What You’ll Learn Here

  • Vocabulary of Direct Farm Marketing
  • Considerations in Developing Your Business
  • Challenges for Direct Farm Marketing
  • Types of Direct Farm Marketing
  • Policies Promoting Direct Farm Marketing

Thousands of American farmers are engaged in direct farm marketing of fruits, vegetables, meat, poultry, and other foods. This number has increased significantly since this guide was first published. For example the USDA Agricultural Marketing Service now lists more than 7,800 farmers’ markets around the nation, up from 2,700 farmers’ markets in 1999. Similarly there has been a 35% increase in the number of farms selling directly to consumers, up from 89,140 in 1997 to 136,817 in 2007.

For many small farmers, direct farm marketing is a preferred business option because of the flexibility and the economic returns it provides. As noted in the previous chapter, direct farm marketing can mean higher prices for farm products and increased profitability, and it can bring many non-monetary benefits to the families involved. Direct farm marketing lets producers sell their crops as “products” rather than commodities, giving them the opportunity to be “price setters” rather than “price takers.” It also gives farmers direct contact with consumers and lets them produce the types of food their customers desire.

In this chapter we will look more closely at the common forms of direct farm marketing which exist and consider some of the key legal issues relating to each type. A particular focus of the chapter will be to consider what role state and federal laws can play in promoting opportunities for direct farm marketing.

Vocabulary of Direct Farm Marketing

There are a number of terms used in direct farm marketing. The following are the common definitions of the different forms of direct farm marketing being discussed.
What's in a Name? Retail Agriculture
 

The Emergence of Retail Agriculture“The Emergence of Retail Agriculture” by Gary Matteson and Allan R. Hunt provides insight on how farmers can take advantage of a number of domestic markets.

It also discusses the need for a term that describes all of the market channels available to farmers who sell products based on consumer preferences. This includes all of the avenues of direct marketing discussed above but also sales to local restaurants and institutions and any sales based on consumer demand for certain characteristics of the product, such as organic, local, or sustainably raised.

  • direct farm marketing: selling food and farm products directly to consumers without using an intermediary
  • farmers markets: local markets held regularly during the growing season where producers sell directly to consumers
  • pick-your-own: farms where consumers are invited onto the property to pick the crops, most commonly fruits and berries
  • community supported agriculture (CSA): a form of subscription marketing where consumers buy a share of production and receive scheduled deliveries for a growing season
  • roadside stand or farmstand: market outlet set up on or near the farm for direct retail sales to consumers
  • agri-tourism: some form of on-farm recreational activity such as hayrides, a petting zoo, or a cornfield maze
  • food hub: a center for aggregating, marketing, and distributing farm products from multiple producers to individual consumers, restaurants, and others
  • online marketing: promoting and transacting sales via the internet.

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Considering the Range of Opportunities Available

If you are considering getting into direct farm marketing you have a variety of choices available. A number of different factors will go into the decision about which options to choose. The most important factors are:

  • what you have to sell.
  • what you may be able to grow on your land.
  • your location in relation to population centers.
  • how you want to market your products.
  • the risks or costs you want to assume.
  • the time you have to devote to marketing and raising food crops.
  • what forms of direct marketing outlets are available in your area.

It is important to keep in mind that many direct marketing opportunities are not mutually exclusive, in fact they are often complimentary or self-supporting. It is common for farmers to be involved in many different forms of direct marketing, for example, have a farmstand, sell at the local farmers market, and run a CSA or a direct delivery business.

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Challenges Facing Direct Farm Marketers

The movement toward increased direct farm marketing is not without its challenges, the legal issues discussed in this book being just one major example. Below are brief descriptions of some of the other challenges faced by direct farm marketers. Fortunately, since the first publication of “The Legal Guide for Direct Farm Marketing” in 1999, there has been significant growth in the resources and organizations available to help address these challenges.

Information on Growing and Marketing Food Crops

More individuals from non-farming backgrounds are becoming interested in pursuing agriculture as a career. This makes the need for information on how to produce food crops and on how to market them, something often taken for granted by those raised on a farm, very significant. One of the best sources of information on direct farm marketing or other topics of interest to producers is a program funded in large part by the USDA known as ATTRA. ATTRA has many publications on these topics and will take and answer questions directly from producers.

Learn more about ATTRA Resources and Contacts

Every year the researchers at ATTRA answer thousands of phone calls and other requests for information from farmers all across the nation. Experience shows the researchers at ATTRA are very helpful in providing information. They were of invaluable assistance in the development of this book.

If you have a question about producing or marketing a product give them a call at 800-346-9140 (800-411-3222 espanol), text your inquiry to askanag@ncat.org, or submit it online.

To obtain copies of publications visit their website, call 1-800-346-9140, or write to ATTRA – National Sustainable Agriculture Information Service, PO Box 3838, Butte, MT 59702.

