Trending at the Market: WIC Cash Value Vouchers

by Emily Finn, Research & Education Intern

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) aims to improve access to nutritious foods for low-income pregnant women, mothers, and young children. The number of WIC participants has held steadily around 9 million from 2008-2012. After enrolling in WIC, participants receive monthly checks, vouchers, or transfers to their Electronic Benefit Transaction (EBT) card that are to be used to purchase specific, WIC-approved foods, which provide important nutrients that participants otherwise may lack.

Given its focus on nutrition, fruits and vegetables are an important component of WIC. Since the early 1990s, Congress has supported programs created to improve WIC participants’ access to fresh fruits and vegetables from farmers markets: the Farmers Market Nutrition Program (FMNP), and the WIC Cash Value Voucher (CVV).

Farmers Market Nutrition Program (FMNP) In 1992, Congress created FMNP with the aim of achieving two goals: (1) increase WIC participants’ consumption of fresh fruits and vegetables; and (2) increase awareness and support of local agriculture. In addition to their monthly WIC benefits, WIC participants four months or older are eligible to receive FMNP checks once a year during farmers market season. Of the 90 state agencies (including all 50 states; Washington, DC; Puerto Rico; four territories; and 34 Indian Tribal Organizations), 46 (51%) participated in FMNP in 2011, resulting in 1.9 million WIC participants (21%) benefiting from FMNP.

States that choose to participate in FMNP receive funding from the USDA’s Food and Nutrition Service (FNS). As FMNP is structured as a Federal/State partnership, participating states match 30% of the federal funds. FMNP is administered by a state agency, in many cases the Department of Agriculture or Department of Public Health. Federal FMNP benefits must be at least $10 and at most $30 per person per year, though states can opt to supplement the federal FMNP benefit level with state funding.

FMNP checks come in packets of $2 or $4, to be used only at WIC-approved farmers markets. There’s some flexibility in the timing, as checks can be redeemed at any point during the market season. The market vendor must write in their ID number, but other than that, the process is relatively straightforward for participating growers.

One of the tangible impacts of FMNP has been the creation of new customers for produce growers at farmers markets, which is one of the program’s main goals. More than 6 in 10 Wisconsin WIC participants who received their first FMNP checks in 2007 went to a farmers market for the first time after receiving the checks. Another important impact of FMNP has been support for the development of farmers markets in lower-income neighborhoods, where FMNP is a major component of income for farmers who sell at these markets.

WIC Cash Value Voucher In 2005, the Institute of Medicine recommended that the WIC food basket be revised with a greater focus on fruits and vegetables in order to better meet the dietary guidelines for Americans. This report led to the creation of the WIC Cash Value Voucher (CVV) program in 2007. The decision of whether CVVs can be accepted at farmers markets is left up to the state. Of the 90 state agencies (including all 50 states; Washington, DC; Puerto Rico; four territories; and 34 Indian Tribal Organizations) 21 (23%) allowed CVV to be used at farmers markets in 2012.

CVV checks are issued monthly, to be used only for purchasing fruits and vegetables, whether fresh, frozen, canned, or dried. Two levels of CVVs are distributed: children are allocated $6/month; mothers, $10/month. While all other monthly WIC vouchers are for a specific quantity of food (i.e., one loaf of bread), CVV checks were structured differently – as a specific dollar amount – in order to grant participants more flexibility in the fruits and vegetables they purchase with their CVVs. Participants do not receive cash back if their purchase comes in at less than the voucher’s amount.

States decide how to handle purchases that come in over the voucher amount, and can either allow participants to combine multiple CVV coupons to cover the cost of their purchase, or use cash or other tender to cover the remainder of the purchase. The latter option has been more popular among states than the former. The USDA tracks CVV use in the aggregate, regardless of whether CVVs are used at farmers markets or grocery stores. As a result, there is no national-level insight into CVV use at farmers markets. Some individual states, however, do report such use.

