Being largely self-employed and self-sufficient, diversified farmers as a whole may be faring better than average in this harsh economic climate. But numbers don’t lie – it’s tough out there for many Americans, and Maine is no exception. According to the most recent data available from the USDA Food and Nutrition Service (FNS), the number of Mainers enrolled in the government’s Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, has risen nearly 19.7 percent in the last year to almost 212,000. (See www.fns.usda.gov/pd/snapmain.htm for statistics for other states.) So nearly one in six Mainers buy most or all of their groceries with SNAP benefits instead of cash, and unless you’re established as a vendor for this and other government food assistance programs, you’re missing a growing opportunity to market your products to a significant portion of the population. Perhaps more importantly, they’re missing out on having access to your good food.
Electronic Benefits Transfer at Farmers’ Markets
You often hear “EBT” used synonymously with SNAP and Food Stamps. EBT stands for Electronic Benefits Transfer – the electronic system through which government assistance program benefits, including SNAP, are executed. The government has phased out use of paper food stamps; all transactions are now electronic. The beneficiary has a card that works much like a debit card, but must be used with a machine that is compatible with the EBT system.
Any farmer or farmers’ market can apply to accept SNAP benefits. The Gardiner and Skowhegan farmers’ markets’ vendors first used the program in 2009. Michele Roy of Long Meadow Farm in West Gardiner is on the market’s steering committee that led the effort to use EBT market-wide. “Probably the most frustrating thing was the application itself – it is set up for a retail business, so answering some of the questions from a farmers’ market perspective was mystifying,” she says.
Sarah Smith of Grassland Farm in Skowhegan, and manager of the Skowhegan market, agrees. “It’s a pretty significant application, and it’s confusing because it’s set up for a retail establishment.”
Both were also challenged by the requirement for a Tax ID number or a Social Security number on the application. Many farmers’ markets are neither formally organized as a legal entity nor do they have a fiscal sponsor. In Skowhegan, one vendor was willing to put her personal information on the form. In Gardiner, the nonprofit Gardiner Main Street sponsored the application.
The Lewiston Farmers’ Market has been accepting EBT cards since 2004. “The farmers at the market have not had to do anything to establish and manage the system, because there are two nonprofits that have done all of that work,” says Amy Carrington of the New American Sustainable Agriculture Program. A hired market manager manages EBT transactions at the market. Customers get a receipt from each farmer for food purchases, leave their items at the stand, bring the receipt to the cashier to pay with their EBT card, then give the paid receipt to each farmer and pick up their purchases. After each market, vendors hand their paid slips to the manager, who writes a check to each from the market’s checking account.
“This would be much more difficult for markets managed by farmers, as it does take time and requires someone to manage the machine at the market as well as manage the finances and reimbursements to farmers,” says Carrington.
The Gardiner market also hires a manager, in part to handle EBT transactions. There, the manager swipes the EBT card and debits the amount requested by the customer in exchange for tokens that can be used to shop at all food booths in the market. Similar to the Lewiston market, vendors are reimbursed at the end of the market day when they turn their redeemed tokens back in to the market manager.
A challenge for both markets and individual farmers who want to accept food stamps at farmers’ markets or farm stands is that the free EBT machine provided by the government, which carries no account or transaction fees, requires access to a phone line and electricity. That was difficult in Gardiner, because the phone company was reluctant to put a line on a pole in the park where the market is held. “Getting the governor’s office on your side is a big help in these situations,” says Roy.
The Skowhegan market, also lacking a phone and electricity, records the necessary information from the customer on a paper voucher, and the market’s treasurer volunteers his time to run all the transactions at home after the market – so a lot of time is spent recording transactions manually at the market. Because information is copied by hand, mistakes can occur, and the market risks finding that an account has insufficient funds when the transaction is run, but Smith says that has not been an issue. “The one time we had an account without enough funds, we knew the person and were able to work it out.”
Individual Farmers’ Experiences
Freedom Farm, a MOFGA-certified organic vegetable farm in Freedom, became a SNAP program vendor in 2009 and used paper vouchers to transact food stamp purchases at five weekly farmers’ markets.
“We’ve probably done close to $3,000 in food stamp purchases this season, so it’s worth it to us to risk getting burned on a few,” says Ginger Dermott of Freedom Farm. “It’s a little time consuming to manually enter all the transactions at home after the market, but we feel very strongly that good food should be accessible to everyone, regardless of their situation.”
Lalibela Farm, a MOFGA-certified organic vegetable farm in Dresden, has been accepting food stamps for several years, and for the first few years also used paper vouchers at the market and processed the transaction later at home. Jaime Berhanu of Lalibela says, “[With this system] the transactions were awkward and presented somewhat of a risk to us, because we didn’t find out if the funds were available on the customer’s cards until we arrived home from the market to process the payments on the machine.” The farm now has a contract for a wireless credit card machine. “We pay a nominal fee each month as well as processing fees per transaction, which is all worth it since we can now accept credit cards, debit cards and EBT cards. We are also able to actually hand the customer a printed receipt!”
