Tens of thousands of low-income Americans may lose the ability to use their federal food assistance debit cards to buy fresh, healthy produce at farmers markets across the company due to bureaucratic red tape. The issue comes at a crucial time, when fruit and vegetable farmers are the height of the 2018 harvest, and farmers markets are at their busiest.
A national farmers market group has said it will keep the system running for the next 30 days, but a permanent solution is needed. The problem is that the Supplemental Nutrition Assistance Program’s Electronic Benefits Transfer cards can’t be processed in the same way as credit or debit cards and require special software. One of the biggest companies that makes the software, the Austin, Texas-based Novo Dia Group, said it was getting out of the business effective July 31.
That would leave about 1,700 of the more than 7,000 markets that allow the use of SNAP benefits with no way to process the transactions, according to a report by The Washington Post and the Food & Environment Reporting Network, a nonprofit journalism organization.
The USDA began providing farmers markets with the equipment to process SNAP benefits in 2012, and awarded the Farmers Market Coalition the contract to administer the program in 2015. Nova Dia was one of the companies the FMC hired to distribute tablets, card readers and software to farmers. The equipment is customized for states and cities that provide supplemental assistance.
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Novo Dia co-founder Josh Wiles said his company decided to get out of the business of processing SNAP purchases at farmers markets not only because of low profit margins, but also due to a USDA decision in April to award a $1.3 million contract to a new company, Financial Transaction Management.
“Our assumption was that we would be able to, for lack of a better word, bid on [the government contract], or at least be contacted [about our services],” Wiles told Modern Farmer. “And we weren’t.”
The U.S. Department of Agriculture’s Food and Nutrition Service, which administers the SNAP program, didn’t mention Novo Dia Group by name, but called the possible disruption of services a matter “of great concern” in a statement earlier this month.
The FNS said that moving forward, it “will continue to work with interested mobile payments providers, while seeking to modernize the approach by employing a bring-your-own-device model for accepting SNAP [benefit transactions” and that “business operators would purchase their own-point-of sale-equipment such as mobile phones and/or transaction terminals.”
According to the statement, “FTM has no role in supporting those markets equipped under previous contracts.”
The press release was dated the same day Financial Transaction Management, which lists only one employee and has no website, was expected to start taking orders for new equipment. About 360 farmers markets are on the waiting list for SNAP processing equipment, The Post said.
“I am aware of the current deficiencies in the farmers market merchant world and fully intend to work with my partners with a maniacal focus on executing in a manner that will quickly resolve this long overdue problem,” Financial Transactions Management CEO Angela Sparrow told The Post in an email.
Novo Dia Group is the largest provider of the software with its Mobile Markets Plus App. If it’s not part of the USDA program, the software fees will be too expensive for the vendors who rely on it, Wiles said.
“There is no backup option,” Ben Feldman, policy director for the Farmers Market Coalition, told the Huffington Post. “July and August are the busiest times of the year. Farmers were promised that they would have functioning equipment and they don’t, and right now there’s no program to help them get it.”
Feldman told The Post the loss of the Novo Dia platform “is a huge step back for our industry.”
“Farmers markets have been at the forefront of innovative efforts to support healthy food access among low-income shoppers while increasing farmer prosperity,” he said. “This situation highlights the need for a long term, reliable, affordable solution for the redemption of SNAP and other forms of electronic payments at farmers markets.”
The National Association of Farmers Market Nutrition Programs said in a statement that it will fund Nova Dia Group for 30 days, but a permanent fix is needed to avoid a looming crisis.
“This potential shutdown of service could translate to lost sales in the millions of dollars processed through farmers’ markets,” the group said in a statement. “The NAFMNP board of directors has thus decided to provide short-term emergency support to avoid any disruption in service.”
Phil Blaylock, the executive director of NAFMNP, told Modern Farmer his group may look at a more permanent fix, but said “we’re having to do this in steps primarily because of the machines of government.”
The decision by Nova Dia Group to exit the market also leaves at risk a range of incentive programs to improve low-income Americans’ access to healthful food. They include nonprofit groups like Wholesome Wave and the Fair Food Network, as well as a $100 USDA program, the Food Insecurity Nutrition Incentive, which matches or supplements SNAP benefits at farmers markets.
“It’s devastating,” Michel Nischan, CEO of Wholesome Wave, which offers matching dollars for SNAP spending at about 1,200 farmers markets, told The Post. “There are markets in areas considered food deserts that are the only places to buy fresh food, and they only exist because patrons can use SNAP or incentives.”
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Wiles told HuffPo “the greatest impact is going to be on people who rely on farmers markets the most.”
Among those affected is Ludy Arnold, 70, who lives in public housing in Washington, D.C. With local matching dollars, she has $20 to spend each week.
“I only have my Social Security,” Arnold told The Post. “So this is how I get my food. I depend on it.”
Photo: Jenna Fisher / Patch
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