Starting a thread to discuss and track the FSMA-broad new regulatory powers given to the FDA to regulate food producers. Many aspects of it are in conflict with the USDA National Organic Standard, which was contrary to the original intent. The only saving grace is that IF you sell less than $500K AND IF you sell over 50% direct to consumers, you are exempt from onerous record keeping, testing and over extremely costly rules for small producers. The rules on using manure and other biological amendments were clearly devised by diabolical forces lobbying for conventional ag in cahoots with FDA rule-writers who had never set foot on a farm. I don't think anyone really knows how this is all going to unfold until it actually goes into effect. The brewer to farmer transfer of spent grain rules have already gone back to be amended.

Wikipedia summary)
FDA official webpage
National Sustainable Agriculture Coalition webpage

Read it and weep. It keeps me up nights, that's for sure. We will qualify for exemption under the <$500K rule, but under extreme limitations to my creative marketing schemes.

Out of curiosity, does the "more than 50%..." rule go by $ value, or pounds?
That could have a huge impact on, for instance a farmer who sells 500 pounds of mushrooms (or garlic) to restaurants and 501 pounds of corn at the Farmers Market.

While I do agree with our government that our archaic rules needed modernizing, the fact that this rule making process was sponsored by multinational vendors and BigAg makes me seriously doubt that it will achieve what the government tells us it was meant to achieve. When Big Bucks wants something, the little guy will invariably get squashed in the process.

Farming is easy when a pencil is your plow, and your desk sits 1,000 miles from the corn field.
Dwight D. Eisenhower - he saw which way farming was going during the '50's

John Polk wrote:Out of curiosity, does the "more than 50%..." rule go by $ value, or pounds?

dunno, but hard to believe they'd choose any metric other than the almighty dollar.

It occurred to me that this arcane rule may do more to encourage locavorism than any food policy a government agency could have intentionally devised. I already met a guy who told me he can't take his winery production beyond 20,000 gallons, because his taxes will double. It's a ridiculous policy in the reddest state in the country, to cripple entrepreneurship, but similarly in the food world, by disincentivizing beyond $500K and wholesalers, it could cause a lot of farmers to seek more farm-to-market sales.

I didn't used to be this way, but I'm about ready to issue a Darwin award to anyone who dies of salmonella because they didn't wash their factory-farmed tomatoes. There has to be a threshold of personal responsibility before we demand regulation because we are feeling sad for someone's misfortune and "have to do something." Most of this evil is because every Congressionman/woman wants his shot at the tv to prove they are "doing something." The only thing they can do is pass yet another law, which leads to yet more regulation. Some times, the right thing to do is send a sympathy card and learn from others' hard-won experience.

I hope they have that $500,000 pegged to inflation.
They really need to peg all dollar limited to inflation.

Another thing to be wary of is that if your neighbor brings eggs or tomatoes over to include in your CSA shares then you will lose your exemption because it only applies if all of the production in from your farm. It will also kill or more likely drive underground all the little local buying clubs and co-ops that coordinate distribution of local foods because they now will fall under the FDAs control. Now legally the FDA should have no control of local intrastate transactions, but the Feds grab any power they can. Even if they didn't the local and state health departments will jump at the chance for more power and adopt the rules unless the state legislatures knock them down.

The 50% rule is based on dollars with a three year running average. The $500K is absurdly low. Realize that is gross sales, not net, not what you keep. Consider a farmer might be only making 1% to 5% profit. Thus 1% of $500K means the farmer's take home pay is only $5,000. Member's of Congress who put this through gave themselves pay raises for sitting around of more than that total take home so they're making hundreds of thousands. The exemption amount should be several million gross sales - an orchard, a vegetable farm, a livestock farm can easily do a million dollars in total sales with the farmer only keeping a small portion.

Irony is that this bill was pushed for by liberals who also push for a "Livable Wage" rule and the "Minimum Wage" law. Apparently they don't believe in farmers making a minimum wage or a livable wage.

Be aware that the exemption $500K number includes ALL sales from the property. They are very inclusive. If there are multiple businesses at the farm they get aggregated.

Hi Walter, do you know if they would aggregate individual businesses if they were somehow on separate properties? For example if you had a business like Mark Shepard's cider business and the apples were produced on your farm but the processing happened on another site and they were set up as separate business entities would that somehow get around that stipulation?

*edit* another example might be if Paul had most of his food production happening on the lab property but then the processing/ value added aspects happened at base camp as I understand it they were purchased as separate properties and perhaps could be distinguished as separate business entities as well.

Thanks,

Daniel

Daniel, that actually raising more problems. There have been a number of cases where farmers have been hit with fines and extra regulations because some part of their operation wasn't on their own farm. OSHA has been really hitting grain farmers that have silos at alternative sites closer to leased fields than their home farm. There are a lot of regulations and requirements on grain silos because of the dangers to workers. Farmers are exempt from a lot of these because they are assumed to know the risk of their own equipment. OSHA says if the silo isn't on the home farm it is a separate operation not part of the farm and fully under their jurisdiction to fine for safety violations even if the farmer doesn't have any employees working with the silo.

