What is the regulatory environment for meat and poultry?
Different statutes regulate the safety and labelling of meat and poultry at the federal level. The Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA) regulate the production, safety and labelling of meat and poultry products, respectively, with few exceptions. The United States Department of Agriculture’s (USDA’s) Food Safety and Inspection Service (FSIS) administers those programmes. Under the FMIA and PPIA, and their implementing regulations and policy statements, The FSIS broadly regulates nearly all aspects of the harvest, processing and labelling of meat, poultry and certain egg products regulated under the Egg Products Inspection Act (EPIA). Two important concepts run through these regulatory schemes: adulteration and misbranding. Adulteration is the standard for food purity and safety, broadly defining which food products meet regulatory requirements and are safe for consumption. Misbranding relates to whether the labelling of a food meets regulatory requirements. Labels for products regulated under the FMIA, PPIA and EPIA must be pre-approved by the FSIS. The FSIS also allows companies to move forward without submitting labels for pre-approval under the ‘generic’ label approval guidelines, but only under limited circumstances. FSIS regulations, policy memoranda and the Food Standards and Labelling Policy Book provide additional labelling requirements and guidance for meat and poultry products.
What is the regulatory environment for all other human food?
Most food products are regulated under the federal Food, Drug and Cosmetic Act (FDCA) administered by the federal Food and Drug Administration (FDA). Whole eggs in shells are regulated under the FDCA but other egg products are regulated under the EPIA, administered by the FSIS. Animal feed and pet food are also regulated under the FDCA, as are dietary supplements, medical foods and infant formula, but with some additional requirements. Alcohol products are almost entirely regulated under the Federal Alcohol Administration Act (FAAA), administered by the US Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB). Organic food products are regulated under the Organic Food Production Act of 1990, administered by USDA.
The FDA monitors food production to ensure food is safe and adequately and accurately labelled under the FDCA. The FDA does not pre-approve food labels. The Nutrition Labelling and Education Act of 1990 (NLEA) requires that food products be labelled with five mandatory elements: (1) the product name; (2) the net contents; (3) a nutrition fact panel; (4) an ingredient list; and (5) the name and place of the manufacturer or distributor. The NLEA authorises the use of certain claims on labels, including nutrient content claims, and certain health claims. The Food Allergen Labelling and Consumer Protection Act of 2004 (FALCPA) requires food labels to identify the presence of the ‘Big 8’ food allergens: milk, egg, fish, crustacean shellfish, tree nuts, wheat, peanuts and soybeans. The FDA also issues regulations on various food label claims, including ‘fresh’, ‘healthy’, ‘GMO free’ and ‘gluten-free’.
The Federal Trade Commission (FTC) administers the Federal Trade Commission Act (FTCA), which regulates advertising of food and other products, prohibiting ‘unfair or deceptive acts or practices’ and false or misleading advertising. The FTC and FDA divide responsibility for food, with the FDA having primary jurisdiction over the food labelling, while the FTC has primary jurisdiction over food advertising. A website may be considered part of a food’s label, and both the FDA and FTC may scrutinise claims made about food products in websites or in social media.
Private enforcement of state statutes prohibiting false and misleading labelling and advertising of food products, through consumer fraud class action lawsuits, are also a concern. As food companies have emphasised products’ claimed health or other benefits, consumers have become more likely to file class action lawsuits, alleging that the food or beverage’s claimed characteristics - whether express or implied - are false and misleading.Relevant organisations
What are the main non-governmental organisations and non-profit organisations in the agribusiness sector in your jurisdiction?
Given the size and breadth of the agribusiness sector, the United States is home to thousands of non-governmental and non-profit organisations related to the industry. These organisations may focus on a certain portion of the industry or represent the interests of particular actors within it. The more prominent ones are:
- The Agribusiness Council;
- United Agribusiness League;
- American Agricultural Economics Association;
- American Farm Bureau Federation;
- Farm Credit Council;
- North American Meat Institute;
- National Livestock Producers Association;
- National Pork Producers Council;
- US Poultry & Egg Association;
- The Animal Transportation Association;
- National Grain and Feed Association; and
- International Dairy Foods Association.
Land acquisition and useLegislation
Identify and summarise the enacted legislation addressing agricultural property transactions in your jurisdiction. Outline how farmland is typically held.
No federal laws restrict the purchase or sale of privately held agricultural property in the United States to foreign individuals or entities. Interested foreign parties may enter into contracts to purchase farmland or other agricultural property.
Although no federal laws restrict these transactions, certain guidelines allow the United States Department of Agriculture (USDA) to obtain information about the purchase of farmland by foreign parties. Under the guidelines, foreign parties must report purchases of farmland within 90 days of closing or they may be subject to civil liability, including the reversion of property to the state jurisdiction. In 2015, the USDA reported that approximately 30 million acres of agricultural property, including farmland, was held by foreign parties.
