Past articles in Wise Traditions have discussed the federal Food Safety Modernization Act and the Tester-Hagan amendment at great length. The focus has been on the high-profile aspects, particularly the extensive new regulations that will be issued and the exemption for small-scale, direct-marketing producers from many of these.
Another aspect of the Tester-Hagan amendment has received far less attention, but could also have very significant impacts on local food producers. This issue dates back to 2002 and the passage of the Bioterrorism Act. In that statute, Congress directed the Food and Drug Administration (FDA) to require every business that holds, stores, processes, or manufactures food—termed a “facility”—to register with the agency.
Between 2002 and 2010 (the passage of the Food Safety Modernization Act), few people paid much attention to the issue of facility registration. The registration was free and more notable for its lack of enforcement than anything else. In fact, many small businesses that were legally required to register never even knew of the requirement.
The Food Safety Modernization Act (FSMA) raised the issue of registration to a very different level. Under FSMA, facilities that have to register under the Bioterrorism Act also have to develop extensive paperwork safety plans, called a Hazard Analysis and Risk-Based Preventive Controls plan (HARPC), conduct environmental testing, and more. If a business doesn’t have to register as a facility, then these new requirements of FSMA don’t come into play.
So who is a “facility”? The starting point is that anyone who holds, stores, manufactures, or processes food is a facility, unless it is for personal consumption or otherwise specifically exempted. Congress exempted “farms” and “retail food establishments” in the Bioterrorism Act, but left the definitions of these entities to the FDA.
The FDA’s definition of “farm” was incredibly narrow, only covering producers who did absolutely no processing of any kind; even drying fruit or creating a salad mix was enough to classify a farm as a facility and trigger the registration requirement.
FDA’s definition of “retail food establishments” was broader, encompassing any establishment whose primary function was to sell directly to consumers, determined by whether the business sold more than half of its products directly to individual consumers (not businesses). However, since the Bioterrorism Act focused on registration of each location, the sales had to occur at the same location as the food processing in order to qualify. In other words, a business that made jams in a commercial kitchen and sold them directly to consumers at the same location would be a retail food establishment; but if the same business sold the same jams at a farmers market, instead, it would not be a “retail food establishment”—and would have to register with FDA.
This issue had not gained much publicity because of the lack of enforcement and because registration was not a great burden. With the proposal of the new requirements in FSMA, however, it became a significant threat for direct marketing producers.
To address this problem, a section of the Tester-Hagan amendment to FSMA modified the scope of the registration requirement. The amendment directed FDA to amend the definition of retail food establishment to “clarify” that “the sale of food products directly to consumers by such establishment and the sale of food directly to consumers by such retail food establishment include” sales at locations such as roadside stands and farmers markets, through community supported agriculture (CSA) programs, and “any other such direct sales platform” FDA identifies. Note that this was in addition to the exemption created in the Tester-Hagan amendment from the new HARPC requirements for small, direct-marketing producers; that exemption is both narrower and broader than the retail food establishment one, since it only covers those with sales of less than half a million dollars annually, but includes sales to local restaurants and retailers within the umbrella of “direct sales.”
The Tester-Hagan language clarifying the definition of retail food establishments addressed all food businesses. But when FDA proposed regulations on facility registration this spring, it limited this provision to just those businesses that are located on farms. This would leave many direct marketing artisan food producers within the definition of “facility” and subject to extensive regulation.
The FDA further limited the scope of the amendment by restricting roadside stands and farmers markets to farmers only. While the majority of the vendors at a market should be farmers for it to be classified as a “farmers market,” artisan food providers have an important role in these markets. There are very few farmers markets in the country that have only farmers, and limiting the definition in this way significantly undermines the scope of the exemption.
In addition, for those businesses that must register, the proposed rule requires electronic registration and a contact email address. The proposed rule also requires that every food business also register with Dun & Bradstreet’s system to get a universal number, which is then also filed with the FDA. These new requirements will burden small food businesses whose owners do not have convenient Internet access or use email regularly, whether for religious or practical reasons.
