food law

In time for another farmers’ market season, Ohio has a new food license available for food entrepreneurs who sell eggs, meats, and certain home-produced foods at farmers markets and similar venues. A new “Low Risk Mobile Retail Food Establishment license” (Low Risk MRFE) offers a lower risk level license that will benefit many of Ohio’s farm-based and home-produced food vendors. Regulations establishing the new license were effective on February 12, 2024.
Ohio law has historically required an MRFE license for vendors selling certain foods from mobile units such as trucks, trailers, tents, and stalls at farmers markets and similar locations. All mobile vendors, regardless of the risk level of the food they were selling, had to obtain the same type of MRFE license. That changes with the new regulations, which create two types of MRFE licenses, low risk and high risk, and different licensing requirements for each.
The new Low Risk MRFE license offers two positive changes for the mobile food vendors who qualify for it:
- The Low Risk MRFE license will be half the cost of the High Risk MRFE license, and,
- Low Risk MRFE license holders can use non-mechanical refrigeration rather than commercial equipment to maintain their food product temperatures.
Here’s an explanation of the new Low Risk MRFE license option.
Mobile vendors that qualify for the Low Risk MRFE license
The Low Risk MRFE license is available for mobile vendors whose activities fall into a low risk level. Low risk level activity means the food poses a potential risk to the public in terms of sanitation, food labeling, sources of food, and food storage practices at the mobile unit, but the risk is lower than higher risk food activities. Low risk activities involve foods that were “pre-packaged” before being brought to sell at the mobile unit, and include the activities of holding pre-packaged refrigerated or frozen foods that require temperature controls for safety and offering pre-packaged foods that do not require temperature controls for safety. See Ohio Admin. Code 901:3-4-05(E)
If pre-packaged, these foods that are held and offered for sale from a mobile unit will qualify for the Low Risk MRFE:
- Eggs
- Frozen and refrigerated meats and fish
- Foods from a licensed Home Bakery that require refrigeration, such as cheesecakes and cream pies
- Cheeses and dairy products from a licensed Milk Producer or Milk Processor
- Frozen foods from a facility with a Frozen Foods License
- Cottage foods from a cottage food operation, but the MRFE is not required if the cottage foods are sold at any of these locations: farmers market, farm market, registered farm product auction, a political subdivision sponsored festival or celebration, or direct from the producer’s residence.
Holding temperature requirements for a Low Risk MRFE
There has long been confusion about the type of equipment an MRFE vendor must use to maintain the temperature of refrigerated or frozen foods, and some health departments have required vendors to use only commercial refrigerators or freezers. That will change under the new rule, which allows a Low Risk MRFE license holder to choose whether to use mechanical or non-mechanical refrigeration such as ice, ice packs, gel packs, or dry ice. The rule does not require the use of commercial equipment.
There are several important points mobile vendors should note about the new rule:
- When applying for the MRFE license or renewal, a vendor should explain their refrigeration choice and method, and the health department might require a plan or process for replenishing the cooling material if using non-mechanical equipment. The health department will note the refrigeration information on the MRFE license.
- The new rule requires a vendor to refresh or replenish the ice, ice packs, gel packs, or dry ice every four hours.
- A vendor should keep a working thermometer inside each cooler or refrigerating unit and be able to document that the temperature is within the allowable range for the food held in the unit.
- Gel packs and dry ice are preferred non-mechanical methods for maintaining food packaged in paper because wet ice can destroy paper packages and increase food safety risk.
See Ohio Admin. Code 3717-1-04.1(K)(K)
Lesser fee for Low Risk MRFE licenses
The new rule specifies that a Low Risk MRFE license fee will be 50% of the health department’s fee for high risk MRFEs. See Ohio Admin. Code 901:3-4-03(A)
New signage requirement for MRFEs
The new rule also requires any MRFE vendor to display specific information on the exterior of the mobile unit, in individual lettering at least three inches high and one inch wide. The information must include:
- Name of the operation
- The operation’s city of origin
- The operation’s telephone number, including area code
See Ohio Admin. Code 901:3-4-02(I)
High Risk MRFEs
A High Risk MRFE creates higher potential risks due to concerns with receiving, holding, cooking, cooling, processing, handling, and heating food products. Activities such as assembling or cooking, heating, and reheating foods are high risk activities. A few examples of high risk activities include making kettle corn or soft serve ice cream. Most farm-based and home-produced food activities will not require the High Risk MRFE. See Ohio Admin. Code 901:3-4-05(E)
For additional questions about the new Low Risk MRFE license, contact your local health department or the Ohio Department of Agriculture's Food Safety Division.
Tags: food law, food license, mobile retail food establishment, farmers market, eggs, meat, cottage foods, home bakery
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Are you a baker ready to sell your home-baked goods? Are you a farmer looking for value-added opportunities for crops you’ve grown or livestock you've raised? Are you an entrepreneur aiming to use local agricultural products to make value-added foods?
