74618 Federal Register / Vol. 71, No. 238 / Tuesday, December 12, 2006 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE 

Food and Nutrition Service 

7 CFR Part 249 

RIN 0584–AD35 

Senior Farmers’ Market Nutrition 

Program Regulations 

AGENCY: Food and Nutrition Service 

(FNS), USDA. 

ACTION: Final rule. 

SUMMARY: This final rule implements 

the provision of the Farm Security and 

Rural Investment Act of 2002 that gives 

the Secretary of Agriculture the 

authority to promulgate regulations for 

the operation and administration of the 

Senior Farmers’ Market Nutrition 

Program (SFMNP), thereby making it a 

permanent program rather than a 

competitive grant. The purposes of the 

SFMNP are to provide resources in the 

form of fresh, nutritious, unprepared, 

locally grown fruits, vegetables, and 

herbs from farmers’ markets, roadside 

stands, and community supported 

agriculture programs to low-income 

seniors; to increase the domestic 

consumption of agricultural 

commodities by expanding or aiding in 

the expansion of domestic farmers’ 

markets, roadside stands, and 

community supported agriculture 

programs; and to develop or aid in the 

development of new and additional 

farmers’ markets, roadside stands, and 

community supported agriculture 

programs. 

DATES: This rule becomes effective on 

January 11, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Debra Whitford or Donna Hines, 

Supplemental Food Programs Division, 

Food and Nutrition Service, USDA, 

3101 Park Center Drive, Room 528, 

Alexandria, Virginia 22302, (703) 305– 

2746, OR 

Debbie.Whitford@fns.usda.gov, or 

Donna.Hines@fns.usda.gov. 

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 

This rule has been determined to be 

Significant and was reviewed by the 

Office of Management and Budget in 

conformance with Executive Order 

12866. 

Regulatory Impact Analysis 

As required for all rules that have 

been designated as Significant by the 

Office of Management and Budget, a 

Regulatory Impact Analysis was 

developed for this rule. It is attached as 

an appendix to this final rule. 

Need for Action 

Congress established the SFMNP in 

Section 4402 of Public Law 107–171 to 

provide resources in the form of fresh, 

nutritious, unprepared, locally grown 

fruits, vegetables, and herbs from 

farmers’ markets, roadside stands, and 

community supported agriculture 

programs (CSAs) to low-income seniors; 

increase the domestic consumption of 

agricultural commodities by expanding 

or aiding in the expansion of domestic 

farmers’ markets, roadside stands, and 

CSA programs; and develop or aid in 

the development of new and additional 

farmers’ markets, roadside stands, and 

CSA programs. This final rule provides 

operating guidelines for the SFMNP, 

consistent with legislative intent. 

The requirements of the final USDA 

rule for the SFMNP are similar to two 

USDA interventions: The WIC Farmers’ 

Market Nutrition Program (FMNP), for 

individuals participating in the Special 

Supplemental Nutrition Program for 

Women, Infants and Children (WIC) and 

those individuals on a waiting list for 

WIC benefits; and the Senior Farmers’ 

Market Nutrition Pilot Program 

(SFMNPP), administered by USDA as a 

pilot program in 2001. The SFMNP has 

been administered by USDA as a 

competitive grant program since Fiscal 

Year (FY) 2001. Establishing rules for 

the SFMNP similar to the FMNP and 

SFMNP eases the administrative burden 

for USDA, State agencies, farmers, and 

program recipients. 

Benefits 

Benefits to Seniors 

Low-income seniors will be afforded 

nutrition education as well as a coupon 

benefit ranging in value from $20 to $50 

per annum, which will be used to 

purchase fresh, unprepared fruits, 

vegetables, and herbs intended to 

improve seniors’ diets. Seniors, and 

ultimately participating farmers, in each 

State agency will benefit from the total 

Federal grant to the State agencies 

minus the amount that State agencies 

spend on administration—up to 10 

percent of the total grant. 

It is possible that seniors will not eat 

additional fresh fruits and vegetables, 

but rather will substitute the fruits and 

vegetables that they would have 

purchased with their own funds with 

fruits and vegetables purchased with 

SFMNP coupons. You, et al., 

‘‘Consumer Demand for Fresh Fruits 

and Vegetables in the United States’’ 

(1998) found that the demand for fresh 

fruits and vegetables in the United 

States was responsive to price changes, 

but not changes in income. 

Benefits to Farmers 

Farmers will collect revenue from 

redeemed coupons up to the total 

Federal grants to State agencies for food 

costs (the total amount of revenue 

collected will depend also on the 

amount of the grant State agencies use 

to cover administrative costs). 

Additional revenue may be reaped as 

seniors might spend their own money 

(and in some States, food stamps) to 

purchase additional goods at the 

farmers’ markets. Farmers will also 

benefit from the exposure of new 

populations to farmers’ markets, 

roadside stands and CSAs, which could 

lead to increased revenues. 

In FY 2005, the SFMNP operated at 

2,663 farmers’ markets, 2,001 roadside 

stands and 237 CSAs. USDA’s Economic 

Research Service (ERS) reported in 

2001, that the SFMNP has not been as 

effective [as envisioned] in developing 

new farmers’ markets, produce stands, 

and community supported agricultural 

programs or in expanding existing ones. 

Nevertheless, ERS suggests that given 

evidence from the WIC FMNP, the 

SFMNP could increase the number of 

farmers’ markets, roadside stands, and 

CSAs in the long run. 

Costs 

The costs associated with the SFMNP 

are based on the following assumptions: 

• Funding for FY 2007–FY 2011 is 

maintained at the current authorized 

level of $15 million annually (assumes 

no carryover funds are available in 

2007-2011); 

• State agencies use 10 percent of the 

Federal grant for administration in FY 

2007–FY 2011; 

• State agencies provide an average 

benefit level of $17.50 to recipients (as 

shown in Table 4 on page 25); and 

• The poverty rate among seniors 

remains constant over the period of 

analysis. 

FNS also assumes for the purpose of 

this analysis that total funding and 

benefit levels will not be indexed for 

inflation; therefore, their value has been 

deflated using projections of the 

Consumer Price Index—Urban index for 

fresh fruits and vegetables (1989 

baseline). Based on these assumptions, 

we estimate there will be little change 

in the percent of SFMNP eligibles 

served in the analysis period, due to the 

large number of eligibles nationally. 

Because the resources devoted to the 

SFMNP are likely to be small in 

comparison to the size of the eligible 

population, the permanent Program will 

not enable State agencies to reach the 

majority of those eligible. However, the 

minimum and maximum benefit levels 


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put forth in this final rule will help 

enable State agencies to serve as many 

eligible individuals as possible. The 

final rule allows for future growth, 

should additional funds be made 

available. Further, State agencies are 

allowed to contribute their own funds to 

enhance their Federal SFMNP grants. 

There were five State agency grantees 

that added State funds to their SFMNP 

food benefits in FY 2005. 

Regulatory Flexibility Act 

This rule has been reviewed with 

regard to the requirements of the 

Regulatory Flexibility Act (5 U.S.C. 

601–612). Nancy Montanez Johner, 

Under Secretary for Food, Nutrition, 

and Consumer Services, has certified 

that this rule will not have a significant 

economic impact on a substantial 

number of small entities. The provisions 

of this rulemaking are applicable to all 

State and local agencies, farmers, 

farmers’ markets, roadside stands, and 

community supported agriculture 

programs, regardless of their size or of 

the volume of SFMNP business they 

conduct. 

Public Law 104–4, Unfunded Mandate 

Reform Act of 1995 (UMRA) 

Title II of the UMRA establishes 

requirements for Federal agencies to 

assess the effects of their regulatory 

actions on State, local, and tribal 

governments and the private sector. 

Under Section 202 of the UMRA, FNS 

generally must prepare a written 

statement, including a cost-benefit 

analysis, for proposed and final rules 

with ‘‘Federal mandates’’ that may 

result in expenditures by State, local, or 

tribal governments in the aggregate, or 

to the private sector, of $100 million or 

more in any one year. When such a 

statement is needed for a rule, Section 

205 of the UMRA generally requires 

FNS to identify and consider a 

reasonable number of regulatory 

alternatives and adopt the least costly, 

more cost-effective or least burdensome 

alternative that achieves the objectives 

of the rule. 

This final rule contains no Federal 

mandates (under the regulatory 

provisions of Title II of the UMRA) for 

State, local, or tribal governments or the 

private sector of $100 million or more 

in any one year. Thus, the rule is not 

subject to the requirements of Sections 

202 and 205 of the UMRA. 

Executive Order 12372 

The Senior Farmers’ Market Nutrition 

Program is listed in the Catalog of 

Federal Domestic Assistance under No. 

10.576. For the reasons set forth in the 

final rule in 7 CFR part 3015, Subpart 

V and related Notice (48 FR 29115, June 

24, 1983), this program is included in 

the scope of Executive Order 12372 that 

requires intergovernmental consultation 

with State and local officials. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. This rule is intended to have 

preemptive effect with respect to any 

State or local laws, regulations, or 

policies that conflict with its provisions 

or that would otherwise impede its full 

implementation. This rule is not 

intended to have retroactive effect 

unless so specified in the Dates 

paragraph of the preamble of the final 

rule. Prior to any judicial challenge to 

the application of the provisions of this 

rule, all applicable administrative 

procedures must be exhausted. 

In the Senior Farmers’ Market 

Nutrition Program, the administrative 

procedures are as follows: 

• Local agencies, farmers, farmers’

markets, roadside stands, and 

community supported agriculture 

programs—State agency hearing 

procedures issued pursuant to 7 CFR 

249.16; 

• Applicants and participants—State 

agency hearing procedures pursuant to 

7 CFR 249.16; 

• Sanctions against State agencies 

(but not claims for repayment assessed 

against a State agency) pursuant to 7 

CFR 249.17—administrative appeal in 

accordance with 7 CFR 249.16; and 

• Procurement by State or local 

agencies—administrative appeal to the 

extent required by 7 CFR 3016.36. 

Federalism Summary Impact Statement 

Executive Order 13132 requires 

Federal agencies to consider the impact 

of their regulatory actions on State and 

local governments. Where such actions 

have federalism implications, agencies 

are directed to provide a statement for 

inclusion in the preamble to the 

regulations describing the agency’s 

considerations in terms of the three 

categories called for under Section 

6(b)(2)(B) of Executive Order 13132. 

FNS has considered the impact of this 

rule on State and local governments and 

has determined that this rule does not 

have federalism implications. Therefore, 

under Section 6(b) of the Executive 

Order, a federalism summary impact 

statement is not required. 

Civil Rights Impact Analysis 

FNS has reviewed this rule in 

accordance with FNS Regulation 4300–

4, ‘‘Civil Rights Impact Analysis,’’ to 

identify and address any major civil 

rights impacts the rule might have on 

minorities, women, and persons with 

disabilities. After a careful review of the 

rule’s intent and provisions, and the 

characteristics of SFMNP participants, 

FNS has determined that none of the 

provisions in this rule have a 

discernible impact on minorities, 

women, or persons with disabilities that 

are likely to result in inequitable 

treatment. FNS specifically prohibits the 

State agencies, and their cooperators, 

that administer the SFMNP from 

engaging in actions that discriminate 

against any individual in any of the 

protected classes (see 7 CFR 249.7 for 

the nondiscrimination policy in the 

SFMNP). Where State agencies have 

options, and they choose to implement 

a certain provision, they must 

implement it in such a way that it 

complies with the SFMNP regulations 

set forth at § 249.7. 

Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. Chap. 35; see 5 CFR 1320) 

requires that the Office of Management 

and Budget (OMB) approve all 

collections of information by a Federal 

agency from the public before they can 

be implemented. Respondents are not 

required to respond to any collection of 

information unless it displays a current 

valid OMB control number. The 

information collections in this rule are 

being reviewed by OMB and will not be 

effective until they have received OMB 

approval. Once they have received OMB 

approval, FNS will publish a notice in 

the Federal Register. 

E-Government Act Compliance 

FNS is committed to complying with 

the E-Government Act, to promote the 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Background 

History of the SFMNP—FY 2001 

Through FY 2004 

USDA’s Commodity Credit 

Corporation (CCC) established the 

Senior Farmers’ Market Nutrition 

Program (SFMNP) in November 2000 as 

a pilot program (65 FR 65825, Nov. 2, 

2000). A brief history of the program 

from FY 2001–FY 2004 was included in 

the preamble to the proposed rule. A 

total of $15 million was made available 

for the pilot SFMNP, in which grant 

awards ranging from $9,000 to 

$1.2 million were made to 30 States, 5 

Indian tribal governments, and the 

District of Columbia. Nearly 420,000 

low-income seniors participated in the 


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SFMNP that first year. In FY 2002, 

Public Law 107–78 (the Agriculture, 

Rural Development, Food and Drug 

Administration and Related Agencies 

Appropriations Act) provided $10 

million from FNS’ Commodity 

Assistance Program account to continue 

the SFMNP for a second year. 

An additional $5 million was 

provided from CCC funds by Section 

4402 of the Farm Security and Rural 

Investment Act of 2002 (the Farm Bill), 

Public Law 107–171 (7 U.S.C. 3007). 

The Farm Bill also authorized the 

SFMNP for FY 2003 through FY 2007, 

provided funding at $15 million for 

each of those years, and gave FNS the 

authority to develop regulations as 

deemed necessary for the SFMNP. The 

basic structure of the SFMNP has 

remained unchanged since its inception, 

with only slight modifications in the 

competitive grant process. By the end of 

FY 2004, 47 State agencies were 

participating in the program, and over 

800,000 seniors had received SFMNP 

benefits during that year’s market 

season. 

The information below brings the 

history of the SFMNP up to date since 

the proposed rule was published. 

SFMNP—FY 2005 Through FY 2006 

Just prior to the beginning of FY 2005, 

OMB clarified to FNS that SFMNP 

funds that were not expended in the 

previous fiscal year could not be carried 

over for allocation in the current fiscal 

year, i.e., that only $15 million could be 

allocated to grantees. To accommodate 

this clarification, FNS reduced each 

participating SFMNP State agency’s 

grant award for FY 2005 by 10.2 

percent. No funds were available to 

support the expansion of any current 

grantee’s existing program, or the 

addition of any new State agencies that 

might have been interested in initiating 

a new SFMNP. Additionally, one State 

agency discontinued its SFMNP 

operation due to the unavailability of 

State funds. The SFMNP funds that had 

been initially allocated to this grantee 

were then redistributed proportionally 

to the remaining 46 SFMNP State 

agencies. Despite the reduction in their 

grant awards, the 46 State agency 

grantees not only continued to operate 

the SFMNP, but many were also able to 

leverage State, local, or private funds to 

make up the difference. 

Public Law 108–447 (Rural 

Development, Food and Drug 

Administration and Related Agencies 

Appropriations Act 2005) included a 

provision that allows FNS to allocate 

any unspent funds from FY 2005, as 

well as the $15 million appropriated for 

FY 2006, to eligible SFMNP grantees. 

The availability of these unspent funds 

is expected to restore the grant awards 

for the 46 current SFMNP State agencies 

to levels approaching the grants that 

were awarded in FY 2004, but there will 

still be insufficient funds to solicit grant 

applications from new State agencies. 

Consistency With the WIC Farmers’

Market Nutrition Program (FMNP) 

USDA’s FNS has administered the 

FMNP since its inception as a pilot 

program in 1988, through its transition 

to an authorized independent program 

when the WIC Farmers’ Market 

Nutrition Act of 1992 (Pub. L. 102–314) 

amended Section 17(m) of the Child 

Nutrition Act of 1966 (42 U.S.C. 

1786(m)). The FMNP provides coupons 

to eligible WIC participants (or to 

individuals on WIC waiting lists) for the 

purchase of fresh, nutritious, 

unprepared fruits, vegetables and herbs 

at farmers’ markets and, at the State 

agency’s option, at roadside stands or 

farm stands. Many of the State agencies 

that have received SFMNP grant awards 

since FY 2001 were already established 

as administering agencies for the FMNP 

in that State. Based on the similar 

natures of the FMNP and the SFMNP, 

and in an effort to create consistency 

between the two programs, this final 

rule is constructed on the framework of 

the FMNP regulations, for which the 

final rule was published in the Federal 

Register on September 27, 1995 (60 FR 

49739). 

General Summary of Comments 

Received on the SFMNP Proposed Rule 

The SFMNP Proposed Rule was 

published in the Federal Register on 

May 26, 2005 (70 FR 30558), with a 90- 

day comment period. A total of 415 

comments were received on the 

Proposed Rule, over half of which were 

from program participants, and 

generally expressed support for the 

SFMNP’s establishment as a permanent 

nutrition assistance program. One 

comment was opposed to the proposed 

rule in all of its provisions, and another 

commenter suggested that the SFMNP 

not be changed in any aspect beyond the 

addition of available funding. 

The remaining comments were 

submitted from a variety of sources, 

including current SFMNP State agency 

grantees, State agencies not currently 

participating in the Program but 

interested in doing so, local agencies, 

farmers, professional organizations and 

associations, Congressional delegations, 

advocacy groups, nutritionists, and 

private citizens. The major comments 

are addressed by topic in further detail 

throughout this preamble. 

What follows is a discussion of each 

section of the final SFMNP rule, 

including the major provisions set forth 

in each section; a brief summary of the 

comments received that addressed these 

issues; and FNS’ rationale for either 

modifying each section in the final rule, 

or retaining its provisions as initially 

proposed. The section numbers 

referenced in the following discussion 

shall be sections of Title 7, Code of 

Federal Regulations, unless otherwise 

indicated. 

1. General Purpose and Scope (§ 249.1) 

While the essential purpose of the 

SFMNP is very similar to that of the 

FMNP, it differs from the FMNP 

purpose in one significant aspect—it 

includes community supported 

agriculture (CSA) programs (as defined 

in § 249.2) as allowable outlets for 

accepting SFMNP coupons or funds. 

CSA programs, while fairly familiar to 

the small farmer and sustainable 

agriculture communities, have not 

previously been associated with FNS 

programs. 

A total of 220 comments were 

received in support of converting the 

SFMNP from a competitive grant 

program to permanent status, and of the 

stated purposes of the program. In fact, 

close to 200 form letters were sent in by 

participating seniors in a single county. 

The purposes and scope of the SFMNP 

are retained in this final rule unchanged 

from the proposal. 

As directed by the provisions of 

Public Law 107–171 (7 U.S.C. 3007), the 

purpose and scope of the SFMNP are to 

improve/enhance the diets of lowincome seniors by enabling them to 

obtain fresh fruits and vegetables from 

farmers’ markets, roadside stands, and 

CSA programs, and to develop or 

expand these outlets by broadening 

their customer bases. 

2. Definitions (§ 249.2) 

Most of the definitions used in this 

rulemaking for the SFMNP are either the 

same as those used in the FMNP or are 

definitions used in the SFMNP 

competitive grant program. The majority 

of these definitions were either not 

addressed by commenters at all, or were 

supported by general comments to that 

effect. Therefore, with the exception of 

the definitions addressed below, all of 

the other definitions contained in 

§ 249.2 of this final rule are retained as 

proposed. 

‘‘Bulk purchase.’’ A number of 

SFMNP grantees have used a modified 

CSA program model in which bulk 

quantities of certain produce items, 

such as apples or sweet potatoes, were 

purchased directly from authorized 


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farmers by the State agency. These items 

were then equitably divided among 

SFMNP participants, and distributed 

directly to them, either at a central 

distribution point (such as a local senior 

center) or through some type of home 

delivery network. Such a program 

model was found to be very successful, 

but was not addressed in the proposed 

rule. Three commenters argued that the 

bulk purchase option should be retained 

in the permanent SFMNP, and FNS 

concurs with this position, as long as it 

is carefully managed to ensure that all 

other program requirements are met, e.g, 

only eligible foods are purchased in 

bulk for distribution, farmers from 

whom the produce is purchased are 

authorized by the State agency, and the 

value of the produce provided to 

SFMNP participants does not exceed the 

allowable maximum of $50 per 

participant. Therefore, a definition for 

‘‘bulk purchase’’ is added to the list of 

regulatory definitions at § 249.2; 

additional information regarding the 

bulk purchase option is also provided in 

Section 10 of this preamble. 

‘‘Eligible foods.’’ In the proposed rule, 

FNS defined ‘‘eligible foods’’ as fresh, 

nutritious, unprepared, locally grown 

fruits, vegetables, and herbs for human 

consumption. Three commenters 

suggested that the proposed definition 

of ‘‘eligible foods’’ be broadened to 

include fruits and vegetables that are 

not otherwise available through local 

production, as well as other 

nutritionally healthful items such as 

dried fruits and raw nuts. Another 6 

commenters supported the addition of 

locally-produced honey to the list of 

eligible foods, and 2 comments 

supported allowing dried beans for 

purchase. One comment suggested the 

inclusion of any edible farm produce, 

with an emphasis on variety, while 

another proposed that State agencies be 

given the authority to determine what 

food items should be considered to be 

eligible for purchase under the SFMNP. 

Finally, one commenter suggested that 

FNS should provide a master list of 

eligible foods from which State agencies 

would select the items that could be 

purchased with SFMNP benefits or 

funds. 

While FNS understands the 

motivation behind the suggested 

addition of such items as honey, dried 

fruits or beans, and raw nuts to the list 

of eligible SFMNP foods, it has no 

legislative authority to make such 

additions. The Farm Security and Rural 

Investment Act of 2002 (Pub. L. 107–

171, also known as the Farm Bill) 

specifically stipulates that SFMNP 

funds are to be used for the purchase of 

fresh, unprepared fruits and vegetables. 

State agencies do have a considerable 

amount of latitude in determining 

which fruits and vegetables are allowed 

for purchase within the Federal 

definition of eligible foods. It is not 

realistic to expect FNS to provide a 

master list of eligible foods beyond what 

is included in the current definition; 

FNS believes that individual State 

agencies are in the best position to know 

which fruits and vegetables are 

appropriate for sale within that State. 

Further, horticultural advances are 

constantly being made, and FNS would 

not want to exclude a potentially 

eligible fruit or vegetable from inclusion 

by establishing an exhaustive—and 

possibly inaccurate—list of eligible 

foods for the SFMNP. 

Therefore, the definition of ‘‘eligible 

foods’’ for the SFMNP will be retained 

in this final rule as proposed. 

‘‘Locally grown.’’ In the proposed 

rule, ‘‘locally grown’’ was defined as 

foods that are grown within the borders 

of the State that the project serves. State 

agencies also have the option to define 

‘‘locally grown’’ to mean foods grown in 

areas of States adjacent to that State, as 

long as such areas are part of the United 

States, and/or to use a more stringent 

definition than the one established by 

FNS. Two comments were received that 

addressed the proposed definition of 

‘‘locally grown’’. One commenter 

expressed concern that the definition as 

proposed is not sufficiently restrictive to 

ensure that the interests of local (i.e., 

within-State) farmers are protected, and 

suggested that the definition be 

strengthened to include a mandatory 

percentage of locally grown produce 

that must be offered for purchase 

through the SFMNP by authorized 

farmers, markets, and/or CSAs. The 

second commenter suggested that State 

agencies be allowed to define ‘‘locally 

grown’’ with no federally-imposed 

restrictions. 

While FNS encourages all 

participating State agencies to promote 

the sale of locally-grown eligible foods 

to the greatest extent possible, we also 

realize that circumstances beyond the 

local farmers’ control may occur to 

make it impossible to meet the demands 

of SFMNP participants entirely, at any 

given point in the market season. Once 

SFMNP coupons have been issued, or 

CSA shares assigned, a commitment has 

been made by the State agency to the 

participant that sufficient produce will 

be available to him or her in exchange 

for the full amount of benefits provided, 

should the participant want to use them. 

Thus it becomes incumbent upon the 

authorized farmer(s) to find a way to 

meet that demand. FNS believes that 

each individual State agency is in the 

best position to determine how much of 

the produce offered must actually be 

grown by the farmer who accepts the 

SFMNP coupons in a transaction. 

Consistent with the FMNP, SFMNP 

State agencies will be responsible for 

defining the percentage of produce that 

must be grown by an authorized farmer. 

However, as clearly stated in the 

proposed rule, FNS believes that it is 

important for an authorized farmer to 

produce at least some portion of the 

fruits and vegetables that she/he offers 

for sale. This requirement is intended to 

support small farmers. 

Therefore, the definition of ‘‘locally 

grown’’ is retained in this final rule as 

set forth in the proposed rule. 

‘‘Participant.’’ The term ‘‘participant’’

was suggested by a commenter as a 

replacement for the term ‘‘recipient’’

that was included in the proposed rule. 

As the commenter pointed out, 

‘‘participant’’ is consistent with the term 

used in other FNS-administered 

nutrition assistance programs. FNS 

agrees; therefore, the definition of 

‘‘recipient’’ that was initially set forth in 

the proposed rulemaking is now used to 

define ‘‘participant’’ for SFMNP 

purposes, the term ‘‘recipient’’ is 

removed from § 249.2, and the term 

‘‘participant’’ replaces 

‘‘recipient’’throughout this final rule. 

3. Administration (§ 249.3) 

This section of the rule delegates to 

FNS the responsibility within USDA for 

administering the SFMNP, and 

delegates the responsibility for direct 

administration of the program to State 

agencies. It also requires each State 

agency to submit an annual State Plan 

of Operations, and to execute written 

agreements between the administering 

(lead) State agency and any other State, 

local, or nonprofit agencies or entities 

involved in operating any aspect of the 

SFMNP. Finally, each State agency must 

ensure that sufficient staff is available to 

administer the SFMNP efficiently and 

effectively. 

Three comments were received that 

addressed this section of the proposed 

rulemaking, and most of them were 

essentially supportive of the 

administrative structure set forth in the 

proposed rule. One commenter 

proposed that the final rule include a 

formal delegation of authority to operate 

and/or administer the SFMNP at the 

local level, but this provision is already 

included as a State agency option at 

§ 249.3(d). 

Therefore, § 249.3 is retained in this 

final rule as proposed. 


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4. State Plan Provisions (§ 249.4) 

In establishing the SFMNP as a 

permanent program, Congress gave FNS 

the authority to set out basic standards 

and requirements for its operation. 

Consistent with other FNS nutrition 

assistance programs, as proposed, each 

State agency that desires to receive a 

SFMNP grant, including State agencies 

currently participating in the SFMNP, 

will need to submit a State Plan of 

Operation for approval by FNS. These 

State Plans will be due by November 15 

of each year. Four commenters 

misunderstood this particular provision 

of the proposed rule, and wrote to 

suggest that submission of a SFMNP 

State Plan should not be required until 

the final SFMNP rule is published. It 

was never FNS’ intent, nor was it 

suggested in the SFMNP proposed rule, 

that State Plans would be required prior 

to publication of the final rule. 

Therefore, the first SFMNP State Plans 

will be due to FNS Regional Offices by 

February 15, 2007, for the FY 2007 

market season, and by November 15 of 

each year thereafter. 

The State plan process replaces the 

grant application process that was used 

for the SFMNP since its inception in FY 

2001. One commenter suggested that the 

SFMNP continue to be administered as 

a competitive grant program. This is not 

a feasible option for future oversight of 

the SFMNP; once the status of the 

SFMNP as a permanent program has 

been established, its administration at 

the Federal level is expected to be 

consistent with other FNS nutrition 

assistance programs, i.e., State plans are 

submitted by and approved for each 

participating State agency, and the 

direct oversight and day-to-day 

management of the program is provided 

through the seven FNS Regional Offices. 

Therefore, this final rule sets out at 

§ 249.4(a) the specific elements that 

must be included in each State Plan 

submitted. A complete list of State Plan 

requirements is contained at § 249.4. 

As indicated above, § 249.4(a) sets out 

specific requirements for information 

that must be included in the State Plan 

of Operation. Many of the requirements 

included in the SFMNP proposed rule 

were new to SFMNP operators, and 

reflected administrative requirements 

that generated a considerable number of 

comments in opposition to the 

requirements. Listed below are 

discussions of most of the proposed 

information to be included in SFMNP 

State Plans, the comments received, and 

FNS’ decision regarding each proposed 

provision. Some of the larger 

administrative issues, such as income 

eligibility determination for SFMNP 

applicants, are addressed in greater 

detail under their respective Sections. 

Number and addresses of authorized 

participating markets, roadside stands, 

and CSA programs (§ 249.4(a)(8)(i))—

Two commenters pointed out that it is 

unreasonable to require the actual 

addresses of all authorized SFMNP 

outlets in November as part of the State 

Plan before the market season actually 

begins the following spring or summer. 

