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Selling Value Added Products and FSMA- An Important Clarification

Updated: Jul 23, 2020

By Sarah Everhart

Person pointing to a glass bottle in a row of different sized bottles (Photo Credit Edwin Remsberg).

Do you process and sell farm products to consumers? If so, you may be confused about whether or not you need to comply with the Food Safety Modernization Act (FSMA) Preventive Controls Rule.

As explained in this post to determine if the Preventive Controls Rule applies, an operator must decide whether their operation qualifies as a food facility (processing facility), a farm, or a retail food establishment as those terms are defined by the law. Food facilities are subject to the law and farms and retail food establishments are exempt. However, mixed-type operations such as farms which also process have been left wondering where they fit within the legal regulatory scheme. Thankfully this question was answered on July 14, 2016, when the FDA issued a “final rule” to clarify the Preventive Controls Rule, and specifically what types of farm operations qualify as exempt retail food establishments.

A retail food establishment is defined as an establishment selling food products directly to consumers as its primary function. A retail food establishment may manufacture/process, pack, or hold food if the establishment’s primary function is to sell food directly to consumers from that establishment, including food it manufactures/processes, packs, or holds. A retail food establishment’s primary function is to sell food directly to consumers if the annual monetary value of sales of food products sold directly to consumers exceeds the annual monetary value of sales of food products to all other buyers.

This definition is easy to apply to typical retail food operations such as grocery stores, but what about a farm which grows tomatoes and also makes and sells tomato gazpacho at a farmers’ market? The farming component of the operation would fit the definition of farm and be exempt, but the processing which went into the gazpacho caused many farmers to wonder if they were going to be considered a food facility and subject to the Preventive Controls Rule.

The final rule directs the FDA to amend the definition of a retail food establishment so it is clear, in determining the primary function of an establishment, the sale of food products directly to consumers includes:

  1. The sale of food products or food directly to consumers by such establishments as a roadside stand or farmers’ market where such stand or market is located other than where the food was manufactured or processed;

  2. The sale and distribution of such food through a community-supported agriculture (CSA) program; and

  3. The sale and distribution of such food at any other such direct sales platform as determined by FDA.

Therefore, a farm operation processing farm products (either on the farm or at an off-farm location qualifying as a farm-operated business) into value-added goods and selling the majority of their products directly to consumers at a roadside stand, farmers’ market or through a CSA, will be considered a retail food establishment and exempt from complying with the FSMA Preventive Controls Rule. The FDA anticipates this amendment will increase the number of operations exempt from compliance with the Preventive Controls Rule. Most farms, even if they are not subject to the Preventive Controls Rule, will be subject to the FSMA Produce Safety Rule. Check out this post for more information on the Produce Safety Rule.

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