How Big Food Companies Are Corrupting the SNAP Program - Essay Example

How big food companies corrupt the SNAP program There is no doubt that SNAP provides an essential service designed to help our nation’s poor but is it helping the less fortunate, or is it creating fortunes for some? Due to economic conditions, many people rely on these supplemental nutritional benefits from the Government. Equally, large companies are also relying on these benefits for their profits. However, big corporations and lobbyists who benefit from them also exploit the programs that are intended to help the poor. The programs that intended to support the poor in our country have always benefited the food producers. In the beginning, this made sense because the country was going through the great depression, farmers could not sell their crops, and people did not have the money to buy them. This led to the creation of the Food Stamp Program in 1939. The food stamp program began as a way to help farmers who were struggling by having the federal government buy food and distribute it the poor. Milo Perkins, the first administrator of the food stamp program, stated, “We got a picture of a gorge, with farm excesses on one cliff and under-nourished city societies with outstretched hands on the other. We set us to find a practical way to build a bridge across that chasm.” The programs worked by having people buy orange stamps, and they would receive blue marks free. They could use the orange stamps to buy any food they wanted and the blue stamps only to by food that the Department of Agriculture determined to be surplus. This benefited the poor by helping them receive food at a discount and help the food producers by creating artificial demand for the surplus product. The program ended in 1943 due to an end of the conditions that made it needed. This was the first government program to provide assistance to feed people. After eighteen years, and with pressure from prominent congressional representatives, President Kennedy started a pilot food stamp program with executive order 10914. This program operated much in the same way as the original without the specific requirement of purchasing particular surplus food. The pilot program was made permanent with the signing of the Food Stamp Act of 1964. The law was signed in as a greater appropriation that supported the prices of cotton and wheat. It also assisted rural representatives, who wanted the farm subsidies and price support that it provided, and urban officials who benefited from the social welfare part of the program supported it. Over the next several years, the program would expand, and by 1974, it was nationwide. According to the article by the Government Accountability Institute titled Profits from Poverty, by October 1974 the program hades 15 million participating and cost 2.8 billion dollars annually. In 1977, the Food and Agriculture Act brought many changes to this program. The biggest change was the elimination of the requirement to purchase food stamps and participants would receive marks on a monthly basis. In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) created even more changes with the intent to reform the welfare program. One of the most noteworthy variations was the requirement for states to implement an electronic way of delivering benefits by October 1, 2002. Recipients would be given electronic benefits transaction (EBT) cards that could be loaded on a monthly basis. This was seen as a way to save government money by not printing food stamps, as well as a way of delivering benefits in a faster and more efficient manner. In order to comply with this mandate, states contracted out with businesses to implement the EBT change. In the Government Accountability Institute article Profits from Poverty, this opened the door for cronyism in the EBT services market (9). The Food Stamp Program’s name was changed to the Supplemental Nutrition Assistance Program (SNAP) with the 2008 Farm Bill. This was the only modification to the program under this bill. The purpose was to change the perceptions of people using the benefit. According to the snaptohealth.org, the SNAP program serves 14% of the population or 45 million Americans. The cost of the program is $74.1 billion dollars and is the largest nutrition program administered by the Department of Agriculture. The average benefits amount is $125.35 per person, per month. The SNAP program is an enormous Government program, with an exceptionally large budget, which provides food to millions of Americans. This program is very necessary to the people that rely on it. With the decline in the economy and the unemployment rate high, many people do not have any other choice. According to Deborah Weinstein, in Time to Tell the Truth About Food Stamps. “While they are receiving SNAP benefits, over half of all working age, non-disabled, adults are working; in the year before receiving SNAP, well over 80 percent were employed.” Many recipients of SNAP are just ordinary people who are down on their luck. It also assists people who are disabled, elderly, and children. Weinstein also writes, “After receiving SNAP for six months, food insecurity drops 24.1 percent.” According to Childrenshealthwatch, “children in food insecure households are more likely to suffer poor health, hospitalizations. They also have developmental delays, and children in families receiving SNAP are less likely to be food insecure than others in similar situations.” The SNAP program does do many goods for many people; it also brings revenue for companies. These companies have a stake in keeping people on assistance programs. Many of the