Food Stamps–Boon for the Local Economy?

Yet another great article passed along from a friend about my home state’s expansion of their food stamp program (supported by their Republican governor, I might add).

Sharon Astyk’s guest article for Grist explains how states benefit from food stamp dollars because those federal dollars are funneled into the states and go directly to people who, considering the aid’s medium and the recipients’ sparse finances, will spend them right away, and spend them in the state.

However, after those food dollars are spent, they haven’t often stayed in the state because they’re most often spent on industrial (and often heavily processed) foods, instead of on less-processed local foods direct from the producer.  Though it’s theoretically possible for farmers markets, and even CSA farms, to accept food stamps, the equipment needed and the red tape to navigate have often blocked their acceptance in practice.

Not only does this prioritization of the industrial do considerable ecological harm and also reduce the access of lower-income families to healthy foods, but it works against the interests of the states, which lose most of the dollars spent there as they go back to industrial producers. [“Stamping out hunger?” 6 Jan 2009]

We know that dollars spent on local products and services tend to recirculate in a community, bolstering the local economy much more dramatically than if the dollars are spent in a non-locally-based business.

States that work to make it possible for food stamp recipients to spend their dollars on locally-produced food would benefit from that multiplier effect: federal dollars come into the state’s communities and hang out there awhile, spreading the wealth (did I say that?) and helping many more than the original recipient of the aid.

If we are going to subsidize expensive food, why not good, nutritious food that will lower national health costs, enrich small farmers and local economies, and improve overall local food security?



6 responses

  1. I don’t know why local producers couldn’t use the same method that schwan’s frozen foods uses when people pay them with food stamps. They use a cell phone and make sure there is funds in the account, and they fill in receipt type deal that is 2-3 copies. The customer gets one, and I imagine the company gets one, and the state gets the other. I don’t know for sure if it is 2 or 3 sheets.

  2. Redhatterb–the biggest reason is the cost–those EBT readers are something like a thousand dollars last I heard, which is a huge chunk of our yearly budget.

    However, the SD Dept of Ag (through the USDA) is offering matching fund market grants this year, and that’s one of the grant projects suggested.

    I’m currently working on getting all the information I can to see if we can pull it off for our market this year. That would make me very happy!


  3. From the way that I understand how foodstamps work in my state they are both good and bad. In the northern part of NH the foodstamp program does help sustain local farms because those receiving food stamps may use them at farmstands. I’d worry that foodstamp dollars would end up being spent at non-local stores to buy non local food. Maine has low income CSA programs that look cool on paper.

  4. What I meant was that the Schwan’s drivers don’t have the EBT readers. It is all hand written on a paper form, in order to determine whether the customer has any funds in their account the driver uses a cell phone and calls the food stamp number into Pierre. After the transaction is done they use the same scanner that they use to determine if they have the merchandise you want on the truck, to print out a receipt. I don’t know if they have the EBT readers at another location or not, but the drivers don’t have them.

    • redhatterb–yes, that is the system we would use–a voucher system. They do have an EBT reader, but they use it at home or an office to report the transactions when the day is done. Apparently, the state provides one EBT reader per location, so the vendor or market does not have to purchase it.


  5. If we are going to subsidize expensive food, why not good, nutritious food that will lower national health costs, enrich small farmers and local economies, and improve overall local food security? -i HAVE to say AMEN to that as well! it makes perfect sense to me, i’m just wondering why a lot of people don’t really realize that.

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