What You’ll Learn About Here

  • Why Food Processing Laws are Important
  • How State Laws Regulating Sales of Food Produced on Farms Vary
  • How State Laws May Regulate On-farm Food Processing
  • Food Safety and Direct Farm Marketing

This chapter considers the important issue of marketing various types of higher value or processed foods.  The main focus is on the application of federal, state, and local food safety and processing laws which establish the rules which must be followed for this form of direct farm marketing.  Rules for inspecting and licensing food preparation facilities and for determining what are “processed foods” are discussed.  The chapter includes a discussion of the important topic of food safety and how it applies in the context of direct farm marketing.

Why Food Processing Laws are Important for Direct Farm Marketers

Many farm families involved in direct farm marketing begin by selling “raw” farm products – fruit and produce such as apples and sweet corn – to their customers.  If that is all you sell – raw products which are not processed in any way, (not cooked, prepared, sliced, or transformed from their natural state) – then in most circumstances there is little concern that food processing laws apply to your farm.  However, many direct marketers recognize that one important way to add value to what they raise and to increase sales and profits is to sell higher value foods.  These products can include a range of food items – such as bread, jam, cheese, and baked goods.  These sales can also include natural farm products which are higher in value even though they may be “unprocessed,” such as milk, eggs, and honey.  It can also include high value products which are only minimally processed such as fresh meat, poultry,  and fruit juices.   If you are involved in selling products which have been manufactured or processed in some way – for example cutting fresh lettuce and mixing it into bags for ready-to-eat salads – your activities will probably fall under state and federal laws which regulate the food processing industry.

In addition, if you become involved in the actual manufacturing or production of foods such as making jams and jellies or baking breads and pies for sale to your customers, these products may also bring you under the authority of food regulators.  Finally, the sale of meat, poultry, eggs and dairy products are all subject to extensive state and federal rules controlling what products must be inspected and where and how they can be sold.  These products are the subject of Chapter Twelve.

So, to answer the question why food processing laws are an important concern to direct farm marketers, the answer is fairly simple.  The laws may limit what you can sell and to who, they may set the minimum guidelines for the steps you must take to prepare and sell certain foods, and they may require you to obtain licenses and have your facilities inspected by state or local officials.  Complying with these laws and regulations – most of which are based on the desire to protect the health and safety of our food supply – will be essential to the future of your operation.

The most important advice you can take from this chapter is when you have questions, ask the state or local officials for their advice.  These people are in the best position to know what regulations apply to the activity you are considering.  The names and addresses for the state food inspection officials are listed in the Appendix.

As a starting point – it is important to address several assumptions you might have about food processing and inspection laws.   You may believe or be concerned these laws will be too complex to understand or the requirements too costly to satisfy.  It may be true the laws and regulations are complicated but they are understandable.  It may also be true that some of the regulations will require you to take certain steps or precautions which you might not otherwise take and there may be costs associated with complying with these requirements.  But in many cases the costs of compliance are not that high.  For some laws there are limited exemptions which apply to direct on-farm sales or to smaller scale operations.  But even in those cases where the regulations are complex or the license requirements are costly, it is important to remember two things.

First, the food processing laws are primarily designed to protect the safety of the food products being sold to consumers.  No one wants to create unnecessary food safety risks or threaten the health of consumers.  Second, to the extent you engage in the sales of processed foods in ways which do not comply with the applicable laws you are taking two significant risks.  You face the penalties and other costs of non-compliance if you are discovered, but more importantly, you could be unintentionally risking the health of your customers and thereby risking the reputation and even the financial existence of your operation.  So pay attention, read closely and try to understand how the food processing laws may apply to you.  As you read this chapter and as you think about how these laws and regulations may apply on your farm remember the most important rule!  If you have questions the best people to ask are the state and local officials who administer these programs.  In conversations with them, these officials always say the same thing – “we are here to help people comply with the law, not to make life difficult – we should be seen as friends not enemies.”  As one state meat inspection official said “it is always easier to correct something on paper before you act than it is to correct it later.”

State Laws Regulating Sales of Food Produced on Farms Vary Widely

This chapter was a challange to write because of the difficulty in generalizing about how state laws apply to the sale of food products directly from farm operations.  The standards for determining what foods are regulated as processed foods vary by state.  In addition, the steps that may be required to meet state and local rules can vary depending on where you live.  Importantly, the exemptions which many state laws provide for the direct sale of food products by farmers also vary widely depending on the food involved.  That is why it is so important to obtain current information about how the food processing and safety laws apply – or are interpreted – in your state.  In the appendix, the addresses and phone numbers of the food safety and inspection officials, as well as the meat inspection officials, are listed for each state.

