Won’t Foot Food Bill: States

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The House’s food stamps cuts aren’t just cruel. They’re dumb.

Chart by CBO.

Yoshinoya Holdings, which sells “gyudon”, or stewed beef over rice, has formed a joint-venture with local farmers to grow onions, cabbage and rice for use in outlets across the country. About 160,000 people nearest the plant were ordered to move out and the government established a 20-km compulsory evacuation zone after an earthquake and tsunami in March 2011 caused reactor meltdowns and contaminated water, vegetables and air. A voluntary evacuation zone was extended to 30 km and separate areas were evacuated further afield depending on the wind direction. The leaks prompted many consumers to shun products from Fukushima prefecture, which was once well-known for its fruit, mushrooms and vegetables. The crops will be grown in Shirakawa, to the south-west of the plant, the company said. Yoshinoya said it would ensure that the vegetables were safe. “We will employ local people in the factory. We think this will lead to support for reconstruction,” Yoshinoya said in a statement. Japan applies strict food monitoring and says that any products allowed on the market are safe. Despite these assurances, public fears have led to a drop in price for Fukushima produce and huge losses for farmers. The operator of the plant, Tokyo Electric Power Co, is struggling to contain contaminated water at the site 240 km north of Tokyo. There have been multiple leaks and glitches over the last two and a half years. (Reporting by Antoni Slodkowski; Editing by Nick Macfie)

While most states represented by food ministers on Tuesday said the Centre should bear the entire expense, Uttarakhand wanted 90% central share of such expenses. State food ministers came down heavily on the Centre for not deciding this issue upfront before asking them to expedite launch of the scheme. “How can we have an Act without setting things clear on who shares what,” Punjab’s representative said. Though 22 states participated in the meeting, three BJP-ruled ones Gujarat, Madhya Pradesh and Chhattisgarh did not send their ministers. Food minister K V Thomas said, “States have their opinion and we have ours. We will resolve the issue.” He said a committee has been formed to address concerns. He added about 50% states including BJP-ruled ones will launch the scheme by this year-end. Earlier, leading the attack, Uttar Pradesh food minister Rajendra Chaudhary charged the government with bringing the law “hurriedly” for political gain and “hosting the notification on the web” without putting in place a system to ensure that the poor got foodgrain and there was no diversion of subsidized grains to the open market. “Include states’ concerns in your list of concerns,” he added. Chaudhary asked the Centre to bear 100% additional expenses on all accounts including transportation, handling, commission to ration shop owners and setting up of consumer redressal mechanism. He also sought funds in advance for implementation of the law. UP is the biggest gainer of the central law. Another state government official said that when the Centre is using the scheme for political dividend and can spend huge on food subsidy why can’t it pay little more for other expenses.

1. Poverty traps Chart by CBO . One thing policymakers are concerned about when it comes to creating social insurance is whether or not it creates bad incentives for those in the program. Having an assets test at such a low level forces people into situations where they might have to spend money they wouldnt otherwise spend, and defer savings, in order to continue to qualify for using food stamps to fight poverty and food insecurity. These problems are usually described as poverty traps. Understanding them, and working to fix or blunt them, has been a major piece of policymaking for decades. Having savings is essential for any kind of real income security, as well as doing things like moving in order to take advantage of a new job. As Reid Cramer of New America told me, the introduction of asset tests are trying to solve a problem that does not exist by introducing a serious one – forcing people to choose between building an emergency fund to deal with crisis and food security. 2. A really fast phaseout We’re going down. (AFP/Getty Images) A second problem is that its a pure cutoff. If you have $1,999 dollars, you are fine. If you have $2,001 dollars, you are cut off. So you get stories about people surprised by a bit of good luck who are suddenly tossed from the program. These steep cliffs are a terrible way to design policy, especially when we want poor people to be saving money. 3. And the phaseout starts pretty low SNAP cuts would hit about 2.8 million families.