As noted, markets and roadside stands 

are not always permanent locations, and 

circumstances may change during the 

intervening months that cause these 

locations to change. Commenters noted 

that providing the number of outlets by 

type (market, roadside stand, CSA) that 

are expected to be authorized for the 

coming season, based on the prior year’s 

authorizations and/or projected 

additions such as new markets that are 

being solicited for inclusion in the 

SFMNP, should be sufficient. FNS 

agrees with commenters that providing 

the addresses of market outlets for the 

prior year is sufficient. Therefore, this 

final is revised in § 249.4(a)(8)(i) to 

require a State agency to provide in its 

State Plan the number and addresses of 

authorized market outlets that 

participated in the SFMNP during the 

prior year. 

A technical oversight in this 

paragraph of the proposed rule has also 

been corrected in this final rule by 

adding the number of individual 

farmers authorized to accept SFMNP 

coupons or CSA program funds to this 

requirement. 

Listing of all SFMNP certification/ 

issuance sites, including a map 

outlining the service area and proximity 

of markets, roadside stands, and/or CSA 

programs to certification/issuance or 

distribution sites (§ 249.4(a)(8)(ii))—

Similar to the requirement for the 

addresses of all authorized outlets, 4 

commenters pointed out that this 

provision is burdensome and 

unrealistic, given that reasonable access 

to the authorized outlets where 

participants will be able to use their 

program benefits is essential to the 

fundamental success of the SFMNP. 

Again, FNS agrees that providing a list 

of SFMNP certification and issuance 

sites, including a map, for the upcoming 

market season is not reasonable. 

Therefore, this final is revised in 

§ 249.4(a)(8)(ii) to require a State agency 

to include in its State Plan the SFMNP 

certification and issuance sites, 

including a map outlining the service 

area and proximity of authorized market 

outlets that participated in the SFMNP 

during the prior year. 

Determination of areas to be served 

(§ 249.4(a)(9)(i))—In the proposed rule, 

FNS included a provision to require the 

State agency to describe in its State Plan 

how it intended to select the area(s) 

within the State where SFMNP services 

would be offered. One commenter 

suggested that FNS should allow State 

agencies to exercise their own discretion 

in making such decisions. The limited 

amount of funding that is available for 

the SFMNP currently forces State 

agencies to make such determinations 

very carefully, and it has become 

evident over the past 5 years of 

operation that the considerations most 

important to FNS (higher concentrations 

of eligible persons and greater access to 

farmers’ markets, roadside stands, and/ 

or CSA programs) are already in use by 

the State agencies that received SFMNP 

grant awards. While we agree that State 

agencies have discretion to decide how 

to select the areas within the State to 

offer SFMNP benefits, FNS would like 

this information and believes State 

agencies should provide it information 

as part of the State Plan. Therefore, this 

requirement is retained in this final 

rule. 

Method for preventing and identifying 

dual participation (§ 249.4(a)(9)(iv))—

Six commenters opposed the dual 

participation requirement, pointing out 

that such a requirement is unnecessary 

in a program as small as the SFMNP. 

These commenters also stated that 

because the majority of SFMNP 

participants come into the program by 

virtue of their certification for or 

participation in another assistance 

program (such as Food Stamps or the 

Commodity Supplemental Food 

Program (CSFP)), the requirement 

designed to prevent dual participation 

in the SFMNP is redundant, because 

such programs already have 

mechanisms in place to detect and 

prevent dual participation. FNS believes 

that the commenters may have 

misunderstood the intention of this 

requirement, and would like to clarify 

that such mechanisms are not intended 

to prevent a senior from participating in 

two different programs for which she/he 

may be eligible, such as CSFP and 

SFMNP. State agencies are still 

required, however, to have in place a 

mechanism to assure that dual 

participation within the SFMNP, i.e., 

receipt of SFMNP benefits from more 

than one local agency or program 

model, can be detected and prevented. 

Such a mechanism does not have to be 

complicated or elaborate, and may be 

combined with a procedure already in 

place in a program for which 

participation or certification confers 

automatic SFMNP eligibility. Therefore, 

the requirement regarding dual 


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participation at § 249.4(a)(9)(iv) is 

retained in this final rule as proposed. 

5. Selection of New State Agencies 

(§ 249.5) 

This section of the proposed rule 

stated that only State agencies, as 

defined in § 249.2, would be eligible to 

receive grants for and administer the 

SFMNP. It also set forth FNS’ intention 

to grandfather in as State agencies in the 

permanent SFMNP those State agencies 

that participated in the SFMNP during 

the previous fiscal year (i.e., FY 2006) 

of the competitive grant program. In 

regard to the determination of entities 

that should be eligible to serve as 

SFMNP State agencies, one commenter 

expressed concern that local Area 

Agencies on Aging (AAA) would not be 

allowed to continue to administer the 

SFMNP. This is not the case. Since its 

inception, only a bona fide State agency 

or a federally recognized Indian Tribal 

Government has been eligible to receive 

funds as a SFMNP grantee. However, 

State agency grantees have also, since 

the inception of the SFMNP, had the 

option to allow local agencies such as 

AAAs to take on the day-to-day 

administrative and operational 

functions of the SFMNP. That option 

was expressly described in the proposed 

rule, and is retained in this final rule at 

§ 249.5. 

Three comments were received that 

opposed the proposal to grandfather in 

those State agencies currently 

participating in the SFMNP. These 

commenters argued that everyone 

should be given a fair opportunity to 

apply for the Program, and that the 

grandfathering clause is unfair to State 

agencies that have been unable to join 

the SFMNP. While funding limitations 

have made it impossible to accept 

applications from prospective SFMNP 

State agencies for the past 2 years, we 

disagree with the concern of overall 

unfairness. The grandfather clause is 

designed to facilitate the continuation of 

existing programs. Therefore, the clause 

is retained as proposed. Any new State 

agency interested in participating in the 

SFMNP is welcome to submit a State 

Plan of Operations to the appropriate 

FNS Regional Office by the regulatory 

deadline. Such prospective State 

agencies should keep in mind, however, 

that FNS approval of a SFMNP State 

Plan does not guarantee the availability 

of Federal funds to support the program. 

6. Participant Eligibility (§ 249.6) 

a. Categorical Eligibility 

In §§ 249.2 and 249.6(a)(1) of the 

proposed rule, FNS defined a person 

categorically eligible for the SFMNP (a 

‘‘senior’’) as an individual 60 years of 

age or older. Indian tribal organizations 

administering the SFMNP could deem 

Native Americans who are 55 years of 

age or older as categorically eligible for 

SFMNP benefits. State agencies would 

have the option to establish a higher age 

limit, such as 62 or 65 years of age. Four 

commenters specifically stated their 

support for these minimum age 

requirements. One additional 

commenter opposed the requirement for 

proof of age as an eligibility 

determinant, but no such requirement 

was included in the proposed 

rulemaking, nor has one been added to 

this final rule. Although two comments 

were received opposing the option for 

State agencies to establish a higher age 

limit, FNS believes that this option is 

important to State agencies as a 

potential caseload management tool. 

At § 249.6(a)(1), FNS also proposed to 

allow State agencies the option to deem 

disabled individuals under 60 years of 

age, who live in housing facilities 

occupied primarily by older individuals 

where congregate nutrition services are 

provided, as categorically eligible for 

SFMNP benefits. SFMNP State agencies 

opting to serve such disabled 

individuals would be responsible for 

weighing the relative benefits of serving 

those persons in certain housing 

facilities against serving additional 

elderly participants who are 60 years of 

age and older in the same, or possibly 

another, service delivery area. Four 

comments were received that addressed 

this provision, most of which were 

generally supportive. In fact, only one 

commenter opposed the ‘‘mandate’’ to 

serve persons less than 60 years old—

a mandate that does not exist in either 

the proposed or this final rule. 

The provisions at § 249.6(a)(1) 

regarding categorical eligibility for the 

SFMNP are therefore retained as set 

forth in the proposed rule. 

b. Residency Requirement 

Section 249.6(a)(2) of the proposed 

rule would have allowed State agencies 

to establish a residency requirement for 

SFMNP applicants, to determine a 

service area for any local agency, and to 

require an applicant to reside within 

that service area at the time of 

application. No durational or fixed 

residency requirement could be 

imposed. Only one comment was 

received related to the residency 

requirement for the SFMNP, and that 

comment reflected support for the 

provision. Therefore, this provision is 

retained as set forth in the proposed 

rule. 

c. Income Eligibility 

In developing the SFMNP proposed 

rule, FNS identified and considered 

three major aspects to the determination 

of income eligibility for the SFMNP: 

1. What should be the maximum 

allowable household income? 

2. Should FNS allow automatic 

income eligibility based on an 

individual’s participation in other 

programs? If so, which programs should 

be included? 

3. How much documentation or 

verification of income eligibility should 

be required for SFMNP applicants? 

Five comments were received that 

generally opposed any and all income 

eligibility requirements. FNS does not 

support this view, because of the need 

for responsible stewardship and 

fundamental program accountability. 

Income eligibility guidelines. As 

described in the preamble to the SFMNP 

proposed rule, most participating 

SFMNP State agencies use a maximum 

household income of 185 percent of the 

annual poverty income guidelines. In 

FY 2005, 36 of the 46 participating 

SFMNP State agencies used an income 

eligibility standard of 185 percent of the 

poverty guidelines, and another 7 State 

agencies linked SFMNP income 

eligibility to the maximum income limit 

used in the Commodity Supplemental 

Food Program (CSFP), i.e., 130 percent 

(7 CFR 247.7(a)(3)). A limited number of 

other variations existed, ranging from 

150 to 200 percent of the poverty 

income guidelines. Therefore, in the 

proposed rule, FNS proposed a 

maximum household income of 185% 

of the poverty guidelines. 

Although over twice as many of the 

comments received pertaining to this 

provision suggested the option of using 

an income eligibility standard higher 

than 185 percent as supported the 185 

percent limit (15 and 7, respectively), 

FNS does not support the option of a 

higher standard, even on a case-by-case 

basis, because a fundamental principle 

of the SFMNP is to serve as many lowincome seniors as possible. Therefore, 

in § 249.6(a)(3), FNS retains the 

maximum income limit of 185 percent 

for the SFMNP as set forth in the 

proposed rule. 

Automatic income eligibility based on 

participation in other programs. Under 

the competitive grant model of the 

SFMNP, many grantees use 

participation in other means-tested 

programs, such as the Food Stamp 

Program, the CSFP, and the Food 

Distribution Program on Indian 

Reservations (FDPIR), to determine 

eligibility for the SFMNP. All of these 

programs use an income eligibility limit 


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that is at or below 130 percent of 

poverty. 

FNS proposed to continue to allow 

State agencies to deem applicants 

automatically eligible for the SFMNP 

based on participation/certified 

eligibility to receive benefits in another 

means-tested assistance program, as 

determined by the State agency, as long 

as income eligibility is set at or below 

the SFMNP maximum income, i.e., 185 

percent of the annual poverty income 

guidelines, and some form of 

documentation is required to establish 

income eligibility for that program. 

All 3 of the comments received 

addressing this provision were 

supportive. One commenter went on to 

suggest that persons eligible for the 

Pharmaceutical Assistance to the Aged 

and Disabled (PAAD) Program also be 

deemed income eligible for the SFMNP. 

As long as the process for establishing 

eligibility for the PAAD is consistent 

with the requirements described above, 

and the individual is otherwise 

(categorically and residentially) eligible 

to participate in the SFMNP, FNS has 

no objection should a State agency wish 

to include the PAAD among its group of 

programs that confer automatic income 

eligibility for the SFMNP. 

Documentation of income eligibility. 

Proposed § 249.6(b) would have 

required SFMNP applicants who are not 

automatically income eligible for the 

program based on participation in or 

certified eligibility for another meanstested program to provide 

documentation of family income at 

certification. 

This requirement was strongly 

opposed in 123 comment letters, 

representing every commenter category. 

They expressed concern about imposing 

an administrative burden of this nature 

for such a relatively small annual 

benefit. One comment stated that the 

amount of time and effort anticipated to 

be necessary to obtain proof or 

documentation of income would be 

excessive given the value of the benefit 

offered—and the cost is unknown. This 

commenter went on to observe that the 

self-identification of need for food 

assistance, self-declaration of 

participation in another means-tested 

assistance program, or self-declaration 

of income should be the minimum 

requirement for accessing a $20 to $50 

annual SFMNP benefit. FNS finds the 

arguments put forth in these comments 

to be compelling, and has not included 

in the final rule a requirement for 

income documentation from all SFMNP 

applicants who are not deemed 

otherwise income eligible. Instead, as 

set forth in this final rule, such 

applicants may be certified if they sign 

an affidavit affirming that their 

household income does not exceed the 

State agency’s maximum income limit 

for their individual household size, 

except that State agencies offering a 

benefit greater than $50 per participant 

through a CSA program may not accept 

a signed affidavit of self-declared 

income eligibility, but must require 

documentation of household size and 

income for such participants. State and 

local agencies continue to have the 

option to verify reported income, in 

order to confirm an applicant’s income 

eligibility for the SFMNP. 

d. Certification Periods 

FNS established in the proposed rule 

at § 249.6(c) a certification period for 

SFMNP participants. As proposed, 

recipients could be certified only for the 

current fiscal year’s SFMNP period of 

operation. One commenter suggested 

that multiple-year SFMNP certification 

periods should be allowed, but FNS 

disagrees with this suggestion. Funds 

for the SFMNP are generally too limited, 

and turnover in the pool of potentially 

eligible senior SFMNP participants is 

too great, to justify such an option. 

Therefore, the provisions related to 

certification periods in the SFMNP are 

retained in this final rule as proposed. 

e. Rights and Responsibilities 

In § 249.6(d), FNS proposed to require 

State/local agencies to inform applicants 

or authorized representatives/proxies of 

their SFMNP rights and responsibilities. 

Several comments were received related 

to the Rights and Responsibilities 

notification—2 generally supported the 

provision, 3 specifically supported the 

provision of information on other 

services that may be available to SFMNP 

participants, and one suggested that a 

joint statement be allowed for seniors 

who are participating in both the 

SFMNP and the CSFP, when both 

programs are administered by the same 

State agency. FNS appreciates the 

principle behind such a suggestion, but 

does not agree. Even when one agency 

is responsible for administering 

multiple programs, such as the SFMNP 

and the CSFP, separate benefits are 

provided to participants under each 

program. Therefore, FNS believes that it 

is important to maintain separate 

statements of the participant’s rights 

and responsibilities as they pertain to 

each individual program. This provision 

is retained in this final rule as proposed. 

This section as proposed also required 

State/local agencies to notify applicants 

in writing if they were ineligible for 

SFMNP benefits (including the reasons 

for the determination of ineligibility), 

and of their right to a fair hearing. A 

total of 18 comments were received 

opposing this written notification 

requirement, arguing that such a 

requirement is excessively burdensome 

in a program that has such a short 

duration each year. While FNS is 

sincere in its stated intention not to 

impose any administrative burden on 

participating State and local agencies 

that is not absolutely necessary, it 

cannot in good conscience eliminate 

this requirement. Once an individual 

has applied for Program benefits and 

has been found to be ineligible to 

receive them, that individual is entitled 

to a formal notification of such a 

determination and of his/her right to a 

fair hearing to challenge that decision. 

However, FNS also believes that there 

may be some confusion between an 

actual determination of an individual 

participant’s program ineligibility and a 

State or local agency’s inability to 

provide benefits because there simply 

are not enough funds (in the form of 

coupons or CSA shares) to serve 

everyone who is interested in receiving 

SFMNP benefits. This provision applies 

specifically to the former instance. The 

proposed rule did not intend to require 

that written notification be provided to 

all potentially eligible seniors in the 

State or local service delivery area when 

funds are not available to provide 

SFMNP benefits. 

The requirement for written 

notification of applicant ineligibility 

and the right to a fair hearing is 

therefore retained in this final rule as set 

forth in the proposed rule. However, 

State and local agencies are not 

expected to implement a complicated or 

time-consuming process in order to 

provide written notices of ineligibility 

and the right to a fair hearing; a form 

letter that has the pertinent information 

(date, name, basis of ineligibility, and 

signature of the certifying official) filled 

in as appropriate and handed to the 

applicant at the time of application is 

acceptable. 

f. Certification Without Charge 

The proposed provision at § 249.6(e), 

stipulating that no applicant or 

authorized representative may be 

charged to apply or be certified for the 

SFMNP, was not addressed by 

commenters. Therefore, the provision is 

retained in the final rule as proposed. 

g. Use of Authorized Representatives/ 

Proxies 

The SFMNP proposed rule included a 

provision requiring any State agency 

electing to allow proxies or authorized 

representatives to obtain a signed 

statement from the eligible senior 

designating another person as his/her 


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authorized representative. This 

provision was characterized by 4 

commenters as a positive addition; in 

fact, the use of proxies in the SFMNP 

has been an option for grantees since the 

program first began. However, another 5 

comments were received that suggested 

that the requirement for a signed 

designation of a proxy by the eligible 

senior is too burdensome and should be 

deleted. FNS strongly disagrees, and 

finds this requirement to be essential in 

order to assure that SFMNP benefits are 

actually received by the eligible senior 

for whom they are intended. Therefore, 

in § 249.6(f) of this final rule, the 

provision is retained as proposed. 

g. Processing Standards/Waiting Lists 

SFMNP State agencies were required, 

at § 249.6(g) in the proposed rule, to 

notify applicants of their eligibility or 

ineligibility for benefits, or placement 

on a waiting list, within 10 days from 

the date of application. This provision 

was proposed to take into account the 

relatively short duration of the SFMNP’s 

actual period of operation. Unlike other 

ongoing nutrition assistance programs, 

such as Food Stamps, FDPIR, or the 

CSFP, the SFMNP does not usually 

operate year-round. Therefore, it is 

important that the certification process 

for the SFMNP be expedited to some 

extent. Reaction to this provision was 

mixed—4 comment letters supported 

the 10-day standard, while 9 maintained 

that it is entirely too short. While FNS 

cannot agree to the 30-day processing 

standard suggested by 3 commenters, 

we can see some benefit to allowing 

State agencies a slightly longer period of 

time to complete the certification 

process. Therefore, in this final rule the 

processing standard for the SFMNP is 

increased at § 249.6(g) to 15 days. 

Although this is only 5 days longer than 

the 10 days initially proposed, the 

reduction of several significant 

administrative functions associated with 

the certification process (most notably 

the acceptance of a signed affidavit in 

the income eligibility determination 

process) makes the 15-day standard a 

reasonable one. State agencies would 

always have the option to establish a 

shorter processing standard for their 

local SFMNP agencies. 

Further, FNS proposed to require 

State agencies to keep a waiting list of 

individuals who apply for benefits but 

cannot be served. This information 

would enable State/local agencies to 

certify individuals if funding within the 

State is reallocated based on need. The 

waiting list would include the name of 

the applicant, the date he/she was 

placed on the waiting list, and an 

address or phone number in order to 

contact the applicant. These 

requirements are consistent with the 

FNS-administered CSFP, which also 

serves seniors. However, as pointed out 

by 18 commenters, it is not reasonable 

to maintain a waiting list when there is 

no realistic expectation of additional 

benefits becoming available at some 

later date. SFMNP benefits are often 

exhausted very quickly, sometimes 

within a matter of days or even hours. 

FNS concurs with the commenters’

position that in such cases, having to 

maintain a waiting list of eligible 

seniors who are interested in benefits is 

a futile and burdensome requirement. 

Therefore, this provision has been 

modified in this final rule to require a 

State agency to maintain a waiting list 

only when there is some reasonable 

expectation of being able to provide 

benefits at a later date to those 

additional unserved individuals. 

7. Nondiscrimination (§ 249.7) 

As indicated in § 249.7(a) of the 

proposed rule, Title VI of the Civil 

Rights Act of 1964 requires that racial 

and ethnic participation data be 

collected from all SFMNP benefit 

participants. Eight commenters 

suggested that the racial/ethnic data 

collection requirement be deleted, and 

another commenter proposed that the 

data collection at least be delayed until 

the new racial/ethnic categories 

stipulated by OMB are in place for the 

CSFP as well. FNS recognizes that this 

data collection requirement may 

duplicate data collections that have 

been performed for SFMNP participants 

when they applied for other nutrition 

assistance programs such as Food 

Stamps, FDPIR, and/or CSFP. Therefore, 

to avoid duplicate collection of racial/ 

ethnic data, a separate SFMNP 

collection would not be required for 

those participants who come into the 

SFMNP as automatically eligible based 

on their participation in another 

assistance program. Racial/ethnic data 

must be collected for all other SFMNP 

participants. State agencies must be able 

to provide racial/ethnic data upon 

request by FNS for all participants, 

whether obtained via another assistance 

program or collected by the SFMNP 

State agency. 

8. Eligible Foods and Level of Benefits 

(§ 249.8) 

Note: In the interest of clarity, the heading 

for this section is modified from the 

proposed rule to reflect the order of the 

topics addressed. 

A comprehensive discussion 

regarding eligible foods in the SFMNP is 

included in the preamble to the 

proposed rule. No other comments in 

addition to those discussed in section 2 

of this preamble, regarding the 

definition of ‘‘eligible foods’’ for the 

SFMNP were received. Therefore, the 

provisions related to eligible foods set 

forth at § 249.8(a) are retained in this 

final rule as proposed. 

In § 249.8(b), FNS proposed minimum 

and maximum annual benefit levels of 

$20 and $50, respectively, for all 

coupon issuance program models 

(farmers’ markets, roadside stands and/ 

or CSA programs). These levels were 

intended to accommodate the majority 

of State agencies that already use at least 

a $20 benefit level, and are consistent 

with the current average benefit level of 

SFMNP benefits issued nationwide. 

The proposed minimum and 

maximum benefit levels resulted in 

comments both for and against the 

provision. All 11 of the State agencies 

with benefit levels lower than $20, 

along with several other interested State 

and local SFMNP agencies, wrote to 

protest the necessity of reducing the 

number of eligible seniors they were 

currently serving in order to raise the 

benefit level to the $20 minimum. A 

relatively small number of commenters 

(6) supported the principle of a 

regulatory minimum and maximum 

benefit level, but half of those 

commenters went on to suggest that 

State agencies be allowed to issue a 

smaller benefit when Federal funds are 

decreased, such as in FY 2005 when all 

SFMNP grantees experienced an acrossthe-board reduction in their SFMNP 

grant awards. 

Anecdotal evidence over the past 6 

years of SFMNP operation consistently 

indicates that certified participants are 

more likely to make use of their SFMNP 

benefits when the benefit level is high 

enough to justify one or more trips to a 

farmers’ market, roadside stand, and/or 

CSA program for the purchase of 

eligible fresh fruits and vegetables. FNS 

believes establishing a minimum 

SFMNP benefit of $20 is not only 

appropriate, but will also be conducive 

to higher expenditure and redemption 

rates in future years of SFMNP 

operation. However, FNS also 

recognizes the difficulties that would be 

encountered by the 11 State agencies 

currently offering a seasonal benefit of 

less than $20. 

The strongest objections to this 

provision were submitted in opposition 

to the $50 maximum benefit level. A 

variety of suggestions were put forth, 

including eliminating the benefit cap 

altogether, increasing the maximum 

benefit to $80 or to $100, and/or 

allowing State agencies the option of 

setting their own minimum and 


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maximum benefits, either for all 

program models or only for CSAs. 

Requests for a grandfather clause that 

would allow current State agencies to 

continue issuing the same level of 

SFMNP benefits came primarily from 

State agencies that expend the largest 

portion of their SFMNP grants on a CSA 

program model of operation. The basic 

structure of most CSAs is predicated 

upon shares of at least $100 each, and 

a total of 60 comments were received 

from State agencies, local agencies, 

participating farmers, and even 

participants to request that the 

maximum SFMNP benefit level be 

increased or at least allowed to remain 

at their FY 2004 levels. Nearly 30 

farmers stated that if the maximum CSA 

benefit level were reduced to $50, they 

would no longer be willing or able to 

continue participating in the SFMNP. 

Therefore, FNS has reconsidered the 

matter of minimum and maximum 

benefit levels in the SFMNP in this final 

rule, and has revised the requirements 

as follows: 

• The minimum benefit level of $20 

is retained as proposed, except that 

SFMNP State agencies being 

grandfathered into the permanent 

program (i.e., that participated in the 

SFMNP in FY 2006) may continue to 

issue benefits at their FY 2006 levels. 

• Current SFMNP State agencies that 

are grandfathering a CSA program 

model into the permanent program may 

continue to issue benefits to senior 

participants in the CSA programs at 

their current (FY 2006) levels, except 

that any State agency whose annual 

CSA participant benefit level is greater 

than $50 will not be eligible to receive 

expansion funds until the $50 benefit 

cap in the CSA program model is 

implemented. While FNS is sympathetic 

to the concerns expressed through the 

public comment process, we also 

believe in the principle of serving as 

many eligible senior participants as 

possible with the limited funds 

available to the SFMNP. 

• New State agencies who begin 

operating the SFMNP after FY 2006 

must comply with the $20 benefit 

minimum as well as the $50 benefit cap. 

SFMNP State agencies that do not use 

a CSA program model must comply 

with the $50 benefit cap as provided in 

the proposed rule. 

As one commenter suggested, State 

agencies will continue to have the 

option of providing a higher benefit 

level out of funding sources other than 

the Federal SFMNP grant. Finally, FNS 

disagrees with the commenter who 

stated that longer growing seasons 

justify higher benefit levels, because it 

can also be argued that shorter growing 

seasons, with commensurately higher 

prices for fresh produce because it is 

only available for a short time, can also 

justify higher benefit levels. 

In order to ensure equitable treatment 

in and access to the SFMNP, FNS 

proposed in § 249.8(c) that all SFMNP 

participants served by the State agency 

must be offered the same level of 

SFMNP benefits. Reaction to this 

provision was almost evenly divided in 

support and opposition, but FNS is still 

convinced that a consistent statewide 

benefit level is important to the integrity 

of the SFMNP. Therefore, the 

requirement is retained in this final rule 

as proposed. 

Also as proposed, FNS has retained in 

this final rule the provision that the 

same statewide benefit level does not 

have to be applied for SFMNP 

participants who are receiving benefits 

through a CSA program. Such 

participants are eligible to receive $50 

or more (if the State agency is exercising 

the grandfather clause set forth in 

§ 249.8(b)) in SFMNP benefits, even if 

SFMNP participants in that same State 

are issued only $10 (if the State agency 

has been grandfathered in at the lower 

minimum benefit level) or $20 (for all 

other State agencies) in coupons to use 

at farmers’ markets or roadside stands. 

As proposed and as set forth in this 

final rule, SFMNP participants may also 

receive benefits through a bulk purchase 

program model, as described in § 249.2, 

as long as each participant receives an 

equitable value of fruits and vegetables. 

In addition, the total benefit provided to 

each participant (whether s/he receives 

a combination of coupons and bulkpurchased foods during the course of 

the season, or only bulk-purchased 

foods) must fall within the minimum 

and maximum levels set forth in this 

final rule. 

Finally, § 249.8(c) of the proposed 

rule offered SFMNP State agencies the 

continued option to issue program 

benefits on either an individual or a 

household basis, as long as State 

agencies continue to report participant 

information to FNS on an individual 

basis. The household option, if SFMNP 

State agencies choose to implement it, 

allows more participants to be served 

with limited funds. The provisions 

contained in this section are retained in 

this final rule as proposed. 

Section 249.8(c)(3) of the proposed 

rule prohibited sharing of food 

purchased through the SFMNP with 

non-participating household members. 

Seven commenters opposed this nonsharing provision, calling it 

unenforceable and therefore 

unnecessary. FNS recognizes the 

difficulty of enforcing such a provision, 

but maintains that it is nonetheless an 

extremely important one. SFMNP 

benefits are generally issued to 

individuals with particular nutritional 

needs with the intention of improving 

that individual’s diet by increasing his/ 

her consumption of fresh fruits and 

vegetables. Therefore, program 

administrators can discuss this issue 

when participants are certified and/or 

provided basic information about the 

SFMNP. It is critical that program 

administrators and participants alike 

understand the importance of the 

SFMNP benefits that are being provided 

to specific eligible individuals for 

specific dietary reasons. Therefore, this 

provision is retained in this final rule as 

proposed. 

