BILL ANALYSIS �
AB 1871
Page 1
Date of Hearing: March 26, 2014
ASSEMBLY COMMITTEE ON AGRICULTURE
Susan Talamantes Eggman, Chair
AB 1871 (Dickinson) - As Introduced: February 19, 2014
SUBJECT : Agricultural products: direct marketing: certified
farmers' markets.
SUMMARY : Recasts and expands Certified Farmers' Market (CFM)
law by increasing fees and penalties, and creating new
requirements and violations. Specifically, this bill :
1)Creates a crime to any person, entity, or their employee or
agent, to make any statement, representation or oral assertion
by any means that is false, deceptive, or misleading related
to the sale or availability of agricultural products regarding
the following:
a) Area of production;
b) Identity of producer; and,
c) Manner and method of production.
2)Provides that violations are a misdemeanor punishable by a
fine not to exceed $2,500, or county jail not to exceed six
months, or both a fine and county jail.
3)Provides in lieu of prosecution, the Secretary of the
California Department of Food and Agriculture (CDFA) or a
county agricultural commissioner (CAC), may levy a civil
penalty of not less than $500 and not more than $5,000, for
each violation. Requires the assessed penalty be based upon
the scope of the violation, seriousness of the deception, and
the impact on the violator, including the deterrent effect for
future violation. Provides provisions for appeal.
4)Additionally, or in lieu of provisions 2) or 3), CDFA or CAC
may modify, suspend, revoke, or refuse or condition the
issuance of a license, permit, registration, or certification
issued under provisions of the CFM statute. Actions taken
shall be based upon scope of the violation, seriousness of the
deception, and the corrective or deterrent effect on future
violations. These actions are subject to due process and
applicable civil remedies of CFM statutes.
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5)Creates the Direct Agricultural Marketing Penalty Account,
with CDFA, requiring all penalties from violations of this
chapter be deposited, to be used for investigations and
enforcement actions, as well as to contract with CAC for
services related to this chapter, including investigation and
enforcement. Provides that this account be continuously
appropriated. Provides civil penalties for enforcement
collected by CAC remain with CAC.
6)Precludes duplicative actions by the state or county brought
for a violation of 1) above for the same violation.
7)Deletes the term "fraudulent" in the California Grown statute
and replaces it with the terms "false, deceptive, or
misleading" regarding the use of "California Grown" adding "or
similar terms," and deletes the current penalties for such
use, conforming them with the penalties in 2) and 3) above.
8)Adds to the direct marketing legislative findings that by the
"permitting, regulation and operating" of CFMs, creates the
essential core and foundation for ancillary, but contiguous,
nonagricultural vending activities. Makes further technical
and conforming changes.
9)Defines "agricultural product" to mean fresh or processed
products produced in California, including raw vegetative and
animal items, and, other homemade, processed, or manufactured
products are not agricultural products for purposes of this
chapter, as specified.
10)Defines "practice of the agricultural arts" to mean the
undertaking of responsibility for the various phases of
producing and harvesting a vegetative or animal agricultural
product.
11)Defines "producer" to mean a person, partnership, corporation
or other legal farm or ranch producing agricultural products
by the practice of the agricultural arts upon legally
possessed land that can be documented. Declares a person or
entity that possesses property only for the limited period or
harvest is not a producer under provisions of this chapter.
12)Permits CDFA to contract with any CAC to carry out provisions
of this chapter, including, but not limited to, assistance
pertaining to direct marketing producers and outlets; to
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categorize contracts, set compensation, fees, and rates for
contracts; and, require them to be paid from assessments and
fees collected pursuant to this chapter not otherwise covered
by this chapter.
13)Permits, upon reasonable suspicion of a violation of this
chapter, a CFM operator to contract with CAC for verification
inspections of fields or storage sites of a producer selling
at the operator's CFM.
14)Exempts from size, standard pack, container, and labeling
requirements, entities registered or certified under this
statute, and operating at an outlet or location regulated by
this statute or by local laws.
15)Makes conforming deletions of statutes where similar
authorities are added elsewhere.
16)Establishes that CFMs are registered points of sales under
provision of this chapter, operated in accord with this
chapter and regulations adopted pursuant to CFMs.
17)Requires a CFM operator to define specifically the market
area where only farmers may sell products; permitting only a
producer or authorized agent to sell agricultural products;
prohibits agricultural products purchased from another entity
to be sold; prohibits a producer or product dealer from
selling product to an entity with the knowledge that the
products will be resold in a CFM; and, requires all CFM
producers to be in compliance with provisions of this chapter.
