- [Announcer] The following is for informational
purposes only, and is not intended as legal advice.
- [Presenter] Now let's find out if you are eligible
for any of the exemptions that are available
under the FSMA Produce Safety and Preventive Controls
for Human Food rules.
If you determined that your produce or foods
are not covered under the Produce Safety rule
or the Preventive Controls rule,
this video does not apply to you.
First, what is an exemption?
An exemption means you do not have to comply
with all parts of the rule.
You only have to comply with certain parts of the rule,
called modified requirements.
Exemptions are generally based on
the size of your operation, your intended buyer,
or how the product will be used
once it gets into the marketplace.
You will need to find out
what the modified requirements are.
Okay.
Let's begin again with the Produce Safety rule.
If you have determined that at least
some of your produce crops are covered under this rule,
now you can find out whether you qualify for any exemptions.
We'll walk you though each step in the flowchart
to see what exemptions might be available.
If you are unsure at any point
as we move through this video,
stop and go back to review it.
The first determination to make
is whether or not your produce is intended
for further processing that destroys pathogens.
For instance, blanching vegetables in hot water
before freezing, or thermal processing in cans or jars,
are processing methods that can reduce
the number of harmful microorganisms to safe levels.
So, for example, although tomatoes or carrots that you grow
may be covered under the Produce Safety rule,
if you sell them to a commercial freezing
or canning operation, you are eligible
for a processing exemption under the Produce Safety rule
for these specific crops.
If your produce will not go through further processing
to destroy pathogens, that is,
you know that it will be sold to consumers
in its fresh form, then you won't be eligible
for the processing exemption, but,
you may still be eligible for what the FDA calls
a qualified exemption.
So, now you need to determine whether
your average annual total food sales
are either less than $500,000 or at least $500,000.
Here, total food sales includes the value
of all the food your business produces,
not just your produce sales.
So, produce plus any other food crops,
like grains intended for making bread,
milk from your dairy herd, or even the value
of animals raised on your farm
that are intended for human food.
If your total annual food sales are $500,000 or more,
then you are not eligible for a qualified exemption
and you must comply with all requirements
in the Produce Safety rule.
However, if you chose my average annual total food sales
are less than $500,000, you still have a chance
to get this exemption.
The decisions that follow are related
to who you sell your produce to.
First, you need to decide how much
of your food sales are direct to consumers.
Examples of direct sales to consumers
are when you sell your produce
at your farm stand, a farmer's market,
through a CSA program, or over the internet.
Are more than 50% of your average annual food sales
directly to consumers?
If so, then your farm business is eligible
for the qualified exemption.
If this isn't the case, and 50% or less
of your food sales are direct to consumer, keep going.
There are a few more decisions you need to go over.
If 50% of less of your food sales
are made directly to individual restaurants
or grocery stores who prepare or sell it
to consumers at that site, that would mean
that the majority of your sales
are to grocery chain warehouses,
brokers, distributors, fresh processing facilities,
or other types of businesses,
where your produce will be resold to other businesses.
If this is the case, you are not eligible
for a qualified exemption, and you must meet
the full requirements of the Produce Safety rule.
But if more than half your food sales
are made directly to restaurants
or retail food establishments and not to a distributor
who resells to another business,
there is another way you might be eligible
for a qualified exemption.
If you fall into this category,
there is one more requirement you need to meet
to get the qualified exemption.
The restaurants or retail food establishments
you sold the food to must be in the same state as your farm,
or no more than 275 miles away.
This was written in the law by Congress
with the goal of giving local foods a break.
If that is your situation, then you are eligible
for a qualified exemption.
If your food sales are to out-of-state buyers
that are more than 275 miles from your farm,
then you are not eligible for the qualified exemption,
and you must comply with all requirements
within the Produce Safety rule.
Now we switch directions to the Preventive Controls rule.
If you decided earlier that you are covered
under the Preventive Controls for Human Food rule,
we can move on to find possible exemptions.
If your business is a farm
where commercial food processing activities also occur,
then start on this side of the chart
and go through the decisions.
We'll go over possible exemptions
for non-farm processing activities a little bit later.
So, if you process foods on your farm,
you need to decide whether all
of your processed food products
are on the FDA's list of low-risk products.
Those considered low-risk are the only
farm processing activities you can do
and still be eligible for what the FDA calls
a mixed type facility exemption.
So, what does the FDA consider to be low-risk?
Low-risk processing activities include
making jams and jellies, syrups and honeys,
grains, oils, vinegars, baked goods,
and other products that do not require refrigeration
to keep them safe to eat.
Many small-scale processors add vinegar
or other acids to foods to pickle them.
However, pickled products are not on the low-risk list.
If, from this list of activities,
you decide that you process at least some items
that are not considered to be low-risk on your farm,
then you are not eligible
for the mixed type facility exemption.
But you may still qualify
for the qualified facility exemption.
To find out if you qualify
for the qualified facility exemption,
you will need to go through the decisions
on the other side of this chart.
We'll come back to that in just a bit.
If you decided that all of my processed food products
are low-risk, then you may be eligible
for the mixed type facility exemption,
but only if you meet certain business size requirements.
If you have less than 500 full-time employees on your farm,
or your average annual food sales
plus the value of your inventory
is less than $1 million, then you are eligible
for the mixed type facility exemption.
Recall that to get your annual total food sales,
you want to take the average of all your food sales
over the previous three years,
including things like produce, grains, dairy, and meats,
and don't forget to add the value of your inventory.
But what you if you have at least 500 full-time employees
and your annual food sales plus the value of your inventory
are at least $1 million?
Then you are not eligible
for the mixed type facility exemption
under the Preventive Controls rule.
So, if you either manufacture processed foods
on property that is not a farm,
or you do your processing activities on your farm
but were not eligible for the mixed type exemption,
now we can check to see if you are eligible
for a qualified facility exemption.
We only need to answer one question to find out.
Are your average annual food sales
plus the value of your inventory at least $1 million?
If this is true, then you are not eligible
for a qualified facility exemption.
But if your average annual food sales plus inventory
are less than $1 million,
then you are eligible for a qualified facility exemption.
It's that simple.
That was a lot of information.
Again, go back and review it now if you need to.
Proving eligibility for qualified exemptions
under either rule requires three years of sales records
to support your claim for the exemption.
You should begin collecting sales records now
to prepare you for your claim
once your compliant date occurs.
Keep in mind that the FDA can remove your exemption
if they find you are growing produce
or making processed food products under unsafe conditions.
As you can see, the requirements
for obtaining an exemption are complex.
If you are still not sure where you stand,
we recommend going to the Penn State FSMA website
to find an expert who can help you.
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