tax-dollar funds to be spent on food stamps.
To understand why private industry groups are such big fans of food stamps it’s important to recognize how SNAP spending is a wealth transfer from non-SNAP recipients to both SNAP users and to industry groups.
SNAP funds can be used only on food. So, when taxpayer dollars are converted into SNAP funds, this takes dollars that could have been spend on anything and channels those funds into food-only purchases. Moreover, empirical evidence shows that SNAP recipients do not treat SNAP funds as fungible with money in general, and the funds are thus part of a “separate mental account.” Consequently, SNAP spending constitutes “extra” spending above and beyond what would have been spent on food without the subsidy.1
This leads to rising prices in the food and food-services industry because “nutrition programs expand the size of the food and agricultural sector through demand-side effects and act to raise agricultural prices.”2
Other empirical studies have also confirmed that SNAP spending does indeed raise prices, and therefore constitutes a wealth transfer to SNAP recipients, food producers, and food retailers. Taxpayers and non-SNAP households, of course, are the ones left holding the bag. As Justin H. Leung and Hee Kwon Seo showed in a June 2022 empirical study of food stamps, the program does indeed benefit SNAP recipients the most, but “increased SNAP benefits also benefit producers at the expense of non-SNAP consumers.”
https://mises.org/mises-wire/how-food-industry-lobbyists-keep-food-stamp-gravy-train-going