One thing that kept coming up in my research is whether or not subsidies for food can ever truly be stopped.
So, government gives, say, $500/month to a single occupant household for food. It can only be used for food items that qualify for the SNAP program.
WIC is a another supplemental nutrition program for Women, Infants and Children, but that wouldn't be included in this example. WIC has stricter guidelines as to what and how many of each food item can be purchased in a given period as a way of making sure infants, children and their mothers are getting more than sugary breakfast cereals, Pop Tarts, sodas, chips and fruit roll-ups in their diet.
So, back to the example. The recipient gets $500 and spends it on reasonably healthy fresh meats and vegetables, dairy products, a few convenience items like canned soups, Hamburger Helper and sandwich ingredients.
The retailer takes $500 from the EBT card in however many visits in the month, and the government reimburses the grocer for the cost. When food stamps were paper coupons, the grocers also received a small handling fee to cover costs associated with the redemption process. Not sure if that's the case with the electronic EBT cards now. My guess is the state might get money for administering the program, but electronic EBT transactions don't seem to be very labor-intensive for retailers.
The food that was sold on EBT is the same food that would be sold for cash or credit. That means the store ordered that food from their suppliers and distributors the same as they would all their food.
In turn, the producers are able to sell their produce, and the companies that process the foods are as well, because the demand for their products remains above what it might be if everyone had to choose to shop within their own budget.
So, production remains steadily high, prices remain relatively stabile, and quantities and selection at the store remain plentiful.
What happens when former EBT-paying customers start choosing the least expensive chickens, hamburger, pot roasts and pork chops because they can no longer afford steak, fresh seafood or the more expensive organic varieties of fruits, vegetables and meats?
Obviously, the demand will shift. Retailers will make less without gov't subsidies enabling "higher quality" choices by those shoppers, which in turn means the distributors, suppliers, producers and prcessors will also make less.
This trickles down into the labor force, transportation costs (fuel/oil), and eventually the tax revenues collected for those states which do charge sales tax on most/all food purchases. No retailer can collect sales tax on qualifying food bought with SNAP/WIC.
It's a complicated and broad circle. Can farmers and ranchers continue to provide the same quantity and quality if prices drop too much due to decreased demand? Will restaurants have to raise prices in order to procure the quality of ingredients they are used to offering? Can parents afford to have fresh veggies with each dinner, or will it be processed, prepackaged, frozen or canned? We used to have a garden every year with about 6-7 vegetables to lower our food bill and have fresh, organic items we grew ourselves.
Anyway, it's something to think about. Can we afford to stop the EBT program on Nov 1 without having taken the time to analyze the impact on the economy and especially those who might depend now on those government EBT dollars to keep them productive in order to supply what everyone not on EBT buys and at the same prices?