Summer Electronic Benefits Transfer For Children:Early Experiences through June 2011 of the Proof-of-Concept Year Contract #: AG-3198-C-11-0002

Pursuant to the 2010 Agriculture Appropriations Act, FNS initiated and carried out the Summer Food for Children demonstration project, aimed at preventing food insecurity and hunger among children during summer months. 

These demonstration projects are being conducted under the authority and funding provided by the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2010. The Appropriations Act authorized the Secretary of Agriculture to use $85 million to develop and test alternative methods of providing access to food for low-income children in urban and rural areas during the summer months, when schools are not in regular session.

A fundamental issue in the design of the Food Stamp Program (FSP) is the form benefits should take. Advocates of the current coupon system argue that coupons are a direct and inexpensive way to ensure that food stamp benefits are used to purchase food. Coupon advocates contend that, despite some evidence of fraud and benefit diversion under the current system, food stamps are used largely to purchase food. In addition, they contend that coupons give household food budgets some measure of protection against other demands on limited household resources. Advocates of cashing out the FSP argue that the current system limits the food-purchasing choices of recipients and places a stigma on participation. Moreover, they cite the cumbersome nature and cost of coupon issuance, transaction, and redemption.

A fundamental issue in the design of the Food Stamp Program is the form the benefits take. From the inception of pilot programs in the early 1960s to the contemporary program, the vehicle of choice has been the food stamp coupon, a voucher that can be redeemed for food at authorized retailers. For nearly that same period analyses have considered the relative merits of cash--or, in practice, checks--as an alternative. Advocates of the current coupon system argue that coupons are a direct and inexpensive way to ensure that food stamp benefits are used to purchase food, that the unauthorized use of food stamps is relatively limited despite some evidence of fraud and benefit diversion, and that coupons provide some measure of protection to food budgets from other demands on limited household resources. Advocates of cash benefits argue that the current system limits the purchasing choices of participants; places a stigma on participation; does not prevent the diversion of benefits (as evidenced by the existence of illegal trafficking); and entails excessive costs for coupon production, issuance, transaction, and redemption.