From: Food Quality & Safety magazine, April/May 2013

Small Businesses Tip the Scales for FSMA Exemptions

by Ted Agres

Small Businesses Tip the Scales for FSMA Exemption

About three-quarters of the U.S. farms that grow, harvest, pack or hold produce, as well as food companies that manufacture, process, pack, or hold food, are likely to be ­exempt from all or most of the requirements of Food Safety and Modernization Act (FSMA). This is because these farms and facilities will be considered to be “small” or “very small” businesses based on the value of their annual sales, end customers, or both.

On Jan. 4, 2013, the FDA published draft regulations on produce safety (“Standards for the Growing, Harvesting, Packing and Holding of Produce for Human Consumption”) and for preventive controls (“Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food”). The two proposed rules, which total more than 1,200 pages, are the first of at least four regulations to implement FSMA. Rules on preventive standards for animal food facilities and on foreign supplier verification requirements are expected sometime this year.

But thus far, it appears that most U.S. farms and food companies will dodge many FSMA requirements. Despite this, the FDA estimates that about 90 percent of the produce grown and consumed in the U.S. will either be covered by FSMA, be consumed cooked, or be processed in plants capable of handling biological hazards associated with produce. However, while family-owned farms, small growers, and small business alliances laud the exemptions, many other food safety experts do not.

“Being a public health agency, FDA knows full well that small places can cause big problems,” says David Acheson, director of the food and import safety practice at Leavitt Partners and former FDA associate commissioner of foods. “I don’t honestly believe that FDA is very comfortable with this, but they have to do what they’ve been told and so will default to using Small Business Administration-type definitions, such as fewer than 500 employees or certain dollar amounts so there will be some consistency across the federal government as to how ‘small’ and ‘very small’ businesses are defined,” Acheson tells Food Quality magazine.

Tester Amendment

As happens with nearly all major pieces of legislation, a variety of interest groups and lobbyists sought to influence FSMA as it was being crafted in Congress. For example, supporters of sustainable agriculture and family-owned farms urged Congress to exempt small growers and small processors, while many large corporations and trade groups urged inclusion regardless of size. In this case, the small farms won. The Tester-Hagan Amendment exempts small farms from having to comply with most FSMA requirements. Named after its cosponsors, Democratic Senators Jon Tester of Montana and Kay

Hagan of North Carolina, the amendment is based on two premises: That FSMA’s requirements would be too burdensome and expensive for small-scale growers and producers, and that food products from small farms and businesses aren’t as risky as those produced by large operators.

“Let’s face it: Dangerous foodborne outbreaks don’t start with family agriculture,” Tester said after introducing the amendment in 2010. “Food produced on that scale shouldn’t be subject to the same expensive federal regulations as some big factory that mass produces food for the entire country.”

The Tester Amendment exempts farms from most FSMA requirements if they have less than $500,000 in average annual sales and more than half the sales go to “qualified end-users,” defined as consumers anywhere or to restaurants or retail food establishments in the same state as the farm or not more than 275 miles away. (These farms may need to comply with certain labeling requirements even if they are exempt.) FDA can withdraw the exemption if the farm is directly linked to a food-related outbreak or to mitigate or prevent an outbreak.

The draft produce rule also excludes any produce that is considered low risk with respect to biological hazards. Examples include produce that is rarely consumed raw, such as potatoes, or that will undergo processing that includes a kill step, such as green beans intended for canning. The proposed rule also does not apply to produce for personal or on-farm consumption.

The rule, which is open for public comment until May 16, 2013, exempts farms having less than $25,000 in average annual sales. According to the FDA, 40,496 domestic farms (including 285 sprout farms) will be fully subject to FSMA rules. Fully or partially exempt would be 75,716 farms that fall under the Tester Amendment provisions and 34,433 farms having less than $25,000 in sales. By this count, 73 percent of all U.S. produce farms would be fully or partially exempt from FSMA requirements. However, FDA notes that, as a group, food businesses with less than $500,000 in annual sales produce less than 1 percent of all U.S. food by dollar value.

