Blue Apron? Get Real…and Stay Local.

Mick Mulvaney, the director of the US Office of Management and Budget, recently called the planned “Harvest Box” overhaul of the US food stamps program (SNAP) a “Blue Apron-type” proposal. He has been rightly lambasted for the insensitivity of comparing the dissemination of food that comes in boxes and cans to a high-end meal delivery service that disperses carefully curated, predominantly fresh ingredients. Most of the criticism has focused either on that callousness or on the improbability that such a scheme will save taxpayers much, given the complexity of the distribution problem. People who need help feeding their families are not a monolithic group; they have varying dietary restrictions, and many live in rural areas without reliable logistical networks.

These are valid concerns, but they ignore the most important shortcoming of the suggested scheme: it undercuts local economies. The current system, in place for more than 50 years, has been tweaked periodically, but the basis has always been rooted in local communities. Although the genesis of that focus was due to the original program’s stated goal of aiding the agricultural sector, which was more atomized at the time, the tangible benefits to food purveyors are obvious. More broadly, as mentioned in a recent post, spending locally has a multiplier effect that sustains a thriving economy, providing jobs in a wide variety of industries beyond just agriculture and food retail. In the new Harvest Box conception of providing food aid to the less fortunate, large, centralized agribusinesses (~1% of US GDP) will win, while local businesses* (~50% of US GDP) will suffer.

Although these two categories are not mutually exclusive, the proposed arrangement will not benefit the small family farms that still operate nearly half of the farmland in the US. As with many White House propositions, the details are not well-defined, but the need for USDA approval of items included in the Harvest Box would favor industrial farms and large food manufacturers and distributors. Consequently, implementing the Harvest Box would strengthen a few commercial centers at the expense of many smaller communities throughout the country.

In trying to save money, the federal government would be wise to think hard about the local multiplier effects, particularly since the mooted changes are likely to hit the economies of rural states hardest. Of the ten states most dependent on federal funds, eight have rural populations comprising more than 30% of their total populations. Overall, according to USDA statistics, SNAP accounts for 10% of food purchases for home consumption, and centralizing this expenditure will eviscerate local economies, as the multiplier effect works in reverse. Since relocation is an expensive prospect, those whose jobs disappear as businesses close will increasingly turn to public benefits, enlarging rather than diminishing a cycle of dependence.

Financial savings based on efficiency is the purported reasoning behind the changes to SNAP, but clearly the full costs of transforming the program to a more centralized model have not been tallied. Luckily, the White House proposal still needs Congressional approval before local retailers start seeing their sales decline and other businesses feel the knock-on effects. That the administration recommended the idea at all, though, implies either a tenuous understanding of economics or a singular focus on large businesses over smaller ones. Hopefully members of Congress recognize that their constituents deserve better.