This post is the second in a multi-part series analyzing FDA’s recently released Preventive Controls Rule for Human Food, and the rules and requirements for farms and facilities that may fall under its purview. The first post analyzed those farms and food enterprises that are exempt from the rule. This post explores exemptions from certain parts of the rule for farm mixed-type facilities and small-scale facilities. The last post looks at the requirements for facilities that are fully covered by the rules, including requirements for facilities that supply from farms and small facilities.

As discussed in the last post, whether or not you are subject to the new Preventive Controls Rule first requires you to determine whether you are a “facility” that must register with FDA, or whether you are exempt from registration.

While farms are technically exempt from registering, you only can claim the exemption if you stay within the parameters of FDA’s definition of “farm.” The last blog post discusses the various criteria and activities to consider in making that determination. If you do “farm” activities, but you also do manufacturing and processing activities that fall outside FDA’s definition of farm, then you are what FDA has termed a “farm mixed-type facility.”

Farm mixed-type facilities must register with FDA and, therefore, the Preventive Controls Rule applies. However, depending on the size of the operation (in food sales) and the types of activities you are doing on your farm, you may not be subject to the full requirements of the rules.

Exemptions from HARPC

The Preventive Controls Rule updated current good manufacturing processes (CGMPs), which many value-added or processing operations are already expected to follow. It also established a new set of prevention-oriented food safety requirements (Hazard Analysis and Risk Based Preventive Controls, or “HARPC”). Certain types of facilities may have to follow CGMPs, but are exempt from following HARPC. These include:

• Off-farm packing and holding of RACs that are not fruits and vegetables;
• Processors covered by other regulatory requirements (e.g. alcohol, seafood, juice); and
• Farm mixed-type facilities that are small or very small businesses and are doing only certain kinds of packing, holding, or manufacturing/processing on certain kinds of foods (this is the exemption for “low risk” on-farm processing, which we’ll explain more below).

Packing operations that do not qualify as “farms” but are only packing and holding produce can elect to either comply with CGMPs or comply with the relevant Produce Rule requirements once finalized. These operations are not exempt from HARPC, but FDA has indicated that their food safety plan – including the identification of hazards and establishment of preventive controls – would draw from what’s required of farms that pack and hold produce under the Produce Rule. We’ll explore what these full requirements entail in more detail in the next post.

Low Risk On-Farm Processing

An exemption from HARPC requirements was added to FSMA by an amendment sponsored by Senator Bernie Sanders (I-VT). If you are doing value-added activities on your farm, you may qualify for this exemption as long as you meet certain criteria:

1. You must be a small or very small business.

The PC Rule defines a small business as “a business employing fewer than 500 full-time equivalent employees.”

A very small business is:

A business (including any subsidiaries and affiliates) averaging less than $1,000,000, adjusted for inflation, per year, during the 3-year period preceding the applicable calendar year in sales of human food, plus the market value of human food manufactured, processed, packed, or held without sale (e.g., held for a fee).

In simpler terms, this means a business that grosses less than $1 million in average annual sales of human food, based on an average of the three preceding years’ sales.

Human food sales include sales from produce and other raw agricultural products (e.g. grain), as well as processed food (e.g. meat, cheese), but excludes sales from animal feed.

2. The only manufacturing/processing activities you’re doing are those that FDA has identified as “low-risk” when done on certain foods.

FDA has identified a list of low risk food/activity combinations. You can see the full list here – it is very extensive, and is exhaustive, which means only those processing activities/food combinations on the list are considered low-risk. The list includes:

1. Boiling: Gums; Latexes; and Resins.

2. Chopping, coring, cutting, peeling, pitting, shredding, and slicing: Acid fruits and vegetables that have a pH less than 4.2 (e.g. cutting lemons and limes); Baked goods (e.g. slicing bread); Dried/dehydrated fruit and vegetable products (e.g. pitting dried plums); Dried herbs and other spices (e.g. chopping intact, dried basil); Game meat jerky; Gums/latexes/resins; Other grain products (e.g. shredding dried cereal); and Peanuts and tree nuts, and peanut and tree nut products (e.g. chopping roasted peanuts).

