USDA's new Food Insecurity Nutrition Incentive (FINI) for affordable fruits and vegetables

Friedman School graduate student Cailin Kowalewski reports today in the student publication Sprout on USDA's new financial incentive program:

The USDA this week announced a new grant program that will help participants in the Supplemental Nutrition Assistance Program (SNAP) afford fruits and vegetables. The Food Insecurity Nutrition Incentive (FINI) program will offer $31.5 million in competitive grants to organizations from across the food system. These organizations will be able to use FINI funding to support projects that increase SNAP participant access to fruits and vegetables through incentive programs at the point of sale.

The Sprout article provides a history and overview of the new program, and it notes divergent views on implementation questions, such as whether the focus should be on farmers' markets or whether it should encompass larger-scale retail channels as well.

USDA's Healthy Incentives Pilot (HIP) finds significant positive impact on fruit and vegetable intake

USDA's Food and Nutrition Service yesterday released final results showing that the Healthy Incentives Pilot (HIP) had a significant positive impact on fruit and vegetable intake for low-income participants in the Supplemental Nutrition Assistance Program (SNAP).

In the pilot, which was conducted in Hampden County, Massachusetts, HIP participants received a 30% incentive added back to their benefit card when they purchased targeted fruits and vegetables in participating retailers. A randomly assigned control group received SNAP benefits as usual with no incentive.

On average HIP participant adults on SNAP consumed 0.23 cup-equivalents more in daily targeted fruits and vegetables -- a 25% increase -- compared to the non-HIP adults on SNAP.

HIP Participants Consumed 0.23 Cup-Equivalent 

More Fruits and Vegetables per Day

The HIP Evaluation Study was led by Abt Associates, Inc., with participation from Westat and the Friedman School of Nutrition Science and Policy at Tufts University. Susan Bartlett from Abt was the project director. On behalf of the Friedman School, I was director of design for the evaluation study and a co-author of the final report.

The pilot represents the most ambitious effort so far to deliver a healthy eating incentive to SNAP participants right through the SNAP card (as opposed to a separate coupon) and in a full range of participating retailers (as opposed to farmers' markets alone). The results complement new work being done by Wholesome Wave and others to explore the potential of financial incentives.

The primary results were based on two post-implementation rounds of surveys of SNAP participants. Preliminary results, based just on the first post-implementation survey round, were published recently in the American Journal of Agricultural Economics (may be gated). The new full report released today has more information about a wide variety of food spending, shopping behavior, and food intake outcomes, and it analyzes the likely cost of extending such a healthy incentives program nationwide.

The dilemma of fair trade bananas

At Civil Eats yesterday, Aliza Wasserman explains the dilemma for the public interest entrepreneurs who are developing a fair trade banana market. The article describes a recent conference at Tufts University.

The most difficult question is whether fair trade bananas should come only from smallholders and cooperatives (preserving fair trade principles but limiting scale), or instead whether fair trade sourcing should allow larger plantations so long as they follow the stipulated principles (sacrificing a small-is-best principle but achieving a larger share of the total market).

Wasserman writes:

Fair Trade banana plantations have also been crucial to building a robust supply of Fair Trade bananas. Plantations represent both a key challenge and opportunity, by providing the promise to impact the broader industry and bring Fair Trade bananas to a larger consumer base. Nearly everyone at the conference hoped to impact the broader industry, whether they are focused on the future of small-scale or “smallholder” farmers, or the overall future of Fair Trade bananas.

But many of the presenters felt that the current pricing system, in which the Fair Trade certifying bodies, like Fair Trade International or FLO, distribute the same premium to plantation owners and small landholders alike, represents a major flaw in the system. Many in the industry believe that cooperatives of small producers should receive a premium that is linked to their higher cost of production relative to plantations, which can take advantage of economies of scale. Yet, the first banana producer to receive Fair Trade certification was a plantation, and scaling up Fair Trade would not be possible without them.

While a student at the Friedman School, Wasserman was a regular contributor to the U.S. Food Policy blog.

30% price incentive has positive impact on fruit and vegetable intake for SNAP participants

USDA's Food and Nutrition Service today released the Interim Report from the Healthy Incentives Pilot (HIP), a major study of price incentives for fruit and vegetable intake for Supplemental Nutrition Assistance Program (SNAP) participants.

This study may help to inform the national discussion about the economic environment and its influence on food choices.  Agriculture Secretary Tom Vilsack today said, "The results of the Healthy Incentives Pilot demonstrate the clear impact that promoting nutritious food choices can have on improving the healthfulness of SNAP purchases."

Here is the punchline:

Our interim results indicate that HIP participants (adults aged 16 and older) consumed one-fifth of a cup-equivalent more fruits and vegetables per day than did non-participants (ES.1). This represents a difference of 25 percent in consumption over control group members. Approximately 60 percent of the observed difference was due to a difference in consumption of vegetables and 40 percent due to a difference in consumption of fruit.