Policy Support for Direct Farm Marketing

Some of the challenges result because direct farm marketing is to a certain extent outside of the traditional system of large-scale commodity agriculture which dominates much of the farm sector – from government policy to university research agendas. There have been signifiant developments in the last 10 to 15 years at the both the state and national level to promote direct farm marketing and local agriculture. Some states are very supportive of the development of direct farm marketing and are undertaking special programs. At a national level changes are underway in agricultural policy and at the USDA to increase the attention given to issues such as direct farm marketing, as noted in the discussion of the Agricultural Marketing Service’s activities in Chapter One.

Organizations Dedicated to Direct Farm Marketing

Another challenge facing farmers involved in direct farm marketing is the limited number of organizations created to serve their needs. While many states have organizations of fruit and vegetable growers these organizations include large-scale commercial growers as well as smaller sized direct marketers. In the past the lack of organization among direct farm marketers has made it difficult to work for policies and programs – such as University research – to assist them. Fortunately this situation is improving as a number of state and even national groups are helping serve direct farm marketers.

In addition to the national organization there are several state organizations representing the interests of producers involved in direct farm marketing.  Examples include the Ohio Roadside Marketing Association, the Ohio Direct Agricultural Marketing Association, and the Virginia Direct Farm Marketing Association. There are also farmer based organizations, such as the Practical Farmers of Iowa, the Pennsylvania Association of Sustainable Agriculture, and the Ohio Ecological Food and Farm Association. Many of these sustainable farm groups have undertaken programs to support direct farm marketing and local community food systems. As direct farm marketing becomes a more important part of the food and agricultural sector, the number of organizations and even businesses created to serve the needs of producers will undoubtedly increase.
Organization Dedicated to Representing Farm Direct Marketers

NAFDMALOGO_transparent copyOne organization created to represent the special needs of direct farm marketers is the North American Farmers Direct Marketing Association (NAFDMA).  The group is run be a board of directors comprised of farmers and ranchers involved in direct farm marketing. It hosts an annual educational conference and trade show which showcases new developments in direct farm marketing. In 2014 the national conference will be held at yet to be determined city in the Midwest in early February.

To join or learn more visit the NAFDMA website, call 413-529-0386, or contact them at NAFDMA, 62 White Loaf Road, South Hampton, MA 01073.

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Different Types of Direct Farm Marketing Opportunities

The following discussion explains the different forms of direct farm marketing and lists the legal issues or questions most commonly associated with them.

Food Hubs

Advantages

Disadvantages

Legal Issues

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Advantages: Producers can spend less time marketing, delivering, and collecting payments from consumers and more time growing food and further developing their business. It also provides an opportunity to reach to customers, particularly retail businesses and institutions that may be looking for large quantities of products. If desired, farmers can focus on one or two products, working with other farmers to provide more options for consumers.

Disadvantages: There is often a fee associated with participation in food hubs. Depending on the structure of the food hub, producers may have to wait longer to receive payment for the products they provide. Food hubs often lack a sustainable business model and may be viewed as an unstable source for marketing.

Legal Issues:

  • What are the requirements in the contract to provide a certain amount of food?
  • What are the consequences if the farmer cannot fulfill orders?
  • Do the food hub distribution sites have to be licensed as a food distribution site with proper facilities for storage and refrigeration?
Food Hubs
Farmer’s Market

Advantages

Disadvantages

Legal Issues

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Advantages: The cost of selling at a farmers market is generally low, ranging from only a few dollars for a day permit – up to perhaps several hundred dollars for a year long space at a successful market. Farmer’s Markets draw many consumers looking specifically for local and regional food.

Disadvantages: There may be many other vendors selling the same products.

Common Legal Issues:

  • Does the market restrict you to selling only products you raise?
  • What is the procedure to follow if the market believes you violated the rules and it wants to prohibit you from selling?
  • Can the market limit the geographic area from which farmers come?
  • Does farm liability insurance apply to activities at the farmers market?

All these issues and others are discussed in Chapter Four on farmers markets.

Farmer’s Market
Roadside Markets and Farmstands

Advantages

Disadvantages

Legal Issues

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Advantages: They are generally less expensive to operate and the advertising costs are limited to a few signs. In some parts of the country it is not uncommon to see farm stands which operate on the “honor” principle meaning no one is present at the market.

Disadvantages: Often reliant on drive-by impulse buyers and may not be possible in remote areas. Inviting customers onto the operator’s property may raise concerns about insurance and liability.

Legal Issues: 

  • Is the market a lawful use under local zoning?
  • Are there restriction on what can be sold and when?
  • Does the state or local government limit the number and size of signs allowed?
  • Must state or local sales tax be collected?

More details on land use issues and property law are available in Chapter Seven of “The Legal Guide for Direct Farm Marketing.”