In Arizona, less than 1% of CVVs are being redeemed at farmers markets; the remainder are used at grocery stores. However, CVVs used at farmers markets are redeemed for nearly their full value (99%), while those used at grocery stores (93.5%) are not. In other words, a $10 CVV used at farmers markets is used to purchase $9.90 worth of produce, versus only $9.35 at grocery stores. California is another state reporting CVV use. In 2012, while close to 13 million CVVs were redeemed in California, fewer than 5,000 of those (< 1%) were used at farmers markets. This may be due, at least in part, to the relatively small number of farmers markets accepting CVVs:  31 of California’s 450+ farmers markets (< 7%). Further, of the 200 farmers who have been trained to accept CVV, only 65 (33%) actively redeemed CVVs in 2012. This is likely due to the regulations for participating farmers, which are more rigorous than FMNP.

States that have made CVVs a priority have dramatically improved their use at farmers markets. In New York, $29,000 in CVVs were redeemed at farmers markets in 2011, compared to only $13,000 in 2010—an increase of over 120%. Maryland has achieved a ten-fold increase in CVV redemption at farmers markets just from 2010 (approximately $3,000) to 2012 (approximately $33,000). This significant increase is due to an innovative program started in 2010: The Eat Fresh Maryland Network. The network brings together a variety of stakeholders interested in increasing the redemption of all federal nutrition benefits programs—including but not limited to CVV—at Maryland farmers markets. More than 30 members, including government representatives, farmers market managers, farmers, and community groups, come together to share best practices and coordinate marketing strategies.  The network instituted co-promotion and uniform training for the WIC and Senior Farmers Market Nutrition Programs as well as CVV throughout the state. Statewide recognition of the programs, combined with training and tools for market managers facilitated a strong connection between Maryland’s farmers markets and its federal nutrition beneficiaries.

Why aren’t all states taking advantage of the opportunity to use CVV at farmers markets? There are a number of challenges to increasing the impact of the program.

1)      Administrative cost to the state

The WIC CVV program does not provide states with additional funds for staff to train and work with participating farmers. This may be contributing to the low rates (23%) of state agencies that have approved CVVs to be used at farmers markets.

2)      Rigorous regulations for participating farmers

As noted above, a major barrier to increasing the number of farmers participating in CVV is the program’s demanding regulations. Before participating in CVV, farmers are required to attend training sessions and provide their banking information to the state.

The process of accepting and redeeming a WIC CVV check is much more onerous for farmers than with FMNP. Some of the steps farmers must take when accepting and redeeming CVVs include:

  • Checking the WIC participant’s ID to ensure they’re using their own CVVs
  • Making sure the purchase amount is written correctly
  • Checking the date to ensure the CVV can still be used
  • Cashing the check at a certified bank within the correct time frame

If anything goes wrong when redeeming CVVs, farmers pay bounced check fees. Further, farmers can be hit with strict penalties for failing to follow any of the state’s specific regulations around WIC CVV use. Though some states indicate that they have no intention of enforcing these penalties, the existent of the penalties discourages some farmers from participating.

3)      CVV check structure can be challenging for consumers

As the CVVs are for relatively high denominations ($6-$10) and as participants must use the entire check at once, it may be more difficult for consumers to accurately calculate how much produce they can purchase with each CVV than with FMNP ($2-$4 denominations).

CVV’s annual budget of nearly $500 million offers an opportunity to dramatically expand the impact of the incentive created with FMNP. Though FMNP has had significant positive impacts on access to fresh produce and creating a new customer base for farmers, the program’s budget ($15.3 million in 2013) is limiting.

CVV has enormous potential to generate long-lasting and consistent benefits for consumers and farmers. Where FMNP helps bring new customers to farmers markets and educate them about the benefits of shopping at such markets, the CVV structure—benefits sent every monthly, rather than once a year—will help encourage those new customers to shop at farmers markets on a regular basis, assuring consistent access to fresh produce and education about nutrition and farmers markets. Given the small percentage of every dollar spent on fruits and vegetables at traditional retail outlets that goes to the produce growers, the return on investment of CVV on American farmers is presently minimal. However, as stated above, CVV has the potential to direct upwards of $500 million a year to farmers markets—nearly 25 times more than the annual FMNP allocation. In New York, where CVV can be used at farmers markets, over $30 million will be distributed each year to WIC recipients compared to only $5.5 million distributed with FMNP. However, as noted above, only $29,000 of the $30 million in distributed CVV was redeemed at farmers markets—far less than 1%. Let’s get more markets to take advantage of this significant potential.