Approximately 30 states do restrict or limit foreign parties from purchasing farmland within their jurisdiction.
In 2018, the federal government passed the Agriculture Improvement Act (the Farm Bill). The Farm Bill re-enacted certain restrictions regarding the conservation of land. These restrictions incentivise farmers with farmland located in designated wetland areas and erodible farmland to strengthen their conservation efforts by providing compensation for these efforts.
Agricultural property owned by the federal government is generally not available for purchase, unless there is a surplus, which may be sold via a competitive process.Non-agricultural land rules
Outline any rules related to use of farmland for non-agricultural uses.
As the percentage of Americans living in urban areas continues to grow, lawmakers have increasingly focused on preserving farmland. Concerns over food security, environmental protections and urban sprawl have spurred this focus. To address the concerns, every state has enacted laws and regulations designed to preserve existing farmlands and protect farmers. These measures incentivise farming in rural areas and restrict non-agricultural uses of rural land.
Right-to-farm laws seek to protect qualifying farmers from civil actions. These statutes, to varying degrees, protect farmers from nuisance actions that would curb normal farming operations and protect farmers against local regulations that would otherwise limit normal agricultural practices. These laws also contain local guidelines designed to restrict normal farming and agricultural operations. In addition, some states have implemented tax incentives for agricultural landowners.
Certain states have implemented zoning regulations to specifically preserve land for agricultural purposes, limit the sale of parcels for non-farming uses and dictate minimum parcel sizes. Generally, these zoning regulations exclusively limit land use in areas designed for farming to active farming and other business purposes that are incidental to the processing and marketing of farm products. Whether these incidental uses meet the zoning regulations is assessed on a case-by-case basis.
Several states have also implemented planning boundaries known as urban growth boundaries (UGBs) to limit sprawl and promote inward urban growth. Under UGBs, urban growth cannot extend past defined boundaries.Lending
What special rules are important to agricultural lending in your jurisdiction?
The issues that distinguish agricultural lending from other lending are mostly found in individual states’ laws, with a narrow federal overlay. Primary concerns include:
- ‘secret liens’: These include (among other things) state statutory liens on crops and animals in favour of suppliers of seed, fertiliser, feed and other inputs. They also include trusts imposed under the federal Perishable Agricultural Commodities Act, the federal Packers and Stockyards Act and similar state laws that benefit producers, processors and other sellers;
- the Federal Food Security Act (FSA): The FSA changes the rules regarding priority between buyers of farm products in the ordinary course of business and secured lenders. Depending on the state, lenders to farmers may need to send notices to potential buyers or file ‘effective financing statements’ (in addition to UCC financing statements) to protect their security interests. Lenders to buyers from farmers should confirm that buyers have systems to ensure compliance with the FSA;
- limitations on farm ownership: Some states restrict ownership of farmland by business entities (such as corporations) and by non-US citizens. In addition, the federal Agricultural Foreign Investment Disclosure Act requires disclosure of farmland ownership by non-US citizens; and
- remedial laws: Some states have rules for foreclosure and other enforcement actions that provide additional protections for agricultural producers. These may require mediation before other remedies can be pursued or extend mortgage foreclosure and redemption periods, among other things. At the federal level, Chapter 12 of the Bankruptcy Code provides a favourable restructuring option for eligible family farmers.
Describe any rules relating to public control of farm property in your jurisdiction. What enacted legislation governs them?
The US Supreme Court has repeatedly established that, under the Fifth Amendment to the US Constitution, the federal government has a right to take privately owned land, which is extended to state governments under the Fourteenth Amendment. Under this right, known as ‘eminent domain’, the government can take private property so long as the taking is for ‘public use’ and the landowners are provided with ‘just compensation’. There is no specific definition for public use, but courts have construed the term broadly to include most purposes that would yield a community benefit. Additionally, courts have generally defined ‘just compensation’ as the fair market value of the property. Courts have found that even when a taking is temporary, the federal government is required to provide just compensation.
There are two main types of takings as defined under the Fifth Amendment: (1) physical; and (2) regulatory. Physical takings are generally defined as physical interference with a private landowner’s use of their property. Identifying this type of a taking is generally relatively straightforward.
Regulatory takings are much harder to prove, and there is no clear test to determine this type of a taking. Courts have found that a regulatory taking occurs when a governmental regulation places restrictions on property that make the land unusable for the landowner’s purpose. Zoning code regulations that restrict or prohibit certain usage rights is a common example of a regulatory taking.Foreign ownership restrictions
Are there any restrictions on foreign ownership of farm property in your jurisdiction? What enacted legislation governs them?
