Food price inflation erodes value of SNAP benefits

Benefits provided by USDA’s Supplemental Nutrition Assistance Program, formerly called the Food Stamp Program, were increased in 2009 by a provision of the American Recovery and Reinvestment Act.

Previous USDA research found that low-income households’ food spending increased and their food security improved following the increase in SNAP benefits. However, from 2009 to 2011, food price inflation eroded about half of the value of the SNAP-benefit increase.

A new report released by USDA’s Economic Research Service examined whether, and to what extent, did food spending decline and food security worsen as the inflation-adjusted value of SNAP benefits decline.

Some of the major findings of the study were as follows:

* From 2009 to 2011, food security worsened for SNAP-recipient households, but not for low-income non-SNAP households, as the inflation-adjusted value of SNAP benefits declined due to inflation.

* Adjusted for inflation in food prices, the maximum SNAP benefit declined by about 7 percent, a reduction of $47 per month for a family of four.

* Results of two studies suggest that increasing the maximum SNAP benefit by 10 percent, or $69 per month for a family of four persons, would reduce the number of SNAP-recipient households with low food security by 22 percent, while reducing the maximum benefit by 10 percent would increase that number by about 29 percent.

To view the entire findings of this study, visit USDA’s Economic Research Service website at www.ers.usda.gov.

Source: USDA Farm Service Agency

Publication date: Mon 11 Nov 2013