9. Nutrition Education (§ 249.9) 

As proposed, this section of the rule 

defined the goal of nutrition education 

in the SFMNP, required the State agency 

to integrate nutrition education into its 

SFMNP operations, and provided 

guidance on coordinating the delivery of 

nutrition education through other 

agencies within the State. Thirteen 

comments were received regarding the 

nutrition education provisions of the 

SFMNP proposed rule, more than half of 

which were generally supportive. Two 

commenters suggested that there should 

be some level of flexibility for nutrition 

education at the local level. Although 

the proposed rule did not specifically 

address such flexibility, FNS supports 

such discretion as long as the State 

agency is aware of the content and 

quality of the nutrition education that is 

being provided, and monitors it 

regularly as required. Additional 

suggestions related to the nutrition 

education provisions that were not 

incorporated into this final SFMNP rule 

included stipulating that all nutrition 

education should be provided or 

overseen by a Registered Dietician or 

other qualified nutrition professional (2 

comments), and that each local agency 

should bear the costs associated with 

providing nutrition education to 

SFMNP participants. Conversely, it was 

suggested in another comment letter 

that the State agency should be 

responsible for providing all nutrition 

education materials to the local 

agencies, in all languages necessary. 

FNS’ view is that issues related to 

nutrition education are matters best 

negotiated between the State and local 

agency, rather than addressed through 

Federal program regulations. FNS agrees 

that it is important to take into 

consideration those participants with 

limited English proficiency, but believes 

that this is sufficiently covered in the 


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Participant Rights and Responsibilities 

statement set forth at § 249.6(g). 

FNS believes nutrition education to 

be an integral component of any 

effective nutrition assistance program. 

For this reason, SFMNP State agencies 

have been required, since the inception 

of the pilot program in FY 2001, to 

include nutrition education as part of 

their program design in order to receive 

a Federal SFMNP grant. 

Nutrition education has also long 

been the hallmark of several other FNSassisted nutrition assistance programs, 

particularly the WIC Program and the 

FMNP, upon which the SFMNP is 

closely modeled. While nutrition 

education is being made increasingly 

available in other FNS programs, such 

as the Food Stamp Program, FDPIR, and 

CSFP, there is still no guarantee that 

SFMNP participants are also 

participating in any of these programs, 

or that the focus of the nutrition 

education that is offered is appropriate 

for the SFMNP participant population. 

As proposed, this final rule requires, 

at § 249.9, all participating State 

agencies to describe the nutrition 

education that will be provided to 

SFMNP participants, including the 

agencies that will be responsible for 

providing the nutrition education (e.g., 

Cooperative Extension Service or local 

Area Agencies on Aging), the format(s) 

in which the nutrition education will be 

provided (e.g., recipe cards or cooking 

demonstrations), and the locations 

where the nutrition education is likely 

to be offered (e.g., senior centers, 

farmers’ markets, common rooms in 

assisted living facilities). The content of 

the nutrition education should be ageand circumstance-appropriate for 

SFMNP participants. FNS encourages 

State agencies to take advantage 

wherever possible of existing nutrition 

education opportunities for senior 

participants. Such opportunities may 

exist, for example, in nutrition 

education classes or events emphasizing 

the importance of fresh fruits and 

vegetables to a healthy diet that may be 

offered to Food Stamp Program 

participants who are also participating 

in the SFMNP, or through food 

demonstrations and tastings provided as 

part of a congregate nutrition program 

funded by the Older Americans Act at 

a local senior center or farmers’ market. 

10. Coupon, Market and CSA Program 

Management (§ 249.10) 

This section of the proposed rule 

outlined the State agency requirements 

regarding all aspects of coupon, market, 

and CSA program management in the 

SFMNP, specifically general 

responsibilities, agreements, training, 

monitoring, coupon control and 

payment, coupon reconciliation, 

instructions to SFMNP participants, 

complaints and sanctions, and CSA 

program management. 

The requirements set forth in § 249.10 

regarding each of these areas were 

discussed at length in the preamble to 

the proposed rule. Five comments were 

received in general support of the 

market management and monitoring 

provisions, and another 2 commenters 

specifically cited their support for the 

proposed rule’s efforts toward 

consistency between the SFMNP and 

the FMNP. Several commenters 

suggested that the SFMNP be allowed to 

operate year-round. Once the SFMNP is 

converted from a competitive grant 

program to a permanent, State Planbased program, there is no reason that 

a SFMNP State agency cannot do so, as 

long as there are funds available to 

support the longer program period. 

Except as noted below, the provisions in 

this section are retained in this final as 

proposed. 

a. Authorization 

As proposed, the State agency would 

have been responsible for establishing 

criteria for the authorization of farmers, 

farmers’ markets, and/or roadside 

stands, as well as the number of outlets 

that it plans to authorize, as provided in 

§ 249.10. One commenter suggested that 

State agencies rank farmers, farmers’

markets, roadside stands, and/or CSAs 

by risk factors as part of the 

authorization process. While FNS does 

not believe that this should be a 

regulatory requirement, there is nothing 

in either the proposed or the final 

SFMNP rule that would prohibit a State 

agency from doing so if it believes that 

such a process will result in a better 

group of authorized SFMNP outlets. 

Therefore, these provisions remain 

unchanged in this final rule. 

One commenter expressed opposition 

to all of the requirements proposed at 

§ 249.10(a) through (e), i.e., everything 

related to the authorization, training, 

monitoring, and payment of farmers, 

farmers’ markets, roadside stands, and 

CSA programs in the SFMNP, and 

proposed that FNS should be 

responsible for authorizing all farmers, 

farmers’ markets, roadside stands, and/ 

or CSAs for the SFMNP, rather than 

individual SFMNP State agencies. The 

commenter cited as precedent for this 

proposal the fact that FNS is responsible 

for authorizing retailers in the Food 

Stamp Program. However, legislative 

authority would be necessary for such a 

provision to be implemented in the 

SFMNP. Furthermore, it would be 

extremely difficult for SFMNP State 

agencies to maintain the degree of 

individuality that has been a hallmark 

of this program from the very beginning 

if FNS were to take on such a 

responsibility. 

b. Agreements 

As proposed, Section 249.10(b) 

outlined the contents of the farmers’

market/CSA program agreement. No 

comments were received in regard to the 

provisions in this section, so they are 

retained in this final rule as proposed, 

with the additional provision allowing 

bulk purchases as defined at § 249.2. 

c. Training 

Pursuant to § 249.10(d), as proposed, 

FNS State agencies must conduct 

annual training for farmers, farmers’

market managers, and (as appropriate) 

CSA program managers. State agencies 

have discretion in determining the 

method used for training purposes. Four 

commenters suggested that the final rule 

allow face-to-face training to include 

phone, videoconference, and/or webbased training. Section 249.10(d) in this 

final rule is clear in its requirement that 

all farmers and farmers’ market 

managers who are participating in the 

SFMNP for the first time must receive 

interactive training that allows for realtime questions and answers between the 

State agency trainer and the farmer or 

farmers’ market manager. Such training 

includes, for example, face-to-face 

training, videoconference training, and/ 

or web-based training. Alternative 

methods of training may be used after 

the first year of program participation, at 

the State agency’s discretion. The points 

that must be covered in training are 

listed at § 249.10(d), and are retained in 

this final rule as proposed. 

d. Sanctions 

Proposed § 249.10(k) set out a number 

of provisions related to sanctions that 

may be applied in the SFMNP. 

Comment letters were received from 

four State agencies suggesting that this 

section be rewritten in such a manner as 

to leave all fraud and sanction policies 

and procedures to the discretion of the 

State agency. FNS believes that the 

proposed rule offered sufficient 

flexibility and latitude to allow SFMNP 

State agencies to tailor the process to the 

particular needs and characteristics of 

its own program operations. Therefore, 

the provisions described in this section 

are retained in this final rule. 

e. Community Supported Agriculture 

(CSA) Programs 

The most significant difference 

between the FMNP and the SFMNP 

regarding market management 


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procedures falls in the area of CSA 

programs, which are not allowable 

outlets for program funds in the FMNP. 

As expected, there were a significant 

number of comments (44 in all) received 

in regard to, and largely in support of, 

CSA program operations and systems. 

Most of these comments focused on 

allowing State agencies with existing 

CSA program models in place to 

continue operating their programs with 

virtually no modifications or 

restrictions. Seventeen commenters 

supported the inclusion of CSAs in the 

SFMNP or opposed the implementation 

of a final rule that favors a couponbased program over one that uses the 

CSA model. 

A discussion of CSA programs and 

their unique requirements is provided 

below. 

CSA programs are described in detail 

in the preamble to the proposed rule. 

The majority of State agencies that 

include a CSA program component in 

their SFMNP operations only do so on 

a limited basis, in combination with the 

more traditional coupon model. 

However, at least two State agencies 

have operated their SFMNP programs 

exclusively through the CSA program 

model since the SFMNP began in FY 

2001. 

Seven commenters categorically 

opposed FNS’ proposal to restrict CSAs 

to no more than 50 percent of the State 

agency’s total Federal SFMNP food 

grant, and another commenter requested 

further clarification of FNS’ intent in 

establishing such a cap. As explained 

above, FNS believes that a greater 

number of low-income eligible seniors 

can be served through the more 

traditional coupon system, thereby 

improving the diets of a larger 

percentage of this vulnerable 

population. 

One commenter expressed his 

objections to the limitations proposed 

for CSA program models. This 

commenter was of the opinion that 

Public Law 107–171 affords equal status 

to farmers’ markets, roadside stands, 

and community supported agriculture 

programs, and that FNS does not have 

the discretion to choose those parts of 

the SFMNP that it wishes to support. 

This commenter further observed that 

Congress gave the States discretion to 

choose among these different delivery 

models in their development of 

successful SFMNP programs, and that 

FNS should not preempt such a statelevel responsibility through rulemaking. 

FNS does not agree with this opinion. 

It is unquestionably true that no 

preference was stated or implied in the 

law for one program model over 

another, and USDA has made every 

effort to work with State agencies in the 

development and success of less 

traditional program models as well as 

those to which we may have been more 

accustomed. This does not mean, 

however, that FNS is prepared to allow 

any State agency, regardless of the 

program model selected, to operate 

outside the fundamental Program 

guidelines and expectations that have 

been developed to assure integrity and 

accountability. Congress, with the 

passage of the Farm Bill, did in fact 

empower FNS to promulgate regulations 

for the SFMNP that would provide such 

assurances. The restrictions and 

limitations that are imposed on CSA 

program models for the SFMNP in this 

final rule are based on information 

collected over the past 5 years of 

SFMNP operation, and represent FNS’

best efforts to prevent as many problems 

as possible as the SFMNP matures. 

Therefore, this final rule retains the 

requirement as proposed. 

FNS further proposed to establish at 

§ 249.8(b) one minimum and one 

maximum benefit level in the SFMNP, 

regardless of the program model used by 

the State agency. We recognized the 

impact of this proposal on the CSA 

program models in use by SFMNP State 

agencies around the country. The 

revised approach to participant benefit 

levels designed in response to the 

comments received on this topic is 

discussed earlier in this preamble and 

reflected at § 249.8. 

In § 249.10(b)(3)(vi), FNS proposed to 

require that State agencies enter into 

written agreements with CSA programs, 

in order to ensure that CSA programs 

track the value of program benefits 

actually provided to individual 

participants and the remaining value 

owed, provide State agencies with 

access to such a tracking system, and 

ensure that the value of program 

benefits provided is consistent with 

program requirements addressing 

minimum and maximum benefit levels 

for each participant. None of the 

commenters addressed these 

requirements, and they are retained in 

this final rule as proposed. 

Finally, 2 SFMNP State agencies have 

used a portion of their grants to 

purchase CSA program shares that are 

then used to supplement meals served 

at congregate feeding sites. Such a 

practice was technically allowable 

under the SFMNP competitive grants, 

primarily because there were no 

legislative or regulatory provisions to 

prevent it and the grants provided an 

opportunity to look at various program 

models. However, it is not consistent 

with the underlying intent of the 

SFMNP, which is to provide individual 

low-income seniors with a resource that 

benefits their diets directly, rather than 

through any type of congregate feeding 

program. Therefore, at § 249.12(a)(3), 

FNS proposed that the use of any 

SFMNP funds to supplement congregate 

meal programs would be specifically 

prohibited. A total of 21 commenters 

wrote to protest this prohibition. 

However, FNS believes that adherence 

to the fundamental intent of the SFMNP 

cannot be ensured without such a 

restriction, and is retaining this 

provision as set forth in the proposed 

rule. 

11. Financial Management System 

(§ 249.11) 

This section of the proposed rule set 

forth FNS’ specific requirements that 

would ensure the prompt and accurate 

payment or allowable costs in the 

SFMNP, as well as the allowability and 

allocability of costs in accordance with 

established general accounting and 

management procedures. Only one 

comment was received regarding this 

section, expressing general support for 

its provisions. Therefore, this section is 

retained in its entirety as proposed. 

12. SFMNP Costs (§ 249.12) 

a. Administrative Funding 

The proposed SFMNP rule contained 

a provision that would have allowed a 

State agency to use up to 8 percent of 

its total Federal grant to defray 

administrative costs associated with the 

SFMNP, as described at § 249.12(a)(1)(i). 

Nearly 40 comments were received in 

opposition to the 8 percent 

administrative allowance, citing the 

extensive increase in administrative 

requirements for State and local 

agencies as well as the inequity between 

the administrative cost allowance for 

the FMNP and the proposed level for 

the SFMNP—a problem for the many 

State agencies that administer both 

programs. Based on commenters’

suggestions, FNS has increased the 

maximum administrative allowance for 

the SFMNP in this final rule to 10 

percent of the State agency’s total 

Federal grant. This position is 

consistent with OMB Circular A–87 and 

the mission of this Agency to provide a 

level of administrative funding to help 

reasonably offset the costs for 

administering the program. 

Eleven commenters also suggested 

that FNS should secure additional 

Federal funds for the SFMNP to cover 

the administrative allowance. This is 

not an issue that can be addressed 

through the regulatory process. 


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b. Food and Administrative Costs 

As proposed, this section of the rule 

defined allowable and unallowable 

costs for the SFMNP, and defined 

specified allowable SFMNP costs. No 

comments were received that 

specifically addressed this section. It is 

retained in the final rule as proposed. 

13. SFMNP Income (§ 249.13) 

As proposed, this section defined 

program income for the SFMNP as gross 

income the State agency earns from 

grant-supported activities, and 

established procedures for its use and 

documentation. No comments were 

received that specifically addressed this 

section. It is retained in the final rule as 

proposed. 

14. Distribution of Funds to State 

Agencies (§ 249.14) 

In order to grandfather in those State 

agencies currently participating in the 

SFMNP competitive grant program, as 

previously discussed in Section 5 of this 

preamble, Selection of State Agencies, it 

was necessary to establish some 

fundamental principles for the 

allocation of SFMNP funds. The 

preamble to the proposed rule provided 

a comprehensive description of FNS’

proposal for allocating both base grants 

and any SFMNP funds that might be 

available for expansion once the base 

grants are fulfilled. Briefly, SFMNP base 

grant levels would be based on the prior 

fiscal year’s grant levels (rather than the 

prior year’s expenditures); in the event 

that the amount of funding available to 

the SFMNP in any fiscal year is not 

sufficient to maintain the prior year 

funding levels for each participating 

SFMNP State agency, each State’s grant 

would be ratably reduced by FNS. Once 

the base grants have been satisfied, any 

remaining funds that are available to the 

SFMNP will be allocated so that 75 

percent of the remaining funding would 

be available to currently participating 

State agencies to expand their existing 

programs, and 25 percent would be 

available to State agencies with 

approved State plans that have not 

previously participated in the SFMNP. 

If either amount is greater than the 

amount necessary to satisfy requests for 

that category (i.e., current State agencies 

or new State agencies), the unallocated 

amount is then applied toward 

satisfying any unmet need in the other 

category. 

Most of the 15 commenters that 

addressed these provisions were 

supportive of the base grant provision, 

but opinions were divided regarding the 

division of available funds after base 

grant commitments are met; one 

commenter specifically supported the 

75/25 split, and 3 commenters suggested 

a 50/50 split instead. Other comments 

included a recommendation to give 

preference to new State agencies over 

current ones, and 3 commenters stated 

that SFMNP funding is not 

proportionally allocated and that all 

State agencies should have an equal 

chance to secure funds for the SFMNP 

at the beginning of each year. However, 

FNS continues to believe that the 

funding allocation process set forth in 

the SFMNP proposed rule is the most 

logical and equitable process for the 

disbursal of SFMNP funds. Thus, these 

provisions are retained in this final rule 

as proposed. 

It was also suggested that SFMNP 

funds should be made available to all 

interested State agencies and ITOs, and 

that funding should be increased for the 

SFMNP. As indicated earlier in this 

section, these are not matters that can be 

addressed through the promulgation of 

program regulations. 

Finally, 4 commenters suggested that 

a timeline for base grant and expansion 

funding allocations be set out in the 

SFMNP regulations. FNS will allocate 

the funds as soon as they become 

available. No changes have been made 

in this final rule to address this 

commitment. 

15. Closeout Procedures (§ 249.15) 

As proposed, this section required 

SFMNP State agencies to submit a final 

closeout report to FNS for each fiscal 

year, and set forth the specific 

procedures to be followed when a 

SFMNP grant to a State agency is 

terminated. No comments were received 

that specifically addressed this section. 

It is retained in this final rule as 

proposed. 

16. Administrative Appeal of State 

Agency Decisions (§ 249.16) 

As proposed, SFMNP State agencies 

are required to provide a hearing 

procedure whereby any entity 

(applicants, participants, local agencies 

and farmers, farmers’ markets, roadside 

stands, and/or CSA programs) adversely 

affected by certain actions of the State 

agency may appeal those actions. This 

section provided a list of the adverse 

actions that may be appealed. It also set 

out the procedures that must be 

followed when an appeal is requested, 

and clarifies that appealing an adverse 

action does not relieve the entity that 

has been permitted to continue in the 

SFMNP while its appeal is pending 

from responsibility for continued 

compliance with the terms of the 

written agreement or contract with the 

State agency. Finally, as proposed, 

§ 249.16 required that the State agency 

explain the appellant’s right to judicial 

review of any State level decision 

rendered against the appellant, and set 

forth additional proposed appeals 

procedures for State agencies that 

authorize farmers’ markets rather than 

individual farmers. 

Three comments were received that 

objected to the provisions in this section 

as too burdensome, and suggested that 

a less formal system be permitted. FNS 

does not agree with these comments. 

The requirements set forth regarding a 

formal hearing process for participants 

are necessary to ensure due process for 

any participant against whom an 

adverse action has been taken, and as 

such are critically important to 

protecting the rights of all participants. 

Therefore, the requirements set forth in 

the proposed rule are retained in this 

final rule. 

17. Management Evaluations and 

Reviews (§ 249.17) 

This section of the proposed rule 

would have required FNS and each 

SFMNP State agency to establish a 

management evaluation system in order 

to assess the accomplishment of SFMNP 

objectives, the State Plan, and the 

written agreement with FNS. No 

comments were received that 

specifically addressed this section. 

Therefore, the monitoring requirements 

are retained in this final rule as 

proposed. 

18. Audits (§ 249.18) 

As proposed, this section set forth the 

specific audit requirements for SFMNP 

State agencies. No comments were 

received that specifically addressed this 

section. It is retained in this final rule 

as proposed. 

19. Investigations (§ 249.19) 

Under this section of the proposed 

rule, FNS would be allowed to make an 

investigation of any allegation of 

noncompliance with the SFMNP 

regulations and FNS guidelines and 

instructions. As proposed, this section 

also requires that the identity of every 

complainant be kept confidential to the 

maximum extent possible. No 

comments were received that 

specifically addressed this section. It is 

retained in this final rule as proposed. 

20. Claims and Penalties (§ 249.20) 

As proposed, this section established 

procedures for the assessment of claims 

against a State agency, established the 

conditions under which interest would 

accrue on any unpaid claim against a 

State agency, and set out mandatory 

penalties for embezzlement, willful 


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misapplication, theft, or fraudulent 

acquisition of SFMNP funds. No 

comments were received that 

specifically addressed the provisions 

related to claims and interest charges 

against State agencies (§ 249.20(a) and 

(b)). These provisions are retained in 

this final rule as proposed. 

Although no comments were received 

on the provision concerning penalties 

for embezzlement, willful 

misapplication, theft, or fraudulent 

acquisition (§ 249.20(c)), upon further 

review, we do not believe these 

provisions are authorized by the SFMNP 

legislation. The provisions proposed at 

§ 249.20(c) are therefore deleted from 

the final rule. It should be noted, 

however, that the actions specified in 

the proposed rule are punishable under 

other Federal and State criminal laws. 

21. Procurement and Property 

Management (§ 249.21) 

The requirements in this section were 

proposed by FNS to ensure that all 

materials and services are obtained for 

the SFMNP in an effective manner and 

in compliance with the provisions of 

applicable law and executive orders. No 

comments were received that 

specifically addressed this section. It is 

retained in this final rule as proposed. 

22. Nonprocurement/Suspension, DrugFree Workplace, and Lobbying 

Restrictions (§ 249.22) 

Under the proposed rule, SFMNP 

State agencies were required to ensure 

compliance with the requirements of 

FNS’ regulations governing 

nonprocurement debarment and 

suspension, drug-free workplace, and 

FNS’ regulations governing restrictions 

on lobbying, where applicable. No 

comments were received that 

specifically addressed this section. It is 

retained in this final rule as proposed. 

23. Records and Reports (§ 249.23) 

As proposed, this section set forth 

FNS’ requirements to ensure that each 

SFMNP State agency maintains full and 

complete records concerning SFMNP 

operations, including the types of 

records that must be maintained, 

retention requirements for such records, 

and provisions addressing the access 

and availability of such records. It also 

required State agencies to submit 

financial and SFMNP performance data 

on a yearly basis as specified by FNS, 

and identified the minimum data that 

must be provided in such reports. In 

response to a technical comment, the 

words ‘‘and type’’are removed from 

§ 249.23(b)(1) of the final rule; they are 

not applicable to the SFMNP. 

24. Data Safeguarding Requirements 

(§ 249.24) 

This section of the proposed rule 

would affirm the Department’s 

commitment to protecting the privacy of 

SFMNP applicants and participants by 

restricting the use or disclosure of 

information obtained from SFMNP 

applicants and participants to 

individuals directly connected with the 

operation or enforcement of the SFMNP, 

representatives of public organizations 

that administer food, nutrition, or other 

assistance programs serving persons 

categorically eligible for the SFMNP 

when written agreements with such 

organizations are in place, and the 

Comptroller General of the United 

States, for audit purposes. Although no 

comments were received that 

specifically addressed this section, it 

has been slightly revised and renamed 

for clarity. 

25. Other Provisions (§ 249.25) 

Section 249.25(a) of the proposed rule 

clarified that participation in the 

SFMNP did not preclude a participant 

from participating in food or nutrition 

assistance programs for which she/he 

may also be eligible. Two commenters 

wrote to support this provision. No 

other comments were received that 

specifically addressed this section. It is 

retained in this final rule as proposed. 

26. SFMNP Information (§ 249.26) 

This section lists the seven Regional 

offices of FNS, provides their contact 

information, and identifies the State 

agencies that are covered by each one. 

27. OMB Control Number (§ 249.27) 

The information collections in this 

rule are being reviewed by OMB and 

will not be effective until they have 

received OMB approval. Once they have 

received OMB approval, FNS will 

publish a notice in the Federal Register. 

List of Subjects in 7 CFR Part 249 

Aging, Community supported 

agriculture programs, Elderly, Farmers, 

Farmers’ markets, Food assistance 

programs, Food donations, Grant 

programs, Nutrition education, Public 

assistance programs, Seniors, Social 

programs. 

■ Accordingly, 7 CFR part 249 is added 

to read as follows: 

PART 249—SENIOR FARMERS’

MARKET NUTRITION PROGRAM 

(SFMNP) 

Subpart A—General 

Sec. 

249.1 General purpose and scope. 

249.2 Definitions. 

249.3 Administration. 

Subpart B—State Agency Eligibility 

249.4 State plan. 

249.5 Selection of new State agencies. 

Subpart C—Participant Eligibility 

249.6 Participant eligibility. 

249.7 Nondiscrimination. 

Subpart D—Participant Benefits 

249.8 Level of benefits and eligible foods. 

249.9 Nutrition education. 

Subpart E—State Agency Provisions 

249.10 Coupon, market, and CSA program 

management. 

249.11 Financial management system. 

249.12 SFMNP costs. 

249.13 Program income. 

249.14 Distribution of funds to State 

agencies. 

249.15 Closeout procedures. 

249.16 Administrative appeal of State 

agency decisions. 

Subpart F—Monitoring and Review of 

State Agencies 

249.17 Management evaluations and 

reviews. 

249.18 Audits. 

249.19 Investigations. 

Subpart G—Miscellaneous Provisions 

249.20 Claims and penalties. 

249.21 Procurement and property 

management. 

249.22 Nonprocurement debarment/ 

suspension, drug-free workplace, and 

lobbying restrictions. 

249.23 Records and reports. 

249.24 Data safeguarding requirements. 

249.25 Other provisions. 

249.26 SFMNP information. 

249.27 OMB control number. [Reserved] 

Authority: 7 U.S.C. 3007. 

Subpart A—General 

§ 249.1 General purpose and scope. 

(a) This part announces regulations 

under which the Secretary of 

Agriculture shall carry out the Senior 

Farmers’ Market Nutrition Program 

(SFMNP). The purposes of the SFMNP 

are to: 

(1) Provide resources in the form of 

fresh, nutritious, unprepared, locally 

grown fruits, vegetables and herbs from 

farmers’ markets, roadside stands, and 

community supported agriculture (CSA) 

programs to low-income seniors; 

(2) Increase the domestic 

consumption of agricultural 

commodities by expanding or aiding in 

the expansion of domestic farmers’

markets, roadside stands, and CSAs; and 


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(3) Develop or aid in the development 

of new and additional farmers’ markets, 

roadside stands, and CSAs. 

(b) These goals will be accomplished 

through payment of cash grants to 

approved State agencies. The SFMNP 

shall be supplementary to the food 

stamp program carried out under the 

Food Stamp Act of 1977 (7 U.S.C. 2011, 

et seq.), and to any other Federal or 

State food or nutrition assistance 

program under which foods are 

distributed to needy families in lieu of 

food stamps. 

§ 249.2 Definitions. 

For the purpose of this part and all 

contracts, guidelines, instructions, 

forms and other documents related 

hereto, the term: 

Administrative costs means those 

direct and indirect costs (as defined in—

249.12(a)(1)(ii)), exclusive of food costs, 

which State agencies determine to be 

necessary to support SFMNP operations. 

Administrative costs include, but are 

not limited to, the costs associated with 

administration and start-up; the 

provision of nutrition education; 

SFMNP coupon issuance; participant 

education covering coupon redemption 

procedures; eligibility determinations; 

outreach services; printing SFMNP 

coupons, processing redeemed coupons, 

and training farmers, market managers, 

and/or farmers who operate CSA 

programs on the food delivery system; 

monitoring and reviewing program 

operations; required reporting and 

recordkeeping; determining which local 

sites will be utilized; recruiting and 

authorizing farmers, farmers’ markets, 

roadside stands, and/or CSA programs 

to participate in the SFMNP; preparing 

contracts for farmers, farmers’ markets, 

roadside stands, and/or CSA programs; 

developing a data processing system for 

redemption and reconciliation of 

coupons; designing program training 

and informational materials; and 

coordinating SFMNP implementation 

responsibilities between designated 

administering agencies. 

Bulk purchase means a program 

model in which bulk quantities of 

certain produce items, such as apples or 

sweet potatoes, are purchased directly 

from authorized farmers by the State 

agency, and are then equitably divided 

among and distributed directly to 

eligible SFMNP participants, either at a 

central distribution point (such as a 

local senior center) or through some 

type of home delivery network. 

Community supported agriculture 

(CSA) program means a program under 

which a farmer or group of farmers 

grows food for a group of shareholders 

(or subscribers) who pledge to buy a 

portion of the farmer’s crop(s) for that 

season. State agencies may purchase 

shares or subscribe to a community 

supported agriculture program on behalf 

of individual SFMNP participants. 

Compliance buy means a covert, onsite investigation in which a SFMNP 

representative poses as a SFMNP 

participant or authorized representative 

and attempts to transact one or more 

SFMNP coupons, or, in the case of CSA 

programs, attempts to obtain eligible 

foods purchased with SFMNP funds at 

a distribution site. 

Coupon means a check or other 

negotiable financial instrument by 

which benefits under the program are 

transferred to program participants. 