As a general rule the greater the potential hazard from the food, for example cream pies or low acid canned foods, or the more the food is processed from its original form, the more likely it is that state law will require you to obtain some form of state food processing license or meet other food handling or preparation requirements. The following box lists the types of questions to consider on this topic.

Seven Questions to Ask State and Local Food Officials About Inspections and Licenses
If you are interested in marketing foods which you process or manufacture on the farm you should contact the state food inspection officials to find out more about how state law and regulations apply for the foods you are interested in selling.  When you contact the officials the following are some questions you might consider asking.

1. Do I need a state license or permit to produce and sell the products in question?

2. Do the local health officials – such as the city or county inspectors – have their own set of rules for food processing and marketing?

3. If I am presently marketing “processed foods” which require a state or local license what is the procedure for obtaining a license and what is the penalty for failing to have one?

4. What types of home produced foods can I sell without having to be licensed or inspected?

5. What type of kitchen or food processing facility will require me to obtain a food processing license?

6. Does the state license or approve “community” or “shared use kitchens” and are there any licensed facilities in my area which I might be able to use?

7. Does the state provide assistance to producers who want to develop food processing and manufacturing businesses?

Considering How State Laws May Regulate On-Farm Food Processing

Q. How does state law determine what foods or food processors are regulated?
While it might be hard to describe any state law as typical – the laws of Iowa are a good example of how the states regulate the sale of processed foods.  The starting point in any state will be the chapter of the state code dealing with the licensing of “food establishments” or “food processing.” This law will generally provide two key components – first, the definition of the term “food” which will set the boundaries for what activities the state is regulating and second, the exemptions for the types of foods or food establishments not regulated under the law.  These may be complete exemptions – meaning the food is not regulated anywhere in the state law, or the exemption may just provide that it is regulated but in another chapter of the state law.  Remember, even though you may be exempt from state food processing laws, food safety should always be a primary consideration in processing and marketing food products.

Lets consider the Iowa law on these two points.  The Iowa Code §137A.1 (4) defines “food” as “any raw, cooked, or processed edible substance, ice, beverage, or ingredient used or intended for use or sale in whole or part for human consumption.”  This definition clearly casts a broad net to include almost any food product under the sun.  So the starting point is the state – in this case the Iowa Department of Inspections and Appeals – which can regulate the sale or processing of all foods.  The state does this by requiring a license for anyone who operates a “food establishment.”  The second key definition in the law is the term “food establishment” because this definition identifies both who needs a license and which foods and businesses are exempt.  “Food establishment” is defined [in Iowa Code §137A.1(5)] as:

a place used as a bakery, confectionery, cannery, packinghouse, slaughterhouse where animals or poultry are killed or dressed for food, retail grocery, meat market, or other place in which food is kept, produced, prepared, or distributed for commercial purposes for off-the-premises consumption, except for the following:

Again, this list is broadly worded to include almost every place food might be produced or handled.  While farms are not specifically mentioned, a farm is a place where food is produced.  But the Iowa law provides several exceptions from the definition of a “food establishmen,” including:

b. Premises which are licensed as a home food establishment as defined in section 137D.1.

c.  Premises which operate as a farmers market.

These two exemptions are important but for different reasons.  The exemption for “home food establishments” requires us to look at another chapter of the law to determine how these are defined and whether they are required to be licensed.  This exemption is considered below.  The exemption for “farmers markets” is important because it deals specifically with a main form of direct farm marketing.  Section 137A.1(3) of the Iowa Code defines “farmers market” as “a marketplace which seasonally operates principally as a common market for fresh fruits and vegetables on a retail basis for off-the-premises consumption.”  As you can see this definition doesn’t mention the sale of meat or eggs and it doesn’t mention the sale of prepared foods eaten at the market, but these items are commonly sold at Iowa farmers markets.

What does this exemption mean?  It means that farmers markets which meet the definition do not need to obtain a state license as a farmers market and that producers who sell raw fruits and vegetables at farmers markets are also not required to obtain a license.  But producers who sell meat or prepared foods to be eaten at the farmers market will need to comply with the licensing and inspection process.  The law includes a section which highlights the responsibility of farmers to obtain needed licenses to sell at farmers markets.  Section 137A.10 provides, “A vendor who offers a product for sale at a farmers market shall have the sole responsibility to obtain and maintain any license required to sell or distribute such product.”

