What You’ll Learn Here

  • The Basic Rules of Contract Law for Direct Farm Marketers
  • Making Sure You Get Paid for What You Sell
  • Rent-A-Cow Marketing Efforts
  • Participating in Public Food Assistance Programs
  • Ways USDA Personnel Can Assist Direct Farm Marketers

While there may be many benefits involved in direct farm marketing, one of the most important is that it provides a market for the food and other products you produce.  The higher prices which can be received makes this form of marketing a very important source of income for many farm families.  This chapter looks at a number of important financial issues relating to marketing farm products. The chapter sets out the basic legal rules you should know about contracts, which should be helpful in many aspects of your farm business.  It includes a discussion of different laws and procedures available to help insure you get paid for what you sell.  Participation in public food assistance programs – such as SNAP and the WIC Farmers Market Nutrition Program, can be very important for many direct farm marketers.  The operation of these programs and some of the unique issues for direct farm marketers are also discussed.

The Basic Rules of Contract Law for Direct Farm Marketers

The starting point for financial agreements on the farm or in any business, is a contract – an agreement between two parties to engage in some conduct or exchange of some item for an agreed price.  Contracts – or legal agreements to take some action – are all around us.  Most of the everyday legal relations common to agriculture – buying seed or feed, selling crops, or borrowing money all involve contracts.  For that reason, it is important to have a good basic understanding of the rules concerning how contracts are made and interpreted.  The Agricultural Law Center at Drake, with the sponsorship of Top Producer and Farm Journal, published my book, A Farmer’s Legal Guide to Production Contracts.  The book (which is available from the Center for $16.95) is a detailed discussion of contracts for the production and marketing of crops and livestock.  One part of the book sets out “Hamilton’s Twelve Basic Rules of Contracting.”

While direct farm marketing does not commonly involve quite as extensive use of contractual arrangements as addressed in that book, it is still important for direct farm marketers to understand contracts.  Remember the contract concerning participation in the New York Greenmarket, discussed in Chapter Four?  It is a good example of how a direct farm marketer can be faced with a detailed contractual agreement.  Other examples of contracts, such as insurance policies and farmland protection easements, are discussed in later chapters.  The following is a version of my basic rules on contracts, written for direct farm marketing.

Hamilton’s Ten Rules of Contracting for Direct Farm Marketing
1. Remember the first rule of contracts is that the parties who wrote the contracts took care of themselves.  This means there is no reason to assume a contract you are asked to sign is fair or balanced, or that it protects your interests.  In fact it is probably safer to assume the opposite.  This does not mean the party on the other side is evil, instead it just reflects the fact that most contracts are arms-length business transactions in which both sides try to maximize their advantage.

2. Read and understand (at least try to) any contract before signing.  Contract terms play a fundamental role in determining the rights and responsibilities of the parties.  Once you have signed a contract it will in most cases create binding legal obligations.  Therefore it is in your best interest to understand what you are agreeing to do.  If you do not understand the terms of a contract you should ask questions about it and consider obtaining legal advice to determine what it means.  This is especially true if the amount of money involved or the actions promised are significant, or create a long term relationship.

3. Complying with the terms of a contract will be required before you are considered to have satisfied the agreement.  The reason for signing most contracts is to obtain some economic advantage, such as selling a product or buying a piece of land.  However, before you are entitled to the benefits of the contract you will have to perform whatever obligations are required.  If a contract to provide a local store with vegetables requires you to meet the quality standards of the buyer, you should not expect to be paid if what you deliver does not meet those standards.

4. Never assume your failure to meet the terms of an agreement will be excused.  Clearly some provisions of a contract may appear to be more important than others, but all of the provisions have legal effect.  While the party on the other side of an agreement may excuse your failure to perform, such as not delivering the quantity you promised, this may not always be the case.  In some situations, like a crop failure due to weather, the law may provide you with an excuse, but in other situations where the failure to perform was due to your actions, the other party might choose to enforce the contract.  If you believe you will not be able to perform a contract as agreed it is a good idea to notify the other side and alert them to your situation.  Then you can attempt to negotiate a resolution.

5. If the contract calls for you to be paid by another party, know their financial situation.  If you are contracting to sell something to another person, it is important to take precautions to limit the risk that you will not be paid.  This can be done by learning more about their financial situation: by requesting financial guarantees, and by selling crops or livestock only to businesses which are covered by the public laws designed to insure farmers get paid.

