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Food Stamp Benefits In Peril At New York's Farmers Markets

ROCHESTER, NY (WXXI) - The company behind the software that turns SNAP benefits into the tokens used at the Rochester Public Market has announced that it’s going out of business.

Novo Dia contacted the Farmers Market Federation of New York last week, alerting the organization that it would cease operations on July 31, and leaving markets across the state scrambling to find a replacement.

The company’s software is essential, said Margaret O’Neill, who directs programs at the Rochester Public Market and sits on the board of the farmers market federation, because there is no substitute. “The problem is, without the app, there is no way for markets in New York State to process SNAP,” said O’Neill. “Right now there is no alternative for farmers' markets.”

“It means all 500 markets in New York State have to quickly get new equipment and a new processing company, or the state needs to come up with a solution for a different app that would run on the same equipment.”

Don Jones, who runs a stall at the Rochester Public Market, estimated that 20 percent of his business was coming from people using SNAP benefits. Katie Wilson, a few stalls down, said almost half of her sales were to people using SNAP.

SNAP benefits go to low-income to help them afford food, but they are not disbursed as cash. They come on debit cards called EBT cards that users swipe when they make a purchase. But vendors at farmers markets often don’t accept electronic payments.

The obstacles the markets face are as much infrastructural as they are economic. Farmers markets often lack a hard-wired connection to the network that runs credit and debit transactions at other businesses, and because of the low profit margins, an iPad and mobile payment processing at each market stall is infeasible, O’Neill said.

The Rochester Public Market’s solution is to convert SNAP benefits from the debit card to tokens that can be used at the market. Vendors collect the tokens and exchange them for cash from the market.

That system is in jeopardy, as Novo Dia runs the software that converts SNAP benefits to market currency at the Rochester Public market, hundreds of other markets in New York state, and 40 percent of the markets across the country, O’Neill said.

Rochester got more notice than others, O’Neill said, “because we are the largest SNAP program in New York state—we’re almost a third of the entire state, out of 500 markets. We got a heads-up.”

SNAP benefits are essential to many Rochesterians’ ability to buy food, especially at the farmers market where they go even further because of a program that provides a 40-percent bonus for SNAP recipients when buying fruits and vegetables at farmers markets.

“It really is important,” said Sako Kamali, who bought about a dozen green bell peppers at the Rochester Public Market Thursday afternoon using tokens. “I’m a man who likes to eat fruits,” Kamali said. “I buy more fruits, and I stay healthier.”