Missouri Alternatives Center's Bimonthly Electronic Newsletter 800-433-3704 "AG OPPORTUNITIES" November-December 2000 (Vol 11 No 3) * Small Farms * New Family Farms * Agricultural Alternatives The Regulatory Jungle (From a presentation by Doug Holt, Chair, Food Science & Extension Specialist, Oct 3, 2000) Yep, you farmers are creative! I hear all kinds of requests for information here at MAC. But you know, I've never laughed at one or shook my head after hanging up the phone. After all, if you really make a serious go at it, most of those creative ideas really could make some money on a diversified farm. Of all those request, the most frequent ones I've been getting lately, besides information on organic farming and certification, is adding value, in particular to meat products. Anytime you add value to a commodity, it falls into a totally different category for regulations. And those regulations can be very confusing. Even for those who are considered "experts", it's even confusing. Recently, I heard a presentation by Doug Holt, Food Safety Specialist, at the Agribusiness Counselors Training Session at the University of Missouri. Essentially, here is what those in attendance learned. Regulations Why are there regulations on value added products? Regulations help to keep the truth straight for consumers. They protect the consumer with safety issues and from fraud. Who does the regulating? There are a number of agencies you would need to be in contact with: - USDA - The United States Department of Agriculture regulates raw agricultural products. This would include meat sold at the wholesale level, fresh fruits and vegetables and whole grains. Meat that is sold direct from the farmer to the end consumer is not USDA regulated. USDA also regulates processed meat products that contain greater than 2 percent meat as well as all sausages. USDA works in unison with other allied agencies such as Food Safety and Inspection Service (FSIS) and Animal and Plant Health Inspection Service (APHIS). - FDA - The Food and Drug Administration regulates all processed foods. Meat that is sold direct to the end consumer or from the wholesaler on, is under FDA jurisdiction. They, too, work in contractual arrangements with other allied agencies such as the MO Dept of Health and the local county health departments. - Federal Trade Commission - Occupational Safety and Health Administration (workplace) - Environmental Protection Agency - Department of Commerce (weights and measures) - Bureau of Alcohol, Tobacco and Firearms What kinds of things do these agencies regulate? - Production and processing conditions - Sources of inputs - Labeling and claims on labels - Distribution and retail conditions - Liability assignment In general, USDA and EPA regulate production issues while the FDA regulates processing issues and sources of inputs. What power do these agencies have? - They usually have a series of steps to punitive action such as on the spot corrections, series of letters and warnings. - FDA can place embargos and recalls on products as well as complete shutdown of a processing facility. - USDA will remove inspectors from complete shutdown processing facilities. It is important to remember that regulations generally do not assure quality of a product but rather regulations deal with safety of a product and prevention of economic fraud to the consumer. The possible exception is with USDA meat quality grades. Again, regulations are for safety and fraud, not quality. So you need to be sure you have a quality product that consumers will want to purchase before you go through all the hassles of regulations. United States Department of Agriculture What does the USDA regulate? Remember that USDA regulates the production process of raw commodities as well as processed meats and milk products to the retail level. This includes: - beef (veal), pork, lamb, goats - poultry - chickens, turkeys and eggs - milk and processed milk products (cattle, sheep, goats) - The USDA is obligated to provide inspection for these species and products, but will control the conditions of slaughter and further processing - meats prior to retail sale The USDA does not regulate exotic species but they have the ability to do so if you request them. A fee of $35.00/hour is charged to have a USDA inspector on site. Exotic species include animals such as: - rabbits and some other small mammals - Antelope, bison, deer, elk, reindeer, water buffalo - ducks and other water fowl - ratites (emu, ostrich, rhea) The major