Title: Assessing Relief Provisions of the FDA Food Safety Modernization Act for Small Business To: UCDC From

: Gregory G. Costanza Date: Final Due December 21, 2011 I. Introduction The main components of the legal architecture for food regulation in the United States stem from the passage of the Federal Food, Drug and Cosmetic Act (“FD&C Act”) in 19381. Important amendments to this legislation have passed since then2, including more stringent regulation of infant formula (1980), more information disclosure through food labeling requirements (1990), and labeling and good manufacturing practices for dietary supplements (1994). Under the FD&C Act, the Food and Drug Administration (“FDA” or “Agency”) has had the primary responsibility of ensuring the safety for the majority of the U.S. food supply3,4. This framework increasingly became outdated because of technological changes affecting food production, processing and distribution, as well as the trade consequences of globalization. Today, about eighty percent of seafood, and two-thirds of fruits and vegetables are imported for consumption in the United States5. Furthermore, foodborne illness is still a costly problem in this country, affecting worker productivity, while disproportionately impacting the young and the


Curtis, P. Food Regulation in the United States. In Microbial Food Safety. Edited by Ovarzabal, O. and Backert, S. New York: Springer. 2012. pp. 204. 2 See FDA, Significant Amendments to the FD&C Act. Available at http://www.fda.gov/RegulatoryInformation/Legislation/FederalFoodDrugandCosmeticActFDCAct/SignificantAmen dmentstotheFDCAct/default.htm. Last updated 04/29/2011. 3 See FN 1, Curtis, pp. 204. 4 The United States Department of Agriculture has primary regulatory authority only for specific foods, mostly major meat products. The FDA has primary regulatory authority for almost all other foods, including animal feed. 5 See FDA, Pathway to Global Product Safety and Quality: A Special Report, 2011, pp. 1. Available at http://www.fda.gov/AboutFDA/CentersOffices/OfficeofGlobalRegulatoryOperationsandPolicy/GlobalProductPathw ay/default.htm.

elderly6. According to data from the Centers for Disease Control and Prevention, each year about 48 million people (1 in 6 Americans) get sick from foodborne illnesses, while 3,000 die and 128,000 are hospitalized7,8. Recent foodborne illness outbreaks from spinach9, eggs10 and peanut butter11 helped underscore the need for changes to food regulation. A rare alignment of support for these changes occurred between consumer advocacy organizations and food manufacturers. Consumer advocacy organizations promoted stronger food regulation in order to protect consumer health. Food manufacturers wanted a safer food supply because “one bad apple would spoil the bunch.” In other words, every time one producer or processer engaged in negligent food safety practices, resulting in large-scale outbreaks, consumer demand for the entire product class would drop precipitously. As a consequence, compliant food companies suffered because of the unhygienic practices of their competitors. As a result of this broad support from traditionally left- and rightleaning groups, Congress passed the FDA Food Safety Modernization Act12 (“FSMA”), which was signed into law by President Obama in January 2011. The FSMA represents a shift in how the government addresses food safety. The new emphasis is on the prevention of foodborne illness by requiring food producers, processors and

Patricia K., L.C. Medeiros, V. Hillers, G. Chen, S. Dimascola, Food Handling Behaviors of Special Importance for Pregnant Women, Infants and Young Children, the Elderly, and Immune-Compromised People, Journal of the American Dietetic Association, Volume 103, Issue 12, December 2003, Pages 1646-1649, DOI 10.1016/j.jada.2003.09.027. 7 Scallan E., R.M. Hoekstra, F.J. Angulo, R.V. Tauxe, M-A. Widdowson, S.L. Roy, et al., "Foodborne Illness Acquired in the United States--Major Pathogens," Emerging Infectious Diseases, 17(1):7-15, 2011. Available at http://www.cdc.gov/EID/content/17/1/7.htm. 8 Scallan E., P.M. Griffin, F.J. Angulo, R.V. Tauxe, R.M. Hoekstra, "Foodborne Illness Acquired in the United States--Unspecified Agents," Emerging Infectious Diseases, 17(1):16-22, 2011. Available at http://www.cdc.gov/EID/content/17/1/16.htm. 9 See FDA, FDA News Release, March 23, 2007. Available at http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/2007/ucm108873.htm. 10 See FDA, FDA News Release, August 19, 2010. Available at http://www.fda.gov/newsevents/newsroom/pressannouncements/ucm223248.htm. 11 See FDA, Peanut Products Recall, Last updated June 18, 2009. Available at http://www.fda.gov/Safety/Recalls/MajorProductRecalls/Peanut/default.htm. 12 Public Law 111-353.

