Lest you thought that surging food prices were only an issue for low income countries and people living on less than a dollar a day, this week’s Economist article on food stamps in the US was pretty arresting:
Participation has soared since the recession began (see chart). By April it had reached almost 45m, or one in seven Americans. The cost, naturally, has soared too, from $35 billion in 2008 to $65 billion last year. And the Department of Agriculture, which administers the scheme, reckons only two-thirds of those who are eligible have signed up.
As the graph shows, while the number of beneficiaries has risen sharply, costs have increased even faster – no surprise, given what’s been happening to food prices. And guess what: the Republicans want to slash the program.
In their budget outline for next year they proposed cutting the amount of money to be spent on food stamps by roughly a fifth from 2015. Moreover, instead of being a federal entitlement, available to all Americans who meet the eligibility criteria irrespective of the cost, the programme would become a “block grant” to the states, which would receive a fixed amount to spend each year, irrespective of demand. The House has also voted to cut a separate health-and-nutrition scheme for poor pregnant women, infants and children, known as WIC, by 11%.
The Economist notes that “it is … hard to argue that food-stamp recipients are undeserving”:
About half of them are children, and another 8% are elderly. Only 14% of food-stamp households have incomes above the poverty line; 41% have incomes of half that level or less, and 18% have no income at all. The average participating family has only $101 in savings or valuables.
And even assuming that the (Democrat-controlled) Senate blocks cuts to food stamps, the larger context is of painful reductions to welfare provision even as the US economy remains anaemic:
Unemployment benefits last for a maximum of 99 weeks at the moment, and that is due to fall to six months from next year. No one knows exactly how many people have exhausted their allotment, as the government does not attempt to count them. But almost half of the 14m unemployed have been out of a job for six months or more, and so would no longer qualify for benefits under the rules that will apply from January 1st.