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)
• five star hotel in BrugesBureau of Alcohol, Tobacco and Firearms

hotel luxueux OradeaWhat 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/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: www.usda.gov
• USDA land-grant university state partners: www.reeusda.gov/1700/statepartners/usa.htm

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
• less than 100,000 units or less than 10 employees - ask per mission
• less than 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: 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: www.fda.gov

Other resources:

• Federal Trade Commission (FTC)
• Occupational Safety and Health Administration (OSHA)
  • Regional & Area Offices
  • State Occupational Safety & Health Plans
• Environmental Protection Agency (EPA)
• Department of Commerce (weights and measures)
• Bureau of Alcohol, Tobacco and Firearms (ATF)

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This article was made available by and used with the permission of Debi Kelly, Editor of the Missouri Alternatives Center newsletter from a presentation by Doug Holt, Chair, Food Science & Extension Specialist, October 3, 2000. Adaptations were made to make this material more generically applicable for a national audience.