Small farms that do not come under the Tester Amendment would be given extra time to comply with FSMA requirements. Sixty days after a final produce safety rule is published in the Federal Register, non-exempt “small businesses” (those with less than $500,000 in annual sales) would have three years to comply with requirements. “Very small businesses” (those having less than $250,000 in annual sales) would have four years to comply, while other businesses would have two years. The smallest farms, those having less than $25,000 in sales, are exempt.

“We know one-size-fits-all rules won’t work,” said Michael R. Taylor, deputy FDA commissioner for foods and veterinary medicine, when the rules were published back in January. “We’ve worked to develop proposed regulations that can be both effective and practical across today’s diverse food ­system,” he said.

Others are not so sanguine.

“Income has no relationship to risk of bacterial contamination,” says David W. Plunkett, senior staff attorney at the Center for Science in the Public Interest in Washington, D.C. “Therefore we see absolutely no reason to suppose that these [small] facilities and farms are inherently safer than larger facilities and farms. One likely result of the Tester Amendment is that food from Tester facilities and farms will begin to bear a disproportionate share of the illness burden,” Plunkett tells Food Quality magazine. “We can’t ignore the fact that Tester weakens FSMA’s effectiveness at preventing foodborne disease.”

Preventive Control Rule

A bit more complicated are small businesses exemptions in the proposed preventive control rule. In general, the rule would require facilities that manufacture, process, pack, or hold food to register with FDA. Unless exempted, these facilities must have a hazard analysis and preventive controls plan in place. (Farms are generally not required to comply unless they are a “mixed use” facility that also employs a processing activity, for example, chopping vegetables.)

The preventive control rule would establish modified requirements for “qualified facilities”—that is, facilities that either meet the Tester Amendment definition for business size and customer base, or that are “very small” businesses. For the latter, FDA is proposing three different categories and is requesting comment on each. The options are average annual revenues of $250,000, $500,000, or $1 million.

However defined, these very small facilities and the Tester Amendment-level firms would only be required to certify that they have identified potential hazards associated with the food being produced and are implementing and monitoring preventive controls measures. Alternatively, they could submit documentation that they comply with a state, local, county, or other non-federal food safety law, including relevant laws and regulations of foreign countries. In either case, they wouldn’t have to submit any actual plans.

FDA estimates that about 97,646 domestic food manufacturers, warehouses, and wholesalers would fall under the preventive control rule. If the exemption were set at less than $250,000 in annual sales, FDA says 46,097 of these firms, or 47 percent, would be exempt from hazard analysis and risk-based preventive controls. If set at less than $500,000, 57,411 or about 59 percent would be exempt, and if less than $1 million, 74,985 or about 77 percent of the firms would be exempt.

Like the produce safety rule, FDA is accepting comments on the draft rule until May 16, 2013. Sixty days after publication of a final rule, large facilities will have one year to comply with requirements, while non-exempt small businesses would have two years and non-exempt very small businesses would have three years.

“I’m not sure it makes that much difference whether a firm has $250,000 or a million dollars in sales,” says Acheson. “But part of the reason FDA is asking for comment is if they get an overwhelming response saying to make the definition as stringent as possible, it gives them cover to do so. If they don’t get it, they will stick to where the comments lead them.”

Both Acheson and Plunkett wish that small businesses had been treated differently.

“If I were calling the shots and had the resources, I would be putting preventive controls requirements on all small businesses irrespective of size if they ship through interstate commerce,” Acheson says. “But I would also build robust programs to educate and train the small producers. The challenge is that many of them are not sophisticated enough to understand what they need to do.”

Plunkett believes that all food processors should conduct science-based assessments of risk and implement preventive measures. “The rule should be structured to accommodate size without overlooking mitigation or elimination of risk,” Plunkett says. “There is a logical lapse in Tester’s assumption that a processor who can’t afford to implement reasonable preventive measures is somehow going to always produce safe food.”

Agres is based in Laurel, Md. Reach him at



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