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Farm Markets Boost Sales via ‘Food Stamp’ Cards

Move brings fresher fruits, veggies to families in need

July 1, 2009 | By Diane Conners
Great Lakes Bulletin News Service

  Paul Fuhr says that accepting “electronic benefits transfer” cards has boosted his business by 20 percent.
DETROIT—Farmer Paul Fuhr still remembers the first time he saw a shopper use “electronic food stamps” at Detroit’s Eastern Market, where he sells apples, raspberries, and cider.

It was two summers ago, and the sight was memorable: A grateful woman lugged away three grocery bags of apples from his stand—all meant to feed her four kids. At the time, she told Mr. Fuhr that she could not have purchased his fruit if Eastern Market hadn’t made it possible to use the electronic cards, which work like debit cards and began replacing traditional food stamps in 2001.

Now, farmers markets able to process the electronic food cards are receiving an added boost, thanks to the Obama administration’s economic stimulus package. The administration recently increased food card assistance to financially strapped families by 13.6 percent. The administration’s goal was to help families better stock their kitchens with food and, at the same time, put some more money into the economy.

The increase went into effect in April, and by the first Saturday in June the change was working, putting more money in Eastern Market’s economy. That day the market set a record for card-based sales of $5,017, a 25 percent jump from the previous record, $4,047, set last October. And it was way up from the $74 day Eastern Market saw two years ago, when it launched its EBT—electronic benefits transfer—machine.

“To have $5,000 a day I think is tremendous,” said Randall Fogelman, vice president of business development for the market. “It is more money in the farmers’ pockets, and it is fresh produce in the hands of people who often have the least access to it. I see a lot of potential for growth. I see us having a $10,000 day at some point in the future.”

Other farm markets across the country also see that potential. About 455 out of the country’s 4,685 markets have added the phone lines, electricity, and administrative support for EBT cards. In Michigan, the number has grown from just three in 2006 to about 30 today, out of 200 markets.

Cardholders are responding to this expanded opportunity to purchase fresh, locally grown food. The Detroit market, for example, went from $36,484 in EBT sales in its first year to $83,061 in the year that concluded on June 30, Mr. Fogelman said.

The expanded EBT market is helping farmers, too.

“It has improved our business about 20 percent,” said Mr. Fuhr, 53, of Fuhr’s Valley View Fruit Farm, a third-generation farmer in Imlay City north of Detroit.

“It was a blessing that they put this system in down here,” he said. “The ones who are struggling, it makes you feel good when you can help them out. And I think it has helped the market a lot. With the economy the way it is, it gives us farmers a chance to survive and exist.”

Working a Tough Market
Mr. Fuhr knows about working hard to survive. In addition to raising nearly 10 acres of apples and raspberries and producing cider and jams with his wife, Laura, Mr. Fuhr makes ends meet by working as a custodian in the Warren Consolidated Schools. He counts his own children as fourth-generation farmers, and is proud that they are learning responsibility and business skills as they help him serve customers each Saturday at the Detroit market.

With the nation’s economy in the tank and Detroit’s auto industry on the ropes, Mr. Fuhr’s kids are honing those skills in a tough, changing market. Record numbers of American families now worry about how they will put food on the table. And more people than ever—33.1 million—are now getting help from the food assistance program, up 18.6 percent over the same time last year, according to the U.S. Department of Agriculture. That includes 1.4 million people in Michigan alone.

Many farmers used to accept the paper food stamps, but they weren’t set up to accept the electronic cards. That shut them out of an important market. It also shut many financially strapped families out of fresh markets, too, since farmers markets often are the leading source of fresh produce in inner cities. Many grocery stores have relocated to the suburbs, leaving behind only convenience stores with mostly packaged foods.

In 2007 the Michigan Farmers Market Association, housed in the nonprofit Michigan Food and Farming Systems organization in East Lansing, set out to change that. The association started providing technical assistance to farmers markets across the state so they could make the switch to accepting food cards.

It’s not too late for farmers markets—or, for that matter, staffed roadside farm stands—to launch EBT card programs this year, said Dru Montri, the market association manager. It can take 45 days for the U.S. Department of Agriculture to approve applications to become card-accepting vendors, but typically it take less than 30 days and sometimes just a week.

In fact, many markets have launched their food card programs in late summer. And the EBT machines are free to anyone with $100 in expected sales per month.

All but one of Michigan’s 30 participating farmers markets use a process similar to the one adopted by Eastern Market.

The sprawling market in the heart of downtown Detroit already had a Welcome Center to answer shoppers’ questions, and it’s there that users of the cards, known in Michigan as Bridge Cards, go to swipe their cards in the EBT machine and receive tokens good for food and vegetable seedlings on sale at the market.

If a person wants to spend $10, they get 10 token coins worth $1 each to spend with farmers, who then redeem them at the Welcome Center. The market does the accounting and mails a check to each farmer. If shoppers don’t spend all of their tokens, they can return them and reload their cards, or just save them for another day.

The Flint market, which runs indoors year-round, takes a different approach. It provides a phone line and electricity to each vendor; farmers have their own EBT machines and process the cards themselves, like any grocery store. Each vendor pays their own monthly fee for the line—about $30—and it’s profitable for them even with that fee, said market director Dick Ramsdell. The Flint market brought in $63,262 in Bridge Card sales last year.

Room for Growth
The more typical Michigan market has about $7,000 to $10,000 in annual card sales, said Ms. Montri, of the Michigan Farmers Market Association. But the markets are planning for continued growth. In fact, the question many have now is how to better promote farmers markets to people who are on food assistance, and how to better serve them as customers, she said. MIFMA is working with 10 markets this year on different promotional scenarios, such as flyers with simple instructions on how to shop at the markets.

Growth also could come if states boost their efforts to let people know when they qualify for food assistance. Nationally, just 67 percent of all people who are eligible for the food assistance have signed up, said Jean Daniel, director of public affairs for the Food and Nutrition Service in the U.S. Department of Agriculture.

“There is certainly a business case for every state to make sure everyone who is eligible for the program knows about it and can participate,” Ms. Daniel said. “The benefits are 100 percent federal dollars, and 98 percent are spent by the end of the month. So this is money that goes directly into the local economy.”

And every $5 in food assistance money spent generates $9.20 in local economic activity, she said.

Mr. Fuhr, the fruit farmer near Detroit, said he’s noticed a lot of longtime customers missing from the market who’ve recently returned. They’d lost their auto industry jobs—whether as a line worker or a secretary—and finally signed up for food assistance.

“They told me, ‘Until I got my card I couldn’t buy anymore. I just didn’t have any money,’” Mr. Fuhr recalled. “Some of them are embarrassed. I tell them, ‘There is nothing for you to be embarrassed about.’”

Diane Conners, a veteran journalist and former farmers market manager, is senior policy specialist for the Michigan Land Use Institute’s Entrepreneurial Agriculture program. Reach her at diane@mlui.org.

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