Trump budget’s ‘Blue Apron-style’ SNAP proposal raises industry eyebrows

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Trump budget’s ‘Blue Apron-style’ SNAP proposal raises industry eyebrows

By David Salazar - 02/13/2018
A small section of the White House’s proposed budget for fiscal year 2019 could have big implications for recipients of the Supplemental Nutrition Assistance Program and food retailers. As part of President Donald Trump’s proposed changes to the Dept. of Agriculture — which include a 16% decrease in its budget from the 2017 enacted level — is a plan to send food benefits directly to beneficiaries’ homes that White House director of the Office of Management and Budget Mick Mulvaney compared to Blue Apron.

The effort, which the USDA has officially dubbed America’s Harvest Box would impact roughly 81% of SNAP households, or 16.4 million households that receive $90 or more per month in SNAP benefits. The USDA projects that the box will make up roughly half a household’s SNAP benefits, with the remainder delivered via Electronic Benefit Transfer card.

The USDA’s fact sheet, published by Agri-Pulse, notes that this effort has the potential to save $129.2 billion between FY2019 and FY2028. In a press briefing on Monday, Mulvaney highlighted the savings to the government from the program.

“It lowers the cost to us because we can buy prices at wholesale, whereas they have to buy it at retail,” Mulvaney said. “It also makes sure that they’re getting nutritious food. So we’re pretty excited about that. That’s a tremendous cost savings.”

CNBC reported that SNAP purchases drive 7.5% of overall supermarket sales, according to Customer Growth Partners. The Food Marketing Institute’s chief public policy officer Jennifer Hatcher on Monday noted that the proposal “makes major changes, but not changes that SNAP-authorized food retailers see as positive or even efficient.”

“FMI and our members have worked with the House and Senate Agriculture Committees and the USDA over several decades to achieve a national system, utilizing existing commercial infrastructure and technology to achieve the greatest efficiency, availability and lowest cost,” Hatcher said. “As we understand the proposal in the President’s budget to create a USDA commodity foods box of staples, each of these achievements would be lost.”

Hatcher also noted that while the savings from “Perhaps this proposal would save money in one account, but based on our decades of experience in the program, it would increase costs in other areas that would negate any savings.”

Indeed, one of the most potentially costly questions — that of fulfillment — is an open question for the program. “States will be given substantial flexibility to distribute these food benefits to participants. States can distribute these boxes through existing infrastructure, partnerships, and/or directly to residences through commercial and/or retail delivery services,” the USDA fact sheet said.

Hatcher said, “As the private partners with the government ensuring efficient redemption of SNAP benefits, retailers are looking to the administration to reduce red tape and regulations, not increase them with proposals such as this one.”