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There are many aspects to running your own market farm - these forms provide a glimpse of the tax and legalese, just one area.

Legalese: Concerns When Setting Up a Direct-to-Consumer Operation

When you start growing for market, you only need to worry about growing good farm products and finding customers to buy them, right? Unfortunately, in today’s legal world, there are a wide range of requirements you’ll need to meet as a market gardener. Some of these issues cover public health; others tie into specific regulations while others cover liability if someone comes to your farm and is injured. Here are some common issues that come up when you’re establishing a market farming business and how to protect yourself and your farm against risk. when getting into business selling direct to the consumer. This would talk about various legal protection for your farm, from business licenses to health department inspections to liability insurance.

  • Business Licenses: Though this is often a non-issue for most market farmers selling at a public market, it can be an issue if you’re setting up a produce stand on your farm or are offering community supported agriculture shares. Make sure to check at the local, county and state level to ensure you have your licenses in order. Some states have language that allows you to sell “at the farm gate” while bypassing a multitude of regulations.
  • Health Department Inspections: If you’re processing the food you’re selling in any way, it’s often required that you prepare the food in a health department approved kitchen. Whether it’s your own kitchen that has been certified or a kitchen you rent at a local church or community center, you’ll want to keep a copy of the last certification or inspection on hand when selling these products.
  • Food-Specific Requirements: In many states, conventional or raw dairy requires inspections or certifications of the farm’s dairy equipment and storage facilities due to the possibility of listeria contamination. Some states require special training before processing and selling pickled foods. Whatever is required in your state, county or city, you’ll want to ensure you meet those requirements and maintain proof of compliance with the law.
  • Liability Insurance: This type of insurance protects you against losses from a lawsuit, whether it’s because someone’s kid fell out of your apple tree when the parents weren’t watching him or because some produce didn’t get handled properly and caused someone to get sick.
  • Sales Tax: As with everything in life, the state wants its cut of your profits. Many farmers markets will collect sales tax from you at the end of the day, while others will have you send it in under your own sales tax account. You’ll want to make sure you stay up to date on these taxes and adjust your tax amount for the different areas you sell in.
  • Income Tax: How much has your market garden profited you this year? It’s important to know so that you can record the information on your annual income taxes. Record any expenses you have, any income you make and the hours you’ve spent making your farm to consumer enterprise a success.
  • Disease Reporting: Many states have requirements with farm animals that particular diseases be reported within a certain amount of time and should the animal die, that particular procedures are followed in disposing of the body and quarantining the remaining animals to ensure public health is not compromised.
  • Other Potential Issues: Of course, your state or locality could have additional requirements that have not been addressed in this article, so check with your local extension office or farm agency to see what you should expect.
  • Legal Help: If you should find yourself in a spot of trouble either because you missed a requirement or an official is taking a different interpretation of a rule than you think is the case, there are a wide range of organizations set up to help with ag law specifically. Farm Aid, Farmer’s Legal Action Group, Farm Law, Legal Aid and any number of other groups can help you in these situations.

Being a market farmer isn’t easy, but by keeping an eye on these and similar areas of risk, you can be sure that your market farming operation will have a much better chance of success without falling into any number of legal issues that can quickly put your farm at risk. Check with local farmers and farm agencies to see what kind of issues may arise in your area and make sure you meet at least the minimum requirements or have documented any exceptions you’ve chosen to follow in your overall growing for market risk management plan.

Author - Cathleen Vought

About: Cathleen Vought is a freelance content and copywriter living on a small farm in southwest Missouri with her husband and daughter, two dogs, a few dozen Shetland sheep and chickens, too many cats and a Morgan-Arabian mare with serious attitude. A strong believer in social entrepreneurship, she has over two decades of experience as a volunteer disaster and medical responder, living the quote, “Be the change you want to see in the world.” She spends her free time working with wild edible and medicinal plants, fiber arts, playing with hot glass at her torch and renovating the family’s historic farmhouse.

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