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Equitable Reimbursement Crucial for CACFP

October 10, 2023

Rising Food Costs_4x3

This federal USDA Child and Adult Care Food Program (CACFP) provides financial reimbursement to child and adult care operators for serving nutritious meals and snacks to those in their care. 

Reimbursement Not Enough to Cover Costs 

CACFP providers work tirelessly to ensure children do not go hungry and CACFP reimbursements help providers absorb some of the costs of providing meals. However, a study by USDA found that 2016-2017 CACFP reimbursements only covered 18% to 51% of the total cost to produce a meal or snack. Since then, food and labor costs have continued to rise without a commensurate increase in reimbursement rates.   

Inequitable Reimbursement Rates Decrease Participation 

Almost 50% of all child care providers that participate in the CACFP are small family day care homes. However, over the past 25 years, there has been a dramatic decline in the number of family day care homes participating in the CACFP. This is largely due to the inequitable tiering system that determines their reimbursement based on the percentage of children in their area who are eligible for free or reduced-price meals. This eligibility requirement fails to account for providers serving low-income children in rural and suburban areas that do not have the same patterns of concentrated poverty as urban areas. These providers are categorized as Tier II and receive a reimbursement rate that is less than half that received by Tier I providers.  

Burden Placed on Small Businesses and Working Families  

As reimbursement rates fail to cover the cost of food, the remaining cost of providing meals falls upon providers and/or the families they serve.  Many providers operate on lean margins – almost one-third of providers are food insecure – and have to cut into their profits, keep staff salaries low, or increase tuition rates in order to serve meals to those in their care.  

For some, it is not financially feasible to continue serving meals at all, causing parents/guardians to have to send in meals with their children. As many of these families themselves are food insecure, their children are likely to be sent in with less nutritious foods or no food at all.  

Keep Care Affordable and Increase Food Security 

In order to ensure that children do not go hungry and child care costs stay low, CACFP reimbursement rates must be increased. Higher reimbursement rates would not only help small businesses continue to serve nutritious meals, but also incentives more providers to join the food program – increasing food security in their communities.  

Urge Your Legislator to Take Action!

There is currently legislation, the Child Care Nutrition Enhancement Act, in the House of Representatives that would permanently increase reimbursement for all CACFP providers. Take a moment to send a letter to your representative urging them to support this important legislation.