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Fortune
Fortune
David L. Ortega

EXPLAINED: The government can lower grocery prices it doesnt have to run the stores - The Real Truth

David L. Ortega, Noel W. Stuckman Chair in Food Economics and Policy at Michigan State University. (Credit: Courtesy of David L. Ortega)

Almost every plan to lower food prices ends up putting the government in one of two businesses, either running a grocery store, as New York Mayor Zohran Mamdani is now doing, or telling grocery stores what to charge. A new proposal from the Kitchen Table Project does neither, which is why I’ve spent more time with it than I expected to. Instead of working on what shoppers pay, it works on what the store pays.

The federal government already buys an enormous amount of food. USDA runs competitive auctions to supply school lunch and other nutrition programs, and it has been doing so for decades. The proposal would let any grocer, whether a bodega in the Bronx or a Kroger in Lansing, buy a basket of 20 staples at a similar auction price. The one condition is that the store has to sell them at a markup that’s set in advance and posted where customers can see it.

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