Oregon ‘cottage food’ law showing benefits

A new study based on dozens of interviews at farmers’ markets across Oregon finds the state’s Farm Direct Marketing Law, which took effect in 2012, is working as advocates hoped, providing new revenue streams for small farms while reducing food waste.

The law sought to clarify licensing and food safety requirements for direct-to-consumer sales at venues such as farmers’ markets and farm stands. In Oregon, about 12 percent of farms engage in direct-to-consumer marketing — more than double the national rate — with $53 million in sales from an estimated 4,252 farms in 2015, according to the USDA.

Part of the law establishes provisions for “cottage foods,” or homemade value-added products such as jellies, canned fruit, pickled vegetables and relishes, using farm-grown produce. Under the rules, farmers can sell these goods direct-to-consumer without a food processor’s license so long as they meet certain labeling requirements and sales don’t exceed $20,000 per year.

Every state except Hawaii and New Jersey has some sort of cottage food laws on the books. Opponents argue that reduced regulatory scrutiny may lead to unsanitary practices that increase foodborne illnesses, though researchers with Oregon State University found no foodborne illness linked to the Farm Direct Marketing Law after its first five years.

Rather, the study, published Sept. 12 in the Journal of Agriculture, Food Systems and Community Development, concluded the law has seemingly accomplished exactly what it was designed to do, and “we expect more farmers will take advantage of this opportunity.”

The study was funded in part by a grant from the USDA National Institute for Food and Agriculture, and led by Lauren Gwin, associate director of the Center for Small Farms & Community Food Systems at OSU.

Researchers visited 20 farmers’ markets during the 2016 season, interviewing 18 farmers and 24 market managers about the Farm Direct Marketing Law. The top two benefits they mentioned were creating new, supplemental income streams and using excess produce to make valuable products such as salsa and preserves, turning potential waste into profit.

One Southern Oregon farmer interviewed for the study said the law was “a huge boon to our farm,” providing an additional $10,000 per year in sales — not enough to afford the flat infrastructure cost it would take to have a facility, “but you know a small amount like $10,000 really helps out our farm for the year.”

Other benefits discussed in the study include the ability for farmers to provide more healthy food choices in isolated, rural communities, and increasing food security in those areas. As one market manager said, “Every product that can be created in a community and sold at the market or a farmstand or CSA is one more thing that can actually be bought there, in rural communities that lack grocery stores.”

When asked how to improve the Farm Direct Marketing Law, farmers mentioned a few barriers mostly around improving public awareness and education about the rules. Others suggested expanding the cottage food exemption to include more products, or increasing the sales cap, and while researchers acknowledged more than half of states with cottage food laws have no limit on sales, “the political feasibility of this in Oregon is uncertain, due to ongoing concern about foodborne illness.”

“Licensed food processors might also object to increased competition from businesses that would be less regulated and have lower compliance costs,” they added.