Q. What does the exemption concerning licensed “home food establishments’” mean?
Iowa Code §137D creates a licensing procedure for “home food establishments.”  The definition of a home food establishment in §137D.1(3) is:

a business on the premises of a residence in which prepared food is created for sale or resale, for consumption off the premises, if the business has gross annual sales of prepared food of less than twenty thousand dollars.  However, a home food establishment does not include a residence in which food is prepared to be used or sold by churches, fraternal societies, charitable organizations, or civic organizations.

Under this chapter the term “prepared food” is defined under §137D.1(4) to mean:

soft pies, bakery products with a custard or cream filling or any other potentially hazardous baked goods.  “Prepared food” does not mean nonhazardous baked goods, including but not limited to breads, fruit pies, cakes, or other nonhazardous pasteries.

To obtain a home food establishment license an applicant must pay a $25 fee and meet the standards adopted by the department of inspections and appeals.  Because the definition of “prepared foods” is limited to only certain types of potentially hazardous baked goods, the “home food establishment” license is not very significant.

Q. Do the exemptions or protections for on-farm or direct sales of food always appear in the law or can they be “unwritten rules”?
This is a good question because when people hear they are “exempted” from the law, they assume the exemption actually appears somewhere in writing.  How else can you rely on its existence?  But this might not always be the case.  Sometimes legal exemptions exist because of agency “interpretations” of the law or unwritten policies concerning how the law will be enforced.  The Iowa law concerning the exemption for the sale of raw foods at farmers markets provides an excellent example of this existence of such “unwritten laws” which can be very important for direct farm marketers.  Research on direct farm marketing of food products indicates there are many examples of similiar “unwritten” rules benefiting farmers in other states.

The Iowa law on licensing of food establishments – and the laws of many states – contains no specific exemption for the sale of raw fruits and vegetables made either on the farm or by a farmer directly to a restaurant or grocery store.  But if you ask the head of food inspections for the state “are these sales legal?” he will tell you “yes they are exempted from state law.”  But where does the exemption come from?  Well, this is the state’s theory.  The law specifically allows the sale of certain raw products – fruits and vegetables – at farmers markets.  If a farmer can bring these foods to town and sell them then why shouldn’t the farmer be able to sell them on the farm?  To remedy this, the state’s administrative rules on this point include a specific exemption for sales at roadside stands or farmstands.  But what about direct sales to grocery stores or chefs?  Again, the state’s logic is that if these people can come buy the products at the farmers market why shouldn’t the farmer be able to take the products directly to them.  But it is important to note that this interpretation is not reflected in any rule or regulation.

The state’s attitude is supportive of and friendly to direct farm marketing.  You can be sure that Iowa farmers are not complaining.  The only potential problem is there is nothing in the law stating this interpretation.  But if this is the interpretation of the agency enforcing the law then farmers making these direct sales should have nothing to fear.  That is true as long as two factors stay the same.  First, farmers sales are limited to products, the sales of which are not otherwise regulated.  Second, as long as the agency doesn’t change its mind.  What might lead the agency to change it’s mind?  The most significant event would be evidence that a public health risk is being created by the direct sale of farm raised fruits and vegetables.  Recent problems with Hepatitis A, for example, could make such concerns more real.  This is another reason why producers must take steps to safeguard the health, safety and quality of all food products sold.

Q. Are certain foods exempt from Iowa’s regulations?
The Iowa law on licensing food establishments includes an exemption that identifies several types of foods which can be sold by farmers, for which no special licensing or inspections are required.  This exemption from the definition of a “food establishment” in §137A.1(5) reads:

d. Premises of a residence in which nonhazardous food is sold for consumption off the premises, if the food is labeled to identify the name and address of the person preparing the food and the common name of the food.  As used in this paragraph, nonhazardous food means only the following:

(1) Baked goods except the following: soft pies, bakery products with custard or cream fillings, or any other potentially hazardous goods.

(2) Wholesome, fresh eggs that are kept at a temperature of forty-five degrees Fahrenheit or less.

(3) Honey which is labeled with additional information as provided by departmental rule.

This exemption means farmers can sell foods like baked goods, eggs and honey from their homes if they meet the standards.  They can sell baked goods produced in the family kitchen, only if they are not “potentially hazardous goods” such as cream pies or other soft foods.

