Nutrition Incentives 101
This page is for anyone interested in learning more about what nutrition incentives are, and why farm direct growers and operators may want to participate in an incentive project.
What Are Nutrition Incentives?
Nutrition incentives provide extra food dollars to encourage shoppers to purchase more fruits and vegetables by offering additional money that can only be spent on produce.
SNAP-based nutrition incentives link those extra produce dollars to purchases made with the shopper’s SNAP (Supplemental Nutrition Assistance Program) benefits.
SNAP-based incentives can be used at any authorized retail outlet, and incentives more broadly can support any kind of purchasing behavior. However, this site focuses on SNAP incentive programs in farm direct settings. Farm direct refers to a food outlet that is focused on connecting the farmer directly to the consumer. For example: farmers markets, farm stands, Community Supported Agriculture (CSA) programs, and some box programs and mobile markets that source their produce directly from growers.
In farm direct settings such as farmers markets, CSAs, and farm stands, nutrition incentives take the form of a match, where the incentive matches the money a shopper spends using SNAP with additional incentive money so that, for example, a customer who makes $15 of purchases on their SNAP Electronic Benefit Transfer (EBT) card at a farm stand, also receives an additional $15 to spend on fruits and vegetables. Many programs also institute a “matching cap” to enable limited funding to go further among more sites and users (i.e. $20 or $50 in incentives per shopper per month).
For more information on other kinds of incentives, including WIC-based incentives, Senior Farmers Market Nutrition Program vouchers, and short-term, community specific incentives, see this blog post from the Farmers Market Coalition on “Additional Incentives.” Notably, research has shown that providing a variety of incentives at a single site increases the effectiveness of each individual incentive project.
Why Nutrition Incentives?
There are many benefits to Nutrition Incentives. For customers, nutrition incentives provide more opportunities to purchase and eat fruits and vegetables. For sales outlets, nutrition incentives provide more opportunities to interact with shoppers who use Federal benefits, create a more resilient and diverse base of shoppers, and yield higher produce sales. For local economies, nutrition incentives mean a greater economic multiplier effect for every dollar of Federal SNAP or incentives funding spent in the community. This is especially true when incentive projects are run through retail outlets that sell locally and regionally grown food, including farm direct outlets like farmers markets, CSAs and farm stands. Money spent at on locally grown produce not only benefits shoppers, it also stays in the local economy. Likewise, nutrition incentives can contribute to a robust food system.
The bottom line for farm direct retailers is that incentives increase the purchasing power of SNAP-eligible customers to buy fruits and vegetables. More money for farm direct fruits and vegetables means more opportunities to create community in public spaces, more money in the pockets of farmers, and more healthy food in kitchens across our communities.
Who Runs Nutrition Incentive Projects?
Nutrition incentive projects usually begin because someone sees a need for more fruits and vegetables in their community, or because a retail outlet sees an opportunity to grow their produce sales and customer base. Projects have been started by nonprofit organizations, local governments, individual farmers markets, supermarkets, and even clinics and hospitals. Administering a nutrition incentive program requires a significant investment of time, effort, and fundraising. Because many farm direct retail operations are small, it can benefit farmers markets and farmers with stands and CSAs to join forces, or partner with an existing regional or state incentive program, or adopt the model of a national incentive program like Double Up Food Bucks or Wholesome Wave. For more on how to decide between joining an existing project or model or starting your own, see PLAN.
What Do Farm Direct Nutrition Incentives Look Like in Action?
There are many ways to set up a nutrition incentive program at a farm direct site, as you’ll see from some of the resources in our PLAN section. Here are a few examples of how nutrition incentives can work in practice. Note that any of these incentive models can be used at any of the venues we mention below:
1- At a farmers market, a shopper arrives at the market’s central info booth and swipes their SNAP EBT card at the market’s EBT terminal. The shopper converts $20 from their EBT card to SNAP tokens (whether they are physical tokens or scrip, or digital e-tokens managed through a software app). Because this market is using a 1:1 incentive model, the info booth worker then hands the shopper an additional $20 in incentive currency to spend on fruits and vegetables, giving them $40 to spend overall. The shopper can spend their $20 in SNAP tokens on any SNAP-eligible items at the market, and their incentive currency on any fruits and vegetables at the market. The incentive currency can also be spent at a later date, allowing the shopper to spread their purchases out across the month and the vendors to have more interactions with this shopper. Vendors who accept the incentive currency are reimbursed by the farmers market, and the market is reimbursed by the organization that administers their nutrition incentive program.