Roadside Markets and Farmstands
Agri-tourism and On-farm Recreation

Advantages

Disadvantages

Legal Issues

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Advantages: Agri-tourism near large populations can drastically increase farm revenue and may only last for one or two months. It can take many forms, including harvest and halloween attractions, hunting and fishing excursions, or educational activities. It is also seen by many people as an important way to increase rural economic activity.

Disadvantages: Some endeavors may take the business out of the realm of agriculture or farming and open it up to land use regulations or nuisance suits. There is also an added amount of risk due to potential accidents and corresponding lawsuits by visitors.

Legal Issues: 

  • Is the business agriculture or farming?
  • Is it subject to land use regulations and nuisance lawsuits?
  • What are the landowner’s liability concerns for accidents on the property?

More information is available in Chapters Eight and Ten.

Agri-tourism and On-farm Recreation
Direct Sales to Restaurants and Stores

Advantages

Disadvantages

Legal Issues

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Advantages: The quantities involved may be larger and it doesn’t require the same commitment of time in making the sales as may be involved with farmers’ markets. Buyers may pay a premium to obtain locally sourced and organic products.

Disadvantages: Food safety requirements or certifications beyond those mandated by law may be required by the buyer. While closer to wholesale marketing, selling directly to restaurants and stores does require more involvement in delivery and sales.

Legal Issues:

  • Is a food processors license necessary for the products being sold?
  • How to make sure of being paid for what is delivered?
  • How to verify the food is being produced in the manner it is being advertised?

More information on the types of direct marketing are covered in Chapter Three of “The Legal Guide for Direct Farm Marketing.”

Direct Sales to Restaurants and Stores
Community Supported Agriculture (CSA)

Advantages

Disadvantages

Legal Issues

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Advantages: Producers receive advance payment in the form of member shares, providing crucial capital at the beginning of the crop year. Upfront payment by members also means that the customers share in the risk of the farm operation. A degree of labor is often supplied by CSA members as part of the membership agreement. CSAs tap into the growing interest in community raised food as subscribers participate in the operation.

Disadvantages: Time and money will be required if deliveries are made available to members. Member agreements and participation add an additional level of complexity to the operation. Inviting members onto the farm operation may raise concerns about liability and insurance.

Legal Issues:

  • Are the members who work on the farm considered employees?
  • Does the CSA need a food processor’s license if it includes processed food in the share?
  • If the CSA uses a drop-off site in town must it be licensed as a food distribution site with proper facilities for storage and refrigeration?

A sample membership contract is available in the “Sample Documents” section.

Community Supported Agriculture (CSA)
Pick-Your-Own

Advantages

Disadvantages

Legal Issues

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Advantages: Pick-you-own operations allow producers to tap into the increasing demand for on-farm recreational experiences and interest in locally produced food.  Allowing customers the opportunity to make a physical connection with the farm can improve sales with other farms of direct marketing.

Disadvantages: There has been a general decline in the number of consumers canning foods at home, which means fewer consumers needing to purchase large quantities. Inviting the public onto the farm creates additional concerns about liability and insurance.

Legal Issues:

  • Does insurance coverage apply to the pick-your-own customers?
  • Has the state adopted a law limiting the liability for pick-your-own operations?
  • Has everything possible been done to remove known hazards from the property?

These issues are discussed further in Chapter Ten of “The Legal Guide for Direct Farm Marketing,” which focuses on insurance and liability.

Pick-Your-Own

 

Read More About the Types of Direct Farm Marketing in Non-flashcard Format
1. Roadside markets and farmstands – these are the most traditional form of direct farm marketing and in many ways are emblematic of direct farmer-to-consumer sales.  The classic image of a small open-sided stand with a hand painted sign – “sweet corn and tomatoes 4-sale” is what people often associate with this form of marketing.  While many farmstands are simple affairs, some roadside markets are as sophisticated as small grocery stores.  The stands are located either on the farm or along an adjacent road.  The value of the stands are that they are generally inexpensive to operate and the advertising costs are limited to    a few signs.  In some parts of the country it is not uncommon to see farmstands which operate on the “honor” principle meaning no one is present at the  market.  Instead customers are trusted to leave the correct amount for the items they take.

The most common legal issues associated with the operation of roadside markets, many of which are discussed in Chapter Seven on Land Use and Property, include:  is the market a lawful use under local zoning, are there restrictions on what can be sold and when, does the state or local government limit the    number and size of signs allowed, and must state or local sales taxes be collected?

