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FSMA Facility Registration Requirements Clarified for Local Food Producers

July 14, 2016


Soaking greens. Photo credit: Lindsey Scalera.

Soaking greens. Photo credit: Lindsey Scalera.

After years of ambiguity and confusion, farmers and small food enterprises primarily selling value-added products directly to consumers finally have some much-needed clarity on the Food and Drug Administration’s (FDA) Food Safety Modernization Act (FSMA) requirements for food facility registration. On July 14, 2016, FDA finally finalized its Preventive Controls Rule, clarifying that small farms and food business will remain exempt from burdensome regulations.

The final rule contains a number of changes to food facility registration requirements, but most important for our readers is the clarification of the definition of what types of operations are exempt from registration as “retail food establishments”.

When is a farm not a “farm”? 

Let’s zoom out. Since the fall of 2015, FDA has been finalizing the major food safety rules it is required to carry out under FSMA. One of those rules, the Preventive Controls Rule, applies only to food facilities that must register with FDA because they pack, hold, manufacture, or process food for human consumption.

Farms are exempt from registering (and therefore exempt from the Preventive Controls Rule) as long as they meet FDA’s definition of “farm”. However, FDA’s definition of farm only allows for farms to do limited processing; meaning that farms that do value-added processing would not be considered farms and would instead be regulated as “food processing facilities”.

NSAC warned Congressional leaders of this potentially disastrous mix-up and succeeded in ensuring that farms doing value-added processing and selling direct-to-consumer would not be subject to the new requirements. Specifically, Congress clarified language in FSMA that exempts farms primarily selling through direct-to-consumer sales platforms like roadside stands, farmers markets, and community-supported agriculture (CSAs). We applaud Senator Jon Tester (D-MT) and former Senator Kay Hagan (D-NC) for sponsoring this amendment.

What does the new rule do?

The exemption for retail food establishments has existed since the requirement for food facilities to register with FDA was first codified in the Bioterrorism Act of 2003. In addition to the exemption from registration for farms, the Bioterrorism Act exempted retail food establishments.

Under existing law (and unchanged by this new rule), a retail food establishment is:

  • An establishment that sells food products directly to consumers as its primary function.
  • An establishment that may manufacture/process, pack, or hold food if the its primary function is to sell from that establishment food, including food that it manufactures/processes, packs, or holds, directly to consumers.
  • An establishment whose primary function is to sell food directly to consumers if the annual monetary value of sales of food products directly to consumers exceeds the annual monetary value of sales of food products to all other buyers. The term “consumers” does not include businesses.

“Retail food establishment” can also include grocery stores, convenience stores, and vending machine locations. In sum, any business making food (including a farm business) with at least 50.1 percent in direct to individual consumer food sales satisfies the definition of a retail food establishment and is exempt from registration.

It is easy to see how this exemption applies to businesses like grocery stores and restaurants, but it was much less clear whether it could also apply to farms or food entrepreneurs selling through more nuanced direct market channels. For example, would it cover an apple orchard that makes apple pies on-farm and sells them at a roadside stand, in addition to selling apples both wholesale and retail? What about a food entrepreneur baking bread from local grains and distributing it through a CSA model?

The ambiguity of the rule has been a serious cause for consternation across the sustainable agriculture community. We are therefore grateful for the clarification of the rules and definitions, which exempts these farmers and food businesses beyond a shadow of a doubt.

Under the new rule, the definition of retail food establishment has been modified to state very clearly that “a ‘retail food establishment’ also includes certain farm-operated businesses selling food directly to consumers as their primary function”. In plain language, that means that farms (or food businesses managed by farms – more on that later) that are processing farm products into value-added goods and selling the majority of their products directly to consumers do not have to register as food facilities with FDA, and therefore are not subject the Preventive Controls Rule.

The rule also makes it clear that location doesn’t matter:

  • First, the point of sale does not have to be on the farm or even in person. This means farm sales at a farmers market, off-site CSA drop off locations, and even online sales are still counted as sales direct to consumer.
  • Second, the processing itself does not have to take place on the farm. Farmers can use off-farm kitchen facilities to make their goods.

It is important to note, however, that sales from off-farm processing must come from what FDA has termed a “farm-operated business,” which they define as a “business managed by one or more farms that conducts manufacturing/processing not on the farm(s)”. This is relevant for farms doing off-farm processing, but also for other businesses (like farmer cooperatives, or food hubs) that may be farmer-owned or operated and are doing some off-farm processing at an incubator kitchen or other location.

While we appreciate that FDA included this language in recognition of the need to account for these types of innovative collaborative businesses, we still find some ambiguity in knowing what types of businesses may or may not satisfy FDA’s definition of a “farm-operated business.” We will continue working to obtain additional clarification on the diversity of food enterprises that may or may not satisfy this definition, and will make that information available as we get it.

It’s also important to note that, of course, everybody has a responsibility to prevent against foodborne illness from farm to fork; exemption from the registration requirement or the FSMA rules does not relieve any food producer of that general duty.

What else should I know?

Farms and food businesses that meet FDA’s definition of “retail food establishment” are not required to register with FDA as food facilities, and therefore the Preventive Controls Rule does not apply to them. They may, however, be subject to state laws governing retail food establishments, or other state or local public health laws. Some farms may also be subject to the Produce Rule.

FDA has not issued clear guidance on what, if any, records a retail food establishment is expected to keep in order to prove their status as a retail food establishment. NSAC is seeking clarification on this point, but in the meantime it would be advisable to retain sales records (how much sold, and to whom) so that you can demonstrate that over half of your food sales are direct to consumer.

Additional Information

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Categories: Food Safety


2 responses to “FSMA Facility Registration Requirements Clarified for Local Food Producers”

  1. Eduardo Carbonell says:

    21 CFR 117 Subpart B (GMPs)does not apply establishments solely engaged in holding or transportation of RAC, which I understand, however I would like to know why it is include in the exemption, establishment engaged in hulling,shelling, drying, packing and/or holding nuts without additional process.
    my concern are specifically with the potential hazards, like allergens in case of shelling,

  2. Reana Kovalcik says:

    Hi Eduardo. We would encourage you to check out FDA’s discussion of this issue in the preamble to the rule (https://www.federalregister.gov/articles/2015/09/17/2015-21920/current-good-manufacturing-practice-hazard-analysis-and-risk-based-preventive-controls-for-human#p-1033). If you still have questions after reading that,we would suggest submitting the question directly to FDA, because FDA can better speak to their reasoning behind deciding things that are covered and things that are not: http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm459719.htm

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