2- A farm’s Community Supported Agriculture (CSA) program is authorized to accept SNAP. Shares at this CSA cost $25 per week. In order to make their program more attractive and affordable to customers who use SNAP for their food purchases, the CSA joins their regional nutrition incentive program, which offers a 1:1 match. For customers who use SNAP, $12.50 can be paid for via SNAP each week, while the remaining $12.50 is reimbursed by the nutrition incentive program, allowing the farm to receive full payment, but offer shares at a 50% discount for those who need the support.
3- A farm stand is authorized to accept SNAP and becomes a participating vendor of an existing local incentive program in order to increase customer base, as well as customers’ buying power and frequency of visits. The local program uses an e-token software platform: a software platform that that allows incentives to be stored in an app and accessed from a patron’s mobile device. When customers make purchases with their SNAP card at any participating retailer, including a local grocery store, they receive additional incentive dollars directly through the app to spend on fresh produce. This allows the customer to make additional purchases at the farm stand using the incentives stored in their app. The customer purchases fresh produce straight from the farm, resulting in higher sales to the farmer, and a stronger local food system for the whole community.
If you’re ready to start thinking about how to start an incentive program, remember that planning is half of success. Our PLAN guide helps you think through the WHY and HOW of starting an incentive program at your farm direct site.
How are Nutrition Incentives Funded?
Nutrition Incentives are funded in a number of ways. The largest funder for nutrition incentives is the federal program known as the Gus Schumacher Nutrition Incentive Program (GusNIP). Formerly known as the Food Insecurity Nutrition Incentive Program (FINI), GusNIP has provided $159 million in funding for nutrition incentive programs since 2015, across 48 states. GusNIP funds pilot projects as well as more established nutrition incentives, and offers additional support through the Nutrition Incentive Hub (which also funds this website). GusNIP funding requires a 1:1 match, so grantees must be able to secure additional funds from in-kind support, philanthropic dollars, local, or state resources to receive this funding.
States and municipalities can also make excellent funders for nutrition incentive projects. Because of the benefits to shoppers, growers, and local economies, farm direct nutrition incentives present a win-win for local and state policy makers across the political spectrum. State and local funding can also provide the match that is needed to receive federal GusNIP funds.
Finally, private funding, drawn from supporters of your farm or market, such as individuals, local businesses, and philanthropy, can be extremely valuable because it provides flexibility and frequently does not require a farm direct outlet to raise additional matching funds from elsewhere. In fact, private funds are sometimes used as part of a match for receiving a GusNIP grant. No matter what funding source is used, however, remember that any SNAP-authorized retailer who wishes to offer an incentive for SNAP-purchases must submit a waiver to the USDA unless they are funded by any federal program.
For More on the History and Current State of Nutrition Incentives…
Read The Origins of Incentives, by Richard McCarthy. This brief, 10-page paper explores how farmers markets innovated nutrition incentives throughout the 1990s and early 2000s, and looks at how farm direct operations’ nimbleness and responsiveness to community positions them as engines of creativity and growth in the field.
Watch a webinar on Incentives 101 from the 2021 GusNIP NTAE Convening that covers incentives in both farm direct and brick and mortar settings. Both of these resources will help farm direct operators to gain a fuller picture of what it’s like to run a nutrition incentive, including both the benefits and the challenges of these projects.
Produce Prescriptions and Brick and Mortar Retail
For further resources and information on nutrition incentives, to learn about produce prescription programs, and for more on the GusNIP grant, visit the website of the Nutrition Incentive Hub at www.nutritionincentivehub.org. For more on nutrition incentives in brick and mortar settings, see the National Grocers Association Technical Assistance Center.