6. Remember that proposed contracts are always subject to negotiation.  Even though many contracts are on printed forms, it does not mean they cannot be changed, if the parties agree to it.  A good rule to keep in mind is that you will never have more bargaining power in a contract relation than just before you sign.  The reverse is also true – once you have signed a contract it will be difficult, though not impossible, to alter it.

7. Make sure any changes to a contract are made in writing.  If you are involved in discussions to amend the terms of a written agreement, be sure to get the new terms in writing and have the other party sign or initial the changes.  One issue to consider is whether the party you are dealing with has the legal authority to make the changes.

8. Do not rely on oral communications to amend the terms of an agreement.  Just because you believe the written contract was amended by your discussions doesn’t make it true.  In fact most written contracts include provisions which state that only the written terms are binding.  That is why it is important to get any changes in writing.  It is also important to keep copies of any letters or other documents which might help show what was agreed.  In some situations, courts will allow parties to use oral testimony to alter a written agreement, but the burden of proof is on the party trying to benefit from the change.

9. Keep good records of your performance under the contract. The recommendation of record keeping includes any records or documentation concerning the amount of produce you delivered and any payments made.  It may also be helpful if you keep notes on any communications you have with the other side.  If a dispute should arise about your performance your records may help provide the answers needed to sort out the situation.

10. Stay in touch with the other side involved in the contract. Communication between the parties can be important in resolving uncertainties and in preventing misunderstandings.  Do not hesitate to ask questions if you don’t understand what is happening, such as why your payment is late.  It may be that the other side is unaware of the situation.  Communication can be especially important in times of stress on the contract, such as when price fluctuations or weather make performance difficult.

These basic rules should help you understand any contractual relation you are asked to enter. By keeping these rules in mind you should be able to make more informed decisions about contracts. These rules can be helpful in identifying questions you should ask in order to make sure you understand what you are agreeing to do. A checklist of questions to ask about any contract you are asked to sign, is contained in the accompanying box.

Ten Questions to Ask (and Answer) Before You Sign A Contract
1. Do you understand what you are agreeing to do, for example are you selling a specific quantity or quality of product?

2. What is the price you will be paid and how is it determined?

3. When will you be paid, or when is payment due if you are buying something?

4. Who will decide whether you have satisfied the terms of the contract?

5. What will happen if a dispute arises, will it go to court or does the contract include some form of alternative dispute resolution such as mediation or arbitration?

6. If there is a dispute where will it be heard and which state’s law will be used?

7. How long will the agreement run and how can it be terminated or extended?

8. Can the agreement be modified once it is signed?

9. Are you considered a merchant under the agreement and held to a higher commercial standard or will you be treated as a farmer?

10. Can the contract be assigned to another person or is it personal to you?

How do you make sure you get paid for what you sell?

The answer to this important question depends on many factors, including who is the buyer, what is being sold, and how.  For most direct farm marketing relations there is little worry over being paid because the sales are cash transactions.  This is especially true for farmers markets and roadside stands, where the only non-cash transactions may be in taking local checks or accepting credit-cards.  In these cases you can decide what policy to adopt when accepting forms of payment other than cash.

In some forms of direct farm marketing transactions larger quantities of products may be sold or delivered to buyers with the understanding that payment will be made at a later date, for example on the next delivery or upon a written invoice.  Examples of these transactions would be the delivery of shipments of vegetables to a restaurant or the sale of a truck load of sweet corn to a local grocery store for resale.  In these situations there are several options you can follow to be paid.  One of the best is to ask for and expect to be paid cash on delivery.  This may be possible, especially when the buyer knows the time of your delivery and the amount involved, or when stopping to get the cash or writing a check does not interrupt the buyer’s business.  But remember, your buyers are also trying to run a business – such as getting the dishes ready for tonight’s menu.  In those situations you should determine a mutually agreed on method for payment.

For some buyers, immediate cash payment may not be possible or convenient.  Instead it may be common for them to pay at a later date from a written invoice (for example when the bookkeeper writes the weekly checks).  Some businesses may even have a standard policy as to when payment is made, e.g. net 30 days.  In these cases if you want to make the sale you will have to follow whatever practices the buyers expect, such as leaving or mailing written invoices.  If the method or timing of payment, in particular any lengthy delays, presents a difficulty, then you should either speak with the buyer and request different payment terms or you must decide whether the sales are worth the trouble or risks.

