EAST LANSING, Mich. — The Food Safety Modernization Act (FSMA) Produce Safety Rule specifies that produce growers who have annual gross produce sales of $25,000 or less are excluded (not covered) under the Produce Safety Rule. On the surface, it sounds simple, but it isn’t. Growers often get confused around what products get figured into the sales average, how the $25,000 number changes with inflation and how donations get figured into the average.
The FSMA Produce Safety Rule has a lot of thresholds. Some are based on total food sales, some are based on covered produce sales and some are based on total produce sales. It’s important to note that the $25,000 farm exclusion is based on total produce sales. These are all fruits and vegetables, even if they are excluded from the Produce Safety Rule. The $25,000 does not include animal feed or processed food being sold as a part of a farm market.
Another issue that trips people up is the inflation adjustment for the exclusion. The $25,000 threshold is benchmarked against 2011 dollars, making it a bit of a moving target. To find out where the current threshold is actually at, you can input the last three years in the FSMA Inflation Adjusted Cut Offs Calculator. This generally only affects those farms that gross just over the $25,000 threshold.
The last issue that confuses growers is how to handle donated produce. The threshold is tied to gross produce sales, and most of the time donated produce is not thought of as a sale. The best explanation comes from FDA directly from the preamble of the FSMA Produce Safety Rule.
“For purposes of the sales thresholds in this rule, FDA does not consider a donation in which there is no payment of money or anything else of value in exchange for produce to be a ‘sale.’ Such donations, including to public institutions or non-profit organizations, are not counted toward a farm’s sales revenue. However, sales of produce to any public institutions or non-profit organizations in which money or anything else of value is exchanged for produce must be counted as sales for purposes of this rule.” (Response to comment 119, Preamble to FSMA Produce Safety Rule.)
Understanding where you fall is a very important question because this is the first question a grower must ask in order to determine if they are covered. If a grower doesn’t gross above this $25,000 threshold, no further action is legally necessary.
If you have specific questions about exemptions of the Produce Safety Rule or have difficulty determining your own exemption status, contact the Michigan State University Extension Agrifood Safety Work Group at email@example.com or 517-788-4292.
— Phil Tocco, Michigan State University Extension
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