FNS Proposes Stricter Standards for SNAP Retailer Eligibility

by Emily Nink

A proposed rule by the Food and Nutrition Service aims to close loops in retailers’ eligibility to accept SNAP benefits. Public comments on the rule are open until April 16, 2016.

On February 17, the federal Food and Nutrition Service (FNS) filed a proposed rule to change retailer eligibility for participation in the Supplemental Nutrition Assistance Program (SNAP). The new ruling seeks to close loopholes and encourage healthier options at stores that accept SNAP benefits.Store_EBT

When applying for SNAP eligibility, retailers group their stock by first ingredient into four categories based on the 2010 Dietary Guidelines:

  1. Fruits and vegetables
  2. Breads and cereals
  3. Dairy
  4. Meat, fish and poultry

Under the new guidelines, retailers accepting SNAP benefits would have to:

  • Increase the number of stocked varieties in each of the staple food categories above from three to seven, and maintain six units per variety stocked at all times
  • Increase the number of categories in which perishable food varieties are stocked from two to three
  • Exclude foods with multiple ingredients (such as TV dinners and frozen pizzas) toward their stocking counts for staple foods, according to a new definition for staple foods (these items would still be eligible for purchase under SNAP, they just wouldn’t count toward a retailer’s eligibility)

The rule would not affect farmers’ markets or stores that specialize in a single staple food category (meaning 50 percent or more of their revenue is generated within a single category). FNS would also publicly disclose information on retailer disqualification for SNAP eligibility, in an effort to improve transparency and deter SNAP fraud.

The language of the proposal reveals the juggling act of regulating food retail to improve healthy food access. On one hand, FNS wants to encourage both a large number and wide range of retail options to accept SNAP benefits in their stores, acknowledging the importance of SNAP retailers in underserved areas. On the other hand, one of the best ways to improve healthy eating among SNAP recipients may be to regulate retailers rather than the individual beneficiaries, making eligibility more restrictive so that retailers expand their healthy food offerings.

One concern is that the rule might cause retailers to abandon their SNAP eligibility altogether, though, FNS doesn’t foresee this happening. Retailer authorization has been rising steadily—and the proposed rule is not intended to counteract this trend, but to incentivize owners to expand healthy options instead. To make sure the proposed rule doesn’t undermine healthy food access as a whole, the agency is requesting comments on other considerations for retailer eligibility. FNS could “consider factors such as distance from the nearest SNAP authorized retailer, transportation options to other SNAP authorized retailer locations, the gap between store’s stock and SNAP required stock for authorization eligibility, and whether the store furthers the purposes of the Program,” according to the proposed rule.

Balancing these two competing goals—broad access to SNAP retailers and healthy food availability at stores—is a policy puzzle on its own. Yet, the agency must also attempt to limit its own administrative burden, limit the cost of the change to retailers, and comply with other federal statutes, including the 2014 Farm Bill.

Ultimately, the proposed change is aimed at improving consumers’ eating habits—but by cracking down on retailers. The rule is a political stick, not a carrot. And that’s why retailers have taken advantage of loopholes in the past to increase their revenue through clever maneuvering. For instance, restaurants have split their businesses into two components (serving hot and cold foods) in order to gain SNAP eligibility for the portion of the business that sells cold foods that are ready to serve. And other businesses have heated food on-site after the point of sale, essentially serving restaurant food purchased with SNAP benefits. The new rule would close these loopholes for good.

The hope of FNS is that rather than losing eligibility (or finding new loopholes), retailers would expand their healthy offerings, ultimately improving the availability of healthy food overall. Of course, these eligibility requirements intervene only in the availability of healthy food, without addressing utilization. Will having seven varieties of type of staple food really increase the amount of healthy food purchased with SNAP benefits? Will six items in each variety suffice as a neighborhood source of healthy food? Or will the healthy options just sit on the shelves (an especial concern now that perishability is being emphasized)?

The public comments received via FNS’ request for information (preceding the proposed rules) reveal the myriad of potential details affected by the changes, and level criticisms ranging from minute to sweeping. Some are clearly aimed at protecting retailers from a perceived attack on profits. Others are rightly concerned with equity and sustainability.

Personally, I think that shifting the numbers slightly is unlikely to affect healthy food utilization much, when corner stores are only incentivized to do the bare minimum. Here’s the “fruits and vegetables” options at the corner store near my house:


potatoes

Incidentally, the Robert Wood Johnson Foundation Healthy Eating Research program recently released its own version of healthy food stocking guidelines for small retailers.

The new public comment period for the proposed rule ends April 16, 2016.

Emily Nink is a MS candidate in the Agriculture, Food and Environment program and a Policy Associate at the Public Health and Tobacco Policy Center.

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