The Weston A. Price Foundation sent out a public action alert to encourage individuals to submit comments to FDA on this issue, and is also submitting its own comments as an organization. As with the rest of the proposed FSMA rules at this moment, we now wait to see how FDA responds.
WHO DECIDES OUR LAWS?
While trying to influence laws and regulations at the federal level is difficult, it pales in comparison to the fights in international forums. The grassroots has no meaningful access to decision-making in these forums, creating the perfect opportunity for large multinational companies to write the rules to suit themselves.
This fact was displayed yet again in May when the World Trade Organization (WTO) issued its latest decision: labels that tell Americans what country our food comes from is a “trade barrier.” This ruling leaves the U.S. vulnerable to trade sanctions and penalties if it continues to enforce its domestic law for Country of Origin Labeling (COOL). Similar claims have been rejected in the U.S. courts, but the WTO was not bound by those rulings.
COOL was a significant victory for American farmers and consumers in the 2008 Farm Bill, and the vast majority of Americans support it. Yet, bowing to the demands of the WTO, the U.S. House Agriculture Committee swiftly voted to get rid of COOL in June. (We are hopeful that we can fight it in the Senate, so our work is not over yet.)
The continuing assault on common-sense U.S. food labels is just another example of how corporate-controlled trade policy threatens to undermine basic protections for Americans. And if the Trans-Pacific Partnership (TPP) is approved, there could be more of these kinds of international challenges to our democratically enacted laws.
Documents leaked earlier this year show that the secretive TPP trade agreement would dramatically expand the power of corporations to use closed-door international courts to challenge our domestic laws. Specifically, the documents confirm reports that the TPP, as currently drafted, includes the infamous “investor-state dispute settlement” system (ISDS). This system gives multinational companies the right to sue governments, and therefore taxpayers, in international courts. This goes even further than many of the current trade agreements, in which only sovereign nations are allowed to bring claims to international tribunals.
Under the ISDS, the companies can claim loss of “expected future profit,” and the international courts will have the power to overrule national laws and judicial systems. ISDS provisions have admittedly been included in some treaties for decades. The concept was developed due to concerns that third-world countries did not have appropriate judicial protections against their government’s appropriating land or equipment, placing first-world companies at risk if they entered into commerce in those countries. These provisions were narrowly drawn and very rarely did any company take advantage of them. Between 1960 and 1990, only about fifty cases total were brought under ISDS provisions during the entire three decades. But with the newest trade agreements, their use has exploded; companies have brought about fifty ISDS cases each year since 2011.
The ISDS tribunals operate largely in secret and do not meet the same standards as our domestic courts. For example, lawyers could rotate between acting as judges in the tribunals and acting as advocates for companies bringing suits in the tribunal! Such dual roles would be deemed unethical in the American, and most other, judicial systems.
Even if the local, state, or federal laws are designed for legitimate public objectives, such as the protection of public health, safety and the environment, the corporations will still be able to sue. “Buy Local” preferences, energy and environmental policy, financial regulations, consumer labeling and more could be overturned by international courts in the name of corporate profits.
In late May, the Senate approved a bill to “fast track” trade agreements such as the TPP. Fast Track would allow trade agreements like the TPP to be approved by Congress with no amendments and essentially no debate. Not only is this bad policy making, it’s an abandonment of Congress’ constitutional role in international agreements.
Unfortunately, fast tracking international trade agreements appears to be one of the few issues on which the Republican leadership agrees with President Obama. However, some of the Tea Party members are allying with Democrats who oppose the deal. The Senate vote was much closer than predicted, raising hopes that we can in fact stop Fast Track in the House. Please keep an eye out for action alerts from WAPF and speak up on this important issue!
This article appeared in Wise Traditions in Food, Farming and the Healing Arts, the quarterly journal of the Weston A. Price Foundation, Summer 2015