Cost of food-assistance programs declined slightly in first half of 1996 - Annual Spotlight on the U.S. Food System

USDA oversees a number of food-assistance programs whose goals are to provide people with access to a more nutritious diet, to improve the eating habits of the Nation's children, and to help America's farmers by providing an outlet to distribute foods purchased under commodity price-support programs (see box on domestic food-assistance programs). For the first 6 months of fiscal 1996 (October 1995-March 1996), USDA spent $19.7 billion on food-assistance programs. Expenditures were 0.5 percent lower than the same period in fiscal 1995 (table 1). If the trend is found to have continued for the entire year, it would mark the first decrease in annual total food-assistance program expenditures since fiscal 1982 [ILLUSTRATION FOR FIGURE 1 OMITTED]. However, the rate of change in expenditures for individual food-assistance programs varied greatly, with some programs expanding and others decreasing significantly.

Most of USDA's food-assistance programs are administered by USDA's Food and Consumer Service (FCS), which works in partnership with the States. The Federal Government is generally responsible for food costs for the programs and shares administrative costs with the States. States determine eligibility to participate in the programs and deliver services.

Food Stamp-Related Programs Decrease

There are two food stamp-related programs: the Food Stamp Program,. the single largest food-assistance program, and the much smaller Nutrition Assistance Programs for Puerto Rico and the Northern Marianas. Combined expenditures for these programs totaled $12.9 billion, or almost two-thirds of all food-assistance program expenditures during the first half of fiscal 1996. This was a decrease of almost 2 percent from the same period in fiscal 1995.

Expenditures for the Food Stamp Program depend largely on the number of participants and the cost of the actual food assistance. (In recent years, the Federal share of State administrative costs and other costs, such as printing and processing the coupons, typically accounted for only 7 percent of total program costs.) Program expenditures for the first half of fiscal 1996 totaled $12.3 billion, a decrease of almost 2 percent [TABULAR DATA FOR TABLE 1 OMITTED] over the same period the previous year. This drop was largely because of decreased participation in the program. It fell from an average 27 million people per month during the first half of 1995 to 25.9 million during the first half of 1996. Participation for each month of the first half of fiscal 1996 was lower than in the same month in fiscal 1995 [ILLUSTRATION FOR FIGURE 2 OMITTED]. In turn, each month of fiscal 1995 was lower than the same month of fiscal 1994, when food stamp participation reached its highest level since the program began. This decline is largely a result of the country's improving economy. The declining participation levels more than offset the increase in average benefits from $71.71 per month per person during the first half of 1995 to $73.41 per month during the first half of 1996.

Combined grants for the Nutrition Assistance Programs in Puerto Rico and the Northern Marianas totaled $573 million during the first 6 months of fiscal 1996, an increase of 1 percent over the same period the previous year.

Child Nutrition Programs Grew Slightly

The child nutrition programs - the National School Lunch, School Breakfast, Child and Adult Care Food, Summer Food Service, and Special Milk Programs - provide nutritious meals and snacks to children in public and nonprofit private schools, childcare institutions, certain adult daycare centers, and summer recreation programs. Together, expenditures for these programs were $4.7 billion for the first half of fiscal 1996, a 1-percent increase over the same period in fiscal 1995.

The largest of the child nutrition programs, the National School Lunch Program, served an average of 24.1 million meals per day during the first half of fiscal 1996, a 1-percent increase over the first 6 months of the previous year. Expenditures also increased 1 percent to $3.3 billion over the same period.

Serving an average of 6.1 million meals per day during the first half of fiscal 1996, the School Breakfast Program is much smaller than the School Lunch Program. However, the program's rapid expansion continued into 1996, as total meals served increased by 2 percent and total expenditures increased by 4 percent for the first 6 months of fiscal 1996 over the same period in fiscal 1995.

Expenditures for the Child and Adult Care Food Program during the first half of fiscal 1996 increased by 3 percent, and the number of meals served increased by 1 percent compared with the first half of fiscal 1995.

Although the Summer Food Service's expenditures decreased by 25 percent in the first half of fiscal 1996 compared with the first half of fiscal 1995, the figures are somewhat misleading. Most of this program's expenditures are incurred during the second half of the fiscal year. For example, in fiscal 1995, only 2 percent of the Summer Food Service program's expenditures were incurred during the first 6 months.

The Special Milk Program experienced a 3-percent spending drop, in large part because of a 5-percent decrease in program participation. This decrease, part of a continuing trend, is due primarily to the expansion of the National School Lunch and School Breakfast Programs. Schools that participate in these and other federally assisted food programs are not eligible to participate in the Special Milk Program.

Supplemental Food Programs...Participation in WIC Grew

Two programs comprise the supplemental food programs - the Special Supplemental Nutrition Program for Women, Infants, and Children and the Commodity Supplemental Food Program. Both were established to provide supplemental foods to low-income women, infants, and children, although the Commodity Supplemental Food Program now serves the elderly as well. Combined expenditures for these programs increased 6 percent to $1.8 billion during the first half of fiscal 1996.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC), along with the Food Stamp Program and the school meals programs, is one of the pillars of the Nation's nutrition security strategy. At almost $1.8 billion for the first half of fiscal 1996, expenditures for the WIC program grew 7 percent relative to the first half of 1995, the largest percentage increase among all the food-assistance programs. During this period, the average number of participants increased by 3 percent. WIC was able to serve more people because of the expansion of cost containment measures, especially infant formula rebates, and increases in appropriated funds.