3. Coating: Dried/dehydrated fruit and vegetable products (e.g. coating raisins with chocolate); Other fruit and vegetable products except for non-dried, non-intact fruits and vegetables (e.g. coating dried plum pieces, dried pitted cherries, and dried pitted apricots with chocolate are low-risk activity/food combinations but coating apples on a stick with caramel is not a low-risk activity/food combination); Other grain products (e.g. adding caramel to popcorn or adding seasonings to popcorn provided that the seasonings have been treated to significantly minimize pathogens); and Peanuts and tree nuts (e.g. adding seasonings provided that the seasonings have been treated to significantly minimize pathogens), and peanut and tree nut products (e.g. adding seasonings provided that the seasonings have been treated to significantly minimize pathogens).

4. Drying/dehydrating (that includes additional manufacturing or is performed on processed foods): Other fruit and vegetable products with pH less than 4.2 (e.g. drying cut fruit and vegetables with pH less than 4.2); and Other herb and spice products (e.g. drying chopped fresh herbs, including tea.

5. Extracting (including by pressing, by distilling, and by solvent extraction) from: Dried/dehydrated herb and spice products (e.g. dried mint); Fresh herbs (e.g. fresh mint); Fruits and vegetables (e.g. olives, avocados); Grains (e.g. oilseeds), and; Other herb and spice products (e.g. chopped fresh mint, chopped dried mint).

6. Freezing: Acid fruits and vegetables with pH less than 4.2, and; Other fruit and vegetable products with pH less than 4.2 (e.g. cut fruits and vegetables).

7. Grinding/cracking/crushing/milling: Baked goods (e.g. crackers); Cocoa beans (roasted) and coffee beans (roasted); Dried/dehydrated fruit and vegetable products (e.g. raisins and dried legumes); Other fruit and vegetable products (e.g. dried, pitted dates); Dried/dehydrated herb and spice products (e.g. intact dried basil); Other herb and spice products (e.g. chopped dried herbs); Grains (e.g. oats, rice, rye, wheat) and other grain products (e.g. dried cereal), and; Peanuts and tree nuts, and peanut and tree nut products (e.g. roasted peanuts);

8. Labeling: Baked goods or candy that do not contain food allergens; Roasted cocoa and coffee beans, and cocoa products that do not contain food allergens; Game meat jerky; Gums/latexes/resins that are processed foods; Honey (pasteurized); Jams/jellies/preserves; Milled grain products that do not contain food allergens (e.g. corn meal) or that are single-ingredient foods (e.g. wheat flour, wheat bran); Molasses and treacle; Oils; Other fruit and vegetable products that do not contain food allergens (e.g. snack chips made from potatoes or plantains); Other grain products that do not contain food allergens (e.g. popcorn); Other herb and spice products (e.g. chopped or ground dried herbs); Peanut or tree nut products, (provided that they are single-ingredient, or are in forms in which the consumer can reasonably be expected to recognize the food allergen(s) without label declaration, or both (e.g. roasted or seasoned whole nuts, single-ingredient peanut or tree nut flours)); Processed seeds for direct consumption; Soft drinks and carbonated water; Sugar and syrups; Trail mix and granola (other than those containing milk chocolate and provided that peanuts and/or tree nuts are in forms in which the consumer can reasonably be expected to recognize the food allergen(s) without label declaration); Vinegar, and; Any other processed food that does not require time/temperature control for safety and that does not contain food allergens (e.g. vitamins, minerals, and dietary ingredients (e.g. bone meal) in powdered, granular, or other solid form).

