A Boost to Nutrition Assistance During Pandemic Is A Boost To Farmers’ Markets

How COVID-19 Spurred Big Expansions to Nutrition Assistance Programs

Before the pandemic, nutrition assistance programs were in a tough spot. Although they were widely utilized and effective at keeping families fed, their cost made them a popular target for conservative politicians, culminating in a 2019 proposal to institute tighter work requirements that threatened to kick more than 600,000 people from the SNAP program. But the arrival of the pandemic put those plans on hold. With millions of people newly unemployed, SNAP enrollment swelled dramatically: more than 5 million people have joined the program since March 2020, increasing total enrollment to 42 million people, or one in eight Americans, today.

Along with that swell came changes to SNAP and other programs: relaxed eligibility rules and  increases in the maximum available benefits meant that many families are still getting an unprecedented amount of money for food. While some of those changes will expire as the pandemic wanes, others, like a shift in how benefit amounts are calculated, mean that a more generous safety net is available for the foreseeable future.

This is especially true for families with kids. One of the biggest new programs, Pandemic Electronic Benefit Transfer (P-EBT), aimed to replace school lunches (for children no longer able to attend in-person) by compensating families for lost meals. Especially in school districts with universal free lunch, P-EBT provided a significant amount of money to household food budgets, reducing food insecurity for recipients by 28 percent.

Farmers’ Markets Benefit From Increased Food Spending

Many families qualifying for multiple programs found themselves with an unprecedented amount of money they could spend on food, sometimes 15 times more than their original benefit.  Like other food vendors, farmers’ markets have been a big beneficiary. USDA data shows that from between the 2019-2020 fiscal years, SNAP spending at farmers’ markets increased by almost 45 percent nationwide.

GrowNYC, which runs farmers’ markets across New York City, saw significant increases in their nutrition assistance transactions. Jessica Douglas, senior manager of GrowNYC’s Food Access Initiatives, says that SNAP spending at the markets plateaued around $1 million before the pandemic. But with the expansion of assistance programs, that spending increased to $1.5 million in 2021 and climbed to $2.3 million by September 2021. Significantly, this only includes situations where GrowNYC exchanges EBT money for market tokens that shoppers redeem with vendors. Because many vendors can process EBT transactions themselves, sales increases via these supplemental assistance funds may have been higher.

Douglas says that while increased SNAP benefits and changes to the Thrifty Food Plan contributed to this increase, the most significant factor was the expansion of P-EBT that allowed all families with children in public schools to collect additional benefits.

Nutrition Incentive Programs Fill The Gap

Expanding funds for assistance programs like SNAP and P-EBT has been great for  farmers’ markets. Additionally, nutrition incentive programs, which encourage people on SNAP and other programs to buy fruits and vegetables by giving funds specifically for healthy foods, also scaled up operations during the pandemic. It’s a win for both SNAP recipients and farmers, who can sell a lot more produce.

With the dramatic increase in SNAP spending, nutrition incentive programs saw dramatic growth. In 2020 alone, spending of Double Up Food Bucks, which matches SNAP money spent on healthy foods, increased 98 percent nationwide. As Kellie Boyd, director of Michigan’s Double Up program, explains, a lot of the increased traffic came from newly eligible customers, particularly those getting assistance through the P-EBT program. New shoppers meant new operating procedures for programs, like expanding hours for customer assistance hotlines and getting new locations up and running.

“We were working overboard behind the scenes to make sure we could onboard new sites,” Boyd says, pointing to more than 20 new Michigan sites opened in 2020. In total, her office was able to increase Double Up spending at farmers’ markets in the state from $575,000 to $888,000 last year. While program data through 2021 isn’t available, she says spending has remained high.

Traditionally, enrollment in programs like Double Up have been limited by funding. Many organizations get their funding through the USDA’s Gus Schumacher Nutrition Incentive Program (GusNIP), which requires organizations to match federal funding with money from non-federal sources, usually state governments or private donors. The matching requirement is a serious limitation for many programs, forcing many to limit operations and place daily caps on how much families could be reimbursed for their purchases.

But as food security concerns mounted nationwide during the pandemic, the USDA made increased funding available to nutrition incentive programs and waived the match requirement on those emergency funds.

Noah Fulmer, director of national partnerships for the Fair Food Network (which runs the Double Up Food Bucks program), says the change allowed the organization to expand Double Up’s reach in both urban and rural areas in the 28 states where the program operates. “With the stimulus, we demonstrated that when the dollars can go out quickly and efficiently to groups around the country, they can really meet that need around hunger and nutrition security.”

Fulmer also notes that states like Hawai’i and Iowa used funding received through the Coronavirus Aid, Relief, and Economic Security Act (CARES) for Double Up programs, allowing the program to serve new customers and lift transaction limits.

Local governments have also received funding directly from GusNIP grants. New York City recently received $5.5 million for their Health Bucks initiative, a similar program to Double Up. In the past, customers could get $2 of Health Bucks for every $5 of SNAP money they spent, but with the new grant, the city was able to match SNAP spending dollar-for-dollar, with a cap of $10 per day. A lot of that cash gets redeemed at GrowNYC’s greenmarkets, so while the changes only went into effect recently, GrowNYC’s Douglas says they’ve already seen an increase in people making use of Health Bucks.

Future Priorities

The pandemic expansion of the country’s food safety net is one of the biggest increases in social spending in recent history. The work is far from over: analysts at the Urban Institute estimate that a modestly-priced, home-cooked meal is still unaffordable to SNAP recipients in 21 percent of US counties. But advocates are hoping that between the avoided toll of food insecurity and the business-sustaining revenues seen by farmers and other food producers, the benefits of more aggressive action on food security are obvious enough to justify continuing them.

Fulmer says that one of the Fair Food Network’s main policy goals is continuing to grow funding for nutrition incentive programs in the 2023 farm bill, which would allow organizations like his to scale up and meet demand. This is particularly important as newer organizations try to prove to grocery stores and farmers’ markets that investing in the equipment and training to accommodate incentive programs will be worthwhile. Larger chains, for example, might hesitate to invest in food access initiatives if they aren’t confident that funding will be around for more than a year or two.

Increasing federal funds, especially if paired with more flexible match requirements, could also help solve an equity problem: nutrition incentive funding has traditionally gone to a small number of well-established organizations, leaving people outside of their operational coverage behind. A bigger pool of available funds without a match requirement would make the grant process less competitive and allow newer, smaller programs to dramatically expand their reach in places where state governments and private donors aren’t as willing to contribute funding.

Fears of rising inflation are bringing renewed scrutiny to federal spending, so even though the expansion of food assistance and nutrition incentive programs has been effective, continued funding at this rate is far from guaranteed. But considering the broader economic benefits that food assistance programs have demonstrated, advocates like Fair Food Network’s Fulmer are hopeful: “The program has always had bipartisan support and appeal, and it’s not just a program that helps families afford healthy food,” he says. “It’s also a program that helps farmers. It helps local grocers. Those dollars support the local economy in a way that’s really been able to grow this work and grow the number of different stakeholders that see themselves in this work.”