Eight years after the Food Safety Modernization Act (FSMA) was passed by Congress, the Tester-Hagan amendment is coming into focus. It is a loophole that keeps on growing for an exemption that may never quit.
Named for Sen. Jon Tester, D-MT, and Sen. Kay Hagan, D-NC, the amendment was a late concession obtained by the two freshmen lawmakers just before the FSMA passed in 2010. Its purpose was to exempt small producers serving only local markets from all the preventive food safety standards that the Food and Drug Administration would be imposing.
So how is it working? FDA recently published updated information for food producers who want to know whether they are exempt from FSMA rules because of the Tester-Hagen amendment.
Some FSMA exemptions
Smaller produce farms and food processors are exempt from FSMA food safety rules. The FDA has recently updated the financial guidelines that define “small” operations. It is a bit complicated.
The most straightforward example, however, is the definition for small produce farms or mixed-type of facilities with an average annual value of the produce sold, during the previous 3-year period, being less than $25,000 on a rolling basis.
FDA has adjusted that for inflation to determine that the average 3-year value for 2015-2017 is $26,999. Operations that sell less than that amount are completely exempt from the FSMA’s safety rules. And, other operations that have sales of more than $1 million are now eligible for exemption from part of the food safety requirements.
Under the Preventive Controls Rule for Human Food, small businesses are qualified as eligible if they have less than $1 million in food sales. Adjusted for inflation, the 2018 figure is $1,079,963.
Some produce operations are eligible for modified FSMA requirements depending on several variables, including the critical calculation of average sales over three years, adjusted for inflation.
“A farm is eligible for a qualified exemption if the average annual monetary value of all food sold during the 3-year period preceding the applicable calendar year was less than $500,000, adjusted for inflation, and sales to qualified end-users during such period exceeded the average annual monetary value of the food sold by such farm to all other buyers,” according to FDA.
The $500,000 adjusted for inflation translates into $539,928 for the average 3-year value for 2015-17.
While the exemption and qualified exemption from the FSMA produce rule get the most attention, similar rolling cutoffs are available for:
- the preventive controls for human and animal food;
- the foreign supplier verification rule;
- the sanitary transportation rule; and
- the intentional adulteration rule.
In the latest information provided on its website, FDA updated the inflation-adjusted values through the end of March for each year. It means that for 2018 compliance, the inflation-adjusted value for 2015-2017 sales is $539,982 for the qualified exemption and $26,999 for the full exclusion.
To qualify requires sales totaling less than those numbers and making most produce sales to qualified end users.
While the passage of time has increased the number required to earn an exemption, inflation during the first decade of the FSMA is low by historical measures.
FDA’s work on the numbers and explanations of how to use them is getting positive reviews.
“We appreciate that FDA is supplying this information in a straightforward, accessible manner, and believe it provides an easy way for farmers and processors to verify their sales against the cutoff,” says the National Sustainable Agriculture Coalition’s (NSAC’s) blog.
As for the authors of that amendment setting those $25,000 and $500,000 thresholds, they’ve gone their separate ways. Hagen failed to win election to a second term, and was last seen joining a Washington D.C. lobbying firm. Tester, the Senate’s only small farm owner, this year is running for a third term.
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