If you’ve answered yes to any of these questions, then the new Food Business Central online course can equip you with knowledge and strategies to launch a successful farm-raised or home-based food business in Ohio.
Navigating food regulations, establishing a new business, and applying best practices for food safety can be challenges for food entrepreneurs. This course is designed to serve as a centralized hub to connect you to information and resources regarding all types of food products you might want to make and sell.
We're part of the teaching team that created the course, which also includes Emily Marrison, OSU Family & Consumer Sciences Educator, Nicole Arnold, OSU Food Safety State Specialist,and Garth Ruff, OSU Field Specialist in Beef Cattle and Livestock Marketing. Our goal is to help food business entrepreneurs start off organized, safe, compliant, and strategic. The self-paced course asks key questions with considerations to explore and actions to take on your journey to start a food business. The cost of the course is $25, and registration is at go.osu.edu/foodbusinesscentral .
The Food Business Central online course was partly funded through North Central Extension Risk Management Education, whose goal is to help farmers and ranchers effectively manage risk in their operations. This assistance comes from the United States Department of Agriculture through the National Institute of Food and Agriculture.
Tags: food business, cottage foods, home bakery, Beef, poultry, eggs, food law
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It’s the time of year when many Ohio vegetable gardeners are wondering, “why in the world did I plant so many zucchini?” And it’s also when we start hearing the question, “is there any liability risk in giving away my garden produce?” The good news is that Ohio has a food donation immunity law. The law encourages food donations by granting liability protection to those who give perishable foods like garden produce to agencies that serve individuals in need. A new amendment to the law recently passed in Senate Bill 16 broadens the types of donations that qualify for liability protection. If you’re up to your ears in garden produce, you may want to know about the food donation immunity law.
Here's how the law works.
- The grant of immunity
The food donation immunity law is in Ohio Revised Code 2305.37. It states in Section B that a person who, “in good faith,” donates “perishable food” to an “agency” is not liable for harm that may arise if the food, when distributed to an “individual in need,” is not “fit for human consumption.”
- The donation must be made “in good faith” that the food is “fit for human consumption” when donated
There is not a definition for the term “in good faith,” but it’s a term commonly used in legal situations. It means that a person acted with an “honest intent” and not with an intent to deceive or conceal something. The food donation immunity law provides two conditions to help ensure a person is donating in good faith. First, the immunity only applies if a person determines, prior to making a donation, that the food is “fit for human consumption” at the time it is donated to an agency. The term “fit for human consumption,” though not defined by this law, means that it is edible and safe. But note there is no responsibility on the donor to ensure the food will be edible and safe after it is donated, when it is actually consumed or distributed. Second, when determining whether food is fit for consumption, a donor cannot act with gross negligence or willful or wanton misconduct. These two conditions mean that if a donor doesn’t inspect the food at all before delivery or knows something happened to the food that could make it unsafe for consumption but donates it anyway, the law will not protect the donor from liability if the food causes harm.
- The law applies to “perishable food”
The law’s definition of “perishable food” is broad. It refers to any food that may spoil or otherwise become unfit for human consumption due to its nature, age, or physical condition. The definition includes fresh fruits and vegetables, fresh and processed meats, poultry, fish, seafood, dairy products, bakery products, eggs, refrigerated and frozen foods, and packaged foods. It also includes food prepared but not served by a food service operation such as a restaurant, caterer, or hotel, and gleaned foods, discussed below.
- Donations must be to “agencies” that serve “individuals in need”
Donations to friends and family don’t qualify for the liability protection—the law only applies to a donation to an “agency” that serves “individuals in need.” Several definitions and conditions are important.
- An “agency” is an organization that distributes perishable food to “individuals in need,” either directly or indirectly. The term includes any nonhospital, charitable nonprofit corporation organized under Ohio nonprofit laws, or nonprofit charitable association, group, institution, organization, or society. An “individual in need” is a person an agency determines to be eligible for food distribution due to poverty, illness, disability, infancy, or similar circumstances.
- A qualifying agency is one that does not charge a fee for the food. However, Senate Bill 16 recently amended the law to allow donations to an agency that charges an amount no more than the cost of handling the food. That change means even if individuals pay a food handling cost to receive the donated food, the donor of the food will receive immunity.
- Another section of the law, 2305.37(D), also grants immunity to an agency that distributes donated food as long as the agency determines the food is fit for human consumption when the food distribution occurs.
Ohio law also provides liability protection for “gleaning”
Growers can also be immune from liability when allowing someone else to pick or salvage the garden produce and donate it to an agency. This is referred to as "food gleaning" and Ohio law also provides liability protection to those who allow food gleaning. First, the gleaned food is considered “perishable food” and is covered by the food donation immunity law described above. Second, the food gleaning immunity law in Ohio Revised Code 2305.35 grants a landowner or operator immunity for physical injuries sustained by a gleaner during the gleaning process. The landowner or operator is not liable for injuries to a gleaner resulting from any risks or conditions of the property or any normal agricultural operations on the property.