Q. What about all the other types of foods - jams, jellies, salsa, pickles, meat and milk - what type of license is needed in Iowa to market these products on the farm?
For all other types of food products, a producer will need to obtain some type of license and meet other inspection requirements.  The Iowa law, §137A.6 provides:

A person shall not open or operate a food establishment until a license has been obtained from the department of inspections and appeals.  A license shall expire one year from date of issue.  A license is renewable.  This section does not require licensing of establishments exclusively engaged in the processing of meat and poultry which are licensed pursuant to section 189A.3.

This section provides several important points.  First it establishes the duty to obtain a license.  This is critical, because in order to qualify for a license the producer must be able to meet the standards established by the state for the facility and equipment.  Second, this section shifts responsibility for licensing and inspecting meat and poultry processing from the department of inspections and appeals to the department of agriculture and land stewardship, under another chapter of the law.  This illustrates an important factor to recognize, there may be several different state agencies involved in the licensing and inspection of food processing.  Depending on the mix of products you produce or market you may need to obtain licenses from and comply with the rules of several different agencies.

Q. If a license is required what will it take to get one?To obtain a license a producer will need to take several steps.  The first step is to submit a written application – generally on a form supplied by the agency – and provide all of the information and details required by the law.  If the application is approved the state will also collect a license fee, which will vary depending on the size of the operation.  The size of fees will vary depending on the state you are in but as a general rule, the size of the fee is not a significant cost of doing business.  For example, in Iowa the food establishment license fee for a business doing less than $20,000 a year in gross sales is only $20.  The fee for the largest class of facilities, those doing more than $750,000 in gross sales a year, is only $150.  So at least in Iowa, the cost of the license fee is a minor expense compared to other requirements which might apply.

The most critical factor in determining whether you can obtain a license is whether your facility complies with the health and safety requirements established by the law and the agency’s regulations. The exact details of these requirements – which can be found in the state regulations – will vary depending on the food and the process involved. The main factors will relate to plumbing, water quality and waste treatment, processing equipment and facilities, and toilets for workers.  Many of the rules for food processing are standardized across the states because the states have adopted the federal Food and Drug Administration (FDA) guidelines for certain processes.  For example, Iowa has adopted the FDA rules for low retort canning and processing acidified foods.  Many states have published booklets of information explaining how the food processing laws operate. The following box contains a discussion of state resources.

In many states, programs are currently underway to increase the opportunities for local processing and marketing of food.  These efforts are viewed as an important part of expanding economic and rural development.  They are often part of state efforts designed to expand “value-added” agriculture by selling items other than just raw farm products.  As a result many states have developed valuable and helpful guides designed to assist people who are interested in developing food based businesses.  For example the Oregon Department of Agriculture published From Growing to Processing: A Guide for Food Processors, which provides information about all the various aspects of state and federal rules on food processing.  Many states have published brochures or pamphlets which try to explain the various rules and regulations relating to food processing and licensing.  The state of Wisconsin has been especially active and the Division of Food Safety of the Wisconsin Department of Agriculture, Trade and Consumer Protection offers many helpful resources to producers including: Frequent Food Label Questions, Acidified Foods Processed in Hermetically Sealed Containers, and Licensing and Regulation of the Direct Marketer. The University of Wisconsin Cooperative Extension Service has published a booklet Direct Marketing of Farm Produce and Home Goods, [Publication A3602], which discusses many of these issues.

State efforts like this can be extremely valuable to direct farm marketers interested in selling processed foods.  The programs are important because they can help you avoid problems and they show that state officials are willing to help create new business opportunities for food producers.  In some states private organizations have prepared valuable materials to help educate producers on these issues.  For example, the Minnesota Food Association publishes a book Food and Agriculture Regulations in Minnesota.  It is likely that similar resources are available in your state, so  find them and use them.  Doing so can help you answer many important questions and avoid serious problems later on.

Q. Once I have obtained a license what is required?
Once you have obtained a license you should be able to retain it by reapplying and paying a new license fee each year.  The most important regulatory issues for your operation will be the state’s regular inspections of your facility and the need for you to keep records of your production practices.  State law will provide that the state can inspect your facility whenever it chooses – during regular business hours – and will establish a schedule for how frequently inspections are to be made – usually annually.  The law will also provide that the state can make an inspection whenever it receives a verified complaint filed by a customer indicating that unsanitary conditions may exist.
Q. What happens if I am found to be in non-compliance with the law?
State law will usually provide several remedies for people who are found to be in violation of the food processing and licensing laws.  The enforcement method chosen by the state will depend on the severity of the violation.  Under Iowa law, the state can suspend or revoke the license of a food establishment if it is found to be in violation of any law or rule.  The state can also go to court to obtain an injunction to prevent the further operation of a business.  If an imminent health hazard exists the state can close the facility down immediately.  In addition to losing the license to operate, under Iowa law a person who violates the rules is also guilty of a simple misdemeanor and can be prosecuted by the county attorney.   While a misdemeanor may not be a major crime, the risk of being closed down or having your license to operate revoked is a major incentive to avoid violating the law.

