The Office of the President is seriously considering the option of introducing in Ukraine special cards for receiving food for the poorest and most vulnerable segments of the population. The reason is a sharp rise in the price of food, which, according to forecasts, will continue in 2022.
Oleg Ustenko, economic adviser to the president, explained that an analogue of American food stamps or payments at Diya app could be introduced in Ukraine.
We will tell you in more detail what exactly these food stamps mean in the USA, what is known about the plans to introduce cards in Ukraine and, most importantly, why the prices of food are growing so strongly.
Where did the food crisis come from?
The cards are going to be introduced as an anti-crisis measure in response to record food prices (if the negative scenario comes true). The products have risen in price due to the rise in energy prices, reports BBC-Ukraine.
The factories cannot pay for gas at the market price, therefore they are shutting down. In the last days of December, the Cabinet of Ministers has already introduced state regulation of prices for loaf and sunflower oil, limited the cost of gas for producers of social products (flour, milk, bread, eggs, chicken meat).
However, the forecasts are still disappointing: the rise in prices in the raw food group in 2022 may reach 20%, which will lead to an inflationary jump to 8-10%.
"The baseline forecast for 2022 is an increase in prices for the raw food group (grain, sugar, cocoa, etc.) from 10% to 20%," says Ustenko.
The rise in prices will be felt all over the world, a significant part of inflation in Ukraine will be "imported". According to Ustenko, inflation in the United States is now due to anti-coronavirus financial measures to support the economy.
Since Ukrainians spend a significant part of their income on food, the rise in price may come as a shock to many of them.
What cards will be introduced in Ukraine?
The distinctive features of new support program can be online payments through the Diya application, says Ustenko: starting from targeted payments by analogy with the current Pidtrymka program (one thousand UAH for vaccinations) through the Diya system to an analogue of the American food stamp.
Ustenko also asked not to confuse the potential innovation with food coupons in the USSR and other historical attributes.
The fact is that food coupons were well known to Ukrainians in the nineties: in the last years of the existence of the Soviet Union, inflation manifested itself "in all its glory" and so coupons were given for meat, sausage, butter, cereals, tea, sugar, soap, matches, cigarettes.
But coupons appeared much earlier, they were either introduced or canceled almost every decade: at first, the Soviet government planned to completely abolish money in 1919, but in 1921 the card system was canceled in connection with the introduction of the NEP. In 1929, the cards returned - first for bread, and in 1931 - for all food products, clothing and footwear, but they were canceled again in 1935.
During World War II, food and clothing cards appeared in many countries: in Great Britain there were coupons for gasoline, sugar, meat, coupons were issued in Germany, Japan and even in the USA.
In peacetime in the USSR, coupons for meat, butter and sausage were actively issued in the 1970s and 1980s in housing offices at the place of residence and work.
What are food stamps in the USA?
In the USA, food is really issued according to the so-called food stamps, which Ustenko spoke about. This is help to people with low incomes through the Supplemental Nutrition Assistance Program (this is one of many programs, there are others). Money for food comes from the state budget to the Ministry of Agriculture, which administers the program.
Until the 90s in the United States, tear-off orange and blue paper coupons for products of several dollars (3, 5, 10) were issued, sealed in booklets. They could pay off in stores like money. Now "stamps" have been completely replaced by debit cards. Every month a certain amount comes to the card. Money can only be spent on buying American food (ultimately the money goes to farmers):
- fruits and vegetables;
- meat, poultry and fish;
- milk products;
- bread and cereals;
- snacks and soft drinks;
- seeds and plants that produce food for the household.
You cannot buy: beer, wine, liquor, cigarettes, vitamins, medicines, cleaning products, hygiene items, cosmetics.
Currently, 42 million Americans receive food stamps under the SNAP program (the total US population is 329.5 million).
To get stamps, you need to apply to SNAP. Each state separately decides who is eligible for benefits. Typically, the program is available to people with an annual income of $ 12,880 and increases with household size. The poverty line for a family of 4 is $ 26,500.
On average, coupons increased by $ 36 per person to $ 157 per month on October 1. But the amount also differs from state to state.