Saturday, May 13, 2006

Changing the monthly food stamp cycle

Retailers in Michigan are asking the state food stamp agency to consider distributing food stamp benefits differently, according to an AP article today by Sarah Karush (via Boston Globe).

In Michigan, each of the 512,000 households -- 1.1 million individuals -- on food stamps receives them within the first nine days of the month. The funds are transferred electronically onto a debit card.

Most states stagger distribution, though eight states issue everyone's benefits on the first of the month, according to the U.S. Department of Agriculture. Of those that stagger, the number of days varies from three in Connecticut to 22 in Missouri.

Tom Wenning, general counsel of the National Grocers Association, said staggered issuance took hold as a way "to provide some relief both for the consumer and the retailer."

But many Detroit retailers say the nine-day spread is not enough. The Associated Food and Petroleum Dealers of Michigan wants the state to divide each recipient's food stamps into two payments per month -- which federal law allows for, but no states currently do.

The monthly food stamp cycle is an issue that colleagues and I have been working on for several years (see here, here, and here, and email me if you would like me to send an electronic copy of the full articles).

In addition to staggered benefits, Karush's article today also discusses benefit delivery more than once monthly. It says advocates for participants in Michigan opposed distributing the benefits twice monthly. However, there is a strong pro-participant case to be made for at least investigating such a policy. Now that benefits are distributed electronically, through debit cards, there is little administrative cost to delivering benefits twice monthly. It might help participants avoid "boom-and-bust" food cycles that harm food security and nutrition at the same time. Indeed, one may speculate that such cycles could be related to both hunger and risk of overweight and obesity.

In focus groups, some food stamp participants have recommended benefit delivery twice monthly (and I presume they weren't just hoping this meant double benefits!). Participant reception of such a policy is an open empirical question -- it seems quite possible that such a policy would solve a problem for retailers and participants at the same time.


Anonymous said...

Seems to me that it is more efficient for stores to be open for only several days than every day of the month.

Anonymous said...

Did I miss something? 95% of all food stamp benefits are redeemed in supermarkets, grocery stores and convenience stores. These are stores that are open every day for all customers. It makes no sense for stores that pay rent and stock perishable products all month long to be open for business "for only several days" just for the benefit of food stamp recipients.