Tariffs Making Buzz, But Farm Bill May Also Have Big Impact On Retailers

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Elaine Casap on Unsplash

Food insecurity affects one in eight Americans.

The history of the Farm Bill is rooted in the need to protect farmers and secure a safe, available supply of food for every American.

Today the Farm Bill includes protective measures covering every facet of food production and distribution. The bill impacts our health, environment, economy and society. Considering its scope and many stakeholders, it’s a complex bill that doesn’t just impact agriculture. In fact, it deeply impacts the retail industry – its sales, its operations and the communities it serves.

The Farm Bill is the nation’s largest legislative effort to address hunger and provide vital resources for rural communities nationwide.

Of all the proposed changes to the bill, nothing impacts the retail industry more than potential changes to reduce participation in the Supplemental Nutrition Assistance Program (SNAP) over the next 10 years.

With the retail industry the largest employer in the U.S. and the biggest contributor to the GDP, if something negatively affects it, the consequences will likely be felt across the nation.

Millions of Americans may find it harder to access food

Food insecurity is a devastating problem in America, affecting one in eight Americans, according to Feeding America, the nation’s largest anti-hunger nonprofit. SNAP, the largest program in the domestic hunger safety net, helps 41 million Americans gain access to food, half of them children. SNAP allows people to shop at grocery stores and farmers markets. This is particularly important because families are choosing food to meet their unique needs, navigate food allergies and manage other health conditions. Doing so is a necessity – 84% of all SNAP benefits go to households that include a child, a senior or someone who has a disability.Choice and flexibility are critical to these families.

Hunger and food insecurity are likely to increase for millions of Americans

We know how devastating it can be for families with limited financial resources to meet basic needs for food, housing and medical care. Poverty and hunger have lifelong impacts for families, communities and our society. SNAP is a program that provides additional financial resources to families and individuals in need. Reducing those financial resources is bad not only for hunger, but also for retail businesses. In 2015, the SNAP program lifted an estimated 8.4 million people out of poverty, according to the Urban Institute. SNAP cuts would harm retailers as well as contribute to increased poverty nationwide.

Through any lens – humanitarian, societal or economical – the weight of poverty can be an insurmountable obstacle. Children raised in poverty are less likely to continue their education, expectant mothers are less likely to maintain good health, and businesses see the impact of a workforce that is less successful.

Potential SNAP cuts come amid trade concerns; grocers and U.S. food producers will feel the loss of benefits

SNAP benefits are spent on groceries. Data from the U.S. Department of Agriculture in 2017 reveals that grocers and supermarkets receive more than 80% of SNAP benefit spending, but represent only 14% of approved SNAP businesses. Consulting firm AlixPartners estimates retail could lose as much as $57.5 billion over the next 10 years if proposed cuts pass. For every $5 of SNAP benefits spent, $1 is spent at Walmart, which stands to lose $12.7 billion over the next decade if benefits are cut. Target could lose as much as $5.3 billion over the same period.

With the loss of these benefits, retailers will need to get creative with how to serve communities, manage costs and drive growth. The impact of less resources from SNAP for food purchases nationwide will not only be felt by retailers, but by food manufacturers and growers as well. Potential SNAP cuts come amid trade concerns, from potential tariffs on the export of U.S. grown food to changes to NAFTA that will impact food production nationwide. That in turn will impact food access and affordability for millions.

Private-public partnerships will need to grow even stronger

As the nation’s largest food assistance program, SNAP provides critical food purchase resources to millions each year. Cuts would impact Feeding America. One in eight Americans receives food assistance each year through the Feeding America network of 200 food banks and the 60,000 local partners including food pantries, kitchens, shelters and meal programs. The Feeding America network cannot make up for cuts to SNAP; for every one meal that the food bank network provides, SNAP provides 12.

Potential cuts to federal nutrition programs undermine public-private efforts aimed at improving our communities and aiding the most vulnerable Americans. Private organizations rely on the national reach and scale of nonprofits to ensure donated resources are maximized with the greatest reach and efficiency. More will be asked of the private sector as nonprofits will need to re-strategize if proposed SNAP cuts become a reality.

Visit Feeding America’spartner page, and you’ll quickly see how many retailers are essential to its operations. The retail industry plays a vital role in fighting hunger. Retailers needs to think not only about how to financially support food banks and kitchens, but how to make it easier for farmers to donate fresh crops – an often costly and labor some endeavor – rather than leave them to possibly waste in the field without other options.

While the Farm Bill is without a doubt a retail issue, it’s also an economical and societal issue. As new policy and provisions take shape, retail will need to continue to work with both the public and private sectors to keep feeding those in need and create economic value.