US federal law generally does not prohibit foreign ownership of farmland or other kinds of agricultural property. However, under the Agricultural Foreign Direct Investment Disclosure Act, the United States Department of Agriculture requires foreign investors to report considerable information about the property and the reporting party within 90 days of purchase or sale. Failure to make required reports can result in civil penalties of up to 25 per cent of the property’s fair market value.
In addition, approximately 30 states have laws designed to restrict foreign ownership of agricultural property or require disclosure of foreign persons and entities acquiring agricultural property in their state. States in the Midwest tend to have the most extensive restrictions.
Other laws and regulations may be implicated where a foreign entity is acquiring agricultural property. The Committee on Foreign Investment in the US reviews foreign investment in companies to determine whether the proposed transaction has potentially negative national security implications. Under the Domestic and Foreign Investment Disclosure Act, parties acquiring an interest of 5 per cent or more in a company registered with the Securities and Exchange Commission must report certain identifying information (including information regarding citizenship status and residence) to the government. Foreign entities acquiring interest in agricultural property are subject to US federal and state antitrust laws and related reporting requirements. Where a proposed acquisition or other transaction meets certain financial thresholds, the parties are required to report their proposed transaction to the Department of Justice and the Federal Trade Commission (for clearance under the Hart-Scott-Rodino Act).
Government programmesSupport programmes
Does the government provide agriculture support programmes to producers, processors or agriculture-related businesses and organisations? Outline the programmes and how they are generally accessed.
The mission statement of the US Department of Agriculture (USDA) is to ‘[p]rovide leadership on agriculture, food, natural resources, rural infrastructure, nutrition, and related issues through fact-based, data-driven, and customer-focused decisions’. To that end, the USDA administers a broad range of programmes in support of domestic agricultural production. These programmes are meant to improve the ability of American producers to sustain themselves financially while making the products needed to feed and clothe people across the world. USDA programmes promote American products and their export, economic development within agricultural communities and improved land stewardship while ensuring a safe, nutritious and secure domestic food supply. The USDA often serves as a safety net for American producers through assistance to struggling industries, disaster assistance and crop insurance. The USDA also offers technical assistance and access to credit.
The USDA has allocated the following amounts toward supporting US producers: US$5.1 billion for commodity programmes that include agriculture risk coverage and price loss coverage, US$8.7 billion for the Federal Crop Insurance Program, protecting farmers against risk to sustain a safe and affordable food supply and US$7.6 billion in farm loans to support veteran farmers as well as beginners. These three programmes are under Strategic Goal 2 of Fiscal Year 2019 USDA Budget Summary, Maximize the Ability of American Agricultural Producers to Prosper by Feeding and Clothing the World. In total US$21.2 billion will be spent on these safeguards in the 2019 calendar year.Incentives for foreign investors
Are there any programmes addressing assistance or government incentives for investment by foreign ownership in agribusiness?
Generally, economic investment incentives are determined by the economic development offices of each US state and vary by state. Typical forms of incentives consist of grants, tax exemptions, preferential tax rates, tax credits and loan participations.
Food safety, certification programmes, animal safety and diseaseLivestock legislation
List the main applicable enacted legislation for primary processors of live animals.
Primary processors in the United States are subject to legislation governing their methods of treatment and slaughter of live animals. The Humane Methods of Slaughter Act (HMSA) governs the slaughter process itself. HMSA enjoys some preemptive power over the states and is enforced by the USDA. Importantly, HMSA does not apply to poultry slaughter.
Another principal piece of legislation in this area is the Federal Meat Inspection Act of 1906 (FMIA). FMIA confers broad authority onto the FSIS, a federal agency within the USDA, to implement and enforce thorough inspection criteria for food processors. FMIA applies to slaughterhouses that transport their products across state lines. A supplemental piece of legislation, the Wholesome Meat Act of 1967, requires all states to have intrastate inspection programmes ‘equal to’ that of the federal government. These laws work in tandem to create a national scheme of health and safety governance applicable to primary processors of most live animals. Relatedly, the Poultry Products Inspection Act of 1957 imposes safe and humane slaughter and processing of poultry products.Food safety regime
Describe food safety regulations for meat and poultry products, and all other food products in your jurisdiction.
See questions 1 and 2.Safety enforcement
What enforcement can take place in relation to food safety? What penalties may apply?