Thanks for the reply Paul,

That is interesting and annoying, but I definitely appreciate the information, I will keep thinking on this problem.

On a different aspect of the legislation I was thinking about what Anne said, that perhaps this law will also force locavorism to increase. If this happens it may also push farmers to look more closely at utilizing polyculture/ permaculture and developing a more diverse and sustainable production system. My reasoning that this law could possibly be a boon to permaculture is as follows: Farmers under this new law need less sales (if they are over the gross cap) and higher margins. To optimize margins without increasing sales farmers will be looking to cut costs. Migrating toward a permaculture system would be the best way I know how to cut costs over the long term while diversifying ones production. It may also increase opportunities for permaculture designers to work with small to mid size farm operations by making cost reduction more effective at increasing margins than production/ sales increases. In this way at least for small producers this aspect of the law dis-incentivizes many of the conventional agriculture production practices and distribution methods.

Do you think that this seems like a logical analysis? Do you think many permaculture production farms would have gross sales of $500,000 or more?

I will be very interested in others thoughts on this

Daniel

Walter,

Are you going to have to change anything due to the FSMA? Cost estimate? Time sink?

Daniel Clifford wrote:Hi Walter, do you know if they would aggregate individual businesses if they were somehow on separate properties?

Possibly. They would probably look at ownership. If they can get you above the exemption they will because it gives them more control.

Ann Torrence wrote:Walter, Are you going to have to change anything due to the FSMA? Cost estimate? Time sink?

No, FSMA deals with produce, fruits, etc and I don't do those because I make a lot more money raising pastured pigs than I could possibly do with the other crops. I raise a lot of veggies and fruit but I raise them to feed our pigs. It is partially because of FSMA and similar issues that I don't sell these things. Likewise I would not sell milk - better to feed it to my pigs and create pasture/dairy fed pork. Similarly with eggs.

There is a question of will FSMA hurt the interaction between farmers and brewers, cheese makers, etc. We'll see what happens there. We have been working for years to produce more and more of our own animal feed. We're capable of doing 100%. As long as I can easily get whey, spent barley and such I will. They're good sources of nutrition for the animals.

As I noted earlier, the first round of proposed rules for produce and processing were withdrawn. http://www.permies.com/t/30711/large-farm/FDA-agreed-propose-rules-farms

Just so y'all understand the federal agency process, I will provide a brief description. Congress drafts and passes a law (that has to be enacted by the President), which has certain dictates but generally grants broad discretion to the agencies to write rules to effectuate the law and enforce it. The agencies have to follow certain processes in order for their rules to be valid. An agency such as the FDA must release its rules in proposed form, stating legal basis for the rules, providing policy justifications, providing a timeline for implementation, analyzing economic impacts, and estimating costs of compliance by effected entities or persons. The is called a proposing release and is published in the Federal Register and at regulations.gov, and sometimes on the agency website. Next, the agency must provide a period of public comment on the proposed rules. Comments can be sent via snail mail and uploaded to regulations.gov. Once the comment period is closed, the agency then sorts through the comments. It drafts what is called an adopting release. At this point, the agency must respond to the comments received. It can justify adopting the proposed rules despite public comment objections, or it can change the rules to deal with the comments. The agency also has the discretion to say the rules as proposed needs substantial revision, so it will revise and repropose the rules for comment again. This is the case with the FDA's original proposals for produce and processing.

The first proposed rules were a disaster. Here are a few examples. First, the agency made the small farm exemption that was set out in the legislation revocable, but provided no means for a revocation proceeding or a means for reclaiming the exemption. This flaw was a clear violation of the Due Process Clause of the 5th Amendment and tons of other legislation and case law. Second, the costs of compliance were estimated at approximately $13K annually. Even if you have gross sales at $500,000 and a net income margin of 10%, the estimated compliance costs were over 25% of a farm's net income. This is a grossly disproportionate economic impact versus potential risks mitigated. Third, the gross sales number aggregated all farm sales. However, meat issues are regulated by the USDA and the states. That regulatory regime is decades old and the legislation did not address it. Aggregating the numbers from meat and produce is a jurisdictional overreach.

The new produce and processing rules are forthcoming. Please be ready to review them and provide comment on how they effect you. The agency does have to consider your comment, and the comment can later serve as a basis for challenging adoption or application of the rules in court. I am sure there will be discussion of any new proposal here. And even if you are not a member of the Farm to Consumer Legal Defense Fund, you can sign up for their email newsletter that will alert you to issues such as this. They also provide instructions on the regulatory comment process and some sample comment language.