As a result of section 102 of FSMA, the Registration Final Rule published on July 14, 2016,
amended the definition of “retail food establishment” in 21 CFR 1.227 to clarify that:
• Sale of food directly to consumers by a farm-operated business or from an establishment
located on a farm includes sales by those establishments directly to consumers:
o At a roadside stand (a stand situated on the side of or near a road or thoroughfare at
which a farmer sells food from his or her farm directly to consumers) or farmers’
market (a location where one or more local farmers assemble to sell food from their
farms directly to consumers);
o Through a community supported agriculture program. Community supported
agriculture (CSA) program means a program under which a farmer or group of
farmers grows food for a group of shareholders (or subscribers) who pledge to buy
a portion of the farmer’s crop(s) for that season. This includes CSA programs in
which a group of farmers consolidate their crops at a central location for
distribution to shareholders or subscribers; and
o At other such direct-to-consumer sales platforms, including door-to-door sales;
mail, catalog and Internet order, including online farmers markets and online
grocery delivery; religious or other organization bazaars; and State and local fairs.
• A “farm-operated business” means a business that is managed by one or more farms and
conducts manufacturing/processing not on the farm(s).
For example, an establishment located on a farm that sells apples it grows and apple pies it
manufactures directly to consumers at a farmer’s market would consider those sales in
determining its primary function. At the same time, if a farmer manufactures or manages the
manufacturing of jellies at an off-farm location, such as an incubator kitchen from the apples that
he grows, and sells those jellies directly to consumers at a farmer’s market, the jelly-making
operation would be a farm-operated business and may consider those sales in determining its
primary function.
We recognize that some farmers rent space at off-farm manufacturing/processing facilities, like
shared kitchens, to conduct value-added processing. The “business” we are referring to in “farmoperated
business” is the business entity conducting the manufacturing/processing operations.
The ownership of the physical building, e.g., the ownership of the shared kitchen, where the
manufacturing/processing occurs is not relevant. Thus, if an apple grower leases space at an off farm
incubator kitchen to manufacture apple jellies, ownership of the incubator kitchen building
would not be relevant. Because the apple farmer manages the off-farm apple jelly manufacturing
operation, the apply jelly manufacturing operation is a farm-operated business and eligible for the
retail food establishment exemption from registration.
In addition, we recognize that some farms are members of cooperatives that pool RACs grown,
harvested, or raised by member farms for value-added processing. The phrase “one or more
farms” in the explanation of the meaning of “farm-operated business” allows cooperatives
comprised of multiple farms performing certain manufacturing/processing activities to be eligible
for the retail food establishment exemption from registration (see Comment 9 in the Registration
Final Rule; 81 FR 45912 at 45921 to 45922).
