Family purchasing product at farm stand
Updated: April 11, 2024
By Ginger S. Myers

Alternative Sources of Payment Can Increase Sales of Fruits and Vegetables 

Producers often think of their sales in terms of marketing outlets - farmers markets, CSA shares, farm stands, restaurants and institutions, and retail outlets. But there is also substantial sales potential with clients that may be using alternative forms of payment. These include EBT cards with SNAP benefits, senior coupons, market bucks, or other market incentives to purchase locally grown fruits and vegetables. In Maryland, we have programs that provide payments and possible tax credits. The Maryland Department of Agriculture, The Maryland Farmers Market Association, and the University of Maryland’s Food Supplement Nutrition Education Program all support training for producers and clients to make this import connection from Farm to Plate.

These programs are key elements of the USDA's new 2.0 version of the Know Your Farmer, Know Your Food Compass initiative which coordinates the Department's support for local and regional food systems. USDA has identified local and regional food systems as one of the four pillars of rural economic development.

  • The 2012 Census of Agriculture indicates that more than 160,000 farmers and ranchers nationwide are tapping into growing consumer demand by selling their products locally. This segment of agriculture is a vibrant growth area that is drawing young people back to rural communities, generating jobs, and improving the quality of life in rural communities.
     
  • In FY13-14, USDA made over 500 infrastructure investments that create new markets for local food- including food hubs, scale-appropriate processing, and distribution networks - that are connecting farmers and ranchers with new sources of revenue and creating jobs.
     
  • Since the program began in 2012, USDA's Farm to School program has funded 221 projects in 49 states, the District of Columbia, and the Virgin Islands. According to the USDA's Farm to School Census, schools spent over $385 million on local food purchases during the 2011-2012 school year.
     
  • USDA has expanded access to healthy foods in underserved communities by making EBT available at farmers' markets. Over 5,000 farmers markets now accept EBT, and SNAP redemption at farmers markets nationwide rose from $4 million in 2009 to over $18 million in 2014.

While accepting these alternate forms of payment may require additional steps in receiving the actual money, they can make a substantial addition to a producer’s total sales. They also help ensure good food for all Marylanders.

Within Maryland

  • Food Donation Tax Credit Pilot Program Now in Effect; Southern Maryland Farmers Eligible for Up to $5,000 State Tax Credit
    Governor Larry Hogan signed into law the Farm Food Donation Pilot Program (SB 416) authorizing the Secretary of Agriculture, in conjunction with the Comptroller, to issue a State tax credit of up to $5,000 per calendar year to qualified farmers or farm businesses that make eligible food donations and certified organic produce donations to charitable organizations. The program is limited to Anne Arundel, Calvert, Charles, Montgomery, Prince George’s, and St. Mary’s counties and only for tax years 2017, 2018, and 2019. The cumulative value of the donations shall not exceed $250,000 per fiscal year.

    Eligible food donations are eligible for a tax credit of up to 50 percent of the value of the donation, not to exceed $5,000 per calendar year. Certified produce donations are eligible for a tax credit of up to a value of 75 percent. The Secretary of Agriculture shall publish the values of the food donations and the certified organic produce weekly.

    Farmers must submit a food donation form to a participating Tax Credit Administrator for the Maryland Food Donation Pilot Program.
     
  • Maryland Farm to School Program
    “Farm to School” is a term that strives to bring locally-produced foods into school cafeterias; hands-on learning activities such as farm visits, producers visiting schools, school gardening, and culinary classes; and the integration of food-related education into the standards-based classroom curriculum. Farm to school includes all types of producers and food businesses including farmers and waterman as well as food processors, manufacturers, and distributors.
     
  • Supplemental Nutrition Assistance Program (SNAP) with Electronic Benefit Transfer (EBT)
    Electronic Benefits Transfer (EBT) is the electronic payment system of debit cards that the government uses to issue Supplemental Nutrition Assistance Program (SNAP) benefits to eligible recipients. SNAP benefits used to be paper-based and easy to redeem at farmers' markets; when the EBT mandate passed, benefit redemption at farmers' markets declined dramatically. Farmers' markets enabled to accept EBT re-establish an opportunity for low-income shoppers to access fresh, locally grown foods. EBT is in the pilot stages for other government nutrition assistance programs (USDA-FNS EBT).

    Frequently Asked Questions 

    The Supplemental Nutrition Assistance Program, is a federal program that provides nutrition benefits to low-income individuals and families that are used at stores to purchase food. The program is administered by the USDA Food and Nutrition Service (FNS) through its nationwide network of FNS field offices. Local FNS field offices are responsible for the licensing and monitoring of retail food stores participating in SNAP.

Federal Programs

United States Department of Agriculture
Food Assistance Programs and Service

What is the purpose of snap?

Supplemental Nutrition Assistance Program (SNAP) SNAP offers nutrition assistance to millions of eligible, low-income individuals and families and provides economic benefits to communities. SNAP is the largest program in the domestic hunger safety net

USDA's Food and Nutrition Service oversees the administration of 15 nutrition assistance programs, including SNAP, that touch the lives of one in four Americans over the course of a year.  These programs work together to form a national safety net against hunger. Visit www.fns.usda.gov for information about FNS and nutrition assistance programs

“These grants increase the availability of fresh fruits and vegetables to SNAP customers and further encourage them to purchase and prepare healthy foods for their families using SNAP benefits,” said Concannon. “In general, research shows that about 20 cents of every SNAP dollar spent on food ends up in the pocket of American farmers. Installing wireless technology at farmers markets expands the customer base for markets and increases the share of the SNAP dollar that goes directly back to local farmers and into local economies.”

USDA has made expanding SNAP recipients’ access to fresh fruits and vegetables through farmers markets a priority in recent years. In 2008, about 750 farmers markets and direct marketing farmers accepted SNAP. In 2012, over 3,200 participated – a four-fold increase in markets, which was accompanied by a six-fold increase in redemptions at these outlets.

Research shows that many farmers markets and direct marketing farmers value their ability to accept SNAP as a means to attract a wider customer base and increase sales.  At the same time, a significant number cited the cost of electronic benefit transfer (EBT) equipment as a barrier to accepting SNAP. These findings and others are part of USDA’s Nutrition Assistance at Farmers Markets: Understanding Current Operations report released last week. 

Impacts

Farmers' markets are making real strides in increasing fresh food access for low-income SNAP participants. $24.4 million in SNAP benefits were redeemed at farmers' markets across the US in 2017, a 35.2% increase from 2012. This dramatic increase can be attributed to markets investing in innovative outreach, education, and incentive programs, and support from federal, state, and local governments.

$24.4 million is a number to be proud of, however, it represents only a small fraction of total SNAP sales. Nevertheless, the rapid growth of SNAP usage at farmers markets in recent years demonstrates that even a small increase in the percent of SNAP benefits spent at farmers markets can make a real impact—more fresh, nutritious foods going to families who need it, and millions of dollars in revenue going directly to farmers.

Resources for Producers: Providing Food and Financial Feasibility