Cottage Food Industry: Lessons Learned from the Southeastern States
Craig Nielsen
Food Safety Manager
Food Safety Division/Georgia Department of Agriculture
International Food Protection Training Institute (IFPTI)
2011 Fellow in Applied Science, Law, and Policy: Fellowship in Food Protection
Abstract
The cottage food industry, in which foods are produced at private residences, is an emerging issue for public health agencies. The Georgia Department of Agriculture (GDA) has received inquiries from community leaders and a state legislator advocating to allow cottage food operations in Georgia. If the GDA is going to adopt cottage food regulations, the lessons learned from experiences in other states that have established such regulations would be very beneficial. In an effort to understand other regulatory agencies’ perspectives on the cottage food industry, state food safety program managers within the Association of Food and Drug Officials of the Southern States (AFDOSS) region were surveyed and asked to evaluate their state’s cottage food program. The results of the qualitative analysis of the survey data indicated that funding for a cottage food program is a fundamental issue to be considered, and that the more control an agency exerts over cottage food operators, the more resources the agency must spend on the cottage food program. When asked to identify strengths of their cottage food programs, program managers cited public relations and the control that the regulatory agencies have over the types of products produced and the limited locations where these products can be sold. Weaknesses identified include the personal safety of employees having to enter private residences, the lack of food safety training, inadequate resources, and the possibility of future exemptions to food safety regulations. If funding is one of the primary challenges to having a cottage food program, educational programs and certified food safety training can provide the best “bang for the buck.” Another recommendation would have cottage food operators register annually and be permitted by the regulatory agency. The final recommendation is for regulatory agencies to reevaluate their cottage food programs.
Background
Currently, 37 states have cottage food regulations, and some of these states are looking to expand their cottage food industry. There are even “food freedom” movements that would like to see food safety disregarded and all regulations that impede personal liberties removed, regardless of the public health consequences. New Hampshire is the latest state to take this stance with the introduction of the New Hampshire Food Freedom Act, which was introduced during the 2012 session (HB 1650-FN).
In times of economic hardship, people begin to explore other sources of income, and many consider selling food they prepare at home. In the state of Georgia, which currently has a jobless rate of 9.2% (Georgia Department of Labor), home-produced foods may be sold at nonprofit events, but there are some restrictions. Organic foods, dairy products produced under the Pasteurized Milk Ordinance, meat products covered by the Meat Inspection Act, and acidified/low-acid foods are examples of food products that are not exempt from the licensing requirements, and, therefore, cannot be sold at nonprofit events unless the manufacturer has obtained a license from the Georgia Department of Agriculture (GDA).
Even before the recent economic troubles, local farmers markets began popping up as there became an increased demand for “locally grown” products. Since the economic downturn, however, these local markets have become an outlet for many new home food producers who are out of work and are trying to generate income. The popularity of local markets is increasing, and the city of Atlanta is adding zoning regulations for farmers markets. The new regulations require at least 75% of the products sold at a farmers market to be produce or “value-added farm products,” such as jams, baked goods, meats, and cheeses (Wood 2011). Value-added farm products, cheeses, and meats sold at nonprofit events are not exempt from Georgia licensing requirements.
Problem Statement
While Georgia currently does not have cottage food regulations, the GDA has received inquiries from community leaders and a state legislator advocating to allow cottage food operations. If the GDA is going to adopt cottage food regulations, the agency needs a better understanding of the potential immediate and long-term effects of those regulations.
Research Questions
If the state of Georgia is going to adopt cottage food regulations, what lessons can be learned from other states that have established such regulations?
What would these other states have done differently?
What are the strengths of these other states’ programs?
What are the weaknesses of these other states’ programs?
Methodology
In an effort to understand other regulatory agencies’ experiences with the cottage food industry, a survey was developed for program managers to evaluate their state cottage food programs. The survey was reviewed by International Food Protection Training Institute (IFPTI) subject matter experts and program managers within GDA. After review, the revised survey was administered to program managers within the Association of Food and Drug Officials of the Southern States (AFDOSS) region. AFDOSS is an affiliate of the Association of Food and Drug Officials (AFDO), which consists of 11 southern states (including Georgia) and one territory (Puerto Rico). While many differences exist from state to state in the way that the cottage food industry is regulated, regionally, states tend to handle issues in similar ways.
Using the survey, a qualitative study was conducted consisting of face-to-face interviews with the program managers from eight states at the AFDOSS Fall Conference in Gatlinburg, Tennessee, in September 2011. Another interview was conducted via phone, and the last was sent via e-mail. Program managers were encouraged to speak candidly about their programs, and all responses were used and discussed anonymously.
The first part of the survey contained 11 questions about the agencies’ cottage food programs, aimed at enhancing dialogue about program attributes. This information gained through these questions was used to determine if the agencies allow cottage food, and the manner in which cottage foods are regulated.
The last part of the survey consisted of 12 questions regarding the implementation of cottage food programs in each state.
Results
Answers to the research question pertaining to what program managers would have done differently when implementing the cottage food programs are summarized in Table 1:
Responses to the research questions pertaining to the strengths and weaknesses of the cottage food programs are summarized in Table 2:
Conclusions
The study has some limitations. Three of the program managers interviewed were from states that have recently adopted cottage food regulations. These states’ regulatory agencies may not have had enough time with the regulations to offer a meaningful critique of the states’ cottage food programs. In addition, one of the states surveyed does not have a cottage food program. The responses for that state are listed in Tables 1 and 2 as “N/A.”