In cases where payment is not made immediately in cash (or by check if acceptable), there are costs and potential risks to sellers.  The major risk is the worry that something might happen so you are never paid for the goods.  In most direct marketing relations this risk is not too big – because the transactions are frequent and relatively small.  Even if there is a risk of non-payment, the size of the transaction – usually a small portion of the total production and a modest sum – reduces the risk.  This is in contrast to the situation in the sale of many traditional farm commodities, where the whole corn crop for the year may be sold to one buyer.

When sales are made for other than cash, you must recognize that there are costs and risks in the process of being paid.  The costs include such things as the expense of keeping the books, mailing the invoices, and reminding buyers who have not paid on time.  Perhaps the most significant cost is the value of the money during the delay in payment.  Direct farm marketers are usually incurring costs, such as paying workers, during the marketing season.  To the extent you are carrying unpaid sales on the books, you may have to borrow money to finance your current operation.  In these situations, one issue to consider is whether to add a finance charge when a bill remains unpaid for a certain period, e.g. longer than 30 days. The possibility of having to pay an additional service charge may encourage buyers to pay sooner.  Another option may be to increase the price of your goods as a way to generate more revenue to cover the marketing costs.

The primary risk associated with non-cash sales is the risk of not being paid at all.  Direct farm marketers must recognize that selling products to buyers on terms other than cash-on-delivery is a form of extending credit to buyers.  While giving buyers a certain amount of time to pay for purchases may be a required business practice, it is unlikely that many direct farm marketers went into business so they could become lenders or finance other peoples’ businesses.  While the risk of not being paid may be slight, you should consider what would happen if you are unable to collect a portion of your sales.

The failure of a buyer to pay could result from a number of events.  In some cases the buyer may have lost the invoice or bill, or may have gone out of business, or may no longer be able or willing to pay, such as when there is a dispute over the quality of what you delivered.  Fortunately, one of the benefits of direct marketing is that the personal relationships typically involved, reduce the likelihood such events will occur.  However there are several rules you should keep in mind concerning being paid:

  • when you deliver goods to another party, the title – and the legal ownership – passes to that person.  This means the risk of loss has passed to you;
  • in most cases you are considered an “unsecured creditor” of the buyer, meaning you have no legal right either to the return of the goods (which have probably been sold or eaten) or to any specific property of a similar value;
  • as an unsecured creditor, you have only a contract claim for payment, based on a breach of the buyer’s promise to pay for the goods;
  • to obtain any money from your claim you will either have to collect it from the buyer or bring a legal action, such as a suit in small claims court, and get a judgment which you must then get a sheriff to enforce, in order to be paid.

As a rule of thumb, when the amounts involved become larger, for example greater than $100, the amounts owed become a significant portion of your total sales or production, or the delays in payment become too long, for example a month rather than a week, then you should consider taking precautions to limit the risk of non-payment.

Remember, your business can not function for very long if you do not have cash flow or if you do not collect payment for what you sell.  There are several steps to limit the risk of non-payment and reduce the size of unpaid accounts:

  • offer discounts for cash sales,
  • refuse to make sales which are not for cash,
  • immediately and regularly mail or leave invoices for all sales and deliveries.
In some limited situations state or federal law may provide legal protections to help insure you are paid.  For example the federal Perishable Agricultural Commodities Act (PACA) protects growers who sell produce at wholesale.  Some states, such as Washington and Wisconsin, have state laws based on PACA, designed to protect sellers of vegetables and produce.  However these laws do not typically apply to the direct farm marketing of products to consumers.  Instead the laws apply to more traditional forms of wholesale marketing.  If you are involved in such sales, then you should be aware of the protections and procedures these laws provide to growers. Along the same line, marketers who sell meat and poultry may be protected by similar regulations of the USDA Grain Inspection, Packers and Stockyards Administration (GIPSA).

