BILL ANALYSIS Ó SENATE COMMITTEE on AGRICULTURE Senator Cathleen Galgiani, Chair BILL NO: AB 224 HEARING: 07/02/13 AUTHOR: Gordon FISCAL: Yes VERSION: 06/26/13 CONSULTANT: Anne Megaro Agricultural products: direct marketing: community-supported agriculture. SUMMARY : This bill would define community-supported agriculture (CSA) within the direct marketing program regulated by the California Department of Food and Agriculture. This bill would establish regulatory parameters and require CSA registration fees to fund administration and related programmatic costs, as specified. BACKGROUND AND EXISTING LAW : The federal Farmer-to-Consumer Direct Marketing Act of 1976 was enacted to promote "the development and expansion of direct marketing of agricultural commodities from farmers to consumers" in order to "lower the cost and increase the quality of food to such consumers while providing increased financial returns to the farmers" (7 USC Sec. 3001). Shortly following, the California Department of Food and Agriculture (CDFA) enacted regulations exempting certified farmers' markets from certain packing, sizing, and labeling requirements under the Fruit, Nut, and Vegetable Standards Law in order to sell agricultural products directly to consumers. These exceptions were expanded by AB 2168 (Jones) in 2008 to include farm stands, field retail stands, and other forms of direct marketing. (Food and Agricultural Code § 47000 et seq.). Existing law makes legislative findings and declarations in regards to the direct marketing of agricultural products as being a benefit to the agriculture community and consumers by supplying quality produce at reasonable prices. Existing law encourages CDFA to assist producers in organizing direct marketing activities by providing technical advice on marketing methods and in complying with the regulations that affect direct marketing programs (Food and Agriculture Code § 47000). Community-supported agriculture (CSA): As defined by the United States Department of Agriculture's National Agricultural Library, "Community Supported Agriculture consists of a community of individuals who pledge support to a farm operation 1Galt, R.E., L. O'Sullivan, J. Beckett, and C. C. Hiner. Jan-Mar 2012. Community Supported Agriculture is thriving in the Central Valley. California Agriculture. 66(1):8-14. AB 224 - Page 2 so that the farmland becomes, either legally or spiritually, the community's farm, with the growers and consumers providing mutual support and sharing the risks and benefits of food production." According to a study conducted at the University of California, Davis1, CSAs have gained popularity in the last few decades, first forming in the mid-1980s and growing to over 3,600 CSA operations today. However, existing law does not specifically define CSAs within direct marketing programs or provide for a cohesive programmatic model or regulatory oversight. Ad Hoc Committee: CDFA convened the Direct Marketing Ad Hoc Committee to assess the role of direct marketing in California and create a transparent and inclusive process to reinvigorate the Direct Marketing Program. The Ad Hoc Committee published a report in December 2012 with their findings, which confronted the long-term health of direct marketing, funding and enforcement, and potential regulatory frameworks and program designs. The CSA Subcommittee of the Ad Hoc Committee agreed that some additional regulatory oversight may be necessary to ensure integrity of commodity marketing, food safety, and a level business playing field. PROPOSED LAW : This bill: Encourages CDFA to assist in organizing community-supported agriculture by including CSAs as a form of direct marketing under Division 17 of the Food and Agriculture Code. Defines "community-supported agriculture program," or CSA program, to mean a program under which a registered California direct marketing producer, or a group of registered California direct marketing producers, grow food for consumer shareholders or subscribers who pledge to contract to buy a portion of the future crop, animal production, or both, of the registered California direct marketing producer(s). Defines "single-farm" CSA programs to mean a program where farm products originate from and are produced at the farm of a single registered California direct marketing producer, with no more than 10% of products originating from other registered California direct marketers. AB 224 - Page 3 Defines "multi-farm" CSA programs to mean a program where all farm products originate from and are produced at one or more farms of a group of registered California direct marketing producers who declare their association as a group by certification. Requires that a registered California direct marketing producer or group comply with the following: o Register annually with CDFA as either a single- or multi-farm CSA and declare that produce will be grown in accordance with good agricultural practices, as outlined in the small farm food safety guidelines published by the department. o Label the farm delivery box with the name and address of the farm. o Maintain the consumer boxes in a condition that prevents contamination. o Inform consumers of the origin of each item included in the box. o Maintain records that document the contents and origin of all items included in each consumer box. o Comply with all labeling and identification requirements for shell eggs