Iowa Legislative Services Agency Fiscal Services I

Iowa Legislative Services AgencyFiscal ServicesISSUEREVDennis Prouty(515) 281-5279FAX 281-8027State CapitolDes Moines, IA 50319November 1, 2007Iowa Farmer’s Market ProgramsISSUEThis Issue Review is an overview of Iowa farmer’s markets and related nutrition programs.AFFECTED AGENCIESDepartment of Agriculture and Land StewardshipDepartment of Elder AffairsDepartment of Human ServicesDepartment of Inspections and AppealsIowa State UniversityCODE AUTHORITYSection 137F.8, Code of IowaBACKGROUNDIA farmer’s market is where producers of locally-grown fruits and vegetables sell producedirectly to customers. Other related products sold at a farmer’s market include baked goods,meat products, jams, honey, flowers, crafts, and Iowa wines.EA vendor that sells food that is required to be temperature controlled must purchase a licensefrom the Department of Inspections and Appeals for each county where the vendorparticipates at a farmer’s market. The license is 100 per year and can be used for anyfarmer’s market located in the county. The vendors are also inspected several times duringthe season.WThe United States Department of Agriculture (USDA) identifies the major benefits of afarmer’s market as: Farmers have direct market access and can supplement their income. Consumers can interact directly with the farmer. Communities benefit from the availability of fresh produce and having an event that bringscustomers to the area to boost the economy.

ISSUE REVIEW2November 1, 2007CURRENT SITUATIONThe Department of Agriculture and Land Stewardship (DALS) administers the Farmer’s MarketPrograms. The Department provides organizing assistance and annual training workshops tomarket managers across the State. In addition, market managers receive the Farmer’s MarketNewsletter several times per year.In Iowa, there are 177 authorized farmer’s markets with approximately 1,600 vendors selling tomore than 135,000 customers. The map below lists the number of farmer’s markets by county for2007. Annual sales are estimated at 20.8 million with an estimated 30.0 million economic impacton Iowa’s economy.Location of Iowa Farmer’s 2007 BAGO11133O'BRIENCLAYPALO ALTOHANCOCK1123PLYMOUTH2HUMBOLDTBUENA VISTA ARSHALL338GRUNDY4STORYBOONECLAYTON3BLACK RRO CKSON2JEFFERSON1HENRY1DAVISVAN BUREN11DES MOINES1LEE3Source: Department of Agriculture and Land StewardshipAn economic analysis completed by Iowa State University in 2005 used market data from the 2004selling season. The following table summarizes the findings (dollars in millions). Refer toAttachment A for complete information from the Report.EconomicCategorySalesEconomic ImpactJobsDirect Impact( in Millions)Indirect Impact( in Millions)Induced( in Millions)Total( in Millions) 20.0 4.3 7.2 31.5 8.4 1.5 2.3 12.2324.855.190.9470.8

ISSUE REVIEW3November 1, 2007The USDA reports there are approximately 4,400 farmer’s markets in the United States. Iowa ranksfifth in the nation as detailed in the table below, which shows the top five states based on thenumber of markets in the nation.State# of Farmer’s MarketsCalifornia497New e Total4,400NUTRITION PROGRAMSIowa farmer’s markets participate in two federal nutritional programs that include the Women’s,Infants and Children’s (WIC) Farmer’s Market Nutrition Program and the Senior Farmer’s MarketNutrition Program.The WIC Farmer’s Market Nutrition Program was established in July 1992, by the federalgovernment to provide fresh, nutritious, and locally-grown fruits and vegetables to WIC participants.This Program is associated with the Special Supplemental Nutrition Program for WIC that providesfood, health care referrals, and nutrition education to low-income pregnant, breastfeeding, and nonbreastfeeding postpartum women, and to infants and children up to five years of age who aredetermined to be at nutritional risk. Participants are issued farmer’s market coupons in addition toregular WIC food benefits. The participant gives the coupon to the farmer’s market vendor topurchase fresh, unprepared fruits, vegetables, and herbs. Vendors in the Program are approved bythe DALS and funding is from federal USDA and State funds. The Program is administered by theDALS in cooperation with Iowa Department of Public Health and local WIC agencies.The Senior Farmer’s Market Nutrition Program provides benefits to low-income seniors who are atleast 60-years-old and have household incomes of not more than 185% of the federal povertyincome guidelines. Participants are issued farmer’s market coupons that are given to the farmer’smarket vendor to purchase fresh, unprepared fruits, vegetables, and herbs. The Program hasvendors approved by the DALS and receives funding from the State, federal USDA funds, and theCommodity Credit Corporation. The Program is administered by the DALS in cooperation with theIowa Department of Elder Affairs and the Area Agencies on Aging.Persons participating in the federal Food Assistance Program, formerly known as the Food StampsProgram, receive benefits on an Electronic Benefit Transfer (EBT) card that is similar to a credit ordebit card. The EBT card allows the recipient to authorize the transfer of their government benefitsfrom a federal account to a retailer account to pay for food products. The card can now be used topurchase fresh fruits and vegetables from participating farmer’s market vendors.

