Nutrition Incentives: Past, Present and Future

October 28, 2020

Tim O’Connor, E-Payment and Regulatory Expert

Many Americans struggle to eat as healthy as they can. This is no different for low-income individuals receiving Supplemental Nutrition Assistance Program (SNAP) benefits, though they may be deterred by their limited buying power.

To help overcome this challenge, Congress sought a solution that would increase the purchase of fruits and vegetables by low-income individuals through provision of a nutrition incentive.

In 2014, Congress established the Food Insecurity Nutrition Incentive Program (FINI) to fund projects that would give SNAP recipients extra benefits for the purchase of produce and promote a healthier diet. These projects provide what is known as a SNAP Incentive for the purchase of produce and operate in two basic ways.

In some projects, SNAP customers get a discount on the purchase of qualifying items at the point of sale. For example, if they buy $10 of produce, their SNAP accounts are charged $5; stores still receive the full purchase amount. In other projects, when customers use their SNAP benefits to buy qualifying products (these can vary from project to project), they receive a coupon (paper or electronic) to purchase more produce on a future store visit.

Initial reviews of FINI projects indicated they seemed to have a positive impact on the purchase of produce. Based on the initial assessment, Congress extended and expanded the pilot programs in 2018. The program was renamed the Gus Schumacher Nutrition Incentive Program (GusNIP) after Gus Schumacher, who was a pioneer in designing and developing the notion of nutrition incentives for low-income people.

In addition to extending the types of projects that were going on under FINI, GusNIP also authorized the creation of a second type of incentive project known as a Produce Prescription Program (PRx). In these programs, if a health care professional diagnoses a low-income person with a health condition that can be improved with a diet that includes more produce, the person receives a prescription for produce that can be redeemed at participating stores. Two key differences between the above SNAP Incentive and PRx programs are that with PRx, the customer does not have to make a qualifying purchase and the benefit must be generated after a health evaluation.

Each year, the U.S. Department of Agriculture’s National Institute of Food and Agriculture (NIFA) puts out a solicitation inviting interested nonprofits and government entities to submit proposals to administer nutrition incentive programs. For SNAP Incentive programs, the applying entity is required to put up half of the funding needed for the project. If the entity succeeds in having its grant application approved, the money they put up is matched dollar for dollar by NIFA. If the proposed project is a PRx, the applying entity does not need to raise half the funding. In these circumstances, the entity’s project is totally funded by NIFA.

To date there have been 114 FINI projects and 53 GusNIP projects.  Early projects tended to focus on farmers markets as outlets for incentive implementation and offerings.  Because of some changes in the law aimed at reaching more SNAP recipients for more of the year, recent projects have included more brick-and-mortar retail food stores. It is now common for projects to include a mix of farmers markets and physical stores.  But no matter the outlet, it must be authorized to redeem SNAP benefits.

While the GusNIP projects are pilot projects, it appears that the idea of incentivizing the purchase of healthy foods is gaining traction. State governments are creating their own programs as are private foundations and companies. For example, we are seeing health care companies becoming involved with PRx programs. Additionally, other programs are being created to incentivize products other than produce; for example, a dairy incentive program has been authorized by Congress and will be piloted soon, and Hawaii has created an incentive program to support Hawaii-raised beef.

As more brick-and-mortar retail food stores participate in GusNIP projects and other incentive programs, it has been acknowledged that additional technical assistance and education could be helpful. This is where the National Grocers Association Foundation Technical Assistance Center (NGAF TA Center) can help. By providing direct one-on-one assistance and developing educational resources, the NGAF TACenter hopes to grow the number of retailers participating in GusNIP programs, thereby increasing the number of SNAP recipients helped.

The NGA TA Center addresses the challenges grocers and supermarket operators face in establishing nutrition incentive programs and is a proud partner of the Nutrition Incentive Hub. The Hub, funded through a cooperative agreement from the United States Department of Agriculture, National Institute of Food and Agriculture, is a new national resource that provides training, technical assistance, reporting, and evaluation for those working to launch or expand SNAP incentives or produce prescription programs. The Hub is led by Gretchen Swanson Center for Nutrition in partnership with Fair Food Network along with a coalition of evaluators, researchers, practitioners, and grocery and farmers market experts from across the country dedicated to strengthening and uniting the best thinking in the field to increase access to affordable, healthy food to those who need it most.