FMI CEO Testifies on Important Retail Role in SNAP

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FMI CEO Testifies on Important Retail Role in SNAP

03/16/2017

The following is testimony from Food Marketing Institute (FMI) President and Chief Executive Officer Leslie G. Sarasin during a Feb. 16 U.S. House of Representatives Agriculture Committee hearing on the operations of the Supplemental Nutrition Assistance Program (SNAP) and the differences between a short-term hunger program as contemplated in SNAP, and a longer-term nutrition program as intended in the Special Supplemental Nutrition Program (WIC). 

Food Retail Role

Grocers play an important role in the efficient delivery of safe, affordable food for both SNAP and WIC. We appreciate this committee's work to better understand SNAP.

Becoming an authorized SNAP retailer is a complicated process. Retailers must submit specified paperwork and credentials and adhere strictly to the SNAP operating rules and ongoing training for their associates. Violation of SNAP operating rules results in revocation of both the SNAP and WIC licenses.

SNAP-authorized stores code all products within the electronic checkout system as either SNAP eligible or ineligible. When an eligible item is scanned, the system deducts the product's price from the customer's SNAP EBT card. When an ineligible item is scanned, the cashier is prompted to ask the customer for another form of payment.

Approximately 50% of SNAP transactions are multi-tendered such that another form of payment is also used to pay for non-food items, ineligible products, or eligible food items that exceed the balance on the SNAP EBT card.

Within the electronic systems, WIC-eligible items are charged against that benefit first, followed by those eligible for SNAP, and finally, the cashier must collect another form of payment — cash, check, debit or credit — for all remaining items.

Grocery transactions for SNAP customers vary significantly throughout the month. Data indicate the first transaction of the month is usually the largest and may contain larger quantities of protein and perishables. By the last week of the month, customers typically purchase maximum calories at minimum cost.

Need for Sound Public Policy

We appreciate the Committee's recognition of the role grocers play in the SNAP program. FMI has announced a new industry SNAP Task Force to identify areas where the program works well and to consider those that may require improvement.

Some suggest that limiting what customers can buy with SNAP, making it more like WIC, may help achieve these goals. Doing so would place a tremendous burden, both on USDA and on food retailers, and likely would not achieve policy goals.

Please consider two recent examples from the WIC program.

When USDA began the fresh fruits and vegetables cash value voucher program, it subjectively decided all fresh fruits and vegetables were eligible except the white potato. As many of you will recall, this "ban" on white potatoes unleashed a great debate throughout Congress and industry.

In the end after more than a year of debate and consideration of actual science, USDA reversed the ban to allow white potatoes to be purchased in WIC. This was 1 item out of the tens of thousands found in each of our member stores that would have to be studied and debated before USDA can make a determination of whether it should be "in" or "out."

Second, if our goal with SNAP is to provide short-term lifelines to needy Americans so they can get and keep a job to earn enough to support their families without government benefits, such limitations seem unlikely to help accomplish that goal at a reasonable cost. Doing so will require additional USDA staff to make these decisions for all products currently in market as well as the estimated 20,000 new products introduced every year. USDA would also need to maintain a real-time list downloadable to every electronic payments system in the country.

I should note that in 2004, Congress directed USDA to create an electronically-downloadable real time UPC database for all WIC eligible foods. Today retailers are still waiting for this list. The fact that nearly 13 years later we're still waiting for the list shows the complexity of creating and keeping one updated in real-time, even for a list of products as small as WIC's. A similar SNAP database would include more than 100 times the number of products included in WIC and is an absolute necessity to achieve real time determinations on the 20,000 products introduced each year. Could it be done? Probably so. But if it hasn't been done in the WIC context in spite of a 13-year-old congressional directive, it likely wouldn't be easy or inexpensive.

We must also note that 82 percent of all SNAP benefits in FY2015 went to households that included a child, an elderly person or a person with disabilities.

Finally, FMI member companies are the largest contributors to our nation's food banks. In 2016, food retailers donated more than 1.3 billion of the 4 billion meals provided by Feeding America to families in need. We're also constantly developing new ways to enhance this donation level by decreasing food waste. In fact, we've spent much of the past year working with our supplier partners at the Grocery Manufacturers Association (GMA) to reduce customer confusion on product date labels, frequently misunderstood to be expiration dates."