2. Farmers markets and public markets  – these are the most common and popular form of direct farm marketing opportunity.  The number of farmers markets is increasing across the nation and most farmers are now located near a local farmers market.  The cost of selling at a farmers market is generally low, ranging from only a few dollars for a day permit – up to perhaps several hundred dollars for a year long space at a successful market.  The markets are typically organized by local governments or non-profit groups such as churches and the markets are run according to a set of regulations.  The regulations can vary from just a few restrictions – complying with state laws on processed foods and selling only what you raise yourself – to more detailed and complex sets of regulations involving annual farm plans and on-farm inspections.  In California the issues of which farmers are eligible to sell at farmers markets and which markets are certified by the state, are determined by a complicated system of state laws and regulations, discussed in Chapter Four.

The main difference between a farmers market and a public market is that a public market generally involves a permanent structure which may be open daily and even on a year-round basis.  Public markets often include a mix of permanent retail outlets such as shops and restaurants, as well as booths for seasonal vendors such as direct farm marketers.  The markets are often owned and managed by public authorities, and are commonly located in old historic structures, such as the Pike’s Place Market in Seattle and the Reading Terminal Market in Philadelphia.  Some states, particularly in the South, also operate networks of state owned and operated farmers markets.  These markets often combine the daily direct sales of typical farmers markets with wholesale or terminal marketing outlets. For example the Georgia Farmers Market law, [GA Code §2-10-2], gives the state the power to regulate and establish farmers markets. In Georgia, the Commissioner of Agriculture establishes general rules for all the public markets, and Market Managers then issue “Local Operating Rules” that may alter, amend, or suspend the general rules, but only with the approval of the Commissioner.

The most common legal issues which arise in connection with farmers markets include: does the market restrict you to selling only products you raise, what is the procedure to follow if the market believes you violated the rules and it wants to prohibit you from selling, can the market limit the geographic area from which farmers come, and does farm liability insurance apply to activities at the farmers market?  All these issues and others are discussed in Chapter Four on farmers markets.

3. Pick-your-own (PYO) – these farm operations, which invite the public on to the farm to harvest their own food, can be an important form of direct farm marketing for some crops, most notably fruits and berries.  While PYO operations in some states have experienced a decline in sales, in part because fewer people are home canning foods and there is less demand for large quantities, other areas are witnessing a resurgence due to increased consumer demand for local food and involvement in where their food comes from.  Other farms have dropped pick your own features due to concerns about insurance coverage and liability if customers injure themselves.  However for some crops, such as strawberries, asparagus, raspberries, flowers, and Christmas trees, “pick-your-own” or “cut-your-own” ventures can be important marketing outlets.  For some crops, such as pumpkins, having the customers pick their own produce has a recreational dimension which ties in with the increasing demand for on-farm recreational experiences.  Most PYO operations are involved in other forms of direct and even wholesale production and marketing of the same crops, and may devote just a portion of the acreage to the PYO.

The most common legal questions associated with PYO’s include: does insurance coverage apply to the PYO customers, has the state adopted a law limiting the liability for PYO operations, and has everything possible been done to remove known hazards from the property?  These issues are discussed in Chapter Ten which focuses on insurance and liability.

4.  Community supported agriculture (CSA) – is a relatively new form of direct marketing in the U.S., with the first CSA beginning operation in Massachusetts in 1986.  Interest in this form of marketing has spread rapidly and it is estimated more than 1,000 CSAs were in operation in 1998.  The number presently, while difficult to track, is by some estimates over 6,000. There is a great deal of variation and flexibility in how CSAs are organized and run but the most common features are an established share price for the members and a set number of weekly deliveries for the growing year.  CSAs may range in size from as few as ten members to well into the hundreds.  While most CSAs continue to involve just one farm family producing the food, a number of mutual CSAs have been formed in which several growers collaborate to provide the products being sold.  The share price for a CSA will vary depending on the quantity of food provided each week and the number of weekly deliveries promised.  Most CSAs provide weekly deliveries during the growing season with share prices ranging from a few hundred dollars to over a $1000 depending on the mix of foods being provided.  Most CSAs are premised on the idea of “community” with the subscribers being considered members of the farm.  CSA’s often include weekly newsletters and recipes with the deliveries and may hold regularly scheduled open houses on the farm.  Some CSAs even expect members to work a certain number of hours during the year as part of the share price.  Other farms which look like CSAs have described themselves as subscription farms, placing less emphasis on the “community” aspect and more on the sale of a periodic delivery of food.

The most common legal questions associated with CSAs include: are the members who “work” on the farm considered employees, does the CSA need a food processor’s license if its includes processed food in the share, and if the CSA uses a drop-off site in town must it be licensed as a food distribution site with proper facilities for storage and refrigeration?  Discussion of the various issues concerning CSAs are found in the appropriate chapters.  For example, information on how CSAs can set up memberships to accept SNAP benefits is found in Chapter Six and a sample of a CSA membership agreement is reprinted in Chapter Five.