Ready to donate?
Gardeners ready to donate excess garden produce first need to locate an agency that serves individuals in need. Find a local food bank, food pantry, soup kitchen, meals on wheels, or similar agency, and make sure the agency doesn’t charge individuals to receive the food or charges no more than the cost of handling the food. These resources can help locate an agency:
- Ample Harvest - https://ampleharvest.org/find-pantry/
- Ohio Victory Gardens - https://u.osu.edu/ohiovictorygardens/donating-your-victory/
- Ohio Soup Kitchens, Food Banks, Food Pantries - https://www.homelessshelterdirectory.org/foodbanks/state/ohio
Before delivering garden produce to tan agency, be sure to inspect the produce and ensure it is fit for consumption—clean, not spoiled, and edible. Don’t have time to pick and deliver? Find a food gleaner who may be willing to glean your garden and donate the food to an agency. Here’s a resource that lists Ohio food gleaners: https://nationalgleaningproject.org/gleaning-map/states/ohio/?fwp_state=oh.
Tags: food law, liability, immunity, food donation, food gleaning
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Did you know Buckeyes can make and sell homemade Buckeyes? That’s because those peanut butter and chocolate candies we call Buckeyes are a “cottage food” in Ohio. And our Cottage Food Law allows home-producers to make cottage foods with little agency oversight and without obtaining a food license. There are several laws that do apply to making Buckeyes and other cottage foods, though. We explain them in our newly updated law bulletin on Ohio’s Cottage Food Law.
Why do we have a Cottage Food Law?
Food science teaches us that some foods pose a lower food safety risk than other foods. Likewise, some foods have a higher chance of causing a foodborne illness if not handled properly. Our Cottage Food Law recognizes this difference and allows home-producers to make and sell those food products that have a low food safety risk and don’t require special handling. At the same time, the Cottage Food Law prohibits home-producers from making higher risk “potentially hazardous” foods.
Which foods are cottage foods?
The Ohio Department of Agriculture (ODA) has the responsibility of determining which foods are cottage foods. If a food is on the cottage food list, the Cottage Food Law applies. The full list is in our Ohio Cottage Food Law Bulletin and in Ohio Administrative Code Section 901:3-20-04. It includes items like baked goods, candies, jams and jellies, granola, and many dry mixes, herbs and mixes. But note that there are exceptions in many of the categories. For example, freezer jam and sugar free jam are exceptions in the jam category, and those types of jams are not cottage foods. For this reason, it’s important to identify whether a specific food product is on the cottage foods list. ODA also maintains a helpful list of foods that are not cottage foods, and we explain those in the bulletin. Many producers will be disappointed to know that salsa is on that list.
What laws apply to cottage foods?
Even though a home-producer need not obtain a food license to make and sell a cottage food, there are four laws that do apply to a cottage food product. These laws address:
- Labeling requirements
- Packaging restrictions
- Sales restrictions
- ODA product sampling authority
Read about these legal provisions and more in our Ohio Cottage Foods Law bulletin, available in the Food Law Library on farmoffice.osu.edu. Also check out our recent webinar that addresses product development and laws for cottage foods and other home-produced foods in the Starting a Food Business webinar series.

The world loves a good baker. If you’re one of those good bakers and you want to sell your baked goods, do you need a license? Maybe. Our newly revised law bulletin, “The Home Bakery Registration Law in Ohio,” explains when a license or “registration” is necessary for selling home baked goods in Ohio.
Whether you need to register for a Home Bakery license depends on the type of baked good you’ll produce. Certain foods are at lower risk of a food safety concern when produced at home, which we refer to as “non-potentially hazardous” foods. Those foods might fall under the Ohio Cottage Food Law, which does not require a license or registration for those who want to produce and sell foods that are on the cottage foods list. When a home baked good does pose higher food safety risks, however, the home bakery law applies to that food and additional practices are necessary to reduce food safety. The producer who wants to sell that type of home baked good must register as a “Home Bakery" with the Ohio Department of Agriculture to help ensure that food safety practices are in place.
Which home-baked foods fall into which category? This chart illustrates the differences between non-potentially hazardous “cottage" foods and potentially hazardous “home bakery” foods. If a food falls into the “potentially hazardous” category, the producer needs to apply for a Home Bakery license.
What’s required for the Home Bakery registration? Our law bulletin explains the registration and inspection process and labeling requirements. Read more about those parts of the Home Bakery Registration Law in our bulletin, available on the Farm Office Food Law Library at https://farmoffice.osu.edu/our-library/food-law.