Expenditures for the much smaller Commodity Supplemental Food. Program decreased by 7 percent during the first 6 months of fiscal 1996. Participation also dropped, falling 5 percent during this period, primarily among women, infants, and children.

Food Donation Programs Decreased Significantly

Food Donation programs are comprised of six individual programs: the Food Distribution Program on Indian Reservations, the Nutrition Program for the Elderly, The Emergency Food Assistance Program, the Commodity Distribution to Soup Kitchens and Food Banks, the Commodity Distribution to Charitable Institutions and Summer Camps, and the Disaster Feeding Program. Some of the food for these programs comes via USDA's commodity price-support programs. USDA distributes some of this surplus food in the Child Nutrition and the Supplemental Food Programs, but most is distributed through the Food Donation programs. USDA also purchases foods specifically to distribute in its Food Donation Programs.

In the past, most of the foods distributed in these programs were surplus commodities. However, modifications in the commodity price-support programs and changing market conditions have resulted in less available surplus food. As a result, the programs have contracted significantly in recent years as reflected in a 35-percent decrease in expenditures for the first half of fiscal 1996.

The Food Distribution Program on Indian Reservations was the only food donation program that grew. During the first 6 months of fiscal 1996, program expenditures increased 4 percent over the first 6 months of the previous year, to $32 million. Program participation also grew by almost 4 percent during this period.

USDA's expenditures for the Nutrition Program for the Elderly during the first half of fiscal 1996 decreased 13 percent over the same period a year earlier, and the number of meals served decreased 3 percent.

Expenditures for the Disaster Feeding Program also decreased markedly during the first half of fiscal 1996. Program expenditures dropped by half compared with the same period the previous year.

The Emergency Food Assistance Program (TEFAP) expenditures totaled $15.4 million during the first half of fiscal 1996. This was a 71-percent decrease from the same period in fiscal 1995.

The largest percentage change in expenditures among all of the food-assistance programs, a 76-percent decrease, was for the Commodity Distribution to Charitable Institutions and Summer Camps Program.

During the first 6 months of fiscal 1996, expenditures for the Commodity Distribution to Soup Kitchens and Food Banks fell 19 percent from the first 6 months of fiscal 1995.

Many Food-Assistance Programs Extended to 2002

Several important pieces of legislation that directly affect the Nation's food-assistance programs were enacted in fiscal 1996. On April 4, the 1996 Farm Bill (PL 104-127) was signed into law by President Clinton. The Bill, referred to as the Federal Agriculture Improvement and Reform Act of 1996, provides a 7-year framework for USDA to administer agriculture and food programs. Although farm commodity programs are the major focus of the Act, Title IV - Nutrition Assistance - contains provisions on several domestic food-assistance programs. The Act reauthorized the Nutrition Assistance Programs in Puerto Rico and American Samoa, the Commodity Supplemental Food Program, The Emergency Food Assistance Program (TEFAP), and the Soup Kitchen and Food Bank Program through fiscal 2002.

The Act also provides start-up assistance for Community Food Projects. The Act authorizes USDA to make grants to assist eligible private nonprofit entities in establishing and carrying out community food projects, which are defined as community-based projects that require a one-time infusion of Federal assistance to become self-sustaining. The projects are designed to: (1) meet.the food needs of low-income people; (2) increase the self-reliance of communities in providing for their own food needs; and (3) promote comprehensive responses to local food, farm, and nutrition issues.

The Act also contains several provisions that affect the Food Stamp Program. However, these provisions were superseded by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, which will significantly affect food assistance in the United States (see box on welfare reform).

What's Next...Nutrition Is a Priority

One of USDA's major initiatives for fiscal 1996 is to continue to make healthy eating an integral part of the Federal food-assistance programs. For example, USDA will move forward with the implementation of the School Meals Initiative for Healthy Children, a comprehensive, integrated plan to ensure that children have healthy meals at school. A major part of this plan is the modification of school lunches and breakfasts to meet the Dietary Guidelines for Americans. USDA launched Team Nutrition to help schools implement the new nutrition standards. Team Nutrition gives schools educational and technical resources to motivate children to improve their diets and provides new tools and techniques to help foodservice staffs prepare nutritious, appealing meals. USDA will continue these efforts to ensure that schools can fully implement the Dietary Guidelines by the statutory deadline of July 1, 1998.

References

U.S. Department of Agriculture, Food and Consumer Service. Annual Historical Review, Fiscal Year 1993. Aug. 1995.

U.S. Department of Agriculture, Food and Consumer Service. Explanatory Notes to Accompany Administration FY 1997 Budget Request. Feb. 1996.

U.S. Department of Agriculture, Food and Consumer Service. Program Information Report (Keydata), U.S. Summary, March 1996. May 1996.

U.S. Department of Agriculture, Office of Communications. USDA 1996 Farm Bill Fact Sheet: Nutrition. Apr. 1996.

Victor Oliveira is an agricultural economist with the Food and Consumer Economics Division, Economic Research Service, USDA.

COPYRIGHT 1996 U.S. Department of Agriculture
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