5. Direct sales to restaurants and stores – another form of direct marketing involves direct sales of food to retail outlets, such as restaurants, groceries, and even institutions such as schools and hospitals.  This form of direct marketing is somewhat like wholesale marketing, except the producer is directly involved in locating the market and making the delivery and sale.  One benefit of this type of direct farm marketing is that the quantities involved may be larger, and it doesn’t require the same commitment of time in making the sales as may be involved with farmers markets.  The prices received for such direct sales may be above wholesale prices, depending on what the parties negotiate and what it is being sold.  An increasing number of restaurants and food stores are interested in obtaining high quality locally produced food, especially if it is organically grown.  In these cases buyers will often pay a premium to obtain dependable local supplies of the quality products they desire.

The most common legal questions associated with these sales include: is a food processor’s license necessary for the products being sold, how to make ensure the food is produced and transported in a safe manner, how to make sure of being paid for what is delivered, and how to certify the food is being produced in the manner it is being advertised?

6. Agricultural tourism and on-farm recreation – one constant challenge for direct farm marketers is how to get customers to come to the farm and spend money. In recent years an increasing number of farmers have found the answer in various forms of agricultural tourism or on-farm recreation.  These ventures may range from adding a petting zoo of farm animals or a haunted hayride at a roadside stand, or may extend to offering paid hunting excursions with on-farm lodging.  A common activity is planting cornfield mazes which can attract thousands of customers.  Agricultural tourism is seen by many people as an important way to increase rural economic activity and to increase farm incomes. It is important to recognize however that tourism and recreational ventures can raise significant legal questions – in particular questions about whether the operations comply with existing zoning laws and whether insurance coverage is adequate to cover  the potential for liability.

Some of the legal issues relating to this form of direct farm marketing will be addressed but many issues relating to recreational uses are beyond this coverage. There have been several court cases across the country considering questions about this type of direct farm marketing operation, including the fundamental question of whether it is really agricultural in nature. If you are thinking about some form of agricultural tourism venture you should visit with the local land use officials and with your insurance agent to make sure your plans are sound.

7. Food HubsThese are distribution centers designed to aggregate products from multiple producers for sale and distribution to customers. This can increase a producer’s market while minimizing marketing and delivery costs.

Ohio Court Rules Haunted Hayrides is Not Agricultural

In Columbia Township Board of Zoning v. Otis, 633 N.E.2d 377 (Ohio App. 9 Dist. 1995), the court decided whether the owner of a 23 acre riding stable, located in a residential district, who began offering “haunted hayrides” was in violation of the law.

The local zoning officials cited her for running a food booth and a haunted forest after the neighbors, who also operated horse farms, complained about the noise, lights and other disturbances. The Ohio court held that offering the haunted hayrides in the evening did not qualify as an “agricultural use of land” for purposes of a state law which exempts agricultural operations from local zoning restrictions. The court ruled that even if the original hayrides on the farm did qualify as an agricultural use, at some point the activity evolved into something which could no longer be called agricultural.

The case is important as it indicates that the more a farm resembles some form of commercial enterprise, it may lose legal protection as a farm. This issue often arises in relation to zoning ordinances and is discussed further in Chapter 8 on Zoning. The issue of what constitutes a farm operation also arises in insurance policies and is covered in Chapter 10.

It’s not a new practice for farmers to sell their goods to local grocery stores and restaurants, nor is it new to market them for such sale. What is somewhat new and developing is a practice referred to as food hubs. Food hubs are distributing centers aimed at making it easier for restaurants and grocery stores across the nation to buy locally grown food. A few of these hubs do the processing for the producers as well, which opens them up to more regulations. As of July 2013, it was estimated by the USDA that there are approximately 220 food hubs in 40 states and the District of Columbia. In Iowa alone, there are five recognized working food hubs including Des Moines’s Iowa Food Cooperative and Grass Run Farms in Dorchester.

The basic premise of a food hub is to aggregate local food products and makes them more accessible to consumers and businesses. They basically create a middleman between the local growers and the restaurants and grocery stores. Instead of the farmer going to the businesses to sell their produce themselves, they bring their goods to a food hub that has done the marketing and sales for them. The farmers are generally required to pay a small fee for the service, and the food hub then takes over the process of selling the goods. These hubs sometimes even market to individuals and not just businesses. Their business models can range from cooperatives to privately held businesses to nonprofit organizations.

Regardless of the business model, it seems to drive up revenue because it saves farmers time and money by doing the marketing and distributing for them. It is argued that food hubs give farmers many more markets to sell to by creating a larger business that will likely be trusted more than if they were to approach the restaurants and grocers themselves. Hubs also help increase interest in agriculture. With a food hub, younger and new farmers have the ability to grow what they can while still making money without themselves having to market their goods. They allow groups to grow as little or as much as they want and still make money as long as the local buyers want it. The USDA strongly supports food hubs because they believe they offer a sustainable business infrastructure and will help build a strong regional food system across the nation. Their support comes in many forms including financial resources and business developmental tips and procedures.