Rent-A-Cow Marketing Efforts

One characteristic of many people involved in direct farm marketing is their creativity in finding new ways to market what they raise.  One of the more unique forms of direct farm marketing developed in recent years are programs in which customers “purchase” or rent a unit of the farm’s production, such as an apple tree or a milk cow, for a year.  In these “rent-a-cow” marketing efforts the customer is generally given a certificate of “ownership” and provided with periodic reports or newsletters concerning how the crop or animal is doing.  Then at harvest or at an arranged time, the customer receives a quantity of the production, such as a bushel of pecans, a quantity of cheese, or so many pounds of meat.  The programs can vary a great deal, but the idea is to provide the customer with a sense of ownership of the farm and to help them experience how farms operate and how food is produced.  One company, Rent Mother Nature, offers customers a selection of twenty-one types of trees, animals and crops from which to choose.

PACA Protects Produce Growers
One of the most significant risks for any grower is the possibility of not being paid. The risk is especially threatening when the quantities being sold are large or the produce is being shipped. The Perishable Agricultural Commodities Act – PACA – creates a process for protecting producers who sell produce in interstate commerce. Under PACA certain buyers are required to obtain a license from the USDA Agricultural Marketing Service (AMS). The requirement applies to persons receiving produce for sale, brokers negotiating the sale of produce for others if they handles more than $230,000 in sales year, and retailers if they purchase more than $230,000 in fresh or frozen fruit and vegetables.

PACA license holders are required to meet certain financial standards to protect the interests of producers and are subject to the authority of the AMS to resolve disputes over payment. Person who have a complaint concerning a transaction can file a claim for damages with the AMA, which will then try to settle the claim through informal mediation. If this fails the law provides for an administrative procedure to resolve payment and licensing disputes. More information is available on the AMS website.

Some states have enacted state versions of PACA for the licensing and regulation of people engaged in dealing produce. Pennsylvania has a “Dealers in Farm Produce” law, designed to protect growers, by requiring licenses of dealers. The law exempts from the licensing requirement “producers marketing farm produce of their own raising, but the law requires a license to do business for “all nonresident producers of unprocessed fruits and vegetables doing business in this Commonwealth,” although the Secretary of Agriculture can waive the licensing requirement for nonresidents from states which do not require a similar license for Pennsylvanians.

While some of the efforts can be seen simply as marketing gimmicks, in some situations “rent-a-cow” arrangements may have a special purpose in dealing with legal rules concerning the sale or processing of certain products.  The following discussion considers some of the issues and questions which can arise if you develop a “rent-a-cow” marketing venture.

1. Do you intend to operate as advertised, such as with distinct ownership of individual units, or is it a marketing device for what you will harvest?  How you answer this question will clearly effect how you manage the business and the type of record-keeping involved.  It could also have an impact on the nature of the relation you have with the customer.  The most important factor influencing this answer will be whether there is some legal advantage which comes from having the customer actually “own” the production unit.  The most common example of this could be in situations where individual ownership allows the owner to take advantage of exceptions concerning custom processing of meat at local facilities.

2. Is the “ownership” interest just a share or quantity of production from the farm or is it in fact tied to a specific animal, tree or crop?  In most situations the customer is really buying the right to a quantity of production, rather than speculating on how well their crop or animal will produce.   The customer is also buying the experience of being involved with the farm as communicated through the periodic reports.  If the customers actually purchase or rent identifiable units, such as one cow or ten chickens, the record keeping system will have to be able to let them know if their cow dies.

3. Is there a state or local law, such as on food processing or meat inspection, which is the motivation behind using this marketing approach?  As noted above, this could be a critical issue concerning this type of marketing.  In addition to the custom meat processing example, another situation in which some producers are using customer ownership relates to the sale of raw or unpasteurized milk.  Some farms may use a legal “boarding contract” under which customers pay an ownership fee for a dairy cow.  As a result the customers are able to obtain unpasteurized milk from the farm, without having a problem with the state health codes which otherwise prohibit such commercial sales.

4. Have the authorities ruled or accepted your organization or marketing method as complying with the law?  If there is a legal motivation behind using a customer ownership type of marketing, it is important to know whether the authorities who enforce the law in question agree that your method is legitimate. Even if the arrangement provides an exception from the rules, the farm still has the responsibility for protecting the health of the cows and the quality of the product. If the state determines something isn’t a “sale” it could still lead to liability if there is a health problem.  You should recognize that health officials in other states may not take the same view as the officials in another state.