18)Requires all vendors of agricultural products selling at CFMs
to do the following:
a) Post an obvious sign or banner at point of sale stating
the name of the farm or ranch, and the county where
products sold were produced, and a statement to the affect
"We grow what we sell." Requires vendors selling a
different farm's products at the same stand to separate the
products of each farm and correspondingly post the signage
requirements.
b) Identify all processed agricultural products by package
or container label, or bulk sales signage that the products
consist only of agricultural products grown or raised by
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the farm or ranch selling them, except for minor exceptions
as specified, including the farm or ranch name, city where
located, plant registration number of who processed the
product, and any other identity references as specifically
required or by the Cottage Food Operations statute. In the
case of meat products, identity of facility where it was
cut and wrapped, or in the case of dairy products, the
identity of the facility where it was manufactured or
processed.
c) Clearly identify organic products with point of sale
signage.
19)Vendors selling at CFMs are subject to provisions and
penalties described in 1).
20)Requires the operator of a CFM that operates, manages, or
otherwise controls a separate sales activity or vending event
or marketing area, next to the CFM, not to allow the sale or
distribution of fresh whole produce by those vendors.
21)Requires an operator of a CFM to keep accurate records and
report quarterly to CDFA the participating individual direct
marketing producers, their registration number, and number of
days they participated, and requires CDFA to create and
maintain online reporting capability.
22)Permits operators of CFMs to establish rules and procedures
that are more restrictive and stringent than state statutes
for CFMs, but cannot be in conflict with state statutes.
23)Requires nonprofit and other qualifying CFM operators, except
for CFMs operated by a government agency, to be considered
private entities that are permitted to take actions, adopt
rules and impose other requirements they need for proper and
honest operation of their CFM. Government agencies operating
CFMs are subject to their agencies conduct and actions
requirements. All CFMs are subject to applicable state and
other laws.
24)Deletes provisions for a producer to appeal a grievance of a
rule or procedure of a CFM, the informal hearing process by
CDFA, and to employ a mediator to settle the dispute.
25)Requires CDFA to establish a CFM Advisory Committee (CFMAC)
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whose primary goals are to do all of the following:
a) Promote the direct purchase of agricultural products
from producers at CFMs;
b) Ensure that CFMs are primarily maintained for the
benefit of producers selling their products; and,
c) Ensure honest and fair marketing of products at CFMs and
in the ancillary vending activities under the control of a
CFM operator.
26)Reduces the membership of CFMAC from 17 members to 14 members
and alternatives; eliminates the requirement for industry's
list of nominees of active certified producers, and instead
requires CDFA to appoint six producers or representatives of
agricultural organizations that represent producers, and six
CFM operators, and endeavor to have them be geographically
diverse and produce diverse products; and, make appointment
terms two years, serving at the pleasure of CDFA.
27)Deletes existing appointment requirements; the authority for
the CFMAC chair to call a meeting; term of office provisions,
conforming to earlier changes; and, the requirement of CFMAC
to appoint its officers, making it permissive. Makes further
technical and conforming changes to the duties of CFMAC.
28)Deletes existing provisions for CFM operators and producers
to become certified along with current set fees for CAC and
recasts them, requiring CAC to provide an estimate for various
inspection costs and certification costs; requires producers
to acknowledge they are using good agricultural practices as
described by CDFA; and, other conforming changes.
29) Deletes the existing $0.60 per day per stall fee for CFM
operators, replacing it with a $2 per day per stall fee;
expands the payment base from CFM vendors to all vendors
selling goods under the authority and management of the CFM
operator; and, maintains a CFM operators' ability to recover
part or all of the $2 fee directly from vendors.
30)Deletes the authority for CDFA to review rules and procedures
of CFMs; requires CDFA to maintain a current list of CFMs and
certified producers; and makes conforming changes.
31)Deletes the January 1, 2018 sunset provisions for this
chapter, making this permanent.
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EXISTING LAW exempts farmers that market direct to consumers
from standard pack and size requirements; establishes
requirements for CFMs and producers to be certified; authorizes
CDFA to adopt regulations to permit the direct selling of
certified agricultural products to consumers; authorizes the
collection of up to sixty cents ($0.60) per producer per market
day to be used for administration, inspection and enforcement;
provides for the appointment of a 17 member advisory committee;
permits CFMs to establish rules and procedures that are more
restrictive than the state rules; provides for civil penalties
for violations of rules; provides for an appeal and decision
process by CDFA; creates a crime by establishing a violation and
provides enforcement provisions that sunset January 1, 2018;
and, allows CDFA to appoint ad hoc advisory committees to assist
in the administration of programs under this authority.