Days means calendar days. 

Department means the U.S. 

Department of Agriculture. 

Distribution site means the location 

where packages of eligible foods are 

assembled for and/or distributed to 

SFMNP participants who are 

shareholders in CSA programs. 

Eligible foods means fresh, nutritious, 

unprepared, locally grown fruits, 

vegetables and herbs for human 

consumption. Eligible foods may not be 

processed or prepared beyond their 

natural state except for usual harvesting 

and cleaning processes. Dried fruits or 

vegetables, such as prunes (dried 

plums), raisins (dried grapes), sun-dried 

tomatoes, or dried chili peppers are not 

considered eligible foods. Potted fruit or 

vegetable plants, potted or dried herbs, 

wild rice, nuts of any kind (even raw), 

honey, maple syrup, cider, seeds, eggs, 

meat, cheese and seafood are also not 

eligible foods for purposes of the 

SFMNP. 

Farmer means an individual 

authorized to sell eligible foods at 

participating farmers’ markets and/or 

roadside stands, and through CSAs. 

Individuals who exclusively sell 

produce grown by someone else, such as 

wholesale distributors, cannot be 

authorized to participate in the SFMNP. 

A participating State agency has the 

option to authorize individual farmers 

or farmers’ markets, roadside stands, 

and/or CSA programs. 

Farmers’ market means an association 

of local farmers who assemble at a 

defined location for the purpose of 

selling their produce directly to 

consumers. 

Federally recognized Indian tribal 

government means the same as the 

definition of that term found at § 3016.3 

of this chapter, i.e., the governing body 

or a governmental agency of any Indian 

tribe, band, organization, or other 

organized group or community 

(including any Native village as defined 

in section 3 of the Alaska Native Claims 

Settlement Act, 85 Stat. 688) certified by 

the Secretary of the Interior as eligible 

for the special programs and services 

provided by the Secretary through the 

Bureau of Indian Affairs. 

Fiscal year means the period of 12 

calendar months beginning October 1 of 

any calendar year and ending 

September 30 of the following calendar 

year. 

FNS means the Food and Nutrition 

Service of the U.S. Department of 

Agriculture. 

Food costs means the cost of eligible 

foods purchased at authorized farmers’

markets, roadside stands, and/or 

through bulk purchases or CSA 

programs. 

Household means a group of related 

or nonrelated individuals who are living 

together as one economic unit. 

Local agency means any nonprofit 

entity or local government agency that 

certifies eligible participants, issues 

SFMNP coupons, arranges for 

distribution of eligible foods through 

CSA programs, and/or provides 

nutrition education or information on 

operational aspects of the Program to 

SFMNP participants. 

Locally grown means grown within 

State borders. If the State agency 

chooses, locally grown may also mean 

grown in areas of States adjacent to that 

State, as long as such areas are part of 

the United States. 

Nonprofit agency means a private 

agency that is exempt from the payment 

of Federal income tax under the Internal 

Revenue Code of 1986, as amended (26 

U.S.C. 1, et seq.). 

Nutrition education means: 

(1) Individual or group sessions; and 

(2) The provision of relevant 

materials, in keeping with the 

individual’s personal, cultural, and 

socioeconomic preferences and the 

Dietary Guidelines for Americans, that: 

(i) Emphasize relationships between 

nutrition and health; and 

(ii) Encourage participants to build 

healthful eating patterns, and to take 

action for good health. 

OIG means FNS’ Office of Inspector 

General. 

Participant means a person or 

household who meets the eligibility 

requirements of the SFMNP and to 

whom coupons or equivalent benefits 

have been issued. 

Program or SFMNP means the Senior 

Farmers’ Market Nutrition Program 

authorized by Section 4402 of the Farm 

Security and Rural Investment Act of 

2002, 7 U.S.C. 3007. 

Proxy means an individual authorized 

by an eligible senior to act on the 

senior’s behalf, including application 

for certification, receipt of SFMNP 


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coupons or other benefits, use of 

SFMNP coupons at authorized outlets, 

and/or acceptance of SFMNP foods 

provided through a CSA program, as 

long as the SFMNP benefits are 

ultimately received by the eligible 

senior. The terms proxy and authorized 

representative may be used 

interchangeably for purposes of this 

program. 

Roadside stand means a location at 

which an individual farmer sells his/her 

produce directly to consumers. This is 

in contrast to a group or association of 

farmers selling their produce at a 

farmers’ market or through a CSA 

program. The term roadside stand may 

be used interchangeably with the term 

farmstand as defined in § 248.2 of this 

chapter. 

Senior means an individual 60 years 

of age or older, or as defined in 

§ 249.6(a)(1). 

SFPD means the Supplemental Food 

Programs Division of the Food and 

Nutrition Service of the U.S. 

Department of Agriculture. 

Shareholder means a SFMNP 

participant for whom a full or partial 

share in a community supported 

agriculture program has been purchased 

by the State agency, and who receives 

SFMNP benefits in the form of actual 

eligible foods rather than coupons that 

must be exchanged for eligible foods at 

farmers’ markets and/or roadside stands. 

State means any of the 50 States, the 

District of Columbia, the 

Commonwealth of Puerto Rico, the 

Virgin Islands, Guam, and as applicable, 

American Samoa or the Commonwealth 

of the Northern Marianas. 

State agency means the agriculture, 

aging, or health department, or any 

other agency approved by the Chief 

Executive Officer of the State that has 

administrative responsibility for the 

SFMNP; an intertribal council or group 

that is an authorized representative of 

Indian tribes, bands, or groups 

recognized by FNS of the Interior and 

that has an ongoing relationship with 

such tribes, bands, or groups for other 

purposes and has contracted with them 

to administer the Program; or the 

appropriate area office of the Indian 

Health Service, a division of FNS of 

Health and Human Services. 

State Plan means a plan of SFMNP 

operation and administration that 

describes the manner in which the State 

agency intends to implement, operate 

and administer all aspects of the 

SFMNP within its jurisdiction in 

accordance with § 249.4. 

WIC means the Special Supplemental 

Nutrition Program for Women, Infants 

and Children authorized by Section 17 

of the Child Nutrition Act of 1966 (42 

U.S.C. 1786). 

WIC Farmers’ Market Nutrition 

Program (FMNP) means the nutrition 

assistance program authorized by 

Section 17(m) of the Child Nutrition Act 

of 1966 (42 U.S.C. 1786(m)), to provide 

resources to women, infants, and 

children who are nutritionally at risk, in 

the form of fresh, nutritious, unprepared 

foods (such as fruits and vegetables) 

from farmers’ markets; to expand the 

awareness and use of farmers’ markets; 

and to increase sales at such markets. 

§ 249.3 Administration. 

(a) Delegation to FNS. Within FNS, 

FNS shall act on behalf of the 

Department in the administration of the 

SFMNP. Within FNS, SFPD and the 

FNS Regional Offices are responsible for 

SFMNP administration. FNS shall 

provide assistance to State agencies and 

evaluate all levels of SFMNP operations 

to ensure that the goals of the SFMNP 

are achieved in the most effective and 

efficient manner possible. 

(b) Delegation to State agency. The 

State agency is responsible for the 

effective and efficient administration of 

the SFMNP in accordance with the 

requirements of this Part; the 

requirements of FNS’ regulations 

governing nondiscrimination (parts 15, 

15a and 15b of this title), administration 

of grants (part 3016 of this title), 

nonprocurement debarment/suspension 

(part 3017 of this title), drug-free 

workplace (part 3021 of this title), and 

lobbying (part 3018 of this title); FNS 

guidelines; FNS Instructions issued 

under the FNS Directives Management 

System; and Office of Management and 

Budget Circular A–130 (For availability 

of OMB Circulars referenced in this 

section, see 5 CFR 1310.3). The State 

agency shall provide guidance to 

cooperating State and local agencies on 

all aspects of SFMNP operations. State 

agencies may operate the SFMNP 

locally through nonprofit organizations 

or local government entities and must 

ensure coordination among the 

appropriate agencies and organizations. 

(c) Agreement and State Plan. Each 

State agency desiring to administer the 

SFMNP shall annually submit a State 

Plan of Operations and enter into a 

written agreement with FNS for 

administration of the Program in the 

jurisdiction of the State agency in 

accordance with the provisions of this 

Part. If the State agency administers 

both the SFMNP and the WIC Farmers’

Market Nutrition Program (FMNP), one 

consolidated State Plan may be 

submitted for both programs, in 

accordance with guidance provided by 

FNS. 

(d) Coordination with other agencies. 

The Chief Executive Officer of the State 

shall ensure coordination between the 

designated administering State agency 

and any other State, local, or nonprofit 

agencies or entities involved in 

administering any aspect of the SFMNP 

by ensuring that the agencies enter into 

a written agreement or letter/ 

memorandum of understanding. The 

written agreement or letter/ 

memorandum of understanding must 

delineate the responsibilities of each 

agency, describe any compensation for 

services, and must be signed by the 

designated representative of each 

agency. This agreement must be 

submitted each year along with the State 

Plan. 

(e) State staffing standards. Each State 

agency shall ensure that sufficient staff 

is available to administer the SFMNP 

efficiently and effectively. This shall 

include, but not be limited to, sufficient 

staff to identify and certify eligible 

SFMNP participants, provide program 

information and nutrition education to 

participants, and oversee coupon, 

market, and/or CSA program 

management, fiscal reporting, 

monitoring, and training. The State 

agency shall provide in its State Plan an 

outline of administrative staff and job 

descriptions for staff whose salaries will 

be paid from program funds. 

Subpart B—State Agency Eligibility 

§ 249.4 State Plan. 

(a) Requirements. By November 15 of 

each year, each applying or 

participating State agency shall submit 

to FNS for approval a State Plan for the 

following year as a prerequisite to 

receiving funds under this section. If the 

State agency administers both the 

SFMNP and the FMNP, one 

consolidated State Plan may be 

submitted for both programs, in 

accordance with guidance provided by 

FNS. The State Plan must be signed by 

the State-designated official responsible 

for ensuring that the Program is 

operated in accordance with the State 

Plan. FNS will provide written approval 

or denial of a completed State Plan or 

amendment within 30 days of receipt. 

Portions of the State Plan that do not 

change annually need not be 

resubmitted. However, the State agency 

shall provide the title of the sections 

that remain unchanged, as well as the 

year of the last Plan in which the 

sections were submitted. At a minimum, 

the Plan must include the following 

items, which must include sufficient 

detail to demonstrate the State agency’s 

ability to meet the requirements of the 

SFMNP: 


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(1) A copy of the agreement between 

the designated administering State 

agency and any other cooperating State, 

local, or nonprofit agencies or 

organizations for services such as 

certification of eligible participants, 

issuance of SFMNP coupons or benefits, 

and/or nutrition education, as required 

in § 249.3(d). 

(2) A description of the State agency’s 

procedures for identifying and certifying 

eligible SFMNP participants, including 

the specific age and income criteria that 

will be used to determine SFMNP 

eligibility. 

(3) An estimated number of 

participants for the fiscal year, and 

proposed months of operation. 

(4) A detailed budget for the SFMNP, 

including: 

(i) The minimum amount necessary to 

operate the SFMNP; 

(ii) A description of the Federal and 

non-Federal funds that will be used to 

operate the Program; and 

(iii) An assurance that no more than 

50 percent of the Federal SFMNP grant 

will be used to support a CSA program 

model for the delivery of SFMNP 

benefits. 

(5) An outline of administrative staff 

and job descriptions. 

(6) A detailed description of the 

SFMNP recordkeeping system 

including, but not limited to, the system 

for maintaining separate records for 

SFMNP funds pertaining to financial 

operations, coupon issuance and 

redemption, authorization of farmers, 

markets, and/or CSA programs, 

distribution of eligible foods through 

CSA programs, and SFMNP 

participation. 

(7) A detailed description of the State 

agency’s financial management system, 

including how the system will provide 

accurate, current and complete 

disclosure of the program’s financial 

status and required reports. 

(8) A detailed description of the 

service area, including: 

(i) The number and addresses of 

authorized farmers, farmers’ markets, 

roadside stands, and community 

supported agriculture programs that 

participated in the SFMNP during the 

prior year; and 

(ii) SFMNP certification/issuance sites 

(such as senior centers or senior housing 

facilities), including a map outlining the 

service area and proximity of markets, 

roadside stands, and/or community 

supported agriculture programs to 

certification/issuance or distribution 

sites that participated in the SFMNP 

during the prior year. 

(9) A description of the coupon 

issuance system including: 

(i) A description of how the State 

agency will target areas with the highest 

concentrations of eligible persons and 

greatest access to farmers’ markets and/ 

or roadside stands; 

(ii) The benefit level per participant, 

or household if benefits are issued on a 

household basis, including: 

(A) How coupons will be issued; 

(B) The value of benefits provided to 

each participant or household at each 

issuance during the year; 

(C) The frequency of coupon issuance; 

and 

(D) The total amount of SFMNP 

benefits issued to each participant or 

household during the year. 

(iii) A method for instructing 

participants on the proper use of 

SFMNP coupons and the purpose of the 

SFMNP; 

(iv) A method for ensuring that 

SFMNP coupons are issued only to 

eligible participants; and 

(v) A method for preventing and 

identifying dual participation, in 

accordance with § 249.6(d)(1). 

(10) If the agency is using a 

‘‘paperless’’ system, i.e., a system that 

does not issue actual coupons, a 

complete description of how such a 

system will be operated in a manner 

that ensures the integrity of SFMNP 

funds and benefits. 

(11) A detailed description of the 

SFMNP coupon redemption process 

including: 

(i) The procedures for ensuring the 

secure transportation and storage of 

SFMNP coupons; 

(ii) A system for identifying and 

reconciling SFMNP coupons; and 

(iii) The timeframes for SFMNP 

coupon redemption by participants, 

submission for payment by farmers or 

authorized outlets (farmers’ markets 

and/or roadside stands), and payment 

by the State agency. 

(12) A description of the State 

agency’s CSA program, if applicable, 

including: 

(i) How the State agency will target 

and select community supported 

agriculture programs designed to 

provide SFMNP benefits to eligible 

participants; 

(ii) The annual benefit amount per 

participant or household, if benefits are 

issued on a household basis; 

(iii) How CSA program contracts are 

developed, negotiated, and executed by 

the State agency; 

(iv) How CSA program shares are 

allocated to eligible SFMNP 

participants; 

(v) A method for instructing 

participants and farmers participating in 

the CSA program on the purpose of the 

SFMNP, and the procedures for delivery 

and distribution of eligible foods 

provided for the SFMNP through the 

CSA; 

(vi) A system to ensure receipt by 

eligible participants of eligible foods 

provided through a CSA program. Such 

a system should include a written 

receipt or distribution log, with the 

participant’s signature (or that of the 

eligible participant’s proxy, if proxies 

are allowed) and the date of each 

distribution; 

(vii) The payment procedures for the 

CSA program(s) used by the State 

agency; 

(viii) How the State agency ensures 

that the full value of eligible foods for 

which it has contracted is provided 

regularly throughout the SFMNP season; 

(ix) A listing of delivery dates and 

distribution sites for CSA programprovided eligible foods; and 

(x) A system for ensuring that each 

SFMNP shareholder receives an 

equitable amount of eligible foods at 

each delivery, and that the total value of 

the eligible foods provided under the 

SFMNP falls within the minimum and 

maximum Federal SFMNP benefit 

levels, as specified in § 249.8(b). 

(13) A complete description of ageand circumstance-appropriate nutrition 

education to be provided to SFMNP 

participants, including: 

(i) The agencies that will provide the 

nutrition education; 

(ii) The format(s) in which the 

nutrition education will be provided; 

and 

(iii) The locations where nutrition 

education is likely to be provided. 

(14) A detailed description of the 

State agency’s system for managing its 

coupon, market, and CSA program 

management systems, including: 

(i) The criteria for authorizing 

farmers’ markets, roadside stands, and/ 

or community supported agriculture 

programs, including the agency 

responsible for authorization; 

(ii) The procedures for training 

farmers, market managers, and/or CSA 

program farmers at authorization, and 

annually thereafter; 

(iii) The procedures for monitoring 

farmers’ markets, roadside stands, and/ 

or community supported agriculture 

programs; 

(iv) A description of the State 

agency’s system for identifying high-risk 

farmers and farmers’ markets, roadside 

stands, and/or community supported 

agriculture programs, as set forth at 

§ 249.10(e)(2)(ii); 

(v) The procedures for sanctioning 

farmers, farmers’ markets, roadside 

stands, and/or community supported 

agriculture programs; 

(vi) A facsimile of the SFMNP 

coupon, including the denominations of 


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coupons that will be issued, and a clear 

indication of where the participant/ 

proxy and (if applicable) farmer are 

required to sign, stamp, or otherwise 

endorse the coupon before it can be 

redeemed; 

(vii) A complete listing of the fresh, 

nutritious, unprepared fruits, 

vegetables, and herbs eligible for 

purchase under the SFMNP; 

(viii) A description of SFMNP coupon 

replacement policy or statement that 

coupons will not be replaced; and 

(ix) The State agency’s procedures for 

handling participant and farmer/ 

farmers’ market, roadside stands, and 

CSA program complaints. 

(15) A system for ensuring that 

SFMNP coupons are redeemed only by 

authorized farmers/farmers’ markets/ 

roadside stands, and only for eligible 

foods. 

(16) A system for identifying SFMNP 

coupons that are redeemed or submitted 

for payment outside valid dates or by 

unauthorized farmers/farmers’ markets/ 

roadside stands. 

(17) A copy of the written agreement 

to be used between the State agency and 

authorized farmers/farmers’ markets, 

roadside stands, and/or CSA programs. 

In those States that authorize farmers’

markets, but not individual farmers, this 

agreement shall specify in detail the role 

of and procedures to be used by farmers’

markets for monitoring and sanctioning 

farmers, and the appropriate procedures 

to be used by a farmer to appeal a 

sanction or disqualification imposed by 

a farmers’ market. 

(18) If available, information on the 

change in consumption of fresh fruits, 

vegetables, and herbs by SFMNP 

participants. This information shall be 

submitted as an addendum to the State 

Plan and shall be submitted at a date 

specified by the Secretary. 

(19) If available, information on the 

effects of the program on farmers’

markets, roadside stands, and/or CSA 

programs. This information shall be 

submitted as an addendum to the State 

Plan and shall be submitted at a date 

specified by the Secretary. 

(20) A description of the procedures 

the State agency will use to comply with 

the civil rights requirements described 

in § 249.7(a), including the processing of 

discrimination complaints. 

(21) A copy of the State agency’s fair 

hearing procedures for SFMNP 

participants and the administrative 

appeal procedures for local agencies, 

farmers, farmers’ markets, roadside 

stands, and/or CSA programs. 

(22) State agencies that have not 

previously participated in the SFMNP 

must provide: 

(i) A description of the need for the 

SFMNP in that State agency; 

(ii) The specific goals and objectives 

of the SFMNP, designed to fulfill the 

purpose of the Program as set forth in 

§ 249.1; and 

(iii) A capability statement that 

includes a summary description of any 

prior experience with farmers’ market 

projects or programs, including 

information and data describing the 

attributes of such projects or programs. 

(23) For State agencies making 

expansion requests, documentation that 

demonstrates: 

(i) The need for an increase in 

funding; 

(ii) That the use of the increased 

funding will be consistent with serving 

eligible SFMNP participants by 

expanding benefits to more persons, by 

enhancing current benefits, or a 

combination of both, and expanding the 

awareness and use of farmers’ markets, 

roadside stands, and CSA programs; 

(iii) The ability of the State agency to 

operate the existing SFMNP 

satisfactorily; 

(iv) The management capabilities of 

the State agency to expand; and 

(v) Whether, in the case of a State 

agency that intends to use the funding 

to increase the value of the Federal 

benefits received by a participant, the 

funding provided will increase the rate 

of coupon redemption. 

(b) Amendments. At any time after 

approval, the State agency may amend 

the State Plan to reflect changes. The 

State agency shall submit such 

amendments to FNS for approval. The 

proposed amendments shall be signed 

by the State-designated official 

responsible for ensuring that the 

SFMNP is operated in accordance with 

the State Plan. The amendments must 

be approved by FNS prior to 

implementation. 

(c) Retention of copy. A copy of the 

approved State Plan shall be kept on file 

at the State agency for public 

inspection. 

§ 249.5 Selection of new State agencies. 

In selecting new State agencies, FNS 

will use objective criteria to rank and 

approve State plans submitted in 

accordance with § 249.4. In making this 

ranking, FNS will consider the amount 

of funds necessary to operate the 

SFMNP successfully in the State 

compared with other States and with 

the total amount of funds available to 

the SFMNP, the number of participants 

estimated to be served, and the 

projected benefit level. Approval of a 

State Plan does not equate to an 

obligation on the part of FNS to fund the 

SFMNP within that State. 

Subpart C—Participant Eligibility 

§ 249.6 Participant eligibility. 

(a) Eligibility for certification. 

Individuals who are eligible to receive 

Federal benefits under the SFMNP are 

those who meet the following criteria: 

(1) Categorical eligibility. Participants 

must be not less than 60 years of age, 

except that State agencies may exercise 

the option to deem Native Americans 

who are 55 years of age or older as 

categorically eligible for SFMNP 

benefits. State agencies may, at their 

discretion, also deem disabled 

individuals less than 60 years of age 

who are currently living in housing 

facilities occupied primarily by older 

individuals where congregate nutrition 

services are provided, as categorically 

eligible to receive SFMNP benefits. 

(2) Residency requirement. The State 

agency may establish a residency 

requirement for SFMNP applicants. The 

State agency may determine a service 

area for any local agency, and may 

require that an applicant be residing 

within the service area at the time of 

application to be eligible for the 

Program. However, the State agency 

may not impose any durational or fixed 

residency requirements. 

(3) Income eligibility. The State 

agency must ensure that local agencies 

determine income eligibility through the 

use of a clear and simple application 

process approved by the State agency. 

Participants must have a maximum 

household income of not more than 185 

percent of the annual poverty income 

guidelines, or be determined 

automatically income eligible based on 

current participation/eligibility to 

receive benefits in another means-tested 

program, as designated by the State 

agency, for which income eligibility is 

set at or below 185 percent of the 

poverty income guidelines and for 

which documentation of family income 

is required. FNS will announce the 

income poverty guidelines annually. 

(b) Documentation of income 

eligibility. 

(1) Automatically income eligible 

applicants. The State or local agency 

must require applicants determined to 

be automatically income eligible to 

provide documentation of their 

eligibility to participate in another 

means-tested assistance program, as 

designated by the State agency. 

(2) Other applicants. 

(i) The State or local agency must 

require all other applicants to provide, 

at a minimum, a signed statement 

affirming that their household size and 

income does not exceed the maximum 

income eligibility standard in use by the 

State agency. 


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(ii) If the State agency offers a benefit 

of more than $50 per participant 

through a CSA program, it must require 

documentation of household size and 

income from all participants receiving 

the higher benefit level. 

(iii) The State agency has the option 

to require all applicants to provide 

documentation of family income at 

certification, and/or to require 

verification of the information provided 

by the applicant. 

(c) Certification periods. Participants 

may be certified only for the current 

fiscal year’s SFMNP period of operation. 

Eligibility must be determined at the 

beginning of each period of operation. 

Prior fiscal year certifications may not 

be carried over into subsequent fiscal 

years, but the State agency may make 

use of its participant enrollment listings 

from the prior fiscal year in its outreach 

efforts for the current fiscal year. 

(d) Participant rights and 

responsibilities. Where a significant 

number or proportion of the population 

eligible to be served needs information 

regarding participation in the SFMNP in 

a language other than English, 

reasonable steps must be taken to 

provide this information in the 

appropriate language(s) to such persons, 

considering the scope of the Program 

and the size and concentration of such 

population(s). In order to inform 

applicants and participants or their 

authorized representatives/proxies of 

SFMNP rights and responsibilities, 

State/local agencies must provide the 

following information: 

(1) During the certification process, 

every program applicant or authorized 

representative must be informed of the 

illegality of dual participation, i.e., 

obtaining SFMNP benefits from more 

than one service delivery area or from 

more than one SFMNP program model 

(coupon system and CSA program) 

within the same service delivery area. 

(2) At the time of certification, each 

SFMNP applicant or authorized 

representative must read or have read to 

him or her the following statements or 

similar statements: 

I have been advised of my rights and 

obligations under the SFMNP. I certify that 

the information I have provided for my 

eligibility determination is correct, to the best 

of my knowledge. This certification form is 

being submitted in connection with the 

receipt of Federal assistance. Program 

officials may verify information on this form. 

I understand that intentionally making a false 

or misleading statement or intentionally 

misrepresenting, concealing, or withholding 

facts may result in paying the State agency, 

in cash, the value of the food benefits 

improperly issued to me and may subject me 

to civil or criminal prosecution under State 

and Federal law. 

Standards for eligibility and participation 

in the SFMNP are the same for everyone, 

regardless of race, color, national origin, age, 

disability, or sex. 

I understand that I may appeal any 

decision made by the local agency regarding 

my eligibility for the SFMNP. 

(3) During the certification visit, each 

participant or authorized representative 

must: 

(i) Receive an explanation of how to 

use his/her SFMNP coupons at farmers’

markets and roadside stands, and/or 

how SFMNP foods will be provided 

under the CSA program in that service 

delivery area; and 

(ii) Be advised of the other types of 

services that are available to SFMNP 

participants, where such services are 

located, how they may be obtained, and 

why they may be useful. 

(4) Persons found ineligible for the 

SFMNP during a certification visit must 

be advised in writing of their 

ineligibility, of the reasons for their 

ineligibility, and of their right to a fair 

hearing. The reasons for ineligibility 

must be properly documented and must 

be retained on file at the local agency. 

Such notice is not required when 

participation is denied solely because of 

lack of sufficient funding to provide 

SFMNP benefits to all eligible 

applicants. 

(5) When a State or local agency 

pursues collection of a claim pursuant 

to § 249.20(c) against an individual who 

has been issued SFMNP benefits for 

which she/he is not eligible, the person 

must be advised in writing of the 

reason(s) for the claim, the value of the 

improperly issued benefits that must be 

repaid, and of his/her right to a fair 

hearing. 

(e) Certification without charge. 

Certification for the SFMNP must be 

performed at no cost to the applicant or 

the authorized representative. 

(f) Use of proxies or authorized 

representatives. At the State agency’s 

discretion, a senior may designate an 

authorized representative (proxy) to 

apply for certification, shop at the 

farmers’ market or roadside stands, and/ 

or pick up their eligible foods from CSA 

program distribution sites on his/her 

behalf if the senior is unable to perform 

these actions. The State agency must 

obtain a signed statement from the 

eligible senior designating another 

individual as his/her authorized 

representative. A senior who has been 

certified to receive SFMNP benefits may 

designate an authorized representative 

at any point during the program’s period 

of operation. 

(g) Processing standards. (1) 

Applicants for the SFMNP must be 

notified of their eligibility or 

ineligibility for benefits, or of their 

placement on a waiting list, as described 

in paragraph (g)(2) of this section, 

within 15 days from the date of 

application. 

(2) When all available program 

benefits have been allocated to eligible 

participants, and there is a reasonable 

expectation that additional funds may 

become available to provide further 

SFMNP benefits to eligible seniors, the 

local agency must maintain a waiting 

list of individuals who contact the local 

agency to apply for the Program. 

Individuals must be notified of their 

placement on a waiting list within 15 

days after they contact the local agency 

to request Program benefits. To enable 

the local agency to contact these 

individuals when caseload space 

becomes available, the waiting list must 

include the name of the applicant, the 

date placed on the waiting list, and an 

address or phone number of the 

applicant. 

(h) Limitations on certification. If 

necessary to limit the number of 

participants, State agencies may impose 

additional eligibility requirements, such 

as limiting participant certification to 

certain geographic areas. Each State 

agency must specifically identify these 

limitations on certification in its State 

Plan. 

§ 249.7 Nondiscrimination. 

(a) Civil rights requirements. (1) The 

State agency must comply with the 

following requirements to ensure that 

no person shall, on the grounds of race, 

color, national origin, age, sex or 

disability, be excluded from 

participation, be denied benefits, or be 

otherwise subjected to discrimination, 

under the SFMNP: 

(i) Title VI of the Civil Rights Act of 

1964; 

(ii) Title IX of the Education 

Amendments of 1972; 

(iii) Section 504 of the Rehabilitation 

Act of 1973; 

(iv) The Age Discrimination Act of 

1975; 

(v) Department of Agriculture 

regulations on nondiscrimination (parts 

15, 15a and 15b of this title); and 

(vi) Applicable FNS Instructions, 

including requirements for racial and 

ethnic participation data collection, 

public notification of the 

nondiscrimination policy, and annual 

reviews of each local agency’s racial and 

ethnic participation data (as required by 

title VI of the Civil Rights Act of 1964). 