The Food Safety Modernization Act (FSMA) imposes numerous food safety requirements on food companies, including a mandate that companies that manufacture, pack or hold food develop written food safety plans. These food safety plans include, among other things, a hazard analysis to identify reasonably foreseeable hazards to humans or animals and controls to minimise or prevent those hazards
FSMA arms the FDA with enhanced monitoring and enforcement powers, including the authority to issue a mandatory recall when there is ‘reasonable probability’ that a food is adulterated or misbranded and will cause serious adverse health consequences or death to humans or animals. The FDA rarely uses its recall power, instead using public announcements and other means to encourage a company to issue a voluntary recall. The FDA can suspend a facility’s registration, seize and detain food, and impose both civil and criminal liability for individuals or corporations that sell adulterated or misbranded products.
Regarding meat, poultry and eggs products, the FSIS has similar legal authority to take administrative, civil or criminal enforcement actions against individuals and companies for violations of the FMIA, PPIA and EPIA. These actions can include detention of products when there are insanitary conditions at a facility or inhumane slaughter or handling. Recalls are initiated by the manufacturer or distributor. At times, the FSIS recommends a company initiate a recall, but all recalls are voluntary. If a company refuses to initiate a voluntary recall, the FSIS has the legal authority to detain and seize those products in commerce. The FSIS can also stop facility production, seize product, file an injunction and seek civil or criminal penalties.Product certification
Describe any certification programmes and regulations for genetically modified foods and organic foods.
In the US, third-party certifying organisations establish adherence to certain voluntary standards, such as organic certification and labelling and labelling products as ‘non-GMO’. Organic certification verifies that the company complies with USDA organic regulations and allows certified companies to label, market and sell products as organic.
Bioengineered foods are regulated by the USDA under the National Bioengineered Food Disclosure Standard of 2016. All bioengineered foods or foods containing bioengineered food ingredients must bear specific labelling by 1 January 2022. The bioengineering disclosure requirement does not address foods that claim to be ‘non-GMO’; this is a claim usually made with certification from a third party that the food is ‘non-GMO project verified’.Food labelling requirements
What are the food labelling requirements, including the applicable enacted legislation, enforcement and penalties?
Federal jurisdiction over food labelling is divided between two key agencies: the Food and Drug Administration (FDA) and the US Department of Agriculture (USDA). The FDA governs most foods sold in the United States under the Federal Food, Drug, and Cosmetic Act (FDCA). The FDCA requires five mandatory label elements: (1) product name; (2) net contents; (3) nutrition fact panel; (4) ingredient list; and (5) name and place of the manufacturer or distributor. Health claims (statements regarding how foods affect the ‘structure and function’ of the human body), and claims such as ‘light’, ‘fewer calories’, ‘less fat’, ‘fresh’, ‘bioengineered’, ‘pasteurized’, ‘organic’, ‘allergens’ and others are found in FDA regulations, guidance documents and compliance policy guides. In many cases, these regulations establish minute details of how text may appear on a label, including font size and placement.
Labelling of meat, poultry and certain egg products is regulated by the USDA’s FSIS. In contrast to products regulated by the FDA, labels for these products must be preapproved by the FSIS.
Labelling compliance is important - if the label fails to meet regulatory standards the food may be characterised as ‘misbranded’ and subject to government enforcement actions ranging from warning letters to product recalls to product seizures. Misdemeanour or felony criminal penalties are also possible. But perhaps the most discussed enforcement development in the last decade has been the growing trend of consumer class action lawsuits seeking substantial damages for labelling transgressions, both real and perceived.Food animal legislation
List the main applicable enacted legislation regarding health of food animals, including transportation and disease outbreak and management.
The FDA Food Safety Modernization Act of 2000 (FSMA) establishes robust, proactive food safety measures across the spectrum of industries that market food products to the public. FSMA imposes safety and control requirements on the production of animal food, which covers food provided to food-producing animals, such as cattle and poultry.
A framework of federal statutory, regulatory and decisional law governs the transportation of food animals. For example, food animals’ health is protected during transportation by the so-called ‘28 Hour Law’ discussed in question 17. Additionally, state negligence law often sets the standard for protecting food animals from exposure to contagions and other disease-causing stimuli.Animal movement restrictions
What are the restrictions on the movement of animals within your country?
Transportation of animals within the US is subject to restrictions found at 49 U.S.C.A. § 80502 (West 2019). Known as the ‘28 Hour Law’, this federal statute prohibits the ‘confine[ment of] animals in a vehicle or vessel for more than 28 consecutive hours without unloading the animals for feeding, water, and rest’. The statute applies to:
- rail carriers, express carriers and common carriers (except by air or water);
- receivers, trustees or lessees of a carrier; and
- owners or masters of vessels or vehicles transporting the animals.
