FÚTBOL / FÚTBOL SALA

The proliferation of WIC-only stores is another consequence of State’s insulation from WIC program costs. WIC-only stores—vendors that derive all or nearly all of their annual food sales revenue from WIC food instruments—came about because entrepreneurs recognized the profi t- making potential of targeting WIC participants (see the section on “2000 to the Present: Recent Developments,” p. 20, for an expanded discussion on WIC-only stores). Since transaction of the WIC food instrument provides foods to the WIC participant without any payment from personal funds, WIC participants are not sensitive to a particular store’s price for the item. As a result, WIC-only stores have little economic incentive to keep prices low.69

WIC-only stores competed for WIC customers using nonprice factors, such as convenience and increased customer services. For example, many WIC-only stores were located in close proximity to WIC clinics and some provided free transportation to and from the store (Neuberger and Greenstein, 2004). A study by the U.S. Government Accountability Offi ce (GAO) found that WIC-only vendors often gathered the food items listed on the food instrument for WIC participants from food maintained behind a counter, eliminating participants’ need to search store aisles and shelves for the

67 _{Besharov argues that WIC has} expanded to serve less needy families. For example, in some States, Medicaid participants with income up to 300 per- cent of the Federal poverty guidelines are adjunctively income eligible for WIC.

68 _{Based on information provided by} FNS in October 2008.

69 _{Federal regulations require that} each State establish a maximum reimbursement amount that it will pay WIC-approved vendors for WIC food instruments. The maximum reimburse- ment amount was typically set high enough to cover the higher costs asso- ciated with small stores. Regular stores generally set their prices for WIC food items in a competitive fashion, usually considerably below the maximum allowed in order to attract non-WIC shoppers. Data suggest that food instruments from WIC-only stores tend to be closer to the maximum allowable reimbursement levels (Neuberger and Greenstein, 2004).

specifi ed food type, brand, and size (U.S. Government Accountability Offi ce, 2006b). Shopping at WIC-only vendors is also likely to reduce the stigma associated with using Government checks to purchase food in regular grocery stores. In the past, WIC-only vendors also gave away incentive items to attract customers, including strollers, diapers, gift certifi cates, and even cash (U.S. Government Accountability Offi ce, 2006b).70

WIC-only stores proved to be popular with WIC participants and, beginning around 2000, the number of WIC-only stores increased rapidly (U.S. Government Accountability Offi ce, 2006b). From 1999 to 2004, the number of WIC-only stores almost tripled (fi g. 14). Although WIC-only stores accounted for only 2 percent of all WIC vendors in 2002, they accounted for 9 percent of all WIC redemptions that year (Neuberger and Greenstein, 2004). In California, the State with the largest number of WIC participants, WIC-only stores accounted for about 40 percent of WIC redemptions in FY 2004. WIC-only stores in California have been estimated to increase WIC food costs by about $33 million per year (Neuberger and Greenstein, 2004).

WIC’s status as an “orphan program” at the State legislative level may be one factor responsible for the rapid increase in WIC-only stores.71 _Because

States are not required to match Federal funds, State government offi cials have little fi nancial stake—and therefore little interest—in WIC operations. As a result, State WIC administrators may have diffi culty instituting vendor cost-containment measures through State law and regulations. Although WIC State agencies have considerable latitude in the design and operation of their vendor management practices, including the authorization of WIC vendors, California illustrates the diffi culty that State WIC administrators may have instituting vendor cost-containment measures through State law and regulations (California WIC Association, 2005). In the early 2000s, the

Figure 14

National total of WIC-only vendors, FY 1999-2004

Source: U.S. Government Accountability Office, 2006b. Number 0 200 400 600 800 1,000 1,200 1999 2000 2001 2002 2003 2004 70 _{P.L. 108-265, enacted in 2004,} largely eliminated the giveaway of incentive items at WIC-only stores.

71 _{The authors fi rst heard of the term} “orphan program” to describe WIC during a discussion in 2006 with Larry Sawyer, former Director of Govern- ment Relations at General Mills.

California WIC agency attempted to enact State legislation that would have ensured that WIC-only stores in California would not be reimbursed for higher food prices than regular price-competitive stores. The owners of WIC- only stores responded by hiring lobbyists to fi ght the proposed legislation. With no State funds at stake, the California WIC agency had diffi culty garnering the political support needed to overcome the lobbying effort, and the agency’s attempt to enact State legislation was defeated (Neuberger and Greenstein, 2004).

When the WIC State agencies were unable to address the growth of WIC- only stores and increased food costs to WIC, the Federal Government

intervened and enacted legislation to stop the growth of these stores (see box, “Federal Legislation Affects WIC-Only Stores,” p. 40).72