Mitigating Legal and
Financial Risk for ValueAdded Food Producers
Mariane Kiraly, Ag Team Leader
Cornell Cooperative Extension
Delaware County, New York
Northeast Extension Risk Management
Education Grant Awarded in 2014
 Grant focus on mitigating legal risk that
value-added food producers could
encounter
 Secondary focus on the financial risk that
accompanies start-up ventures in valueadded food production
 Need to get producers on the right track
as a surge of new and diversifying
producers were asking for resources to
assist them
 Many producers did not have a business
plan or a partial budget that would give
further clarity to their ideas
 An inordinate amount of time was being
spent with producers one-on-one
 Producers needed networks along with
education
 We could get many start-up issues solved
in the process of the educational forums
How to streamline and focus the
program for the multi-county region
 Three distinct groups of farmers were asking for valueadded education:
Horticulture producers
Meat producers
Dairy producers
These 3 groups made a logical division for three
conferences to bring in experts, agencies, and
farmers that make value-added products successfully
Program took place in Southern Tier of NY within 120 miles of NY City
Region Demographics
 Rural region with few cities
 Small farms with dairy and beef predominating enterprises
 Much interest in serving metropolitan area of NYC due to its
proximity and growing food hubs to transport products
 15 in-county seasonal farmers’ markets
 Tourism in season brings many visitors to the area
 Catskills are close with many tourist venues
 Many new farmers who may have purchased or owned
second homes or farms now retiring to start ag ventures
 Graduates of ag schools coming home to the area with
open minds and a lot of energy
Program Development
 Contacts were made with Federal and State regulators such as
USDA Food Safety Inspection Service, New York Agriculture and
Markets Inspection Service, New York State Department of
Health to present food regulations at conferences
 Cornell University Food Venture Center-processes, labels
 Cornell Department of Food Science-equipment, food safety
 Resources such as “Becoming a Small Scale Food Processor”
and the “Legal Guide for NY Farmers & Food Entrepreneurs”
were located and would be made available to participants
 Dates in the fall were chosen in September, October and
December to accommodate harvest schedules of potential
attendees
 The title was chosen for the 3-part program – “Food Rules”
Publicity for “Food Rules”
 While it costs money, publicity can make or break a program
along with timing, topic, location, and cost to attend
 Every effort was made to cast a wide net to the regional area
 Press releases along with paid advertising was developed
 Cost of attendance was capped at $10/person-bring your
own lunch-to reduce any financial barrier
 All area newsletters carried the advertising weeks in advance
 Location was central at our CCE Education Center
 Attendees were encouraged to bring their own products for
critique or bring other local products with “issues”
 Our mid-August Fair provided a good venue to offer publicity
to farmers prior to the program
Poster/advertisement of “Food Rules” using
CCE colors consistent with other brochures
Farmer Panel Recruitment-or “no
surprises”…
 An integral component of each workshop was a farmer panel at
the end of the presentations to bring the program to life
 Farmers who were already doing a good job on all fronts (legal and
financial) were vetted to attend the workshop and serve on the
panel
 Farmers were paid a stipend, offered lunch, and brought samples of
their own products with them
 Attendees were also encouraged to bring local products so the
group could evaluate them with respect to labels, process,
marketability, shelf life, etc.
 Many times the farmer panelists were on a first name basis with the
regional and local inspectors
 There were “no surprises” after a thorough vetting process
Program Agendas
 Each program was similar in the make-up of the agenda
 A pre-program survey was conducted to get a good idea of the audience
following sign-in and prior to program start
 Technical information from local, state and federal agency representatives
was followed by Q and A
 Each agency provided resources for potential value-added processors
specific to each area
 Regulations to keep producers legal, transparent, and confident that they
knew what they were doing were presented and reviewed
 Examples and hands-on activities were helpful reinforcement of concepts
such as critique of products that participants or farmer panel brought in
 Follow-up assistance was made available to all who attended
Pre-program survey and Post Program
Evaluation
Food Rules Post Program Evaluations
 An evaluation of the program followed immediately that day
 A second evaluation of the program followed a few months
later
 In-between, consultations with Agricultural Staff with respect to
business planning, cash flow considerations, loan applications,
and record keeping were offered as way to keep connected to
the farmers and reinforce program concepts
 The later work with individuals kept them on track, helped them
further with specific resources, helped remove stumbling blocks
and gave them more confidence to follow-through
 While participants had all of the tools, some decided not to
pursue a product while others were “full steam ahead”
Food Rules follow-up survey
Continued Follow-up and Resources
 Each group of attendees received a specific “reading list” tailored
to the type of food product they were interested in
 Each participant in the series received the book “Legal Guide for
New York Farmers and Food Entrepreneurs”
 Each received a list of contacts for local, state and federal
agency representatives to contact for further needs
 Each received the link to the “Guide to Farming in New York” put
together by Cornell University and Northeast Beginning Farmers
 Each received Circular 933 – Rules and Regulations relating to
Human Foods: Current Good Manufacturing Practice
 Each received the New York State Food Labeling Guide
Encouragement, Not Intimidation
 Farmers in our area are primarily dairy farmers used to selling milk
wholesale and have little experience with value-added production
 It was apparent that these farmers and new farmers could feel
overwhelmed and intimidated by “inspectors, compliance officers,
legal terminology
 For some, a place to start was with a simple product that they could
experiment with using a Home Processor’s Exemption, such as jam
 Packaging, marketing and distribution would be areas that we
would address in subsequent workshops and were of concern to this
audience
 While 57 attended, there were 48 farms represented
 12 followed up with a value-added product, so far, or 25%
Audience Demographic and
Success
 81% of the audience were women
 Over 50% were new or diversifying into new ventures
 From a 7 county area
 All learned the critical need to limit liability by following the
regulations
 All were concerned with food safety and the issues that can make
a product safe, legal and marketable
 12 followed through with a value-added product to be sold at a
farmers’ market, farm store, farm stand or CSA
Attendee Feedback
 Participants cited the importance of meeting people in the regulatory
agencies to assist them in setting up a processing facility and get it right the first
time
 Clarification of rules and regulations was key to making a value-added
product decision
 Participants were glad to learn of the Cornell University resources that were
available, further resources tailored to their individual needs and products
 Networking opportunities that were gained by meeting others with the same
mind or mentor/farmers doing what they want to do
 Learn about the details of actually producing a value-added products from
experienced farmers who took part in the farmer panels
 Having the confidence to move forward armed with the right information that
will make a food business legal, safe and profitable
Subsequent work with these
producers
 Business planning and record keeping – one-on-one and in workshops
 Specific production events such as:
 Organic dairy discussion group
 IPM in greenhouses
 Beef, sheep and goat workshops
 Hops production workshop
 Food hub readiness work
 CCE opened up a local food outlet in 2015 with farmers that already
were well-prepared with excellent value-added products
Other benefits of risk management in
value added food production
 Producers realize a direct benefit during and after the program
 Legal and financial risk management is a topic that addresses needs that
producers know they have when venturing into “new” territory
 Excellent and relevant programs bring new people into Extension
 Producers are more likely to then belong to production and discussion
groups that further solidify risk management education
 More products generate more economic activity and keep agriculture
strong
 Farmers fulfill their aspirations and are in a better position to be profitable
 The reach of Extension is greater and word travels, support grows
Questions?