(2) Compliance with Title VI of the 

Civil Rights Act of 1964, Title IX of the 

Education Amendments of 1972, 

Section 504 of the Rehabilitation Act of 

1973, the Age Discrimination Act of 


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1975, and regulations and instructions 

issued thereunder shall include, but not 

be limited to: 

(i) Notification to the public of the 

nondiscrimination policy and complaint 

rights of participants and potentially 

eligible persons, which may be satisfied 

through FNS’ required 

nondiscrimination statement on 

brochures and publications; 

(ii) Review and monitoring activity to 

ensure SFMNP compliance with the 

nondiscrimination laws and regulations; 

and 

(iii) Establishment of grievance 

procedures for handling participant 

complaints based on sex and handicap. 

(b) Complaints. Persons seeking to file 

discrimination complaints may file 

them either with the Secretary of 

Agriculture, or the Director, Office of 

Civil Rights, USDA, Washington, DC 

20250 or with the office established by 

the State agency to handle 

discrimination grievances or 

complaints. All complaints received by 

State agencies that allege discrimination 

based on race, color, national origin, or 

age shall be referred to the Secretary of 

Agriculture or the Director of the Office 

of Civil Rights, USDA. A State agency 

may process complaints that allege 

discrimination based on sex or 

disability if grievance procedures are in 

place. 

Subpart D—Participant Benefits 

§ 249.8 Level of benefits and eligible 

foods. 

(a) General. State agencies must 

identify in the State Plan the fresh, 

nutritious, unprepared, locally grown 

fruits, vegetables and herbs that are 

eligible for purchase under the SFMNP. 

Eligible foods may not be processed or 

prepared beyond their natural state 

except for usual harvesting and cleaning 

processes. Dried fruits or vegetables, 

such as prunes (dried plums), raisins 

(dried grapes), sun-dried tomatoes, or 

dried chili peppers are not considered 

eligible foods in the SFMNP. Potted 

fruit or vegetable plants, potted or dried 

herbs, wild rice, nuts of any kind (even 

raw), honey, maple syrup, cider, seeds, 

eggs, meat, cheese, and seafood are also 

not eligible for purposes of the SFMNP. 

‘‘Locally grown’’ means produce grown 

only within a State’s borders but may be 

defined by State agencies to include 

border areas in adjacent States. Under 

no circumstances may produce grown 

outside of the United States and its 

territories be considered eligible food. 

(b) The value of the Federal benefits 

received. (1) The Federal SFMNP benefit 

level received by each participant, 

whether individual or household, may 

not be less than $20 per year or more 

than $50 per year, except that: 

(i) A State agency that operated the 

SFMNP in FY 2006 may continue to 

issue the same level of benefits that was 

provided to participants in FY 2006, 

even if the benefit level was less than 

$20; 

(ii) Participants served by a State 

agency that operated the SFMNP 

through a CSA program model in FY 

2006 may, at the State agency’s 

discretion, continue to receive the same 

CSA benefit levels that were provided to 

such participants in FY 2006, subject to 

the conditions set forth at § 249.14(e)(3), 

Distribution of Funds; and 

(iii) Participants who are participating 

in the SFMNP through a CSA program 

may receive a higher total benefit level 

than participants participating in a 

check or coupon program model, as long 

as that level is consistent for all Senior 

CSA program participants and does not 

exceed the $50 annual maximum per 

individual or household, except as 

provided in paragraph (b)(1) of this 

section. 

(2) The total value of SFMNP benefits 

provided in a combination of program 

models, such as coupons/checks and 

bulk purchase, may not exceed the $50 

maximum benefit level set forth in 

paragraph 249.8(b)(1). 

(c) Participant or household benefit 

allocation. (1) All SFMNP participants 

living in the areas served by the State 

agency must be offered the same amount 

of SFMNP benefits, regardless of the 

program model(s) used by that State 

agency. 

(2) Benefits may be allocated on an 

individual or on a household basis. 

(3) Foods provided are intended for 

the sole benefit of SFMNP participants 

and are not meant to be shared with 

other non-participating household 

members. 

(4) Participants must receive SFMNP 

benefits free of charge. 

§ 249.9 Nutrition education. 

(a) Goal. Nutrition education shall 

emphasize the relationship of proper 

nutrition to good health, including the 

importance of consuming fruits and 

vegetables. 

(b) Requirement. The State agency 

shall integrate nutrition education into 

SFMNP operations and may satisfy 

nutrition education requirements 

through coordination with other 

agencies within the State. State agencies 

wishing to coordinate nutrition 

education with another State agency or 

organization must enter into a written 

cooperative agreement with such 

agencies to offer nutrition education 

relevant to the use and nutritional value 

of foods available to SFMNP 

participants. In cases where SFMNP 

participants are receiving relevant 

nutrition education from an agency 

other than the administering State 

agency, the provision of nutrition 

education is an allowable administrative 

cost under the SFMNP. 

Subpart E—State Agency Provisions 

§ 249.10 Coupon, market, and CSA 

program management. 

(a) General. This section sets forth 

State agency responsibilities regarding 

the authorization of farmers, farmers’

markets, roadside stands, and/or CSA 

programs. The State agency is 

responsible for the fiscal management of 

and accountability for SFMNP-related 

activities for farmers, farmers’ markets, 

roadside stands, and CSA programs. 

Each State agency may decide whether 

to authorize individual farmers and 

farmers’ markets separately, or to 

authorize only farmers’ markets. In 

addition, each State agency may decide 

whether to authorize roadside stands 

and/or CSA programs. The State agency 

may authorize a farmer for participation 

in a farmers’ market, a roadside stand, 

and/or CSA program simultaneously. 

All contracts or agreements entered into 

by the State agency for the management 

or operation of farmers, farmers’

markets, roadside stands, and/or CSA 

programs shall conform to the 

requirements of part 3016 of this title. 

(1) Only farmers, farmers’ markets, 

and/or roadside stands authorized by 

the State agency may redeem SFMNP 

coupons. Only farmers authorized by 

the State agency, or having a valid 

agreement with an authorized farmers’

market, may redeem coupons. Only CSA 

programs authorized by the State agency 

may receive payment from the State 

agency at the beginning of the planting 

season, in order to provide eligible 

foods to senior participants who are 

shareholders. 

(2) The State agency must establish 

criteria for the authorization of 

individual farmers and/or farmers’

markets, roadside stands, and/or CSA 

programs. Any authorized farmer, 

farmers’ market, roadside stand and/or 

CSA program must agree to sell 

participants only those foods identified 

as eligible by the State agency. State 

agencies may determine farmers, 

farmers’ markets and/or roadside stands 

as automatically authorized to 

participate in the SFMNP based on 

current authorization to operate in the 

FMNP under Part 248 of this chapter. 

Individuals who exclusively sell 

produce grown by someone else, such as 

wholesale distributors, cannot be 


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authorized to participate in the SFMNP, 

except individuals employed by a 

farmer otherwise qualified under these 

regulations, or individuals hired by a 

nonprofit organization to sell produce at 

roadside stands on behalf of local 

farmers. 

(3) The State agency must ensure that 

an appropriate number of farmers, 

farmers’ markets, roadside stands, and/ 

or CSA programs are authorized for 

adequate participant access in the 

area(s) proposed to be served and for 

effective management of the farmers, 

farmers’ markets, roadside stands, and/ 

or CSA programs by the State agency. 

(4) The State agency may establish 

criteria to limit the number of 

authorized farmers, farmers’ markets, 

and/or roadside stands. 

(5) The State agency must limit the 

value of shares awarded to CSA 

programs to no more than 50 percent of 

their total Federal SFMNP food grant, 

except in the case of a State agency that 

has grandfathered a CSA program model 

into the permanent SFMNP that uses 

more than 50 percent of the total 

Federal SFMNP food grant for the CSA 

program. The State agency shall make 

efforts to select the CSA program(s) that 

provides the greatest variety of eligible 

foods. 

(6) The State agency may purchase 

bulk quantities of eligible foods directly 

from authorized farmers. Such foods 

must then be equitably divided among 

and distributed directly to eligible 

SFMNP participants. SFMNP 

participants who have received checks 

or coupons to purchase eligible foods 

earlier in the season may also receive 

foods through the bulk purchase option 

as long as the total combined value of 

the benefits provided to each SFMNP 

participant does not exceed $50, as 

stipulated in § 249.8(b). 

(7) The State agency shall ensure that 

training is conducted prior to start up of 

the first year of SFMNP participation of 

an individual farmer, farmers’ market, 

roadside stand, and/or CSA program. 

The training shall include at a minimum 

those items listed in paragraph (d) of 

this section, and may be delivered in a 

variety of methods, including but not 

limited to classroom settings, telephone 

conferences, videoconferences, and 

web-based training modules. 

(8) Authorized farmers shall display a 

sign stating that they are authorized to 

redeem SFMNP coupons. 

(9) Authorized farmers, farmers’

markets, roadside stands, and/or CSA 

programs shall comply with the 

requirements of Title VI of the Civil 

Rights Act of 1964, Title IX of the 

Education Amendments of 1972, 

Section 504 of the Rehabilitation Act of 

1973, the Age Discrimination Act of 

1975, Department of Agriculture 

regulations on nondiscrimination (parts 

15, 15a and 15b of this title), and FNS 

Instructions as outlined in § 249.7. 

(10) The State agency shall ensure 

that there is no conflict of interest 

between the State or local agency and 

any participating farmer, farmers’

market, roadside stand and/or CSA 

program. 

(b) Farmer, farmers’ market, roadside 

stand, and/or CSA program agreements. 

The State agency shall ensure that all 

participating farmers’ markets, roadside 

stands, and/or CSA programs enter into 

written agreements with the State 

agency. State agencies that authorize 

individual farmers shall also enter into 

written agreements with the individual 

farmers. The agreement must be signed 

by a representative who has legal 

authority to obligate the farmer, farmers’

market, roadside stand, and/or CSA 

program. Agreements must include a 

description of sanctions for 

noncompliance with SFMNP 

requirements and shall contain, at a 

minimum, the following specifications, 

although the State agency may 

determine the exact wording to be used: 

(1) The farmer, farmers’ market and/ 

or roadside stand shall: 

(i) Provide such information as the 

State agency may require for its periodic 

reports to FNS; 

(ii) Assure that SFMNP coupons are 

redeemed only for eligible foods; 

(iii) Provide eligible foods at or less 

than the price charged to other 

customers; 

(iv) Accept SFMNP coupons within 

the dates of their validity and submit 

such coupons for payment within the 

allowable time period established by the 

State agency; 

(v) In accordance with a procedure 

established by the State agency, mark 

each transacted coupon with a farmer 

identifier. In those cases where the 

agreement is between the State agency 

and the farmer and/or roadside stand, 

each transacted SFMNP coupon shall 

contain a farmer identifier and shall be 

batched for reimbursement under that 

identifier. In those cases where the 

agreement is between the State agency 

and the farmers’ market, each transacted 

SFMNP coupon shall contain a farmer 

identifier and be batched for 

reimbursement under a farmers’ market 

identifier. 

(vi) Accept training on SFMNP 

procedures and provide training to 

farmers and any employees with 

SFMNP responsibilities on such 

procedures; 

(vii) Agree to be monitored for 

compliance with SFMNP requirements, 

including both overt and covert 

monitoring; 

(viii) Be accountable for actions of 

farmers or employees in the provision of 

eligible foods and related activities; 

(ix) Pay the State agency for any 

coupons transacted in violation of this 

agreement; 

(x) Offer SFMNP participants the 

same courtesies as other customers; 

(xi) Comply with the 

nondiscrimination provisions of USDA 

regulations as provided in § 249.7; and 

(xii) Notify the State agency if any 

farmer, farmers’ market or roadside 

stand ceases operation prior to the end 

of the authorization period. 

(2) The farmer, farmers’ market and/ 

or roadside stand shall neither: 

(i) Seek restitution from SFMNP 

participants for coupons not paid by the 

State agency; nor 

(ii) Issue cash change for purchases 

that are in an amount less than the value 

of the SFMNP coupon(s). 

(3) The CSA program shall: 

(i) Provide such information as the 

State agency may require for its periodic 

reports to FNS; 

(ii) Assure that SFMNP participants 

receive only eligible foods; 

(iii) Provide eligible foods to their 

SFMNP shareholders at or less than the 

price charged to other customers; 

(iv) Assure that the shareholder 

receives eligible foods that are of 

equitable value and quantity to their 

share; 

(v) Assure that all funds from the 

State agency are used for planting of 

crops for SFMNP shareholders; 

(vi) Provide to the State agency access 

to a tracking system that determines the 

value of the eligible foods provided and 

the remaining value owed to each 

SFMNP shareholder; 

(vii) Assure that SFMNP 

shareholders/authorized representatives 

provide written acknowledgement of 

receipt of eligible foods; 

(viii) Accept training on SFMNP 

procedures and provide training to 

farmers and any employees with 

SFMNP responsibilities for such 

procedures; 

(ix) Agree to be monitored for 

compliance with SFMNP requirements, 

including both overt and covert 

monitoring; 

(x) Be accountable for actions of 

farmers or employees in the provision of 

eligible foods and related activities; 

(xi) Offer SFMNP shareholders the 

same courtesies as other customers; 

(xii) Notify the State agency 

immediately when the CSA program is 

experiencing a problem with its crops, 

and may be unable to provide SFMNP 

shareholders with the complete amount 


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of eligible foods agreed upon between 

the CSA program and the State agency; 

(xiii) Comply with the 

nondiscrimination provisions of USDA 

regulations as provided in § 249.7; and 

(xiv) Notify the State agency if any 

CSA program ceases operation prior to 

the end of the authorization period. 

(4) The CSA program shall not 

substitute ineligible produce when 

eligible foods are not available. 

(5) Neither the State agency nor the 

farmer, farmers’ market, roadside stand, 

and/or CSA program has an obligation 

to renew the agreement. The State 

agency or the farmer, farmers’ market, 

roadside stand and/or CSA program 

may terminate the agreement for cause 

after providing advance written 

notification. 

(6) The State agency may deny 

payment to the farmer, farmers’ market 

and/or roadside stand for improperly 

redeemed SFMNP coupons and may 

demand refunds for payments already 

made on improperly redeemed coupons. 

(7) The State agency may demand a 

refund from any CSA program that fails 

to provide the full benefit to all SFMNP 

shareholders as specified in its contract, 

or that provides ineligible foods as 

substitutes for eligible foods. 

(8) The State agency may disqualify a 

farmer, farmers’ market, roadside stand, 

and/or CSA program for SFMNP 

violations. The farmer, farmers’ market, 

roadside stand, and/or CSA program has 

the right to appeal a denial of an 

application to participate, a 

disqualification, or a SFMNP sanction 

by the State agency. Expiration of a 

contract or agreement with a farmer, 

farmers’ market, roadside stand, and/or 

CSA program, and claims actions under 

§ 249.20, are not appealable. 

(9) A farmer, farmers’ market, 

roadside stand, and/or CSA program, 

which commits fraud or engages in 

other illegal activity is liable to 

prosecution under applicable Federal, 

State or local laws. 

(10) Agreements may not exceed 3 

years. 

(c) Agreements with farmers’ markets 

that do not authorize individual 

farmers. Those State agencies that 

authorize farmers’ markets but not 

individual farmers shall require 

authorized farmers’ markets to enter 

into a written agreement with each 

farmer within the market that is 

participating in SFMNP. The State 

agency must set forth the required terms 

for the agreement and provide a sample 

agreement that may be used. 

(d) Annual training for farmers, 

farmers’ market managers and/or 

farmers that operate a roadside stand or 

CSA program. State agencies shall 

conduct annual training for farmers, 

farmers’ market managers, and/or 

farmers who operate a CSA program in 

the SFMNP. The State agency must 

conduct interactive training for all 

farmers and farmers’ market managers 

who have never previously participated 

in the SFMNP. After a farmer/farmers’

market manager’s first year of SFMNP 

operation, State agencies have 

discretion in determining the method 

used for annual training purposes. At a 

minimum, annual training shall include 

instruction emphasizing: 

(1) Eligible food choices; 

(2) Proper SFMNP coupon 

redemption procedures, including 

deadlines for submission of coupons for 

payment, and/or receipt of payment for 

CSA programs’ distribution of eligible 

foods; 

(3) Equitable treatment of SFMNP 

participants, including the availability 

of eligible foods to SFMNP participants 

that are of the same quality and cost as 

that sold to other customers; 

(4) Civil rights compliance and 

guidelines; 

(5) Guidelines for storing SFMNP 

coupons safely; and 

(6) Guidelines for cancelling SFMNP 

coupons, such as punching holes or 

rubber-stamping. 

(e) Monitoring and review of farmers, 

farmers’ markets, roadside stands, CSA 

programs and local agencies. The State 

agency shall be responsible for the 

monitoring of farmers, farmers’ markets, 

roadside stands, CSA programs and 

local agencies within its jurisdiction. 

This shall include developing a system 

for identifying high risk farmers, 

farmers’ markets, roadside stands, and/ 

or CSA programs, and ensuring on-site 

monitoring, conducting further 

investigation, and sanctioning of such 

farmers, farmers’ markets, roadside 

stands, and/or CSA programs as 

appropriate. In States where both the 

SFMNP and the FMNP are in operation, 

these monitoring/review requirements 

may be coordinated to avoid 

duplication. If the same farmers, 

farmers’ markets, and/or roadside stands 

are authorized for both programs, a 

review conducted by one program may 

be counted toward the requirement for 

the other program. 

(1) Where coupon reimbursement 

responsibilities are delegated to farmers’

market managers, farmers’ market 

associations, or nonprofit organizations, 

the State agency may establish bonding 

requirements for these entities. Costs of 

such bonding are not reimbursable 

administrative expenses. 

(2)(i) Each State agency shall rank 

participating farmers, farmers’ markets, 

roadside stands, and/or CSA programs 

by risk factors, and shall conduct 

annual, on-site monitoring of at least 10 

percent of farmers, 10 percent of 

farmers’ markets, 10 percent of roadside 

stands, and 10 percent of the CSA 

programs or one of each program model, 

whichever is greater, which shall 

include those farmers, farmers’ markets, 

roadside stands, and/or CSA programs 

identified as being the highest-risk. 

(ii) Mandatory high-risk indicators 

include: 

(A) A proportionately high volume of 

SFMNP coupons redeemed by a farmer 

within a farmers’ market or at a single 

roadside stand (as compared to other 

farmers within the farmers’ market or 

within the State); 

(B) Participant complaints; 

(C) In the case of CSA programs, an 

extended or ongoing inability to provide 

the full SFMNP benefit to each 

shareholder as contracted; and 

(D) Farmers, farmers’ markets, 

roadside stands, and/or CSA programs 

in their first year of SFMNP operation. 

States are encouraged to formally 

establish other high-risk indicators for 

identifying potential problems. 

(iii) If additional high-risk indicators 

are established, they must be set forth in 

the farmers, farmers’ market, roadside 

stand, and/or CSA program agreement 

and in the State Plan. If application of 

the high-risk indicators results in fewer 

than 10 percent of farmers, farmers’

markets, roadside stands, and/or CSA 

programs being designated as high-risk, 

the State agency shall randomly select 

additional farmers, farmers’ markets, 

roadside stands, and/or CSA programs 

to be monitored in order to meet the 10 

percent minimum. The high-risk 

indicators listed above generally apply 

to a State agency already participating 

in the SFMNP. A State agency 

participating in the SFMNP for the first 

time shall, in lieu of applying the highrisk indicators, randomly select 10 

percent of its participating farmers, 10 

percent of its participating farmers’

markets, 10 percent of its participating 

roadside stands, and 10 percent of its 

participating CSA programs or at least 

one farmers’ market, roadside stand, 

and/or CSA program, whichever is 

greater, for monitoring visits. 

(3)(i) The following shall be 

documented for all on-site monitoring 

visits to farmers, farmers’ markets, 

roadside stands, and/or CSA programs, 

at a minimum: 

(A) Names of both the farmer, farmers’

market, roadside stand, and/or CSA 

program and the reviewer; 

(B) Date of review; 

(C) Nature of problem(s) detected or 

the observation that the farmer, farmers’

market, roadside stand, and/or CSA 


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program appears to be in compliance 

with SFMNP requirements; 

(D) Record of interviews with 

participants, market managers, farmers, 

and/or farmers who operate a CSA 

program; and 

(E) Signature of the reviewer. 

(ii) Reviewers are not required to 

notify the farmer, farmers’ market, 

roadside stand, and/or CSA program of 

the monitoring visit before, during, or 

immediately after the visit. The State 

agency shall do so after a reasonable 

delay when necessary to protect the 

identity of the reviewer(s) or the 

integrity of the investigation. 

(iii) In instances where the farmer, 

farmers’ market, roadside stand, and/or 

CSA program will be permitted to 

continue participating in the SFMNP 

after being informed of any deficiencies 

detected by the monitoring visit, the 

farmer, farmers’ market, roadside stand, 

and/or CSA program shall provide plans 

as to how the deficiencies will be 

corrected. 

(4) At least every 2 years, the State 

agency must review all local agencies 

within its jurisdiction. 

(f) Control of SFMNP coupons. The 

State agency must: 

(1) Control and provide accountability 

for the receipt and issuance of SFMNP 

coupons; 

(2) Ensure that there is secure 

transportation and storage of unissued 

SFMNP coupons; and 

(3) Design and implement a system of 

review of SFMNP coupons to detect 

errors. At a minimum, the errors the 

system must detect are a missing 

participant signature (if such signature 

is required by the State agency), a 

missing farmer and/or market 

identification, and redemption by a 

farmer outside of the valid date. The 

State agency must have procedures in 

place to reduce the number of errors in 

transactions. 

(g) Payment to farmers, farmers’

markets, roadside stands, and/or CSA 

programs. The State agency must ensure 

that farmers, farmers’ markets, roadside 

stands, and/or CSA programs are 

promptly paid for food costs. 

(h) Reconciliation of SFMNP coupons. 

The State agency shall identify the 

disposition of all SFMNP coupons as 

validly redeemed, lost or stolen, 

expired, or not matching issuance 

records. Validly redeemed SFMNP 

coupons are those that are issued to a 

valid participant and redeemed by an 

authorized farmer, farmers’ market, and/ 

or roadside stand within valid dates. 

SFMNP coupons that were redeemed 

but cannot be traced to a valid 

participant or authorized farmer, 

farmers’ market, and/or roadside stand 

shall be subject to claims action in 

accordance with § 249.20. 

(1) If the State agency elects to replace 

lost, stolen or damaged SFMNP 

coupons, it must describe its system for 

doing so in the State Plan. 

(2) The State agency must use uniform 

SFMNP coupons within its jurisdiction. 

(3) SFMNP coupons must include, at 

a minimum, the following information: 

(i) The last date by which the 

participant may use the coupon. This 

date shall be no later than November 30 

of each year. 

(ii) A date by which the farmer or 

farmers’ market must submit the coupon 

for payment. When establishing this 

date, State agencies shall take into 

consideration the date financial 

statements are due to the FNS, and 

allow time for the corresponding 

coupon reconciliation that must be done 

by the State agency prior to submission 

of financial statements. Financial 

statements are due to FNS by January 

30. 

(iii) A unique and sequential serial 

number. 

(iv) A denomination (dollar amount). 

(v) A farmer identifier for the 

redeeming farmer when agreements are 

between the State agency and the 

farmer. 

(vi) In those instances where State 

agencies have agreements with farmers’

markets, there must be a farmer 

identifier on each coupon and a market 

identifier on the cover of coupons that 

are batched by the market manager for 

reimbursement. 

(i) Instructions to participants. Each 

participant must receive instruction on 

the redemption of the SFMNP coupons, 

or participation in a CSA program 

(where applicable), including, but not 

limited to: 

(1) A list of names and addresses of 

authorized farmers, farmers’ markets, 

and/or roadside stands at which SFMNP 

coupons may be redeemed, or 

procedures on the home-delivery 

process; 

(2) Procedures to designate a proxy; 

(3) The name and address of the 

authorized farmer of the CSA program, 

and locations of distribution sites; 

(4) A description of eligible foods and 

the prohibition against cash change for 

SFMNP purchases of eligible foods; 

(5) A description of eligible foods that 

will be provided through the CSA 

program; 

(6) A schedule outlining a timeframe 

for distribution of the eligible foods 

from the CSA program; and 

(7) An explanation of his/her right to 

complain about improper farmer, 

farmers’ market, roadside stand, and/or 

CSA program practices with regard to 

SFMNP responsibilities and the process 

for doing so. 

(j) Participant and farmer, farmers’

market, roadside stand, and/or CSA 

program complaints. The State agency 

must have procedures that document 

the handling of complaints from 

participants and farmers/farmers’

markets, roadside stands, and/or CSA 

programs. Complaints of civil rights 

discrimination shall be handled in 

accordance with § 249.7(b). 

(k) Participant and farmer, farmers’

market, roadside stand, and/or CSA 

program sanctions. (1) The State agency 

must establish policies which determine 

the type and level of sanctions to be 

applied against participants and 

farmers, farmers’ markets, roadside 

stands, and/or CSA programs based 

upon the severity and nature of the 

SFMNP violations observed, and such 

other factors as the State agency 

determines appropriate, such as 

whether repeated offenses have 

occurred over a period of time. Farmers, 

farmers’ markets, roadside stands, and/ 

or CSA programs may be sanctioned, 

disqualified, or both, when appropriate. 

Sanctions may include fines for 

improper SFMNP coupon redemption 

and the penalties outlined in § 249.20, 

in the case of deliberate fraud. 

(2) In those instances where 

compliance purchases are conducted, 

the results of covert compliance 

purchases can be a basis for farmer, 

farmers’ market, and/or roadside stand 

sanctions. 

(3) A farmer, farmers’ market, 

roadside stand, and/or CSA program 

committing fraud or other unlawful 

activities are liable to prosecution under 

applicable Federal, State or local laws. 

(4) State agency policies must ensure 

that a farmer that is disqualified from 

the SFMNP at one market, roadside 

stand, or CSA program shall not 

participate in the SFMNP at any other 

farmers’ market, roadside stand or CSA 

program in the State’s jurisdiction 

during the disqualification period. 

(5) State agency policies must ensure 

that a farmer, farmers’ market, roadside 

stand, and/or CSA program that is 

disqualified from participating in the 

WIC Farmers’ Market Nutrition Program 

is also disqualified from participating in 

the SFMNP in the State’s jurisdiction 

during the disqualification period. 

§ 249.11 Financial management system. 

(a) Disclosure of expenditures. The 

State agency must maintain a financial 

management system that provides 

accurate, current and complete 

disclosure of the financial status of the 

SFMNP. This must include an 

accounting for all property and other 


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assets and all SFMNP funds received 

and expended each fiscal year. 

(b) Internal controls. The State agency 

shall maintain effective controls over 

and accountability for all SFMNP funds. 

The State agency must have effective 

internal controls to ensure that 

expenditures financed with SFMNP 

funds are authorized and properly 

chargeable to the SFMNP. 

(c) Record of expenditures. The State 

agency must maintain records that 

adequately identify the source and use 

of funds expended for SFMNP activities. 

These records must contain, but are not 

limited to, information pertaining to 

authorization, receipt of funds, 

obligations, unobligated balances, 

assets, liabilities, outlays, and income. 

(d) Payment of costs. The State agency 

must implement procedures that ensure 

prompt and accurate payment of 

allowable costs, and ensure the 

allowability and allocability of costs in 

accordance with the cost principles and 

standard provisions of this part, part 

3016 of this title, and FNS guidelines 

and Instructions. 

(e) Identification of obligated funds. 

The State agency must implement 

procedures that accurately identify 

obligated SFMNP funds at the time the 

obligations are made. 

(f) Resolution of audit findings. The 

State agency shall implement 

procedures that ensure timely and 

appropriate resolution of claims and 

other matters resulting from audit 

findings and recommendations. 

(g) Reconciliation of food instruments. 

The State agency must reconcile SFMNP 

coupons in accordance with § 249.10(h). 

(h) Transfer of cash. The State agency 

must establish the timing and amounts 

of its cash draws against its Letter of 

Credit in accordance with 31 CFR Part 

205. 

§ 249.12 SFMNP costs. 