- the confinement period may be extended by an additional eight hours in two circumstances:
- when the transported animal is sheep and the 28-hour maximum concludes at night; and
- if the owner or custodian of the animals makes a separate request in writing for a time extension;
- any animal may be confined in excess of 28 hours if unloading the animal cannot be accomplished safely in light of ‘accidental or unavoidable causes that could not have been anticipated or avoided when being careful’; and
- the confinement period is inapplicable where the animals are transported by means which allow for food, water, space and an opportunity for rest.
Maximised confinement periods must be followed by five consecutive hours of release when food, water and rest are provided. Violations of the 28 Hour Law expose those bound by it to civil penalties ranging from US$100-US$500.
The Safe Air Travel for Animals Act governs the transportation of pets and other live animals through air travel.Slaughter legislation
Where would one find the regulations related to livestock slaughtering?
The regulations are primarily codified under Title 9 of the Code of Federal Regulations. USDA’s virtual ‘National Agricultural Library’ houses pertinent statutory and regulatory law and explanatory secondary sources in a retrievable format. The Humane Methods of Slaughter Act, FSIS regulations and training materials and GAO enforcement reports are accessible through the USDA’s library.Pest control requirements
Outline the regulatory regime for pesticides in your jurisdiction.
In the US, the Environmental Protection Agency (EPA) regulates pesticides, with authority derived from the Federal Insecticide, Fungicide and Rodenticide Act of 1947 (FIFRA). FIFRA operates as a registration statute and requires EPA approval and registration of pesticides prior to their sale, distribution or use in the US. A party seeking to register a pesticide must submit certain categories of testing data to the EPA. In determining whether to register a pesticide, the EPA engages in a cost-benefit analysis of the pesticide’s intended uses, weighing the potential adverse effects on human health and the environment against the benefits of the intended use. Additionally, states may regulate the sale and use of pesticides if they do not allow a sale or use that is prohibited by FIFRA. States cannot impose labelling requirements in addition to or different from those required under FIFRA.
The Federal Food, Drug and Cosmetic Act (FFDCA) will apply if pesticides are applied to food or food crops. Under the FFDCA, as amended by the Food Quality Protection Act of 1996 (FQPA), the EPA must establish a maximum safe level, or tolerance, of pesticide residue depending on the type of crop. Statutes such as the Endangered Species Act, Clean Water Act and Safe Drinking Water Act apply generally to a broader category of chemical use and storage, but certain pesticides may be addressed specifically.
Business organisationTypical organisation
How are agricultural operations typically organised in your jurisdiction?
Most organisations are either corporations, LLCs (limited liability companies) or various forms of general and limited partnerships. Cooperatives, which are a type of business organisation owned and controlled by a group of members that use its products and services, are also utilised, and are more common in agricultural production and input operations than in manufacturing, processing and distribution businesses. Each type of entity has pros and cons, but generally, except for general partnerships (or general partners), all provide a liability shield to equity owners. Corporations are generally more prescriptive by statute, while LLCs and partnerships can have more flexible governance and distribution structures. For example, a corporation is required to hold certain meetings and undertake certain governance matters on an annual basis.
It is important to consult tax expertise when selecting an entity. Generally, a corporation would pay taxes on its income, and then distributions would also be subject to tax. LLCs and partnerships can have a single layer of tax. With respect to governance, a corporation is often managed by a board of directors, which delegates authority for day-to-day activities to officers. Governance of LLCs and partnerships can be structured in several ways, including structures similar to a corporation. The type of entity can also impact capital raising, as some investors will prefer to hold a certain type of equity interest.Foreign ownership
Outline any restrictions on foreign ownership of agricultural operations or businesses other than farming operations.
See Question 8. Because the definition of ‘agricultural property’ under the AFIDA and related state laws is broad enough to encompass far more than just farmland, the reporting requirements and restrictions governing foreign ownership of farm property are equally applicable to agricultural operations and other agriculture-related businesses. Furthermore, the other reporting and disclosure requirements, as well as the antitrust laws, discussed in question 8, are also applicable here.
Agricultural workers, immigration, and health and safetyWorker rights
Describe any specific rules or laws governing the rights of workers or employees for agricultural operations.
The Fair Labor Standards Act (FLSA) is a federal law that sets minimum wage, overtime compensation, record-keeping and child labour requirements. The current federal minimum wage is US$7.25 per hour. Generally, employers must pay non-exempt employees overtime compensation at one and one-half times the employee’s regular rate of pay for all hours worked over 40 per work week. For employees under the age of 18, the FLSA regulates issues such as hours of work and prohibited (hazardous) occupations. Some agricultural employers and employees are exempt from certain requirements under the FLSA. Exemptions involve fact-intensive inquiries. Whether the employer or the employee is exempt from the minimum wage or overtime requirements depends on factors such as the nature of the employer’s agricultural operation and the nature of the agricultural work the employee performs.Immigration regulation
How is farmworker immigration regulated in your jurisdiction?
