Value-added products and food safety laws.

It’s difficult for small farms and gardens to be profitable, especially in their first few years.

A few reasons why small farms tend to generate less income, proportionately, than large farms include:

  • Limited purchasing power: small farms purchase materials in small quantities and therefore don’t receive as much of a discount from retailers as large farms.
  • Low volumes of product = less efficient.
  • Small fields: on urban farms, a “field” might be no bigger than a narrow city lot.
  • Limited farm knowledge and experience: many urban farmers and gardeners are relatively new to agriculture and therefore haven’t yet learned how to maximize income from their farm.

Ag 101: Introduction to Small Scale Farming, p4.

At this weekend’s Real Food Farm workshop, I attended another interesting session called “Fully Utilizing a Small Plot.” Aliza Ess of Baltimore’s Boone Street Garden shared a few ideas for value-added products, which her farm/garden is selling this year in order to generate more income:

  • Houseplants, packaged in attractive containers.
  • Baked goods.
  • Prepared foods, such as pickles, jams, spice mixes, and sauces.

So, legally, here’s where things get tricky.

Food safety is a heavily regulated area of the economy in the United States, at the federal, state and local levels. Food safety regulation exists to prevent outbreaks of foodborne illnesses, such as E. coli and salmonella.

In Maryland, value-added food producers must either possess (1) a commercial food processing license or (2) an on-farm home processing license.

Commercial food processing license: A commercial food processor must follow the detailed state regulations found at COMAR (Code of Maryland Regulations) § 10.15.04.00-.17. The regulations include standards for ingredients, processing practices, equipment and utensils, worker sanitation, and storage and transportation.

One source estimates that the set-up cost of a commercial kitchen to produce jams and jellies could be as much as $30,000. (Nina W. Tarr, Food Entrepreneurs and Food Safety Regulation, 7 J. FOOD L. & POL’Y 35, 52 (2011)) If the urban farmer’s goal is to increase the farm’s income stream, clearly, obtaining a commercial food processing license would be counterproductive.

On-farm home processing license: An individual who owns a farm may process some products in a home kitchen that is located on the individual’s farm under this exception. The individual must complete a health department-approved food safety course and may only produce certain “non-potentially hazardous foods” such as honey and herb mixtures, dried fruit and vegetables, certain baked goods with low “water activity,” and fruit pies, canned fruit, and herbs in vinegar, all of which must be high in acid (pH of 4.6 or less). COMAR § 10.15.04.18(A), (B), & (C)(2). Forbidden products include: low-acid canned foods, cured or fermented foods, seafood, apple cider or other juice, milk, and frozen desserts. COMAR § 10.15.04.18(C)(3).

Urban farms may want to take advantage of Maryland’s on-farm home processing exception. However, a lot of smaller farms may not have kitchens located on their property; unless the kitchen in which the food is prepared is on the farm site, this license is not available to small farmers. Also, the statute requires that the individual doing the processing be the “owner” of the farm.

Another option which may work for urban farms is to hire a commercial kitchen to process the farm’s food, and then to sell the processed product. Selling the finished product would not require a food processing license; however, the commercial kitchen would take a chunk out of the farm’s profits from selling that food item.

One interesting point out of the state of California: The California Health and Safety Code has an interesting and rather archaic provision in which:

[t]he operation of noncommercial canning centers by community canning centers, schools, churches, other organizations, or housewives who pack hermetically sealed canned food products for their own consumption and do not sell the canned food, is exempt from the licensing provisions of this chapter. Health & Safety Code § 112665.

So go ahead and can away, California housewives!

Posted on by Kristine Dunkerton

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