5. Is the “agreement” or “lease” arrangement with the customer considered to be just part of the marketing literature or does it create a distinct legal right to the property involved?  The issue of ownership of the product involved could be important for reasons other than rules on sales or processing.  Third parties who may have an interest in the farm operation, such as a bank which may consider the property as collateral, might be concerned to learn the title or ownership of some of the assets have been passed to other people.  Interesting tax and accounting issues could also arise in such relations.

The best advice if you are thinking about undertaking a “rent-a-cow” marketing venture is to be clear about what it is you intend to do and why, and to talk with people who have experience with such efforts and with those who may be involved in regulating your actions.

Participating in Public Food Assistance Programs

We live in a nation of abundance, but unfortunately hunger is still a factor in the lives of many Americans. According to the USDA 1 out of 8 households in the U.S. experiences hunger or the risk of hunger, and 33 million Americans, including 13 million children, must seek emergency food assistance. Many of these people rely on food banks and soup kitchens. The federal government is directly involved in helping people with limited incomes or who are out of work to obtain enough to eat.  Programs such as SNAP, congregate meals for the elderly, free school lunches, and the supplemental feeding program for Women, Infants and Children (WIC) are all examples of this effort.  Federal and state programs designed to fight hunger can be an important source of sales for many direct farm marketers.  Each year, tens of billions of dollars in public assistance is spent addressing the problems of hunger in our nation.  While it is hard to believe, close to one in every thirteen Americans is eligible to receive public hunger assistance. In September 2013 the USDA reported that over 47.7 million people were receiving SNAP assistance.

The size of these programs and the fact that direct farm marketers are often the closest sources of food for low income citizens, makes understanding how to participate in public feeding programs important.  The USDA and many states have combined to fund a special supplemental feeding program for low income mothers with children.  This program, known as the Women Infants and Children (WIC) Farmers Market Nutrition Program (FMNP), provides recipients with additional benefits which can only be used at farmers markets.  To participate a state must provide additional matching funds to supplement the federal money.  The goal of the program, as stated in the Washington state administrative code, is:

(a) Provide locally grown fresh fruits and vegetables to nutritionally at-risk low-income women, infants over six months of age, and children, who participate in the special supplemental nutrition program for women, infants, and children (WIC); and

(b) Expand the awareness and use of and sales at farmers markets.

The program was first developed in Massachusetts in 1986.  The idea was such a good one that Congress and USDA made it a national program.  It was first funded at the federal level in 1992, and is now considered a great success for everyone involved.   However, to date there has not been sufficient federal funding to make the program available in all states.  But the good news is that USDA funding has grown in recent years allowing several new states to join.  In 2013 the federal government supplied grants to state agencies and others of nearly $19 million through this program. Currently more than 45 states, territories, and tribes participate in the program.

Many direct farm marketers, especially vendors at farmers markets, participate in the USDA’s SNAP  program and in the FMNP.  If you visit a farmers market you will see signs on some booths noting they accept SNAP or participate in the WIC program.  To be able to participate in the FMNP, producers must attend a state certification and training program which explains which foods are eligible and how to accept and redeem the coupons.   To learn more about the program and whether it is offered in your state, you should contact your state’s nutrition program, the state office of the USDA’s Food and Nutrition Services (FNS), or the National Association of Farmers Market Nutrition Programs, at PO Box 9080, Alexandria, VA 22304, phone 703-837-0451.  The USDA officials will be able to explain the process for becoming certified to accept SNAP.

Below are a few questions from our FAQs page relating to Food Assistance Programs.

Q. The SNAP program in my state is moving to an electronic benefits transfer (EBT) system and I am afraid I will no longer be able to participate?