(a) General. (1) Composition of 

allowable costs. In general, a cost item 

will be deemed allowable if it is 

reasonable and necessary for SFMNP 

purposes and otherwise satisfies 

allowability criteria set forth in part 

3016.22 of this title and this Part. 

SFMNP purposes include the 

administration and operation of the 

SFMNP. Allowable SFMNP costs may 

be classified as follows: 

(i) Food costs and administrative 

costs. Food costs are the costs of eligible 

foods provided to SFMNP participants. 

Administrative costs are the costs 

associated with providing SFMNP 

benefits and services to participants and 

generally administering the SFMNP. 

Specific examples of allowable 

administrative costs are listed in 

paragraph (b) of this section. A State 

agency may use up to 10 percent of its 

total Federal SFMNP grant to cover 

administrative costs. Any costs incurred 

for food and/or administration above the 

Federal grant level will be the State 

agency’s responsibility. 

(ii) Direct and indirect costs. Direct 

costs are food and administrative costs 

incurred specifically for the SFMNP. 

Indirect costs are administrative costs 

that benefit multiple programs or 

activities, and cannot be identified to 

any one program or activity without 

effort disproportionate to the results 

achieved. In accordance with the 

provisions of part 3016 of this title, a 

claim for reimbursement of indirect 

costs shall be supported by an approved 

allocation plan for the determination of 

such costs. An indirect cost rate 

developed through such an allocation 

plan may not be applied to a base that 

includes food costs. 

(2) Costs allowable with prior 

approval. A State or local agency must 

obtain prior approval in accordance 

with part 3016.22 of this title before 

charging to the SFMNP any capital 

expenditures and other cost items 

designated by part 3016.22 of this title 

as requiring such approval. 

(3) Unallowable costs. Costs that are 

not reasonable and necessary for 

SFMNP purposes, or that do not 

otherwise satisfy the cost principles of 

part 3016.22 of this title, are 

unallowable. Notwithstanding any other 

provision of part 3016 of this title or this 

Part, the cost of constructing or 

operating a farmers’ market is 

unallowable. The use of SFMNP funds 

to supplement congregate meal 

programs is prohibited. Unallowable 

costs may never be claimed for Federal 

reimbursement. 

(b) Specified allowable administrative 

costs. Allowable administrative costs 

include the following: 

(1) The costs associated with 

administration and start-up; 

(2) The costs associated with the 

provision of nutrition education that 

meets the requirements of § 249.9; 

(3) The costs of SFMNP coupon 

issuance, or participant education 

covering proper coupon redemption 

procedures; 

(4) The cost of eligibility 

determinations and outreach services; 

(5) The costs associated with the 

coupon and market management 

process, such as printing SFMNP 

coupons, processing redeemed coupons, 

purchasing bags or other containers to 

be used in home-delivery and bulk 

purchase operations, and training 

farmers, market managers, and/or 

farmers who operate CSA programs on 

SFMNP operations; 

(6) The cost of monitoring and 

reviewing Program operations; 

(7) The cost of SFMNP training; 

(8) The cost of required reporting and 

recordkeeping; 

(9) The cost of determining which 

local sites will be utilized; 

(10) The cost of recruiting and 

authorizing farmers, farmers’ markets, 

roadside stands, and/or CSA programs 

to participate in the SFMNP; 

(11) The cost of preparing contracts 

for farmers, farmers’ markets, roadside 

stands, and/or CSA programs; 

(12) The cost of developing a data 

processing system for redemption and 

reconciliation of SFMNP coupons; 

(13) The cost of designing program 

training and informational materials; 

and 

(14) The cost of coordinating SFMNP 

responsibilities between designated 

administering agencies. 

§ 249.13 Program income. 

Program income means gross income 

the State agency earns from grant 

supported activities. It includes fees for 

services performed and receipts from 

the use or rental of real or personal 

property acquired with Federal grant 

funds, but does not include proceeds 

from the disposition of such property. 

The State agency must retain Program 

income earned during the agreement 

period and use it for Program purposes 

in accordance with the addition method 

described in part 3016.25(g)(2) of this 

title. Fines, penalties or assessments 

paid by local agencies or farmers, 

farmers’ markets, roadside stands, and/ 

or CSA program are also deemed to be 

Program income. The State agency must 

ensure that the sources and applications 

of Program income are fully 

documented. 

§ 249.14 Distribution of funds to State 

agencies. 

(a) State Plan and agreement. As a 

prerequisite to the receipt of Federal 

funds, a State agency must have its State 

Plan approved and must execute an 

agreement with FNS in accordance with 

§ 249.3(c). 

(b) Distribution of SFMNP funds to 

previously participating State agencies. 

Provided that sufficient SFMNP funds 

are available, each State agency that 

participated in the SFMNP in any prior 

fiscal year shall receive not less than the 

amount of funds the State agency 

received in the most recent fiscal year 

in which it received funding, if it 

otherwise complies with the 

requirements established in this Part. 

(c) Ratable reduction. If amounts 

appropriated for any fiscal year for 


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grants under the SFMNP are not 

sufficient to pay to each previously 

participating State agency at least an 

amount as identified in paragraph (b) of 

this section, each State agency’s grant 

must be ratably reduced. However, to 

the extent permitted by available funds, 

each State agency shall receive at least 

$75,000 or the amount that the State 

agency received for the most recent 

prior fiscal year in which the State 

participated, if that amount is less than 

$75,000. 

(d) Expansion of participating State 

agencies and establishment of new State 

agencies. Any SFMNP funds remaining 

for allocation after meeting the 

requirements of paragraph (b) of this 

section shall be allocated in the 

following manner: 

(1) Of the remaining funds, 75 percent 

shall be made available to State agencies 

already participating in the SFMNP that 

wish to serve additional participants or 

increase the current benefit level. If this 

amount is greater than that necessary to 

satisfy all State Plans approved for 

expansion, the unallocated amount shall 

be applied toward satisfying any unmet 

need in paragraph (d)(2) of this section. 

(2) Of the remaining funds, 25 percent 

shall be made available to State agencies 

that have not participated in the SFMNP 

in any prior fiscal year. If this amount 

is greater than that necessary to satisfy 

the approved State Plans for new States, 

the unallocated amount shall be applied 

toward satisfying any unmet need in 

paragraph (d)(1) of this section. FNS 

reserves the right not to fund every State 

agency with an approved State Plan. 

(e) Expansion for current State 

agencies. In providing funds to State 

agencies that participated in the SFMNP 

in the previous fiscal year, FNS must 

consider on a case-by-case basis the 

following factors: 

(1) Whether the State agency utilized 

at least 80 percent of its prior year food 

grant. States that did not spend at least 

80 percent of their prior year food grant 

may still be eligible for expansion 

funding if, in the judgment of FNS, good 

cause existed which was beyond the 

management control of the State, such 

as severe weather conditions or 

unanticipated decreases in participant 

caseload; 

(2) Documentation supporting the 

funds expansion request as outlined in 

§ 249.4(a)(23); and 

(3) Whether the State agency currently 

issues a participant benefit greater than 

$50. Such State agencies will not be 

eligible to receive additional SFMNP 

funds for expansion until the maximum 

participant benefit no longer exceeds 

$50. 

(f) Funding of new State agencies. 

Funds will be awarded to new SFMNP 

State agencies in accordance with 

§ 249.5. 

(g) Administrative funding. A State 

agency will have available for 

administrative costs an amount not 

greater than 10 percent of the total 

SFMNP funds it receives. 

(h) Recovery of unused funds. State 

agencies must return to FNS any 

unexpended funds made available for a 

given fiscal year by February 1 of the 

following fiscal year. 

§ 249.15 Closeout procedures. 

(a) General. State agencies must 

submit to FNS a final closeout report for 

the fiscal year on a form prescribed by 

FNS and on a date specified by FNS. 

(b) Grant closeout procedures. When 

grants to State agencies are terminated, 

the following procedures shall be 

followed in accordance with part 3016 

of this title. 

(1) FNS may disqualify a State 

agency’s participation under the 

SFMNP, in whole or in part, or take 

such remedies as may be appropriate, 

whenever FNS determines that the State 

agency failed to comply with the 

conditions prescribed in this part, in its 

Federal-State Agreement, or in FNS 

guidelines and Instructions. FNS will 

promptly notify the State agency in 

writing of the disqualification together 

with the effective date. 

(2) FNS may terminate a grant when 

both parties agree that continuation 

under the SFMNP would not produce 

beneficial results commensurate with 

the further expenditure of funds. 

(3) Upon termination of a grant, the 

affected agency may not incur new 

obligations after the effective date of the 

disqualification, and must cancel as 

many outstanding obligations as 

possible. FNS will allow full credit to 

the State agency for the Federal share of 

the noncancellable obligations properly 

incurred by the State agency prior to 

disqualification, and the State agency 

shall do the same for farmers, farmers’

markets, roadside stands, and/or CSA 

programs. 

(4) A grant closeout shall not affect 

the retention period for, or Federal 

rights of access to, SFMNP records as 

specified in § 249.23(a). The closeout of 

a grant does not affect the 

responsibilities of the State agency 

regarding property or with respect to 

any SFMNP income for which the State 

agency is still accountable. 

(5) A final audit is not a required part 

of the grant closeout and should not be 

needed unless there are problems with 

the grant that require attention. If FNS 

considers a final audit to be necessary, 

it shall so inform OIG. OIG will be 

responsible for ensuring that necessary 

final audits are performed and for any 

necessary coordination with other 

Federal cognizant audit agencies or 

State or local auditors. Audits 

performed in accordance with § 249.18 

may serve as final audits providing such 

audits meet the needs of requesting 

agencies. If the grant is closed out 

without an audit, FNS reserves the right 

to disallow and recover an appropriate 

amount after fully considering any 

recommended disallowances resulting 

from an audit which may be conducted 

later. 

§ 249.16 Administrative appeal of State 

agency decisions. 

(a) Requirements. The State agency 

shall provide a hearing procedure 

whereby applicants, participants, local 

agencies and farmers, farmers’ markets, 

roadside stands, and/or CSA programs 

adversely affected by certain actions of 

the State agency may appeal those 

actions. 

(1) What may be appealed. 

(i) An applicant may appeal denial of 

certification of SFMNP benefits, except 

that no appeal is available if 

certification is denied solely because of 

the lack of sufficient funding to provide 

SFMNP benefits to all eligible 

applicants. 

(ii) A participant may appeal 

disqualification/suspension of SFMNP 

benefits. 

(iii) A local agency may appeal an 

action of the State agency disqualifying 

it from participating in the SFMNP. 

(iv) A farmer, farmers’ market, 

roadside stand, and/or CSA program 

may appeal an action of the State agency 

denying its application to participate, 

imposing a sanction, or disqualifying it 

from participating in the SFMNP. 

(2) What may not be appealed. 

Expiration of a contract or agreement 

shall not be subject to appeal. 

(b) Time limit for request. The State or 

local agency must provide individuals, 

local agencies, farmers, farmers’

markets, roadside stands, and/or CSA 

programs a reasonable period of time to 

request a fair hearing. Such time limit 

must not be less than 30 days from the 

date the agency mails or otherwise 

issues the notice of adverse action. 

(c) Postponement pending decision. 

An adverse action may, at the State 

agency’s option, be postponed until a 

decision in the appeal is rendered. 

(1) In a case where an adverse action 

affects a local agency or farmer, farmers’

market, roadside stand, and/or CSA 

program, a postponement is appropriate 

where the State agency finds that 

participants would be unduly 


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inconvenienced by the adverse action. 

In addition, the State agency may 

determine other relevant criteria to be 

considered in deciding whether or not 

to postpone an adverse action. 

(2) Applicants who are denied 

benefits at initial certification may 

appeal the denial, but must not receive 

SFMNP benefits while awaiting the 

hearing. Participants who appeal the 

termination of benefits within the 

period of time provided under 

paragraph (b) of this section must 

continue to receive Program benefits 

until the hearing official reaches a 

decision or the certification period 

expires, whichever occurs first. This 

does not apply to participants whose 

certification period has already expired 

or who become otherwise ineligible for 

SFMNP benefits. Participants who 

become ineligible during a certification, 

or whose certification period expires, 

may appeal the termination, but must 

not receive benefits while awaiting the 

hearing. 

(d) Procedure. The State agency 

hearing procedure shall at a minimum 

provide the participant, local agency or 

farmer, farmers’ market, roadside stand, 

and/or CSA program with the following: 

(1) Written notification of the adverse 

action, the cause(s) for the action, and 

the effective date of the action, 

including the State agency’s 

determination of whether the action 

shall be postponed under paragraph (c) 

of this section if it is appealed, and the 

opportunity for a hearing. Such 

notification shall be provided within a 

reasonable timeframe established by the 

State agency and in advance of the 

effective date of the action. 

(2) The opportunity to appeal the 

action within the time specified by the 

State agency in its notification of 

adverse action. 

(3) Adequate advance notice of the 

time and place of the hearing to provide 

all parties involved sufficient time to 

prepare for the hearing. 

(4) The opportunity to present its case 

and at least one opportunity to 

reschedule the hearing date upon 

specific request. The State agency may 

set standards on how many hearing 

dates can be scheduled, provided that a 

minimum of two hearing dates is 

allowed. 

(5) The opportunity to confront and 

cross-examine adverse witnesses. 

(6) The opportunity to be represented 

by counsel or, in the case of a 

participant appeal, by a representative 

designated by the participant, if desired. 

(7) The opportunity to review the case 

record prior to the hearing. 

(8) An impartial decision maker, 

whose decision as to the validity of the 

State agency’s action shall rest solely on 

the evidence presented at the hearing 

and the statutory and regulatory 

provisions governing the SFMNP. The 

basis for the decision shall be stated in 

writing, although it need not amount to 

a full opinion or contain formal findings 

of fact and conclusions of law. 

(9) Written notification of the decision 

in the appeal, within 60 days from the 

date of receipt of the request for a 

hearing by the State agency. 

(e) Continuing responsibilities. When 

a farmer, farmers’ market, roadside 

stand, CSA program, and/or local 

agency appeals an adverse action (and is 

permitted to continue in the SFMNP 

while its appeal is pending), it 

continues to be responsible for 

compliance with the terms of the 

written agreement or contract with the 

State agency. 

(f) Judicial review. If a State level 

decision is rendered against the 

participant, local agency, farmer, 

farmers’ market, roadside stand, and/or 

CSA program and the appellant 

expresses an interest in pursuing a 

further review of the decision, the State 

agency shall explain any further State 

level review of the decision and any 

available State level rehearing process. 

If neither is available or both have been 

exhausted, the State agency shall 

explain the right to pursue judicial 

review of the decision. 

(g) Additional appeals procedures for 

State agencies that authorize farmers’

markets and not individual farmers. A 

State agency that authorizes farmers’

markets and not individual farmers 

shall ensure that procedures are in place 

to be used when a farmer seeks to 

appeal an action of a farmers’ market or 

association denying the farmer’s 

application to participate, or 

sanctioning or disqualifying the farmer. 

The procedures shall be set forth in the 

State Plan and in the agreements 

entered into by the State agency and the 

farmers’ market and the farmers’ market 

and the farmer. 

Subpart F—Monitoring and Review of 

State Agencies 

§ 249.17 Management evaluations and 

reviews. 

(a) General. FNS and each State 

agency shall establish a management 

evaluation system in order to assess the 

accomplishment of SFMNP objectives as 

provided under these regulations, the 

State Plan, and the written agreement 

with FNS. FNS will: 

(1) Provide assistance to State 

agencies in discharging this 

responsibility; 

(2) Establish standards and 

procedures to determine how well the 

objectives of this Part are being 

accomplished; and 

(3) Implement sanction procedures as 

warranted by State SFMNP 

performance. 

(b) Responsibilities of FNS. FNS will 

establish evaluation procedures to 

determine whether State agencies carry 

out the purposes and provisions of this 

part, the State Plan, and the written 

agreement with FNS. As a part of the 

evaluation procedure, FNS will review 

audits to ensure that the SFMNP has 

been included in audit examinations at 

a reasonable frequency. These 

evaluations shall also include reviews of 

selected local agencies, and on-site 

reviews of selected farmers, farmers’

markets, roadside stands, and 

community supported agriculture 

programs. These evaluations will 

measure the State agency’s progress 

toward meeting the objectives outlined 

in its State Plan and the State agency’s 

compliance with these regulations. 

(1) FNS may withhold up to 10 

percent of the State agency’s total 

SFMNP grant if FNS determines that the 

State agency has: 

(i) Failed, without good cause, to 

demonstrate efficient and effective 

administration of its SFMNP; or 

(ii) Failed to comply with the 

requirements contained in this section 

or the State Plan. 

(2) Sanctions imposed upon a State 

agency by FNS in accordance with this 

section (but not claims for repayment 

assessed against a State agency) may be 

appealed in accordance with the 

procedures established in § 249.20(a). 

Before carrying out any sanction against 

a State agency, the following procedures 

will be followed: 

(i) FNS will notify the chief 

departmental officer of the 

administering agency in writing of the 

deficiencies found and of FNS’

intention to withhold administrative 

funds unless an acceptable corrective 

action plan is submitted by the State 

agency to FNS within 45 days after 

mailing of notification. 

(ii) The State agency shall develop a 

corrective action plan, including 

timeframes for implementation to 

address the deficiencies and prevent 

their future recurrence. 

(iii) If the corrective action plan is 

acceptable, FNS will notify the chief 

departmental officer of the 

administering agency in writing within 

30 days of receipt of the plan. The letter 

will advise the State agency of the 

sanctions to be imposed if the corrective 

action plan is not implemented 


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according to the schedule set forth in 

the approved plan. 

(iv) Upon notification from the State 

agency that corrective action has been 

taken, FNS will assess such action and, 

if necessary, perform a follow-up review 

to determine if the noted deficiencies 

have been corrected. FNS will then 

advise the State agency of whether the 

actions taken are in compliance with the 

corrective action plan, and whether the 

deficiency is resolved or further 

corrective action is needed. Compliance 

buys can be required if, during FNS 

management evaluations by regional 

offices, a State agency is found to be out 

of compliance with its responsibility to 

monitor and review farmers, farmers’

markets, roadside stands, and 

community supported agriculture 

programs. 

(v) If an acceptable corrective action 

plan is not submitted within 45 days, or 

if corrective action is not completed 

according to the schedule established in 

the corrective action plan, FNS may 

withhold the award of SFMNP 

administrative funds. If the 45-day 

warning period ends in the fourth 

quarter of a fiscal year, FNS may elect 

not to withhold funds until the next 

fiscal year. In such an event, FNS will 

notify the chief departmental officer of 

the administering State agency. 

(vi) If compliance is achieved before 

the end of the fiscal year in which the 

SFMNP administrative funds are 

withheld, the funds withheld may be 

restored to the State agency. FNS is not 

required to restore funds withheld 

beyond the end of the fiscal year for 

which the funds were initially awarded. 

(c) Responsibilities of State agencies. 

The State agency is responsible for 

meeting the following requirements: 

(1) The State agency must establish 

evaluation and review procedures and 

document the results of such 

procedures. The procedures must 

include, but are not limited to: 

(i) Conducting annual monitoring 

reviews of participating farmers’

markets, roadside stands, and 

community supported agriculture 

programs. This includes on-site reviews 

of a minimum of 10 percent of farmers 

and 10 percent of each type of 

authorized outlet (farmers’ markets, 

roadside stands, and community 

supported agriculture programs), and 

includes those farmers and authorized 

outlets identified as being at the highest 

risk. The first year of operation in the 

SFMNP shall be considered a high-risk 

indicator. More frequent reviews may be 

performed, as the State agency deems 

necessary. In States where both the 

SFMNP and the WIC Farmers’ Market 

Nutrition Program are in operation, 

these reviews may be coordinated to 

avoid duplication. A review by one 

program may be counted by the other 

program toward the monitoring 

requirement, provided that appropriate 

sanction action is taken for all violations 

found. 

(ii) Conducting monitoring reviews of 

all local agencies within the State 

agency’s jurisdiction at least once every 

2 years. Monitoring of local agencies 

shall encompass, but not be limited to, 

evaluation of management, 

accountability, certification, nutrition 

education, financial management 

systems, and coupon and/or CSA 

program management systems. When 

the State agency conducts a local agency 

review outside of the SFMNP season, a 

review of documents and procedural 

plans of the SFMNP, rather than actual 

SFMNP activities, is acceptable. 

(iii) Instituting the necessary followup procedures to correct identified 

problem areas. 

(2) On its own initiative or when 

required by FNS, the State agency must 

provide special reports on SFMNP 

activities, and take positive action to 

correct deficiencies in SFMNP 

operations. 

§ 249.18 Audits. 

(a) Federal access to information. The 

Secretary of the U.S. Department of 

Agriculture, the Comptroller General of 

the United States, or any of their duly 

authorized representatives, or duly 

authorized State auditors shall have 

access to any books, documents, papers, 

and records of the State agency and 

their contractors, for the purpose of 

making surveys, audits, examinations, 

excerpts, and transcripts. 

(b) State agency response. The State 

agency may take exception to particular 

audit findings and recommendations. 

The State agency shall submit a 

response or statement to FNS as to the 

action taken or planned regarding the 

findings. A proposed corrective action 

plan developed and submitted by the 

State agency must include specific time 

frames for its implementation and for 

completion of the correction of 

deficiencies and problems leading to the 

deficiencies. 

(c) Corrective action. FNS will 

determine whether SFMNP deficiencies 

identified in an audit have been 

adequately corrected. If additional 

corrective action is necessary, FNS shall 

schedule a follow-up review, allowing a 

reasonable time for such corrective 

action to be taken. 

(d) State sponsored audits. State and 

local agencies must conduct 

independent audits in accordance with 

parts 3015, 3016 (§ 3016.26 of this title), 

or 3051 of this title, as applicable. A 

State or local agency may elect to obtain 

either an organization-wide audit or an 

audit of the Program if it qualifies to 

make such an election under applicable 

regulations. 

§ 249.19 Investigations. 

(a) Authority. FNS may make an 

investigation of any allegation of 

noncompliance with this part and FNS 

guidelines and instructions. The 

investigation may include, where 

appropriate, a review of pertinent 

practices and policies of any State and 

local agency, the circumstances under 

which the possible noncompliance with 

this Part occurred, and other factors 

relevant to a determination as to 

whether the State and local agency has 

failed to comply with the requirements 

of this Part. 

(b) Confidentiality. No State or local 

agency, participant, or other person 

shall intimidate, threaten, coerce, or 

discriminate against any individual for 

the purpose of interfering with any right 

or privilege under this Part because that 

person has made a complaint or formal 

allegation, or has testified, assisted, or 

participated in any manner in an 

investigation, proceeding, or hearing 

under this Part. The identity of every 

complainant shall be kept confidential 

except to the extent necessary to carry 

out the purposes of this Part, including 

the conducting of any investigation, 

hearing, or judicial proceeding. 

Subpart G—Miscellaneous Provisions 

§ 249.20 Claims and penalties. 

(a) Claims against State agencies. (1) 

If FNS determines through a review of 

the State agency’s reports, program or 

financial analysis, monitoring, audit, or 

otherwise, that any SFMNP funds 

provided to a State agency for food or 

administrative purposes were, through 

State agency negligence or fraud, 

misused or otherwise diverted from 

SFMNP purposes, a formal claim will be 

assessed by FNS against the State 

agency. The State agency must pay 

promptly to FNS a sum equal to the 

amount of the administrative funds or 

the value of coupons and/or eligible 

foods so misused or diverted. 

(2) If FNS determines that any part of 

the SFMNP funds received, coupons 

printed, and/or eligible foods otherwise 

lost by a State agency were lost as a 

result of theft, embezzlement, or 

unexplained causes, the State agency 

must, on demand by FNS, pay to FNS 

a sum equal to the amount of the money 

or the value of the SFMNP funds or 

coupons/eligible foods so lost. 


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(3) The State agency will have full 

opportunity to submit evidence, 

explanation or information concerning 

alleged instances of noncompliance or 

diversion before a final determination is 

made in such cases. 

(4) FNS is authorized to establish 

claims against a State agency for 

unreconciled SFMNP coupons, and/or 

for failure to comply with the terms of 

duly executed CSA program contracts or 

agreements. When a State agency can 

demonstrate that all reasonable 

management efforts have been devoted 

to reconciliation and 99 percent or more 

of the SFMNP coupons issued, or of the 

eligible foods contracted for delivery by 

the CSA program, have been accounted 

for by the reconciliation process, FNS 

may determine that the reconciliation 

process has been completed to 

satisfaction. 

(b) Interest charge on claims against 

State agencies. If an agreement cannot 

be reached with the State agency for 

payment of its debts or for offset of 

debts on its current Letter of Credit 

within 30 days from the date of the first 

demand letter from FNS, FNS will 

assess an interest (late) charge against 

the State agency. Interest accrual shall 

begin on the 31st day after the date of 

the first demand letter, bill or claim, and 

shall be computed monthly on any 

unpaid balance as long as the debt 

exists. From a source other than the 

SFMNP, the State agency shall provide 

the funds necessary to maintain SFMNP 

operations at the grant level authorized 

by FNS. 

§ 249.21 Procurement and property 

management. 

(a) Requirements. State agencies must 

comply with the requirements of part 

3016 of this title for procurement of 

supplies, equipment and other services 

with SFMNP funds. These requirements 

are adopted for use by FNS to ensure 

that such materials and services are 

obtained for the SFMNP in an effective 

manner and in compliance with the 

provisions of applicable laws and 

executive orders. 

(b) Contractual responsibilities. The 

standards contained in part 3016 of this 

title do not relieve the State agency of 

the responsibilities arising under its 

contracts. The State agency is the 

responsible authority, without recourse 

to FNS, regarding the settlement and 

satisfaction of all contractual and 

administrative issues arising out of 

procurements entered into in 

connection with the SFMNP. This 

includes, but is not limited to, disputes, 

claims, protests of award, source 

evaluation, or other matters of a 

contractual nature. Matters concerning 

violation of law are to be referred to 

such local, State or Federal authority as 

may have proper jurisdiction. 

(c) State regulations. The State agency 

may use its own procurement 

regulations provided that: 

(1) Such regulations reflect applicable 

State and local regulations; and 

(2) Any procurements made with 

SFMNP funds adhere to the standards 

set forth in part 3016 of this title. 

(d) Property acquired with program 

funds. State and local agencies shall 

observe the standards prescribed in part 

3016 of this title in their utilization and 

disposition of real property and 

equipment acquired in whole or in part 

with SFMNP funds. 

§ 249.22 Nonprocurement debarment/ 

suspension, drug-free workplace, and 

lobbying restrictions. 

The State agency must ensure 

compliance with the requirements of 

FNS’ regulations governing 

nonprocurement debarment/suspension 

(part 3017 of this title) and drug-free 

workplace (part 3021 of this title), as 

well as FNS’ regulations governing 

restrictions on lobbying (part 3018 of 

this title), where applicable. 

§ 249.23 Records and reports. 

(a) Recordkeeping requirements. Each 

State agency must maintain full and 

complete records concerning SFMNP 

operations. Such records must comply 

with part 3016 of this title and the 

following requirements: 

(1) Records must include, but not be 

limited to, information pertaining to 

certification, financial operations, 

SFMNP coupon issuance and 

redemption, authorized outlet (farmers, 

farmers’ markets, and CSA program) 

agreements, authorized outlet 

monitoring, CSA program agreements, 

invoices, delivery receipts, equipment 

purchases and inventory, nutrition 

education, fair hearings, and civil rights 

procedures. 

(2) All records must be retained for a 

minimum of 3 years following the date 

of submission of the final expenditure 

report for the period to which the report 

pertains. If any litigation, claim, 

negotiation, audit or other action 

involving the records has been started 

before the end of the 3-year period, the 

records must be kept until all issues are 

resolved, or until the end of the regular 

3-year period, whichever is later. If FNS 

deems any of the SFMNP records to be 

of historical interest, it may require the 

State agency to forward such records to 

FNS whenever the State agency is 

disposing of them. 

(3) Records for nonexpendable 

property acquired in whole or in part 

with SFMNP funds must be retained for 

three years after its final disposition. 

(4) All records must be available 

during normal business hours for 

representatives of FNS of the 

Comptroller General of the United 

States to inspect, audit, and copy. Any 

reports resulting from such 

examinations shall not divulge names of 

individuals. 

(b) Financial and participant reports. 

