by Peter Larkin/ president and CEO, National Grocers Association
Special to The Shelby Report
Congress has the chance to strengthen the food security safety net, also known as the Supplemental Nutrition Assistance Program, or SNAP, for recipients and retailers in the 2018 Farm Bill.
Every five years, Congress must pass a comprehensive omnibus bill that’s one of the single most important pieces of legislation in the food and agriculture industry: The Farm Bill. The practice dates back to 1933 when the first Farm Bill was enacted into law as part of President Roosevelt’s New Deal. Its three original goals—keeping food prices fair for farmers and consumers, ensuring an adequate food supply, and protecting and sustaining the country’s vital natural resources—have largely stayed the same over the past 80 years.
Lawmakers are aiming to reauthorize the next Farm Bill in the fall of 2018, with congressional hearings already under way in Washington. Jimmy Wright, single-store operator of Opelika, Alabama-based Wright’s Market, testified last year before the Senate Agriculture Committee on issues retailers face while administering SNAP benefits on behalf of the NGA.
Below are five of the most important provisions NGA is working hard to ensure make it into the next Farm Bill:
1. Strengthen the Food Insecurity Nutrition Incentive (FINI) Grant Program. FINI grants are awarded to nonprofit groups and government agencies to conduct programs that provide point-of-sale incentives for the purchase of produce. While the program is popular in the independent supermarket industry, grocers have received a smaller share of funding despite longer operating hours and ability to reach more low-income consumers. Congress should help increase grocery store participation by allowing supermarkets to apply directly instead of restricting eligibility to nonprofit organizations and government entities, helping stores to overcome technical challenges with program implementation, and maximize federal resources for grocery stores.
2. Preserving Consumer Choice in SNAP. It’s crucial that lawmakers not place burdensome regulations on supermarket operators by restricting what SNAP customers can purchase with SNAP benefits. There are more than 650,000 food and beverage products on the market today, and approximately 20,000 are introduced each year. These numbers cover just those items with UPC codes, not items within the deli and bakery that are often made instore or sourced from local producers. Placing restrictions on SNAP purchases would significantly increase burdens on independent supermarkets by adding new costs and administrative burdens to an already highly regulated, low-margin industry.
3. Fighting Swipe Fees on SNAP Authorized Retailers. A major credit card brand is asking Congress to lift the legislative prohibition on swipe fees for SNAP transactions. If card networks are allowed to charge the average swipe fee of about 48 cents per transaction, retailers could face an additional $1.3 billion—yes that’s billion with a B—a year for accepting SNAP payments. While these fees might prove to be a nice cash windfall for the mega-banks and major card brands, they would unfairly and significantly increase retailers’ SNAP costs.
4. Protecting Private SNAP Retailer Sales Data. While Freedom of Information Act (FOIA) requests provide a means for citizens to know about the activities of their government, the release of store-level SNAP redemption data would harm competition within the independent supermarket industry. In fact, the annual and monthly nationwide and state level SNAP redemption data has long been available. The availability of site-specific data would simply create a windfall information for big box stores, who will gain a competitive advantage and poach the customers and revenues of smaller independent grocers.
5. Rejecting a SNAP Tax on Retailers. Last year, a SNAP retailer application fee was included within the president’s budget. While stores currently do not pay a fee to become authorized, retailers take on large equipment, compliance, and training expenses to participate in the program. Under the proposal, however, fees would range from $250 for the smallest businesses, such as convenience stores, to as much as $20,000 for the largest retailers. Requiring retailers to pay SNAP application fees won’t deter fraud in the program; however, it would simply serve as a new tax on Main Street businesses, which is contrary to the Administration’s goal of lowering taxes and costs on small businesses.
Independent retail supermarkets and the wholesalers that supply them play a vital role in the communities they serve through access to food items and as a contributor to the local economy. Independents have been long partners with federal and state government entities in the SNAP food delivery system. Since the program’s inception, grocers have worked collaboratively with USDA, Congress and industry partners to improve efficiency and effectiveness in the program, and have supported the bipartisan efforts to find solutions to address the lack of food access in rural and urban areas.