BILL ANALYSIS
AB 537
Page 1
Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 537 (Arambula) - As Amended: April 23, 2009
Policy Committee: AgricultureVote:8
- 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires a farmers' market, a certified farmers'
market, or any other open-air market selling fresh produce that
does not already have a Food Stamps Electronic Benefits Transfer
(EBT) system in place by January 1, 2012, to obtain the system
or permit a Food and Nutrition Service (FNS) authorized
third-party organization to operate an EBT system on behalf of
the produce sellers.
FISCAL EFFECT
1)One-time costs of approximately $1 million ($500,000 GF) for
the purchase of the point of sale (POS) devices and the
initial activation fee for the 733 certified farmers markets
in the state that are currently are not participating in the
program.
2)On-going, annual costs in excess of $600,000 ($300,000 GF) for
the transaction fees and monthly charges associated with
maintaining the POS devices.
3)Unknown one-time and on-going costs of several hundred
thousand dollars to provide POS devices at an unknown number
of open-air markets and farmers' markets that are not
certified. The state does not collect data on how many of
those markets exist throughout the state and therefore the
fiscal impact cannot be calculated.
COMMENTS
1)Rationale . According to the author, the switch from paper
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food stamps to electronic benefit transfer (EBT), essentially
a debit card, rendered certified farmers' markets inaccessible
to individuals using their food stamp benefits for food
purchases. While many farmers' markets throughout the state
have begun to use POS devices which allow food stamp
recipients to use their benefits to purchase fresh fruits and
vegetables at farmers' markets, not all have acquired the
necessary equipment. This bill would require all open air
markets selling fresh produce to obtain a POS system or allow
a third-party to operate a POS system on behalf of the sellers
at the market.
2)Background . There has been an on-going national policy
discussion concerning the lack of fresh produce available to
many people who are living on limited incomes or receiving
food stamps or other forms of assistance. Many poorer urban
neighborhoods lack farmers' markets or even grocery stores
that sell fresh produce. An integral part of those
discussions and that effort has been to allow people using EBT
cards access to farmers' markets.
As of the end of 2008, 753 farmers' markets were authorized
nationwide to accept Supplemental Nutrition Assistance Program
(SNAP) (Food Stamps in California) benefits nationwide, a 34 %
increase from 2007. While the percentage of redemptions is
low, the amount of funds going to small farmers has increased
from about $1 million in 2007 to $2.7 million in 2008,
nationwide. Over 250 farmers' markets were operating a scrip
or token system nationwide.
3)Current Farmers' Market Utilization . The state has allowed
farmers' markets to operate POS EBT devices for close to a
decade. Currently, approximately 67 certified farmers' markets
in the state allow customers to utilize their food stamp
benefits when purchasing produce or other goods at the market.
In 2007-08, $633,000 in food stamp benefits were redeemed at
these markets, out of a total statewide food stamp benefit
redemption of close to $3 billion.
4)Third-Party Access to the Federal Financial System . The bill
requires a third party be allowed to provide access to EBT
benefits for individuals at farmers' markets. Preliminary
information suggests that it is unlikely that the federal
government will allow a contracted third-party to have access
to the federal financial system, which is what would likely be
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required for this provision to be operable.
5)WIC Farmers Market Programs . The Farmers' Market Nutrition
Program was established by Congress in 1992, to provide fresh,
unprepared, locally grown fruits and vegetables to
participants in the Women, Infants, and Children Nutrition
Program (WIC), and to expand the awareness, use of and sales
at farmers' markets. Currently, 46 states, including
California, participate in the federal program.
Eligible WIC participants are issued Farmers' Market Nutrition
Program (FMNP) coupons in addition to their regular WIC food
instruments. These coupons can be used to buy fresh,
unprepared fruits, vegetables and herbs from farmers, farmers'
markets or roadside stands that have been approved by the
state agency to accept FMNP coupons. The farmers, farmers'
markets or roadside stands then submit the coupons to the bank
or state agency for reimbursement. The Federal food benefit
level for FMNP recipients may not be less than $10 and no more
than $30 per year, per recipient.
6)Healthy Purchase Pilot . The pilot project is designed to
strengthen California's efforts to prevent obesity by
increasing access to fresh fruit and vegetables in low-income
communities where fruit and vegetables typically are
unavailable or costly. California, like other states, has a
growing obesity problem, with approximately 60% of adults and
25% of children obese or overweight. The consequences of
obesity are devastating to individuals, and include diabetes,
hypertension, heart disease, cancer and other debilitating
diseases. Physicians, nutritionists and other experts
recognize the importance of a diet rich in fruit and
vegetables as one key strategy in preventing obesity.
7)Committee Concern . Should the state focus its energy and
resources on supporting farmers' markets that serve low income
communities, rather than requiring that markets in all
communities (including such places as Beverly Hills,
Sausalito, Tiburon, Montecito that may not serve low income
families) have an EBT system in place? In addition, the
committee may want to consider targeting resources toward
programs like the Healthy Purchase Pilot, which encourage
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store owners in low income areas to carry fresh produce and
reward food stamps recipients who purchase fresh produce,
rather than investing in POS EBT devices that may not be
utilized.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081