9. Making: Baked goods from milled grain products (e.g. breads and cookies); Candy from peanuts and tree nuts (e.g. nut brittles), sugar/syrups (e.g. taffy, toffee), and saps (e.g. maple candy, maple cream); Cocoa products from roasted cocoa beans; Dried pasta from grains; Jams, jellies, and preserves from acid fruits and vegetables with a pH of 4.6 or below; Molasses and treacle from sugar beets and sugarcane; Oat flakes from grains; Popcorn from grains; Snack chips from fruits and vegetables (e.g. making plantain and potato chips); Soft drinks and carbonated water from sugar, syrups, and water; Sugars and syrups from fruits and vegetables (e.g. dates), grains (e.g. rice, sorghum), other grain products (e.g.malted grains such as barley), saps (e.g. agave, birch, maple, palm), sugar beets, and sugarcane; Trail mix and granola from cocoa products (e.g.chocolate), dried/dehydrated fruit and vegetable products (e.g. raisins), other fruit and vegetable products (e.g. chopped dried fruits), other grain products (e.g. oat flakes), peanut and tree nut products, and processed seeds for direct consumption, provided that peanuts, tree nuts, and processed seeds are treated to significantly minimize pathogens; and Vinegar from fruits and vegetables, other fruit and vegetable products (e.g. fruit wines, apple cider), and other grain products (e.g. malt).

10. Mixing: Baked goods (e.g. types of cookies); Candy (e.g. varieties of taffy); Cocoa beans (roasted); Coffee beans (roasted); Dried/dehydrated fruit and vegetable products (e.g.dried blueberries, dried currants, and raisins); Dried/dehydrated herb and spice products (e.g. dried, intact basil and dried, intact oregano); Honey (pasteurized); Milled grain products (e.g. flour, bran, and corn meal); Other fruit and vegetable products (e.g. dried, sliced apples and dried, sliced peaches); Other grain products (e.g. different types of dried pasta); Other herb and spice products (e.g. chopped or ground dried herbs, dried herb- or spice-infused honey, and dried herb- or spice-infused oils and/or vinegars); Peanut and tree nut products; and Sugar, syrups, vinegar, and any other processed food that does not require time/temperature control for safety (e.g. vitamins, minerals, and dietary ingredients (e.g. bone meal) in powdered, granular, or other solid form).

11. Pasteurizing: Honey.

12. Roasting and toasting: Baked goods (e.g. toasting bread for croutons).

13. Salting: Other grain products (e.g. soy nuts); Peanut and tree nut products, and Processed seeds for direct consumption.

14. Sifting: Milled grain products (e.g. flour, bran, corn meal); Other fruit and vegetable products (e.g.chickpea flour), and; Peanut and tree nut products (e.g. peanut flour, almond flour).

You can also package, pack, or hold any of these items.

So, what does all this mean? It means if you are a farm mixed-type facility and you only process the foods listed above in the manner listed above (including packing and holding those foods), and you are a small or very small business, and all of the processing takes place on your farm, then you are exempt from complying with the new PC Rule requirements (e.g. HARPC). However, you are expected to follow CGMPs, and there are certain requirements regarding records and training that still apply. We discuss those requirements in more detail below.

Exemptions for Qualified Facilities

Farm mixed-type facilities that perform activities beyond those identified above as low-risk, and facilities that are not located on farms, maybe still be eligible for modified requirements if they meet the definition of a “qualified facility.”

The PC Rule defines a qualified facility as “facility that is a very small business as defined in this part.” As defined above, a very small business is one that grosses less than $1 million in annual sales of human food, based on an average of the three preceding years.

FSMA also established a statutory definition of qualified facility – often referred to as the “Tester-Hagan exemption” for Senator Jon Tester (D-MT) and former Senator Kay Hagan (D-NC) who sponsored the provision – based on sales of food direct to consumers or other “qualified end users” (such as restaurants or retail food establishments) within the same state or 275 miles. The final PC Rule also includes these criteria in the definition of “qualified facility” as an alternative way of satisfying the definition. However, because the Tester-Hagan sales threshold is less than $500,000 in sales, all Tester-Hagan facilities automatically satisfy FDA’s definition of very small business.

Therefore, qualified facilities are likely to find it easier to demonstrate their status as a qualified facility based on the definition of very small business, which does not consider the end user or their location. Moreover, FDA has indicated they will be looking for financial records that support the very small business definition because they will be easier to maintain and review.

Requirements for Qualified Facilities

Qualified facilities are not required to comply with the full HARPC provisions. However, they are still held to CGMPs, and there are other requirements that apply to qualified facilities, including an attestation, records, and provisions relating to the conditions and processes under which a qualified exemption may be withdrawn or reinstated.

