Increased enrollment in the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) contributed to the growth of retail groceries in Georgia from 2007 to 2014, even though this period, often labeled “the Great Recession,” was characterized by general and deep economic declines in world markets.
This countertrend was observed in a new study by UGA researchers who used data from the U.S. Department of Agriculture and Georgia Division of Family and Children Services to track retailers’ increasing acceptance of SNAP benefits during those years.
The study, which was published in the November 2016 issue of Health Affairs, suggests that increased enrollment in the program during the Great Recession improved access to food for SNAP beneficiaries. It did so by acting in effect as a subsidy to retailers, thereby enhancing the number of retailers and their sales.
Between 2007 and 2014, the number of SNAP retailers in Georgia increased by 82 percent, primarily due to growth in the number of small retailers.
“In one of the roughest economic patches of the last 100 years, we see this huge boom in stores, which seems counterintuitive. During the recession, rather than closing their doors, we saw the number of SNAP retailers nearly double,” said Jerry Shannon, an assistant professor in the Franklin College of Arts and Sciences’ department of geography and the study’s lead author. “I think this outcome points to the fact that SNAP is very much an economic stimulus and that during times of economic hardship, stores rely on SNAP as much as some consumers do. Especially for small stores, it can be a vital source of financial support.”
The study differentiated how much of the growth was represented by the opening of new stores launched as authorized SNAP retailers versus existing stores becoming SNAP retailers. For small outlets such as convenience stores, gas stations and pharmacies, the breakdown was roughly 50-50.
“SNAP is often framed as an important support for people who have low incomes,” Shannon said. “It defrays food insecurity, provides countercyclical support for folks when the economy is tough and then trails off when things get better. But it was also designed, from practically the genesis of the program, to support retailers during those tough times as well.”
The foundation for SNAP was the 1933 Agricultural Adjustment Act. The program, referred to as the Federal Surplus Relief Corporation, was established during the Great Depression, when prices for crops fell and farms across America were struggling to deal with the excess supply. To support farmers, the federal government purchased basic agricultural commodities at discount prices and distributed them among hunger-relief agencies in states and local communities.
To formalize food distribution and to avoid duplicating efforts by local relief agencies, the Food Stamp Program was first implemented in 1939 during President Franklin D. Roosevelt’s administration. Over time, the program evolved while maintaining its goals to achieve a more effective use of agricultural overproduction, improve levels of nutrition among individuals with low incomes and provide economic stimulus to farmers, distributors and retailers. In 2015, the program served over 45 million individuals, and over 250,000 retailers were authorized to accept SNAP benefits nationwide.
“When we think about food deserts, or food accessibility, SNAP can help support stores, as it already does in low-income neighborhoods,” Shannon said. “But it also highlights the dependence of those stores on SNAP. During the recent economic downturn, convenience stores were most sensitive to the increased enrollment, though they are not generally places where we think of buying healthy foods.”
He maintains, moreover, that his research is consistent with new rule changes proposed by the U.S. Department of Agriculture that would require SNAP retailers to provide healthy foods as a way of improving access to such foods generally.
The data support interventions that would help improve nutritional quality of foods available to consumers,” he said. “It also suggests how SNAP might be useful for other alternative food sites, such as farmers markets and other local food programs, which help consumers link up with nearby producers.”