Tags: food law, home bakery, starting a food business, cottage foods, Ohio Cottage Food Law, Ohio Home Bakery Law
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Direct food marketing in Ohio is hot. The latest USDA survey identified 7,107 Ohio farms with direct food sales--third highest in the nation. That might be why our program receives more legal inquiries about food sales than any other area of law. And that is also why we’re hosting a three-part webinar series on “Starting a Food Business,” providing an introduction to what a producer needs to know about selling home-based and farm-raised foods directly to consumers and retailers.
The free webinar series will be from 7—9 p.m. on January 24, February 28, and March 28 in 2023, with these different topics each night:
- January 24: Start-Up Basics. What do you want to sell? We’ll review initial considerations for selling your food product. We’ll cover food safety, licensing, legal, and economic considerations for starting up a food business.
- February 28: Selling Home-Based Foods. Learn about food product development, Ohio’s Cottage Food and Home Bakery laws, and requirements for selling canned foods.
- March 28: Selling Meat and Poultry. A look at the economics, processing options, and labeling and licensing requirements for selling meat and poultry.
Our teaching team for the webinar series includes:
- Nicole Arnold, Asst. Professor and Food Safety Field Specialist for OSU Extension. Nicole supports food handlers, consumers, and educators with food safety education and risk communication efforts.
- Peggy Kirk Hall, Assoc. Professor and Agricultural Law Field Specialist for OSU Extension. Peggy directs OSU Extension’s Agricultural & Resource Law Program and regularly teaches and writes on food laws.
- Emily Marrison, OSU Extension Educator in Family and Consumer Sciences. Emily’s food science background provides expertise and insight on food safety, product development, and selling home-based foods.
- Garth Ruff, Beef Cattle Field Specialist for OSU Extension. Garth has a background in animal science and specializes in livestock production and marketing, farm management, and meat science.
The webinar series is free, but registration is necessary. Find details and the registration link at go.osu.edu/foodbusiness.
Tags: starting a food business, food law, cottage foods, Beef, Food Safety, home bakery
Comments: 0
There’s much disagreement over what we know about COVID-19, but one thing we can agree upon is that it has left an impact on the food supply chain. For some food producers, that impact is creating opportunity. Many growers see the potential of filling the gaps created by closed processing facilities, thin grocery shelves, and unwillingness to shop inside stores. If you’re one of those growers who sees an opportunity to sell food, we have a few thoughts on legal issues to consider before moving into the direct food sales arena. Doing so will reduce your risks and the potential of legal liability.
1. Follow COVID-19-related guidelines
Perhaps this goes without saying, but businesses should take COVID-19 guidelines seriously. Doing so will hopefully reduce the potential of a COVID-19 transmission in the operation while also minimizing the risk of an enforcement action and potential legal liability for failing to protect employees and customers. Follow the Ohio Department of Health Responsible RestartOhio Guidelines that are now in effect. Engaging directly with customers places a grower in the “Consumer, Retail and Services” sector guidelines, which are here. Mandatory requirements include protecting the health and safety of employees, customers and guests by establishing six-foot distances or barriers, wearing face masks, handwashing and sanitizing, checking for symptoms daily, posting signs, deep cleaning, and dealing with suspected and confirmed cases of COVID-19. The FDA has also issued “Best Practices for Retail Food Stores, Restaurants and Food Pick-Up and Delivery Services” here, and OSU’s direct marketing team has many helpful resources for implementing the practices here. Develop protocols based upon the guidelines, carefully train employees on protocols, and document your compliance.
2. Determine what food safety regulations apply to you
For food safety purposes, the Ohio Department of Agriculture and local county health department require licensing or inspection of certain types of food sale activities. The regulations are a bit messy, and it’s challenging to know when an operator is affected by these regulatory requirements. We’ve explained licensing laws pertaining to sales directly at the farm in this law bulletin, “Selling Foods at the Farm: When Do You Need a License?” There are more stringent requirements for those who sell meat, process food, or sell higher risk foods or several different types of foods. We’ve provided a few simple guidelines in the chart at the end of this post, but please refer to the above law bulletin for further details. Additionally, produce growers need to comply with Good Agricultural Practice (GAPs) and Food Safety Modernization Act (FSMA) rules. Learn more about those on our Fruit and Vegetable Safety Program website here.
3. Check your zoning
If you’re within a municipality, you may have zoning regulations that apply to your production and sales activities. Check your local zoning regulation to ensure that those activities are “permitted uses” within your designated zoning district. If not, you may need to seek a “conditional use” permit. Also be aware that some municipal zoning regulations regulate “home businesses,” and a home bakery or cottage food operation that has customers coming to the home to purchase the goods might fall into that category.
If you’re outside a municipality, Ohio’s agricultural exemption from county and township zoning applies to your production and sales activities. Local zoning can’t prohibit your activities regardless of your zoning district, with limited exceptions if you’re in a “platted subdivision” situation (on a lot under 5 acres in a platted area of at least 15 other contiguous lots). Note, however, that county and township zoning can regulate a “farm market” that receives more than 50% of its gross income from goods that weren’t raised on the owner’s farm. You might need to comply with a few zoning regulations that pertain to the size and setback lines for your structure, the parking area, and ingress and egress points for customers.
