New ‘cottage-food’ rules open door for small firms

Advocates for two cottage food industry bills passed during the recent legislative session hope the laws will grow business and yield new jobs in both rural and urban Nevada.

One statute allows certain foods such as jams and fruit pies made in home kitchens to be sold directly to consumers, while the other legislation lets farmers host a limited number of so-called farm-to-fork events without registering as eating establishments.

Both laws eliminate the lengthy and costly permitting process and strict regulations imposed on other food-based businesses. In exchange, they limit the type of foods produced and where, when and how they can be sold.

The hope is Nevada’s many small farmers and home-based bakers will be able to supplement their income or test out new business ideas before sinking money into permits, equipment and the other costs to start up a typical food enterprise.

For Jacobs Family Berry Farm in Gardnerville, it’s a way to diversify business and reduce waste. The two-year-old, one-acre farm grows 16 varieties of blackberries and raspberries, which must be sold within a few days of picking.

“Selling at the same rate as you pick is a challenge,” says Jack Jacobs, owner. “We built into our business model moving them into another product after a few days if they’re not sold. And jam is particularly interesting to us.”

But, before the new laws were passed, Jacobs looked into producing jams and discovered it would cost thousands of dollars for permits, testing and inspections. He also talked to merchants about selling the product and found out they wanted too big a cut of the pie.

“If you want to sell in store you have to pass along some of the margin,” says Jacobs. “Someone I spoke to wanted 38 percent. I don’t make 38 percent.”

In addition, the farm can’t guarantee its output because some weeks it sells all the berries picked and other weeks there are plenty left over to turn into jams or pies.

So Jacobs became part of the grassroots movement to get cottage food laws passed. It started with a December 2012 meeting of the Healthy Communities Coalition, the Dayton-based non-profit that works to promote wellness in Lyon, Storey and Mineral counties.

“We had dozens of people brainstorming on how to improve the economy,” says Quest Lakes, task force facilitator for the group. “People who are unemployed here have never gone without work in their life. They hate that they can’t work and were looking for all sort of ideas.”

The group hit on fostering a cottage food industry, which 33 other states allow, and started working with Sarah Adler, the state director for the U.S. Department of Agriculture’s Rural Development, the Food Bank of Northern Nevada, which helped write a bill draft, and the state’s four health districts, which advised on the types of foods that could be safely included and agreed to simplify the application process and share registries. Then they found a couple legislators – Sen. Aaron Ford, D-Las Vegas, and Assemblywoman Ellen Spiegel, D-Henderson – to sponsor the legislation.

“I think this is just a great Nevada story,” says USDA’s Adler. “We don’t have to over-think or overregulate. We’re a small state and it’s easy to find the right people to communicate and easy to get people together to collaborate.”

The laws went into effect last month and next week the University of Nevada Cooperative Extension is hosting an all-day workshop in Las Vegas which will be broadcast to locations in Elko, Ely, Fallon, Reno and Yerington. The workshop will cover what farmers and bakers need to know. Senate Bill 206, the cottage food bill, for example, limits the types of food that can be produced, requires labeling that identifies it as a homemade food not subject to inspection and limits its annual sales to $35,000. Assembly Bill 200, the farm-to-fork bill, limits the number of events a farm can hold, requires that the bulk of what is served be produced on the farm and guests are given notice that the food was not subject to inspection.

About 83 people had signed for the event before brochures were even sent to Cooperative Extension’s 400-member agriculture mailing list, says Carol Bishop, Cooperative Extension educator for North East Clark County.

“Both laws are wonderful opportunities for the small grower,” says Bishop. “The fastest-growing contingent in Nevada is the small acreage farm and backyard growers.”