Crab crackdown? Feds' move to restrict food stamp use for carryout crabs seen as new threat to seafood industry

Federal regulators have forbidden many Baltimore-area carryout shops from accepting food stamps for steamed crabs, stirring debate over whether such purchases are an appropriate use of government benefits, and if the restrictions could be another blow to Maryland's beleaguered seafood industry.

Officials warned retailers last year that they could continue to accept food stamps for crabs only if they sold them alive or raw (but they could steam the crustaceans for a separate cash fee). The shops were also told that they had to provide a variety of food staples, not just the Chesapeake Bay delicacy, to qualify for food stamp transactions.


Otherwise, the government is considering them restaurants — which aren't eligible to accept the vouchers. Food stamps cannot be used on prepared or heated foods.

The government benefits are a key revenue source for carryout businesses in low-income areas, so the crackdown is raising some alarm. Crab retailers say they feel unfairly singled out.


"We understand why the government's doing what they're doing," said Scott Schoenberger, owner of Waverly Crabs on Greenmount Avenue. "They're trying to get rid of excessive spending money and they want to get people back to work.

"The problem I'm having is, why are they targeting the seafood industry?"

The policy change is also worrying watermen who are already vexed by a slow start to the crab season and a major labor shortage at Eastern Shore seafood processing companies. Maryland natural resources officials announced Wednesday that the crab population is 18 percent smaller than it was a year ago.

"I don't think it's going to be any good for us crabbers," said Jason Krauch, an Anne Arundel County waterman who owns Pasadena Seafood, which recently stopped accepting food stamps.

In October, officials at the federal Food and Nutrition Service began demanding that stores provide more information about their sales to justify eligibility to accept food stamps. The agency, part of the U.S. Department of Agriculture, said 43 city shops have since lost their authorization under the federal Supplemental Nutrition Assistance Program, or SNAP, the formal name for food stamps.

Fourteen of the stores did not respond when regulators initiated the food stamp reauthorization process, two began the process but didn't cooperate with the information request, and two failed to meet eligibility criteria, the officials said. They said the other 25 stores did not report any food stamp sales.

Stores can accept food stamps only for crabs that are sold cold, and must obtain a majority of their revenue from sales of a mix of four groups of food staples: fruits and vegetables; dairy products; meat, poultry or fish; and breads and cereals.

"If the whole business is selling steamed crab (whether the crab is steamed before or after purchase) then that establishment probably meets the definition of a restaurant, and then the establishment would not be an eligible SNAP retailer and you could not redeem SNAP benefits there," officials said in a statement.


Store owners say they were told that if they didn't meet the requirements, they had to stop accepting food stamps starting in January. Now, as the weather warms and appetite for crab increases, they are feeling the effects.

In Maryland, crab season begins April 1, but the crustaceans typically aren't harvested in large numbers until May or June.

Food stamp use has been growing in recent years as participation in the traditional federal welfare program has declined. More than 40 million people are on food stamps across the country, including more than 200,000 — almost a third of the population — in Baltimore as recently as 2014.

President Donald J. Trump has criticized the program, proposing that instead of food vouchers, the government should provide families that are most dependent on benefits with cartons of canned and boxed goods.

To many, the Trump administration's approach on crabs makes sense. Krauch said he doesn't think crabs should be eligible for purchase with food stamps because they're more of a luxury food item. While he said he received a small number of food stamp sales over the years, "I never really agreed with it."

But others say that in a community so tied to its seafood, crabs shouldn't be considered any different from chicken or beef. Carryout store owners said a typical food stamp purchase is $20 of smaller and often female crabs — not the jumbo or colossal male crabs that cost hundreds of dollars per bushel — and that the sales make up a third or more of their income.


"In Baltimore, crabs could be a staple food," said Hank Schrott, owner of The Crab Shack II in Gwynn Oak. "People really like crabs in Baltimore."

State Del. Richard K. Impallaria, a Republican who represents parts of Baltimore and Harford counties, said he is urging state leaders in Washington and Annapolis to push back against the crab crackdown by food stamp regulators. He said he worries that it could exacerbate problems with food deserts in places such as Baltimore.

"It is inherently unfair for the USDA to malign seafood as an elitist food product," Impallaria wrote in a letter to The Baltimore Sun. "These new regulations disproportionately shift a large fraction of the financial burden onto seafood businesses located in less affluent areas."

Stewart Fried, a Washington attorney who represents a carryout store in West Baltimore, said he doesn't think the food stamp system is fair to small, independent retailers. He said rules set up to prevent food stamp fraud are easy for Walmart or Giant supermarkets to abide by, because they have sophisticated computer systems that can easily track what portion of their revenue comes from sale of staple foods, but not for small operations.

Baltimore crab businesses have never been required to maintain such records, and now are being asked to produce them or lose their food stamp eligibility, Fried said.

"It's really inappropriate in my mind," he said.


Watermen are also concerned. City retailers, along with Eastern Shore seafood processors, are a key market for crabbers working across the Chesapeake to sell smaller and female crabs.

The Trump administration this year for the first time held a lottery to distribute the guest worker visas that the processing companies use to hire crab pickers from Mexico and other foreign countries. The crab houses of the Eastern Shore have lost nearly half their typical workforce as this year's crab season begins.

Now the industry also has to worry about a loss of sales using food stamps.

"If people aren't using [food stamps] to buy crabs, those crabs might not get bought," said C.J. Canby, a Pasadena waterman.

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The crab season is already off to a slow start because more than a third of the bay's adult crabs died during prolonged cold this winter, the Maryland Department of Natural Resources said. Scientists estimate the bay's crab population at 371 million, 18 percent smaller than a year ago. The number of juvenile crabs in the bay is up by a third — meaning harvests could improve later in the season.

Robert T. Brown, president of the Maryland Watermen's Association, said his industry is just learning about the food stamp changes, and is watching closely — and nervously — to see how its effects could trickle down.


"We need to have our seafood available to everybody because of the nutritional value of it," he said. "Plus, it helps stabilize our seafood market."

Schrott, of The Crab Shack II, predicted the food stamp changes would "affect the whole chain. It's going to be a mess."

If there is any comfort, he said, the seafood business has weathered challenges many times before: "It's not an easy business."