FMC Submits Comments on SNAP Retailer Requirements

      Posted On: November 6, 2013

Earlier this month, the Food and Nutrition Service (FNS) solicited input on SNAP retailer regulations and ways to increase healthy food access to SNAP participants. Specifically, FNS requested, ‘information from any and all interested parties on opportunities to enhance retailer definitions and requirements in a manner that improves access to healthy food choices for SNAP participants as well as program integrity, and ensures that only those retailers that effectuate the purpose of SNAP are authorized to accept benefits.’ FMC took the opportunity to point out the important role that farmers markets play in bringing healthy food access to low-income communities, and voice the need for a farmers market specific SNAP application. The comments can be viewed here on the FNS website, here as a PDF, and are also copied below:

Shanta Swezy
Chief, Retailer Management and Issuance Branch
Retailer Policy and Management Division
Supplemental Nutrition Assistance Program
Food and Nutrition Service
U.S. Department of Agriculture
3101 Park Center Drive, Room 426
Alexandria, VA 22302

Dear Ms. Swezy,

Farmers Market Coalition (FMC) is grateful for the opportunity to comment on the critical issue of SNAP retailer requirements. FMC is a 501(c)(3) nonprofit dedicated to strengthening farmers markets across the United States for the benefit of farmers, consumers, and communities. Through our membership, we represent more than 4,300 farmers markets nationwide. It is in response to experience and input from our members that we submit the following recommendations.

Farmers markets and other farm-direct retailers have been growing in number and in capacity, providing the opportunity to purchase fresh food in neighborhoods that may have no other healthy options. Farmers markets clearly meet all of the SNAP program goals, and hold a record of integrity and success administering benefits (FNS question #2). FNS could fulfill the stated objectives of improving “availability of more healthful foods without compromising access for SNAP participants, or unnecessarily burdening the retailers the redeem SNAP benefits, and to improve integrity of the program,” by supporting SNAP access at farmers markets across the country.

The number of farmers markets has grown exponentially in the past few years, providing affordable, nutritious food in many of America’s urban and rural food deserts. Farmers markets and farmstands can be established more quickly and at lower cost than building groceries in these neighborhoods, and the food sold at farmers markets is overwhelmingly nutritious. Since low-income Americans suffer disproportionately from diet-related health conditions, it is clearly in the public interest to facilitate healthy food access to those receiving SNAP benefits (FNS question #1). Studies show that shopping at farmers markets increases fruit and vegetable purchases and consumption, and living near a farmers market is associated with lower Body Mass Index (BMI). As farmers markets are already making strides in improving healthy food access and public health, it’s common sense to offer SNAP access at more farmers markets.

SNAP redemptions at farmers markets increased nearly 400% since 2009, reaching $16.6 million in 2012. More SNAP recipients are including the farmers market in their weekly shopping routines, and seeing health benefits as a result. Of 216 shoppers surveyed at the Janesville Wisconsin Farmers Market in 2012, 98% said that they eat more fruits and vegetables as a result of their SNAP benefits being accepted at the market and 30% said that they had not shopped at the market before SNAP benefits were accepted. FMC recommends that rather than further restricting food and retailer options (FNS question #3), FNS should focus on facilitating the increased availability of nutritious food to SNAP participants. Farmers markets are providing SNAP access to healthful food with no history of waste, fraud or abuse associated with SNAP use at farmers markets. Continuing to increase the amount of SNAP benefits redeemed at markets is in the best interest of SNAP participants and FNS.

Currently, SNAP retailer application requirements and fees for processing SNAP transactions prevent many farmers markets from becoming SNAP authorized. FMC recommends that FNS recognize farmers markets as important players in the healthy food retail environment by creating a SNAP retailer application specific to farmers markets, and removing the additional processing fees required in many states (FNS question #13).

Farmers markets and other local food initiatives are decidedly different than traditional retail stores, however, when applying for SNAP authorization they are considered the same as any large-scale, brick-and-mortar food retailer. The organizational structure of farmers markets varies widely. A few are co-operatively governed; many function as associations of farmers with a board of directors. Often, markets are sponsored by a non-profit organization that has additional functions, a Main Street group, or a branch of local government. Much of the information asked of farmers markets in the SNAP application is not applicable to their business models, making it difficult for markets to become authorized.

Farmers markets have faced the following challenges when attempting to complete the SNAP retailer application:

  • There is no option for a non-profit organization among the Type of
    Ownership options;
  • Recent FNS interpretations of the Social Security number requirement on the application has some markets including the SSN of all board members, rather than one responsible party. This results in serious delays and markets declining to participate;
  • Farmers markets are not required to have business licenses in many jurisdictions. The application should clearly indicate that submitting a business license number is optional for farmers markets;
  • Organizations that are well suited to carry out the administrative and financial management tasks of accepting SNAP benefits on behalf of a farmers market are not permitted to do so, even with permission in writing from the decision making body of the farmers market;
  • Many markets do not require farmers to report their earnings and so cannot provide required sales data.

These issues can be addressed by creating a farmers market SNAP retailer application that requires information specific to their business structures. This will allow FNS to collect and maintain accurate and relevant records about authorized farmers markets, while also encouraging their participation in the SNAP program (FNS question #13).

Fees associated with EBT transactions on wireless machines also pose a problem for farmers markets. Most farmers markets are required to pay monthly and transaction fees for SNAP sales because their states do not require EBT processing companies to provide free service to food retailers that use wireless systems as they do for mom and pop brick and mortar stores. The Michigan Farmers Market Association (MIFMA) surveyed third-party processors and found that, on average a farmers market will pay $600-$1,200 to purchase wireless point of sale device equipment and pay at minimum $50/per month to operate the equipment. While we understand that FNS may not require states to have contracts that include providing the same service to retailers using wireless service as to those using traditional machines, USDA could take the lead in explaining the distinction to states and encourage state SNAP agencies to include the requirement in future processing contracts.

Farmers markets clearly meet the food requirements of SNAP retailers, and play a key role in bringing healthful food to Americans in need. FNS can easily increase the number of farmers markets functioning as SNAP authorized retailers by removing the application and fee barriers that currently exist.

Sincerely,
Farmers Market Coalition