2014 Farm Bill
After more than two years of work, Congress recently passed and President Obama has signed a comprehensive Farm Bill. The newly-enacted legislation contains several provisions that impose additional obligations on retailers that redeem Supplemental Nutrition Assistance Program (SNAP) benefits. This document summarizes these provisions, and provides guidance to current and prospective SNAP retailers on how they can begin planning to comply with these additional obligations.
The Farm Bill imposes the following additional obligations on SNAP retailers:
Technological Mandates
- Preventing Sales of Ineligible Items – The Farm Bill requires SNAP retailers to implement point-of-sale technology systems that will (i) not redeem SNAP benefits for the purchase of ineligible items, and (ii) will further preclude cashiers from manually overriding this prohibition.
- Guidance for SNAP Retailers – As a practical matter, a majority of convenience store operators already have such systems in place. For those that do not, they will eventually need to upgrade their systems, although this provision does not become effective until the Department of Agriculture (USDA) issues regulations implementing it. These regulations – which will likely contain more precise specifications for compliant point-of-sale technology systems – will not be issued for at least several months.
Depth-of-Stock Mandates
- Increased Variety – The Farm Bill requires SNAP retailers to stock at least seven different “varieties” of food items in each of the four “staple food” categories on a “continuous basis.” Current USDA regulations (pre-dating the Farm Bill) require SNAP retailers to stock at least three different items in each staple food category on a continuous basis. o Under statutory requirements pre-dating the FARM bill, the four staple food categories are:
- Meat, poultry, or fish
- Bread or cereals
- Vegetables or fruits
- Dairy products
To stock food on a “continuous basis,” USDA regulations pre-dating the Farm Bill stipulate that the SNAP retailer must, on any given day of operation, offer for sale and normally display an item in a public area.
Different “varieties” means, pursuant to USDA regulations pre-dating the Farm Bill, different types of foods (such as apples, cabbage, tomatoes, and squash in the fruit or vegetable category, or milk, cheese, butter, and yogurt in the dairy category), rather than different brands, nutrient values, or packaging.
- Perishable Goods – The Farm Bill requires SNAP retailers to stock at least one “perishable” food item in at least three of the four staple food categories. Current federal statutory law (pre-dating the Farm Bill) requires SNAP retailers to stock at least one perishable food item in at least two of the four staple food categories. o “Perishable” foods are items which are either frozen staple food items or fresh, unrefrigerated or refrigerated staple food items that will spoil, or suffer significant deterioration in quality within 2-3 weeks.
- Guidance for SNAP Retailers – At the present time, it is unclear when these depth-of-stock provisions will take effect. USDA has indicated it is at just the initial stages of planning the implementation process. Thus, at the moment, there is substantial uncertainty regarding the effective date for the Farm Bill’s depth-of-stock provisions.
It is possible that USDA will need to issue updated regulations before the provisions take effect, which will take at least several months. Updated regulations are more likely to be necessary with regard to the increased variety requirement, since the provision in the Farm Bill requiring a variety of seven different items is in conflict with USDA regulations currently on the books requiring a variety of just three different items. (Such a conflict does not exist with regard to the perishable goods requirement, which is grounded in federal statute rather than USDA regulations.)
Although much uncertainty remains regarding the date on which SNAP retailers will be required to comply with them, any current or prospective SNAP retailer should promptly begin planning to comply with the Farm Bill’s new depth-of-stock requirements.