html. In addition to those changes made by the Tester Amendment.” Accessed online on November 16. 2011. Available at http://tester. 13 Tom Lutey. Title II of the FSMA is partly focused on granting additional authorities to the FDA.” Billings Gazette. and by establishing a 3rd-party inspection regime (section 307) to perform inspections for import certifications (section 303) and the voluntary qualified importer program (section 302). stronger administrative detention authority (section 207) and the enhanced tracking and tracing of foods and access to records (section 204). after its sponsor Senator Jon Tester of Montana. United States Senator for Montana. Passage of the bill was partly stalled by this group13. “Summary of Tester Amendment.com/news/state-and-regional/montana/article_45d8a1ad-76b5-58aa-9d31-6fe257131ba7. 2010.senate. November 18. 14 See Jon Tester. by expanding the capacity of the Agency to inspect foreign facilities (section 306). a requirement that the FDA conduct a study to define small businesses in the food processing sector.cfm. which was able to successfully incorporate certain protective provisions into the final bill through changes known as the Tester Amendment14. Available at http://billingsgazette. . These changes included a clarification of the definition of a retail food establishment. These provisions are described below based on their order of appearance in the FSMA. and an exemption for certain small farms from the produce safety rules. These far-reaching changes to the regulation of food were met with apprehension by one group in particular: small food businesses. Title III of the FSMA significantly alters the regulatory regime for imported food. These prevention principles are mostly set forth in various provisions of Title I of the FSMA.distributors to implement food safety plans that have taken into account the hazards that may exist in the course of their operations. including new mandatory recall authority (section 206). “Food Safety Bill Vote Delayed.gov/Legislation/foodsafety. there are a number of provisions in the FSMA that direct the FDA to ease the burden of the FSMA regulations on small businesses. qualified exemptions for small businesses from the preventive controls regulations. by requiring importers to ensure the compliance of their suppliers with particular provisions of the FD&C Act (section 302).

FSMA section 102(b)(1) amends FD&C Act section 415 by creating a mechanism by which the FDA has the authority to suspend the registration of a facility (with some qualifications) if the FDA determines that the food from that facility “has a reasonable probability of causing serious adverse health consequences or death to humans or animals17 …. 18 FD&C Act Section 415(b)(4). 19 FD&C Act Section 415(b)(2) and (3). 17 FD&C Act Section 415(b)(1). . The FDA can have a facility’s registration reinstated either during a hearing or through the submission of a satisfactory corrective action plan19. 20 Id.” Once a facility is suspended. The term small entity will have to be defined during the FDA’s rulemaking process21. processing. FSMA Section 102: Registration of Food Facilities Small Entity Compliance Guide. it may not “introduce” its products into the stream of commerce in any way18. FSMA section 102(b)(2) requires the FDA to issue a “small entity compliance guide” to assist “small entities” in complying with the registration and other requirements in section 102.C. 350d. packing. Public Law 107-188.II. Section 415(b)(5) of the FD&C Act20 directs the FDA to promulgate regulations to implement these new requirements.S. or holding food for consumption in the United States” to register with the FDA. This guide will help small businesses to the extent that it provides some clarity and plain language for small businesses to determine whether they have to register (depending on what type of facility they 15 16 21 U. 21 See FD&C Act section 418(n)(1). Congress added this requirement to the FD&C Act through incorporation into the Public Health Security and Bioterrorism Preparedness and Response Act Of 2002 (“the Bioterrorism Act”)16. Clarification of Intent Section 41515 of the FD&C Act requires all domestic and foreign facilities that are engaged in “manufacturing.

