SNAP at Farmers Markets Growing, but Limited by Barriers

By: Dan Blaustein Rejto       Posted On: June 10, 2015

The number of farmers markets and farmers accepting Supplemental Nutrition Assistance Program benefits (SNAP, formerly called Food Stamps) has increased five-fold since 2009, but continues to remain stubbornly low. Nearly two in three farmers markets nation-wide still do not have the equipment and authorization required to accept SNAP. The same is true of farmers market vendors; fewer than 2,500 out of at least 70,000 vendors are authorized to accept SNAP.

This limitation creates an obstacle for SNAP recipients who want to shop at farmers markets. With over 360,000 SNAP households shopping at farmers markets each year, spending an increasing amount of their benefits at markets, it’s clear the problem is not the lack of customer demand.

Source: United States Department of Agriculture Food and Nutrition Service. Correction: We previously published that 2013 SNAP Redemption was $21 million. USDA recalculated and corrected this amount to $17.5 million because several retailers were incorrectly labeled

Source: United States Department of Agriculture Food and Nutrition Service

Barriers to SNAP Growth
The primary barriers to more farmers markets and vendors accepting SNAP seem to be technological, financial, and regulatory.

SNAP Equipment and Personnel
The cost of the technology to accept SNAP benefits is often prohibitive regardless of whether a market uses a traditional point-of-sale (POS) terminal or a smartphone to process SNAP benefits. POS terminals can cost upwards of $1,000 each. Both terminals and smartphone options typically require monthly wireless fees, and all options require markets to pay approximately $.15 per SNAP transaction.

A POS Terminal to Accept SNAP Benefits
Source: Coindesk.com

A Smartphone Equipped to Process SNAP Benefits
Source: Novo Dia Group

Although farmers markets have grown immensely in recent years, the majority of them still operate on a shoestring budget (or none at all) with an all-volunteer “staff.” It is not surprising then that many markets cannot afford to purchase SNAP equipment. Those with the income to purchase equipment often lack the resources to hire staff to handle the SNAP transactions, bookkeeping, and outreach. There must be a staff person present for the duration of the market to run SNAP transactions. Afterward, transactions must then be reconciled and tallied on a regular basis, and farmers must be reimbursed for the SNAP payments they accept. These expenses add up. For example, the Burlington, Vermont farmers market pays over $1,200 a year in fees and spends $3,200 paying staff to manage their EBT system.

“One Site, One Permit, One Machine” Policy
The USDA Food and Nutrition Service requires farmers market organizations to get SNAP authorization and equipment for every individual site where a farmers market operates. This policy dramatically increases the financial burden of operating SNAP at farmers markets. Organizations that run markets at multiple sites must pay additional equipment costs, set-up fees, monthly wireless fees, and more for each machine. These costs have forced some farmers market organizations to stop accepting SNAP at one or more of their markets and has discouraged other organizations from starting to accept SNAP.

SNAP Promotion
For markets that decide to get SNAP authorization and equipment, this is only the first step in running a successful SNAP program. Farmers markets must deliberately notify, educate and attract SNAP customers to promote SNAP spending at their markets. The lack of a budget and other resources needed to do this limits the success of SNAP authorized markets and may further deter markets that are considering accepting SNAP.

Where There’s a Will, There’s a Way
New USDA and state programs to support SNAP at farmers markets demonstrates that these barriers can be overcome.

Federal Opportunities
In 2012, the USDA appropriated $4 million for the purchase or rental of a wireless device and related SNAP fees for markets that were newly authorized to accept SNAP. USDA has provided similar support in 2013 and 2014, helping thousands of farmers markets and direct marketing farmers afford to accept SNAP.

Another federal move to support SNAP at farmers markets came in the 2014 farm bill. While the new bill unfortunately cut overall funding for SNAP, it introduced the Food Insecurity Nutrition Incentive (FINI)—a program that aims to bring SNAP incentive programs to markets and retailers across the country. Over the course of five years, FINI will provide $100 Million to match (usually doubling) the value of SNAP benefits spent on fruits and vegetables. This program has the potential to significantly increase the number of SNAP shoppers at markets and give markets greater reason to start accepting SNAP.

Take Action: Farmers market supporters should ask USDA to continue supporting SNAP at farmers markets, and to end their costly “One Site, One Permit, One Machine” policy.

State Opportunities
In many of the states with the most SNAP authorized farmers markets, the state SNAP agency provides significant technical support and/or covers the cost of some SNAP equipment or fees. For example, the South Carolina Department of Social Services, working with Xerox, provides free SNAP equipment and service to farmers markets. Expanding this type of support to other states would greatly reduce the financial barriers for markets to accept SNAP and enable SNAP participants to buy more fresh food directly from their local farmers.

Various food, farm, and social service organizations are also introducing legislation to create state SNAP incentive programs to attract SNAP shoppers to farmers markets and other fresh food retailers. For example, California’s legislature is currently considering a bill that would create a state-run incentive program using federal FINI funds as well as funds from other public and private sources.

Take Action: Our farmers markets and SNAP shoppers need more organizations and people to talk with their state officials about starting similar programs. State support can directly increase the number of markets and farmers who can accept SNAP. Incentive programs encourage SNAP shoppers to buy fresh fruits and vegetables at markets, which lack the advertising resources of supermarkets and other retailers.

We Can Do This
The history of SNAP spending at farmers markets shows SNAP shoppers have an enormous demand for fresh, healthy , and local food. More and more farmers markets and farmers are responding by accepting SNAP, but there are too many obstacles for many of them to overcome. We need to make federal regulations more farmers market-friendly, increase federal and state support of SNAP at markets, and help markets advertise to SNAP participants.