Most of the discussion in this chapter has focused on health and safety issues relating to food processing, but another area of concern is the truth of the claims made about the products.  Most farm marketers are honest in describing what they sell but there have been examples of criminal prosecutions relating to the mislabeling or false advertising of food products.  For a discussion of an interesting federal criminal prosecution for fraudulent sales made at farmers market across the South, see the sidebar on the following page.

Q. Will the inspections or enforcement always be carried out by the state or do local and municipal agencies regulate food processing and sales?
The answer to this question will depend on where you live.  While the laws concerning food processing and food safety will generally be found at the state or federal level, local governments may be given the authority by state law to be involved in this area.  For example, Iowa law provides the state has the “sole and exclusive authority to regulate, license and inspect food establishments…”  The law also provides that “municipal corporations shall not regulate, license, inspect, or collect license fees from food establishments except as provided for in agreements entered into between [the state] and the municipal corporations.”  This means if an Iowa town wants the local board of health to implement the food inspection laws it can contract with the state to do so.  Iowa has entered into thirty-three agreements with cities and counties, both on an individual and regional basis.  Today, in all but twenty of Iowa’s ninety-nine counties, food establishment inspections are handled by local boards of health.  This means that for producers involved in food processing and marketing, the person doing the inspection – and interpreting the state rules – may be from a local board of health.
Q. Will state food inspection officials take an aggressive attitude toward enforcing laws against people involved in on-farm sales or selling directly to consumers?
It is impossible to answer this question because the answer will depend on the attitude and approach of the state and local officials responsible for enforcing the food laws in question.  However, it is possible to suggest some general answers to the question.

First, conversations with state food inspection officials indicate they generally believe that direct farmer-to-consumer sales are not an enforcement priority for state officials.  In fact, most state officials generally favor increasing these sales.  It is this supportive attitude which can lead to favorable interpretations of how the food processing rules apply to producers.  For example, in the summer of 1998 after the FDA adopted new rules requiring the hazard labeling for unpasteurized apple juice, Iowa state officials did not implement a similar rule for intrastate sales of the juice.  This means that while producers who sell their raw apple cider across state lines need to meet the new FDA rules, Iowa producers who only market locally within the state will not.   For a discussion of the impact on the new federal rules on cider makers, see the sidebar.

Second, state officials may take the attitude that if consumers want to buy a particular food product – such as raw unpasteurized apple juice – and they are willing to go to the farm to buy it from the producer, then they should have this freedom to do so.   This attitude is easier to share if the officials believe that the producers are operating clean, sanitary operations.  It is also easier to have if the size or amount of the sales are limited.  This is one reason why many states have either formal or informal rules allowing for small-scale sales of “hazardous” products, like raw milk, as discussed in the next chapter.

Third, not all state and local officials share such a supportive attitude toward direct farmer-to-consumer sales.  Some inspectors may have had bad experiences with the sanitation found on farms or others may have heard complaints from food retailers who feel farmers are unfairly stealing their customers.  A good rule is not to expect anyone to do you a favor but be very grateful if they do.

Fourth, even if state officials do generally support farmers efforts to sell foods, this feeling will only go so far.  If the marketing by farmers grows in size so that more customers are involved – and more of the public is possibly put at risk – it will be difficult for inspectors to look the other way especially if rules are being violated.  If the sales involved are made not just on the farm but also involve direct deliveries to stores, homes, or restaurants, then you can expect increased state scrutiny.  The same is true if the food involved is not really a raw farm product but instead is processed or is a food which has historically raised health concerns, such as raw milk.  While some state inspectors may not visit farmers markets to see if anyone is selling homemade jam without a food processing license, if you try to sell that product through other retail outlets you could be in trouble.

Fifth, remember the best advice is to know and understand the state and local food processing laws that apply to the products you are  selling.  If there is an exemption for your product or your method of sale, then take advantage of it.  But if the law requires you to obtain a license to operate or to sell the food you are processing, then get it.  You might be surprised to learn that the regulations are not that hard to meet or that the costs of using a licensed processing facility are not that great.  In some cases you might want to consider the possibility of using a community kitchen or a shared use processing facility, as discussed in the next section.

