CSA Agreements – Get Them In Writing

Although most CSA’s do not have a written contract, I highly suggest that farms have a simple CSA Agreement signed by the subscribers.  Not only does it help secure payment terms, but the CSA Agreement should mitigate potential liability in the case of a food safety issue arising from the mishandling or misuse of the food product.  It doesn’t have to be long and complicated full with legalese- the CSA Agreement can oftentimes be very simple but it needs to cover the material terms of the agreement.

The CSA Agreement should specify how long the “growing season” will last (e.g., 20 weeks), the products available (e.g., egg share, vegetable share) and whether the subscribers will receive a guaranteed minimum amount of food for that share (e.g., pounds of meat per week, dozen eggs per week).  The following are a few additional issues that should be discussed in the CSA Agreement:

Price/Payment Methods.  Not only does a farm need to decide the price per share, but it needs to determine whether:  (1) it will have a sliding scale based on family income, (2) it will accept a payment plan on a monthly or weekly basis, (3) it will accept payment via credit card, PayPal, and/or Google Checkout, (4) offer “half shares”, (5) it will charge a fee to deliver to the home directly, (6) it will charge a penalty for late payments, and/or (7) accept EBT (must obtain certification to do so).

How a Share is Defined. What quantity of food product should the shareholder reasonable expect?  Is it measured by a box, basket, bag, etc. or a percentage of the harvest?

Subscriber’s Risk with Harvest. The CSA Agreement should note that the subscriber bears the risk of a partial or total crop failure due to drought, flood, insects or other conditions that may reasonably impact production.  Although the CSA Agreement should state that the farmer will use reasonable efforts to generate a successful harvest, the actual quantity will vary according to the myriad of factor that affect a harvest.  Put simple, the agreement should state that the subscriber is sharing these risks.

Subscriber’s Benefit from Successful Harvest. On the flip side, the agreement should state that the subscriber will already reap the benefits of a better than expected harvest season.  From a practical standpoint, some subscribers may not want additional food in this situation.  To prevent waste, the CSA Agreement should address this situation giving the producer discretion on how to handle a surplus, including an option to donate the food to a local food bank or share with the farm workers and their families.

Delivery/Drop-Off Location.  There may be zoning and/or permit issues depending on where a farm wishes to drop-off its food products.  Storage and refrigeration of any egg, meat or processed food products may also be a concern at these drop-off locations.  If a farm wishes to have its subscribers pick-up the food products from the farm, then its insurance policy should properly cover invitees to the premises.  If a farm wishes to deliver the product directly to the subscriber, the specifics as to a time block and address should be memorialized in the CSA Agreement.

Forfeited Products.  To prevent a dispute, the CSA Agreement should note that the food products will be forfeited if they are not picked-up during the allotted time without alternative arrangements being made.  Some CSA Agreements note that forfeited products may be sold or donated (e.g. homeless shelters, food pantries, after-school programs, elder care facilities).

Reuse of Box/Bag.  In some cases, the CSA Agreement should indicate that the subscriber must return the box or bag each week for pick-up.

Communication.  There should be method to communicate to the subscribers in case of an emergency or inclement weather.  This mode of communication should be noted in the CSA Agreement (e.g., email).  Furthermore, many CSA’s have newsletters for its subscribers noting farm news/events helping the consumers feel more connected to the farm.  Subscription to this newsletter can take place directly in the CSA Agreement and/or the farm’s website.

Fresh/Frozen Meat.  If applicable, the CSA Agreement should note whether the meat product will be fresh or frozen.

Volunteer Requirements. Some CSA’s require subscribers to volunteer a certain number of hours during the harvest season (“work shares” or “half work shares”).  Details relating to these requirements should be formally discussed, keeping in mind “in kind” compensation and minimum wage requirements under the Fair Labor Standards Act.

In hopes of building a sense of community, some CSA Agreements improperly use the word “partner”.  It is paramount that farms avoid using the words “partner” or “partnership” in its CSA Agreement and conversations with the subscribers and the CSA Agreement should clearly note that it is not a partnership.  A partnership is specific kind of legal entity where the partners go into business together and split profit – each partner is jointly and severally liable for one another’s actions.  It’s important to be clear that a CSA is not a general partnership.  Along these lines, I also recommend avoiding the words “member” and “shareholder” when possible to avoid implying that the consumer has some type of ownership in the farm.  The word “subscriber” most accurately describes the relationship.

There has been virtually no litigation thus far with CSA’s; however, due to its exponential growth, I anticipate legal disputes will arise in the future.  It’s always prudent to build a written record of a farm’s compliance with the CSA Agreement.  Records should be kept regarding production, delivery of products, the quality of the delivery, food safety controls (including storage, transportation and refrigeration), etc.