The number of farmers markets in the United States has increased by almost 7,000; from 1,755 in 1994 to 8,687 in 2017 (USDA, 2017a). And while this growth in the number of markets has increased access to fresh, locally produced foods for many, those individuals and families receiving Supplemental Nutrition Assistance Program (SNAP) benefits (formerly known as the Federal Food Stamp program) do not have the ability to spend those benefits at all farmers markets in Ohio.
In 2012 there were 98 Ohio farmers/farm markets that accepted SNAP benefits. The number increased to 224 in 2017; a 128.6 percent increase. Likewise there were $270,510 in SNAP benefits redeemed at Ohio farmers/farm markets in 2017 a 34.6 percent increase from $201,013 in 2012 (USDA, 2017b). Even with this positive increase there are many more markets in Ohio that could accept SNAP benefits to increase where SNAP recipients can shop.
This fact sheet details the process Ohio farmers markets can follow to begin accepting SNAP benefits at their markets. The first section includes management items to consider before applying to the USDA Food and Nutrition Service (FNS) for SNAP eligibility to receive Electronic Benefit Transfer (EBT) cards. The second section discusses the application process and implementation for the farmers market.
Accepting SNAP Benefits at a Farmers Market
There are a few management items farmers markets need to explore before beginning the process of accepting SNAP benefits:
- How is the market legally organized? In other words, is the market structured as a cooperative, Limited Liability Company, corporation, sole proprietorship, or not-for-profit organization? While is it not required for markets to accept SNAP, it is a good business practice for markets to be legally organized.
- How does the market manage its finances? Does the market have a bank account that is dedicated to handle the income and expenses of the market? SNAP benefits are electronically deposited once transactions have been processed, a bank account is required. For more information about legal structure, consult the U.S. Small Business Administration website. Search "Choose a Business Structure."
- How will the market administer and manage the acceptance of SNAP benefits? These management capabilities also include a person or persons responsible for operating the SNAP terminal, processing transactions, and maintaining records. Vendor training and reimbursement is also required to accept SNAP benefits. For some markets this person is a market staff member or volunteer. Some markets work with a local non-profit organization to provide this service to the market vendors and SNAP recipients.
- How will the market promote its ability to accept SNAP benefits? Many markets accepting SNAP benefits have great success in offering matching dollars to benefit recipients. However, these dollars currently come from funds other than the USDA Food and Nutrition Service (FNS). Markets often work with charitable organizations and/or local foundations to offer matching funds to consumers. For more information about matching programs, review the handbook available on the USDA Agricultural Marketing Service website: “Supplemental Nutrition Assistance (SNAP) at Farmers Market: A How-To Handbook.”
Applying for SNAP Eligibility
Once the items listed above have been evaluated, and the farmers market has the capacity to manage the program, the next step is to apply to USDA FNS to become an eligible retailer. This application can be completed on line at the USDA FNS website here. Find it by searching for the SNAP farmers market application at USDA FNS, or you can request a paper application by calling 1-877-823-4369.
Questions on the application include the market contact, the market’s physical location, and information about the products that are sold at the market. In addition to the information about the market, you will need to provide the Employer Identification Number (EIN) for the market. This number can be obtained, or applied for, online at the IRS website (irs.gov) by searching Employer Identification Number (EIN).
Receiving SNAP Benefits
Once your application is approved by USDA FNS, you will receive notice that the market has been approved to accept SNAP benefits. Upon approval, you will need to secure the equipment needed to accept SNAP at your market. There are several ways a market can choose to accept SNAP benefits.
- Voucher system–This system does not require an Electronic Benefits Transfer (EBT) terminal. However, telephone access is required at the market to call a 1-800 number to verify the benefits are available for purchasing eligible products. After calling the number, an authorization number will be given to allow the customer to shop at the market. The market will then mail the vouchers with the authorization number to the processor. Once processed, payment for the benefits used will be electronically deposited into the market’s designated bank account. For additional information about the voucher system, contact the EBT Section of the Ohio Department of Job and Family Services (ODJFS).