regulations that the USDA covers are plant construction and overall operation of the plant including good manufacturing practices and HACCP requirements. They also regulate personnel, allowed ingredients in a product, percentage of ingredients (standards of identity) and labeling. USDA labeling regulations include: - Federal inspection mark termed in the industry as a bug - The name of the product - Ingredients list (if applicable) - Identification of manufacturer or distributor - Accurate statement of net contents - Safety handling instructions (for raw products) - Nutritional labeling (for some products) USDA nutritional labeling requirements include: - voluntary but encouraged for raw products - small business exemptions available based on the dollar value of sales - generally follows the format of FDA regulated labels USDA requires that labeling be pre-approved before it can be used in retail sale. Usually a USDA regulated facility will have someone who can help with label design and approval. There are expediters who can help you with labeling review branch of the USDA. Labeling definitions for USDA regulations do not allow a meat product to be labeled "organic" but can be labeled as "certified organic by …." (Jan 22, 1999). Examples include: not allowed - organic chicken or organic beef. Allowable labeling - "beef" and elsewhere on the label "certified organic by OCIA (or whichever certifying agency you choose). To be labeled as natural there must not be any use of artificial ingredients and minimal processing to the meat. Animal production claims, such as no hormones (can be used with beef but not for pork or poultry) and the term free range may also be used. The USDA does not directly regulate meat after it leaves a USDA inspected facility destined for retail; meat that is bought and sold among individuals as the live animal; and meat that is processed by "custom exempt" processors (the end user is the owner of the product). To learn more about USDA regulations, contact - MO Value Added Development Center, 573-882-1150 - MO Dept of Ag, Ed Gladden, 573-526-2090 - USDA Technical Information Center, Bob Hasiak, 402-221-7400 - USDA web site: http://www.usda.gov Food and Drug Administration What does the FDA regulate? They regulate all processed foods except those containing significant amounts of meat, milk, or eggs, seafood (including freshwater), all products at retail and the food service industry. Remember that the FDA regulates all processed foods. This includes plant construction and operation to be sure the plant is using good manufacturing practices and following HACCP requirements (seafood, voluntary for food service); being sure that allowed ingredients are generally recognized as safe; the percentage of ingredients (standards of identity) and labeling. The FDA regulates inspectable facilities. This includes construction details such as walls, floors, ceilings, water source and equipment as well as operational details and personnel. When it comes to labeling, FDA requires a label to have the following: - the name of the product - ingredients list (if applicable) - identification of manufacturer or distributor - accurate statement of net contents - nutritional labeling (for some products if going into retail store) A label must meet FDA requirements but there is no pre-approval process of the label before a product goes to retail as is required with USDA. If you claim any of the following on a label, be prepared to show the data that backs it up: - content claims such as low, lite, high, rich, fat, sodium, calories - health claims such as cancer, heart disease, birth defects, osteoporosis - the FDA does not have as defined a stance on "value labeling" (all natural, free range, organic, etc) as the USDA Nutritional labeling for FDA - required on all products except with small business exemption - <100,000 units or <10 employees - ask per mission - <10,000 units - no notification required - required if claim is made UPC codes (universal product codes) are not a government requirement, but managed by a private company. They cost about $300 a year for the initial code (based on estimated sales.) An incremental additional cost is charged for each additional code in the same company. For more information see: http://www.uc-council.org/ The FDA does not regulate anything the USDA regulates nor nutritional supplements implied claims such as medicinal herbs. To learn more about the FDA regulations, contact: - MO Value Added Development Center, 573-882-1150 - Local Health Dept and ask for the "tan" book - MO Dept of Health, Mary Fandrey, 573-751-6111 - FDA Small Business Representative in Dallas TX - 214-655-8100 ext 128 - FDA web site: http://www.fda.gov New cooperative venture aims at helping farmers in new agriculture (by Bob Thomas, MU Information Specialist) "We're not talking about picking the low-hanging fruit but the planting of new trees," John Gardner, associate dean for extension at the University of MO, told representatives from state and federal agencies. Gardner was discussing a new cooperative venture to help farmers organize and negotiate business structures that will add value to what they produce. The Ag Business Network, made up of regional county-based Extension specialists will help farmers identify markets, manage value chains and design new businesses. It will work in conjunction with the newly formed Missouri Agriculture Innovation Center in the MO Dept of Ag. Other cooperators include the MO Dept of Economic Development and the MO Enterprise program, the Small Business Development Centers and the MU College of Agriculture, Food and Natural Resources. "This is a cooperative effort to help farmers make a transition to a new level," Gardner said. "Our regional specialists and small business development staffs will create a geographic web of local contact and service points for Missouri farmers and related agricultural businesses." The counselors will help establish point-to-point contact for their clients, he said. They will also access a central computer server on the MU campus to provide key data and availability of providers of a wide range of business and financial services. Kyle Vickers, deputy director of the MO Dept of Ag, said Missouri has a golden opportunity to add value to what its farms produce. "The state has a population of five and a half million consumers with an interest in Missouri-produced products and a good transportation system," he said. Gardner said the state's new agriculture will be characterized by differentiated products, rather than commodities; buying and selling on contracts; and the formation of clusters and interdependent supply chains. "As this new network evolves, we must listen to find out what the farmer needs and see that the needs are met," he said. Starting a value-added business can be rewarding but offers many challenges (by Bob Thomas, MU Information Specialist) Starting a new value-added agricultural business can be rewarding, but there are risks to overcome along the way. That's the message regional extension specialists heard at a two-day training program initiating the Ag Business Network, an effort by the University of MO to help farmers organize and negotiate business structures in today's changing agriculture. The Ag Business Network will team up with the newly formed Missouri Agriculture Innovation Center in the MO Dept of Ag. The network will provide local contacts to counsel farmers interested in starting or expanding a value-added enterprise. More than half of all value-added startups fail, said Jeff Kistner, business development officer with CoBank in Omaha, Neb. Poor management and under-capitalization are the two top reasons for failure. "Dedicated local investors and sound marketing and business plans are keys to success in starting a value-added business," he said. "New ventures must have the capital to cushion unplanned adversity," he added. "Communication with investors is very important. It's also important to remember that you are no longer a commodity or livestock producer but a value-added processor." Mary Holz-Clause, value-added specialist at Iowa State University, said a feasibility study is a critical early step in establishing a value-added business. She suggests using an independent third party, despite the cost, to explore business opportunities. The feasibility study creates a framework to use in writing a business plan. Such a study is an independent analysis, while a business plan is a plan for operation of the specific business, she said. "Starting a business requires commitment," she said. "I tell people it is like raising a family: It's a life sentence." Fourth Annual Entrepreneurial Agriculture Conference New Industries for the Region December 7, 2000 - 7:00 am - Ramada Inn, Sikeston, Missouri The Entrepreneurial Agriculture Conference will address new agriculture enterprises for Southeast MO and the surrounding states. Beginning in 1997, this is the fourth conference, and the first in the Bootheel of Missouri. This year's conference has four tracks with over 20 different sessions from emerging agriculture technology to project funding. We hope that you will participate with us in this event, and take home information to assist you in developing your enterprise. 