Oh Snap!

09.27.13

Supermarkets and Retailers Turn Blind Eye to Food Stamp Funding Cuts

Supermarkets and food manufacturers depend on food stamps for a significant chunk of their sales each year. Yet as Republicans push for huge, punitive cuts in funding for the program, the big corporations that benefit are keeping silent.

Republicans have made it clear that they want massive cuts to the federal budget, and food stamp assistance is on the chopping block. Last week, the House of Representatives passed a measure that would slash nearly $40 billion in spending on the Supplemental Nutrition Assistance Program (SNAP) over the next several years.

Because the deep cuts would impose serious hardship on recipients of food stamps, advocates for the program have been speaking out loudly. But some of the groups that stand to lose a great deal from the proposed draconian cuts have been silent. As debate has raged, food merchandisers, packaged goods manufacturers, and grocery stores—and the trade groups that represent them—haven’t made much noise.

SNAP deals out more than $74 billion a year to low-income individuals to buy food. For grocery and convenience stores where those families use their stamps, that’s essentially $74 billion of money in the bank. Food merchandisers like Kellogg and Pepsi, who sell products that are purchased with the money from food stamps, are also large winners.

According to the American Center for Progress, the proposed cuts to SNAP would result in 11,300 lost jobs in the retail market—including grocery stores—21,000 jobs lost in food manufacturing and agriculture, and more than 8,000 jobs lost in trucking and warehousing. Despite the obvious stake big supermarket and food companies have in SNAP funding, many have turned a deaf ear to the program’s plight. Instead of lobbying to keep funding going strong they refuse to make a comment.

A spokesperson for Walmart, one of the largest supermarket chains (and whose customers frequently use food stamps), told The Daily Beast the company doesn’t have a position on SNAP cuts and that it “hasn’t been an issue that Walmart has taken a stance on in the past or now.”

The National Grocers Association, a lobbying group specifically for supermarkets, isn’t lobbying for SNAP initiatives. The NGA said the only stance it’s taken when it’s come to SNAP regards opposing any proposals that would limit the choices of grocery stores and food items eligible for food stamp use. So far no such federal legislation is in the works.

The Food Marketing Institute, an organization that represents supermarkets like Stop & Shop and Giant, has spoken up in support of SNAP. It praises SNAP as an asset for millions of families in need, but it tiptoes around the current federal fight to cut SNAP’s funding and won’t address the cuts outright.

“According to Feeding America, food banks experienced a 46 percent increase in clients between 2006 and 2010. Clearly, the private sector alone cannot ensure that no child is hungry and there continues to be a critical role for SNAP,” a spokesperson for the FMI told The Daily Beast.

For groups that support federal poverty assistance, the reluctance of supermarket associations and food merchandisers to lobby for SNAP is mind-boggling.

“Well I can’t speak for the food associations’ reasoning but there is going to be a hit in jobs in the food industry if those SNAP cuts go through, which makes it all the more baffling,” said Melissa Boteach, director of the poverty and prosperity program at the Center for American Progress. “The cuts are going to hit the food industry the hardest of anyone in terms of job losses and sales.”

Boteach says that more than 55,000 jobs will be lost in the first year alone from any cuts to SNAP.

It seems that politics may be the main culprit at play. Although all grocery stores and supermarkets that accept SNAP payments—there are more than 231,000 stores nationwide—stand to benefit extremely from continued SNAP funding, many of the same organizations are large Republican Party backers.

Walmart, is a political heavy hitter, one of the top federal election donors, and gave 54 percent of its donations to Republicans in 2012.  

General Mills, the parent company of Betty Crocker, Yoplait and Pillsbury, among others, has spent more money on Republican candidates than Democratic candidates in every election cycle between 1990 and 2012.

The National Grocers Association lobby spent $23,800 on Republican house members in 2012, and $4,000 on Democratic candidates.

The grocer associations and food companies face a political conundrum. They can advocate publicly for businesses benefitting from SNAP funding, and thus ally themselves with the White House and liberal advocacy groups against Washington Republicans. Or they can stay mum on the topic and continue to back Republicans who generally support their agenda on trade, labor, tax, and regulatory issues.

In the past, SNAP funding was bundled into the larger farm bill and hence received bipartisan support. Lashing food stamps to agricultural subsidies made food stamps palatable to rural conservatives and made agricultural subsidies palatable to urban liberals. And so companies and trade groups didn’t have to make that choice. “In the past it’s been bipartisan,” said Boteach of the Center for American Progress. “We just worked with former senators Tom Daschle and Bob Dole who were talking about the history of the Farm Bill ... how Democrats and Republicans came together and didn’t play politics with hunger.”

But things have changed. For the first time in recent history, the House decided to separate food stamps from agricultural subsidies. The Farm Bill has passed the House and Senate separately but still has some debate ahead of it before it can be signed into law. Cuts to SNAP now look inevitable, a reality that low income families may have to digest. It seems like the food industry may have already started that process.