Farmers Markets and SNAP: Thanks, New York…Your Move, Congress

August 8, 2018 | 4:41 pm
Karen Perry Stillerman
Deputy Director

This National Farmers Market Week, we have some things to celebrate. There’s peak summer produce, of course…I mean, who doesn’t like a perfectly ripe tomato? And now, we may be a little bit closer to a day when that lovely red orb is accessible to anyone who wants one on a hot day in August. But first, let’s talk about a crisis averted.

Late last month, the state of New York and the New York Farmers Market Federation came to the rescue of thousands of farmers markets—and the shoppers that rely on them. The emergency? A host of technical and financial problems threatened the sudden collapse of the systems that allow farmers markets to accept food stamp benefits electronically. And although that didn’t happen (thanks, New York!) the events that unfolded over the past month illustrate the need for more extensive and permanent infrastructure to connect low-income consumers with farmers and help local food systems thrive.

SNAP EBT problem solved, for now

Since 1997, the Supplemental Nutrition Assistance Program (SNAP, or food stamps) has provided benefits via Electronic Benefits Transfer (EBT) cards, offering convenience and minimizing stigma in transactions at grocery stores. But EBT posed a challenge for farmers markets held outdoors without secure data lines, leading companies like the Austin-based Novo Dia Group to develop mobile software solutions. The firm now uses wireless technology to process some 40 percent of SNAP transactions at farmers markets nationwide.

But in early July, Novo Dia announced it was unable to fulfill the remainder of its contract with the USDA and would end its service within the month. This would have affected a significant number of the nation’s 8,720 farmers markets, at which low-income shoppers redeemed more than $22.4 million in SNAP benefits last year.

The factors contributing to the shutdown remain somewhat unclear; Novo Dia cites high operational costs associated with its wireless platform, compounded by the company’s exclusion from a new contract between the USDA and Financial Transaction Management (FTM)—a new and relatively unknown company that won the bid to provide equipment to farmers markets in March 2018. (For clarity: USDA previously contracted with the Farmers Market Coalition for this service, who then subcontracted with Novo Dia.)

But regardless of the reasons, the consequences would have been devastating. A shutdown would have left some 1,700 farmers markets across the country without a way to redeem SNAP EBT—meaning SNAP participants would lose access to fresh, nutritious, affordable food and farmers would lose customers and revenue—right smack in the middle of the season.

Enter the state of New York, which jumped in last week to provide financing that will keep Novo Dia’s system operating nationwide through early 2019. Novo Dia’s financial viability aside, questions remain about why the USDA selected FTM—a little-known company that will replace Novo Dia with other unknown subcontractors—to serve the nation’s farmers markets. Yes, it could be an unremarkable outcome of a routine government bidding process. But the USDA’s mid-July press statement describing the situation isn’t wholly reassuring.

Congress can build lasting solutions

While New York bails out Novo Dia, there’s much more that Congress can do to enable long-term solutions; namely, by connecting farmers with consumers to support the growth of economically vibrant local food systems in communities throughout the country. Using data from our 50-State Food System Scorecard, UCS health analyst Sarah Reinhardt wrote recently that in states whose farmers grow more fruits and vegetables—and who can rely on better infrastructure to get that healthy food onto people’s plates—diet and health outcomes are better.

And this is where Congress comes in. This month, the 2018 farm bill is entering a critical stage of negotiations, as leaders in the US Senate and House of Representatives come together to finalize this massive 5-year legislative package, which shapes everything about how we eat in this country and who can afford nutritious food. Earlier this summer, the Senate passed a version of the bill that would make much-needed investments in local food systems, creating an innovative Local Agriculture Market Program (LAMP). The bipartisan provisions of this program would help communities expand access to fresh, nutritious food for many consumers, grow the customer base for small and midsize farmers, and offer a much-needed boost to struggling rural economies. That’s a win all-around.

However, the House version of the farm bill passed up the opportunity to make such investments. And now, members of the House and Senate are coming together in a conference committee to hash out their differences and negotiate a final bill. It’s time to insist that negotiators prioritize smart local food policies and include LAMP provisions in the bill that goes to the president’s desk.

What you can do: Local food programs that connect producers to consumers can support profitable farms, enable more people to afford healthy food, and keep food dollars in rural communities. So while you’re celebrating farmers markets this week with a slice of tomato mayo toast (my latest obsession), take a moment to sign our petition to support healthy local food solutions in the farm bill TODAY!