this clarification for the exemption requirement will reduce their regulatory burden. Section 102(c) directs the FDA to amend the definition of the term “retail food establishment” in 21 CFR 1.” Therefore. To date the FDA has not promulgated any rules to implement these new registration requirements. and how to contest a suspension. Congress added section 102(c) of the FSMA as part of the “Tester Amendment” to the Senate’s version of the FSMA. 51022. identify and implement preventive controls to minimize these hazards. how to register. Retail food establishments were exempted from the registration requirement under the Bioterrorism Act. Available at http://www. 510: FDA Food Safety Modernization Act. FSMA Section 103: Hazard Analysis and Risk-Based Preventive Controls Exemption for “qualified facilities”. 2011.227(b)(11).govtrack.us/congress/bill. Delayed Compliance Section 103 of the FSMA amends the FD&C Act by adding a new section 418. Since small businesses are the predominant entities that sell their products at farmer’s markets. restaurants. these other entities that engage in direct sales are to be exempted as well. 23 FSMA section 102(c)(1). Exemption for low-risk on-farm activities. operator or agent in charge of a facility to routinely evaluate hazards. Small Entity Compliance Policy Guide. to 22 Govtrack. community supported agriculture (“CSA”) operations. The amended definition would clarify the primary function of a retail food establishment to include the direct sale of food to consumers through such means as roadside stands. nor has the Agency issued the small entity compliance guide to clarify the registration requirements.xpd?bill=s111-510. and other “direct sales platform[s] as determined by the Secretary [of HHS]23. and some other establishments that are exempt from the registration requirements. in addition to farms.are). III. at roadside stands or through CSA operations. “S. farmers markets. S. which creates a new requirement for the owner.” Accessed on December 20. .

FD&C Act section 418(l) exempts a “qualified facility” from the preventive control requirements. 27 Based on the preceding three-year calendar year average of their sales.” FD&C Act section 418(n)(1)(B) requires the FDA to define a very small business (and for other purposes. “Hazard Analysis & Critical Control Points (HACCP). The FSMA directed the FDA to publish this study along with the proposed rule for section 103. 26 See FDA. The intended beneficiaries of this “qualified facility” exemption are small businesses. This study must characterize the size and distribution of farms. and foodborne illness risk by these entities across different agricultural sectors.gov/food/foodsafety/hazardanalysiscriticalcontrolpointshaccp/default. a very small business will also be defined in this proposed rule. These functions are further clarified and explained in FD&C Act sections 418(b) – (i) and are modeled on the Hazard Analysis and Critical Control Points (“HACCP”) standards25 that have already been established for seafood. 2011. HACCP is a management process for mitigating hazards in all stages of the food system26. food processors. Available at http://www. December 8. http://leavittpartnersblog. “FDA’s Views on Preventive Control Requirements Beginning to Emerge – Time to go Beyond HACCP?” Leavitt Partners Blog. The first definition of a qualified facility under 418(l)(1)(B) is for a “very small business. juice and thermally processed low-acid foods. as described in FD&C Act section 418(l)(1)(B) and (C). .com/20113304/david-acheson/fda %E2%80%99s-views-on-preventive-control-requirements-beginning-to-emerge-time-to-go-beyond-haccp.monitor the performance of those controls and to maintain records of the monitoring24. The second definition of a qualified facility under FD&C Act section 418(l)(1)(C) is for facilities that meet two tests regarding the type and size of their annual sales27. 2011. Presumably.htm. The first test is satisfied when a facility’s “average annual monetary 24 25 FD&C Act section 418(a). There are two definitions of a qualified facility. as described in FD&C Act section 418(l)(5). a small business) for this exemption after conducting a study of the food processing sector.” Last updated April 27. David Acheson. and includes subsidiaries and affiliates.fda.