Nutritional Labels

One labeling issue that can arise in the processing of foods concerns application of the federal Nutritional Labeling and Education Act (NLEA) which sets out the requirements for meeting FDA guidelines on nutritional labels.  This is the law which requires label information about the ingredients and the nutritional value of the product.  Many direct farm marketers may fall within the “small business exemption” of the act which applies if the sales of all items (food and nonfood) are less than $500,000 per year or if total sales are greater than that amount but food sales are less than $50,000.   Information about FDA labeling requirements is found in most books written for food processors and is contained in the following FDA publications “Food Labeling Regulations” and “A Food Labeling Guide.”  For more information contact the FDA, Center for Food Safety, 200 C St. SW, Washington D.C. 20204, phone 202/485-0282 or visit the FDA web site at <www.fda.gov>.

Shared-Use and Community Kitchens

One challenge facing many direct farm marketers interested in processing foods is the cost of constructing a kitchen or processing facility which will meet state and federal standards.  While this cost may not be too great if the business being planned is large enough to justify it, small-scale operations or those who want to test the possible market for a unique “farm-made” product, the cost of building a licensed facility can be a real obstacle.  But there are important options which direct marketers can consider.  If you can’t afford to build your own kitchen or don’t want to – consider using someone else’s kitchen facility which is already licensed or which can meet the state’s requirements.  In recent years there has been increasing attention to this approach, known as “shared-use” or “community kitchens”.

Here is how it works.  In the shared-use situation you locate someone who has a kitchen facility that meets commercial standards.  This may not be as hard as you might imagine because many kitchen facilities in your own town may already meet the standards.  Schools, churches, nursing homes, and commercial restaurants are all examples of businesses which have kitchen facilities which probably meet the standards for commercial food processing.  This is true because these operations need their own state or local licenses to operate.    While not all of these operations might be interested in working with you to arrange your use of their kitchen facilities, some of them might.   This may be especially true for facilities which are idle during most of the week, such as churches.  Once you have located a local kitchen facility which you can use (and have negotiated any fee for this use) you should contact the state food inspection officials and inquire about the procedure for obtaining a food processing license at the facility.   This will probably require a separate inspection of the facility and may require the state inspector to be on hand to observe your procedures for manufacturing or processing the food item in question.  Talk to your state food inspection officials listed in the Appendix to see what their approach is to shared use kitchens.

The second alternative is to determine whether there is a “community kitchen” facility located nearby.  This approach differs somewhat from the shared use kitchen in that in this situation the kitchen facility is constructed specifically for use by different businesses or marketers.  This is really a cooperative approach to providing access to food processing facilities.   Community kitchens are a relatively new idea but they are becoming more widely available.   For example there is a community kitchen located in Adams County, the most sparsely populated county in Iowa.  The kitchen was financed by several foundations and the state as a form of rural economic development.  It is designed to be an incubator for local food-based business.  Similar examples of community kitchen facilities available for use by local businesses can be found across the country such as those in Spring Green, Wisconsin and Duchess County, New York.  Many of these facilities have been financed by the public as part of the renewed attention to rural development and value-added agriculture. To learn more about whether such efforts are underway in your state you should contact cooperative extension or the state department of economic development, the addresses are listed in the Appendix.

Food Safety and Direct Farm Marketing

In today’s society the issue of food safety causes many people great concern.  The newspapers seem to be full of stories about the latest outbreak of E.Coli or some other food safety related story.  One effect of these stories and the increasing national attention to “food safety” is that many consumers are becoming more aware of food safety issues when they make choices about what foods to buy and where to buy them.

Food safety is an issue which can have a significant impact on farmers involved in direct marketing.  On the positive side, food safety concerns are one major factor helping increase the demand for food obtained through direct farm marketing.  Many consumer see the opportunity to make direct personal contact with the people who grow their food as a way to help insure its quality and reduce the possible safety risks.  Buying food directly helps shorten the links in the food processing chain.  By reducing the number of people who have handled or touched the food, as well as by reducing the time it takes to reach them, consumers are in not just getting fresher, tastier food but in most situations are getting food with less risk of contamination.  However, while direct farm marketing can increase consumer confidence in food, it is not a guarantee of safety.  If proper precautions are not taken, food can become contaminated or be prepared in an unsafe manner regardless of how it was produced or who sold it.

