Homegrown Alabama Economic Outreach Programs Report

Report I prepared for the Homegrown Alabama Farmers Market. March 2012.
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Homegrown Alabama Economic Outreach Programs Report A Special Report for Homegrown Alabama Prepared by the Auburn University Department of Agricultural Economics & Rural Sociology A Special Report for Homegrown Alabama Prepared by the Auburn University Department of Agricultural Economics & Rural Sociology 1 Table of Contents Background Tuscaloosa, Alabama Supplemental Nutrition Assistance Program (SNAP) SNAP at Farmers Markets Canterbury Chapel Deacon’s Deli April 2011 Tornado Outbreak 3 3 4 5 5 6 Economic Outreach Programs Overview SNAP and Match Deacon’s Deli Bama Cash 7 7 8 11 14 Conclusions References Acknowledgements 17 18 19 2 3 Background Tuscaloosa, Alabama Alabama is one of the most socioeconomically challenged states in the United States of America. According to the USDA Economic Research Service, 18.9% of Alabamians live in poverty, including 25% of Alabama’s children. This poverty is only made worse by food insecurity; 17.3% of Alabama’s households are considered to be Food Insecure, with 7% of those experiencing Very High Food Insecurity. In addition to these factors, approximately 32.3% of Alabamians are considered to be obese. This highlights the need to increase availability of high-quality, nutritious foods to those living in poverty and experiencing low food security. Tuscaloosa, Alabama is located in West Central Alabama. With a population of approximately 91,000, it is the fifth largest city in Alabama. As of 2011, 19.9% of Tuscaloosa County’s residents lived in poverty, and four of the cities 28 census tracts were considered to be “Food Deserts” by the US Department of Agriculture. Tuscaloosa “Food Deserts” From USDA Food Desert Finder 4 The USDA defines a “food desert” as, “a low-income census tract where a substantial number or share of residents has low access to a supermarket or large grocery store.” In order to qualify as a “low-income community,” a census tract must have a poverty rate higher than 20%, or a median family income below 80% of the area’s median income. In order to qualify as a “low-access community,” at least 500 people (or 33% of the census tract’s population) must live more than one mile or more away from a supermarket or grocery store. The Tuscaloosa census tracts that qualify as food deserts, shown in the previous map, include the entirety of The University of Alabama campus. While the current literature provides many varying definitions of what a food desert is or is not, it is evident that there are food access issues, particularly among children, students, and minority families, particularly in Tuscaloosa. Supplemental Nutrition Assistance Program (SNAP) Initially started in the late 1930s as the Food Stamp program, The Supplemental Nutrition Assistance Program was authorized by the 2008 Farm Bill, renaming the program to reduce stigma and making electronic benefits transfer (distribution of benefits using debit cards instead of paper stamps). To qualify, households must have less than $2,000 in resources available, with exceptions made for homes with elderly individuals. While benefits are funded at the Federal level, benefits are administered at the State and Local levels. In Alabama, approximately 67% of qualifying households participate in the SNAP program, receiving an average monthly benefit of $289. In Tuscaloosa County, 12% of all residents receive SNAP benefits, including 27% of Children and 27% of AfricanAmerican residents. 5 SNAP at Farmers Markets According to the USDA, a Farmers’ Market that can accept SNAP benefits using Electronic Benefits Transfer (EBT) is defined as “…a multi-stall market at which farmer-producers sell agricultural products directly to the general public at a central or fixed location, particularly fresh fruit and vegetables (but also meat products, dairy products, and/or grains).” For markets that qualify under this definition, there is a three-step process for being eligible for SNAP Authorization: 1. Creating a USDA Account Online 2. Filling out an Online Application (with information such as owner's name, home address, social security number, and estimated sales) 3. Submitting corroborating paperwork to the appropriate regional Food Nutrition Service office, determined by region. Once approved, employees (or volunteers) must be trained in SNAP use and an active phone line, along with a power connection, is required to use the EBT device, which operates in the same manner as a debit or credit card. Currently, out of the 121 Alabama Farmers Markets, only three accept SNAP benefits through EBT. Homegrown Alabama is the only market that has a centralized system in which the market itself is registered as a SNAP vendor, streamlining the process for farmers. Canterbury Chapel Deacon’s Deli Canterbury Episcopal Chapel and Student Center is an Episcopal parish located adjacent to The University of Alabama. As part of their food outreach ministries, the parish operates a food pantry called Deacon’s Deli. The Deacon’s Deli provides food assistance to individuals and families on Tuesday mornings of each week, using donations from the West Alabama Food Bank and from parishioners. 