despite a qualified facility receiving an exemption from the requirements of section 418. however it remains to be seen in the proposed rule which non-Federal food safety laws will qualify. local. The second test is satisfied if the average annual monetary value of all the food sold to all sources was less than $500. Alternatively. which demonstrates compliance with State. county or other “applicable non-Federal food safety law28…” This requirement for qualified facilities is broader than the first one. the facility could submit documentation. and is monitoring the preventive controls to ensure that they are effective. such a facility would still be obligated under the new FSMA rules to submit to the FDA a choice of two types of documentation. See FD&C Act section 418(l)(2)(B)(ii). . is largely the same as what the facility would have to follow if they didn’t receive an exemption. as specified by the FDA. then the facility satisfies the definition of a “qualified facility” and will receive an exemption from the preventive control requirements. is implementing preventive controls to address these hazards. The first type of documentation. Furthermore. as described in FD&C section 418(l)(2)(B)(i)(I).000. This. the facility should be deriving more of its revenue from sales to consumers than from wholesalers. However.value of food sold” directly to “qualified end-users” (as defined in FD&C Act section 418(l)(4) (B)) exceeded the average annual monetary value of food sold to all other purchasers during such period. would demonstrate to the FDA that the facility has identified potential hazards. with the exception that there is no recordkeeping requirement. of course. all qualified facilities will have to provide documentation demonstrating that they meet either definition for a qualified facility29. In other words. If both of these tests are met. 28 29 FD&C Act section 418(l)(2)(B)(i)(II).

Congress directed the Agency to promulgate regulations for characterizing these activities for the purposes of the registration requirement of FD&C Act section 415 (where “farms” are exempt.” This exemption is more extensive than that described above for qualified facilities because it doesn’t require alternative preventive controls rules to be followed. FSMA section 103(c)(1)(D)(ii) states that these exemptions “shall apply only to small businesses and very small businesses. manufacturing or processing activities to determine which are low-risk and involve foods that are low-risk. holding. manufacturing or processing of food that is not grown on such farm (or another farm under the same ownership). This guide should describe in “plain language” the requirements of section 418 and the rest of section 103 of the FSMA. Furthermore. although it is more limited in the types and number of entities to which it applies. facilities that receive these exemptions will still be subject to the registration requirement). the FDA is directed to conduct a science-based risk analysis of these on-farm packing. For all “small entities” that are subject in one way or another to the preventive controls rules.Aside from the exemption for qualified facilities. holding. section 103(d) of the FSMA directs the Agency to issue a small entity compliance guide not later than 180 days after the issuance of the FD&C act section 418 regulations. Under FSMA section 103(c). in order to exempt the facilities engaging in these low-risk activities from the preventive controls rules (FD&C Act section 418) and the inspection frequency mandate (FD&C Act section 421) (however. As part of these regulations. there is one other exemption for facilities that are engaged in on-farm packing. in order to assist small entities in complying with these new rules. but “facilities” are not). as defined in the regulation promulgated under section 418(n) of the [FD&C Act] …. FSMA section 103(i)(2)(A) specifies that the “amendments” made by section 103 (which includes the FD&C Act section 418 rules and regulations) shall apply to .

Note that the definitions of small and very small business are to be defined in the rulemaking for section 105. Therefore. In theory. Flexibility Requirement. These amendments will apply to very small businesses 18 months after the effective date of the regulations30. FD&C Act section 419(a)(3)(A) specifically directs the Agency to “provide sufficient flexibility to be applicable to … small businesses and entities that sell directly to consumers.S. Note that this is the same time period as the required issuance of the small entity compliance guide. then. the guide could be published at the same time that the rules go into effect. 32 See FD&C Act section 419(a)(3)(F).small businesses six months after the effective date of such regulations. 21 U. Apart from the exemption or modified standards for low-risk fruits and vegetables available to small businesses.C. small and very small businesses that produce and harvest those types of fruits and vegetables that are determined by the FDA to present a low risk of harm may be exempt from these regulations. . Direct Farm Marketing Exemption Section 105 of the FSMA amends the FD&C Act by adding a new section 41931. FSMA Section 105: Standards for Produce Safety Exempt or Modified Standards for Low-Risk Foods. Delayed Compliance. Guidance. or may be subject to modified requirements. Small Entity Compliance Guide. IV. which directs the FDA to issue regulations establishing science-based standards for the safe production and harvesting of fruits and vegetables when such standards minimize the risk of serious adverse health consequences or death. 350h. Under FD&C Act section 419(a)(1)(B). it is possible that the definitions under the produce safety standards would be different from the definitions used in other parts of the FSMA32. and be appropriate to the scale and diversity of the production and harvesting of 30 31 FSMA section 103(i)(2)(B).

