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(February 21, 2018) Earlier this week I read with great surprise—as I'm sure did many of you—the proposed changes to the Supplemental Nutrition Assistance Program (SNAP). It appears in an effort to reduce costs and eliminate waste, the administration wants to deliver food directly to the tens of millions of Americans who currently use federal food subsidies at their local grocery retailer.
Which begs the question: How could that possibly work?
The US grocery industry is the most efficient food distribution system in the world, allowing American families to get the widest selection of products at just pennies over cost. Each day our industry sources, ships, warehouses and distributes to local grocery stores in neighborhoods across America. At IGA alone, we have more than 1,100 US family owned grocery stores, located from downtown Seattle to the deep rural south; from federal Indian reservations to the Florida Panhandle. We supply fresh eggs, milk, bread, produce daily to the most remote locations imaginable. Even Amazon Prime won't support every neighborhood we serve!
The inefficiencies and high cost of SNAP won't be fixed by shifting the distribution of food from the private sector to the government. Whether republican or democrat, no one should believe that using bureaucracy to lower costs is a reasonable strategy.
But there is something that would work: An overhaul the 1970s-era, analog technology that makes SNAP expensive to administer and hard to regulate.
The magnetic stripe Electronic Benefits Transfer (EBT) card used for SNAP is a one-way, "dumb" technology. It doesn't interact with modern point of sale systems or sync with retailer inventories, meaning controls to ensure that awards go to food products (as intended) simply do not exist—and states spend millions in overhead and misredemption.
Modern grocery technology is digital, two-way, interactive—and in a word, "smart." There are more controls for grocery digital coupons than exist in the magnetic stripe EBT cards used for SNAP!
Should we modernize SNAP? Yes! Should we take out cost, reduce fraud, end inappropriate subsidies and eliminate waste? Yes! Should we cut out the grocers who know best how to distribute food at the lowest profit margin of any retail vertical? My answer to that is an emphatic NO!
If there was ever a time to galvanize our Alliance and our industry and use our collective power for change, it is now. Working in conjunction with NGA, we are asking you to sign-on to this letter requesting Members of Congress to oppose the Trump Administration's proposal to convert the SNAP program into a "food box" delivery service. We must act to show our country's lawmakers—democrats and republicans alike—that the grocery industry has both a place in this dialogue and solutions to bring to bear.
Let's work together to improve the SNAP program, ensuring low-income families—and especially their children—get the high-quality, healthy, fresh food they need.
IGA retailers: Stay tuned next week for more on how IGA, in conjunction with our industry association partners at FMI and NGA, plan to act on behalf of your interests.