The Secret Life of a Food Stamp Might Become a Little Less Secret

A blog about business and economics.
Aug. 5 2014 4:01 PM

The Secret Life of a Food Stamp Might Become a Little Less Secret

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Exactly how much does Walmart make in food stamps?

Photo by Robyn Beck/AFP/Getty Images

Should the public know how much money Walmart—or for that matter, the convenience store down the street—takes in through the federal food stamp program? Or does that information amount to a retail trade secret? Those are the questions at the heart of a request for public comment announced yesterday by the U.S. Department of Agriculture, which runs the food stamp program.

Last year we spent $76 billion in taxpayer money on food stamps, officially known as the Supplemental Nutrition Assistance Program, or SNAP. That money goes to about 47 million low-income Americans, who use it to buy food at more than 250,000 retail stores across the country. But as Marketplace and Slate have reported before, exactly which stores and which companies benefit most from those food stamp dollars is something the federal government has never disclosed. Officials argue that they are required by law to keep the information secret in order to protect retailers.

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A few years ago, South Dakota newspaper the Argus Leader sued the USDA, arguing the public has a right to see this data. The issue is still tied up in court. Last spring, when I interviewed Agriculture Undersecretary Kevin Concannon about the issue, he spoke positively on the idea of greater transparency. “I think personally it’s in the interest of the American public,” he said. “These are public benefits that are moving through the economy.”

When I asked him whether he would push his agency to disclose the information, he said he needed to “talk to the lawyers.” Judging from the USDA’s announcement Monday, the lawyers have been consulted. In the press release announcing the agency’s request for public input, Concannon said:

Our goal is to provide more transparency so that people can have access to basic information about the amount of SNAP benefits that individual grocery stores and retailers are redeeming. We hope that this public comment period will be informative as to how we can do that in the most thoughtful and appropriate way possible.

The USDA will take public comment on the issue until Sept. 8. As for what kind of comments might come in, we have some clues already. When I asked Walmart spokesman David Tovar last spring about how much revenue his company took in from food stamps, he told me it was proprietary information. “We don’t provide our market-share data on any categories like that,” he said. Tovar pointed out that knowing how much a particular Walmart in a particular location makes in food stamps could be unduly helpful to competitors.

In addition to being the nation’s largest retailer, Walmart likely takes in the most food stamp dollars—an estimated 18 percent last year, according to leaked comments from a company vice president at a private dinner last fall, which Walmart later confirmed. That sum would amount to $13 billion, or about 4 percent of Walmart’s total U.S. sales.

Walmart is also one of several retailers that have a significant number of employees who make little enough that they rely on food stamps to get by. In Ohio, up to 15 percent of Walmart’s workforce uses SNAP, based on our analysis of state food stamp enrollment data.

Outside the retail community, there are voices advocating for making the data public. “It could be used to improve SNAP and make it more accessible to poor families,” writes Stacy Cloyd, the senior domestic policy analyst at the Bread for the World Institute, an anti-hunger organization. Knowing which stores attract the most SNAP customers would “allow hunger advocates to learn from successful businesses and share best practices. It would also help them identify the highest-volume vendors so that they can offer the stores information and recommendations on how they can supply a variety of nutritious foods,” she writes.

As Jonathan Ellis, the South Dakota journalist who sued the USDA to make food stamp data public, points out, “Typically, if a business participates in a government program, you can get a copy of their contract and find out how much they’re being paid.”

That’s how it works when the government pays a construction company to build a bridge or a defense contractor to build a fighter plane. But that’s not how it works when the government reimburses retail companies that participate in the federal food stamp program—at least for now.

This story was produced in conjunction with Marketplace. Listen to Marketplace's full series on food stamps here. Read the Marketplace/Slate series "The Secret Life of a Food Stamp" here.

Krissy Clark is senior reporter for Marketplace’s Wealth & Poverty Desk. Follow her on Twitter.

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