June 28, 2012

Farm Bill Considerations: The Case for Supporting Price Incentives in SNAP

Sarita Wahba

Sarita Wahba

Research Assistant

Center for a Livable Future

I am a true lover of fruits and vegetables. I am also a true lover of burgers, and french fries, and cookies. When faced with the decision of what to eat, there are many factors that come into play, including taste, healthiness, and cost. Being somewhat health conscious, the health factor frequently (but not always) takes first place in the hierarchy of factors that constitute my final meal choice. However, I could say with certainty that if healthy foods cost less, I would have more of an incentive to purchase them over other alternatives, even when the burgers and fries seem to be calling out to me directly.

Like many Americans, SNAP participants face this dilemma as well. With so many low-cost, energy-dense foods available, it can be difficult to make the argument to purchase fruits and vegetables, especially when they are much harder to access, as is the case in food deserts. Providing access to lower-cost produce might tip the scales, and incentivize SNAP participants to increase produce consumption. Therefore CLF recommends that the 2012 Farm Bill allocate funds for providing incentives that lower the cost of fruits and vegetables for SNAP participants, and we’re glad to see the Senate version of the bill doing just that.

In general, Americans eat insufficient amounts of fruits and vegetables. However, low-income Americans consume even fewer servings compared to those who earn more. This coincides with a high incidence of diet-related chronic diseases like cardiovascular disease, stroke, and some cancers, in low-income Americans. For example, the rate of heart disease is 40 percent higher in low- versus middle-income Americans. Health and well-being implications aside, chronic diseases are also extremely costly. Over 75 percent of current health care costs are related to chronic diseases. With health care costs continuing to rise, it is clear that something must be done to reverse this path, and pricing incentives have shown success.

So how do pricing incentives work? There are several different methods of applying price incentives, but they are all used to make healthier food items cheaper than less healthy ones. Incentives have been used successfully in school vending machines to encourage the purchase of healthier snacks, and in other programs that supplied coupons for the purchase of healthy foods. One program, the Wholesome Wave’s Double Value Coupon (DVCP) has been shown to be particularly effective. Essentially, this program doubles the value of SNAP dollars when redeemed at participating fruit and vegetable vendors. In 2010, approximately 20,000 SNAP participants took part in this program, and 87 percent of them said that it increased or greatly increased their fruit and veggie intake. Correspondingly, local producers saw $1 million in revenue associated with purchases from DVCP.

What’s better than that? A government program that improves the health of SNAP participants, while simultaneously driving local economic activity, and addressing health care costs, is a program that needs to be supported.

For more information check out CLF’s policy brief, Pricing Incentives in SNAP to Improve Diets of Low-Income Americans.

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