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* USDA slow to adjust benefits to rising food costs
* Government should consider access to food, preparation costs
* Program under pressure for funding cuts
By Lisa Lambert and Susan Heavey
WASHINGTON, Jan 17 (Reuters) - A report by a panel of experts released on Thursday questioned whether the U.S. government's food stamp program adequately provides for healthy diets for the more than 47 million low-income people who rely on the benefit.
The report by the National Academy of Sciences found that the aid for families to pay for groceries, officially called the Supplemental Nutrition Assistance Program, or SNAP, does not account for many barriers to finding affordable, nutritious food by inner-city shoppers.
Panelists for the academy, an independent group of scientists who advise the federal government, also said benefits lag behind the increasing cost of food and the program penalizes beneficiaries with jobs.
The U.S. Agriculture Department, which administers the aid program, sought the report to help it determine the best way to assess whether food stamps benefits are adequate for recipients to have access to a healthy diet.
"We will thoroughly review the analysis and recommendations contained in this report and use them to help set our agenda for future program research," USDA said in a statement.
During and following the 2007-2009 recession, demand for food stamps soared, with middle-class families who found themselves suddenly homeless and jobless pushing enrollment to a record 47.7 million people by September 2012. Even during the recovery, demand has remained high and food pantries and soup kitchens continue to feel the strain.
But the program rankles many, especially some Republicans, who see it as a bloated government handout. Fraud concerns are also an ongoing issue.
In its report, the panel said the USDA is slow to react to rising food costs. There is a 16-month lag between when the government assesses the cost of food and when it adjusts benefit amounts to accommodate fluctuations, it said.
"Because of the impact of inflation and other factors on food prices, this lag in the benefit adjustment can significantly reduce the purchasing power of SNAP allotments," the report said.
Panelists said the dearth of affordable supermarkets in many cities means that urban dwellers, who represent a high proportion of those in poverty, must pay more for healthy foods.
They also questioned basic assumptions built into the program about how Americans prepare daily meals, especially for single parents. Food stamps are intended for buying cheap basic ingredients and unprocessed foods.
"By failing to account for the fact that SNAP participants, like other households, need to purchase value-added foods that save preparation time, the current value of the SNAP allotment substantially limits the flexibility and purchasing power of SNAP benefits," the report said.
Food stamp funding could be cut in coming years.
The U.S. Congress has passed a one-year extension of the so-called Farm Bill that allocates money for food assistance, along with agricultural programs.
Republicans' desire to reduce benefits has become a major obstacle to passing a wider, more comprehensive Farm Bill that would cost $500 billion. They are seeking $16 billion of cuts in the program over 10 years - the deepest cuts in a generation.
The report also questioned formulas used to determine how much each family receives. USDA assumes families will spend 30 percent of their incomes on food, when in fact most can afford to spend only 13 percent given rising costs for housing and healthcare, it said.
That means that as the families' incomes rise, the government reduces their benefits too sharply, the report found.