Gretchen Kruse, the owner of Hickory Hill Farm, thinks it was a great idea to allow recipients of the Supplemental Nutrition Assistance Program — aka SNAP or food stamps — to use their benefits to purchase food at farmers’ markets.
Not only does it support small-scale farmers like her, Kruse says, the program “provides access to local and nutritional food versus someone going to Walmart. Health of the people is really the bottom line.”
That system was further augmented with support from local municipalities through the Dane Double Dollars Program, which matched SNAP funds by up to $25 a day per market.
Now, all of that is in jeopardy after changes to the program that could make it much harder for local markets to process SNAP funds after this year.
Erica Anderson, a food security specialist at the Community Action Coalition for South Central Wisconsin, promotes the Double Dollars program in Dane County. “It wasn’t always an easy sell convincing market vendors to accept the SNAP payment cards,” she says.
And although Anderson doesn’t yet know what will happen, the threat to the program has made one thing clear to her: “It made me realize how many people find [SNAP benefits] at farmers’ markets worth protecting.”
In 1997, the USDA introduced electronic benefit transfer (EBT) payment cards, which are swiped just like a debit or credit card. But it’s difficult to use the cards at farmers’ markets, which are typically set up in parking lots where there are no secure lines to run transactions.
In 2012, according to The Washington Post, the USDA set up the Free SNAP Wireless Equipment Program, which provided mobile devices to the Farmers Market Coalition, a group that supports farmers and market managers, so it could help markets process wireless transactions. For most markets that operate on small budgets, electronic benefit card processing is a high cost and a financial barrier with wireless processing equipment costing around $1,000 dollars and processing fees ranging from $30 to $100 a month.
Through the FMC, markets were given free payment processing equipment and a three-year contract that paid for all processing fees of SNAP payments. Several companies created software that could process these benefits, but Novo Dia was the only one that worked with both Apple and Android devices and was user-friendly.
The program was a success, with people using SNAP funds at 2,500 markets nationwide. The amount of SNAP dollars spent at farmers’ markets grew from $16.5 million in 2012 to $22.4 million last year, according to the Post.
That trend was disrupted this year when the USDA awarded the Free SNAP Wireless Equipment Program contract to Financial Transaction Management (FTM). FTM was formed weeks before submitting a contract bid and Govtribe lists the company as having a single employee, Angela Sparrow, who did not return requests for comment to Isthmus or other outlets reporting on the changes. The company’s address is listed at a “virtual office” space, in Reston, Virginia.
FTM decided not to contract with Novo Dia for its processing software. So earlier this summer, Novo Dia announced it would stop offering the service by July 31.
On Aug. 3, New York Gov. Andrew Cuomo put in stop-gap funding for six months, reaching an agreement with Novo Dia to support it nationwide. This means that farmers’ markets for the remainder of the season will see no interruption in EBT processing.
Markets that don’t use Novo Dia are also concerned about how long SNAP benefits will be usable. Westside Community Market currently uses FIS Global/Merchant Solutions for its wireless card terminal. In June, it was notified via email by the Wisconsin Department of Health Services that the current model they were running would not be supported after Aug. 15 — in the middle of the busy market season.
The Verifone brand model that Westside uses costs around $1,500, and not all markets receive funding to pay for the initial purchase of the machines, let alone upgrades when companies decide to discontinue their services.
Other markets are in remote areas and need devices that have cell signals. The Elver Park Farmers’ Market utilizes a wireless Clover machine for this reason, and no free options were available to purchase its equipment.
“Markets are making the best out of a system that hasn’t been designed for them,” says Ben Zimmerman, manager of the Westside Community Market. “Most have to utilize expensive equipment because most are pop-up without infrastructure like power or phone lines that can make card processing much more affordable.”
The same machines that are being used at markets are made for processing credit and debit cards. That technology often changes rapidly in order to keep card processing secure. “This leads to these machines becoming obsolete every few years,” says Zimmerman.
Markets have been trying to make do with whatever equipment they can afford, says Joe Ryan, president of the Madison West Neighborhood Association, which helped spearhead the Elver Park market. “It was our highest goal to bring healthy food to an area of Madison that was hurting, and make it affordable and appealing,” Ryan says.
Elver Park, in its second year of operation, is a participant in the Double Dollars program. It would not have been able to afford the start up cost of an EBT processing machine without the help of sponsorships from Exact Sciences and Madison Gas and Electric, according to Ryan.
Westside market was lucky enough to receive a small grant from the state Department of Health Services in 2013, but has since had to buy more machines as they become obsolete. They are currently on their third machine in five years. “For a small nonprofit organization like us, those costs can eat up a significant portion of our annual budget,” says Zimmerman.
For the remainder of the summer, Dane County markets, vendors, SNAP and Double Dollars customers can continue to use and process EBT payments. Luckily, only three out of the 20 markets in Dane County utilize Apple devices for processing and so the potential future impact around the Novo Dia news is small. “On a local level, the customers are probably not going to notice any changes because we have been working hard for them not to have a gap in service,” says Anderson.
Still, Anderson worries about the program’s future. “It’s hard for me to tell markets they can trust this service if it’s going to disappear,” says Anderson. “I wonder how many people have stopped shopping or stayed away because the information was miscommunicated or misunderstood when the national stories were released.”
“At a policy level, this is a real cause for concern,” she adds. “The way that the transition was handled, and the threat to stop service in the middle of the busy season — this affects health and it affects lives.”
For markets like Westside, the concerns over longevity of processing SNAP has been ever-present. “Until a SNAP processing system is designed with markets in mind, and one that lasts, these financial concerns are going to continue to plague farmers’ markets,” says Zimmerman.
As a community market, he believes it’s essential for the Westside market to accept SNAP benefits. “Farm fresh food is something we believe should be available to everyone.”
Editor's note: This story originally referred to Erica Anderson by the incorrect last name of Johnson.