Food hubs, however, face a number of challenges in business including balancing supply and demand. Seasonal fluctuation of goods, variety of products, and a lack of local farms in operation can all factor into the supply and demand issue. In addition, many businesses are resistant to paying more for food items from a food hub that they could get from elsewhere for a lower price. They are often reluctant to enter into long-term agreements for the local and regional products because of this. Access to capital can also pose a problem for both hub operators and the farmers themselves. For hub operators, there is often a discrepancy between when farmers are looking to be paid and when the hub is reimbursed by the customers. Capital problems for farmers often mean they are limited in the amount they can produce, which affects the supply and demand issue as well. When there is no money to expand, the demand for more cannot be met. Food hubs are also challenged with meeting buyer specifications for quality and consistency.

The drawbacks for food hubs seem to mostly affect the food hub itself. The benefits on the other hand to both farmers and consumers are easily counted. Farmers have more business with less effort on their part, and consumers are able to get the locally grown products they want more readily. It seems to be a win-win for all, unless the food hub falls victim to the challenges of running such a business.

State and Federal Policies to Promote Direct Farm Marketing

Direct farm marketing is an economic activity that will happen wherever you find people. It is as old as civilization and will continue as long as there are people on the land raising food and there are others who want to eat fresh food but who can not raise it themselves. When considered from this perspective you can almost take the view that direct farm marketing is bound to happen unless something stands in its way.

Unfortunately, many of the issues discussed in this book, such as the local zoning laws considered in Chapter Eight, are examples of things which may stand in the way of direct farm marketing. On the other hand, there are steps that governments at all levels – from the smallest town right up to the Congress – can take to foster and encourage direct farm marketing.

The following discussion looks at examples of public policies designed to promote direct farm marketing. These policies may be important to you for several reasons. First they demonstrate how public action can support this form of farm marketing.  Second, some of the laws discussed may create opportunities of which you can take advantage.  Third, the laws provide ideas you can ask your own state and local officials to consider enacting.

Q. Are there states which have enacted laws to promote direct farm marketing?

Yes, a number of state legislatures have enacted programs to support development of direct farm marketing.  The states of New York and California are two of the best examples.  The states are interested in how the state government – generally through the department of food and agriculture – can help create opportunities for farmers to sell directly to consumers.  The states do this in a variety of ways, from supporting creation of farmers markets to providing grants to farmers interested in diversifying into direct farm marketing.

California Law on Direct Marketing

The California Food and Agricultural Code, Article 47000, contains the state law to promote direct marketing.  The law provides an excellent set of legislative “findings” concerning the value of direct farm marketing.  The law provides:

The Legislature finds and declares all of the following with regard to the direct marketing of agricultural products:

(a) Direct marketing of agricultural products benefits the agricultural community and the consumer by, among other things, providing an alternative method for growers to sell their products while benefiting the consumer by supplying quality produce at reasonable prices.

(b) Direct marketing is a good public relations tool for the agricultural industry which brings farmers face-to-face with consumers.

(c) The marketing potential of a wide range of California-produced agricultural products should be maximized.

(d) Farm stands allow farmers to sell fresh produce and eggs grown on their farm as well as other food products made with ingredients produced on or near the farm, thus enhancing their income and the local economy.

(e) The department should maintain a direct marketing program and the industry should continue to encourage the sale of California-grown fresh produce.

(f) It is the intent of the state to promote the consumption of California-grown produce and to promote access to California-produced agricultural products. Restaurants and nonprofit organizations can provide assistance in bringing California-grown products to all Californians.

(g) A regulatory scheme should be developed which provides flexibility that will make direct marketing a viable marketing system.

(h) The department should assist producers in organizing certified farmers markets, field retail stands, farm stands, and other forms of direct marketing by providing technical advice on marketing methods and in complying with the regulations that affect direct marketing programs.

(i) The department is encouraged to establish an ad hoc advisory committee to assist the department in establishing regulations affecting direct marketing of products and to advise the secretary in all matters pertaining to direct marketing.

New York Law on Direct Marketing
The California law is without doubt one of the strongest laws on direct marketing, but New York also has some very important laws concerning the value of direct marketing for farmers and consumers.  A New York law, enacted in 1981, [New York Stat. Chap. 69 Art. 23 §281] provides:

The legislature hereby finds that inflation has caused higher prices in all phases of farm and food production and farm and food products distribution; and that demand, by consumers within the state, for increasing supplies of wholesome, fresh and nutritious farm and food products provides a significant opportunity for the development of alternative marketing structures for food grown within the state by which such products may be supplied directly to the consuming public.

The legislature finds also that encouraging direct sales from farms and other agricultural producers to consumers and other buyers can provide producers with a substantially increased income over that which is currently obtainable through the conventional wholesale marketing system.