In the United States, federal law governs immigration, inclusive of the H-2A Temporary Agricultural Worker Program. This programme, authorised by the US Immigration and Nationality Act, allows US employers to bring temporary foreign workers to the United States to perform seasonal agricultural labour.
While there is currently no annual limit on the number of H-2A workers that can come to the United States, employers must certify that (1) there are no available US workers to perform the work; and (2) the wages and working conditions offered to the foreign nationals meet or exceed specified minimum requirements in the area of intended employment. Agencies responsible for managing the H-2A programme include the US Department of Labor, US Citizenship and Immigration Services and the US Department of State.
Multiple additional state and federal laws and regulations seek to protect workers in all industries, inclusive of migrant and seasonal farmworkers. One of these laws, the Migrant and Seasonal Agricultural Worker Protection Act of 1983 (MSPA), is the primary labour statute covering people engaged in seasonal or temporary agricultural work. The MSPA plays an important role in establishing wage and working condition requirements for these workers and in requiring the registration of farm labour contractors.Work health and safety regulation
Outline the health and safety regulations relating to farmworkers in your jurisdiction.
Generally, agribusiness employees or farmworkers must be provided with safe and healthy working conditions as specified by the Occupational Safety and Health Act of 1970 (OSHA), certain OSHA health and safety standards and the General Duty Clause under that Act. The Occupational Safety and Health Administration (which is part of the US Department of Labor) enforces workplace health and safety standards and the requirements of the General Duty Clause.
OSHA covers agribusiness in areas such as (this is not an exhaustive list):
- temporary labour camps;
- grain bins and silos;
- vehicle hazards and tractor rollover protection;
- guarding of equipment;
- heat and weather-related hazards;
- fall hazards;
- noise-related hazards;
- storage of anhydrous ammonia;
- field sanitation;
- hazard communication;
- personal protective equipment;
- animal-related hazards;
- cadmium usage; and
- logging operations.
In the case of family farms, immediate family members of a family farm owner/employer are not considered employees, so OSHA does not apply to them. Also, small agricultural operations with 10 or fewer employees (excluding family members) in the last 12 months have typically been excluded from OSHA regulations through language in the Department of Labor appropriations bills - as long as those small operations did not maintain a temporary labour camp during the same period.
Indiana regulates agricultural operations consistent with federal OSHA requirements. Under Indiana’s OSHA-approved state plan, it must regulate in a manner that is at least as effective as federal regulatory requirements. However, Indiana law provides, under Ind. Code § 22-8-1.1-17.5, that the Indiana Commissioner of Labor may not enforce ‘any provision’ used to carry out enforcement action that is more stringent than the corresponding federal provision enforced by the United States Department of Labor under OSHA.
International tradeImport regulation
Describe the regulatory environment for animal product imports.
See question 1.
Describe the regulatory environment for all other food imports.
See question 2.Tariffs and quotas
May tariffs, quotas or similar measures be put in place?
The Commerce Clause in the Constitution gives Congress the power to regulate international trade, including imposing tariffs and quotas on imports of goods such as agricultural products. Over the years, Congress has passed legislation to delegate some trade regulatory authority to the President, though that authority is subject to review. For example, beginning in January 2018, President Trump used that delegated authority to impose tariffs on many goods, including most Chinese-origin commodities. China retaliated with its own tariffs, which initially affected US agricultural exports such as pork and soybeans (China rolled back pork and soybean tariffs in September 2019). Recognising the impact on US agricultural producers, in 2019 the Trump administration authorised up to US$14.5 billion in Market Facilitation Program payments to US farmers affected by Chinese tariffs.
In October 2019, the US Trade Representative found that the European Union and certain member states had denied US rights under the World Trade Organization Agreement concerning certain subsidies to the EU large civil aircraft industry. The US Trade Representative acted by declaring additional duties on products of certain member states of the EU. Several of the products subject to this additional 25 per cent duty are agricultural, food and beverage products.Import and export treaties
What treaties apply to the import and export of agricultural products in your jurisdiction?
The US is party to the following international agricultural treaties and organisations:
- the General Agreement on Tariffs and Trade and World Trade Organization: This covers international trade of goods, focused on reducing trade barriers such as quotas and tariffs;
- the Agreement on Agriculture: This attempts to reform agricultural trade and create a fair market for the movement of agricultural goods, with provisions for market access, domestic support and export competition. Signatories must reduce tariffs and other trade barriers, reduce the value of export subsidies and establish minimum access tariff quotas. It also accounts for specific concerns of developing countries;
- the Agreement on Sanitary and Phytosanitary Measures: This allows participants to set health and safety standards for imports, but advises participants to base their food safety and animal and plant health regulations on international standards where possible and to apply standards equitably; and
- the Agreement on Trade-Related Aspects of Intellectual Property Rights: This recognises varying IP protection standards and provides for protection of IP as part of trade. Participating nations must protect the IP of other nations as carefully as they protect their own. In agriculture, IP rights apply to biotechnology, genetics, pesticides, agricultural equipment and other products.
