Among the states, Texas has gotten it wrong most dramatically. The Texas Department of Agriculture (TDA) has adopted regulations that claim the right to physically inspect exempt farms. The TDA regulations also allow inspectors to shut down any farm, regulated or exempt, under a highly subjective, ambiguous standard. These regulations are beyond the scope of the agency’s authority under the statute and are a serious violation of farmers’ constitutional rights.

In December, FARFA sued the Texas Department of Agriculture. On January 24, the agency responded by denying all the allegations. So, we are in for a difficult court battle in the coming months.

While no other state appears to have adopted similarly improper regulations, we are getting reports that some state agencies are doing inspections that go beyond their authority. If that has happened to you, please contact Judith@FarmAndRanchFreedom.org.

Understanding FSMA

The FSMA rules cover all types of food except for meat.  The first major FSMA rule is the Produce Safety Rule (PSR), which covers everyone who grows, harvests, or holds produce (fruits, vegetables, mushrooms, or sprouts) for sale. The second major FSMA rule is the Preventive Controls Rule, which covers everyone who processes, manufactures, or holds any type of food (except for meat) for sale.

Both rules have important exemptions for small-scale producers; exemptions that we succeeded in getting into FSMA at the Congressional level through the Tester Amendment.

The focus of this post is on farmers raising produce and the Produce Safety Rule.  We’ll cover the issues for food businesses that are under the Preventive Controls Rule in a separate post. 

The information provided is not legal advice. If you have legal questions, please consult an attorney who is licensed to practice law in your state.

Which Produce Growers Are Affected?

Most of our members will be either “not covered” (exempt) or “qualified exempt.” But you need to be keeping the appropriate records and potentially more, even if you are exempt.

“Not covered”: A farm that grows and sells fresh produce, but whose gross sales of produce were no more than $25,000 annually on average over the previous three years, is exempt from the Produce Safety Rule. The cut-off is indexed for inflation. For 2019, the inflation-adjusted number is $27,528. In other words, you are exempt if your average gross sales of produce in 2016, 2017, and 2018 were under $27,528.

You are also exempt if you only grow produce that FDA has determined “is rarely consumed raw.” The FDA’s list is posted at https://www.fda.gov/media/107445/download. Similarly, farms that process all of their produce with a kill step (for example, canning) or that are selling their produce entirely to a processor who then applies a kill step, are also exempt.

If you do not fall within one of those categories, yours is a “covered farm” – but you still may have a qualified exemption that protects you from having to comply with most of the substantive (and expensive) requirements of the Produce Safety Rule. 

A farm is “qualified exempt” if it:

• grosses less than $500,000 annually (adjusted for inflation) in sales of all food (including live animals) on average over the last three years, and
• sells more than half to qualified end users, which are:

1. 1. Individual customers anywhere. For example, your sales at a farmers’ market, through a CSA, and online sales to individuals all qualify.
   2. A restaurant or other retail food establishment, which in turn sells directly to consumers, and which is in the same state or within 275 miles of your farm.

For 2019, the inflation-adjusted number for the qualified exemption is $550,551. 

We also have two flow charts to help you determine if you are covered by, or exempt from, both rules at: https://farmandranchfreedom.org/fsma/.

Exempt Farmer Responsibilities

If you are exempt or qualified exempt, you must keep records sufficient to prove that fact. For both types of exemptions, this would mean records that establish your 3-year average sales. If you are in the qualified exempt category, you also need to be able to show how much you have made through each sales channel (i.e. farmers markets, CSA or weekly box program, restaurant sales, etc). For any wholesale sales, you will need to distinguish between those that are to qualified end users (i.e. to restaurants or retailers who in turn sell direct to consumers and who are within the required distance of your farm) and those that are to distributors or more distant outlets. 

You must also do a comprehensive annual calculation, and sign and date it, as part of your records. In other words, once a year, create a single-page sheet that sets out your gross sales for each of the previous three years. If you are qualified exempt, also list the amounts that went through each sales channel (direct-to-consumer, wholesale to a restaurant or retailer within the required distance of your farm, and wholesale to non-qualified end users) each year. Calculate the percentages to confirm that you meet the requirements for the exemptions. Then sign and date the page and keep it in your files.

Under the FDA’s rule, a farmer must be able to produce adequate and legible sales records to justify their exempt or qualified exempt status within 24 hours of being requested by FDA or the state agency. These records can be electronic or handwritten or a combination.

Last, the Produce Safety Rule also requires qualified exempt Farms to either label their produce with the farm name and business address or have a sign posted with that information at the point of sale. A vinyl banner at your farmers’ market booth, or the invoice to the restaurant, are examples of ways to meet this requirement.

Non-Exempt Farmer Responsibilities

If you do not fall within the exempt or qualified exempt categories, you are subject to the full substantive requirements of the Produce Safety Rule. You will need to attend a certified Grower Training course, which will help you to learn what you need to do to comply. The PSR covers a huge range of topics, including your buildings, equipment, employee training, irrigation water testing, the use of manure or other biological soil amendments, and more.

State Agency Overreach

The discussion above reflects the federal law and regulations. In most states, the state agriculture department is the primary agency for implementing and enforcing the PSR, with funding from FDA. 

The Texas Department of Agriculture adopted rules for its state that significantly undermine the exemption for small farmers and infringe on farmers’ rights – with the threat of fines and forced closures for farmers who run afoul of the agency.

While the federal rule does not require farmers to obtain agency approval of their exemption, under its rules, TDA is claiming authority to determine each farm’s exemption status. TDA has been contacting farms to investigate whether the farm is covered, exempt, or qualified exempt.  

TDA’s first step appears to be a phone call to the farm. Some of the questions being asked are pertinent to determining a farm’s status – namely, questions about gross sales and sales channels. But some farmers are reporting that TDA staff are asking them questions that are only appropriate for covered farms, relating to matters such as water sources, and whether or not the farm is using compost, manure, or other biological soil amendments. Exempt and qualified exempt farms are not required to provide this information to the agency.

Exempt farms are only required to provide information on their gross sales of produce (for the $25K exemption), or the types of produce being grown (if they are exempt because they only grow produce that is rarely consumed raw). Qualified exempt farms are required to also provide information about sales channels and revenues, to establish their status for the qualified exemption.

Providing information beyond that is up to the individual farmer’s discretion, since that information is not pertinent to TDA’s regulation of exempt farm under the federal rules.

More troubling, the TDA is seeking to physically inspect some of the exempt and qualified exempt farms. We’ve had reports that the agency has led several farmers to believe that they had no choice but to allow such an inspection – but, as our lawsuit emphasizes, this is a violation of farmers’ constitutional rights to be free of unreasonable searches. You can read our complaint here.  

We are beginning to hear similar reports from other states of implementing agencies seeking to physically inspect exempt farms. To our knowledge, however, no other state agency has enshrined this overreach of their powers in regulations, in contrast to TDA. 

If you are an exempt or qualified exempt farm, and have been contacted by your state agency seeking to do a physical inspection of your farm, please let us know by emailing Judith@FarmAndRanchFreedom.org.