State agencies must submit financial 

and SFMNP performance data on a 

yearly basis as specified by FNS. Such 

information must include, but shall not 

be limited to: 

(1) Number of participants served 

with Federal SFMNP funds; 

(2) Value of coupons issued and/or 

eligible foods ordered under CSA 

programs; 

(3) Value of coupons redeemed and/ 

or eligible foods provided to 

participants under CSA programs; and 

(4) Number of authorized outlets by 

type; i.e., farmers, farmers’ markets, 

roadside stands, and CSA programs. 

(c) Source documentation. To be 

acceptable for audit purposes, all 

financial and SFMNP performance 

reports must be traceable to source 

documentation. 

(d) Certification of reports. Financial 

and SFMNP reports must be certified as 

to their completeness and accuracy by 

the person given that responsibility by 

the State agency. 

(e) Use of reports. FNS will use State 

agency reports to measure progress in 

achieving objectives set forth in the 

State Plan, and this part, or other State 

agency performance plans. If it is 

determined, through review of State 

agency reports, SFMNP or financial 

analysis, or an audit, that a State agency 

is not meeting the objectives set forth in 

its State Plan, FNS may request 

additional information including, but 

not limited to, reasons for failure to 

achieve these objectives. 

§ 249.24 Data safeguarding procedures. 

FNS and SFMNP State agencies will 

take reasonable steps to keep applicant 

and participant information/records 

private to the extent provided by law. 

Such steps include a requirement for 

each State agency to restrict the use or 

disclosure of information obtained from 

SFMNP applicants and participants to: 

(a) Persons directly connected with 

the administration or enforcement of the 

SFMNP, including persons investigating 

or prosecuting violations in the SFMNP 

under Federal, State or local authority; 

(b) Representatives of public 

organizations designated by the chief 

State agency officer (or, in the case of 

Indian Tribal governments acting as 


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Federal Register / Vol. 71, No. 238 / Tuesday, December 12, 2006 / Rules and Regulations 74645 

1Administration on Aging (AOA), U.S. 

Department of Health and Human Services. 2000. 

A Profile of Older Americans: 2000. Washington, 

DC: USDHHS. 

2United States Department of Agriculture, 

Economic Research Service (USDA/ERS) 1998. 

Factors Affecting Nutrient Intake of the Elderly. 

Agricultural Economic Report Number 769. 

Washington, DC: USDA/ERS. 

3 Georgetown University, Center on an Aging 

Society. ‘‘Obesity Among Older Americans At Risk 

for Chronic Conditions.’’ http://www.agingsociet.org, number 10, July 2003. 

4 Guthrie, JF and BH Lin. Overview of the diets 

of lower- and higher-income elderly and their food 

assistance options. Journal of Nutrition Education 

Behavior, Supplement 1, March–April 2002. 

5 Gerrior, Shirley A. Dietary Changes in Older 

Americans from 1977 to 1996: Implications for 

Dietary Quality. Center for Nutrition Policy and 

Promotion, Family Economics and Nutrition 

Review, Vol. 12 No. 2, 1999. 

6 Gerrior, Shirley A., 1999. 

7United States General Accounting Office. Fruits 

and Vegetables: Enhanced Federal Efforts to 

Increase Consumption Could Yield Health Benefits 

for Americans. GAO–02–657, July 2002 (p. 4). 

SFMNP State agencies, the governing 

authority) that administer food, 

nutrition, or other assistance programs 

that serve persons categorically eligible 

for the SFMNP. The State agency must 

execute a written agreement with each 

such designated organization: 

(1) Specifying that the receiving 

organization may employ SFMNP 

information only for the purpose of 

establishing the eligibility of SFMNP 

applicants and participants for food, 

nutrition, or other assistance programs 

that it administers and conducts 

outreach to SFMNP applicants and 

participants for such programs; and 

(2) Containing the receiving 

organization’s assurance that it will not, 

in turn, disclose the information to a 

third party. 

(c) The Comptroller General of the 

United States for audit and examination 

authorized by law. 

§ 249.25 Other provisions. 

(a) No aid reduction. Any programs 

for which a grant is received under this 

part shall be supplementary to the food 

stamp program carried out under the 

Food Stamp Act of 1977 as amended (7 

U.S.C. 2011, et seq.) and to any other 

Federal or State food or nutrition 

assistance program. 

(b) Statistical information. FNS 

reserves the right to use information 

obtained under the SFMNP in a 

summary, statistical or other form that 

does not identify particular individuals. 

§ 249.26 SFMNP information. 

(a) Any person who wishes 

information, assistance, records or other 

public material must request such 

information from the State agency, or 

from the FNS Regional Office serving 

the appropriate State as listed below: 

(1) Connecticut, Maine, 

Massachusetts, New Hampshire, New 

York, Rhode Island, Vermont: U.S. 

Department of Agriculture, FNS, 

Northeast Region, 10 Causeway Street, 

Room 501, Boston, Massachusetts 

02222–1066. 

(2) Delaware, District of Columbia, 

Maryland, New Jersey, Pennsylvania, 

Puerto Rico, Virginia, Virgin Islands, 

West Virginia: U.S. Department of 

Agriculture, FNS, Mid-Atlantic Region, 

Mercer Corporate Park, 300 Corporate 

Boulevard, Robbinsville, New Jersey, 

08691–1598. 

(3) Alabama, Florida, Georgia, 

Kentucky, Mississippi, North Carolina, 

South Carolina, Tennessee: U.S. 

Department of Agriculture, FNS, 

Southeast Region, 61 Forsyth Street, 

SW., Room 8T36, Atlanta, Georgia 

30303. 

(4) Illinois, Indiana, Michigan, 

Minnesota, Ohio, Wisconsin: U.S. 

Department of Agriculture, FNS, 

Midwest Region, 77 West Jackson 

Boulevard—20th floor, Chicago, Illinois 

60604–3507. 

(5) Arkansas, Louisiana, New Mexico, 

Oklahoma, Texas: U.S. Department of 

Agriculture, FNS, Southwest Region, 

1100 Commerce Street, Room 555, 

Dallas, Texas 75242. 

(6) Colorado, Iowa, Kansas, Missouri, 

Montana, Nebraska, North Dakota, 

South Dakota, Utah, Wyoming: U.S. 

Department of Agriculture, FNS, 

Mountain Plains Region, 1244 Speer 

Boulevard, Suite 903, Denver, Colorado 

80204. 

(7) Alaska, American Samoa, Arizona, 

California, Guam, Hawaii, Idaho, 

Nevada, Oregon, Trust Territory of the 

Pacific Islands, the Northern Mariana 

Islands, Washington: U.S. Department of 

Agriculture, FNS, Western Region, 550 

Kearny Street, Room 400, San Francisco, 

California 94108. 

(b) Inquiries pertaining to the SFMNP 

administered by a federally recognized 

Indian tribal organization (ITO) should 

be addressed to the FNS Regional Office 

responsible for the geographic State in 

which that ITO is located. 

§ 249.27 OMB control number. [Reserved] 

Dated: December 1, 2006. 

Nancy Montanez Johner, 

Under Secretary, Food, Nutrition, and 

Consumer Services. 

Note: This appendix will not be published 

in the Code of Federal Regulations. 

Appendix—Regulatory Impact Analysis 

1. Title: 7 CFR 248: Senior Farmers’ Market 

Nutrition Program (SFMNP). 

2. Statutory Authority: Farm Security and 

Rural Investment Act of 2002 

(Pub. L. 101–171). 

3. Need and Program History: Congress 

established the Senior Farmers’ Market 

Nutrition Program (SFMNP) in Public Law 

101–171, Sect. 4401 to (1) provide resources 

in the form of fresh, nutritious, unprepared, 

locally grown fruits, vegetables, and herbs 

from farmers’ markets, roadside stands, and 

community supported agriculture programs 

(CSAs) to low-income seniors; (2) increase 

the domestic consumption of agricultural 

commodities by expanding or aiding in the 

expansion of domestic farmers’ markets, 

roadside stands, and CSA programs; and (3) 

develop or aid in the development of new 

and additional farmers’ markets, roadside 

stands, and CSA programs. This final rule 

provides operating guidelines for the 

SFMNP, consistent with legislative intent. 

The requirements of the final USDA rule 

for the SFMNP are similar to two USDA 

interventions: (1) The WIC Farmers’ Market 

Nutrition Program (FMNP), for individuals 

participating in the Special Supplemental 

Nutrition Program for Women, Infants and 

Children (WIC) and those individuals on a 

waiting list for WIC benefits; and (2) the 

Senior Farmers’ Market Nutrition Pilot 

Program (SFMNPP), administered by USDA 

as a pilot program in 2001. The SFMNP has 

been administered by USDA as a competitive 

grant program since FY 2001. Establishing 

rules for the SFMNP similar to the FMNP and 

SFMNP eases the administrative burden for 

USDA, State agencies, farmers, and program 

recipients. 

Special Nutritional Needs of Seniors 

Seniors are a rapidly increasing segment of 

the population, accounting for 30 percent of 

the nation’s healthcare costs.1 2 The health 

and well-being of the nation’s seniors has a 

substantial impact on the economy. Lowincome seniors are at a particularly high 

nutritional risk. For instance, obesity rates for 

older adults with lower incomes are much 

higher than other population groups.3

Additionally, low-income seniors are found 

to consume fewer recommended foods from 

the Food Guide Pyramid and fewer 

nutrients.4 Further, in the general elderly 

population, not taking income into account, 

a study using USDA’s 1994–1996 Continuing 

Survey of Food Intakes by Individuals (CSFII) 

found that average intakes of food energy, 

dietary fiber, vitamins B6 and E, calcium, 

magnesium and zinc were lower than 

recommendations for older Americans.5

Consumption of fresh fruits and vegetables 

is important for all Americans and especially 

for the elderly who have additional health 

concerns.6 ‘‘Scientific evidence shows that 

consuming the recommended 5 to 9 daily 

servings of fruits and vegetables helps protect 

against heart disease and cancer. While there 

is no estimate for disease-related costs or 

numbers of deaths attributable to low fruit 

and vegetable consumption, medical experts, 

including the Surgeon General, have noted 

that physical inactivity and poor diet—of 

which low consumption of fruits and 

vegetables is a key component—cause 

diseases that result in the death of more than 

300,000 Americans each year.’’ 7


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74646 Federal Register / Vol. 71, No. 238 / Tuesday, December 12, 2006 / Rules and Regulations 

8Administration of Aging (AOA), U.S. 

Department of Health and Human Services. 1996. 

Aging in the 21st Century. Washington, 

DC:USDHHS. 

9United States Department of Agriculture, 

Economic Research Service (USDA/ERS) 1998. 

10United States Department of Agriculture, Food 

and Nutrition Service (USDA/FNS). 1999. Reaching 

the Working Poor and Poor Elderly Study: What We 

Learned and Recommendations for Future 

Research. Washington, DC: USDA/FNS. 

11http://www.ams.usda.gov/farmersmarkets/ 

facts.htm, April 5, 2006. 

12http://www.ams.usda.gov/farmersmarkets/ 

map.htm, April 5, 2006. 

13http://www.ams.usda.gov/farmersmarkets/ 

FMstudystats.htm, April 5, 2006. 

14http://www.ams.usda.gov/farmersmarkets/ 

FMstudystats.htm, April 5, 2006. 

15FNS, National Data Bank, May 1, 2006. 

16FNS, National Data Bank, May 1, 2006. 

17FNS, National Data Bank, May 1, 2006. 

18United States Department of Agriculture, Food 

and Nutrition Service. Food Stamp Program 

Participation Rates: 2003. July 2005. 

19USDA, 1999. 

20 Gabor, Vivian, et al. Seniors’ Views of the Food 

Stamp Program and Ways To Improve 

Participation—Focus Group Findings in 

Washington State: Final Report. USDA/ERS, 2002. 

21USDA/FNS. Characteristics of Food Stamp 

Households: FY 2004, September 2005. 

22Evaluation of the Food Distribution Program on 

Indian Reservations, Volume 1: Final Report, 

Research Triangle Institute (prepared for USDA, 

19USDA, 1999. 20 Gabor, Vivian, et al. Seniors’ Views of the Food 

Stamp Program and Ways To Improve 

Participation—Focus Group Findings in 

Washington State: Final Report. USDA/ERS, 2002. 

21USDA/FNS. Characteristics of Food Stamp 

Households: FY 2004, September 2005. 

22Evaluation of the Food Distribution Program on 

Indian Reservations, Volume 1: Final Report, 

Research Triangle Institute (prepared for USDA, 

Food and Nutrition Service), 1990. 

23FNS National Data Bank, May 1, 2006. 

24FNS National Data Bank, May 1, 2006. 

25http://www.aoa.gov/press/fact/alpha/ 

fact_elderly_nutrition.asp, April 10, 2006. 

26http://www.aoa.gov, March 19, 2004. 

27http://www.bls.gov (FY 2002 cost inflated by 

Fruits and vegetables comprise two of the 

five major food groups in the food guide 

pyramid. However, the cost of fresh fruits 

and vegetables may be a barrier for many. In 

addition to cost constraints, seniors face 

other obstacles to achieving good health; 

many seniors live in social isolation, and 

have limited mobility.8 9 10

Farmers, Farmers’ Markets, Roadside Stands, 

and Community Supported Agriculture 

Programs (CSAs) 

In addition to increasing seniors’ fresh fruit 

and vegetable consumption, the intent of 

Congress is also to increase the consumption 

of agricultural commodities and increase the 

number of farmers’ markets, roadside stands, 

and CSAs. 

The number of farmers’ markets in the 

United States has grown dramatically, 

increasing 111 percent from 1994 to 2004.11

According to the National Farmers’ Market 

Directory, in 2004 there were over 3,700 

farmers’ markets operating in the United 

States; all 50 States and the Virgin Islands 

operate farmers’ markets. The number of 

farmers’ markets operating in States varies 

widely, from 6 in Delaware to 444 in 

California.12 According to the 2000 USDA 

Farmers Market Study Statistics, 19,000 

farmers reported selling their produce only at 

farmers’ markets.13 Further, 58 percent of 

markets participate in WIC FMNP, food 

stamps, local and/or State nutrition 

programs.14

Programs Intended to Feed the Low-Income 

Elderly Population 

The SFMNP will operate alongside several 

other food assistance programs funded by the 

federal government that provide benefits to 

seniors. The commonality of the programs is 

that they provide food in some capacity, for 

example, a Food Stamp Electronic Benefits 

Transfer (EBT) Card or a home-delivered 

meal from Meals on Wheels. 

Child and Adult Care Food Programs 

(CACFP) 

CACFP reimburses day care providers for 

making healthy meals and snacks available to 

children and adults in day care. Adult 

participants must be functionally impaired or 

age 60 or older, and enrolled in an adult care 

center where they may receive up to two 

meals and one snack each day. The total cost 

of the elderly component of the program in 

FY 2005 was $80.3 million; average daily 

adult attendance in CACFP was 103,386.15 In 

FY 2005, institutions caring for seniors 

received $64.81 per senior in monthly 

CACFP benefits.16

Commodity Supplemental Food Program 

(CSFP) 

Another program addressing the special 

needs of the low-income elderly population 

is the CSFP, operating in 32 States, the 

District of Columbia, and on two Indian 

reservations. USDA purchases food and 

makes it available to CSFP State agencies and 

Indian Tribal Organizations (ITOs), along 

with funds for administrative costs. State 

agencies that administer CSFP are typically 

departments of health, social services, 

education, or agriculture. State agencies store 

the food and distribute it to public and nonprofit private local agencies. Local agencies 

determine the eligibility of applicants, 

distribute the foods, and provide nutrition 

education. Local agencies also provide 

referrals to other welfare, nutrition, and 

health care programs such as the Food Stamp 

Program, Medicaid, and Medicare. The food 

package for the elderly is designed for their 

specific nutritional needs and includes such 

nutritious foods as canned fruits and 

vegetables, juices, meats, fish, peanut butter, 

cheese, cereal and grain products, and dairy 

products. In FY 2005, the program, on 

average, served almost 460,000 elderly per 

month. Food costs totaled $67.2 million and 

the elderly received approximately $12.17 in 

food benefits per month.17

Food Stamp Program (FSP) 

While the Food Stamp Program is available 

to alleviate hunger in the low-income senior 

population by providing EBT cards 

redeemable for food in approved food retail 

stores (and some farmers’ markets), many 

seniors do not participate. In 2003, 

approximately 28 percent of eligible seniors 

used the program compared to a 56 percent 

participation rate in the total Food Stamp 

eligible population.18 Low participation rates 

by seniors are attributed to (1) A lack of 

information; (2) a perceived lack of need; (3) 

low expected food stamp program benefits; 

(4) burdensome program administration; and 

(5) stigma and other psychological 

reasons.19 20 In FY 2004, the most recent year 

for which data is currently available, 1.92 

million seniors participated in the Food 

Stamp Program (8.2 percent of the total FSP 

caseload). At that time, the average monthly 

senior benefit was $65 and the USDA spent 

about $1.5 billion on elderly participants.21

Food Distribution Program on Indian 

Reservations (FDPIR) 

FDPIR provides commodity foods to lowincome households living on Indian 

reservations, and to American Indian 

households residing in approved areas near 

reservations or in Oklahoma. Many 

households participate in FDPIR as an 

alternative to the Food Stamp Program 

because they do not have easy access to food 

stamp offices or authorized food stores. Each 

month, participating households receive a 

food package to help them maintain a 

nutritionally balanced diet. No recent data 

exists on the number of elderly participating 

in the program. However, in 1990, the elderly 

constituted 14.8 percent of total program 

participation.22 If this has remained 

unchanged, the number of seniors 

participating in FY 2005 would have been 

about 14,638 at a cost of about $11.3 

million.23 At that time, FDPIR recipients 

received an average of $37 a month in 

commodities.24

The Elderly Nutrition Program 

The Administration on Aging’s (AoA) 

Elderly Nutrition Program, authorized under 

Title III, Grants for State and Community 

Programs on Aging, and Title VI, Grants for 

Native Americans, under the Older 

Americans Act, provides grants to support 

congregate and home delivered (Meals on 

Wheels) meals and nutrition services to older 

people throughout the country. Meals served 

under the program must provide at least onethird of the daily-recommended dietary 

allowances established by the Food and 

Nutrition Board of the National Academy of 

Sciences—National Research Council (now 

the Institute of Medicine). In practice, elderly 

individuals participating in the Elderly 

Nutrition Program receive an estimated 40 to 

50 percent of many required nutrients.25 In 

FY 2002 (the most recent year that data is 

available), the ENP served 3.1 million 

elderly, costing the federal government $604 

million.26 If the same number of participants 

were served in FY 2005, the cost of the ENP 

would have been about $650 million.27

While there is no means test among Elderly 

Nutrition Program participants, 80 to 90 

percent have incomes below 200 percent of 

poverty.28 More than twice as many Title III 

participants live alone; and two-thirds of 

participants are either over or under their 

desirable weight, placing them at risk for 

nutrition and health problems. Title III homedelivered meals participants have twice as 

many physical impairments compared with 

the overall elderly population.29


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30http://www.mathematica-mpr.com/3rdLevel/ 

enphot.htm. Serving Elders at Risk, The Older 

Americans Act Nutrition Programs, National Evaluation of the Elderly Nutrition Program, 1993–

1995, Mathematica Policy Research, Inc., 1995. 

In 1995 Mathematica Policy Research, Inc. 

conducted an evaluation of the Elderly 

Nutrition Program for the Administration on 

Aging. Key findings included: 

• People who receive ENP meals have 

higher daily intakes of key nutrients than 

similar nonparticipants. 

• ENP meals provide approximately 40 to 

50 percent of participants’ daily intakes of 

most nutrients. 

• Participants have more social contacts 

per month than similar nonparticipants. 

• Most participants are satisfied with the 

services the ENP provides.30

Summary 

The following chart depicts total nutrition 

assistance funding currently available for 

low-income seniors and the percent of total 

funding the SFMNP represents. 


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74648 Federal Register / Vol. 71, No. 238 / Tuesday, December 12, 2006 / Rules and Regulations 

31The 2004 Child Nutrition and WIC 

Reauthorization Law increased the maximum 

benefit from $20 to $30 in July 2004. 32FNS National Data Bank, May 1, 2006. 

33USDA/FNS Administrative Data, 2001. 34 ‘‘The Seniors Farmers’ Market Nutrition Pilot 

Program: A Preliminary Assessment.’’ Unpublished 

staff paper. USDA/ERS. October 10, 2001. 

35USDA/FNS Administrative Data, 2002. 

36USDA/FNS Administrative Data, 2003. 

Nutrition assistance 

program 

FY 2005 funding for seniors 

(in millions) 

FSP ..................................... * $1500 

ENP .................................... 650 

CSFP .................................. 67 

CACFP ................................ 80 

SFMNP ............................... 15 

FDPIR ................................. 11 

Total ............................. 2,323 

* Food Stamp funding for seniors reflects the 

FY 2004 cost, which is the most recent year 

for which data is currently available. 

SFMNP Program Models 

The final rule draws from a variety of other 

programs, specifically, the WIC FMNP and 

the Senior Farmers’ Market Nutrition Pilot 

Program and the SFMNP under the 

competitive grant process. The following 

section describes these programs in an effort 

to provide an understanding of the 

framework and provisions of the final rule. 

WIC Farmers’ Market Nutrition Program 

(FMNP) 

In 1992, Congress established the WIC 

Farmers’ Market Nutrition Program to 

provide WIC participants with additional 

benefits to purchase fresh, unprepared, 

locally grown fruits and vegetables, 

recognizing the importance of the nutritional 

benefits of fresh produce. The program also 

assists farmers by increasing sales, use and 

awareness of farmers’ markets. 

The WIC FMNP provides grants to State 

agencies. Administrative funds are available; 

however, State agencies are required to 

match 30 percent of the total administrative 

cost of the program. 

By law, the federal benefit level provided 

to FMNP recipients (WIC participants and 

those on a waiting list for WIC services) must 

be not less than $10 and not more than $30 

per year.31 State agencies may supplement 

this amount with State funds. 

Forty-five State agencies currently operate 

the WIC FMNP. In FY 2005, almost 2.7 

million or about 33 percent of WIC Program 

participants participated in the WIC FMNP. 

Farmers redeemed over $23 million in 

coupons.32

Seniors Farmers’ Market Nutrition Pilot 

Program 2001 

In an effort to extend FMNP services to 

other segments of the population and to 

promote farmers’ markets, roadside stands 

and CSAs, USDA instituted the Seniors 

Farmers’ Market Nutrition Pilot Program 

(SFMNPP) using Commodity Credit 

Corporation (CCC) funds in 2001. This 

program provided grants to State agencies to 

use to distribute coupons to eligible seniors. 

Coupons were redeemed at a value 

established by each State agency for fresh 

fruits and vegetables at farmers’ markets, 

roadside stands and CSAs. 

The pilot program was closely aligned to 

the WIC FMNP, as is the final rule. In 2001 

USDA provided $15 million to 36 grantees 

(45 State agencies applied for grants) using 

CCC funds. Grant awards ranged from $9,000 

to $1.2 million, enabling participating States, 

tribes and the District of Columbia to serve 

420,000 low-income seniors. Benefits to 

seniors differed by State agency, ranging from 

$10 to $540 per recipient per year. 

Approximately 8,508 farmers, 1,205 farmers’

markets, 886 roadside stands, and 49 CSAs 

participated in the SFMNPP in 2001. State 

agencies spent 83 percent of available 

funds.33

Subsequent to its first year of operation, 

the USDA’s Economic Research Service 

(ERS) conducted an in-house analysis of the 

pilot program. ERS found the pilot program 

to be highly popular among stakeholders, 

including Congress, income-eligible seniors 

and farmers. Early findings also suggest that 

the coupons increased low-income seniors’

ability to purchase fruits and vegetables, as 

seniors reported that produce at farmers’

markets was less expensive than the produce 

at grocery stores. Additionally, ERS found 

that seniors are more inclined to redeem 

SFMNP coupons in contrast to food stamps 

where there is a stigma attached with 

redemption.34

While ERS did not find the SFMNPP 

effective in developing farmers’ markets or 

expanding existing markets, they did suggest 

that if the program continues to grow, it is 

possible that these goals will be realized as 

well. ERS also noted that State agencies 

wanted Federal funds to support 

administrative expenses. The final rule 

addresses this issue by allowing State 

agencies to use up to 10 percent of Federal 

grant dollars to fund the administration of 

the program. 

Senior Farmers’ Market Nutrition Program 

2002 

Congress continued to fund the SFMNP in 

2002 and provided $15 million to the 

program ($10 million from the Agriculture 

Appropriations Act of 2002 and $5 million 

from the Commodity Credit Corporation). In 

addition, Pub. L. 101–171 established the 

permanent SFMNP and authorized the 

SFMNP to be funded at $15 million for each 

year from FY 2003 to FY 2007 from CCC 

funds. USDA was authorized to promulgate 

regulations implementing the program. In 

2002, USDA awarded 36 grants that enabled 

State agencies to serve 500,000 low-income 

seniors. Approximately 10,000 farmers 

participated in 2002. Nearly 89 percent of 

program funds were spent.35

Senior Farmers’ Market Nutrition Program 

2003 

In 2003, the USDA grandfathered-in State 

agencies that had participated in the SFMNP 

in the previous year. After the original 36 

State agencies were awarded 2002 Federal 

grant funds, there was enough funding 

available from unspent carryover funds to 

award grants to 4 new State agencies and to 

provide additional grant money to 13 current 

grantees.36 USDA awarded a total of $16.8 

million in grants to State agencies; 800,000 

low-income seniors participated. Over 85 

percent of the total available program funds 

were spent. 

Senior Farmers’ Market Nutrition Program 

2004 

In FY 2004, USDA awarded State agencies 

a total of $16.7 million for SFMNP grants; 

over 802,000 low-income seniors 

participated. All 40 State agencies that 

participated in the SFMNP in 2003 received 

funding. In addition, 4 new State agencies 

and 3 new ITOs received SFMNP funding in 

2004. Nearly 86 percent of the total available 

program funds were spent. 

Senior Farmers’ Market Nutrition Program 

2005 

In FY 2005, no carryover funds from FY 

2004 were available and an across-the-board 

reduction of just over 10 percent was applied 

to the current grantees’ base grants. One State 

agency that participated in FY 2004 did not 

participate in FY 2005. A total of $15 million 

was awarded to current State agencies and 

ITOs to fund their Programs; 94 percent of 

the SFMNP funds were spent in FY 2005. 

TABLE 1.—SUMMARY OF THE 2005 SENIOR FARMERS’ MARKET NUTRITION PROGRAM

State agency 

grant amount 

Income eligibility (% of 

poverty) 37

Age eligibility 

‘‘elderly’’ 

Average benefit level per 

participant 

Recipients per 

state 

Farmers’ 

markets per 

state 

Roadside 

stands per 

state 

CSAs per 

state 

Mean ............ $326,087 172% 60 $33 17,505 58 44 5 

Median ......... 130,811 185% 60 27 7,185 31 1 0 

Minimum ....... 7,918 100% 55 10 148 0 0 0 

Maximum ...... 1,366,229 All elders 65 165 175,914 370 704 169 


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37The Grand Traverse Band of Ottawa and 

Chippewa Indians allows all elders to be income 

eligible; the Grand Traverse Band of Ottawa and Chippewa Indians is excluded from the calculation 

of the mean and median. 

TABLE 1.—SUMMARY OF THE 2005 SENIOR FARMERS’ MARKET NUTRITION PROGRAM—Continued 

State agency 

grant amount 

Income eligibility (% of 

poverty) 37

Age eligibility 

‘‘elderly’’

Average benefit level per 

participant 

Recipients per 

state 

Farmers’

markets per 

state 

Roadside 

stands per 

state 

CSAs per 

state 

Total ...... 15,000,000 ........................ ........................ ........................ 771,285 2,663 2,001 237 

Note: CSAs are Community Supported Agriculture Programs. 