While the majority of the program managers surveyed did not indicate they would have done anything differently when implementing the cottage food programs, two of the three elaborative responses concerned money and program resources. Most agencies have seen a reduction to their budgets, since tax revenues have declined during the recession. Food safety agencies have to evaluate how much of their resources can be devoted to a cottage food program. An agency must first decide what degree of oversight to use, and then fund the program accordingly. Two of the program managers suggested that the funding issue could be addressed by charging a fee for the permit or by getting the state legislature involved. The legislature can appropriate additional staffing and resources required to oversee cottage food operations. While involving the legislature does not guarantee funding or ensure passage of a law that is amenable to a food safety program, the possibility exists that the regulatory agency will have some input into the process.
There were a multitude of answers given when the program managers were asked to give the greatest strength of the state’s cottage food program. A common theme involves public relations. Cottage food programs have allowed some agencies to be characterized as “farm-friendly,” “small business advocates,” and “making friends instead of creating enemies.” The cottage food industry has allowed small businesses to flourish and provide locally grown foods. For agencies with a marketing division, cottage food is a tool to advocate for farmers, sustainable agriculture, and farm-to-fork initiatives that are gaining in popularity.
The other perceived strengths of the cottage food programs stem from the control that the regulatory agencies have over the types of products produced and the limited locations where those products can be sold. The program managers who participated in this study all valued the degrees of oversight afforded to cottage food programs in their states. Avenues of oversight identified through this study include; the ability to conduct an in-depth review of the operators’ products; licensing/permitting/inspection of cottage food operations; the low volume of foods allowed; labeling requirements; and regulatory foundation that allows an agency to fine operators that do not comply with food safety rules and regulations.
When asked to describe the weaknesses of the state’s cottage food program, one agency cited the lack of food safety education required for the cottage food operators. Another cited the safety of the agency’s employees having to enter private residences. Visiting private residences was also decried as counterproductive, since the inspectors frequently have to call ahead to see if the operator is processing. One of the agencies was legislatively mandated to allow production of low-acid foods, which the majority of agencies surveyed do not allow. Other program managers identified as a weakness the lack of resources and staffing required to regulate cottage food operations. The last weakness involves creating exemptions to the laws and regulations. Allowing exemptions creates the “slippery slope” leading to less control and the increased likelihood of foodborne illness outbreaks.
Recommendations
The first recommendation is to require food safety training of operators as a prerequisite to cottage food operations. If funding to implement and maintain a cottage food program is a primary challenge for agencies, educational programs and certified food safety training are two cost-effective strategies agencies can adopt. The cost of educational materials is relatively small compared with the costs of funding positions and purchasing equipment. Educational materials can be disseminated online, thanks to the availability of Web access and the increasing use of social media. Agencies that administer food safety exams can charge a registration fee to cover the costs associated with providing the training. Education generally does not pose a significant burden to budget-strapped food safety programs, and this strategy guarantees that operators had some measure of food safety knowledge at one point.
The second recommendation is to require cottage food operators to register annually and receive a permit from the regulatory agency. A preoperational inspection would be required, and the operator would be subject to consumer complaint or foodborne illness outbreak investigations. Registration fees can be used to offset the cost of issuing permits and preoperational inspection. Issuing permits to cottage food operators allows the regulatory authority to reap the benefits of positive public relations, and could help create a level playing field. Policing an entire state is not possible, according to some of the program managers. Requiring cottage food permits could help consumers make more informed decisions, and also could force unpermitted operators to register.
The final recommendation is for regulatory agencies to reevaluate their cottage food programs. Surveying states in the AFDOSS region has shown a fair amount of variability in how cottage foods are handled from state to state. The AFDO has drafted a Regulatory Guidance for Cottage Foods that provides valuable information on the best practices and limitations that should be placed on cottage food operations. As state agencies strive for consistency in regulatory programs, agencies should also strive for consistency between states in how cottage food programs are developed and implemented. The slippery slope exists. Every time a regulatory program relinquishes control, states that do not have cottage food regulations will have a more difficult task, when attempting to establish such regulations.
Acknowledgments
This project was completed as a part of the International Food Protection Training Institute (IFPTI) Fellowship in Food Protection, and thanks must be given to all the IFPTI employees I have had the pleasure of getting to know during the course of the program. I would especially like to thank my mentor, Joe Corby, whose help on this project cannot be underestimated. The IFPTI deserves special recognition for the quality of instruction provided and for the organization’s commitment to food safety.
Thanks to all the Fellows for their support and camaraderie.
Thanks to the GDA, which made my participation in the Fellowship program possible. From the Food Safety Division, I especially thank Oscar Garrison, Division Director, for his support of this project. I would also like to thank Natalie Adan, Program Manager of the Manufactured Foods Section and IFPTI Fellowship alumnus, who referred the Fellowship program to me. The experience was every bit as rewarding as she said it would be.
Last, but certainly not least, thanks to the program managers whose insight and candor about their cottage food programs and regulatory philosophies were integral to this project. I greatly appreciate their participation and willingness to help.
Corresponding Author
Craig Nielsen, Food Safety Division/Georgia Department of Agriculture
Email: Craig.Nielsen@agr.georgia.gov
References
Georgia Department of Labor (3/8/2012). Georgia jobless rate statistics. Retrieved from
http://www.dol.state.ga.us/
New Hampshire House of Representatives. HB 1650-FN. The New Hampshire General Court. Retrieved from
http://www.gencourt.state.nh.us/legislation/2012/HB1650.html
Wood, C. (July 15, 2011). Proposed Atlanta regulations may offer more venues for farmers markets. Atlanta-Journal Constitution Online. Retrieved from
http://www.ajc.com/news/atlanta/proposed-atlanta-regulations-may-1018955.html