The U.S. Senate passed S510 by a large majority, including the provisions of the Tester-Hagan amendment exempting small food producers. It’s looking ever more likely that the U.S. House will approve the Senate’s version and, presto, the U.S. Food and Drug Administration will have powers approximating those of the airport screeners (part of Homeland Security), which is absolute power, as anyone who travels well knows (and in point of fact, the legislation requires FDA to work together with the Department of Homeland Security in implementation).
It couldn’t have been an hour after the Senate acted that I received an email promo from one of the largest accounting firms in the country, wondering if I wanted to interview one of its experts advising on the impact of the legislation on businesses. Yes, there will be many services for large accounting and consulting services to sell–drawing up HACCP plans (Hazard Analysis and Critical Control Points), preparing companies for recalls, having your records in a form that will please U.S. Food and Drug Administration inspectors who can come calling at any time. Kaching, kaching, kaching.
Well, I have my own advice, and it’s a lot simpler than what the big accounting and consulting firms will tell you (and priced a lot lower to boot). Despite the supposed protections of the Tester-Hagan amendment, it’s just a matter of time, as several readers have pointed out, before they are whittled down. Definitely less time if your operation happens to be doing more than $500,000 a year in revenues, or ships product more than 275 miles–not such big numbers, as Pete points out, for an operation that is capitalizing on the fast-growing demand for nutrient-dense food.
My advice is to do all you can to stay out of harm’s way. This is authoritarian stuff we are dealing with–agents able to march in and rummage through your business materials without even having to wave a search warrant–so you’ve got to be nimble, and creative. Food producers in places like Rumania, Poland, Russia and Cuba have had lots more practice than we have, so it’s time to do some catch-up. Here are several approaches you can take:
1. Examine ways to divide your business into several separate entities, each falling under the small business revenue guidelines. Perhaps you have a vegetable LLC, an egg LLC, a cheese LLC, and a chicken LLC. You see where I’m going. The Europeans, who have long had onerous regulations on all businesses, are masters at such techniques. As you grow, you continue subdividing the business. Maybe eventually you have ten or twelve independent businesses that are part of your “organization.” But better act fast, so you don’t get sucked into the regs to begin with; it will be much more difficult, I’m sure, to exit the FDA’s tentacles than to avoid them in the first place.
2. Consider keeping two sets of books. One covers the operations in summary form, and doesn’t include lists of customers, suppliers, and other details. This is the one for FDA inspectors, while another off-site has more detailed info. Once again, get going on this quickly, so you have some practice on keeping things in order.
3. Avoid registering or getting permits from any government agencies, if possible, since the new legislation requires the FDA to work in concert with state regulators. I appreciate that my advice comes too late for many food producers, which have permits of various sorts. The idea is to be as little known to the regulators as possible.
4. Go private. Related to the previous suggestion to stay outside the permit systme, explore leasing and CSA arrangements, since there’s no evidence the new legislation will apply to these non-commercial situations. In other words, as much as possible, sell your products privately, outside the conventional distribution system.
I’m sure others here have other ideas…for example, what to do when the FDA agents come calling to implement Good Agricultural Practices on your farm. I think it’s useful to share ideas as much as possible, to get as many producers as possible sowing confusion for the enforcers. Just because Congress has no problem sacrificing our rights to be able to point to a rare “accomplishment” doesn’t mean we have to make it easy for them.