Sadly it is true that one important issue which might limit your ability to accept SNAP, is how your state implements the shift to Electronic Benefits Transfer or EBT.  The federal government has a goal of moving all forms of public assistance, from SNAP  to social security, away from the use of checks and other paper benefits to some form of electronic transfer, similar to a bank card.  While there are many benefits from such a shift, including efforts to reduce fraud and prevent the resale of SNAP, one unfortunate side-effect is how it might impact direct farm marketing.  The concern is the shift to EBT can pose a real problem for direct farm marketers, such as at local farmers markets, if the state does not provide a form of technology which allows small scale or periodic markets to participate.  If the equipment needed to access the EBT system is too expensive or too difficult to use then small roadside stands and farmers markets may lose out on making SNAP sales.  In states which have made the shift without providing appropriate technology, the use of SNAP at farmers markets has dried up.  However, this does not have to happen because the state officials have flexibility in shaping the EBT programs.
Q. Can I accept SNAP in payment for a share in my CSA?
Community supported agriculture or CSA is becoming an increasingly popular option for some people to buy locally raised food. Because of the quality and quantity of food available through a CSA many producers believe they could be an excellent source of food for SNAP recipients. Unfortunately, in 1993 the USDA ruled that a CSA organized on a share basis, could not participate in the SNAP program.  The ruling, made in Michigan was based on the theory that SNAP can only be used for the purchase of eligible foods.  The USDA official who examined the CSA arrangement in question concluded that because there was some risk that the crop might fail and thus the share may be reduced, the arrangement was speculative rather than a purchase.  The USDA ruling also noted it could not approve the pre-payment of the share price using SNAP, because SNAP rules do not allow pre-payment.
This local ruling was subsequently cited in a national policy memo from the “Benefit Redemption Division” of the USDA’s Food and Nutrition Service, [Index No. 94-07, re 7 CFR §278.1(k), August 25, 1994] to all state food state program directors, instructing them on how to treat CSAs which might have been approved to accept SNAP. While this interpretation has not been reversed, it is possible to redesign the CSA member relation so as to remove the USDA concerns.
The CSA Farmer’s Nationwide Guide to Accepting SNAP/EBT Payments” from Zenger Farm provides information on the benefits of participating in SNAP, includes descriptions of subscription models that are acceptable for SNAP participation, and describes relationships with SNAP members.
For example if the share price is paid in monthly installments and if the price is for a guaranteed quantity of food, with no risk to the member, then the CSA could be eligible.  If you have a CSA and are interested in participating in the SNAP program you should contact the state office of the USDA Food and Nutrition Service and get an interpretation on whether your method of payment and delivery would qualify.  If it does you may have found a way to expand the pool of possible CSA members, and help get nutritious food to families in need.
Q. Can I accept SNAP at my farmstand or roadside market?
Yes, SNAP can be used at any qualified vendor, including roadside markets as well as farmers markets.  State officials have the authority to identify different types of qualified vendors.  If you would like to become eligible to participate as a retailer in SNAP, you should contact the state office which handles SNAP.  More information about SNAP can be obtained by contacting the USDA either at the FNS state office or in Washington, DC.  The national office can be contacted at:  Public Information, Food and Nutrition Service, 3101 Park Center Drive, Room 819, Alexandria, Virginia 33202-1594, phone 703-305-2062, or check out the web site.

Donating Food to the Needy

Participating in SNAP and the FMNP can provide direct farm marketers with the opportunity to get fresh nutritious food to those who can most use it. But many times you may also face a situation where you have extra produce you would like to donate to help feed hungry people.  If you want to help feed the hungry, there are several ways you can do so. First, almost every city and town in the nation has some form of food bank or food pantry which helps distribute food to the needy. Most local food banks are very interested in obtaining fresh fruits and vegetables to supplement the other commodities they distribute. If you are interested in making a donation of food or money call your local food bank  to see how you can help. To learn more about the food banks in your area you can also contact Feeding America, a nationwide organization representing most of the food banks in America.  Contact Feeding America, 35 East Wacker Driver, Suite 2000, Chicago, IL 60601, phone 800-771-2303.

A second way you can help feed the hungry is by planting extra crops for that purpose.  In 1995, the Garden Writers Association of America developed a program called “Plant a Row for the Hungry” which encourages home gardeners to plant extra for the purpose of local donation.  The program is designed to help local food banks obtain more locally grown fresh produce and fruit. Many local food banks will even come to your farm and pick up your donation.  Since its inception the program has provided over 18 million pounds of produce to food banks across the country. To learn more about the program, call Garden Writer’s at 877-492-2727 or visit the website.

The USDA has been very involved in promoting programs to increase the amount of food which is available to the hungry and to try to reduce the amount of food which is wasted.  The Department has promoted the issue of “food recovery” – which means using already prepared food and meals, such as from restaurants and special events, in local feeding efforts rather than have it thrown away. It now has a Food Waste Challenge to help minimize the waste of food across the country. More information can be found at the USDA’s Office of the Chief Economist.