4. You may have to collect sales taxes on some items
Most takeaway food items to be consumed off-site, such as meat and produce, aren’t subject to Ohio’s sales tax. But if you sell items that are not exempt from sales tax, you’ll need to collect sales taxes on the items. If you’re planning to sell ready-to-eat items on site, beverages, flowers, or container plants, you must charge and collect sales taxes and obtain a vendor’s license in order to submit the taxes to the state. Find more details in our law bulletin on vendor’s licenses and sales taxes here.
5. Review contracting situations
You’ll likely be presented with a contract or agreement in many situations, such as a farmers’ market contract or an agreement for selling on an online sales platform. Or you may need to generate your own contract for selling whole animals or establishing a “community supported agriculture” operation. In either instance, read your contracts carefully. Be sure to include and review important terms such as price, quality delivery dates, payment processes, late fees, data use, and other provisions related to your type of sale. Don’t hesitate to involve an agricultural attorney to be sure that you’ve minimized your legal risk.
6. Talk to your insurance provider
Direct food sales might not be adequately covered by your insurance policy. You’ll need to know whether you have sufficient premises liability coverage if a customer is harmed on your farm, coverage for transporting foods or for selling at a farmers’ market (typically required by the market) and product liability coverage in case someone claims illness or other injury from consuming your food. You may need to increase coverage or purchase additional riders to the policy, depending on your risk level. Reviewing your policy with your provider and aligning coverage with your food sales activities is imperative to reducing your liability risk.
7. Do you need a separate business entity?
Consider whether your food sales activities put other assets at risk, and whether your insurance is sufficient to address that risk. If not, you should consider forming a separate business entity for your direct marketing business. Forming a Limited Liability Company for your direct food sales activities can help shield your other assets from the liability of the food sales. Talk with an agricultural attorney to assess your needs and determine what type of entity is best for your situation.
8. Keep great records
This one applies to everything above. Maintain records of what you do in regards to COVID-19 precautions, employee training, food safety compliance, and financial records of your expenditures and sales. If a liability incident arises, document it carefully. Keep the records for the required amount of time, which is typically three years for receipts for purchases and sales, ten years for insurance and employee records, and permanently for other records.
9. Don’t stop here
This list is a starting point for legal considerations for direct food sales, but it shouldn’t be the end. There may be other legal issues that affect your particularly situation. To learn more and fully consider all risks of direct marketing, talk with others who’ve directly sold food, visit with your accountant, lawyer and insurance provider, and learn the best practices for growing and marketing your food products.
Do you need a license for your direct-to-customer food sales?Peggy Kirk Hall, OSU Agricultural & Resource Law Program Emily Marrison, OSU Extension Coshocton County We offer this chart as guidance and not as legal advice. Please confirm your specific situation and needs with the Ohio Department of Agriculture and your local county health department. |
Selling meat for custom operator processing. You don’t need a license to sell an animal to a customer who will have it processed by a custom operator. But you can’t bring custom operator processed meat back to the farm and sell it to customers in individual portions; that type of sale requires processing by a federally approved processor. |
Selling meat in individual portions. You may sell cuts of beef, pork and other livestock if the meat is processed and labeled by a processor that meets federal regulations and is deemed “fully inspected” by ODA (see a list of such facilities here).
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Selling chickens processed at the farm. Growers may be surprised to learn that no license is required to process and sell up to 1,000 birds per year at the farm where the birds are raised. But if a grower sells the birds along with other food items such as produce, then the grower must register as a Farm Market and be inspected by ODA. The Farm Market registration form is here. |
Selling eggs. A grower does not need a license to sell eggs produced at the farm where sold, as long as the grower has 500 or fewer birds. But if a grower wants to sell eggs through a farmer’s market or sells other low risk foods along with eggs, either a Farm Market registration and inspection from ODA (here) or a Retail Food Establishment license from the county health department is necessary. |
Selling produce. Selling only fresh, unprocessed produce does not require any licensing. However, if selling other low risk foods along with produce, a grower must either register as a farm market through ODA or obtain a Retail Food Establishment license from the county health department. |
Selling multiple food items. Regulation increases when a grower offers multiple types of food items for sale. If those items are “low risk,” the grower must register as a Farm Market with ODA, which involves a site inspection. If higher risk foods are involved, such as meat, eggs from offsite or from more than 500 birds, dressed poultry from offsite or from more than 1,000 birds, the grower must obtain a Retail Food Establishment license from the county health department. |
Selling cottage foods and home bakery goods. Many home-prepared foods such as cookies, breads, jams, granola, snack mixes and more fall under Ohio’s cottage food law and require no licensing, but there are labeling requirements. See our law bulletin on Ohio’s Cottage Food Law here. |
Tags: direct marketing, food law, cottage food, produce, eggs, meat, COVID-19, food business
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Every year, we hear fascinating legal updates at the American Agricultural Law Association’s annual conference. Thanks to presentations by Todd Janzen and Brianna Schroeder of Janzen Ag Law in Indianapolis, we were inspired to learn a little more about trends in meat law. For readers with a livestock operation, these legal issues can present great challenges, and keeping up to date on legal trends helps farmers stay prepared.