the small entity compliance guide is to be published not later than 180 days after the issuance of the produce safety standards. This could be especially problematic if there will already be exemptions or modifications of the rules for low risk commodities.such commodities. .” Because this flexibility requirement is vague. There is also a delayed compliance requirement in FD&C Act section 419(b)(3). Unlike the preventive controls rule. There is a stronger argument to be made that rules that are “applicable” for small businesses must simply include those entities. FSMA section 105(b) directs the Agency to issue a small entity compliance guide before the rules go into effect. In this case. whereas rules that are “practicable” for small businesses must allow those businesses to follow them in a manner that is not overly burdensome. FD&C Act section 419(c)(1)(B) states that the final rules promulgated must be “practicable for all sizes and types of businesses. The final regulations will not be applicable for small business until one year after their effective date. The final regulations will not be applicable for very small business until two years after their effective date. In addition to the small entity compliance guide. Although. however. which describes the criteria for small business by which the final regulation must comply. FD&C section 419(e)(1) directs the Agency to provide updated guidance on good agricultural practices (“GAPs”) and on the safe production and harvesting of “specific types of fresh produce…” In the creation of these guidance documents.” which is arguably a more stringent requirement. Note that this requirement is repeated in FD&C Act section 419(c)(1)(B). the Agency must consult with “the Secretary of Agriculture. it remains to be seen how accommodating the FDA will be when issuing the produce safety rules. instead of saying that the rules must be “applicable” to small businesses (as described above under FD&C Act section 419(a)(3)(A) for the proposed rule).

the definition of a qualified end-user is slightly different in this rule. however. The main difference.representatives of State departments of agriculture. Furthermore. and … small businesses…” To this end. FD&C Act section 419(f). the Agency must conduct at least three public meetings in diverse geographic locations to solicit input from and conduct outreach for these groups. This second loophole could be exploited through 33 34 See FD&C Act section 419(e)(3)(A). These tests are almost identical to the second definition test of a “qualified facility” under the Preventive Controls rule above (where the value of sales to qualified end-users must exceed the value of sales to other buyers and must be less than $500. See FD&C Act section 419(f)(4)(A). creates an exemption of the section 419 requirements for farms that meet two tests. including small businesses such as a small food processing facility co-located on a farm33…” This means that the GAPs guidance document for the production and harvesting of produce must be particularly useful to and provide targeted information for smaller entities (farms and food processing facilities on farms) that cannot afford full-time employees or wellpaid consultants – people who are often used by larger entities for determining good agricultural practices. . called the Exemption for Direct Farm Marketing. farmer representatives. in that it omits the requirement (which is not omitted in section 418(l)(4)(B)(ii)(II)) that a restaurant or retail food establishment must purchase the food from the farm for sale directly to consumers at that restaurant or establishment34. is the absence of language in this exemption defining a farm to include subsidiaries or affiliates.000). If this rule is sufficiently costly. Furthermore. this guidance document must “provide sufficient flexibility to be practicable for all sizes and types of facilities. then this absence could lead to entity restructuring in order to qualify for this exemption.

39 Note that a mandatory recall order is a new authority under FSMA section 206. Nevertheless. or if the “conduct or conditions” associated with the exempted farm are material to the safety of the food produced or harvested by such farm37. This includes fees to cover the total cost to the Agency for domestic and foreign facility reinspections. defined as a follow-up inspection after there has been an official action indicated from a primary inspection. to cover the cost of creating a third-party accreditation system. If a label is not required. or if online. for 35 36 FD&C Act section 419(f)(2)(A)(i). poster. this exemption may be withdrawn in the event of an active foodborne illness investigation that is directly linked to an exempted farm. sign. placard or documents delivered contemporaneously with the food in the normal course of business. or on a label.“transactional restructuring” and it remains to be seen how the agency may deal with these potential attempts by farms and qualified end-users to avoid the produce safety regulations. Who is going to refuse this order if it would trigger a fee? . Finally. Section 107 creates this regime by adding a section 743 to the FD&C Act. V. 37 See FD&C Act section 418(f)(3)(A). FD&C Act section 419(f)(2)(A)(ii). 38 There is also a fee regime created as part of FSMA section 307. if a food packaging label is required35. farms that qualify for this exemption are required to “prominently and conspicuously” include the name and business address of the farm where the produce is grown. FSMA Section 107: Authority to Collect Fees Reduced Fee Consideration for Small Business FSMA section 107 creates the first fee regime for foods that are within the FDA’s jurisdiction38. in an electronic notice36. which gives the FDA the authority to assess and collect fees for four categories of activities. then this information must be displayed prominently and conspicuously at the point of purchase. Fees are also authorized for parties who refuse a mandatory recall order39.