The US has developed its own trade agreements with various countries. As of October 2019, USMCA (the United States-Mexico-Canada Free Trade Agreement) is awaiting ratification as a replacement scheme for NAFTA (the North American Free Trade Agreement).
Intellectual propertyPlant breeder rights
How are plant breeders’ property rights protected in your jurisdiction?
Codified by the Plant Variety Protection Act (PVPA) and administered by the Plant Variety Protection Office (PVPO) of the USDA, plant variety protection (PVP) certificates give the breeder (or the successor in interest of the breeder) of a variety a personal property right in the variety. Protection is available for sexually and asexually reproduced varieties, as well as tuber-propagated varieties.
For 20 years (25 years for vines and trees) from the grant of the certificate, the breeder is granted exclusive control over the variety. Unless otherwise permitted by the breeder, third parties are prohibited from: selling, offering for sale, importing and exporting the variety; multiplying or propagating the variety as a step in marketing; using the variety in producing (distinguished from developing) a hybrid; dispensing the variety in a form which can be propagated without notice that the variety is protected; conditioning the variety for purposes of propagation; stocking the variety for an infringing purpose; and actively inducing performance of an infringing act.
To obtain a PVP certificate, a detailed application is submitted to the PVPO. This includes a statement of breeding history of the variety, a statement of distinctness, an objective description of the variety, any additional descriptive information (optional) and a statement of the basis of ownership and a declaration of deposit. A variety must be ‘new’ as of the application filing date and must be distinct, uniform and stable as demonstrated by testing data. A sample of the variety (eg, seed) must be deposited with the USDA.Access to plant varieties
How is farmers’ access to crop varieties and plant technologies addressed in your jurisdiction?
Farmers may purchase any protected variety or seed, or any other plant technology, subject to the conditions and restrictions imposed by any attached intellectual property right or licence agreement. If protected solely by a PVP certificate, the variety can be used to breed new varieties (but not generate hybrids), and farmers may save harvested seed for planting on their own farms or land they rent or lease. A farmer may not sell or otherwise distribute saved seed to others for the sole purpose of planting and reproducing the variety. Farmers must, however, be wary of additional contractual limitations imposed on saving seed for replanting. No exceptions exist if a variety is protected by a utility patent (eg, many hybrid corn varieties); no seed may be harvested and saved for planting without the patent holder’s permission.Other intellectual property
What other intellectual property considerations apply to agribusiness in your jurisdiction?
Varieties can be protected by PVP certificate, plant patent, utility patent, trademark, contract, or any combination (including all) of these (if the variety is eligible for each type of protection). Trade secret may also be used, although not in conjunction with PVP certificate, plant patent or utility patent protection, as each requires a public disclosure of the variety.
Plant patents are available for invented or discovered asexually reproduced plants (excluding tuber-propagated plants) that are novel, non-obvious, and adequately described or enabled. The United States Patent and Trademark Office examines and issues plant patents. A plant patent expires 20 years from its earliest application (ie, priority) date, and grants the patentee the right to exclude others from making, using (including for breeding), offering for sale, selling and importing the claimed plant.
Utility patents are available for any new and useful process, machine, manufacture or composition of matter. A utility patent may protect hybrids, inbreds, plant parts (eg, seeds), germplasm, transformation methods, transferrable traits, plant products, animal breeding and genetics technologies, agricultural machinery and agrochemicals. A utility patent expires 20 years from its priority date and grants the patentee the right to exclude others from making, using, offering for sale, selling and importing the claimed invention.
Plants, products thereof and other agricultural goods may be marketed using a trademark, which identifies the source of goods. Plant variety names that identify all plants of that variety are considered generic names and cannot be trademarked.
Environmental issuesRegulatory agencies
Describe the regulatory agencies that have a role in managing the environmental impact of agricultural production in your jurisdiction.
The EPA is the primary federal agency that manages environmental laws in the US. Additionally, the USDA works directly with agricultural producers to implement environmental protection programmes. Both federal agencies act under the authority of statutes passed by Congress and implement such statutes through regulations. These regulations apply at every level of the agricultural supply chain, from farm to processing plant. Additionally, individual states and municipalities enact and enforce environmental laws.Water and air pollution regulation
Describe how water and air pollution is regulated in relation to primary agriculture in your jurisdiction.