industries who benefit from the program will lobby and spend money to keep current policies in place or expand them to include more people. The amount of influence that they have in government is preventing the possibility of a better solution to feeding the Hungary. Possibly one that will get them a job, or provide an opportunity to make a livable wage. The EBT industry is made up of three main banks, J.P Morgan Electronic Financial Services, Affiliated Computer Services, and E-Funds Corporation. These companies profit heavily by providing the electronic processing of the payments and they typically charge this fee per month. They also make money by providing the actual point of sale machines for a fee, as well as fees for using an ATM to access benefits and replacing lost cards. With the amount of people using the SNAP program, they are making millions of dollars. In a way, the recipients of the assistance are costumers of these banks without even knowing it, and in any good business model, it would be beneficial for the banks to retain their customers. According to Simon, “JP Morgan Chase has contracts for Electronic Benefits Transfer. In half the states, indicating a lack of competition and significant market power” (3), in Florida alone Chase makes about $16.7 million a year. Simon also mentions, “States are seeing unexpected increases in costs while banks are reaping significant windfalls from the economic downturn and increasing SNAP participation” (3). The big food industry has an enormous stake in the users of the SNAP program. In the article, “9 Big Companies That Benefit from Food Stamps,” the CEO of Kraft, Vernon was quoted in an interview with The Financial Times, “food stamp users are a big part of our audience.”Vernon went on to say “food stamp buys make up one-sixth of Kraft’s revenue. In addition, he mentioned that Wal-Mart is one of the largest recipients of food stamp dollars. Executive Vice President of Corporate Affairs for Wal-Mart was quoted in saying, “A very significant percentage of all SNAP dollars are spent in Wal-Mart stores, in some states up to fifty percent” (17). Simons article also quoted the Tulsa World in saying “of the nearly $1.2 billion of food stamp expenditures in Oklahoma, $506 million went to Wal-Mart” (17). The list of large companies that make tremendous profit seems almost endless, but what is even more disturbing is their influence on American politics. According to Profits from Poverty, after JP Morgan started providing EBT services, their contributions to members of the Ag Committee more than doubled from $82,897 to $215,120 per election cycle. Their donations during the 2008 Presidential cycle they donated more than twice the amount of money to Barack Obama over John McCain. After Barack Obama was elected, SNAP benefits increased by 13.6% (17). With all of this influence, one might has to ask whom is the SNAP program really helping? When it comes to the type of food that can be purchased, big food will spend tremendous amounts of money lobbying to prevent any restriction when it comes to unhealthy food. “Given the huge stakes for the food and beverage industry lobbying has played a critical role in shaping public policy” (Simon 9). In Florida, State Senator Ronda Storms introduced SB 1658 that would “prohibit the use of benefits in restaurants” (Simon 13), soon after it was introduced large companies including Coca-Cola, Kraft, and the Florida Beverage Association began immediately opposing it. This bill was designed to encourage healthy behaviors for recipients of SNAP benefits but was opposed due to the profit these companies receive from the poor. Our policies should be focused on what is best for the people who have to use these programs. One of the purposes of the program is to provide supplemental nutrition for the less fortunate. Marion Nestle, points out that “rates of obesity are higher among low-income groups, including SNAP recipients, then in the general population”(1). Some people will argue that the large corporations are not doing anything illegal, and in fact are doing what their in business to do, make money! While that is true, supporting policies that keep people in poverty or promoting unhealthy habits is nothing more then exploitation. The policies they promote are preventing progress and may be standing in the way of a better program or policy that may address the cause of so many people being on programs like SNAP. We should be trying to decrease the number of people on the program, not by making the eligibility requirements tighter but by allowing better policies real consideration. We are not helping people by keeping them dependent on a program, we should be helping them improve their situation so they would not have to rely on public assistance. Works Cited "The History of SNAP." Snap to Health. N.d. web. 6 May 2015. "The Snap Vaccine." SNAP (n.d.): n. pag. 12 Feb. 2012. Web. 14 Apr. 2015. “Profits from Poverty: How Food Stamps Benefit Corporations.” Government Accountability Institute, n.p. Sep. 2012. Web. 10 Apr. 2015. Berman, Jillian. 9 Big Companies That Benefit From Food Stamps. The Huffington Post.TheHuffingtonPost.com, n.d. Web. 14 Apr. 2015. Nestle, Marion. Food Stamps for Fast Food? - No: What the Poor Need Is Healthy Food. Food Stamps for Fast Food? - No: What the Poor Need Is Healthy Food. N.p., 24 Sept. 2011. Web. 14 Apr. 2015. Simon, Michelle. Food Stamps Follow the Money: Are Corporations Profiting from Hungry Americans? Eat Drink Politics. June 2012. Weinstein, Deborah. Time to Tell the Truth About Food Stamps. The Huffington Post, 24 Jan. 2014. 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