which does not include foreign travel expenses. and Importer Reinspection User Fee Rates for Fiscal Year 201241. then it must do so through notice and comment rulemaking. 76 Fed. and in the context of the rest of the section. These fee amounts represent the direct and indirect costs of full-time-equivalent (FTE) or paid staff whose primary responsibility is for those categories of activities for which the fees are being collected. Congress directed the Agency to propose guidelines within the Federal Register “in consideration of the burden of fee amounts on small business. 42 See Table 3 “FSMA Fee Schedule for FY 2012” in the Notice for Comment. to reduce the fees for small business. The Agency is not directed to automatically reduce the fee amounts.e. 45820-45825.importers participating in the voluntary qualified importer program (“VQIP”) to cover administrative costs (see FSMA section 302). Reg. 2011. 2011. this hourly rate is $224 if no foreign travel is required and $325 if foreign travel is required42.” The term “in consideration” is particularly ambiguous. Recall. including indirect costs) is $207 per hour. In FD&C section 743(b)(2)(B)(iii). but not the obligation. although this is an option. the FDA published a Notice for Comment titled.” FD&C Act section 743(b)(2) requires the Agency to collect sufficient fees to cover 100% of the costs to the Agency for the activities described above. which is discretionary.” This Notice establishes the fee schedule for the above activities for the FDA fiscal year starting on October 1. On August 1. it seems likely that the most reasonable interpretation of the term is one in which the Agency has the discretion. 40 41 See FD&C Act section 743(a)(1)(A)-(D). After adjusting for inflation. It also discusses the methodology the Agency uses for estimating the fee amounts. Instead. The Agency calculates that a “fully supported” FTE (i. . If the Agency decides to adjust or reduce the fee amounts. “Food Safety Modernization Act: Domestic and Foreign Facility Reinspections. the Agency must consider the burden. and for importers that are “subject to reinspection40.

The impact of these fees on small businesses and importers is one of the most important issues within the FSMA because these fees have the potential to put many people out of business. VI. 45818-45820. Section 204: Enhancing Tracking and Tracing of Food and Recordkeeping Pilot Study Requirement. The third question is how a reduced fee amount should take form – as a waiver.Instead of publishing these guidelines and possibly a separate publication where the fee schedule would be reduced by taking into account the guidelines. no decision has been made to date. it appears likely that the Agency is considering a waiver and/or reduction of the fees for small businesses. the Agency decided to first “gather additional information” so the guidelines could be published along with modifications to the fee schedule. Waiver of Recordkeeping Requirements. and if there is a burden. on August 1. the Agency seeks comment on three overarching questions. Under this question. a percentage or fixed dollar reduction. Small Entity Compliance Guide. Reg. The second question is how to define a small business in the proposed guidelines. Undoubtedly. However. the small food business community is closely watching this issue. To this end.” In this Notice for Comment. Based on these questions. . Feasibility Assessment. Delayed Compliance 43 76 Fed. nor have the guidelines been published. how this might be different for certain small businesses. The first question is whether a fee reduction or “other consideration” is appropriate for small business. The author drafted this Notice. 2011 the Agency also published a Notice for Comment titled. or something else. “Burden of Food and Drug Administration Food Safety Modernization Act Fee Amounts on Small Business43. Relaxed High-Risk Recordkeeping Requirements. the Agency is attempting to assess the potential burden of the fees on small business.