Veal, pork, and eggs: states battle each other on minimum confinement space regulations.
California voters passed Proposition 12 in the November 2018 election, which will require producers to comply with minimum confinement space regulations in order to sell certain products in California. The Prevent Cruelty California Coalition placed the proposition on the ballot, expanding a previous regulation on in-state suppliers, but the new law would apply to any producer trying to sell veal, pork, or eggs in California. By 2020, veal calves must be housed with at least 43 square feet of usable floor space, breeding pigs must be housed with at least 24 square feet of usable floor space, and egg-laying hens must have at least 1 square foot of floor space. However, by 2022, egg-laying hens must be cage free. Proposition 12 strengthens requirements approved by California voters in 2008’s Proposition 2 by imposing the requirements on out-of-state producers who want to sell their products in California.
In 2016, Massachusetts voters approved a ballot measure that would require eggs sold within the state to be cage free by 2022. Thirteen states, led by Indiana, have sued Massachusetts in the United States Supreme Court in an attempt to stop Massachusetts from enforcing the requirement. These states allege that the restriction is an attempt to regulate how farmers in other states operate, which violates the rights of other states to create their own regulations. This would be a constitutional question under what is known as the Dormant Commerce Clause, which prohibits states from unfairly regulating business activities that have impacts beyond a state’s border. Status updates on the lawsuit are available here.
Trying a legislative solution to slow the trend of cage-free restrictions, Iowa passed a law earlier this year that requires grocers that sell cage-free eggs to also sell conventional eggs if they want to receive benefits from the USDA WIC program. Supporters of the law argued that cage-free eggs are often more expensive and excluded from the WIC program. They argue that as a result, when grocers make commitments to sell only cage-free eggs, they make it more difficult for low-income families to purchase eggs.
Beef: non-meat proteins continue to target beef.
The “Impossible Burger” wants to convince consumers that a non-meat burger patty that tastes just like meat is just around the corner. Veggie burgers are not new to the grocery store shelves, but recent innovations that have allowed non-meat proteins to improve in taste and texture have raised concerns among meat producers that these products are becoming a serious threat. Given that many of these innovations have taken aim at the burger market, beef producers in particular have felt a target on their backs. As we reported in a previous edition of The Harvest, Missouri became the first state this year to regulate labeling of non-animal products as being derived from an animal, and the U.S. Cattlemen’s Association has petitioned the USDA to consider regulating labels involving animal terms like “meat.” Other speakers at the AALA conference indicated that the USDA is currently debating how to regulate labels, but has yet to develop a comprehensive rule package.
Dairy contracts: always know what you are signing.
The market has been very tough for dairy producers. Having a long term supply contract in place is certainly preferable to no contract, but depending upon the terms of the contract, unfortunate surprises may be in store.
Purchasers often write the contracts, and include terms that favor them. For example, many contracts contain termination provisions that allow either party to end the agreement for essentially any reason with prior notice, often 30 days. When producers invest in their operations under the expectation that the contract will stand throughout the term specified, these termination provisions can result in devastating surprises. As another example, many contracts contain confidentiality agreements that make it difficult for a producer to determine whether the deal they are offered is great, average, or actually bad. Equally concerning for producers are provisions that shift liability for problems with the milk to the producer, and away from the purchaser who sells the milk on the market. With modern technology, tracking where milk originated makes this possible. Courts are likely to enforce these agreements because the law of contracts favors enforcement of private agreements.
Given the current market, many dairy producers felt that they are not in a position to negotiate better terms, for fear that another dairy close by will accept the terms as-is. This position is made worse by the inability of producers to talk about their contracts with one another because of confidentiality provisions.
What a producer can do is to read the contract carefully and make sure that he or she understands the terms of the contract. It may be wise to speak with an attorney to verify that the producer’s understanding of the contract matches how the contract is likely to be read by a court.
Tags: AALA, food, food law, meat, cage-free, animal confinement, non-meat proteins, dairy contracts
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By Ellen Essman, Sr. Research Associate
On September 25, 2018, USDA found a Cleveland, Ohio company to be in violation of the Perishable Agricultural Commodities Act, or PACA. USDA initiated the complaint against Forest City Weingart Produce (Forest City) in November 2017. Forest City’s failure to pay $716,689, collectively, to numerous produce sellers is considered “unfair conduct” under PACA. The complaint was determined to be valid, and consequently, Forest City is not permitted to “operate in the produce industry” for a time. Because USDA found Forest City’s violations to be “repeated and flagrant,” under PACA, the Secretary of Agriculture had the authority to revoke the company’s license. According to USDA’s press release, Forest City will be able to reapply for a PACA license on September 21, 2020. The principal officers of the company are also banned from being “employed by or affiliated with any PACA licensee” through September 21, 2019. Since Forest City has been found to have violated PACA by participating in unfair conduct, the law states that the company is liable to those they took advantage of “for the full amount of damages,” which in this case, would be the aforementioned $716,689.
