Food Stamp Program

Why Food Stamps Matter - Fact Sheet

There are millions of hungry Americans.

• In 2006, the last year for which there is official USDA data, 35.5 million Americans lived in households unable to consistently purchase adequate food. i

• Nearly one quarter of the country (12 states) have more than 20 percent of children living in food insecure households. The states of Texas and New Mexico have the highest rates of children in households (24 percent) without consistent access to food. ii

• Food Stamps have responded to increased need during the current economic downturn.  There are more than one million additional people enrolled in the Food Stamp Program compared to just one year ago.

• Hunger has adverse consequences for all Americans, but particularly for children and mothers. It impedes growth and development. It is a significant predictor of adverse health conditions, and is associated with behavior problems among preschoolers and school-age children.

• The Food Stamp Program currently reaches only 57 percent of eligible working poor households. iii

Food Stamps are effective, efficient and closely monitored.

• The Food Stamp Program is efficiently targeted to reach people who have the most difficulty affording an adequate diet. Eighty-seven percent of participants are households with incomes below the poverty level; 39 percent of households had a gross income less than or equal to half the poverty guideline. iv

• Food stamp benefits are provided in the form of an electronic benefit card (EBT) which acts like a debit card and can be used in supermarket checkout lines for the purchase of food. 

• Food stamp error rates (overpayments and underpayments) have declined for six consecutive years and are at an all-time low, which is an extraordinary accomplishment for a program administered by thousands of eligibility workers in state and local offices across the country. v

• Changes to the Food Stamp Program that reduce eligibility or benefits cannot be adequately replaced by food banks and other private charities, or by local communities suffering the loss of local jobs. These agencies are already struggling to meet growing demands driven by long-term unemployment, falling wages, and rising fuel prices.

Food Stamps benefit farmers, the food industry, and the economy.

• USDA’s Economic Research Service (ERS) estimates that each $1 billion of retail demand by food stamps generates $340 million in farm production, $110 million in farm value-added, and 3,300 farm jobs;vi and an additional $5 of food stamps can generate $9.20 in total economic activity. vii

• Changes in food stamp policy have significant impacts on economic activity and household income across the economy, according to an ERS study finding that hypothetical cuts in food stamp benefits reduce food demand and farm production. viii

• Food stamp participation closely follows the economic cycle. With few exceptions (notably 1981-1983 following substantial program cutbacks) food stamp caseloads have closely tracked the unemployment rate, rising as unemployment rises, and falling when it declines. ix

• Paired with unemployment insurance, food stamps are a vital part of America’s front-line defense against recession. They help to prevent hunger in families with laid-off workers that fall into poverty, provide temporary support until these families can get back on their feet, and quickly get federal support into local communities when times are tough. x

• During the late 1990’s food stamp participation fell by 40 percent, largely because of a strong economy and declining unemployment. Participation rose with the economic downturn beginning in 2001 and the program now serves over 9 million more people. x

 The Food Stamp Program helps individuals and communities hit by disasters.

• When natural or man-made disasters hit, the Food Stamp Program provides timely, critical resources to help people cope, and is an important ingredient for physical and economic recovery.

• In fiscal year 2006, the Food and Nutrition Service provided nearly $740 million in disaster food stamp assistance to disaster victims. xi

 Food Stamps make work pay and help those seeking economic independence.

• Food stamps help low-wage workers make ends meet and assure that families are financially better off working than on welfare.  A family with one adult and two children not participating in any federal nutrition assistance programs and has no vehicle, dependent care and excess shelter costs is eligible to receive $105 in food stamp benefits. xii

• Food stamps promote self-sufficiency.  For every additional dollar a food stamp recipient earns, his or her benefits decline by 24-36 cents, thus providing a strong incentive to work longer hours and search for better employment opportunities. x

• In fiscal year 2005, 82 percent of all food stamp households with earnings are households with children.  Five percent of all households with children receive TANF and earnings combined.  Of the 3.7 million single adult food stamp households with children, 26 percent receive TANF, while nearly 40 percent had earnings (earnings such as wages, self-employment income, and or social security retirement benefits).iv

More must be done to strengthen and improve the Food Stamp Program

• The 2007 Farm Bill reauthorization provides Congress with an opportunity to strengthen the reach of the Food Stamp Program.  Eliminating barriers to participation, increasing the minimum benefit provided, funding food stamp outreach activities and innovative access and enrollment efforts by nonprofit organizations are just a few ways the Congress can make this essential program work better.     

For more information, please contact Eleanor Thompson, Director of Government Relations and Public Policy at 312-641-6706.