7:00 am - Registration 7:30 - State of the Delta Breakfast - US. Representative Jo Ann Emerson 8:30 - Welcome - Dr. John Gardner, Associate Dean, Agriculture, University Outreach and Extension, Columbia, MO 9:00 - Four Tracks I. Value -added diversification in row crops - Topics: Rice processing and marketing, New Crops: aromatic rice, watermelons, spinach, ethanol, cottonseed processing, fee hunting II. Emerging Bootheel Region Industries - Topics: Aquaculture, shrimp, catfish, beef packing, marketing alliances and retail, forestry and agroforestry. III. Emerging technologies for new Delta industries - Topics: Precision agriculture, rice/cotton byproducts for construction materials, particle board from straw, kenaf/hemp, biodiesel, USDA/ARS commercial opportunities. IV. Financing innovative agri-businesses - Topics: Local financing, USDA-Rural Development programs, US Federal Reserve, Co-op Bank, FDIC, MO Dept. of Ag. programs, HUB Zones. 12:00 - Delta Futures Luncheon - Senator Kit Bond - Missouri (invited) For information contact: Van Ayers, University Outreach and Extension, Bloomfield, MO 573-568-3344, ayersv@missouri.edu Master Tree Farmer 2001 Program This program was first developed in 1999 to provide private, non-industrial forest landowners in the Southern Region with an opportunity to further their knowledge of natural resource management on their lands. The Master Tree Farmer 2001 Program is the only satellite broadcast of it's kind for forest landowners. Clemson University in South Carolina will serve as host, with professionals and a targeted audience of forest landowners from throughout the country. The course will introduce forest landowners to stewardship considerations, best management practices for protecting the environment and enhancing wildlife habitats, planning to meet landowner objectives as well as services and assistance available for Missouri landowners in managing their forest land. Management principles and concepts will be tailored to address Missouri forest conditions. Local professional instructors and presenters will include staff from the following agencies: The School of Natural Resources-University of MO, MO Dept of Conservation, Natural Resources Conservation Service, University Outreach and Extension, MO Tree Farm Committee. Classes will be held every Tuesday, 6 - 9 p.m. Feb 6 - Introduction to Forest Management, Forestry Terms and Concepts. Feb 13 - Forestry as an Investment (Estate Planning, Taxation and Basic Forest Finance) Feb 20 - Managing for Pine and Hardwoods (Natural, Artificial (Agroforestry)) Feb 27 - Managing for Hardwoods (Uplands and bottomlands) Mar 6 - Timber Marketing, Security and Harvesting Mar 13 - Wildlife Management (Game and Non-Game) Mar 20 - Forestry Services and Programs for the Southern (Missouri) Landowner For more info contact, Bob Pierce,573-882-4337, piercer@missouri.edu or John Dwyer, 573/882-3537, dwyerj@missouri.edu *** In the News *** Missouri state regulations on poultry processing should be in place by Dec 2000. While USDA allows for producers to sell retail and wholesale off their farm for up to 20,000 birds per year to anyone, county and city health regulations can restrict institutions, restaurants and grocery stores by requiring them to purchase USDA inspected meats. While MO state regulations will not replace these city and county regulations, these local health departments can review and accept MO inspections as equal to USDA inspections thus allowing wholesale markets to purchase MO inspected poultry. For info call Rose Foster at 573-522-3377 or email her at Rose Foster@mail.mda.state.mo.us A possible alternative crop for growers: the American mayapple. Its leaves yield an anticancer extract called podophyllotoxin, which is used by companies to produce the cancer-fighting drug etoposide. It's a substance for Podophyllum emodi, close relative to the mayapple, which also produces the anticancer compound but is now almost extinct. Compound can be quickly extracted and is relatively inexpensive. Talks are under way with drug firms to make the drug available in stores. For more information, call 662-915-7965 or email ccanel@oldmiss.edu. (The Kiplinger Agriculture Letter, Vol 71, No 15) According to the March 2000 Kiplinger