A symbiotic relationship between farmers and low-income produce buyers is at risk thanks to a technical glitch.
At least 1,700 farmers markets could soon lose their ability to accept SNAP (Supplemental Nutrition Assistance Program, or food stamps) dollars from low-income customers due to a gap in the government’s mobile processing contracts, The Washington Post reported.
Farmers markets across the country depend on government-provided technology to process electronic benefit transfer (EBT) debit cards used by food stamp recipients. In 2017, recipients spent more than $22 million at 7,300 farmers markets, a boon for small-scale farmers.
“Building trust with both farmers and families has been years in the making,” Adrienne Udarbe of Pinnacle Prevention, an Arizona nonprofit organization that manages a statewide program that doubles the value of SNAP benefits spent at farmers markets, told Talk Poverty, a website of the Center for American Progress. “Farmers now trust that SNAP is an income source they can rely on to feed their families, and SNAP customers now put their trust in us and in the market to provide them food. When you break that trust, it does a lot of damage and there’s a lot of repair that has to happen.”
In mid-July, Austin-based mobile payment company Novo Dia said it would end its service to farmers markets by the end of the month. By law, states must give farmers markets and select retailers no-cost options for processing payments. Novo Dia had developed the widely used Mobile Market Plus app that the U.S. Department of Agriculture provided free of charge to farmers markets, along with card readers and tablets. Since 1,700 markets relied on Novo Dia’s app and hardware, and only Novo Dia’s app works on Apple-based systems, the company processed close to 40 percent of all SNAP purchases nationwide.
But Nova Dia said SNAP transactions are highly regulated and low-profit, and without necessary support from the USDA, they were having a hard time staying sustainable, much less profitable.
The USDA recently gave the $1.3 million SNAP mobile payments processing service contract to Financial Transaction Management of Virginia.
Brandon Lipps, the USDA’s acting deputy undersecretary for Food and Nutrition Service, issued a statement on July 14 that promised to avoid service disruption. In it, he said the USDA awarded the new contract to Financial Transaction Management in March, and the new company was required to start processing applications for new equipment in July, but it is unclear how long it will take to get the equipment to markets.
A group of 14 Democratic senators sent a letter two days later to Lipps, urging him to explore every possible option to ensure no disruption in EBT service at farmers markets, something that would have “devastating impacts on SNAP families as well as farmers who sell their products to these local families.”
In a last-ditch effort, the non-profit National Association of Farmers Market Nutrition Programs said it would foot the bill to keep Novo Dia operational through August. Last Friday, New York announced it had reached a deal with Novo Dia to keep the system operational at markets in their state through January, but other states are still grappling with what to do.
The best solution would be development of generic software for use on any phone or computer terminal, something the USDA has said it wants to do. The question is, as with all government processes, just how long it will take. On the bright side, with a government mandate to convert to electronic processing by 2020, the USDA’s Women, Infants and Children (WIC) Program will likely benefit from getting all these kinks ironed out now.