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Amazon to Begin Accepting Food Stamps

Internet-based retail giant Amazon is among the seven online food retailers that will soon start accepting food stamps, as part of a pilot program instituted by the U.S. Department of Agriculture (USDA).

The two-year program, set to launch this summer, will test online ordering and payment methods.

The USDA, which oversees the $74 billion food stamp program, also known as SNAP or the Supplemental Nutritional Assistance Program, says it plans to expand the online program nationwide and eventually add more retailers.

Participating retailers include Safeway, ShopRite, Hy-Vee, Hart’s Local Grocers, and Dash’s Market, and will serve  food stamps recipients in seven states: Maryland, New Jersey, New York, Pennsylvania, Washington, Iowa, and Oregon.

However, Amazon is by far the largest online food distributor participating in the federal government’s new program.

“Amazon is excited to participate in the USDA SNAP online purchasing pilot,” the Seattle, Washington-based company said in a press release. “We are committed to making food accessible through online grocery shopping, offering all customers the lowest prices possible.”

For years, government watchdog groups have demanded tighter regulations as food stamp fraud remains a common and costly problem.

The USDA, seemingly aware of the risks for fraud, says “online payment presents technical and security challenges that will need to be examined and fully addressed before it is offered nationwide.”

News of the USDA’s pilot program comes as a new report reveals Americans used food stamps to buy more than $600 million worth of “sweetened beverages,” and bought hundreds of millions more of junk food and sugary snacks.

Overall, $1.3 billion in food stamps were spent on “sweetened drinks, desserts, salty snacks, candy, and sugar,” which accounted for about 20 cents of every dollar spent on food items purchased by 26.5 million households in 2011, according to a recently released report from the USDA.

What’s more, the USDA’s plan to allow tens of millions of food stamps recipients to purchase products from Amazon is the latest example of mega-corporations profiting from poverty.

Big banks like J.P. Morgan have made millions providing electronic benefits transaction (EBT) services for state governments and their respective food stamps programs.

“Since 2004, 18 of 24 states who contract with J.P. Morgan to provide welfare benefits have contracted to pay $560,492,596.02,” an investigation by the Government Accountability Institute (GAI) found.

Christopher Paton, the company’s former managing director of treasury services, told Bloomberg News in 2011:

This business is a very important business to JP Morgan. It’s an important business in terms of its size and scale. We also regard it as very important in the sense that we are delivering a very useful social function. We are a key part of this benefit delivery mechanism. Right now volumes have gone through the roof in the past couple of years or so … The good news from JP Morgan’s perspective is the infrastructure that we built has been able to cope with that increase in volume.

Walmart, which wasn’t selected to participate in the USDA pilot program, hopes to be added to the USDA’s Food and Nutrition Service online purchasing program in the future.

“We look forward to working with FNS as they continue to explore this opportunity,” the company said, CBS reports. “We’ve expanded our highly popular online grocery service from five markets to more than 100 markets over the past 18 months in both large and small communities across the country.”

Follow Jerome Hudson on Twitter @jeromeehudson

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