It is therefore the intent of the legislature and the purpose of this article to encourage expanded production of farm and food products through providing increased opportunities for farm and food product producers within the state to wholesale and retail their products directly to consumers on a state, regional and local basis; to encourage purchasing opportunities which will lower food costs to consumers; to increase the share of the consumer’s food dollar retained by the producers of farm and food products; to make farm and food products more readily available to residents of the state; and to encourage and facilitate the purchase and use of farm and food products produced within the state by public and private institutions and agencies.

Steps States Can Take to Promote Direct Farm Marketing

If state officials are interested in promoting direct farm marketing there are a number of actions they can take.  The New York law identifies eight different activities as part of a statewide direct marketing initiative and the law authorizes regional efforts to promote direct marketing.  The eight steps are good examples of what states can do to promote direct farm marketing.  The law [New York Stat. Chap. 69 Art. 23 §284] provides these activities shall include, but not be limited to:

  1. Communications and promotion of direct marketing activities, to include, where appropriate, cooperation with the cooperative extension service in the area of education.
  2. Development of institutional direct marketing programs to increase the purchase of New York state farm and food products in coordination with the office of general services and the department of education.
  3. Development of a technical assistance program for initiating, improving, and expanding direct marketing activities and developing new forms of direct marketing.
  4. Development of guidelines for direct marketing operations that will assist individual producers in reducing costs and improve their financial returns and help assure consumers of high quality food.
  5. Assistance to retail food stores in purchasing directly from New York state food producers.
  6. Assistance to direct marketing organizations in areas identified as having poor consumer access to high quality and reasonably priced food and farm products.
  7. Assistance to producers and consumers to initiate or improve retail and wholesale farmers markets.
  8. (a) Submission of a quinquennial report to the legislature, the first of which shall be submitted in the year two thousand six, which shall include an evaluation of the regional and institutional effect of direct marketing activities during the previous five years. (b) Between report due dates, the department shall maintain the necessary records and data required to satisfy such report requirements and to satisfy information requests received from the legislature between such report due dates.
  9. Establish the Hudson valley agricultural center to serve as a marketing, promotional, informational and cultural center for the Hudson river valley agricultural region and greenway and to promote the production of fruits (including juices, jellies, and preserves made therefrom), wine, cider, vegetables, and other agricultural products.

Q. What types of direct farm marketing are most commonly supported by states?

Most states which have adopted laws on direct farm marketing place emphasis on supporting the creation of farmers markets and on the operation of roadside stands.  For example another New York law discussed in Chapter Four makes it the state policy to encourage the creation and use of farmers markets.  Other state programs help support the creation of roadside stands.  For example, both Georgia and South Carolina operate “roadside market incentive programs” designed to improve the appearance and operation of the markets.  Under the Georgia law [GA Code Ann. § 2-10-130] theRoadside Market Incentive Program,” is designed to “improve the quality of roadside markets and to promote fair and sanitary marketing practices throughout the roadside markets in this state.”  The law gives the state Department of Agriculture rule making authority to establish standards for the design and operation of markets.  Roadside markets meeting the guidelines are eligible to post signs designating the markets as “state certified.”

A more recent trend is extending the protection of “recreational use statutes” to landowners engaged in agri-tourism activities. Recreational use statutes provide some protection to landowners that open their land to visitors for recreational purposes, such as hunting, fishing, and wildlife viewing. Most of these laws only apply to landowners that do not receive any compensation for letting the recreational users enjoy their property. Several states have now created similar laws for landowners that do charge admission to engage in on-farm activities, such as hayrides and corn mazes. This will covered in greater detail with examples of state laws in Chapter 10: Insurance and Liability.

Q. Are there other actions states can take to promote direct farm marketing?

Yes, there are a variety of activities and programs states can undertake to assist direct farm marketers.  One of the most valuable is to publish directories of farms which have food products for sale to consumers.  Many states publish such farm directories, for example the Maine law on direct marketing of agricultural commodities [Maine Stat. Title 7, Chap. 101, §412] requires the Commissioner of Agriculture to prepare information designed to develop and promote direct marketing, including, “a list of the names and addresses of all Maine farmers and of the agricultural commodities which each produces.”  Many other states publish guides or maps, in print and online, to help people locate farmers involved in on-farm marketing. Where available, these directories and guides are listed in the “Important Contacts Appendix.”

Another approach being taken in a quickly increasing number of states is to address direct farm marketing as part of a more comprehensive effort to examine the food and agricultural system in the state. Connecticut was one of the first states to do this through the establishment of a state food policy council, which is described in the examples below. Another action many states have taken is to provide legislative protection for roadside markets under local zoning laws.  Examples of these laws are discussed in Chapter Eight.  The following are some other examples of state programs to assist direct farm marketers.