Agriculture Letter, two new programs from USDA are designed to help organic farmers. A pilot federal crop insurance program is the beginning of an effort to get full coverage for organic farmers. The pilot program will be implemented in the areas of the country with existing state or private organic certification systems. The second project is a marketing order program. Similar to marketing order programs for other commodities, organic farmers will receive help in promoting their organic fruits and vegetables from the USDA Agriculture Marketing Service and other project cooperators. Free seed is available in limited quantities for use in educational, agricultural research, or breeding purposes from the USDA Agriculture Research Service National Plant Germplasm System (NPGS). NPGS is a plant genebank network that collects seeds worldwide to maintain a constant source for scientific study. The NPGS collection is distributed from its web site at http://www.ars-grin.gov/npgs/ (Small Farm News, Vol 11, 2000) *** In Print *** *Naturalize Your Farming System: A Whole-Farm Approach to Managing Pests* A SAN publication that defines ecologically based systems, outlines ecological principles for managing pest and suggests how to apply those principles to real life farm situations. Free. Call 301-504-6422, adeyemi@nal.usda.gov *USDA Issues Center-US Organic Agriculture Web site* http://www.ers.usda.gov/whatsnew/issues/organic/. Presents basic info on organic agriculture. Includes data tables on certified organic livestock, crops and acreage as well as organic certification programs. Provides links for more information. Contact Cathy Greene, ERS-USDA, Rm 4051, 1800 M Street NW, Washington, DC 20036-5831, 202-694-5541, cgreene@ers.usda.gov or cgreene@econ.ag.gov *Building Soils for Better Crops* Explains how soil management boosts fertility and yields while reducing environmental impacts and pest pressures. Provides practical infomation for farmers, ranchers, educators and gardeners. Call 802-656-0484,email lhendric@zoo.uvm.edu. *** On the Calendar *** Nov 30-Dec 2-Greenhouse Food Production Seminar, Fremont, OH. Call 419-354-6916, donnell.8@osu.edu Dec 2-Exotic Animal Auction, Eldon, MO. Call 573-392-2997. Dec 7-4th Annual Entrepreneurial Agriculture Conference, Sikeston, MO. Call 573-568-3344. Dec 7-9-26th Annual ACRES USA Conference, Minneapolis, MN. Call 1-800-355-5313. Dec 10-12-MO Governor's Conference on Agriculture, Tan-Tar-A, MO. Call 573-751-5622. Jan 5-6-Great Plains Vegetable Conference, St Joseph, MO. Call 816-279-1691. Jan 15-21-North American Farmers Direct Marketing Conference, Phoenix, AZ. Call 888-884-9270. Jan 17-19-Specialty Crops Conference, Champaign, IL. Call 309-557-2107. Jan 19-20-10th Annual SAWG Conference, Chattanooga, TN. Call 225-654-2017, toni-hawk@tlxnet.net Jan 20-MO Christmas Tree Producers Assn Winter Meeting, Jefferson City, MO. Call 573-243-5501. Jan 22-MO Landscape & Nursery Assn Nuts & Bolts Employee Short Course, St Louis, MO. Call 816-233-1481. Jan 23-MO Landscape & Nursery Assn Nuts & Bolts Employee Short Course, Kansas City, MO. Call 816-233-1481. Jan 24-26-Mid-America Fruit Growers Conference, Olatha, KS. Call 573-882-9632. Jan 26-28-MO Assn of Fairs & Festivals Convention, Columbia, MO. Call 618-355-0854. Jan 27-6th Annual Local Food Systems Conference, Iowa City, IA. Call 515-232-5649. Feb 2-3-8th Annual Mid MO Agriculture Expo, Sedalia, MO Call 660-826-2222. Feb 3-4-MO Young Farmers/Young Farm Wives Convention, Branson, MO. Feb 3-5-Midwest Regional Grape & Wine Conference. Call 800-392-WINE. Feb 5-9-Ag Science Week, Columbia, MO. Call 800-433-3704. Feb 13-Soil Health and Biodynamic Methods Workshop, Jefferson City, MO. Call 800-433-3704. Feb 14-16-Advanced Organic Vegetable Production for Small and Large Scale Producers Workshop, Jefferson City, MO. Call 800-433-3704. Feb 16-Local Foods Reception, Columbia, MO. Call 800-433-3704. Feb 17-SPAN and MO Organic Assn Joint Conference "Preserving Farm Diversity to Secure Our Future", Columbia, MO. Call 800-433-3704. Feb 19-21-MO Small Fruit Conference, Springfield, MO. Call 417-926-4105. March 21-23-North Central Region Small Farm Workshop, Springfield, IL. Call 800-433-3704. March 24-Family Farm 2001: Diversity to Prosper, Silex, MO. Call 573-485-7261. April 28-29-Farm-Fiber Festival and MO Spin-In. Call 573-874-2233. University Outreach and Extension does not discriminate on the basis of race, color, national origin, sex, religion, age, disability or status as a Vietnam-era v