and processed foods. Adds registered California direct marketing producers in good standing and in compliance with these provisions as an "approved source" of food that conforms with applicable laws, current public health principles and practices, and generally recognized industry standards that protect public health. Adds any whole uncut fruit, vegetable or unrefrigerated shell egg grown or produced in compliance with all applicable federal, state or local laws, regulations and food safety guidelines issued by a regulatory agency, as an "approved source" of food. Requires all potentially hazardous food contained within a consumer box to be produced, processed and handled according to all applicable federal, state and local food safety requirements. Requires poultry, rabbit, and other meat to comply with handling requirements established in the small farm food safety guidelines published by CDFA per provisions in this AB 224 - Page 4 bill. Authorizes the California Department of Public Health or a local regulatory agency responsible for retail food safety to enter and inspect a CSA operation in response to a public food safety complaint. The CSA shall cover reasonable costs associated with such an inspection. Authorizes the secretary of CDFA to set and collect an annual registration fee, not to exceed $100, from a registered California direct marketing producer. These funds shall be used by the department for administration of this program, which includes the following: o Creation and maintenance of a registration system. o Development and publication of periodic small farm food safety guidelines in consultation with the Department of Public Health and local health officers. The guidelines shall include, but not be limited to, safe production, processing, and handling of both non-potentially hazardous and potentially hazardous foods. o Expenses incurred relative to meetings of any ad hoc direct marketing advisory committee established by the secretary. Waives part or all of the annual registration fee if the California direct marketing producer pays fees for registration or certification under any other program under the purview of this chapter. Provisions of this chapter shall be followed regardless of any fee waiver. COMMENTS : Stated need for this bill: According to the author, the "rapid expansion of CSAs in recent years along with adaptations to the original CSA model demonstrates that CSAs are in need of definition and parameters for its regulation. With the numerous economic, social, and environmental benefits of Community Supported Agriculture and its growing popularity, it makes sense to explore the creation of policy instruments to support the needs of CSA farmers and consumers." Furthermore, according to those in support, "It became clear in that task force (CDFA Direct Marketing Ad Hoc Committee) that CSAs were not an "approved source" for health and safety purposes at present, and AB 224 - Page 5 that either they needed to obtain retail food permits from Environmental Health or they needed to be clearly included in the direct marketing laws and some food safety practices mandated that would satisfy the health authorities." Ad Hoc Committee: According to the Direct Marketing Ad Hoc Committee report, "In practice, there is significant variation within the State of California in regard to definition of a CSA. These models substantially deviate from USDA's definition. For example, there are entities which purchase agricultural products at CFMs (certified farmers' markets), farm stands, field retail stands, the point of production, and wholesale markets and subsequently sell a "subscription" to the public. Other CSAs produce some of their own agricultural products and supplement with products from other producers or entities. As a result of the ambiguity related to the definition of a CSA, industry and consumers would benefit from a clear definition of CSAs that encompasses California's burgeoning CSA industry." Program cost: The $100 registration fee has been determined by the Assembly Appropriations Committee to be adequate to cover the costs of administering this program. RELATED LEGISLATION : AB 996 (Dickinson) of 2013. Amends certified farmers' market law, requirements, fees, and related provisions and adds community-supported agriculture to the definition of direct marketing. Held under submission in the Assembly Appropriations Committee. AB 1632 (Gordon) of 2012. Would have encouraged CDFA to assist in organizing the marketing of community-assisted agriculture. AB 2168 (Jones), Chapter 447, Statutes of 2008. Expands the definition of direct marketing to include farm stands, field retail stands, and other forms of direct marketing, revises related definitions, and authorizes CDFA to adopt regulations to regulate direct marketing, as specified. AB 593 (Strom-Martin), Chapter 833, Statutes of 1999. Codifies regulations exempting direct marketers from specified packing and labeling standards, amends fee structures, and authorizes farmers' markets to establish rules and procedures. AB 224 - Page 6 PRIOR ACTIONS : Assembly Floor 76-0 Assembly Appropriations 17-0 Assembly Agriculture 7-0 SUPPORT : Community Alliance with Family Farmers (Sponsor) California Association of Environmental Health Administrators California Farm Bureau Federation California Federation of Certified Farmers' Markets OPPOSITION : None received