Just as food safety concerns are helping fuel the demand for locally grown food, thereby creating opportunities for direct farm marketing, food safety issues can also present serious challenges to farmers involved in direct marketing.  As food safety becomes a more pressing public issue, farmers may find it necessary to comply with increasingly demanding regulations concerning how foods must be processed and how they can be marketed.  Consider the recent FDA action concerning the sale of unpasteurized apple juice.  Many direct marketers rely on sales of fresh unpasteurized apple juice as one of the unique, farm-made products many people seek.  The decision whether to mandate pasteurization of all fruit juices and the related costs this adds, especially for smaller producers, was a significant issue both for public health and for the economic success of producers.  On many food safety issues, there are no easy answers which can address all the concerns of both sides.  Everyone involved in agriculture and in our food system wants to see a safe wholesome food supply.  The challenge facing producers, consumers, and the government is how to best achieve this goal.

The following are ten reasons why all direct farm marketers should consider how food safety issues apply to their operations.   These suggestions do not offer a blueprint of what a farmer should do, as much as they do provide guidelines for actions.

First, you must recognize that food safety is part of your responsibility as a farmer who sells food directly to consumers.  The basic premise of direct marketing is that you are selling wholesome, safe food and that your consumers are relying on you to do your job.  This is as much a moral obligation as it is a legal or contractual one, although those obligations may in fact exist as well.

Second, there may be a series of local, state, and even federal regulatory steps with which you must comply.  As this chapter illustrates, legal rules exist regarding food processing, obtaining necessary licenses to operate, and setting minimum temperatures for the storage and sale of perishable products such as eggs.  If you fail to comply with these regulations, it may place you at risk, not only with the public officials but also with individuals who might be harmed by your failure to follow the guidelines.  The obvious implication is you have an obligation to be informed about what rules apply to you and the products you are marketing.  While the answer “I did not know I had to” may work in some limited situations, it will probably not be an effective legal defense or excuse.  The point is, if you are selling food products to others with the intention of profiting from the sales, society expects you to educate yourself about what precautions are required.

Third, many state and local laws may include exemptions which apply to farmers involved in direct marketing or who are processing only a small quantity of a product.  Good examples are the state laws which exempt the sale of eggs by producers from certain inspection requirements and the exemption from poultry inspection requirements for producers who sell fewer than 1,000 birds directly to consumers.  Exemptions such as these can provide important benefits to direct marketers.   However, it is essential to understand that just because you may be exempt from a regulatory requirement this does not mean you are exempt (or protected) from the possible consequences which could follow if someone becomes ill from eating your product.  The exemption from a duty to follow a law is not the same thing as a protection from potential liability, especially if your conduct was negligent or unreasonable.  The point is an exemption is not the same as a protection from liability.  As a result, in some situations you might decide to voluntarily comply with a regulation or a standard even though it may not apply to you.  Instead it may just make good sense to do so.  For example, having your facility licensed and inspected shows you have taken efforts to protect the quality of your product.  This is something you can communicate to your customers.

Fourth, there are an array of safe handling techniques, best practices, model food handling codes, etc., which exist for most of the food products you grow or market. Many of these codes are voluntary but they can be valuable in helping you decide what practices to adopt.  Part of your task is to decide which practices are appropriate or affordable for the type of operation you have.  Keep in mind that cutting corners or reducing costs on issues relating to food safety may be some of the most unwise and costly decisions you can make.

Fifth, it is common to hear people – farmers included – complain about burdensome government regulations especially ones relating to seemingly insignificant issues, such as whether a food processing facility has a separate bathroom, or whether there are hand washing facilities in the field.  It is important to remember that regardless of how mundane or insignificant a regulation may seem, there is probably a good reason why it was adopted.  This doesn’t mean it can’t be improved – but it shouldn’t be ignored.  Consider for example the requirements concerning toilet facilities and hand washing.  While these may seem insignificant, they could be two of the most important protections helping prevent the spread of food borne pathogens.  Sometimes the most basic requirements, such as those dealing with hygiene or with proper food storage, may be the most important in protecting food safety.

Sixth, while you may have purchased “liability” insurance for your farm or operation it is generally tied to the use of the property, such as a guest being injured, not to the sale of products.  In fact, typical farm liability policies will not provide any form of legal protection in connection with the sale of a product grown or made on your farm.  Product liability insurance which might cover the production and sale of an item is generally unavailable for food products, or if it is available, it may be very expensive.  If you are told that your insurance covers you for damages which might result from the consumption or use of products you sell, be sure to examine the policy closely to see if this is actually the case.