6 April 2011 Tornado Outbreak On 27 April 2011, an EF4 tornado struck Tuscaloosa, killing 43 with over 1000 injured. Much of the area struck by the tornado was inhabited by residents living under the poverty line, and much of the damage was within census tracts considered to be Food Deserts. Supplemental Nutrition Assistance Program (SNAP) eligibility requirements were relaxed to allow many of those affected by the tornado to receive benefits, even if previous barriers such as income had prevented them from receiving benefits. 7 Economic Outreach Programs Supplemental Nutrition Assistance Program (SNAP) and Match, Deacon’s Deli, & Bama Cash programs Overview In order to improve access to local, healthy foods, Homegrown Alabama has adopted several programs that have increased community access through the weekly Homegrown Alabama Farmers Market. These programs are primarily geared towards improving access to local food in communities that are underserved, particularly students, those living with income restrictions, and the African-American residents of the Tuscaloosa community. Over the span of the 25-week 2011 market season, the Homegrown Market utilized three programs that expanded the amount of local, healthy food available to the aforementioned target communities. These programs were • Accepting Supplemental Nutrition Assistance Program (SNAP) benefits, as well as the SNAP and Match program, • Continuing the Deacon’s Deli voucher program with Canterbury Episcopal Chapel and Student Center, and • Accepting Bama Cash, the University of Alabama’s student debit system. These three programs created $6,449 in sales for Homegrown’s vendors, with vendors receiving an average of $276.12 in additional sales thanks to Homegrown’s Economic Outreach Programs. Additionally, through looking at the spending patterns of Homegrown’s customers, we can see that these three programs were 8 effective in improving access to healthy, local food in the Tuscaloosa community, as the majority of funds (58%) was spent on produce, and that participants in the Economic Outreach Programs became repeat customers through a metric we created called the “Redemption Rate.” SNAP and Match Upon deciding to accept SNAP Benefits at the weekly Market, Homegrown collaborated to develop a Match Incentive program with Canterbury Chapel. Canterbury gave Homegrown a $1,500 grant, and so that for every $10 of SNAP/EBT redeemed by beneficiaries, they received an additional $5 through the SNAP and Match Program. According to the USDA, most Farmers Markets that accept SNAP benefits through EBT utilize some kind of incentive program for SNAP beneficiaries. This process, as well as the process for farmer payment, was streamlined through a centralization of payment. EBT users decide and pay the amount of SNAP benefits they would use to the Homegrown volunteers. Then, Homegrown would give tokens for that amount plus the amount of match, which could be used as currency at each farm’s booth. At the end of the market, farmers traded these wooden tokens for cash and volunteers recorded the value of tokens received by each vendor weekly. Thus, we know precisely how SNAP beneficiaries used their funds from week to week, and have a good idea of what goods they bought. The SNAP and Match program created a total of $4,834 of additional sales for Homegrown’s vendors. 9 SNAP Paid to Farmers (Weekly) $600.00 $450.00 $300.00 $150.00 $0 5 May 11 9 Jun 11 14 Jul 11 18 Aug 11 22 Sep 11 As is shown by the above chart showing weekly expenditures in the SNAP and Match program, the beginning of the market saw larger dollar outlays at Homegrown’s vendors, perhaps due to Homegrown’s aggressive marketing campaigns leading up to the market, as well as the large influx of emergency SNAP benefits into Tuscaloosa in light of the 27 April tornado outbreak. Later in the market, a sharp drop in funds paid out to farmers can be observed, and this can be explained since the Match program ran out of funds in early September, meaning SNAP and Match users were unable to increase their funds though the Match program. When looking at the SNAP and Match program expenditures by product category graph on the next page, it shows that SNAP and Match customers are mostly interested in buying produce and grass-fed beef. 10 SNAP and Match Program Expenditures (By Category) Produce (58%) Goat Cheese (8.5%) Honey (2.9%) Flowers (0.04%) Grass-Fed Beef (26%) Eggs (1.2%) Baked Goods (3.2%) Herbs (0.18%) To get more insight into the SNAP and Match program shoppers, we created a metric called the “Redemption Rate," calculated simply as the amount of funds paid out each week to farmers divided by the sum of the amount of SNAP benefits processed through EBT and the match program. The chart on the next page shows the Redemption Rate patterns for the 2011 Homegrown market season. The redemption rate can tell us several things about Homegrown shoppers that utilize the SNAP and Match program, but most importantly it can show that the SNAP and Match participants are repeat customers. Weeks with Redemption Rates above 100% are evidence that SNAP and Match program participants will save benefits from previous weeks and return to use them later. 