Whether you work with government-sponsored nutrition
programs like the Snap program or not, you’ve probably heard the buzz by now
about farmers markets. Every spring they sprout up in vacant lots in urban
areas, in Yuppie neighborhoods, or in church parking lots anywhere in America.
We know where they are and what they are. What we don’t know are the business
issues underlying them.
The U.S. Department of Agriculture’s Office of Research andAnalysis has shed some more light on the inner workings of these markets with a
new study, “Nutrition Assistance at Farmers Markets: Understanding Current
Operations.” It provides a look into how these markets operate and what makes
them sustainable.
The data for the study were gathered from a national survey
of nearly 1,700 markets and 600 farmers who market directly to the public. The survey results covered into four areas:
1.
Operations
2.
Funding
3.
Products
4.
Snap participation
Operations
The study showed a gradual evolution in market operations.
For example, markets that were authorized by USDA for Snap EBT and were
actively accepting that form of tender were more organized and tended to have
more rules regarding market participation.
These markets also tended to partner with some other types
of organization. They also required the vendors to report the value of their
sales, and had operating expense greater than $25,000.
Direct sellers who actively sold to Snap program
participants were likely to be long-time, full-time farmers. Nearly two-thirds of them also sold in
farmers markets. And, if a farmer was currently Snap-authorized and redeeming,
he was more likely to have annual farm revenue above $100,000. That farmer was
also likely to see more than 25 percent of his total revenue come from direct
food sales.
Funding
Despite the focus on food, both markets and
direct-from-the-farm sellers rely on other sources of income, according to the
survey. Over four-fifths of farmers markets rely on vendor fees. Roughly 40
percent of farmers markets and 30 percent of direct sellers got outside financial
or in some cases non-financial aid. Sources of this aid included non-federal
government agencies, non-profit agencies or private businesses.
The Cooperative Extension Service was the largest provider
of aid to direct-marketing farmers.
Products
Both farmers markets and direct-from-the-farm sellers sold
more fruits and vegetables than any other product. However, direct-selling
farmers were less likely than markets to feature other products, according to
the survey.
Snap Participation and Barriers to Participation
When an entire markets not authorized to accept Snap
benefits it is still likely that some of the vendors in the market are
Snap-approved. The converse is also true, according the survey. When the market
is Snap-authorized, there may be some vendors within the market that do not
participate in the program, according to the study.
Lack of infrastructure was the factor most cited by
non-participating sellers and the reason for not participating in the Snap
program. Infrastructure could include a “card-accepting
device,” that allows the seller to “read” the card data, or telecommunications
connections that allow the seller to transmit the electronic card data for
authorization.
Issues
The USDA survey is a valuable tool for understanding the
business and operational issues of farmers markets. But questions remain, such
as: Exactly how viable a business is farmers market? Is it sustainable for the
long run? Could it survive without the subsidies and grants that 40 percent of
markets and 30 percent of direct marketing farmers receive, according to the
data?
And if the answer to the survivability question is no, then
rather than looking market business models, we should examine whether there is
a compelling public interest that underlies farmers markets. If the answer to
that question is yes, then perhaps markets should be treated as another
nutrition channel, similar to the School Lunch program or WIC, and federally
supported as such.
But there is even a problem with that. According to the
survey, just the process alone of becoming Snap-authorized may be problematic for
sellers and markets. This includes the application process, the necessary
end-of-day accounting, the potential need to hire staff to deal with the
paperwork and the cost of equipment. When
direct marketing farmers who redeem the most benefits only see a quarter of
their sales from the government program, there’s not a big incentive for other
farmers to join in.
“Nutritional
Assistance of Farmers Markets” is a good piece of research. But we still
have a long way to go before we figure out whether farmers markets will be a
viable piece to solving our nation’s nutritional puzzle, or a Saturday morning
curiosity for the Starbucks crowd.