What is PACA?
PACA was passed in 1930. The Act’s purpose is to promote “fair business practices” when buying and selling “perishable agricultural commodit[ies].” A perishable agricultural commodity is defined in the law as “fresh fruits and fresh vegetables of every kind and character,” which can also be “frozen or packed in ice,” including “cherries in brine.”
PACA contains a list of what the law considers to be “unfair conduct.” Such unfair conduct is unlawful for commission merchants, dealers, or brokers, who are essentially the middle-men of the perishable agricultural commodities industry, to engage in. The following actions are deemed to be “unfair” under the law, and therefore illegal when the transaction is in interstate or foreign commerce:
- Using any unfair, unreasonable, discriminatory, or deceptive practice when weighing, counting, or determining the quantity of a perishable agricultural commodity;
- Rejecting or failing to deliver perishable agricultural commodities under the terms of the contract, if there is no reasonable cause for the failure;
- Discarding, dumping, or destroying any perishable agricultural commodity received without reasonable cause;
- Making a false or misleading statement, for a fraudulent purpose, in connection with any transaction involving a perishable agricultural commodity; failing or refusing to make full, prompt, payment in such a transaction; or failing to perform any specification or duty in such a transaction without reasonable cause;
- Misrepresenting by word, act, mark, stencil, label, statement, or deed, the character, kind, grade, quality, quantity, size, pack, weight, condition, degree of maturity, or State, country, or region of origin of any perishable agricultural commodity;
- Removing, altering, or tampering with any card, stencil, stamp, tag, or other notice upon any container or railroad car containing any perishable agricultural commodity, if such notice contains a certificate or statement under the authority or law or regulation of the federal or state government concerning the grade, quality, or origin of the commodity;
- Making any change by way of substitution or otherwise in the contents of a load or lot of any perishable agricultural commodity after it has been officially inspected for grading and certification.
PACA also makes it mandatory for commission merchants, dealers, and brokers to be licensed. In order to obtain a license, both an application and fee are required. If all the requirements are met, the Secretary of Agriculture may issue the license. Licenses can be annual or cover multiple years, depending on the type of entity licensed. The Secretary may also suspend or revoke a license.
Violations, Complaints, and Liability
PACA specifically states that when any commission merchant, dealer, or broker is found to have participated in unfair conduct (discussed above), they are “liable” to those injured by their conduct “for the full amount of the damages sustained in consequence of such violation.” Liability can be enforced through the complaint process or through the courts. Complaints of unfair conduct can be sent to the Secretary of Agriculture up to nine months after the unfair conduct occurs. Notifications of violations by merchants, dealers, or brokers can also be sent to the Secretary by officers of state agencies. The Secretary is then able to investigate complaints and notifications. If the investigation shows violations occurred, then the Secretary can “have the complaint served” on the violator. If the alleged damages are more than $30,000, the Secretary must provide the violator with the opportunity for a hearing. After a hearing, the Secretary can “determine whether or not the commission merchant, dealer, or broker has violated” any part of the law regarding “unfair conduct.”
Those interested in background information on PACA, fees, licensing, etc. can find it at the USDA’s website, here. The federal regulations that accompany PACA are here.
Written by Evin Bachelor, Law Fellow and Sr. Research Associate
We’re back from another successful Farm Science Review! Thank you to everyone who stopped by our booth to ask us questions and pick up law bulletins. We received some great suggestions on new topics affecting agricultural law, so stay tuned as we post more to our Ag Law Blog and Law Library in the near future.
Here’s our gathering of ag law news you may want to know:
ODA reviews meat inspection rules. Ohio’s meat inspection rules are up for review under the state’s Five-Year Review requirement. The Ohio Department of Agriculture (ODA) recently posted the proposed changes to Ohio Administrative Code 901:2-1; 901:2-3; 901:2-6; and 901:2-7 for stakeholder comment on its website. The primary changes to the substance of the rules are meant to bring them into compliance with new federal requirements that took effect earlier this year. ODA also proposes to merge the interstate and intrastate regulations, which could change some rule numbers, but not necessarily their substance. ODA will be accepting comments until Monday, October 1, 2018, which stakeholders may submit to AGReComments@agri.ohio.gov.
