What Are the Requirements for Small and Some Medium Scale Farms?

Under the Produce Safety Rule (PSR), farms can be classified as farms: a) Not covered by the Rule, b) farms eligible for a qualified exemption and modified requirements or c) Covered farms. This page will focus on farms that are “not covered” and farms that are eligible for a qualified exemption and modified requirements. Most small and some medium scale produce farms in North Carolina are likely to fall into these categories.

Farms not covered by the PS Rule

Farms that are not covered by the PSR meet one of the following criteria:

The farm’s average annual produce sales for the previous 3-year period is $28,561* or less.
Farms that grow produce only for personal consumption.

These are farms that will not be subject to regular inspections. FDA has implied that there is an expectation that these farms keep financial records to show that their produce sales are below $28,561. This value is adjusted for inflation annually, the figures used in this publication have already been adjusted for inflation for 2021

Farms eligible for a qualified exemption and modified requirements

In order to be eligible for a qualified exemption and modified requirements produce farms must meet these two requirements:

The farm must sell the majority of the food** directly to qualified end-users. Qualified end-users are the consumer of the food as long as the consumer is not a business. Internet sales to the consumer of the food are allowed. A qualified end user is also a restaurant and retail food establishment*** that is located within NC or not more than 275 miles from the farm that produced the food. Based on this, if the farm sells food to a business such as a broker, those sales should be 49% or less of total food sales.
The average annual monetary value of food** sales for the past three years must be less than $571,214*. To calculate this value for your farm use annual sales starting in 2018.

Any farm, CSA or U-pick operation can be eligible for a qualified exemption and modified requirements as long as they meet the two conditions set above by the PS Rule. If a farm does not meet both requirements, then the farm should be considered a “covered farm”. Covered farms have to comply with the practices outlined in the PSR and have specific compliance dates.

Notes and definitions that apply to these requirements:

**Food is defined as articles used for food or drink for man or animals, or articles used to make components of it. It includes seeds and beans used to grow sprouts. As farms calculate food sales take into account that cotton, tobacco and timber are not considered food. Examples of food include: fruits, vegetables, fish, dairy products, eggs, raw agricultural commodities for use as food or as components of food, animal feed (including pet food), food and feed ingredients, food and feed additives, dietary supplements and dietary ingredients, infant formula, beverages (including alcoholic beverages and bottled water), live food animals, bakery goods, snack foods, candy and canned foods. Livestock and meat are both food within this definition. FDA may interpret the “food” to include “live animals raised for food”.

There are instances when live animals are sold for purposes other than for food, such as being sold as pets (e.g., dogs), pets are not considered food. FDA notes that only the value of food “sold” during the year should be counted to determine the eligibility for the qualified exemption. As farms calculate food sales take into account that cotton, tobacco and timber are not considered food.