Food Law: An Introduction & How It Relates to Local Food

Food Law: An Introduction & How It Relates to Local Food Vermont Bar Association, June 4, 2012 Marne Coit, Partner Greenfield Research & Consulting LLC www.greenfieldrc.com

Presentation Overview • Background • Federal Regulation of Food • Overview of Agency Authority • Labeling • Food Law & Local Food • What is Local Food • Legal Issues in Direct Marketing • Federal Government & Local Food

What is Food Law? • Definition of Agricultural Law: laws that apply to the business of farming • Bankruptcy • Credit • Estate planning • Property/Land use • Farm workers • Commodity programs

What is Food Law? • Definition of Food Law: laws that apply to food items grown/raised on farms, on farm and beyond • Labeling • Food safety • National Organic Program • Direct marketing • Farmers markets • CSAs • Agritourism/PYO operations • Farm stands

What is Food Law? History: Agricultural Law – 1980s farm financial crisis Food Law – more recent

What is Food Law? Keep in Mind: • Overlap Between Agricultural and Food Law • May be relevant federal, state and/or local laws

Federal Regulation of Food Basic Framework & Authority USDA: • Meat – Federal Meat Inspection Act • Poultry – Poultry Products Inspection Act • Egg products – Egg Products Inspection Act • National Organic Program – Organic Foods Production Act

Federal Regulation of Food Basic Framework & Authority FDA: • Everything else (including shell eggs) - Federal Food, Drug, and Cosmetic Act • FDA originally part of the USDA • 1940 moved to what is now Department of Health and Human Services

Labeling • Federal Food, Drug, and Cosmetic Act (FDCA) • First passed in 1938 • Prohibits misbranded and adulterated food/drink from entering interstate commerce • Adulterated – contains substance that is injurious to health • Misbranded – if label is false or misleading • Should be understandable by “ordinary individual” 21 U.S.C. § 343(f)

Labeling • Federal Food, Drug, and Cosmetic Act (FDCA) • Requires labeling of packaged food • name of the food • net weight • name and address of manufacturer or distributor • list of ingredients

Labeling • Federal Food, Drug, and Cosmetic Act (FDCA) • Nutrition Information • Serving size • Number of servings per container • Calories • Nutrients: fat, saturated fat, cholesterol, sodium, total carbohydrates, complex carbohydrates, sugars, dietary fiber, protein

Labeling • Vermont Law – similar to FDCA • Prohibits adulteration or misbranding of food • Prohibits the sale of food that has been adulterated or misbranded • Is “misbranded” if labeling is false or misleading

Labeling • Food Allergen Labeling and Consumer Protection Act (FALCPA) • Requires major food allergens be identified on label • Includes: milk, eggs, fish, crustacean shellfish, tree nuts, wheat, peanuts, soybeans • Applies to packaged foods regulated under FDCA

Labeling • Organic • “Organic is a labeling term that indicates that the food or...agricultural product has been produced through approved methods that integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity.” USDA-AMS website

Labeling • Organic Food Production Act of 1990 • NOP Final Rule published in 2000 • Applies to crops, livestock and other agricultural products • Must be produced and processed by standards set by National Organic Program • Synthetic fertilizers, sewage sludge, irradiation, and genetic engineering are prohibited

Labeling • Organic • Farms, ranches, distributors and processors must be inspected by certification agent • There are more than 90 organic certification agencies worldwide • Example – Vermont Organic Farmers, LLC (VOF) is the certification branch of Northeast Organic Farming Association of Vermont (NOFA-VT)

Labeling • Organic • Four tiers of labeling for foods: • *100% organic – all ingredients are certified organic • *Organic – at least 95% of ingredients are organic • Made with organic ingredients – at least 70% organic ingredients • If product contains < 70% organic ingredients, may specify which on ingredient label • *May use the USDA organic seal

Labeling - Vermont • Secretary of Agriculture, Food and Markets has authority to • Establish grades and standards for farm products • Design labels for identifying these farm products • Example: “Vermont maple syrup” shall only contain 100% maple syrup produced in Vermont • Penalties for violation: up to $5,000 and/or up to 1 year in prison 6 VSA §§ 171, 173, 490, 498

Food Law & Local Food Q: What is local food? How is it defined? A: It depends.