The Clean Water Act (CWA) and the Clean Air Act (CAA) are the two primary federal statutes regulating water and air in the US. The EPA works in conjunction with state environmental agencies in administering these statutes.
The CWA protects water quality primarily through permits issued under the National Pollutant Discharge Elimination System (NPDES). NPDES permits are required for ‘point source’ discharges of pollutants into ‘waters of the United States’.
The CWA does not vest EPA with regulatory authority over non-point source discharges. In the context of agriculture, non-point source pollutants include, among others, excess fertilisers and pesticides, oil and grease, sediment, salt and livestock manure. States encourage agricultural producers to use best management practices to reduce or prevent these discharges.
Section 404 of the CWA establishes a permit programme to regulate the dredge and fill of wetlands. Although many farming practices are exempt from Section 404 regulation, violations may result in farm programme payment ineligibility.
The CAA requires the EPA to establish national ambient air quality standards (NAAQS) to protect public health and welfare and to regulate the emission of hazardous air pollutants. The EPA enacted NAAQS for six air pollutants: sulphur dioxide, particulate matter, nitrogen dioxide, carbon monoxide, ozone and lead.
To carry out the CAA regulations set by the EPA, state environmental agencies create ‘state implementation plans’. These plans include specific limits for ‘major sources’. Most farms do not exceed the emission thresholds necessary to be considered a ‘major’ source; therefore, most farms are exempt from CAA regulatory programmes.Waste regulation
Describe how liquid and other waste is regulated in relation to primary agriculture in your jurisdiction.
Three principal environmental statutes control the handling of hazardous waste. Hazardous waste is defined differently under each of these statutes, but in the context of agriculture, waste may include pesticides, fertilisers and livestock manure.
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as ‘Superfund’, is aimed at cleaning up sites contaminated with hazardous waste. Additionally, CERCLA helps prevent the contamination of future sites by assigning liability for cleanup costs to all responsible parties. The EPA administers CERCLA through both removal and remedial actions. Removal actions are short-term endeavours, while remedial actions are long term and may only be taken at sites on the National Priorities List.
The Resource Conservation and Recovery Act (RCRA) gives the EPA authority to control the generation, transportation, storage and disposal of hazardous waste. In other words, EPA’s regulatory authority over hazardous waste under RCRA extends from cradle to grave. RCRA also sets forth a regulatory framework for non-hazardous solid waste.
The Emergency Planning and Community Right-to-Know Act (EPCRA) requires industries to report the storage, use and release of hazardous substances to federal, state and local governments. The purpose of EPCRA is to help communities plan for environmental emergencies.
Notably, reporting of ‘air emissions from animal waste at farms’ is no longer required under CERCLA or EPCRA.
Additionally, the production, sale and use of pesticides are regulated by the EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).
Updates and trendsKey developments of the past year
What are the most noteworthy current trends or primary legal issues of concern in relation to agriculture and agribusiness in your jurisdiction? What future trends in relation to agriculture and agribusiness do you foresee in your jurisdiction?Key developments of the past year35 What are the most noteworthy current trends or primary legal issues of concern in relation to agriculture and agribusiness in your jurisdiction? What future trends in relation to agriculture and agribusiness do you foresee in your jurisdiction?
Since the 2011 passage of the Food Safety Modernization Act (2011), the FDA’s focus has shifted from reacting to food safety threats to preventing them. Examples include requirements for food safety plans and preventive controls for certain hazards. We expect that the FDA will continue to issue and enforce regulations that require food companies to identify and control food safety risks. And, we envision greater expansion of food recalls as testing technology improves. That, in turn, will lead to increased food safety litigation.
With the Produce Safety Rules, the FDA has expanded its jurisdictional reach to agricultural practices at the farm level. With Foreign Supplier Verification, the FDA requires companies to enforce their own foreign suppliers’ compliance with FSMA rules no matter where they are located on the globe. We anticipate continued increasing regulation of food and agribusiness worldwide.
As consumers demand greater transparency about their food and agricultural products, litigation about how foods are grown, produced and manufactured has increased. Public interest groups have joined that effort, filing suits related to environmental, sustainability and animal welfare practices.
Economically, many in the food and agribusiness industry are concerned about recession (or have already suffered a recession in certain industry segments). Farm loan delinquencies are at a six-year high, Chapter 12 bankruptcies are increasing, and commodity prices and international supply chains continue to be affected by tariffs and global trade negotiations. Economic stress can lead to issues with regulatory compliance and increased litigation.
Environmentally, farmers await clarity on the ‘waters of the United States’ jurisdictional element of the Clean Water Act. Increased regulation of particulate matter may result in livestock farms being classified as ‘major’ sources under the Clean Air Act, and states are considering regulating methane emitted from animal agricultural operations.