TABLE 2.—2005 PARTICIPATING STATE AGENCIES

State agency Benefit level 

Alabama Farmers’ Market Authority ................................................................................................................................................ $20.00 

Alaska Department of Health and Social Services ......................................................................................................................... 30.00 

Arkansas Department of Human Services, Division of Aging ......................................................................................................... 50.00 

California Department of Aging ....................................................................................................................................................... 20.00 

Chickasaw Nation of Oklahoma ...................................................................................................................................................... 100.00 

Colorado .......................................................................................................................................................................................... 20.00 

Connecticut Department of Agriculture ........................................................................................................................................... 15.00 

District of Columbia Department of Health ...................................................................................................................................... 30.00 

Five Sandoval Indian Pueblos ......................................................................................................................................................... 20.00 

Florida Department of Elder Affairs ................................................................................................................................................. 60.00 

Grand Traverse Band of Ottawa & Chippewa Indians .................................................................................................................... 50.00 

Hawaii Department of Labor & Industrial Relations ........................................................................................................................ 165.00 

Illinois Department of Human Services ........................................................................................................................................... 15.00 

Indiana Department of Health ......................................................................................................................................................... 18.00 

Iowa Department of Agriculture & Land Stewardship ..................................................................................................................... 28.00 

Kansas Department of Aging .......................................................................................................................................................... 30.00 

Kentucky Department of Agriculture ................................................................................................................................................ 40.00 

Louisiana Department of Agriculture ............................................................................................................................................... 16.00 

Maine Department of Agriculture ..................................................................................................................................................... 67.00 

Maryland Department of Agriculture ................................................................................................................................................ 15.00 

Massachusetts Department of Food and Agriculture ...................................................................................................................... 10.00 

Michigan Office of Services to the Aging ........................................................................................................................................ 40.00 

Minnesota Department of Agriculture .............................................................................................................................................. 20.00 

Mississippi Department of Agriculture ............................................................................................................................................. 28.00 

Mississippi Band of Choctaw Indians .............................................................................................................................................. 45.00 

Montana Department of Public Health and Human Services ......................................................................................................... 40.00 

Nebraska Department of Agriculture ............................................................................................................................................... 48.00 

Nevada Department of Administration ............................................................................................................................................ 30.00 

New Hampshire Department of Health and Human Services ........................................................................................................ 18.00 

New Jersey Department of Health and Senior Services ................................................................................................................ 20.00 

New York Department of Agriculture and Markets ......................................................................................................................... 18.00 

North Carolina Department of Health & Human Services .............................................................................................................. 15.00 

Ohio Department of Aging ............................................................................................................................................................... 65.00 

Oregon Department of Human Services ......................................................................................................................................... 40.00 

Osage Tribal Council ....................................................................................................................................................................... 25.00 

Pennsylvania Department of Agriculture ......................................................................................................................................... 20.00 

Pueblo of San Felipe ....................................................................................................................................................................... 40.00 

Puerto Rico Department of Agriculture ........................................................................................................................................... 16.00 

Rhode Island Division of Agriculture ............................................................................................................................................... 15.00 

South Carolina Department of Social Services ............................................................................................................................... 25.00 

Tennessee Department of Health ................................................................................................................................................... 30.00 

Vermont Department of Aging and Disabilities ............................................................................................................................... 61.00 

Virginia Department for the Aging ................................................................................................................................................... 40.00 

Washington Department of Social and Health Services ................................................................................................................. 31.00 

West Virginia Department of Agriculture ......................................................................................................................................... 20.00 

Wisconsin Department of Agriculture, Trade, and Consumer Protection ....................................................................................... 30.00 

4. Summary 37 of Key Provisions: Following 

is a summary of key provisions of this rule 

and their impact on USDA, State and local 

agencies, farmers and recipients. Effects 

describe how the program will change 

compared to policies in place for the current 

SFMNP. 


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TABLE 3 

Final rule: Final rule effect on: 

§ 249.3 Administration: USDA 

(a) Delegates the responsibility within USDA to administer the 

SFMNP to FNS.

(b) Delegates the responsibility for direct administration of the 

SFMNP, in accordance with program regulations, to State agencies. Allows State agencies to operate the SFMNP at the local 

level through written agreements with nonprofit organizations or 

local government entities. 

(c) Requires each State agency to ensure that sufficient staff is 

available to administer the SFMNP efficiently and effectively, and 

to include in the State Plan an outline of administrative staff and 

job descriptions for staff who will be paid out of SFMNP funds. 

The Supplemental Food Programs Division and FNS Regional Offices 

will need to use resources to provide assistance to State agencies 

and to assess and/or monitor all levels of Program operations to ensure that the goals of the Program are effectively and efficiently 

achieved. 

State/Local Agencies: State agencies will need to use resources to 

meet administrative requirements. However, State agencies that participated in the SFMNP have administrative structures in place, mitigating the need for resources to develop new administrative structures, which can be supplemented if needed to meet any new responsibilities from this rule. 

§ 249.5 Selection of new State agencies: USDA 

All current SFMNP State agencies are grandfathered into the proposed program. The amount of the grant would be equal to the 

total Federal funds received in the prior fiscal year, contingent 

upon the availability of sufficient funds for the SFMNP and an 

approved State Plan.

There will be some impact on FNS Regional Office resources in the review and approval of State plans submitted by State agencies, including those not currently participating in the SFMNP. 

State/Local Agencies: Congress has authorized $15 million per year 

for the SFMNP through FY 2007. Modest program expansion has 

been funded by unspent funds that have carried over into the next 

fiscal year. Therefore, it is unlikely that many additional State agencies will have the opportunity to participate in the program. Further, 

participating State agencies cannot expect to see their programs expand much. An appropriation not indexed to inflation will decrease in 

real dollars over time. 

Farmers: Grandfathering in State agencies that currently participate in 

the SFMNP, combined with limited funding is likely to limit the program primarily to farmers, markets, and CSAs in State agencies already participating. 

Recipients: Grandfathering in State agencies that currently participate 

in SFMNP, combined with limited funding is likely to limit the program to recipients in States currently participating. 

§ 249.6 Participant eligibility: USDA 

(a) Sets out criteria for eligibility for certification ...............................

1. Categorical Eligibility. Participants must not be less than 60 

years of age. ITOs have the option to deem Native Americans 

who are 55 years or older as categorically eligible. State agencies may, at their discretion, also deem disabled individuals less 

than 60 years of age who currently reside in housing facilities 

occupied primarily by older individuals where congregate nutrition services are provided, as categorically eligible. States have 

the option to establish a higher age limit. 

2. Residency requirement. States are allowed to establish a residency requirement. 

3. Income eligibility is set at 185% of poverty. 

Most SFMNP participants are likely to be income eligible based on 

documentation of their eligibility to participate in another means-tested assistance program. However, because some State agencies 

may not require documentation of income for other participants, it is 

possible that some participants may not be eligible, thus barring eligible seniors from participating and potentially resulting in some erroneous payments. State agencies have the authority to require income documentation from applicants, which would help alleviate the 

potential loss of funds due to erroneous payments. 

State/Local Agencies: State agencies have latitude in defining the eligible population, enabling State agencies to tailor the program to their 

needs. The final rule also provides State agencies with the flexibility 

of not requiring income documentation from applicants who are not 

deemed automatically income eligible based on certification for or 

participation in another means-tested assistance program for which 

the income eligibility standard is not more than 185% of the Federal 

poverty income level. If State agencies choose to unilaterally require 

income documentation, they will face an increase in the administrative burden placed upon them. If income documentation is instead 

required on a case-by-case basis, State agencies would be expected to provide guidance to local agencies on when such documentation might be needed and local agencies will need to collect 

and review the documentation. It is not expected that these activities 

will impose a significant administrative burden upon State and local 

agencies. 

(b) The State or local agency must require applicants to either provide documentation of their eligibility to participate in another 

means-tested assistance program as designated by the State 

agency, sign a statement attesting to the participation in or certification for another means-tested program as designated by the 

State agency, or sign a statement affirming that their household 

income does not exceed the maximum income eligibility standard in use by the State agency. State agencies have the option 

of requiring income documentation as they deem necessary.

Recipients: The final rule allows State agencies to continue serving 

those currently participating and provides for expansion of the program, based on the availability of funds. 


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TABLE 3—Continued 

Final rule: Final rule effect on: 

§ 249.8 Level of benefits and eligible foods: USDA 

(a) Eligible foods are fresh, nutritious, unprepared fruits, vegetables 

and herbs. States must specifically identify in the State Plans 

those foods that may be purchased.

(b) Establishes that the SFMNP benefit received by each recipient 

may not be less than $20 or more than $50 each year, except 

that State agencies that provided an annual SFMNP benefit of 

less than $20 in FY 2006 may continue, at their discretion, to 

issue less than the $20 minimum after the program becomes 

permanent. Participants served by a State agency that operated 

the SFMNP through a CSA program model in FY 2006 may, at 

the State agency’s discretion, continue to receive the same CSA 

benefit levels. New States may issue higher benefits up to $50 

per year to participants who are participating through a CSA program, as long as that level is consistent for all Senior CSA program participants. 

(c) Establishes that all SFMNP recipients living in the areas served 

by the State agency must be offered the same amount of 

SFMNP benefits, regardless of the program model used by that 

State agency. Benefits may be allocated on an individual or on a 

household basis. 

Instituting a minimum and maximum benefit level ensures a certain 

level of participation is possible, given cost constraints. 

Requiring a Statewide benefit level eases administrative burdens and 

promotes equity within the program. 

State/Local Agencies: Maximum and minimum benefit levels reduce 

flexibility. 

Grandfathering CSA program models into the permanent program by 

current State agencies will allow current State agencies to maintain 

successful Programs by maintaining its economic viability for authorized farmers. 

Recipients: The eligible food requirement increases access to fresh 

fruits and vegetables for participating seniors. 

If State agencies are unable to maintain current funding levels, State 

agencies will have to reduce benefits, reduce the number of seniors 

served, or both. 

§ 249.9 Nutrition education: USDA 

(a) Defines the goal of nutrition education in the SFMNP, i.e., to 

emphasize the relationship of proper nutrition to the total concept 

of good health, including the importance of consuming fresh 

fruits and vegetables.

a. Requires the State agency to integrate nutrition education into 

SFMNP operations, and provides guidance on coordinating the 

delivery of nutrition education through other agencies within the 

State. 

FNS will have to monitor State’s provision of nutrition education. 

State/Local Agencies: All State agencies currently provide nutrition 

education. Only the new State agencies would experience an increase in burden; however, the final rule allows State agencies to 

use up to 10% of their Federal grant to offset this burden. 

Recipients: Nutrition education could have a positive impact on the 

health of seniors. However, the manner in which it is provided, and 

its accessibility will determine the success of the education to improve eating and physical activity levels. 

Nutrition Education can be funded out of State agencies’ administrative 

funds (up to 10% of the total grant), which could reduce (1) the 

amount of funds spent on program administration; and (2) the 

amount spent on food benefits. 

§ 249.12 SFMNP costs: 

(a) Defines allowable and unallowable costs for the SFMNP ...........

1. States are permitted to use their grant of up to 10 percent for 

administrative costs. 

2. Food costs are the costs of eligible foods provided to SFMNP 

recipients. 

3. Administrative costs are those costs associated with providing 

benefits and services to recipients. 

State/Local Agencies: The Program has been operating since 2001. 

Administrative funds have not been available to State agencies 

since the program was established. ERS found in its 2001 in-house 

evaluation of the program that most State agencies wanted additional funds to support program administration.38 It is therefore likely 

that State agencies will use the administrative funds allowed under 

the final rule. Additionally, State agencies have more administrative 

requirements under the program regulations in the final rule than 

they do under the current program (e.g. State Plan, racial/ethnic participation data collection and reporting, specific minimum and maximum benefit levels, management evaluation requirements for both 

FNS and each State agency, regular and routine participation and 

expenditure reports, audit requirements, and specific contractual requirements for authorized outlets.) There is no maintenance of effort 

requirement in the final rule, so it is unlikely that State agencies will 

continue to use the resources that they were using during the pilot 

programs. 

Because future funding levels are based on funding provided to current State agencies, administrative funding was not previously available, and the provisions in the final rule allow State agencies to use 

up to 10% of their total grant for administrative purposes, the actual 

dollar amount available for food benefits will likely be lower than the 

total food funds currently provided to State agencies. 

Farmers: The reduction in total benefits to seniors due to allocating 

funds for program administration will impact farmers authorized to 

redeem SFMNP coupons. As food benefits decrease there may be 

some decrease in recipients’ demand for farmers’ market produce. 


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38USDA/ERS, 2001. 

39 Inflation rate based on 2005 CPI–U data for 

fresh fruits and vegetables. 

40This does not include those seniors 

participating in states that grandfathered a benefit 

level lower than $20 or a CSA program model into 

the permanent SFMNP. 

41 You et al. ‘‘Consumer Demand for Fresh Fruits 

and Vegetables in the United States.’’ The Georgia 

Agricultural Experiment Stations, College of 

Agricultural and Environmental Sciences, The 

University of Georgia. Research Bulletin, number 

431 (January 1998). 

42USDA/FNS Administrative Data, 2006. 

43 ‘‘The Seniors Farmers’ Market Nutrition Pilot 

Program: A Preliminary Assessment.’’ Unpublished 

(internal) staff paper. USDA/Economic Research 

Service. October 10, 2001. 

TABLE 3—Continued 

Final rule: Final rule effect on: 

Recipients: Unless States augment federal funding, which they are encouraged to do, they will have to reduce SFMNP benefits, reduce 

the number of seniors served, or both. For instance, utilizing the 

total $15 million, the program could provide benefits to about 4.9% 

of the eligible population in 2007. Assuming State agencies use 10% 

of grant funds for administration, the percentage of the eligible population served decreases by about 10 percent to 4.4% in 2007. 

§ 249.14 Distribution of funds: USDA 

(a) Establishes a base grant level (prior fiscal year’s grant) for previously participating State agencies.

(b) Provides for a ratable reduction of all SFMNP grants in the 

event that appropriated funds in any fiscal year are not sufficient 

to cover the base grants at the prior fiscal year’s grant level. 

(c) Establishes a funding formula for the allocation of any remaining SFMNP funds (after base grants are met) for expansion of 

participating State agencies (75 percent) and introduction of new 

State agencies (25 percent). 

(d) Sets out factors to be considered in approving requests for expansion from participating State agencies. 

(e) Provides for the reallocation by FNS of any unspent SFMNP 

funds. 

Basing grants on prior year grant levels eases the administrative burden for FNS. 

State/Local Agencies: Basing grant money on prior year grant levels 

would help State agencies plan and better manage their programs. 

The funding formula allows State agencies to maintain their programs 

and, if funds are available, for current and new State agencies to expand or start a SFMNP. 

Farmers: Basing current funding levels on prior year levels provides 

stability within the Program. The funding formula establishes a method to distribute funds, when available, to allow current State agencies to expand their Program and to allow new State agencies to 

start operating the SFMNP. As current and new State agencies expand or start Programs, new program outlets (farmers’ markets, 

roadside stands, and CSAs) will be added to the SFMNP. 

Recipients: Basing current funding levels on prior year levels provides 

stability within the Program. The funding formula establishes a method to distribute funds, when available, to allow current State agencies to expand their Program and to allow new State agencies to 

start operating the SFMNP. As current and new State agencies expand or start programs, the SFMNP will be able to serve a larger 

share of the eligible elderly population. 

5. Cost/Benefit Analysis of Proposed Rule: 

Federal Cost. The SFMNP was authorized to 

be funded at $15 million annually through 

FY 2007. This analysis assumes that the 

Program will continue to be funded at $15 

million per year throughout the 5-year period 

of analysis. The real cost of the program will 

be less than the nominal cost of $15 million 

because the program is not indexed to 

inflation.39 The FNS administrative cost 

associated with program implementation is 

assumed to be less than 1.5 percent of the 

total federal grant to State agencies. 

Benefits to Seniors 

Low-income seniors will be afforded 

nutrition education as well as a coupon 

benefit ranging in value from $20 to $50 per 

annum, 40 which will be used to purchase 

fresh, unprepared fruits, vegetables, and 

herbs intended to improve seniors’ diets. 

Seniors, and ultimately participating farmers, 

in each State agency will benefit from the 

total Federal grant to the State agencies 

minus the amount that State agencies spend 

on administration—up to 10 percent of the 

total grant. 

It is possible that seniors will not eat 

additional fresh fruits and vegetables, but 

rather will substitute the fruits and 

vegetables that they would have purchased 

with their own funds with fruits and 

vegetables purchased with SFMNP coupons. 

You et al. (1998) found that the demand for 

fresh fruits and vegetables in the United 

States was responsive to price changes, but 

not changes in income.41

Benefits to Farmers 

Farmers will collect revenue from 

redeemed coupons up to the total Federal 

grants to State agencies for food costs (the 

total amount of revenue collected will 

depend also on the amount of the grant State 

agencies use to cover administrative costs). 

Additional revenue may be reaped as seniors 

might spend their own money (and in some 

States, food stamps) to purchase additional 

goods at the farmers’ markets. Farmers will 

also benefit from the exposure of new 

populations to farmers’ markets, roadside 

stands and CSAs, which could lead to 

increased revenues. 

In FY 2005, the SFMNP operated at 2,663 

farmers’ markets, 2,001 roadside stands and 

237 CSAs.42 ERS reported in 2001, that ‘‘the 

SFMNPP has not been as effective in 

developing new farmers’ markets, produce 

stands, and community supported 

agricultural programs or in expanding 

existing ones.’’43 Nevertheless, ERS suggests 

that given evidence from the WIC FMNP, the 

SFMNP could increase the number of 

farmers’ markets, roadside stands, and CSAs 

in the long run. 

Limitations 

Benefits to seniors and farmers will be 

limited by the authorized funding for the 

program, which will go primarily to already 

participating State agencies. The use of the 

Federal grant money to cover administrative 

costs will also limit the benefits realized by 

seniors and farmers. FNS recognizes the 

tradeoffs involved in these decisions, but 

feels that they are necessary to maintain 

strong infrastructure for the program. 

Uncertainties 

It is unclear what level of benefits State 

agencies will provide under this rule. The 

rule provides State agencies the flexibility to 

make tradeoffs between possibly making a 

larger difference in diet quality for a few 

seniors and providing some level of benefits 

for many. Growing seasons are also likely to 

have an impact; State agencies with longer 

growing/market seasons may be more likely 

to issue higher benefit levels so that seniors 

can take advantage of the season. 

It is also unclear who will be served—

anyone meeting age/residency and income 

requirements is eligible, but the program has 

not been funded at levels that come close to 

providing benefits to all who are eligible. 

State agencies will need to consider carefully 

their individual outreach and service 

priorities to ensure that the SFMNP, 


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44Baseline is 1989 for all tables. 

45Weighted average benefit offered by states. 

46Eligibles are calculated using Census 

projections of the total number of seniors (60+) in 

2007–2011. The total number of seniors was 

adjusted to account for those in poverty by using 

the March 2004 CPS Supplement. The poverty rate 

is held constant at the 2004 level. 

consistent with other FNS nutrition 

assistance programs, targets those most in 

need. 

Estimate of Costs and Benefits of the 

Proposed Rule 

The following table provides an estimate of 

the costs and benefits described above as 

well as the number of program recipients 

during 2007–2011. Key assumptions include: 

• Funding for 2007–2011 is maintained at 

the current authorized level of $15 million 

annually (assumes no carryover funds are 

available in 2007–2011); 

• State agencies use 10 percent of the 

Federal grant for administration in 2007–

2011; 

• State agencies provide an average benefit 

level of $17.50 to recipients (as shown in 

Table 4); and 

• The poverty rate among seniors remains 

constant over the period of analysis. 

This analysis also assumes that total 

funding and benefit levels will not be 

indexed for inflation; therefore, their value 

has been deflated using projections of the 

Consumer Price Index—Urban index for fresh 

fruits and vegetables (1989 baseline). Based 

on these assumptions, we estimate there will 

be little change in the percent of SFMNP 

eligibles served in the analysis period, due to 

the large number of eligibles nationally. 

TABLE 4.—PROJECTED COSTS AND BENEFITS OF PROPOSED RULE IN CONSTANT DOLLARS 44

[Figures in millions unless otherwise noted] 

2005 2007 2008 2009 2010 2011 

Total Federal Grants to State 

Agencies ................................... $15,000,000 $15,000,000 $14,995,800 $14,992,300 $14,988,510 $14,984,720 

Federal Administrative Costs ....... $180,000 $180,000 $180,000 $180,000 $180,000 $180,000 

Administrative Funds for State 

Agencies ................................... $0 $1,500,000 $1,499,580 $1,499,230 $1,498,850 $1,498,470 

Benefits Paid to Participants/ 

Farmers .................................... $15,000,000 $13,500,000 $13,496,220 $13,493,070 $13,489,660 $13,486,250 

Number of Recipients .................. 771,285 771,285 771,285 771,285 771,285 771,285 

Average Benefit Per Participant 45 Per Year ....................... $19.45 $17.50 $17.50 $17.49 $17.49 $17.49 

Number of Eligibles 46 ................. 16,620,000 17,470,000 17,975,000 18,476,000 19,180,000 19,451,000 

Percent of Eligibles Served ......... 4.64% 4.41% 4.29% 4.17% 4.02% 3.97% 

6. Alternatives: USDA considered a variety 

of alternatives when constructing the 

regulation for the Senior Farmers’ Market 

Nutrition Program. Primarily, the proposed 

regulation is modeled after the FMNP, the 

SFMNPP, and the SFMNP under the 

competitive grant process. Consistency 

provides administrative ease among the State 

agencies, localities, and USDA as well as 

continuity to beneficiaries and farmers who 

have been participating in the FMNP and/or 

the SFMNPP. However, USDA carefully 

reviewed six alternatives with regard to: 

Grant structure, eligible grantees, provision 

of administrative funding, eligibility 

requirements, and benefit levels. An analysis 

of these alternatives was included in the 

regulatory impact analysis for the proposed 

rule. In response to comments on the 

proposed rule, USDA further considered 

additional alternatives to the final rule 

regarding participant eligibility, benefit 

levels, and SFMNP costs. 

The Department received numerous 

comments in opposition to the requirement 

that if an applicant was not automatically 

income eligible for the SFMNP that he/she 

must provide documentation of income at the 

time of certification. Commenters expressed 

concern over the administrative burden that 

would be placed upon State agency 

personnel in order to obtain proof or 

documentation of income given the benefit 

eligible applicants would receive. It was 

suggested that self-identification of need for 

food assistance, self-declaration of 

participation in another means-tested 

assistance program, or self-declaration of 

income should be the minimum requirement 

for accessing SFMNP benefits. As such, 

USDA removed the requirement that proof of 

income be provided by applicants not 

deemed income-eligible based on 

certification for or participation in another 

means-tested program that uses a maximum 

income level of not more than 185% of the 

Federal poverty income; however, the final 

rule continues to give State and local 

agencies the option to verify reported 

income. 

The proposed rule put forth annual 

minimum and maximum SFMNP benefit 

levels of $20 and $50, respectively. All of the 

State agencies with benefit levels below $20 

as well as many other interested State and 

local SFMNP agencies opposed a $20 

minimum stating that it would require 

reducing the number of eligible seniors they 

were currently serving in order to comply 

with the $20 minimum benefit. Commenters 

also strongly opposed the proposed $50 

maximum benefit level. Numerous farmers 

stated that if the maximum CSA benefit level 

were reduced to $50, they would no longer 

be willing or able to participate in the 

SFMNP. USDA considered a variety of 

alternatives put forth by commenters, which 

included eliminating the benefit cap, 

increasing the maximum benefit to $80 or 

$100, allowing State agencies the option of 

setting their own minimum and maximum 

benefits, either for all programs or only for 

CSAs, or allowing current State agencies to 

continue issuing benefits at their FY 2004 

level. USDA recognizes the importance of 

farmer participation, particularly in CSA 

program models, to the success of the 

SFMNP. As such, the Department has revised 

the maximum benefit level requirements put 

forth in the proposed rule. 

The final rule retains the minimum benefit 

level at $20, as set forth in the proposed rule, 

but allows State agencies that issued a lower 

benefit in FY 2006 and that are grandfathered 

into the SFMNP when it becomes a 

permanent program to continue issuing 

benefits at the lower level. New State 

agencies who begin operating the SFMNP 

after FY 2006 must comply with the $20 

benefit minimum and the $50 benefit cap put 

forth in the proposed rule. Current SFMNP 

State agencies that are grandfathering a CSA 

program model into the permanent program 

may continue to issue benefits at their 

current, FY 2006, levels. Any State whose 

annual CSA participant benefit level is 

greater than $50 will not be eligible to receive 

expansion funds until the $50 benefit cap in 

the CSA program model is implemented, and 

must require each SFMNP applicant to 

provide documentation that his/her 

household income does not exceed the 185% 

standard set forth in the final rule. State 

agencies will have the option of providing a 

higher benefit level out of funding sources 

other than the Federal SFMNP grant. The 

Department believes these changes will allow 

State agencies to maintain their current 

caseload while adhering to our principle of 

serving as many eligible senior participants 

as possible with limited available funds. 

In addition, commenters suggested that the 

modified CSA program model in which bulk 

quantities of certain produce is purchased 

directly from authorized farmers by the State 

agency and then equitably divided among 

and distributed to SFMNP participants be 

retained in the permanent SFMNP. The 

Department did not address this type of 

program model in the proposed rule. 

Therefore, the final rule proposes and sets 

forth that SFMNP participants may also 


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74654 Federal Register / Vol. 71, No. 238 / Tuesday, December 12, 2006 / Rules and Regulations 

receive benefits through a bulk purchase 

program model. Commenters found this type 

of program model to be very successful and 

the Department is committed to maintaining 

the success of the SFMNP. Because the final 

rule requires that each participant receive an 

equitable value of fruits and vegetables and 

that the total benefit provided to each 

participant fall within the minimum and 

maximum levels set forth in this final rule, 

this addition will not change the estimated 

costs or benefits of the final rule. 

7. Impact of the Final Rule on Current 

SFMNP Benefit Levels and Participation: 

Given the changes to the minimum and 

maximum benefit levels made from the 

proposed rule to the final rule, which gives 

State agencies more flexibility in establishing 

benefit levels, the Department expects that 

States will adjust benefits to a level that 

would allow them to maintain their current 

participation. This analysis assumes that 

State agencies will try to serve the same 

number of people in FY 2007 as they did in 

FY 2005. In doing so, it is expected that the 

weighted average benefit will decrease from 

approximately $19.45 in FY 2005 to about 

$17.50 in FY 2007. Because it is expected 

that State agencies will use 10 percent of 

their Federal grant to cover administrative 

costs, the estimated $1.95 reduction in the 

average benefit level is the result of the 10 

percent reduction in food funds. 

If States choose to use a portion of their 

Federal grant to pay for the administrative 

costs of operating the SFMNP and do not 

adjust their benefit levels to capture the 

reduction in food funds, they may not be able 

to serve as many eligible elderly individuals 

in FY 2007 as they did in FY 2005. For 

example, in FY 2007, if State agencies 

continue to issue an average benefit of $19.45 

and use 10 percent of their Federal grant for 

administration, there could be a decrease in 

the number of recipients served in FY 2007 

of about 77,000 seniors. As a means of 

mitigating the effects of decreased food 

funds, State agencies could continue to cover 

administrative costs. This would allow States 

to maintain their FY 2005 participation and 

benefit levels in FY 2007. 

Summary 

Because the resources devoted to the 

SFMNP are likely to be small in comparison 

to the size of the eligible population, the 

permanent Program will not enable State 

agencies to reach the majority of those 

eligible. However, the minimum and 

maximum benefit levels put forth in this final 

rule will help enable State agencies to serve 

as many eligible individuals as possible. 

While the program is not currently fully 

funded, the final rule allows for future 

growth, should additional funds be made 

available. 

Appendix A—Calculation of Eligibles 

A. U.S. States 

1. Used Census 1995 State Projection 

Series for 2007–2011, broken out by race 

and age (60+) 

2. Multiplied State projection data by 

poverty rate, 185% and 130%, (broken 

out by race and age, seniors 60+); 

Poverty rate data found in Census’

Current Population Survey March 

Supplement, 2004 

3. Added all State eligibles to get total U.S. 

State eligibles at both 185% and 130% 

of poverty 

B. U.S. Territories 

1. Used Census’ International Data Base 

2. Used ‘‘Other Demographic Aggregation’’

(2004–2011), population by age and sex 

(by each territory) 

3. Multiplied population projections by 

1999 Census poverty level estimates (by 

territory); 130% of poverty was not 

available (used 124% poverty) 

C. Total 

1. Added eligibles from U.S. States and 

U.S. Territories 

2. Did not calculate eligibles in Indian 

Tribal Organizations (very small number 

and data not readily available) 

3. Did not calculate the disabled 

population living in senior facilities 

(very small number and data not readily 

available) 

Note: Assumed constant poverty rate over 

2007–2011 period (held constant at 2004 

level as calculated from CPS data) 

[FR Doc. 06–9569 Filed 12–11–06; 8:45 am] 

BILLING CODE 3410–30–P 


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