FoodShare redemption increases at Madison farmers’ markets

Madison farmers’ markets processed more FoodShare dollars (previously called food stamps) in 2011 than since the ‘90s, when the government food assistance program started using electronic bank transfer (EBT) cards.

At $49,234, Dane County Farmers’ Market (DCFM) customers spent the most federal food assistance dollars of any market in Wisconsin last year. The Fondy Farmers’ Market of Milwaukee came in second, at just over $30,000 for the year.

This is the most FoodShare dollars to be redeemed at farmers’ markets since the state abandoned traditional “food stamps” and went paperless in the 1990s. The United States Department of Agriculture’s Food and Nutrition Service (FNS) initiated the change from paper stamps to EBT cards in 1993 and by 2002, all 50 states switched to the plastic payment form.

[1]Graphic by Emily Eggleston

Although food stamps were regularly redeemed at farmers’ markets before the switch, the change to plastic quashed that option. Since farmers’ markets are generally held outdoors, vendors did not have the outlets and phone jacks necessary to process electronic payments.

In 2005, however, the Northside Farmers’ Market and South Madison Market were the first farmers’ markets in Dane County to accept FoodShare EBT cards.

“There’s a lot of low-income people in the neighborhood and we wanted to make sure everyone had access to fresh produce,” said Northside Market Manager, Lisa Wiese.

Northside Farmers’ Market pioneered the system for accepting FoodShare EBT payment that other area markets, including MadWest, Monona, and Dane County, now use.

First, the Northside Farmers’ Market acquired a point-of-sale (POS) machine, to process electronic transactions. Then, Wiese devised a script system by which FoodShare cardholders purchase market tokens at the information tent. They can then exchange these tokens for food.

In turn, vendors redeem the tokens with Wiese, who reimburses them. This removes the burden of every vendor needing to purchase a POS machine.

However, managing this reimbursement system and financing the purchase of a POS machine is often a burden for farmers’ markets. A closer look at the process of becoming a FoodShare-accepting outdoor market reveals why it can be so challenging.

Picking up the tab for federal food assistance

Since the United States Department of Agriculture (USDA) administers federal food assistance dollars, markets apply to the USDA to become a registered FoodShare-accepting location.

That is the easy part.

The hard part is acquiring a wireless POS machine, which costs over $1000, and then paying a monthly service fee along with a transaction fee each time a card is swiped. The USDA offers a free POS machine for markets, but it must be plugged in to both electricity and a phone line.

Since these machines do not work outdoors, Madison farmers’ markets found a way to purchase a more expensive but wireless machine that works on site.

Community grants enabled the purchase of wireless POS machines for many markets. Alliant Energy Foundation funded the purchase for Dane County Farmers’ Market. Willy St. Co-op Community Reinvestment Fund supplied the necessary investment for MadWest Neighborhood Farmers’ Market. And Madison Community Foundation granted Monona Farmers’ Market the money to purchase the machine.

Without these grant programs, small markets might not have been able to purchase such expensive machines [2]Farm Fresh For All advocates Stephanie Jung (left) and Katie Wier said Stephanie Jung, founder of Farm Fresh For All. Farm Fresh For All is an initiative Jung and two other social work graduate students started to promote FoodShare access at markets.

“Our initial goal was to build awareness that EBT could be used at farmers’ markets,” Jung said. “Then we realized that markets were struggling to buy and maintain the EBT equipment.”

The struggle exists because even if FoodShare access prompts more customers to attend the market, the increased sales end up in farmers’ pockets, while the market bears the cost of the transaction. In addition to purchasing the machine, each market pays a monthly fee to a service that processes electronic bank transactions, and pays a transaction fee of a few cents, every time a card is swiped.

“The transaction fee is a hardship for larger markets, because they so many swipe cards,” said Katie Wier, another Farm Fresh For All advocate. “And the monthly service fee of about $45 is often a hardship for smaller markets because they have such small budgets.”

Ross Cohen, manager of Monona Farmers’ Market, said that the process was more challenging than he thought it should be.

“We’re providing access to healthy food for low-income people and supporting the local economy,” Cohen said. “I would think it’d be the state’s responsibility to waive our fees in that process.”

In order to sustainably pay the transaction fees and the $45 EBT service fee, Cohen asked farmers to pay a little more in their market fees. Monona vendors agreed to support FoodShare access via raised fees.

Dane County Farmers’ Market faced a different struggle in sustaining their FoodShare redemption—too much cash flow. In 2010 and 2011, DCFM redeemed over $40,000 in food assistance. Friends of Dane County Farmers’ Market, who began accepting FoodShare EBT cards in 2008, said they could not keep pace with the huge cash flow.

“Our financial infrastructure wasn’t meant to handle tens of thousands of dollars,” said Kathy Sandefur, Board Chair of Friends of DCFM.

Initially, they attempted to reimburse the vendors with cash for the FoodShare market script each vendor collected. That quickly became overwhelming for the small nonprofit, as they needed to process thousands of dollars every Saturday.

For the 2012 market, DCFM formed a new partnership with Community Action Coalition to handle their ever-increasing FoodShare redemptions. The new reimbursement process will occur via check, rather than a cash transaction. Farmers will no longer be reimbursed on market day, but Sandefur said the system will be more secure and sustainable.

If you buy a POS machine, will they come?

In order to promote awareness of market FoodShare redemption opportunities, Farm Fresh For All and Friends of DCFM both ran bus advertisement campaigns.

Wiese, farmers’ market FoodShare veteran, said that advertisement is a big help in drawing FoodShare customers to the market.

“If you don’t advertise, it doesn’t go anywhere,” Wiese said. “And you have to keep advertising in the same places because people go on and off of food assistance.”

Rachel Neymark, market manager for MadWest Neighborhood Farmers’ market agreed it was hard to get the word out that FoodShare could now be redeemed at their market.

“The card has so many names, EBT, Quest, FoodShare, SNAP, people didn’t always recognize what I was promoting,” Neymark said.

But given the increase in FoodShare redemption at farmers’ markets, the word does seem to be getting out, at least in Madison.

Of the 30 farmers’ markets in Wisconsin registered to accept FoodShare EBT payment, five are in Dane County. According to the USDA, the five Dane County markets receive well over half of the state’s food assistance redemptions at farmers’ markets.

Adding Fondy Farmers’ Market in Milwaukee to the Dane County redemption numbers accounts for almost all of the state’s food assistance dollars spent at markets. DCFM is the largest site for the redemptions, but there are FoodShare market customers who rely on access farther from the Capitol Square.

Cohen said one third of the FoodShare customers at Monona market were people who came back week after week. Neymark said that MadWest also had repeat FoodShare customers and that the food assistance dollars made up a significant part of market vendors’ revenue.

Both Weir and Jung, of Farm Fresh For All, believe continued advocacy for EBT card access at farmers’ markets and increased awareness of FoodShare acceptance at farmers’ markets is important.

“If they can overcome the barriers, low-income people really do want good food,” Jung said.

Farm Fresh For All’s advocacy is about breaking barriers to more than fruits and vegetables.

“I want to give everyone access, to be a part of their community,” Weir said. “It’s not just about the food, it’s allowing people the experience of a farmers’ market and breaking down access barriers to being a part of the community that exists at a farmers’ market.”