Connecticut Food Policy Council Law

The “Connecticut Food Policy Council” statute [C. G. S. A. § 22-456] was one of the first of its kind. The law creates a fourteen member council within the state Department of Agriculture. The Council is made up of representatives involved with farming, anti-hunger, Cooperative Extension Service, food retailing, produce wholesaling, state government, education, and the legislature. The purpose of the Council as set out in the law, is as follows:

The council shall: (1) Develop, coordinate and implement a food system policy linking local economic development, environmental protection and preservation with farming and urban issues; (2) review and comment on any proposed state legislation and regulations that would affect the food policy system of the state; (3) advise and provide information to the Governor on the state’s food policy; and (4) prepare and submit to the joint standing committee of the General Assembly having cognizance of matters relating to the environment an annual report concerning its activities with any appropriate recommendations concerning food policy.

Passage of the law was the result of efforts by a number of people and organizations working on community food security, most notably Mark Winne. Mark writes extensively on Food Policy Councils and maintains a national listing of food policy councils and an extensive list of resources on the topic on his website, MarkWinne.com.

Minnesota Buy Local Law Includes Food Products
In 1988 Minnesota enacted a law, [Minn. Stat. Ann. §16C.12] titled “Agricultural Food Products Grown in State.”  The law provides, “The commissioner [of administration] shall encourage and make a reasonable attempt to identify and purchase food products that are grown in this state.”  Many other states, such as Connecticut and Massachusetts, have similar local purchasing laws. These laws typically either encourage local or state food acquisition or set a mandated threshold of local purchases that must be met.

Minnesota Grown Label Law
Minnesota also has a program, enacted in 1979, for the development and use of a Minnesota Grown label and logo.  [See Minn. Stat. Ann §17.102].  The law requires people to obtain a license from the state for the use of the label.  Any fees generated from use of the logo go into a “Minnesota grown account” to be used for enforcement and promotion.  The law provides that, “the Minnesota grown logo or labeling statement may be used on raw agricultural products only if 80% or more of the agricultural product is produced in this state.”

Many state departments of agriculture, for example Iowa, New Jersey, Utah, and West Virginia, administer similar state labeling programs to promote produce and food grown in the state.  Under such programs farmers can obtain stickers showing the item was produced in the state to be placed on food products and posters for use in farmers markets.

Q. Do any states publish local guides to laws and regulations which apply to direct farm marketing?

In researching this project, an effort was made to locate any educational materials which had been prepared by the states on the legal issues relating to direct farm marketing.  A variety of materials were uncovered dealing with different topics such as food processing, business formation, and taxes.  As consumer demand for local food has grown, so has the the number of state resources that educate producers on state laws and regulations. Delaware, Oregon, and Washington, have issued state publications covering the “Regulations Applying to Direct Farm Marketing.”  A listing of this state guides is found in the Library.

Q. Has the federal government or the USDA ever considered undertaking a program to support direct farmer-to-consumer sales?

Yes, in 1976 Congress enacted the “Farmer-to-Consumer Direct Marketing Act” which is still found in the U.S. Code at 7§3001 et seq.  The law authorizes the USDA to carry out a range of activities to support direct farm marketing.  The law defines “direct marketing from farmers to consumers” as:

“the marketing of agricultural commodities at any marketplace (including, but not limited to, roadside stands, city markets, and vehicles used for house-to-house marketing of agricultural commodities) established and maintained for the purpose of enabling farmers to sell (either individually or through a farmers organization directly representing the farmers who produced the commodities being sold) their agricultural commodities directly to individual consumers, or organizations representing consumers, in a manner calculated to lower the cost and increase the quality of food to such consumers while providing increased financial returns to the farmers.”

The Agricultural Marketing Service, under an amendment to this Act, administers the Farmers Market Promotion Program (FMPP)Grants from the FMPP are targeted to help improve and expand domestic farmers’ markets, roadside stands, community-supported agriculture programs, agri-tourism activities, and other direct producer-to-consumer market opportunities. Over $9 million in FMPP grants were awarded for Fiscal Year 2012. The maximum amount awarded for any one proposal cannot exceed $100,000. The USDA continues to support direct farm marketing through other means as well, such as the Agricultural Marketing Service’s “Federal-State Marketing Improvement Program (FSMIP) grants and the AMS’s new direct marketing initiative and web site noted in Chapter One.

Since the first publication of “The Legal Guide for Direct Farm Marketing” in 1999, the USDA has substantially increased its support for direct farm sales. Recognizing the value of direct farm marketing for farmers and consumers, the USDA has established the “Know Your Food Know Your Farmer” Campaign and website with information on how to find local food, how to locate funding for local and regional marketing initiatives, and where to look for additional research information on the topic.  It has also planted the People’s Garden on the grounds of the USDA in Washington D.C. to challenge other USDA and government facilities to plant gardens and “inspire locally-led solutions to challenges facing our country – from hunger to the environment.”

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