Illegal Food Stamp Trafficking Up 30 Percent Since 2006
August 20, 2013 by Ben Bullard
Last week, the U.S. Department of Agriculture (USDA) released a study on the illegal resale of food stamps under the Supplemental Nutrition Assistance Program (SNAP). The report found a 30 percent increase in the proportion of SNAP recipients who illegally sell their SNAP credits back to stores, which fraudulently redeem the credits by paying the SNAP recipients the creditsâ€™ cash value.
The 30 percent jump has been incremental, dating back to 2006 — the earliest period covered in the study. Food stamp trafficking fraud now accounts for an estimated $858 million per year in diverted SNAP funds, compared with $330 million in 2006.
The SNAP program itself has also grown immensely since President Barack Obamaâ€™s aggressive expansion of the programâ€™s reach, with last yearâ€™s benefits totaling more than $74 billion — compared with $34 billion in 2008.
Predictably, the study links the increase in SNAP fraud with the commensurate increase in the Obama-era expansion.
And even though the dollar value of misappropriated SNAP funds represents a smaller percentage of the entire SNAP budget today than it did during Bill Clintonâ€™s Presidency (3 percent now, compared to 4 percent in the mid-1990s), technology is likely to thank. The programâ€™s full-scale adoption of point-of-sale, declining-balance debit cards, which debuted in limited numbers in the late 1980s, took human â€śerrorâ€ť out of the old process of exchanging and tracking government-issued paper scraps of fiat food currency.
But personal relationships and the low-budget exigencies of mom-and-pop economics still combine to account for the bulk of transactions in which â€ścustomersâ€ť swap Food Stamps for cash.
The U.S. Food and Nutrition Serviceâ€™s press release for the study states: â€ś[T]he report attributes the change in the rate to 1.3 percent primarily to the growth in small- and medium-sized retailers authorized to accept SNAP that may not provide sufficient healthful offerings to recipients. These retailers accounted for 85 percent of all trafficking redemptions. This finding echoes a Government Accountability Office (GAO) report that suggested minimal stocking requirements in SNAP may contribute to corrupt retailers entering the program.â€ť