NASDA Meat the Need Plan Increases Expenditures - Burdens Grocers

NASDA Proposes Second EBT Card to Purchase Meat and Dairy Products

October 5, 2009

NC NEWS -- North Carolina Agriculture Commissioner Steve Troxler and his counterparts across the country have offered the federal government a new proposal to help struggling dairy, pork and poultry farmers. The National Association of State Departments of Agriculture (NASDA), has proposed yet another electronic benefits transfer (ETB) card to purchase pork and dairy products. The proposal, known as "Meat the Need," calls for the federal government to purchase cheese and other dairy products in up to three installments of 75 million pounds each over 120 days.

The NASDA has put forward the "Meat the Need" plan to take extra dairy, pork and poultry supplies off the market, stabilizing prices paid to producers while making more protein-rich foods available to food banks, school lunch programs and other food assistance programs. The largest of these programs is the United States Department of Agriculture's (USDA) Supplemental Nutrition Assistance Program (SNAP), which costs our country 37,658.1 million dollars per year. Further USDA data indicates that it costs the USDA, 3,049.7 million dollars to service 28.409 million beneficiaries of this single program - SNAP! Additionally, from 2007 to 2008, SNAP increased service to 1,941,000 beneficiaries with an increased federal administration cost of 233.4 million dollars. Meanwhile, SNAP's total expenditures increased a whopping 4468.5 million dollars last year. This is also the highest yearly expenditure in the history of the SNAP program. Lastly, the 3,049.7 million dollars per year to service 28.409 million beneficiaries only includes the federal share of expenditures to administer the program. Federal share Expenditures include State administrative expenses and Employment and Training programs, and other Federal costs such as printing and processing of stamps; anti-fraud funding; program evaluation.

Now, having clearly defined the term "other food assistance programs" let us return to our main topic the proposed "Meat the Need" plan. The "Meat the Need" proposal grew out of discussions between Troxler and his colleagues before and during NASDA's annual meeting earlier this month in Alabama. Additionally, NASDA is composed of the commissioners, secretaries and directors of agriculture from the 50 states and Puerto Rico, Guam, American Samoa and the Virgin Islands. The proponents for the "Meat the Need" plan also claim it is designed to use money previously authorized by Congress. The plan follows the position that if the target price of $16 per hundredweight of milk - the cost of production - is reached before the second or third installment, the purchases would stop, Troxler said. Likewise, the government would purchase up to three installments of 100 million pounds of pork products over 180 days until a target price of 49 cents per pound - the average cost of production - is reached. The plan also includes a one-time purchase of 100 million pounds of turkey.

NC Agriculture Commissioner Troxler is quoted as saying:

"This is a bold solution that would allow the U.S. Department of Agriculture to increase allocations to the Supplemental Nutrition Assistance Program, and beneficiaries would spend the new allocations on meat and possibly dairy products. These products would be available at grocery stores, and participants would be given separate electronic benefits transfer cards to purchase the products."

Well that is wonderful. Create more bureaucracy to increase state and federal expenditures with the creation of a second EBT card or food stamp card to purchase meat and dairy products. Moreover, who will monitor the distribution and control of this additional EBT Card or food stamp card? Mainly the USDA and each state's Health and Human Services! Therefore, the budgets of every state must be increased to meet with the extra burden placed upon social services division in order to ensure the integrity of the program's controls are not compromised. So, not only will this program increase federal SNAP expenditures, it will increase each state's expenditures as well. Continually increasing government expenditures inevitably causes an eventual increase in state and federal taxation.

However, this proposed plan, Meat the Need, will not only increase state and federal administration expenditures, it will also increase the price of all groceries. If the proposed plan is placed into effect, and a secondary EBT card is needed to purchase pork and dairy products at the grocer's checkout register, would it not increase the overhead expenditures of grocers? Grocers would be burdened with the unnecessarily processing of two separate EBT cards per beneficiary at the register.

So, "the other white meat" with an average price markup of five times its production value will also increase if this proposed Meat the Need program is established, and the consumer will pay even more for these products before they reach the dinner table.

Troxler said major action is needed quickly, "Dairy farmers across the country are suffering mightily," adding, "Bankruptcies and foreclosures are occurring at an alarming rate." The USDA has been buying pork, but not nearly enough to do anything about the prices farmers receive claimed the NC Agricultural Commissioner. Troxler said, "'Meat the Need' provides the impact the dairy and pork industries need," and "It is fiscally sound and is flexible enough to respond to changing market conditions."

In conclusion, this proposed NASDA plan "Meat the Need," may appear to be "fiscally sound," but it will indeed increase the size of government and government expenditures, which will ultimately cause an increased burden on the taxation of household incomes. As the economist, Adam Smith said, "There is no such thing as a free lunch," and this also applies whether you are serving pork or turkey NC Agriculture Commissioner Steve Troxler.