Friday, October 17, 2008

Food stamp benefits when inflation is high

The benefit level in the Food Stamp Program -- now called the Supplemental Nutrition Assistance Program (SNAP) -- is updated every year for food price inflation. The update occurs in October based on the Consumer Price Index in June. It is somewhat in the eye of the beholder whether to think of benefits as lagging by 4 months (counting from the start of the year) or 10 months (the average for the year) or being "15 months out of date by the end" of the year (with italics for emphasis). The lag in the benefit update does raise greater concern in the last couple years, because food price inflation has been higher recently. Here is a revised report on the topic by Dottie Rosenbaum at the Center on Budget and Policy Priorities.

A somewhat offsetting consideration is that the Thrifty Food Plan has been increasing in recent years at a rate higher than the overall food price inflation measured in the Consumer Price Index (CPI). This has the effect of raising the food stamp benefit faster than the overall rate of food price inflation. Mark Lino at USDA's Center for Nutrition Policy and Promotion said the reason for this pattern in 2004-2005 (.pdf) was because the Thrifty Food Plan is weighted more heavily toward fruits and vegetables, milk, and lean meats, which experienced faster price increases. I imagine similar trends have continued more recently.

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