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Legal Issues Pertaining to Farmers Markets and its “Market Rules”

Photo from the Greenmarket in Union Square (New York City)

I had a chance recently to review Prof. Neil Hamilton’s publication titled “Farmers’ Markets:  Rules, Regulations and Opportunities.”  Though it was drafted nearly a decade ago, he does a nice job highlighting legal issues relevant to todays’ farmers markets.

As Prof. Hamilton states, it’s important for the farmer to clearly understand the “Market Rules” (or “Statement of Rules”) for each farmers’ market that he/she participates in.  Please don’t be shy about contacting a lawyer if you have any questions on what the rules mean.  These Market Rules make up the contractual agreement between the farmer/vendor and the farmers’ market sponsoring organization.  Farmers should pay special attention to the definitions section of the Market Rules.

I am including a useful chart developed from Prof. Hamilton’s article discussing various provisions or terms in the Market Rules below:

Provision or Term Standard Description

(Market Rules may specifically define)

Application Process, Fees, and/or Rent Provides for the timing of the application, process for vendor selection, and notification of approval.  This clause likely identifies any fees associated with the application itself and/or fees associated with security of vendor space including payment method and timing.  There may be a limitation to the number of stalls that a particular vendor can reserve.  Depending on the market, flat fees and/or commissions may be utilized (percentages may vary depending on type of vendor and/or product sold).  The market may also require rent on a weekly, monthly or seasonal basis.
Approval of Vendors and Products Defines who can sell products at the farmers’ markets (e.g., farmer, non-farmer, peddlers) and what type of products may be sold at the market (e.g., produce, crafts, processed foods).
Carrying Crafts Non-food items made by vendors; if allowed, said crafts may have to be selected and approved.
Carrying Rules This clause may allow vendors to sell products raised by other farmers.
Categories of Products Rules for items such as raw produce, baked goods, nursery plans, eggs, cheeses, meat, and processed foods including but not limited to rules relating to inspections, sanitary conditions and handling.
Changes in Ownership and Vendors’ Rights This clause will address issues pertaining to the transfer/change of business and seniority for market spaces.
Enforcement Process These provisions establish procedures for rule enforcement (usually from the Market Manager), including reporting violations/grievances, notice, penalties, suspension/removal, and appeals.
Farm Visit (or “Farm Inspection”) Where the Market Manager visits the vendor’s farm to make a determination whether the food product was “farm-raised.”  This requirement is more typical in farmers’ markets that have producer-only standards.  The farmer typically must agree to comply with specific inspection procedures which are likely provided for under a separate document than the Market Rules.  There may also be a small inspection fee that is required.
Food Safety, Sanitation and Sampling These provisions will set forth specific rules from the farmers’ market pertaining to handling and storing difference types of food products.
Hold Harmless and Indemnification Clause Typically, the vendor agrees to financially protect the farmers’ market and its organizers from any liability.
Length of Market Usually, the Market Rules will specify the start and end date for the farmers’ market (usually a 5-6 month span).
Location The same Sponsor may be running several farmers’ markets in different locations in a particular community; thus, it may choose to use the same Market Rules for all of its markets.  In these cases, the Market Rules may enumerate specific rules according to different locations.
Market Manager Person designated to run the market on a day-to-day basis.  This person enforces the Market Rules.
Market Operation This will memorialized detailed guidelines/procedures for set-up, clean-up, selling times, notification for non-attendance/tardiness, pets, parking, vehicles, samples, sanitation, signage, hawking, smoking/alcohol/drugs, pets (including seeing eye dogs), display guidelines, shelter requirements from rain/sun, food safety, food handling and food labeling requirements.  These operational provisions are likely very detailed.
Membership and Market Organization In these cases, an operational structure is created for the farmers’ market and a separate payment may be required for membership in the sponsoring organization in order to participate as a vendor.
Necessary Documents/Permits This clause will list the various documents and licenses from the NYS Department of Agriculture & Markets.  This may include, but is not limited to, Proof of Insurance, tax permits, health certificates, NYSDAM licenses (e.g., Article 28D, Article 5A), farm plan, farm information sheet (describing the size, type and scope of the operation), load lists for products raised, USDA National Organic Program certification, business organizational documents (e.g., Articles of Organization or Incorporation, Certificate of Assumed Name), and federal tax identification number.
Peddlers Vendors who buy products at wholesale for reselling at the market.
Producers-Only A farmers’ market that only sells items raised by the farmers who sell them (i.e., no peddlers or reselling of other farm produce).
Proof of Insurance A form of vendor obtains from the insurance carrier (1) as proof of insurance, (2) as a summary of type of coverage obtained, and (3) proof that the farmers’ market is a covered party under the insurance policy.  Some farmers’ markets will require that the vendor has a certain amount of coverage (e.g., $1 million).
Product List List of food (and non-food) products that the farmer plans to sell at the farmers’ market which is typically used by the market to help allocate ample space and limit vendors from unapproved products.
Prepared Food Ready-to-eat food (e.g., take-away meals and snacks)
Processed Food Value-added food that has been processed (e.g., jams, jellies, wine, salsa, canned goods, cider, vinegar, maple syrup, and baked goods).  In some cases, categories for processed foods are established.  The market may have specific labeling requirements for home-processed food products.
Sponsor or Organizer (and its Logo Use) The group or organization legally responsible for creating and operating the farmers’ market.  This clause generally sets out the philosophy and purpose of the farmers’ market.  Furthermore, some Market Rules lay out procedures for using the sponsor or farmers’ markets logo on advertising materials.
Vendor (and Criteria for Selecting Vendors) A vendor is a farmer or other person designated by the management as having the right to participate in the market.  Most Market Rules also state criteria for selecting vendors such as any priorities or preferences (e.g., geographic distance) (and the basis for any priority or preference).   In some cases, “Categories of Vendors” are described for both seasonal and daily vendors.

Please review Neil Hamilton’s article for more information in this area.  Again, I recommend that farmers have a relationship with an attorney to discuss the Market Rules and other potential legal issues relevant to their direct marketing efforts.

Disclaimer:
"This blog is for informational purposes only and is not intended to create an attorney-client relationship. It is recommended that you speak to an attorney licensed in your jurisdiction before relying on the information in this blog."

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