These impact estimates are statistically significant, and they are big in percentage terms, but the baseline intake for the control group is quite low, so the impact seems fairly small in terms of cup-equivalents.  There is evidence that some retailers and participants in the pilot were still in the process of learning how the incentive worked.

The pilot was implemented in Hampden County, MA.  The study used a random assignment research design.  The Interim Report is based on a pre-implementation survey and an early post-implementation survey.  A Final Report in several months will use an additional later second post-implementation survey.

The authors of the Interim Report are Susan Bartlett, Jacob Klerman, Parke Wilde, Lauren Olsho, Michelle Blocklin, Christopher Logan, and Ayesha Enver.  As one of the co-authors, I worked on this study as part of a team led by Abt Associates, with funding from USDA's Food and Nutrition Service.  I will be presenting some results from this report on August 5 in Washington, DC, at the annual meeting of the Agricultural and Applied Economics Association (AAEA).  For me, personally, the project is the most terrifically ambitious research effort to which I have ever contributed.

This pilot initiative is related to other efforts to enhance incentives for purchasing fruits and vegetables, in farmers' markets and other outlets.  Some municipalities, including Boston, have Bounty Bucks programs, and Wholesome Wave has a series of related efforts.  One cool thing about the HIP study is that it worked through the SNAP participants' Electronic Benefit Transfer (EBT) card in all sorts of participating retailers.

Agreement with Mexico about tomato imports

Agriculture Secretary Tom Vilsack on Feb. 2 announced a new agreement with Mexico, under which Mexico's tomato exports must satisfy a minimum price.

In adopting a moderately protectionist policy by mutual agreement, the two countries avoid a trade conflict that could have harmed their commerce more seriously.

"I applaud the good work of Undersecretary Sánchez and the Commerce Department to forge this important agreement to allow our domestic tomato industry to compete on a level playing field. The draft agreement meets the requirements of U.S. antidumping law and provides an effective remedy for our domestic tomato producers, further bolstering agriculture as a bright spot in our nation's economy. Ultimately, the Obama Administration forged an agreement that will restore stability and confidence to the U.S. tomato market and ensure fair trade in fresh tomatoes through increased reference prices, coverage and strengthened enforcement. The United States is one of the world's leading producers of tasty, high-quality tomatoes. Our U.S. fresh and processed tomatoes account for more than $2 billion in cash receipts and support thousands of American jobs in our food industry, shipping, processing and more."

Undersecretary Francisco J. Sánchez

The U.S. Food Policy blog recently discussed how agricultural labor markets in Mexico and the United States are interconnected.  If it is true that agricultural wages in Mexico are rising, it becomes easier for Mexico to agree to a price floor for Mexican tomato exports, addressing multiple problems simultaneously.  In a 2010 article for the Journal of Agricultural and Resource Economics (may be gated), Friedman School graduate student Wendy Johnecheck, Julie Caswell, and I studied the possible impact of hypothetical country-of-origin labeling (COOL) regulations on the U.S.-Mexican trade in tomatoes.

In my class on U.S. food policy, we explore (a) some occasions when import-competing businesses (such as U.S. tomato growers) have convinced the government to put up protective barriers and (b) other occasions when such barriers have been resisted by advocacy coalitions led by import buyers (such as major retail chains) and other U.S. agricultural industries that rely on exports (such as wheat producers).  These U.S. advocacy coalitions are politically important, because, of course, Mexican producer groups have no direct representation in the U.S. Congress.

A former student from this class today pointed out yesterday's New York Times coverage of the new tomato deal, which echoes these points.  In the article, Stephanie Strom explains the advocacy coalitions that make the new policy politically feasible:

The Mexicans enlisted roughly 370 American businesses, including Wal-Mart Stores and meat and vegetable producers, to argue their cause. Those businesses feared a bitter trade war like the one the Mexicans waged over trucking, which imposed stiff tariffs on American goods headed south. 

Choices Magazine: An evaluation of food deserts in America

A Choices Magazine theme issue released today explores the economics of food deserts.

Guest editors Dave D. Weatherspoon, Shelly Ver Ploeg, and Paula Dutko provide the theme overview and links to four more articles.  Weatherspoon and colleagues use data from a natural experiment, when a new retailer set up shop in a low-income neighborhood of Detroit.  Tatiana Andreyeva suggests that WIC's new fruit and vegetable vouchers may have improved the healthfulness of local food retail in Connecticut.  Dutko reviews the economic disadvantages observed in food deserts.  And Alessandro Bonanno's article stands out for its attention to the economics of food retail supply as well as consumer needs.  Attention to both need and supply is essential for people who want to think sharply about the food retail improvements that are truly feasible, not merely wishful thinking.