OSU explains tariff relief program and impacts. Our good friend and economist Ben Brown and other policy experts in OSU's College of Food, Agricultural, and Environmental Sciences recently published information that explains and analyzes the USDA’s response to the tariffs. View a brief brochure that explains the Market Facilitation Program here. View a longer report on the Market Facilitation Program and the impacts on farm income in Ohio here .
U.S. EPA petitions for new hearing on Chlorpyrifos registrations. A panel of three judges on the U.S. Court of Appeals for the Ninth Circuit in San Francisco ordered the U.S. Environmental Protection Agency (EPA) to cancel chlorpyrifos registrations in August. The judges cited scientific evidence that the chemical insecticide causes developmental defects in children. The U.S. Department of Justice (DOJ), on behalf of the U.S. EPA, filed a petition on Monday, September 24th, requesting an en banc hearing on the decision. If granted, an en banc hearing would involve all the judges who serve on the Ninth Circuit, rather than only the three judges who initially ordered the cancellation of the registrations. The U.S. DOJ argues that the August decision was incorrect and that the court should allow the U.S. EPA to reconsider the insecticide’s registration. For more details, check out The Progressive Farmer’s post here.
License needed to broker oil and gas leases in Ohio. On Tuesday, September 25th, the Ohio Supreme Court decided that oil and gas leases fall within the statutory definition of “real estate.” As such, a person who offers and negotiates an oil and gas lease must have a real estate broker’s license under Ohio Revised Code § 4735.01(A) and § 4735.02(A). Check out Court News Ohio’s webpage for more details.
No "bill of rights" vote for Lake Erie. The group Toledoans for Safe Water sought to put a “Lake Erie Bill of Rights” on the ballot this November as an amendment to the Toledo City Charter. The amendment would have stated that Lake Erie and its watershed “possess the right to exist, flourish, and naturally evolve,” and that the citizens of Toledo have a right to a clean and healthy environment. Enforcement would have been through a mix of revoking corporate licenses and privileges or criminal penalties if violated. Despite having enough signatures, the Lucas County Board of Elections refused to place the issue on the ballot, saying that the amendment contained provisions beyond the City of Toledo’s authority. The dispute made it up to the Ohio Supreme Court, which on Friday, September 21st, decided that Toledoans for Safe Water failed to prove that the Lucas County Board of Elections improperly denied their petition to place the issue on the ballot. The court’s decision is here.
Iowa court makes owner liable for corporate liabilities. An Iowa Court of Appeals decision recently allowed a plaintiff who was suing a biosolids management corporation to “pierce the corporate veil” and collect directly from the sole owner of the corporation. The plaintiff obtained a judgment of $410,067 against the corporation for breach of contract after the corporation stopped performing its work. However, the plaintiff could not collect against the corporation, and an Iowa Court of Appeals decided that the sole owner must pay the judgement. The court said that the owner did not conduct the business or maintain its finances in a manner that demonstrates the existence of a separate legal entity from himself or his other businesses. The owner co-mingled corporate and personal assets and accounts, failed to keep records, and had no bylaws or meeting records. For more on the case, visit the Iowa State University’s Center for Agricultural Law and Taxation website here, or view the case opinion here.
California passes "home cooked food" law. California's governor signed a bill into law last Friday that allows cities and counties to authorize and permit residents to operate “microenterprise home kitchens.” Assembly Bill 626 exempts qualifying businesses from some food service facility regulations to allow residents to sell prepared food from their home, while also recognizing the differences between a home kitchen and a commercial kitchen. To qualify, among other things, the operation can have no more than one full-time non-family employee, the food must be sold direct to the customer, and no more than 60 individual meals can be prepared per week. The bill’s full text and legislative analysis are here.
Barn wedding popularity continues to grow. Fifteen percent of weddings in the United States took place in a barn last year, according to a survey published by the wedding planning site The Knot. In comparison, only two percent of weddings took place in a barn as recently as 2009. The popularity of wedding barns has become a point of contention in many states, including Ohio, because statutory zoning exemptions for agriculture have been used to exempt wedding barns from zoning requirements. We explain Ohio's zoning exemption for "agritourism" in this law bulletin.
Ohio legislation on the move:
- Ohio Senate refers township bill to committee. The Ohio House of Representatives passed House Bill 500 earlier this summer, and the bill has recently been referred to the Ohio Senate’s Local Government, Public Safety, and Veterans Affairs Committee. House Bill 500 proposes to make a number of changes to Ohio’s township statutes, including a change to agricultural zoning regulations. If passed as-is, the bill would allow a township to use zoning to regulate agricultural activities within any platted subdivision. Under current law, townships are limited to a specified list of platted subdivisions that townships may regulate; however, the new law clarifies that the specified list is not intended to be exclusive. For more information on the bill, view the bill analysis produced by the Ohio Legislative Service Commission, or visit the Ohio General Assembly’s website here.
Tags: ag law harvest, meat, food law, oil and gas leases, tariffs, Lake Erie, corporate liability, chloropyrifos, agritourism, townships
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