Oscar Heanue is a law student in the Food Law & Policy Clinic of Harvard Law School and guest contributor on this blog.
Thanks to the U.S. Department of Agriculture’s (USDA) Online Purchasing Pilot, participants in the Supplemental Nutritional Assistance Program (SNAP) are now able to use their benefits online for the first time in the program’s history. However, although the pilot has provided many SNAP recipients with a new avenue to purchase food, it has also received criticism for its limited selection of retailers and failure to expand to all states.
Background of the Online Purchasing Pilot
USDA began the SNAP Online Purchasing Pilot in April of 2019 after it was mandated in the 2014 Farm Bill. At its launch, the pilot was described by Secretary of Agriculture Sonny Purdue as a way to “ensure [that] the same shopping options are available for both non-SNAP and SNAP recipients.”
After initially launching the program in New York State, USDA approved the addition of seven additional states over the ensuing calendar year. The program began expanding rapidly in Spring of 2020, however, as the COVID-19 pandemic increased the need for both SNAP and online grocery services.
Expansion and Response to COVID-19
The COVID-19 pandemic and resulting economic downturn have created a fundamental shift in how Americans buy their food. With businesses closing and social distancing impacting in-store experiences, many Americans are now choosing to have their groceries delivered or prepared for pickup by an online service. In August, 40 million households ordered groceries online, roughly doubling the number of online orders placed in August of 2019.
USDA’s Online Purchasing Pilot has allowed SNAP households to participate in this trend. The expansion brought the pilot to the majority of the country, with 45 states and the District of Columbia now included in the program. Expanding the pilot has led to a significant increase in the number of households utilizing SNAP for online purchases. According to USDA, online orders using SNAP grew from just 35,000 in March to 769,000 in June.
Critiques and Next Steps
Although many more SNAP participants are now placing online orders, some organizations have criticized the program for failing to provide adequate options. Only five total retailers are currently participating in the pilot, and 39 out of 45 states allow purchases from only two retailers–Walmart and Amazon.
Limiting purchases to these two sellers may create a lose-lose situation. While SNAP recipients are presented with a limited set of options, small and local businesses are excluded from the economic benefits of bringing SNAP payments online. The missed opportunity for small businesses–many of which are already struggling due to the pandemic–is enormous. SNAP can have a stimulating effect on local economies, particularly during times of hardship. For example, at the height of the Great Recession in 2009, $50 billion in SNAP benefits were spent at local businesses, generating an estimated $85 billion in activity for local economies.
Restricting purchases to Amazon and Walmart could also cause direct harms to consumers. A recent report from the Center for Digital Democracy raised concerns about the data-driven marketing techniques employed by these retailers. The report warns that “automated digital marketing technologies,” like those used by Amazon and Walmart, “undermine consumer decision-making and promote unhealthy foods.” These online grocers are more likely to promote unhealthy products, including fatty foods and sugar-sweetened beverages. Forcing consumers to purchase from these sites, the report warns, could reinforce cycles of unhealthy eating.
These criticisms have not fallen on deaf ears. The Expanding SNAP Options Act has been introduced in both houses of Congress to help remedy some of the shortcomings of the existing pilot program. The bill, introduced in the Senate by Senators Tammy Duckworth [D-IL] and Dick Durbin [D-IL] and in the House by Representative Robin Kelly [D-IL-2], would provide $100 million in total funding to develop technologies and facilitate online purchasing for smaller retailers. This funding includes $25 million for the development of a secure online and app-based portal that would allow smaller retailers to securely process SNAP payments. Additionally, the bill allocates $75 million for the creation of a USDA Technical Assistance Center. The Center would be aimed at facilitating online purchases from small retailers, farmers markets, and direct-to consumer farmers, as well as providing information to SNAP recipients about which businesses are participating in online purchasing.
The bill would also take the online purchasing program nationwide–something that the pilot has, thus far, failed to do. For the more than one million SNAP recipients living in Alaska, Louisiana, Maine, and Montana–the four states not currently approved to participate in the pilot–this bill would put them on equal footing with SNAP recipients in other states.
USDA’s rapid expansion of online SNAP has helped the program reach hundreds of thousands of new households. However, the program is far from perfect. Passing the proposed legislation would be a major step forward, ensuring that all SNAP recipients have the opportunity to make online purchases with a greater degree of flexibility and choice.
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