Who’s exempt from the Produce Safety Rule?

by Sally Colby

According to the FDA, the Produce Safety Rule is a set of science-based minimum standards for the safe growing, harvesting, packing and holding of fruits and vegetables grown for human consumption. The rule is part of the FDA’s Food Safety Modernization Act (FSMA).

Sarah Everhart, University of Maryland senior research associate and legal specialist

with the Agriculture Law Education Initiative, said FSMA is a comprehensive, prevention-based control that has changed the food safety landscape. Prior to FSMA, which takes a more preventive approach, the FDA was the main agency charged with investigating food-borne illnesses.

While the Produce Safety Rule (PSR) places legal responsibilities on growers to prevent food-borne illness outbreaks, it doesn’t apply to some small operations and start-up farms. Everhart explained the rule and who it applies to, and urged farmers to consult an attorney in their state for details.

In short, any farm earning less than $25,000 in annual produce sales is not covered by the PSR. “That is a rolling average for the previous three years,” said Everhart. “These numbers have been adjusted for inflation, so the figure is $26,999 for farms using the years 2015, 2016 and 2017.”

However, all provisions of the PSR apply to any farm that grows, harvests or packs produce intended to be eaten raw and has more than $500,000 in annual produce sales in the past three years.

Farms that fall somewhere between those dollar values may be qualified exempt. To be eligible for the exemption, the average annual monetary value of all food the farm sold during the three years preceding the applicable calendar year must be less than $500,000. “We aren’t just talking about produce for this definition,” said Everhart. “We’re talking about all the food the farm sold, including grain, animal food, dairy products, poultry, livestock; and the average annual monetary value of all the food sold directly to qualified end users during the previous three-year period exceeded the average annual value of the food sold to all other buyers during that period.”

Everhart admitted the wording can be confusing. “More than half (50.1 percent) of the average annual monetary value of the food the farm sold in the previous three-year period was sold directly to qualified end users,” she explained. “This requires the farmer to do some comparisons. First, look at the last three years – how much did you sell altogether? What was the total value of the food sold to make sure you’re under the $500,000 threshold? Then figure out ‘who did I sell that food to? How much of that food was sold to qualified end users?’ Then do a comparison and make sure you meet that 50.1 percent average sold to qualified end users.”

Several entities meet the definition of qualified end user. “It can be the consumer of the food, such as an individual,” said Everhart. “If you’re selling directly to consumers – selling at a roadside stand or farmers market or directly from the farm, that is a consumer, or if you’re selling to a restaurant or a retail establishment that’s located in the same state or reservation as the farm that produced the food, and not more than 275 miles from the farm.”

What about selling produce to a food hub? “Food hubs with a farm-to-business model are unlikely to meet the definition of a qualified end user,” said Everhart. “If the food hub is a farm-to-consumer business model, it may meet the definition.” Everhart said it depends on what the food hub is doing with the food – if they are acting as a wholesaler and providing that food to other businesses, they may not qualify. “If the food hub is acting as a retail store and food goes directly to the consumer,” she said, “the food hub may meet the definition of qualified end user.”

Produce auctions have a similar designation. “As long as the farmer is selling the food through the auction instead of to the auction, it may qualify,” said Everhart. “A restaurant or retail establishment buying that food at the auction may be a qualified end user if they fit the geographical restrictions (same state or within 275 miles from the farm).” If the food is sold to a consumer through a produce auction, the location of the consumer doesn’t matter.

It’s important to understand that eligibility for the qualified exempt category of FSMA doesn’t mean the PSR doesn’t apply – the grower is subject to modified requirements of the rule. Farmers still must keep records, pay attention to compliance and enforcement and are subject to having their qualified exemption withdrawn.

“There are some labeling requirements that are part of the qualified exemption,” said Everhart. “If a food packaging label is required on the produce, according to the modified requirements, you must include prominently and conspicuously on the label the name and complete business address (street address, city, state and zip code) for where the produce was grown.” The effective date for that requirement is Jan. 1, 2020. Everhart said for produce that does not otherwise require a food packaging label, such as food sold in an unpackaged form, the name and complete business address of the farm that produced the food must appear on the label on the produce container, a sign or placard at the point of purchase, or on documents such as an invoice or sales receipt delivered with the produce.

Everhart reviewed the record-keeping requirement to prove a grower is qualified exempt. “You need to keep records that show the farm’s food sales for the previous three-year period are below the sales threshold – below $500,000,” she said, adding that the FDA website includes current inflation rates, “and you’re selling more food to qualified end users than not. You’re selling that 50.1 percent to qualified end users, and the purchasers are qualified end users.” Everhart said many growers haven’t kept such records and will have to become accustomed to doing so in order to comply with the law. Growers should maintain records internally on the farm and be able to produce them in the case of an audit or FSMA request.

Growers should keep records reflecting an annual review and verification of the farm’s continued eligibility for the qualified exemption. “Every year you are subject to this law, you need to verify that you are still qualified exempt,” said Everhart. “In order to be qualified exempt, you have to look at the previous three-year period. In order to confidently say that, look at your books every year and make sure it’s still a true statement.”

The FDA can withdraw a farm’s qualified exemption if there’s an active investigation of a food-borne illness outbreak directly linked to the farm, or if the FDA determines it’s necessary to protect public health or mitigate an outbreak associated with the farm. “If the qualified exemption is withdrawn, the farm would be subject to the full requirements of the produce safety rule,” said Everhart. “It can be reinstated if the FDA determines the outbreak was not directly related to your farm and/or determines that the problems associated with your farm have been adequately resolved and the withdrawal of the exemption is no longer necessary to protect public health.”

While qualified exempt farms are not legally required to follow all the provisions of the PSR, including worker health and hygiene, sampling and testing agricultural water, sanitation of equipment and other recommended best practices for produce growers, Everhart urges all growers to learn about and adopt the PSR provisions because those provisions are the gold standard in preventing food-borne illness. “If the FDA did withdraw your qualified exemption,” she said, “you’d be in the position of having to quickly come into compliance with a lot of different requirements you may or may not already have in place on your farm.”

Everhart urges all growers to attend produce safety rule training, refer to resources on the FDA website and consult an attorney for specific recommendations.

2019-02-12T11:22:46-05:00February 11, 2019|Grower, Grower East, Grower Midwest, Grower West|0 Comments

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