Proposed Reforms in the Food Stamp Program: Economic Impacts on Agriculture and the Economy of The Work Opportunity Act of 1995

The Work Opportunity Act of 1995 proposes reforms in the Food Stamp Program (FSP) that cut benefits and require at least 80 percent of block grant transfers to remain in the form of targeted food assistance benefits such as food coupons, EBT, or commodities rather than allowing complete cashout of benefits. The major economic impact of the proposed reforms on the food sector arises from reduced benefit levels. Benefit levels will be substantially less for States that opt for the block grants. Based on those benefit projections, this paper examines the economic consequences of the proposed reforms on food spending, gross farm income, farm program costs, and the general economy