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Consumer safety just part of marketing laws

 

By Doug Graves

Ohio Correspondent

COLUMBUS, Ohio — Selling farm products directly to consumers benefits both consumers and farmers. Direct farm sales let consumers purchase fresh local products ordinarily not available to them, while allowing growers and producers to capture more of the food dollar than they would by selling to distributors.

All this sounds simplistic, but there are strict guidelines for these sometimes-roadside vendors. “Federal, state and local government entities regulate food sales from the perspective and focus of food safety and public health,” said Peggy Hall, assistant professor of agribusiness law at The Ohio State University.

“So it pays to know the rules before developing your farm and food enterprises that rely on direct sales. In the end, it all depends on the type of food offered for sale. Sales of foods such as fresh produce or cottage foods do not require a license.”

Cottage foods, she explained, include non-potentially hazardous bakery products, jams, jellies, certain candies, certain flavored honeys, fruit chutneys, fruit butters, granola, granola bars, certain maple sugar, popcorn, unfilled baked doughnuts, waffle cones, pizzelles, seasoned dry cereal and nut snack mixes, roasted coffee, dry baking or cookie mixes, dry herbs or herb blends, certain dry soup mixes, dry seasoning blends and dry tea blends. Many of these can be found at farmers’ markets and roadside stands.

“The purpose of Ohio’s cottage food requirements is to allow individuals to sell certain types of food products without needing a license, assisting individuals and the local economy,” said Terri Gerhardt, Ohio Department of Agriculture chief of its Division of Food Safety.

According to Gerhardt, notable changes in Ohio’s cottage food regulations went into effect in 2016, adding to the acceptable food list.

“The 2016 revisions were mostly clarifications, along with the addition of flavored honey, fruit chutneys, maple sugar and soup mixes containing commercial dried vegetables, beans, grains and seasonings,” she noted. “The ingredients list is really important, especially with allergies today.”

According to Hall, sales of certain types of baked goods require a home bakery license. Sales of multiple types of foods or higher-risk foods require a farm market registration or a retail food establishment (RFE) license. All three, she said, involve inspections of the production or sales area.

“It is important for a producer to carefully assess the food sales situation and comply with the appropriate licensing or registration requirements,” Hall said. “Many producers sell a food product that presents low food safety risk, such as eggs, maple syrup or fresh vegetables. Selling only one ‘low risk’ type of food typically defines the producer as a ‘roadside stand’ or ‘cottage food’ facility under Ohio law.”

She explained that Ohio-produced cottage food products may be sold only in Ohio. Cottage food products may be sold directly to the consumer from the home where the products are produced. They may also be sold through grocery stores, registered farm markets and sold or used in preparing food in a restaurant.

Ohio cottage food regulations were first established in 2009. Revisions were made in 2016 and were applied to items such as flavored honey, fruit chutneys, maple sugar and soup mixes containing commercial dried vegetables, beans, grains and seasonings.

“Many don’t get all the requirements on the label right, but we help educate them,” Gerhardt said.

Compared to others

Food laws are similar in other Midwest states. Indiana’s laws are restrictive in that sales are only allowed at farmers’ markets and roadside stands. Aside from this, however, the laws in the Hoosier State are quite lenient. They allow for any food below a certain pH value or water activity level, which basically allows nearly any kind of non-potentially hazardous food.

There is no registration, fees or process to get set up, and there is no limitation to how much a vendor can sell.

Michigan’s cottage food laws are somewhat limited, but many people use them and they are still one of the most active cottage food states. The number of allowed foods in Michigan are above average in comparison with other states, but laws are very specific about what is allowed.

Fortunately, there is no need to obtain a license, which makes it relatively easy to start a cottage food business. However, the laws in Michigan are still restricted in that sales are limited to $20,000 per year, and products may only be sold directly to the consumer.

Illinois has two different laws in place that allow farmers to sell homemade food. The older law is for standard cottage food operations, and the newer is for “home kitchen operations,” which one should use if selling baked goods outside of farmers’ markets.

The latter only allows one to sell cottage foods at a farmers’ market, up to $36,000 in products per year. Products with a locally grown main ingredient can also be sold on the farm that grew the main ingredient, or delivered directly to the consumer.

In 2012, Tennessee updated its home-based food laws to make it much easier for farmers to sell their homemade food. Although a license or inspection from the state’s agriculture department is no longer required, producers can only sell in-person at certain venues.

And, while no training is required under that law, the Tennessee Department of Agriculture encourages sellers to take a food safety course.

Iowa has comparatively lax laws for farmers. Producers who sell only non-potentially hazardous food products do not need any license or permit from the state’s health department – but one can only sell at home or at farmers’ markets. There are no sales limitations, and the labeling requirements are quite basic.

Iowans who want to sell perishable baked goods from home or want to sell their baked goods at other venues must become a Home Food Establishment.

Kentucky is different than most other states and is more restrictive, in that it only allows farmers to sell, including individuals who grow the primary ingredient of their product. Sales from Kentucky farmers are restricted to farmers’ markets, roadside stands and the processor’s farm.

Be ready for legalities

Liability issues? You bet there are, said Rich Schell, author, attorney and teacher of food law.

Schnell is past president of The Chicago Farmers, a 501(c) organization dedicated to education and outreach on issues related to land ownership and agriculture. He grew up in Illinois as part of a multi-generational farm family.

“Liability comes in two basic flavors: public liability and private liability,” he explained. “Public liability means that various levels of government may fine or otherwise punish individuals and companies who fail to abide by the regulations involved in selling food, while private liability means a debt or obligation to pay that a court will recognize in the form of a judgment.”

According to Schell, selling food exposes the seller to both public and private liability for errors and omissions.

“Private liability exposure exists, too,” he said. “For example, if a person was warned repeatedly that he or she was conducting a food operations in a manner that caused it to be considered a nuisance, they might eventually be charged with a misdemeanor criminal offense. After being charged, the person would be given a court date and the case would go forward like any other criminal matter.”

Hall and Schell agree there are other concerns, such as zoning rules, selling as organic, taxing issues, employees and insurance. “Know what the zoning requirements are before actually setting up your roadside stand,” Schell said. “Local zoning in one’s area may require that a roadside stand be owned by the same person or persons who own the lot.”

Owners who wish to certify as “organic” should consult the federal regulations and the website of USDA’s National Organic Program at www.ams.usda.gov/nop

Individuals making sales to customers in any state must report sales tax on products sold, whether the product is sold on the farm or at a farmers’ market. Each state has its own set of rules and regulations involving state tax, but most require the reporting of sales.

9/19/2018
Consumer safety just part of marketing laws

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