Seventh, consumer education is an important part of addressing food safety issues. You have an important part to play in educating your customers about the safety of their food, and the proper methods for storing, handling and preparing it.  Educating people about the potential for contamination in food, such as the risk of salmonella in eggs may create a paradox.  On the one hand, you do not want to scare people away from buying and enjoying your food, but on the other hand, it is important that consumers appreciate the role they must play in protecting the safety of their food.  Remember, many food products are perishable.  You should do all that you can to help consumers understand their role in food safety.  But don’t expect them to do it all and don’t assume you can blame them if something goes wrong.  They are coming to you to buy safe, wholesome food.  You should do all you can, such as testing your water quality or taking other safety steps, to help meet their expectations.  When you take these steps be sure to let them know what you have done to protect them and why you have done it.

Eighth, some food safety issues can be addressed in connection with the use of labels or certification of production methods.  The use of some types of labels are regulated.  For example, describing your product as “organic” is regulated by national and state law,  discussed in more detail in Chapter Seven.  Other forms of promotional labeling or advertising – such as calling your produce “farm fresh” or “locally grown” are generally less subject to controls, although several states, notably Maine and Vermont regulate the use of terms like “locally grown.”  Some forms of labeling such as “Integrated Pest Management” may be privately developed.  As a general rule, the use of such terms or certifications is not directly linked to food safety.  Experience shows that foods produced organically can become contaminated as easily as other foods if they are handled or prepared improperly.  Even though there is no direct link between such labels and food safety, it is important to recognize that many consumers believe this link exists.  Intuitively, such claims or labels, may have the effect of indicating that the food is probably safer or that there is less risk with this product.  As noted earlier, one of the main reasons an increasing number of people are seeking out locally produced foods and making connection with farmers, is to obtain food they believe is safer.  This has several implications for farmers involved in direct marketing.  First, you can benefit from consumers’ beliefs that your food is safer, but you should  not make claims about food safety which you can not verify.  Second, there may be opportunities for you to make verifiable claims about the safety of your product.  For example, you can say it was produced under state license, if you have one or that the water used to irrigate the crops was tested as clean.  In the future there will no doubt be increasing numbers of ways to certify claims of food safety, for example the development of salmonella-free poultry lines.

Ninth, if a problem in your operation relating to food safety should arise, for example an inspection turns up a problem or a customer reports a possible illness, you must recognize the serious nature of the matter and the potential impact on your farm.  People may be of two different minds on how to respond.  Some might say be cautious, don’t cooperate and for heavens sake don’t admit any form of wrongdoing or responsibility.  On the other hand, being cooperative, maintaining a good attitude, and doing whatever you can to respond or limit the problem can be productive.  Especially when you are dealing with the potential for food borne illness and contaminated products, quick action to identify the problem or the source may limit the magnitude of the illness.  Hopefully you will never be in the situation of having to respond to such a problem, but if you are, you should seek the advice of your attorney and consider what steps are ethically required.

Tenth, many people involved in the production and marketing of food are concerned about the possible consequences of what could happen if they are sued for selling a food product which caused an illness or death.  The concern about potential liability is an issue found in all parts of American life and business.  News reports of lawsuits and multi-million dollar judgments are making everyone either “sue happy” or scared of being sued.  It is one of the reasons we buy so much insurance.  These concerns are legitimate when it comes to marketing food products, because the potential risks – such as the death of a child – when weighed against the economic activity involved – the sale of a $3.00 meal – can be so out of proportion.  But, while the concerns are real, the reality is that there has not been – at least yet – very much action in courts involving suits relating to food borne illnesses.  This is especially true as it relates to foods sold in typical direct farm marketing operations.  A review of the law books reveals very few reported cases in which courts have faced these issues.  This does not mean that no law exists, because the basic rules of tort liability and negligence will apply to any claim for damages from a food related illness.  Nor does it necessarily mean that cases are not being filed, because if they are settled out of court or if the local trial court decision is not appealed, the cases don’t become part of the established law.  There are some basic rules to keep in mind about such cases when they are filed.  First, they will not be easy to defend or to win.  The person bringing the suit will need to do several things: prove a connection – the causation – between the damages experienced and the product which was sold; show that the cause didn’t come from somewhere else; establish that it wasn’t their own fault, and show that the person being sued owed a duty to them and that the duty was violated.  While these can all be difficult issues to prove they can also be difficult to defend.


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