1. Attestation

Qualified facilities must submit two attestations. First, an attestation that they satisfy the definition of “qualified facility” based on their status as a very small business. They do not have to submit the sales records to support the attestation, but they are required to retain such financial records. The compliance timeline for record retention is different than the general compliance timelines, and begins as early as January 2016 for qualified facilities seeking to claim the exemption. We will discuss compliance dates in more detail below.

They must also submit an attestation either that:

1. They have identified potential hazards associated with the food being produced, are implementing preventive controls to address the hazards, and are monitoring the performance of the preventive controls to ensure that such controls are effective; or
2. The facility is in compliance with State, local, county, tribal, or other applicable non-Federal food safety law, including relevant laws and regulations of foreign countries, including an attestation based on licenses, inspection reports, certificates, permits, credentials, certification by an appropriate agency (such as a State department of agriculture), or other evidence of oversight.
   • If you follow this second option, then you must also provide consumers with the name and complete business address of the facility where the food was manufactured or processed via a label, sign at point of sale, documents arriving along with the food in the normal course of business (i.e. an invoice), or electronically for internet sales.

Again, you do not have to submit the underlying documentation that supports this attestation to FDA. But, you do need to maintain records that support the attestation, and those records must be made available in the event of an inspection.

FDA has said they will be issuing guidance that explains the types of records a qualified facility must maintain to comply with the rule.

Attestations can be submitted either electronically or by mail, and instructions for doing so are available via the Federal Register, and FDA’s website.

Compliance Dates for Submitting Attestations

Because qualified facilities are very small businesses, they have three years from September 17, 2015 (when the PC Rule was finalized) to come into compliance with the PC Rule’s modified requirements for qualified facilities, and the general provisions that apply to all facilities related to training and recordkeeping, which we discuss below.

The rule requires qualified facilities to submit their initial attestations within 90 days of the date of compliance, or by December 17, 2018. However, if a qualified facility plans to start operating after the very small business compliance date (September 17, 2018), then they must submit the attestations before they start operating.

If an existing facility plans to change its status to a qualified facility (presumably because of a reduction in average annual sales below $1 million), then they must submit their attestations by July 31 of the applicable calendar year. (On the other hand, if a qualified facility changes its status to “not a qualified facility,” then they must comply with the full PC Rule requirements by December 31 of the applicable calendar year, unless they reach an alternate agreement with FDA.)

Then, starting in 2020, qualified facilities must submit new attestations every two years between October 1- December 31 of each even-numbered year. These dates line up with the biennial registration requirement for all facilities that must register with FDA.

2. Recordkeeping and Compliance Dates for Record Retention

As referenced above, the timeline for submitting the initial attestations aligns with the three years that very small businesses have to come into compliance with the rule (within 90 days of September 17, 2018). At that time, however, the records that support the attestation must be available in the event of an inspection. Therefore, FDA is requiring qualified facilities to begin retaining the records necessary to justify the attestation much earlier.

The very small businesses sales determination is based on an average of the prior three years’ sales. The PC Rule requires facilities to make their determination that they are a qualified facility by July 1 of each year, based on the sales of the preceding three calendar years. Therefore, FDA is requiring qualified facilities to begin retaining financial records to support their status as a qualified facility by January 1, 2016. That way, by July 1 of 2018 (the year they must first submit their attestation), they will have two years of financial documentation to support their attestation.

Qualified facilities can certainly rely upon three years’ worth of financial records if they have them, but FDA will also accept two years’ worth of records for qualified facilities during any inspections done in 2018.

3. Withdrawal of a Qualified Facility Exemption

Qualified facilities are subject to provisions that relate to conditions under which FDA can withdraw their exemption, thus requiring the qualified facility to come into compliance with the full PC Rule.

There are two situations under which FDA can withdraw a qualified facility exemption:

1. In the event of an active investigation of a foodborne illness outbreak that is directly linked to the qualified facility; or
2. If FDA determines that it is necessary to protect the public health and prevent or mitigate a foodborne illness outbreak based on conditions or conduct associated with the qualified facility that are material to the safety of the food manufactured, processed, packed, or held at such facility.

