Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Monday, November 10, 2008

Can the poor afford fruits and vegetables?

Here is one recent USDA Economic Research report worth noting. Can low income Americans afford a healthy diet? Yes and no, the USDA explains. For the poor find what little money they have pulled in many directions. From the report:

Since the 1960s, changes in living standards and relative prices have reduced the average share of income spent on food from 30 percent to around 10 percent. Expenditures on many goods such as housing, utilities, medical care, transportation, and child care have been growing. Basic needs other than food are taking up larger shares of household budgets. Low-income households faced with allocating 30 percent of their income to the purchase of healthy diets would have to forgo many of the items on which other households currently spend almost 90 percent of their income.

In reality, most low-income households do not allocate their budget shares in the same proportions as households in the 1950s. Research conducted by ERS and USDA’s Food and Nutrition Service (FNS) found that in 2006, the typical household with income below 130 percent of the poverty line spent about 5 percent less on food than the cost of the Thrifty Food Plan.

In low-income households, as in other households, budgets are clearly pulled in many directions. The extent of this pull is further illustrated by numerous empirical studies on the impact of additional resources on household food purchases. Results show that an additional dollar of income increases low-income household food expenditures by 5 to 10 cents. This suggests that when budget constraints are relaxed, households give priority to spending on other basic needs, not food. Even when households are given a dollar’s worth of SNAP benefits, they increase spending on food by only 17 to 47 cents. Even though they spend all SNAP benefits on food, these households simultaneously shift some of their previous cash expenditures on food to alternative uses.

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