Release No. 0251.04

Jean Daniel (202) 720-4623
Susan Acker (703) 305-2286

Veneman Announces Full Implementation of Food Stamp Program Electronic Benefits Transfer System

Reports National Error Rate is at Historic Low

WASHINGTON, D.C., June 22, 2004—Agriculture Secretary Ann M. Veneman today announced the end of the “paper era” in the Food Stamp Program since all 50 states and the U.S. territories now provide Food Stamp Program benefits with Electronic Benefits Transfer (EBT) instead of the traditional paper coupon. 

“Food Stamps remain an important line of defense in our nation’s battle against hunger,” Veneman said during remarks at the National EBT Conference. “The transition to the electronic benefits transfer technology has improved administration of the program, saved money and made it easier for low-income families to purchase nutritious foods for their families.” 

EBT is based on the same technology used in commercial debit card systems with recipients using a plastic card with a personal identification number (PIN) to purchase eligible foods at authorized stores. EBT operations first began in 1984 with a demonstration project in Reading, Penn. and within 10 years nine states had EBT systems. Secretary Veneman oversaw the initial implementation of EBT when she served as Deputy Secretary of Agriculture. In August 1996, Congress mandated EBT. At that time 14 states had EBT systems. In the last eight years, 40 state agencies changed to EBT. This technology improves service for recipients who can use the benefits without worrying about loss or theft and improves accountability by tracing each transaction. EBT also ensures that benefits may only be spent at authorized stores. Many states use this technology to deliver benefits from other Federal programs such as Temporary Assistance to Needy Families (TANF), Medicaid and Child Care.

Veneman also announced that USDA has improved the administration of the program resulting in improved error rates. 

“In 2003, the combined national error rate of 6.64% was the lowest in program history, down from the historic high of 12.4% in 1981,” Veneman said. “Program accuracy has improved by 25 percent over the last three years, which has resulted in a decrease in erroneous payments of nearly half a billion dollars and the payment of $173 million to eligible clients who otherwise would not have received those benefits.”

The Food Stamp Program is the cornerstone of the federal food assistance programs, and provides crucial support to needy households and to those making the transition from welfare to work. The program enables low-income individuals and families to buy nutritious food in authorized retail food stores. 

Veneman said that with the full implementation of the EBT system, the term “Food Stamps” no longer applies. Therefore, USDA will seek comments on an appropriate name change for the Food Stamp Program. Congressional action is required to change the name of the Food Stamp Program, but the Department is soliciting public comment on how to better reflect the mission of this vital program that assists over 23 million low-income participants each month. The results of the public comment period will be shared with Congress for their consideration. A notice is published in the Federal Register today outlining the comment process. 

Food Stamp coupons are no longer being produced or issued by states and inventories are being destroyed. However, coupons that have already been issued will continue to be honored

Further information about the Food Stamp Program and information about providing comments on the renaming of the program can be found at www.fns.usda.gov .

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