INDUSTRY GIRDS TO DEFEND FOOD STAMPS IN 1997

WASHINGTON (FNS) -- While the food stamp program for low-income Americans was preserved in the massive farm bill signed into law by President Clinton earlier this month, the grocery industry is not sanguine that further attempts to reduce it are quashed.Attempts to return the program to the states or to cash it out, and give recipients money instead of vouchers for food, are expected to be revived

WASHINGTON (FNS) -- While the food stamp program for low-income Americans was preserved in the massive farm bill signed into law by President Clinton earlier this month, the grocery industry is not sanguine that further attempts to reduce it are quashed.

Attempts to return the program to the states or to cash it out, and give recipients money instead of vouchers for food, are expected to be revived in 1997. Attempts to reform it this year are unlikely because it's an election year and politics are complicating legislation.

"It won't happen this year," said John R. Block, president of the National-American Wholesale Grocers' Association, Falls Church, Va.

Tim Hammonds, president and chief executive officer of the Food Marketing Institute here, considered it a major victory that the industry was able to defeat congressional attempts to scale back the program by $26.2 billion over seven years. Congress approved changes in the plan as part of a major welfare overhaul but President Clinton vetoed it. The block grant proposal is advocated by congressional Republicans who want to end the current welfare system.

"We want to celebrate our victory but this battle is not over yet," Hammonds said. "We'll have to fight this all over again in 1997."

The $25 billion annual program was extended through 1997 in the farm bill with relatively few alterations. Grocery stores get about 90% of that in food sales. One change in the two-year extension backed by the industry would disqualify the stores from participation in the program only if the owners knew about illicit food stamp trade. One proposal considered but scrapped would have taken food stamp licenses from retailers if employees were illicitly trading in stamps.

Hammonds said congressional staff already are being contacted about changes that the industry would like to see in the nutrition program. The industry is ardently working to defeat any attempt to turn the nutrition aid back to the states without strings attached. "If recipients are given cash, some of that money would be diverted to things other than food," Hammonds said. Instead of relinquishing federal control, Hammonds said, the industry seeks to direct congressional attention to prohibiting fraud and abuse.

The industry would back a nationwide electronic benefits transfer system. Part of the congressional proposal, EBT has been touted as reducing fraud.

In addition to extending food stamps, the Freedom to Farm Act overhauls agricultural subsidy programs in place since the Great Depression in the 1930s. President Clinton reluctantly signed it into law April 4 and complained that the bill fails to provide an adequate safety net for family farmers. Under the plan, commodity support payments would be phased out over seven years.

Block praised the overall measure and noted, "It gives farmers more freedom to react to market signals and respond to market demands and consumer demands. It's also fairer to retailers. It's a great step forward for the whole food industry."