11 SNAP and Match Redemption Rate 350% 233% 117% 0% 5 May 11 9 Jun 11 14 Jul 11 18 Aug 11 22 Sep 11 The redemption rate can also tell us that redemption is higher during weeks where there are marketing events (particularly 2 June’s Squash The Heat Festival, 2 August’s Herb Festival, and 20 October’s Fall Festival), and the insight that redemption is lower during markets where there in inclement weather (such as 26 May, 7 July, and 14 July). Deacon’s Deli The Deacon’s Deli voucher system works in a similar way to the SNAP and Match program. Paper vouchers are given out at Tuesday Deacon’s Deli sessions, and the vouchers were used at individual farm stands by participants, with farmers converting the vouchers into cash at the end of each market. The Deacon’s Deli voucher program created a total of $1,247 of additional sales for Homegrown’s vendors. 12 Deacon’s Deli Paid to Farmers (Weekly) $150.00 $112.50 $75.00 $37.50 $0 5 May 11 9 Jun 11 14 Jul 11 18 Aug 11 22 Sep 11 As can be seen from the chart above, the Deacon’s Deli program is much smaller in scale than the SNAP and Match program, as participants receive (and subsequently spend) smaller amounts. There is an influx of use in the late summer, perhaps due to emergency aid and tornado assistance from other sources slowing down compared to earlier in the summer. Early in September, the Deacon’s Deli program ran out of new vouchers to give out, reducing the amount available to participants. Deacon’s Deli Redemption Rate 200% 150% 100% 50% 0% 5 May 11 9 Jun 11 14 Jul 11 18 Aug 11 22 Sep 11 13 The redemption rate for Deacon’s Deli program participants is generally lower than that of the SNAP and Match Program, which may imply that they are less likely to be repeat customers, although there are several weeks with redemption rates over 100%, including the first week, indicating that Deacon’s Deli customers may have carried over benefits from previous years of the program. Deacon’s Deli Funds Spent (By Category) Produce (88%) Goat Cheese (0.6%) Baked Goods (2.18%) Grass-Fed Beef (9.0%) Eggs (0.3%) One of the major upsides, however, of the program is that Deacon’s Deli customers spent an overwhelming majority of their funds on fresh produce (88%, compared to 58% for SNAP and Match participants and 60.1% overall for all three Economic Outreach Programs). 14 Bama Cash The Bama Cash program is a preloaded debit account that University of Alabama students, faculty, and staff can access using their identification cards (called Action Cards) at vendors both on and off of The University of Alabama’s campus. It is predominantly used by students, so Homegrown became a Bama Cash redemption site upon the return of students to campus in September. The Bama Cash program created a total of $408 of additional sales for Homegrown’s vendors, despite only being available for a mere six weeks of the market. Bama Cash Paid to Farmers (Weekly) $150.00 $112.50 $75.00 $37.50 $0 15 Sep 11 22 Sep 11 29 Sep 11 6 Oct 11 13 Oct 11 20 Oct 11 The redemption rate of Bama Cash users is also similar to the SNAP and Match program’s redemption rate, where a spike at the end of the market season can be observed. Bama Cash Redemption Rate 110% 100% 90% 80% 70% 22 Sep 11 29 Sep 11 6 Oct 11 13 Oct 11 20 Oct 11 15 Because of the stricter restrictions faced by SNAP and Match Program and Deacon’s Deli Voucher program participants on how funds can be used, it can be observed that Bama Cash users were able to purchase a wider variety of items at the market. Bama Cash Funds Spent (By Category) Produce (58%) Goat Cheese (8.5%) Honey (2.9%) Flowers (0.04%) Grass-Fed Beef (26%) Eggs (1.2%) Baked Goods (3.2%) Herbs (0.18%) While less was spent on produce, more was spent on other expenditure categories, particularly barked goods. This could be attributed to the lack of traditional kitchens in student on-campus housing, as well as to student tastes more generally. 16 17 Conclusions Through measuring cash sales, expenditures by category, and the Redemption Rates of Homegrown Alabama’s Economic Outreach programs, we can see that they are achieving their goals of increasing access to fresh, local produce to the Tuscaloosa, Alabama community. More importantly, though, we can conclude that there is demand for highquality, local produce in underserved communities, particularly families that utilize programs such as the Supplemental Nutrition Assistance Program (SNAP) and those that use food banks to supplement their food needs (such as the Deacon’s Deli program). In turn, members of these underserved communities became loyal, repeat customers, contributing to the local economy by patronizing local farmers, increasing the diversity of farmers market clienteles, and improve their own health along with the health of their community. 18 References The New York Times (2009) Food Stamp Usage Around The Country. Trust for America’s Health (2012) Key Health Data About Alabama. USDA Agricultural Marketing Service (2010) Supplemental Nutrition Assistance Program (SNAP) at Farmers Markets: A How-to Handbook. USDA Economic Research Service (2011) Food Desert Locator. USDA Economic Research Service (2012) State Fact Sheet: Alabama. USDA Food And Nutrition Service (2012) Nutrition Assistance in Farmers Markets: Understanding Current Operations—Formative Research Findings. USDA Food And Nutrition Service (2011) Helping Low-Income Families and Local Communities in Alabama. US Social Security Administration (2008) Electronic Fact Sheet: Food Stamp Facts. 19 Acknowledgements We would like to thank the customers, vendors, and community of Homegrown Alabama, Canterbury Episcopal Chapel and Student Center, The University of Alabama’s New College, the City of Tuscaloosa, Auburn University, Auburn Office of International Agriculture, Auburn Economic & Community Development Institute, Dr. Norbert Wilson, and Mr. Joshua Segall.