While renting or owning a wireless machine may be attractive, in the case of markets, multi-vendor transactions on one machine would require significant bookkeeping, and that, in addition to the expense of the machines and transactions, is a major deterrent. According to Micheal O’Connor, the Department of Health and Human Services’ EBT project manager, a pilot program funded by stimulus package money will make six wireless machines, for EBT transactions only, available for farmers this year.
“Having a wireless machine would make our lives so much easier,” says Roy. “It would help eliminate the risk of human error,” adds Smith. Both plan to request one of the six for their markets. O’Connor says funds to purchase additional wireless machines may be available if enough farmers and markets show interest.
EBTs for CSAs
“Overall our experience with accepting food stamps is that mostly, people don’t know, or don’t expect that they can use their benefits at a farmers’ market,” observes Berhanu. The same goes for Community Supported Agriculture (CSA) shares, for which Lalibela Farm also accepts EBT payments. Reba Richardson of Hatchet Cove Farm in Warren became a SNAP vendor this year so that her CSA members would have a new payment option. “Once we figured out who to talk to, it was really simple to get set up as a vendor,” she says. Hatchet Cove markets its MOFGA-certified organic vegetables primarily through its CSA program. Five of the farm’s 130 shares were paid for with SNAP benefits, and Richardson looks forward to offering the option to more customers in the future. “This year was an experiment for us, so we didn’t advertise widely. The few members that used EBT to pay for their shares were either already members from previous years, or heard through word of mouth that we could accept EBT. Next year we plan to advertise [the program] more widely.”
Applying SNAP funds toward CSA shares requires a few extra steps for the farmer. “The rules of the program are that you must receive food within two weeks of paying for it, so we needed to arrange with customers to take the money out of their account every two weeks.”
Richardson was also directed to draw up the following contract to use with members that addresses some other SNAP rules:
“The Hatchet Cove Farm summer CSA will run for 18 weeks, from mid-June to mid-October. There are no membership fees. Vegetables will be provided to members once a week, and all food orders will be made available to members within 14 days from when the farm receives the EBT/Food Stamp payments. $33 dollars will be deducted every two weeks from each member’s EBT account, until a total of $300 is reached. If there is a complete crop failure no members will be expected to continue to pay for the season.”
Says Richardson, “It feels really good to broaden our membership base in this way, and we’re excited to expand into the future.”
Similarly, Berhanu says, “Our experience has been very positive with accepting food stamps, and I definitely would encourage other farmers to do the same!”
Other Government Food Assistance Programs
The Supplemental Nutrition Assistance Program isn’t the only government food assistance program for which farmers can be vendors. The Women, Infants and Children (WIC) Program provides food benefits to income-eligible pregnant and nursing mothers, infants and children. The Farmers’ Market Nutrition Program (FMNP), administered by WIC, gives coupons to WIC clients to spend specifically on fruits or vegetables at a farm stand or farmers’ market. The benefit is relatively small, ranging from $10 to $20 per family per year, but until recently was the only component of the WIC benefit that could be spent with local farmers.
As of October 1, 2009, the WIC package of benefits changed to reflect updated nutrition guidelines, so the regular benefits that mothers and children receive now include fruits and vegetables. (For more information on the WIC program and recent changes to the benefits package, see www.maine.gov/dhhs/wic/.)
According to WIC vendor manager Kayla Colby, the Maine WIC office is focused on implementing this new program with it’s existing vendors (primarily grocery stores), but “we hope to have a new training program for farmers developed by April of next year.” This will allow farmers to become vendors, so the new fruit and vegetable benefits can be spent at farmers’ markets and farm stands as well as grocery stores.
When you complete the SNAP vendor application, think of yourself as a “retailer” and your farm as a “store.”
To request a paper application, call 877-823-4369, the USDA FNS SNAP vendor line, or the USDA FNS Field Office in Boston: 617-565-6380. If you fill out a paper application, you mail it to this field office.
An online application is available at www.fns.usda.gov/snap/retailers/register.htm You need to navigate back and forth between the FNS Web site and your email, as you have to register, confirm the registration, then go back and log in to access the application.
You submit your completed application to the FNS Field Office in Boston, which can take up to 45 days to process the application, but most farmers say they hear back within a couple of weeks. When your application has been approved, you will receive a contract asking for your deposit account information. After that has been processed, you will be contacted by a company called Affiliated Computer Systems (ACS), the company with which the state government contracts to provide EBT technology services. ACS will contact you to get you set up with your “point of sale” (POS) equipment, whether the free EBT-only machine or another private option. You will then receive your equipment along with instructions on how to use it.
General information on accepting SNAP at farmers’ markets: www.fns.usda.gov/snap/ebt/fm.htm
WIC questions: Kayla Colby, WIC Vendor Manager, 800-437-9300, [email protected]
EBT machine questions: Micheal O’Connor, DHHS EBT project manager, 800-452-4643, [email protected]
Special considerations for CSAs as SNAP vendors: Claudia Ortiz, FNS office, Rochester, N.Y. 585-263-6744, [email protected]
A private, wireless credit card machine company that one grower uses is North American Bancard, www.nabancard.com.
Melissa White Pillsbury is MOFGA’s organic marketing coordinator. You can contact her at 568-4142 or [email protected].