ISSUE REVIEW4November 1, 2007The Iowa Department of Human Services (DHS) and the Iowa Farm Bureau began a pilot project in2005 to test the use of electronic benefit transfer (EBT) point-of-sale (POS) equipment with 10vendors selling produce in Des Moines, Red Oak, and Marshalltown. The project included the useof wireless, hand-held, POS devices that accepted EBT cards and credit cards from Visa andMasterCard.At the beginning of the 2006 farmer’s market season, the project was expanded to include 67vendors in Bettendorf, Cedar Rapids, Clarinda, Council Bluffs, Davenport, Des Moines Downtown,Des Moines Drake, Marshalltown, Mason City, and Sioux City. Currently, there are 160 vendorsusing the POS equipment.Currently, there are no costs to the farmer for using the wireless POS device. A company calledTotal Merchant Sales donated the POS equipment used for the pilot project. The DHS pays themonthly transaction and statement fees and the Iowa Farm Bureau pays for the commercialtransaction fees. For FY 2006, the DHS paid 18,000 in fees for EBT transactions at Iowa farmer’smarkets.Due to the pilot project’s expansion from 2005 to 2006, a National Farmer’s Market Conference washeld in Des Moines during September 2006. Attendees from 35 states received information onIowa’s pilot project and other information related to farmer’s markets. The project received threenational awards, including the Pinnacle Award from the USDA in 2006 and 2007 and the Project ofthe Year Award by the National EBT Council in 2007.BUDGET IMPACTFor FY 2007, the DALS received a total of 775,000 for the Farmer’s Market Program, including 543,000 in federal funds and 225,000 from the General Fund, and a total of 482,000 for theSenior Farmer’s Market Program, including 405,000 in federal funds and 77,000 from theGeneral Fund.ADDITIONAL INFORMATIONAdditional information on the Report and nutrition programs discussed in this Issue Review may beaccessed at the following web sites:“Consumers, Vendors, and the Economic Importance of Iowa Farmer’s Markets: An EconomicImpact Survey Analysis”, Dr. Daniel Otto, Department of Economics, Iowa State University, TheresaVarner, Graduate Student, Iowa State University, March ting files/markets rfswg.pdf.WIC Farmer’s Market Nutrition Program: or Farmer’s Market Nutrition iorFMNPoverview.htm.STAFF CONTACT: Debra Kozel (Ext. 16767)Iowa Farmer’s Market 4 pm

ISSUE REVIEW5November 1, 2007

Attachment AFarmer’s Market Economic Impact Information2004 nformation ServicesFinance, Insurance, Real EstateProfessional ServicesOther ServicesGovernment 12,440,000000007,610,00000000 Total 20,050,0002004 Income:Industry 74,013359,8201,878,2412,077,954912,1601,278,723 4,248,719 7,208,998 ,722 ailInformation ServicesFinance, Insurance, Real EstateProfessional ServicesOther ServicesGovernment 4,818,841000003,541,13500000 167854,906281,73625,048 613425,3361,072,614324,21252,770Total 8,359,976 1,541,083 2,316,208 12,217,267IndirectInducedTotal2004 n ServicesFinance, Insurance, Real EstateProfessional ServicesOther 9Source: Iowa State University

Iowa farmer’s markets participate in two federal nutritional programs that include the Women’s, Infants and Children’s (WIC) Farmer’s Market Nutrition Program and the Senior Farmer’s Market Nutrition Program. The WIC Farmer’s Market Nutrition Program was established in July 1992, by the federal