BILL ANALYSIS
AB 537
Page 1
Date of Hearing: April 15, 2009
ASSEMBLY COMMITTEE ON AGRICULTURE
Cathleen Galgiani, Chair
AB 537 (Arambula) - As Amended: April 23, 2009
SUBJECT : Farmers' markets: electronic benefit transfers.
SUMMARY : Requires a farmer's market, Certified Farmers' Market
(CFM) or any open-air markets selling fresh produce, by January
1, 2012, to have in place a system for acceptance of electronic
benefit transfer (EBT) for sellers of produce, or they must
permit an approved third party organization to operate an EBT
system in the market on behalf of the produce sellers.
Specifically, this bill :
1)States that farmers markets, CFMs, and other open-air markets
selling fresh produce are important sources of low-cost
produce for Californians in need of food assistance.
2)Requires, if by January 1, 2012, any of these market places
has not implemented a system for their produce sellers to
accept EBT, the market must permit an approved Food and
Nutrition Service (FNS) organization to operate an EBT system
in their market on behalf of the produce sellers. Requires
the market to reasonably accommodate the approved FNS
organization in a manner that aids in the creation,
implementation, and operation of the EBT system.
3)Permits the Department of Social Services (DSS) to designate
or assign any non-profit public benefit, charitable or social
welfare organization that is or can be authorized as an FNS to
accept the EBT card on behalf of the produce sellers, but DSS
cannot designate or assign an organization if that
organization is another market competing or will potentially
compete with the market being served.
EXISTING LAW requires DSS to provide oversight of the federal
Supplemental Nutrition Assistance Program (SNAP) also known as
Food Stamp Program. DSS provides guidelines to local
governments that are required to administer SNAP locally. DSS
provides registration and approval services for entities to
become FNSs to accept SNAP's EBT payments. Fines and penalties
are established for anyone who fraudulently appropriates or
acquires food stamps (EBT) or falsifies counterfeits or alters
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food stamps (EBT).
California Department of Food and Agriculture licenses CFMs and
requires all farmers selling at CFMs to be certified as growing
the commodities they sell by the county agricultural
commissioner. Fees, fines and penalties are established for
certification, licensure and violations of these requirements.
Growers may sell their produce at roadside stands on or adjacent
to their farm; these farmers and those selling at CFMs are
exempt from state standard packing and labeling requirements.
The Business and Professions Code defines "Swap Meets" to
include, and which are interchangeable with, the terms flea
market, indoor swap meets, or open-air markets and are defined
as an event that occur more than six times in a 12-month period
at which two or more persons offer merchandise for sale or
exchange and that meets specific criteria.
FISCAL EFFECT : Unknown. Legislative counsel has keyed this
bill fiscal.
COMMENTS : According to the author, approximately 10 years ago,
when the federal government switched from paper food stamps to
EBT, access to CFMs became non-existent to individuals and
families receiving public assistance. AB 537 attempts to
reestablish that access by requiring CFMs to create their own
EBT program or by having a non-profit third party to establish
such a program. This bill also permits DSS to designate or
assign an approved or a qualifying entity to a market for the
purpose of establishing an EBT process, unless such an entity
could compete against the market that is to be served.
Currently, according to the U.S. Department of Agriculture's
SNAP report, within California there are 52 CFMs authorized to
accept SNAP benefits at 118 market locations. The markets are
using both wireless and hard-wired systems with script. This
works by having an approved FNS, be that the market or a third
party, at a central location for the EBT where a beneficiary
uses their card to receive script that can be used to purchase
fruits and vegetables in the market. No change is provided for
the script. At some point during or after market is concluded,
the farmers exchange the script received with FNS for currency.
There are two other nutrition programs occurring at CFMs
presently; one is the Senior Nutrition Program and the second is
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the Women, Infants and Children Program. Each of these programs
uses a booklet of negotiable script which the farmers can
deposit like a check. Typically the script comes in $2.00 units
and the booklets hold 10 scripts.
Several welfare, hunger, and health advocates have become
involved in outreach to farmers and community markets trying to
assist low income families with greater access to fruits and
vegetables. DSS has, when feasible, contacted the CFM managers
directly, to encouraging participation in SNAP.
Supporters state that access to fresh produce is important, and
should be available to everyone, especially low income families,
as fresh products lead to healthier diets and improved health.
AB 537 will increase such access to California-grown products
purchased directly from California farmers.
Opposition has come mostly from CFMs that state that the cost of
handling the exchange of tokens for EBT at many markets has made
it unfeasible to offer such a vital service. There were also
objections to the mandate of providing this service in order to
be certified in the previous version of this bill. In the
current form of AB 537, there remains a mandate to provide the
service at CFMs, therefore it is unclear that if a CFM or other
referenced markets do not provide this service, for whatever
reason, could they continue to operate after January 1, 2012.
The committee may wish to have author clarify the intent to the
committee.
AB 537 requires CFMs, or other referenced markets, to accept an
approved FSN third party onto their property for the purpose of
handling EBT transfers with the farmers of that market. It is
not clear that all farmers or vendors that participate in the
respective market are required to participate in the EBT
program. Further, there is no stated recourse for a market to
remove the FSN should any problems or conflicts occur between
the market, the farmers or vendors and the FSN third party.
The committee may wish to consider if it is appropriate for DSS
to designate or assign an entity to provide FNS services at CFMs
or other markets. DSS has been doing outreach to CFMs as
appropriate in order to encourage the participation in the EBT
program; it is not known if they have conducted the same efforts
toward the other markets referenced in AB 537.
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The terms "farmer markets" and "open-air markets" are not
Certified and Licensed such as the CFMs, the committee may wish
to clarify the meaning of these terms in order to ensure who
must be incompliance.
REGISTERED SUPPORT / OPPOSITION :
Support
Berkeley Farmers' Markets
California Catholic Conference
California Immigrant Policy Center
California Institute For Rural Studies
California Pan-Ethnic Health Network
California Rural Legal Assistance Foundation
Central Valley Partnership for Citizenship
Centro Binacional Para El Desarrollo Indigena Oaxaquen
COFEM
Everyone's Harvest Farmers' Markets
Food First
Food FUNdamentals
Having Our Say
Physicians for Social Responsibility
Planning and Conservation League
Policy Link
Public Health Law and Policy
San Mateo County Health System
Santa Cruz Community Farmers' Market
Sunflower CRMP
Watsonville Certified Farmers' Market
One Individual
Opposition
Agricultural Council of California
California Federation of Certified Farmers'
Markets
Cedros Avenue Farmers Market
MainStreet Oceanside
Manteca Certified Farmers Market/Manteca
Convention & Visitor Bureau
Monterey Bay Certified Farmers Market
Occidental Bohemian Farmers Market
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Oroville Hospital's Community Farmers' Market
Pacific Coast Farmers' Market Association
Redlands Certified Farmers' Market
Solana Beach Farmers Market
Studio City Farmers Market
One individual
Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084