S. This mandate is likely to restrict the types of track and trace technologies that the agency can impose on small food processors. including those 44 45 21 U. which arguably means that the methods cannot impose a disproportionate impact on small businesses through labor intensive methods or methods that require high equipment or material expenditures. . FSMA section 204(a)(2)(A) directs the Agency to develop and demonstrate methods that are “practicable for facilities of varying sizes.” This system must take into account the findings from pilot projects described in FSMA section 204(a) and information gathering requirements described in FSMA section 204(b). The purpose of these pilot projects is to develop and demonstrate methods and technologies for the rapid tracing and tracking of foods to be used to inform the proposed regulations47. The FDA must conduct at least two pilot projects “to explore and evaluate methods …” that enable the Agency to rapidly “identify recipients of food [in order] to prevent or mitigate a foodborne illness outbreak45…” One pilot project must be with the processed food sector. including small businesses. See FSMA secion 204(a)(1).C. 47 See FSMA sections 204(a)(1)(A)-(C). the other must be with processors or distributors of fruits and vegetables that are raw agricultural commodities46. 46 See FSMA section 204(a)(2). which requires the FDA to conduct a cost/benefit analysis of any contemplated track and trace technologies. 2223. This point is further underscored by FSMA section 204(b).” This mandate is significant because it requires the FDA to consider track and trace methods that are appropriate for small businesses.FSMA section 204(c) directs the Agency to establish a product tracing system that will allow the FDA to collect information that “improves the capacity of the Secretary [of HHS] to effectively and rapidly track and trace food that is in the United States or offered for import into the United States44.

” and not require the creation of duplicate records. which are yet to be determined. including small businesses…” To summarize. and the technologies for doing track and trace. and instead design the requirements in a scale and capability appropriate way. FSMA Section 204(d)(1)(E) requires the Agency to design the recordkeeping requirements in a manner that is “scale-appropriate and practicable for facilities of varying sizes and capabilities with respect to costs and recordkeeping burdens. then the FDA could use this factor to relax the requirements to the extent necessary to relieve these costs and thereby improve the cost/benefit ratio. If the costs for compliance are higher for small businesses. In addition to the establishment of a track and trace system for foods. 48 See FSMA section 204(d)(1)(A)-(M). pack or hold such foods will be required to meet these additional recordkeeping requirements. . Several of these conditions are helpful for small businesses. FSMA section 204(d) directs the FDA to establish additional recordkeeping requirements for certain “high risk” foods. and to assess the “feasibility of such technologies for different sectors of the food industry. FSMA Section 204(d)(1)(D) requires the Agency to conduct a cost/benefit analysis to ensure that the benefits of these recordkeeping requirements to the public outweigh the cost of compliance with the requirements. must be respectively practicable and feasible for small businesses. and the proposed rule will have to conform to these rather loose terms. the methods of track and trace.used in the pilot projects. These are the key terms within the statute. although there are a number of conditions that the Agency must comply with when crafting these requirements48. This is an important provision for small businesses because it explicitly directs the Agency to abandon a one-size-fits-all approach that could be particularly burdensome to small businesses. process. Facilities that manufacture.

To help small businesses comply with the additional recordkeeping requirements for high-risk foods under section 204(d). FSMA section 204(d)(1)(I) requires the Agency to include a waiver process if it is determined that the requirements would “result in an economic hardship for an individual facility or a type of facility. this waiver provision will most likely be beneficial to small businesses because compliance with the recordkeeping requirements is likely to pose a disproportionate economic hardship on them. and the other provisions discussed above.Furthermore. Section 204(i)(2) provides a two-year grace period for very small businesses (as defined in section 103). like this one. Nonetheless. can be useful for reducing the time and effort required to understand and comply with the law. Compliance guides. This small entity compliance guide should be in plain language in order to assist small entities – including farms – in complying with the requirements. to date the details remain murky since not even a proposed rule has been promulgated for any provisions . However. Nonetheless. this usefulness is dependent on the clarity and efficiency of the writing. FSMA section 204(h) requires the Agency to issue a small entity compliance guide not later than 180 days after the promulgation of a final rule. Along with the small entity compliance guide. and therefore lower the costs of compliance. Section 204(i)(1) provides a one-year grace period for compliance with the recordkeeping requirements of section 204(d) for small businesses (as defined in section 103). The last provision within the FSMA section 204 that provides some relief for small businesses is section 204(i). section 204 has the potential to greatly relax and assist small entities with the requirements of track and trace and recordkeeping for high risk foods.” It is unclear at this point what factors the Agency will consider when deciding what constitutes an economic hardship of sufficient magnitude to qualify a facility for a waiver.

