Small Growers Worry New Rules Will Shut Down Farms

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Published September 10, 2013

| FOXBusiness

For small farmers, some seeds of change are being sown, as the 10-month comment period for a rule that would change the way farmers grow, harvest and store produce winds down over the next couple months.

The Food Safety Modernization Act, called a “sweeping reform of our food safety laws” by the FDA, was signed into law by President Obama in January, 2011. FDA Deputy Commissioner Michael Taylor says the law aims to prevent the introduction of biohazards and protect consumers from the threat of food-borne illnesses. But more than two years later, the proposed rule specifically governing the way farmers produce fruits and vegetables is still being hammered out—and many local and organic farmers are more than a little wary.  

“We’re in the process of developing regulations to implement the statutory mandate of safe growing practices,” says FDA Deputy Commissioner Michael Taylor. He says the FDA has been recommending agricultural best practices to farmers for decades, but the agency has never before regulated practices used on the farm.

To that end, the FDA has extended the comment period in which farmers affected by the law can submit feedback until November 15. Taylor expects that the final rule will be published in June, 2015.

“There is a lot of concern being expressed by the grower community about how this will affect them,” says Taylor. Farms with $500,000 or less in annual sales that sell half of their goods to consumers or local retail outlets will be exempt from compliance. And another 20% of farms producing low-risk items like potatoes, which are cooked by consumers, will also be exempt.

But Roger Noonan, president of the New England Farmers Union, says the $500,000 threshold doesn’t make much sense.

“That’s a very small business,” says Noonan, who suggests that too many small- and medium-sized farms will have to comply.

Water Compliance Costs Run High

Taylor admits the proposed regulation surrounding water quality may prove challenging to small businesses.

“It targets irrigation water on the part of the plant that you’re harvesting … a lot of the larger companies are already doing what we’ve proposed,” he says.

But Noonan says calling the compliance costs “challenging” doesn’t quite capture the full extent of the burden on small farmers.

“They probably underestimated the costs by half – the capital costs, annual compliance costs, recordkeeping and testing,” says Noonan, who himself runs a 150-acre vegetable farm. He estimates his costs at $14,000.

“The cost of testing surface water is too expensive … It may cause some farmers to choose not to continue farming,” he adds.

Many of the farmers who have submitted official comments on the regulation second this fear.

“By extending rules that might make sense to industrial growers who gross millions of dollars a year in huge operations to small growers, you run the real risk of putting them out of business. And you risk depriving the increasing numbers of people who wish to purchase fresh, local produce from farmers they know and trust,” says James Eisenstein, who farms with his son on a certified organic vegetable farm.

And Larry Martin, a grass-fed beef producer in Oregon who is neighbors with many vegetable farmers, questions the validity of the safety standards suggested by the FDA.

“What science-based trials have been done to justify the microbial standard, or is it just an arbitrary number borrowed from EPA's recreational water standards with no correlation to proven risk from real life production systems?” asks Martin. He expresses concern that lawmakers’ good intentions may cause damage to local food systems.

Suspicions Regarding Big Agri-Business

With the local and organic food movement growing in popularity, many small farmers are viewing the new rules suspiciously, wondering whether big farms will benefit from the regulations.

In August, Agriculture Secretary Tom Vilsack announced that there were currently more than 8,000 farmers in the USDA directory, up from 5,000 just five years earlier. And the latest Census of Agriculture estimated nearly $7 billion in local food sales last year – an increase of $6 billion since 2005.

In terms of the relative impact of the food-safety rules, The George Washington University Regulatory Studies Center estimates that compliance costs for large farms will run to only 1% of annual sales. Small farms with less than $500,000 in annual sales (those not meeting the exemption threshold based on percentage of sales to consumers or local retail outlets), however, can expect to pay anywhere between 4% and 6%, with the smallest of farms paying the greatest percentage of sales.

“This puts small and very small farms at a significant competitive disadvantage relative to their larger counterparts,” write the authors of the GWU study.

For his part, Noonan says the effect on small farms could be a “big boon” for larger businesses who are now selling the specialty items like kale and kohlrabi made popular by local farms. Should some of these smaller farms call it quits, Noon suggests that consumers might go back to shopping from larger producers.

Eisenstein, the organic farmer, says it could suffocate the local movement.

“The growing competition from organic, local produce undoubtedly comes as unwelcome news to agri-business, the Grocers Association, and other big players in the food system, and no doubt they would like nothing better than to see unnecessary and unaffordable regulations imposed on small farmers as a way to stifle competition,” says Eisenstein.

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