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In a rare tuneup to the $74 billion food-stamp program, U.S. regulators deemed potato chips and ice cream too unhealthy to count as staple foods.

The U.S. Department of Agriculture made other changes to the Supplemental Nutrition Assistance Program this week that fell short of recommendations from many public-health advocates.

The new rules bar stores from accepting food stamps if they draw more than half their sales from prepared meals or foods that are heated up on the spot, such as microwavable pizzas. Draft proposals earlier this year had called for a much lower threshold, 15% of food sales from such items.

The new rules released on Thursday removed additional fatty and sugary items like potato chips and ice cream from a list of foods that were previously considered staples because their main ingredients are potatoes and milk, respectively. But that fell short of some health advocates' expectations. Grape juice and canned mushroom soup could still count toward the minimum staples stores must stock to accept food stamps, for instance, because of the fruit and vegetables they contain.

"I'm disappointed that the rules don't go as far as what was proposed early this year," said Danielle Nierenberg, president of Food Tank, a nutrition advocacy group. "USDA has missed an opportunity to increase the availability of and access to healthier foods for low-income Americans."

The earlier proposals also recommended leaving food with multiple ingredients like frozen pizza or canned soup off the staple list. The outcome is a win for the makers of such products, like General Mills Inc. and Campbell Soup Co., which feared they would lose shelf space as retailers added new items to meet the requirements.

But retailers still criticized the new guidelines as too restrictive. Stores must now stock seven varieties of staples in each food category: meat, bread, dairy, and fruits and vegetables. Three of the items must be perishable. The USDA suggested smaller stores add products like chilled shrimp, chicken nuggets or canned salmon to offerings like beef jerky and canned tuna.

Doug Beech, director of government relations for Casey's General Stores Inc., said seven varieties of meat is asking too much. Bacon, deli ham and hot dogs sold at Casey's 1,941 small grocery stores in the Midwest, he pointed out, will all count just as pork.

"Our customers aren't familiar with, and can't afford, duck and lamb," he said. "This will force stores to re-do our inventory and replace foods that sell with ones that might not.

More than 45 million people received funds from the program last year, at an average of $126.83 a month, up from three million people in 1969 receiving $42.82, when adjusted for inflation. From 2010 to 2015, the percentage redeemed at convenience stores, liquor stores, dollar stores, pharmacies and gas stations nearly doubled to 11.6%, or $8 billion, USDA says.

The USDA moved ice cream, cakes and more into a category of nonnutritious foods that can't be counted toward the staples stores must stock to accept food stamps. For instance, Twinkies can no longer be considered bread, and pork rinds aren't considered a staple meat.

"These foods are typically deficient in important nutrients," the USDA said.

The American Cancer Society applauded that change, but called for increased nutrition education and new efforts to help low-income consumers afford healthier foods.

More changes to the food-stamp program may lie ahead. The new rules were published a day after the House Committee on Agriculture released a report calling for major changes to the program, which Republicans on the committee say discourages recipients from finding better-paid work.

Write to Annie Gasparro at annie.gasparro@wsj.com

(END) Dow Jones Newswires

December 09, 2016 12:05 ET (17:05 GMT)

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