FISCAL EFFECT : Unknown. Legislative Counsel has keyed this
bill fiscal.
COMMENTS : Certified farmers' markets have become established in
many California communities, as have other outlets for direct
marketing, such as farm stands and community supported
agriculture. There are roughly 800 farmers' markets in
California, a significant number of which operate year-round.
Following the enactment of the Federal Farmer to Consumer Direct
Marketing Act of 1976, CDFA enacted regulations that exempted
farmers from packing, sizing and labeling requirements for fresh
fruits, nuts, and vegetables, and enabled them to sell products
they grow at farmers' markets, provided they receive
certification from a CAC. The certification process is to
guarantee the consumer that the product is grown by the seller.
The success of CFMs has created community events around them.
Many CFMs have adjacent non-agricultural markets selling all
types of homemade and commercial products. There have been some
non-CFMs that sell agricultural products in competition with the
farmers within the CFM.
As CFMs have become more popular, the willingness of a few
producers to sell whatever they could became a concern to many
CFM operators. In 1999, they came to the Legislature and
enacted a daily per stall fee of sixty cents, intending it to be
used by CDFA and CAC for inspections and enforcement purposes.
Due to the growth of the program and reductions in General Fund
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to CDFA and reductions to CACs budgets, the fee has had to be
used to administer the program and not for inspection and
enforcement, as it was intended.
A few years ago a Los Angeles television station did an
undercover story, exposing a certified producer who was not
producing what he was selling, causing much concern to the
publics' confidence in buying from CFMs. CDFA put a task force
together to attempt to evaluate the program and develop new
requirements for operating and participating in a CFM.
AB 1871 uses the task force recommendations to restructure and
expand the requirements for CFMs, producers, and adjacent
non-agricultural markets. It establishes a specific inspection
and enforcement fee, while increasing the amount of the daily
stall fee, as well as, broadening the pool of payers to include
those that participate in adjacent non-agricultural markets. It
prohibits the sale of fresh whole agriculture product being sold
at the adjacent market, and it requires the producers to declare
that they are "selling what they grow," thereby creating a claim
that can be pursued by district attorneys or citizens, being
modeled after Business and Professions Code false advertising
statutes.
The prerequisite of food coming from an approved source is one
of the many new food safety requirements to have come from the
2010 passage of the federal Food Safety Modernization Act. CDFA
has developed Small Farm Food Safety Guidelines, which are
considered to cover "on-farm, food safety, good agricultural
practices" for producers to follow. This is an important
element for food safety.
Last year this committee heard AB 996 (Dickinson), which was
substantially similar to this bill. We also heard AB 224
(Gordon). Both bills were passed out of committee but had
several conflicts that were addressed after our committee
hearing. AB 996 was held in Assembly Appropriations Committee
and AB 224 was signed by the Governor.
As written, AB 1871 states honey as an agricultural product
permitted to be sold. There are other products that come out of
a bee hive such as beeswax, pollen, propolis, and royal jelly,
in addition to honey. The committee may wish to consider
changing the term 'honey" to "honey bee hive products." This
would broaden the products that beekeepers could sell at CFMs.
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The committee may wish to consider a technical change on page
10, line 24-25, regarding the reference to "local laws," which
typically are referred to as "local ordinances."
RELATED LEGISLATION : AB 996 (Dickinson), held under submission
in the Assembly Appropriations Committee, died pursuant to
Article IV, Section 10(c) of the Constitution, rewrote and
expanded CFM laws, requirements, and fees; and, increaseed
penalties for violations.
AB 224 (Gordon), Chapter 404, Statutes of 2013, created
definitions dealing with requirements for Consumer Supported
Agriculture (CSA); and, authorized CDFA to establish fees, not
to exceed $100, to administer this new program, as specified.
AB 654 (Hall), Chapter 409, Statutes of 2013, extended the
sunset date to January 1, 2018, for the collection of CFM
operator fees and enforcement provisions.
SB 513 (Cannella), Chapter 337, Statutes of 2011, extended the
sunset date to January 1, 2014, for the collection of CFM
operator fees and enforcement provisions.
REGISTERED SUPPORT / OPPOSITION :
Support
Beverly Hills Farmers' Market
California Farm Bureau Federation
Harbor Area Farmers Markets
Model Neighborhood Program
Sustainable Economic Enterprises of Los Angeles
The Hollywood Farmers' Market
Opposition
None on file
Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084