Can a shift in the purchase of local foods by Supplemental Nutrition Assistance Program (SNAP) recipients impact the local economy?

In recent years, several initiatives have sought to encourage redemption of food assistance benefits at direct-to-consumer (DTC) market venues such as community supported agriculture programs and farmers’ markets in the USA, with the dual goal of increasing access to healthy foods for low-income families and sales of locally-grown foods for farmers. Proponents of these interventions assert that these programs have a positive impact on local economies yet there is limited evidence to validate this argument. This research project used a customized input-output model to simulate potential economic impacts of programs and policies that enable Supplemental Nutrition Assistance Program (SNAP) recipients to shift purchases from traditional food retailers to DTC venues in four states. Two different scenarios were explored: (1) increased outreach to low-income consumers and (2) financial support for using SNAP benefits at DTC market channels. We found a positive, though modest, economic impact at the state level under both scenarios when accounting for (a) business losses in the food retail and wholesale sectors, (b) a shift in acreage from commodity to specialty crops and (c) the cost to taxpayers. Since most of the increased economic activity would be in the produce farming sector, we discuss the opportunities and challenges for this sector along with potential policy implications.