However, before FDA can issue an order to withdraw a qualified facility exemption, FDA must:

1. Notify the owner or operator – in writing – of the circumstances that may lead FDA to withdraw the exemption;
2. Provide an opportunity for the owner or operator to respond in writing (within 15 calendar days) to FDA’s notification, and;
3. Consider the actions taken by the facility to address the circumstances that may lead FDA to withdraw the exemption.

FDA can also consider one or more other actions before resorting to withdrawing the qualified exemption, including a warning letter, recall, administrative detention, suspension of registration, seizure, and injunction.

The PC Rule contains additional procedures and requirements regarding the process for issuing an order to withdraw the exemption – such as who must issue the order, what the order must contain, how to appeal an order, how to request an informal hearing on the order, and when an order to withdraw an exemption can be revoked – as well a process for reinstating the exemption of a qualified facility that was withdrawn.

FDA says in the rule that withdrawing the qualified facility exemption would be a “rare event,” and that is more customary for the agency to work with a food facility to address problems before taking enforcement actions.

We will be providing more information on the details related to these processes when we update our FSMA website.

General Requirements Applicable to All Facilities that Must Register

Whether you are exempt from HARPC as a low-risk on-farm processor, subject to modified requirements as a qualified facility, or fully subject to the PC Rule (as we’ll discuss in our next post), all facilities that must register with FDA are subject to a few general requirements. These include recordkeeping and training requirements.

 1. Records

Records that must be maintained to support the various exemptions from certain parts of this rule are subject to review upon inspection. Records must be kept as either original records, true copies (i.e. photocopies, pictures, scanned copies, or other accurate reproductions), or as electronic records. This means you are not required to keep all of your records electronically, though you may chose to.

Financial records that are maintained to document the status of a qualified facility — that is, the preceding three years’ worth of sales — must be retained at the facility as long as necessary to support the facility’s status during the applicable calendar year. All other records must be retained at least two years after the date they were prepared.

2. Qualified Individuals

The PC Rule establishes requirements applicable to all facilities (whether exempt from the full rule or not) regarding the qualifications of individuals who manufacture, process, pack, or hold food – in other words, the people who work for or at the facility. The requirement applies both to facilities subject to CGMPs and facilities subject to the full HARPC requirements.

This provision requires all individuals engaged in or supervising the manufacturing, processing, packing, and holding food at the facility to be “qualified to perform their assigned duties.” To satisfy this requirement, each individual must be considered a “qualified individual.” That is, they have the education, training, or experience (or some combination of the three) necessary to manufacture, process, pack, or hold clean and safe food as appropriate to their assigned duties.

They also must receive training in the principles of food hygiene and food safety, including the importance of employee health and personal hygiene, again, as appropriate to the food, the facility, and the individual’s assigned duties.

Supervisors must also have the education, training, or experience (or some combination) necessary to supervise the production of clean and safe food.

Facilities must retain records documenting the training provided to employees as required by the rule.

The rule does not specify a specific training program. However, the rule does acknowledge that the Food Safety Preventive Controls Alliance has been funded by FDA to develop a model curriculum that can be used in-house to provide the needed training as can online CGMP or other food safety courses.

Additional Information and Resources

Our next (and final) blog post in the series analyzes the requirements applicable to facilities fully covered by the rule. We will look at the particular requirements, which include food safety plans and supply chain verification, as well as compliance timelines and provisions related to facilities that receive products from farms or qualified facilities. For information on farms and food businesses that may be entirely exempt from the PC Rule, visit our first blog post in this series.

You can view the final regulations and the discussion of comments received on the proposed rule via the Federal Register. You may also be interested in the final rule for animal food facilities.

FDA will be following up on many issues in the final rule by developing guidance documents, which provide more explanation for the regulated industry (and regulators) to use in determining whether and how the final rules apply to a specific situation. FDA is accepting questions and suggestions as they begin to develop these documents. You can submit questions or recommendations to FDA here to assist them in identifying issues that will require further explanation.

NSAC will also be updating our website and “Am I Affected” flowchart to reflect the final rules, designed to help farmers, small food businesses – and the organizations that work with them – understand whether the FSMA rules apply to them and if so, what requirements apply.

You can also read our recent blog posts on FSMA implementation and appropriations issues to learn more.