The agency has been involved in promoting gleaning, which involves volunteers harvesting the crops  left behind after the commercial harvest is complete.  Gleaning can be a major source of large quantities of fresh fruit and produce for local food banks, which are not bothered by the fact the produce may not meet the “cosmetic” standards for commercial sale.  The USDA publishes a toolkit “Lets Glean: United We Serve,” which provides information about different state and local programs available to help save food.

One question you might have about making donations of food to local food banks or about letting volunteers glean your fields concerns the possible liability if someone gets hurt, or if the food is not handled properly.  All fifty states and Congress have passed some version of what is known as the “Good Samaritan” law designed to protect people who make charitable donations of food.  The federal law [42 U.S.C. §1791-1793] which provides a model for adoption by the states, was named the Bill Emerson Good Samaritan Law after a Congressional leader active in the fight against hunger.  It provides in part:

(c) Liability for Damages From Donated Food and Grocery Products

(1) Liability of person or gleaner – A person or gleaner shall not be subject to civil or criminal liability arising from the nature, age, packaging, or condition of apparently wholesome food or an apparently fit grocery product that the person or gleaner donates in good faith to a nonprofit organization for ultimate distribution to needy individuals.

(2) Liability of nonprofit organization – A nonprofit organization shall not be subject to civil or criminal liability arising from the nature, age, packaging, or condition of apparently wholesome food or an apparently fit grocery product that the nonprofit organization receives as a donation in good faith from a person or gleaner for ultimate distribution to needy individuals.

(3) Exception – Paragraphs (1) and (2) shall not apply to an injury or death of an ultimate user or recipient of the food or grocery product that results from the act or omission of the person, gleaner, or nonprofit organization, as applicable, constituting gross negligence or intentional misconduct.

(d) Collection or Gleaning of Donations

A person who allows the collection or gleaning of donations on property owned or occupied by the person by gleaners, or paid or unpaid representatives of a nonprofit organization, for ultimate distribution to needy individuals shall not be subject to civil or criminal liability that arises due to the injury or death of the gleaner or representative, except that this paragraph shall not apply to an injury or death that results from an act or omission of the person constituting gross negligence or intentional misconduct.

The value of these laws are that they remove any worry farmers or others might have about making donations of food, thereby helping increase the amount of food which can go toward helping feed the hungry.

Nine Ways USDA Personnel Can Assist Farmers Involved in Direct Farm Marketing

People who work for the USDA, whether with Extension, the Farm Service Agency (FSA), the Natural Resources Conservation Service (NRCS), the Risk Management Agency, or other agencies can play important roles in advising farmers and others who are interested in exploring the opportunities for direct farm marketing.  While not all USDA personnel have direct authority or involvement with programs relating to farm marketing, everyone in the USDA should be familiar with what is involved in this form of production.  The following are ten suggestions for how USDA employees can help producers or consumers who contact them with questions about direct farm marketing.

1. Consider Using Federal Property for Farmers Market – The USDA has made a priority of increasing the number of farmers markets in the U.S., because doing so creates opportunities for farmers and consumers alike.  In some areas, for example smaller towns in rural America, one challenge may be finding someone to sponsor a farmers market or identifying a place to hold it.  As noted in Chapter Four, the USDA has published a brochure, “Using Federal Property for Farmers Markets” which outlines how USDA officials can help.  The bottom line is that if you are contacted by local farmers about the need for a farmers market one alternative is to consider using the FSA parking lot.  The brochure is available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5079490.

2. Be Aware that the Agricultural Marketing Service has Programs to Support Direct Farm Marketing – Of all the USDA agencies with potential in direct farm marketing, AMS has the most contact and involvement.  One program in particular can be of value to states trying to help local producers interested in marketing or processing.  The Federal-State Marketing Incentives Program (FSMIP) offers grants to state officials to be used in creating new marketing opportunities for farmers.  FSMIP funds, which are currently about $1 million a year, have been used to create new farmers markets, to support producer cooperatives, and similar efforts.  To learn more about FSMIP check out the AMS web site, http://www.ams.usda.gov/AMSv1.0/FSMIP, or contact Janice Zygmont, FSMIP Staff Officer, USDA-AMS, 1400 Independence Ave SW, Room 4549-S, Washington, DC 20250, Tel: 202-720-5024.