- EBT Terminal Use–if the market chooses to only accept SNAP benefits and not debit and/or credit cards the EBT Section at the ODJFS will need to be contacted to secure an EBT terminal. Currently, the terminals provided through ODJFS are cost-free, but require a landline telephone line and electricity to use the terminal at the market. If this is not available, a combination voucher and EBT system may be chosen. This system is where the market calls the 1-800 number to receive authorization and then processes the transactions at a later time where there is access to a landline telephone line and electricity. This can be done at the market office or at the market’s SNAP coordinators residence. Vouchers must be processed in a timely fashion in order to receive reimbursement of benefits used at the market. If a market fails to process the voucher in a timely fashion, they will not be reimbursed.
- If the market does have access to a landline telephone line and electricity at the market location, the EBT terminal can be used on site. To process a transaction, the customer “swipes” their EBT card, called the Ohio Direction Card, through the terminal and enters their PIN number. The SNAP coordinator then enters the amount of funds the customer requests. Once the transaction is processed, receipts are printed; one retained by the market and one by the customer. The market then gives the customers tokens to use as cash to purchase eligible products from the market vendors.
- Accepting SNAP and debit and/or credit cards–Some markets choose to accept not only SNAP cards but also debit and/or credit cards at their markets. If the market chooses to accept multiple types of cards, the market will need to work with a third party processor (TPP) to acquire their EBT terminal. There are many different TPPs available. Markets are encouraged to talk with other farmers markets that accept multiple cards for recommendations on TPP companies. Some TPPs will allow the market to either purchase or lease an EBT terminal. There are fees for purchase or lease of these terminals as well as operating fees. Most TPPs will charge a monthly data package fee, a swipe fee, and a percent of sales fee. These fees can vary from TPP so markets should explore the various TPPs, and compare fees charged, services provided, and the length and flexibility of the contract.
- Accepting SNAP via an iPhone or iPad–An iPhone/iPad app has been developed to allow markets and vendors to accept SNAP transactions wirelessly. In order to accept these transactions, USDA FNS requires a printed receipt to be given to the SNAP customer. There is a cradle accessory available for iPhones to print this receipt. If using an iPad, a printer is required on site that can serve this purpose.
Throughout the process of accepting SNAP benefits, records should be retained by the market. These records should include: the number of SNAP transactions per market, the number of tokens/scrip redeemed by vendors, and how and when vendors are reimbursed for tokens/scrip they redeem with the market. This information is usually printed when the market runs an end of day report from the EBT terminal. This information does not include personal or identifying information about the SNAP customers, but can be compiled over the course of a market season(s) to track the performance of the farmers market as it relates to SNAP customers. The information can then be used to share community impacts, seek sponsorships for the market, and promote the increased access to fresh, local foods for food insecure individuals and families.
Accepting SNAP at farmers markets allows increased access by SNAP benefits recipients to fresh, healthy, and locally produced foods. It also allows for increased revenues for market vendors. In 2013, over 2 billion SNAP dollars were distributed in Ohio (USDA, 2014). By increasing the choices where SNAP recipients can use these benefits to purchase healthy foods, the consumer wins, the market vendors win by increasing the consumer food dollars they capture, and the community wins by keeping those food dollars circulating in the community.
The SNAP farmers market application through USDA FNS is available at fns.usda.gov/snap/retailer-apply.
Choose A Business Structure. (n.d.). Retrieved November 15, 2018, from U.S. Small Business Administration: sba.gov/business-guide/launch-your-business/choose-business-structure
USDA. 2017a. National Count of Farmers Markets Directory Listing. USDA AMS Marketing Services Division. www.ams.usda.gov/sites/default/files/media/NationalCountofFMDirectory17.JPG (Accessed on 7-18-2018)
USDA. 2017b. Comparison of SNAP Authorized Farmers and Markets FY2012 and FY2017. fns-prod.azureedge.net/sites/default/files/snap/SNAP-Farmers-Markets-Redemptions.pdf (Accessed on 7-18-2018)
USDA, 2014. Supplemental Nutrition Assistance Program Benefits fns.usda.gov/pd/17SNAPfyBEN$.htm. (Accessed on 7-18-2018)
Wasserman, W., D. Tropp, V. Lakins, C. Foley, M. DeNinno, J. Thompson, N. Owens, and K. Williams. 2010. Supplemental Nutrition Assistance Program (SNAP) at Farmers Markets: A How-To Handbook. U.S. Department of Agriculture, Agricultural Marketing Service. dx.doi.org/10.9752/MS039.06-2010