Outreach. or which provisions of FSMA will be considered a new practice. . Best Practices and Model Programs As the name implies. which is titled. Competitive Grant Program. whether the advise will be specific to entities or in a more general 49 50 Public Law 105-185. and Technical Assistance Program. Territorial. FSMA section 209 directs the Agency to establish various capacity building programs and standards for State. Section 209: Improving the Training of State. Extension. Education. and therefore the potential exists that the rules implementing the requirements of this section will be overly burdensome to small businesses.” FD&C Act section 1011(c) directs the FDA to “ensure coordination” with the National Institute of Food and Agriculture of the USDA in “advising producers and small processors transitioning into new practices required as a result of the enactment of [FSMA] and assisting regulated industry with compliance with such Act. 7625. local.” It is unclear who qualifies as a small processor under 1011(c).S. Section 209 also amends the Agricultural Research. and Tribal Food Safety Officials Extension Advising. “National Food Safety Training. Local. 204 (track and trace) are all significant and largely new practices. which bears the same title as that of FSMA section 209. territorial and tribal food safety officials in order to enhance their ability to enforce relevant provisions of the Food Safety Modernization Act. FSMA section 209 codifies these provisions by amending the FD&C Act by adding a section 1011.e. 105 (produce safety). Extension. VII. It is also unclear what form of advice will be afforded by this provision. 7 U. and Education Reform Act of 199849 by adding a section 40550.C.within section 204. i. although FSMA sections 103 (preventive controls).

Nonetheless. beginning farmers. As specified in section 405(b). instead they will receive additional funding for FSMA-related outreach.” “small food processors. and conservation and environmental practices.” and “small fruit and vegetable merchant wholesalers. for farmers and smaller processors and wholesalers. and Education Reform Act of 1998 was created to implement the competitive grant program of FD&C Act section 1011(d).form like a small entity compliance guide for particular entities and sectors. so it is reasonable to expect that the current mode of operation of these extension services will not change form. but this section states that this competitive grant program must be carried out in accordance with section 405 of the Agricultural Research.” This integration can be viewed as an attempt to harmonize. FD&C Act section 1011(d) establishes a competitive grant program. encompassing conventional. this advice is going to come from USDA-sponsored agricultural extension programs. small processors.” Like the extension services described above. or small fresh fruit and vegetable merchant wholesalers. the multitude of agricultural and food safety mandates and programs that these entities may face. However. Extension and Education Reform Act of 1998. Section 405(c) specifies that the priority for awarding grants should be given to projects that target “small and medium-sized farms.” Appropriations for . to be administered by the USDA National Institute for Food and Agriculture (through a memorandum of understanding with the Secretary of HHS). organic. Section 405 of the Agricultural Research. many of the details of this program are vague. the details are again sparse. to provide food safety capacity building services to “owners and operators of farms. the purpose of this grant program is to facilitate the “integration of food safety standards and guidance with the variety of agricultural production systems. Extension. sustainable. socially disadvantaged farmers.

See section 405(i). daunting and may in fact pose an existential threat to the sustainability of many small food business owners. . While this change may appear slow to some stakeholders. commented on. This paper has attempted to provide an early look at the current contours in how this regulatory structure is setup to address the concerns of this important stakeholder in the food web. it can appear rapid. as rules are proposed. reflecting their importance and the priorities set by the Agency. This process will take many years. Conclusion A review of the relief provisions of the Food Safety Modernization Act for small businesses reveals a regulatory regime that is clear in its basic contours but lacking in the detail necessary for someone to be able to weigh and predict their likely effects on small businesses. Information gained from the projects funded through this program may result in the issuance of a set of recommended best practices and models for food safety training programs for the entities targeted by this program. with the possibility of future Congressional bills further altering the legal landscape. In fact. and then released in an interim or final form. while globally convergence and harmonization represent trends in food law. Some sections of the FSMA will be enacted sooner than others. VIII. the details will only emerge slowly.this program are authorized for fiscal years 2011-2015. What is clear is that the food regulatory regime is greatly expanding in the United States. deliberated by the FDA and other relevant governmental authorities and stakeholders.