Food Law & Local Food Legal Definitions • There is no one standard legal definition • Different definitions for different purposes • Federal government • State/Local government • Nonprofit organizations • For-profit business • Others

Legal Definitions • First From Federal Government: 2008 Farm Bill • Title VI – Rural Development: • Locally or Regionally Produced Agricultural Food Products Loan Program: “Locally or regionally produced agricultural food product” means any agricultural food product that is raised, produced, and distributed in— (I) the locality or region in which the final product is marketed, so that the total distance that the product is transported is less than 400 miles from the origin of the product; or (II) the State in which the product is produced 7 U.S.C. § 6015

Legal Definitions • Vermont’s Definition of “local" and "locally grown" (for food and other goods) • Originated within the state or • Originated within 30 miles of where they are sold 9 V.S.A. § 2465a

Direct Marketing • Most local food sales conducted through direct marketing • Farmers’ Markets • Community Supported Agriculture (CSAs) • Pick Your Own (PYO) • Farm Stands • Farm to School/Farm to Cafeteria

Direct Marketing • Sales typically governed by oral agreements • However, written contracts helpful in some situations • Example: if farmer selling to grocery store, restaurant, or large institution

Direct Marketing • Benefits of Written Contract • Flexible Tool – can set terms to parties’ needs • Clarifies parties’ expectations • Provides assurance • Aid in long-term business planning

Direct Marketing • Possible Terms to Include • Price • Quantity • Delivery • How often, time of day, etc. • Method of payment and terms • Cash, Check, Invoice • What happens if don’t have product or don’t have enough • Duration of deal

Direct Marketing • Farmers’ Markets – Issues to Consider • Establishing a Market • Nonprofit Organizations • Towns or Other Government Entities • Is Permitting Needed • Insurance • Other applicable state/city regulations

Direct Marketing • Farmers’ Markets – Issues to Consider • Market Manager to Run Day-to-Day Operations, including: • Allocating stall space to vendors • Fee collection • Resolving disputes • Farm inspections • Opening the market for the day

Direct Marketing • Farmers’ Markets – Issues to Consider • Market Rules Can Include: • When market opens • How stall space is determined • Fees • What can be sold • producer-only vs. outside goods/products • produce vs. crafts • Signage • Parking

Direct Marketing • Farmers’ Markets – Vermont • Legal definition: when 2 or more vendors gather to sell agricultural products • As of 2010: • 87 summer markets • Total reported gross sales $7,993,334 • Agricultural products: $4,974,775

Direct Marketing • Milk • FDA’s Grade “A” Pasteurized Milk Ordinance (PMO) • First written in 1924; most recent update in 2011 • Covers: processing, packaging, and sale of Grade "A" milk and milk products • However, states regulate sales of raw milk

Direct Marketing • Vermont: Raw Milk (updated 2009) • Sales permitted for personal consumption • Can only be sold from the farm • Can’t sell or sample anywhere else • Must comply with sanitation standards • Recordkeeping requirements • Example: maintain list of customers and one year of transactions (customer name, date, amount purchased) • Labeling requirements

Direct Marketing • Vermont – Raw Milk • Two-tiered regulatory scheme • Tier 1: 50 quarts/day or less • May deliver if meet requirements of Tier 2 • Tier 2: 51-160 quarts/day • Annual inspection • Milk must be tested 2x/month • Must register with Agency of Agriculture • May deliver to customers home if purchased in advance

Federal Relationship to Local Food • Example: Nutrition Programs • Account for almost 80% of farm bill budget • Programs Include: • Supplemental Nutrition Assistance Program • Senior Farmers Market Nutrition Program • National School Lunch Program • Women, Infants, and Children (WIC) Farmers’ Market Nutrition Program • Fresh Fruit & Vegetable Program

Federal Relationship to Local Food • Supplemental Nutrition Assistance Program (SNAP) • Federal assistance program to help low-income households pay for food • Administered by the states • Eligible foods include: bread, cereal, fruits, vegetables, meats, fish, poultry, dairy products, and seeds and plants which produce food • May be used at farmers’ markets

Federal Relationship to Local Food • Supplemental Nutrition Assistance Program (SNAP) • Nationally: • 2007: 26 million participants vs. Today: 46 million participants • FY 2007: $33 billion vs. FY 2011: $76 billion • Vermont: • FY 2011: Vermont received $134,856,526 in federal funding for SNAP • On average, 92,038 individuals/month participate

Federal Relationship to Local Food • Other Programs Related to Local Food • Know Your Farmer, Know Your Food • USDA effort to support local and regional food systems • USDA Farm to School • Grants • Farm to School Grant Program • Farmers Market Promotion Program • Community Food Projects • Sustainable Agriculture Research & Education

Current Issue: Is Our Current System For Regulating Food Effective?

Additional Resources • Vermont Agency of Agriculture Food and Markets: www.vermontagriculture.com • Vermont Farmers Market Association: www.vtfma.org • Northeast Organic Farming Association of Vermont (NOFA-VT): www.nofavt.org • Farmers’ Legal Action Group, Inc.: www.flaginc.org • USDA: www.usda.gov • Food Research and Action Center: www.frac.org • National Agricultural Law Center: www.nationalaglawcenter.org

Legal DisclaimerThis information is for general informational purposes only and is not to be construed as legal advice or legal opinion. Use of this information does not create an attorney-client relationship nor establish the protections of such a relationship. www.greenfieldrc.com

Food Law: An Introduction & How It Relates to Local Food Vermont Bar Association, June 4, 2012 Marne Coit, Partner Greenfield Research & Consulting LLC www.greenfieldrc.com

Food Law: An Introduction & How It Relates to Local Food