3. Understand How SNAP and Other Hunger Assistance Efforts Affect Direct Farm Marketers – Public feeding programs such as SNAP can be an important market for direct farm marketers.  In particular, the WIC farmers market nutrition program helps many consumers buy from local farmers.  One problem which can arise is uncertainty on the part of farmers and even USDA personnel about how SNAP rules and related programs apply to direct marketers.  You can assist your farmer clients if you understand how these USDA programs operate. You can also be of assistance by making sure programs are not interpreted so as to create unnecessary obstacles to farmers who want to participate, such as CSA growers.  If you have never talked to the USDA and state officials who administer public hunger assistance programs consider getting to know them, so you can understand the programs.

4. Know Your State Authorities on Direct Farm Marketing – Even if the USDA personnel in your agency aren’t involved in direct farm marketing, it is a good bet someone in your state is working on the subject.  These people will either be in the state department of agriculture, with cooperative extension, or in producer and grower groups.  The appendix lists names and addresses of people in each state who are working with direct farm marketing.  Don’t hesitate to contact them or provide their names to producers who inquire.

5. Be Aware of Any Special State or Local Programs to Support Direct Farm Marketing – One challenge facing many producers interested in direct farm marketing, is finding financial resources or loans to help diversify their operations.  Many states have programs to help expand the opportunities for value-added agriculture, and these programs often have provisions of potential use by direct farm marketers.  The best people to contact concerning such programs are in the state department of agriculture.  Some states even offer state lending programs to help farmers diversify into new crops.  For example, in Iowa, the State Treasurer’s office runs what is known as the LIFT program, Linked Investments For Tomorrow, to offer low interest loans through local banks for farmers diversifying into new crops.

6. Support Local Direct Farm Marketers When Purchasing Food – Many USDA agencies are routinely involved in sponsoring workshops, conferences, and other events where meals are served.  One way to help increase the marketing opportunities for direct farm marketers is to use locally raised and processed foods at these events.  If you are sponsoring an event ask the hotel or restaurant providing the meals to see if they can use local sources.  If they do not know where to find such foods help put them in contact with producers or groups who can provide such foods.  If they tell you they don’t want to use local foods you might want to consider whether to give your business to people who are not willing to help the local farm economy.  Remember, if it is USDA money being spent, you should be able to help determine how it is used to promote the agency’s goals.

7. Understand and Support the SARE Program – Of all of the USDA activities, the Sustainable Agriculture Research and Education Program, is the one most directly involved in promoting local production and direct marketing of food.  SARE is administered by the Cooperative Research Education and Extension Service (CREES) and is organized into four regional programs, the addresses for which are listed in Chapter One.  The SARE program is active in every state providing information and supporting on-farm research and education about sustainable farming.  If you aren’t familiar with what the SARE program is doing, or with the various research programs it offers, make a point of contacting the state SARE coordinators listed in the Appendix to find out more.

8. Use the Technical Information Support Available from ATTRA – For more than 10 years the USDA has funded a program known as Appropriate Technology Transfer for Rural Areas, which responds to farmer requests for information about various issues.  One of ATTRA’s primary functions is to respond to inquires from farmers, consumers, and USDA personnel about alternative crops, production and marketing.  The information specialists at ATTRA respond to thousands of requests for information each year.  They can be an excellent source of information if you have a question about a crop or production issue.  To contact ATTRA call 800-346-9140 (English), 800-411-3222 (Español), or submit your question online at https://attra.ncat.org/ask.php.

9. Recognize that Direct Farm Marketing Can Mean New Clients for USDA to Serve – Farming and agriculture are changing and the USDA is under pressure both to serve this changing sector and to adjust its focus to serve society’s needs.  In the past, direct farm marketing may not have been seen as an important priority for USDA in part because the farms involved are often small.  But today that has changed as the agency has recognized the importance of serving America’s small farms and as more Americans show interest in buying locally produced foods.  Helping expand the opportunities for farmers and consumers to experience direct farm marketing, by providing information and assistance, means USDA personnel can broaden the base of people who rely on USDA.  This work will help the USDA maintain its relevancy in a changing society.


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