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Elaine Casap on Unsplash

Food insecurity affects one in eight Americans.

The history of the Farm Bill is rooted in the need to protect farmers and secure a safe, available supply of food for every American.

Today the Farm Bill includes protective measures covering every facet of food production and distribution. The bill impacts our health, environment, economy and society. Considering its scope and many stakeholders, it’s a complex bill that doesn’t just impact agriculture. In fact, it deeply impacts the retail industry – its sales, its operations and the communities it serves.

The Farm Bill is the nation’s largest legislative effort to address hunger and provide vital resources for rural communities nationwide.

Of all the proposed changes to the bill, nothing impacts the retail industry more than potential changes to reduce participation in the Supplemental Nutrition Assistance Program (SNAP) over the next 10 years.

With the retail industry the largest employer in the U.S. and the biggest contributor to the GDP, if something negatively affects it, the consequences will likely be felt across the nation.

Millions of Americans may find it harder to access food

Food insecurity is a devastating problem in America, affecting one in eight Americans, according to Feeding America, the nation’s largest anti-hunger nonprofit. SNAP, the largest program in the domestic hunger safety net, helps 41 million Americans gain access to food, half of them children. SNAP allows people to shop at grocery stores and farmers markets. This is particularly important because families are choosing food to meet their unique needs, navigate food allergies and manage other health conditions. Doing so is a necessity84% of all SNAP benefits go to households that include a child, a senior or someone who has a disability.Choice and flexibility are critical to these families.

Hunger and food insecurity are likely to increase for millions of Americans

We know how devastating it can be for families with limited financial resources to meet basic needs for food, housing and medical care. Poverty and hunger have lifelong impacts for families, communities and our society. SNAP is a program that provides additional financial resources to families and individuals in need. Reducing those financial resources is bad not only for hunger, but also for retail businesses. In 2015, the SNAP program lifted an estimated 8.4 million people out of poverty, according to the Urban Institute. SNAP cuts would harm retailers as well as contribute to increased poverty nationwide.

Through any lens – humanitarian, societal or economical – the weight of poverty can be an insurmountable obstacle. Children raised in poverty are less likely to continue their education, expectant mothers are less likely to maintain good health, and businesses see the impact of a workforce that is less successful.

Potential SNAP cuts come amid trade concerns; grocers and U.S. food producers will feel the loss of benefits

SNAP benefits are spent on groceries. Data from the U.S. Department of Agriculture in 2017 reveals that grocers and supermarkets receive more than 80% of SNAP benefit spending, but represent only 14% of approved SNAP businesses. Consulting firm AlixPartners estimates retail could lose as much as $57.5 billion over the next 10 years if proposed cuts pass. For every $5 of SNAP benefits spent, $1 is spent at Walmart, which stands to lose $12.7 billion over the next decade if benefits are cut. Target could lose as much as $5.3 billion over the same period.

With the loss of these benefits, retailers will need to get creative with how to serve communities, manage costs and drive growth. The impact of less resources from SNAP for food purchases nationwide will not only be felt by retailers, but by food manufacturers and growers as well. Potential SNAP cuts come amid trade concerns, from potential tariffs on the export of U.S. grown food to changes to NAFTA that will impact food production nationwide. That in turn will impact food access and affordability for millions.

Private-public partnerships will need to grow even stronger

As the nation’s largest food assistance program, SNAP provides critical food purchase resources to millions each year. Cuts would impact Feeding America. One in eight Americans receives food assistance each year through the Feeding America network of 200 food banks and the 60,000 local partners including food pantries, kitchens, shelters and meal programs. The Feeding America network cannot make up for cuts to SNAP; for every one meal that the food bank network provides, SNAP provides 12.

Potential cuts to federal nutrition programs undermine public-private efforts aimed at improving our communities and aiding the most vulnerable Americans. Private organizations rely on the national reach and scale of nonprofits to ensure donated resources are maximized with the greatest reach and efficiency. More will be asked of the private sector as nonprofits will need to re-strategize if proposed SNAP cuts become a reality.

Visit Feeding America’spartner page, and you’ll quickly see how many retailers are essential to its operations. The retail industry plays a vital role in fighting hunger. Retailers needs to think not only about how to financially support food banks and kitchens, but how to make it easier for farmers to donate fresh crops – an often costly and labor some endeavor – rather than leave them to possibly waste in the field without other options.

While the Farm Bill is without a doubt a retail issue, it’s also an economical and societal issue. As new policy and provisions take shape, retail will need to continue to work with both the public and private sectors to keep feeding those in need and create economic value.

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