Food Stamps Go Digital, Disrupting Farmersí Market Purchases

During the next two years, low-income Californians who receive food stamps will stop using paper coupons to make their purchases. Instead, they will access food stamp benefits by means of a plastic card similar to an ATM card. The system, called Electronic Benefits Transfer (EBT), is mandated by federal law to be rolled-out nationwide. Itís already operational in forty-six states and four of Californiaís fifty-eight counties-Alameda, Yolo, San Bernardino, and San Diego. While state and federal officials laud the system for reducing paperwork and eliminating the stigma felt by food stamp recipients, public health professionals and community activists worry about its affect on food access.

Consider the impact on farmersí markets, which many inner-city families depend on to fill the nutritional gaps left by a decades-long exodus of grocery stores. Across the state, hundreds of farmersí markets are authorized by the USDA to participate in the food stamp program. Farmers accept food stamp coupons in exchange for fresh fruits and vegetables and the USDA redeems the coupons for cash. But in the pilot counties of Yolo and Alameda, farmersí markets are suffering under the digital system. Developed by the Manhattan-based international bank Citicorp, under contract with the state, the system requires participating markets to use a digital machine to swipe food stamp cards. The changeover is proving too costly or complicated for many farmers.

In anticipation of the problems, state officials set up Alameda County pilot programs to test two models. At the relatively small Berkeley Farmersí Market, customers swipe their cards on a wireless machine at the central information booth and receive wooden tokens in the amount they expect to spend. After shopping, they return extra tokens and have their cards credited for the amount returned. Farmers visit the information booth at the end of the market day to exchange the tokens theyíve earned for cash. This model works well for small markets with staffed information booths.

The Old Oakland Farmersí Market in downtown Oakland is piloting a second model, for large markets that redeem a high volume of food stamps but have no staffed information booth At this market, the state has been trying to work with individual farmers to help them become USDA authorized to receive food stamps and use an EBT point of sale machine. For several reasons, his model has been much less successful, with only three farmers signing up for the new system. Although the market has a high redemption, each individual farmer may not serve enough food stamp recipients to make it worth the trouble of signing up. Additionally, most of the vendors are limited English speakers and neither the state nor Citicorp have the language ability to help them.

Due to the barriers in making the EBT system work at open air markets, Alameda Countyís farmerís markets had difficulty accepting food stamps the first two months of EBT implementation. Additionally five farmerís markets decided not to participate at all. The result: a deteriorating diet and financial stress for the low-income families who shopped at these markets and the farmers who depended on their patronage.

Ethnic mom-and-pop groceries and mobile vendors, an important food source in such large cities as Los Angeles, are expected to suffer problems similar to the farmersí marketsí making it more difficult for them to participate in the food stamp program. Elderly and disabled consumers, who depend on others to assist them or to shop for them, may be hit especially hard, as the digital swipe card makes all of their benefits instantly accessible, increasing their vulnerability.

Only through community vigilance can EBT be made to work for low-income Californians and the food venders who serve them. To learn more about EBT advocate groups forming in your county, get in touch with Debra Garcia at Consumerís Union: (415) 431-6747 or

-Frank Tamborello and Jessica Bartholow, California Hunger Action Coalition