If you love to garden, selling produce from home can be a great way to make money. Whether you need a license to sell fruits and vegetables depends on state law, on where and how you're selling it, and on how much produce people are buying. You may also have to deal with local ordinances and regulations that restrict where and how you can grow food.
TL;DR (Too Long; Didn't Read)
Before you plant, find out if your zoning or homeowners association covenants have restrictions on vegetable gardens. Talk to your state or county agricultural department about what regulations apply to home produce. You may not need a license, but that's not guaranteed.
Define Your Vision
Selling produce from home is an umbrella concept that covers dozens of different options. Before you can find out whether you need a license to sell fruits and vegetables and determine what kind of license is necessary, you have to get specific about your plans. Answer these questions to get started:
- Are you going to market your fruit as organic, local or naturally grown?
- Will you set up a stand at a farmers market? Sell to customers coming by your house or drop off at theirs? Make deliveries to local restaurants? All of the above?
- Are you planning a small-scale container garden to bring in just a little extra income, or do you want to use most of your backyard to grow produce?
- How much do you plan to sell, assuming there are plenty of buyers?
- Do you intend to sell across state lines?
If you engage in interstate commerce, you need to deal with federal regulations. The United States Department of Agriculture's PACA license (short for the Perishable Agricultural Commodities Act) even applies to in-state commerce if you sell more than a ton of produce a day. If you sell more than $500,000 worth of produce a year, FDA regulations might apply too. Otherwise, you're largely off the federal hook.
Zoning and Covenants
Another question to research before you plant anything is whether the local government and your homeowners association allow backyard mini-farms. Some zoning ordinances don't allow home businesses, which is what you're planning to run. Others allow them if they don't draw traffic to your neighborhood. If you're selling from a farmers market or a roadside stand rather than out of your home, you might be fine.
Some homeowners association covenants also restrict home businesses. HOAs may have rules and regulations for garden design, so research those too. It may be that the rules don't allow for a vegetable garden, or at least not one visible from the street.
Even if the rules are against you, you may be able to appeal to your HOA board or your local government and secure permission. Be sure of this before you launch your produce business.
Selling Produce From Home in California
As one example of how state laws and regulations shape what you can do and how you sell it, look at California. You can grow farm produce in most parts of the state without a state permit. Selling, however, may require paperwork, depending on how you're connecting with your customers.
- If you're growing food in agriculturally zoned, unincorporated areas, you can legally set up a farm stand. If it's temporary or smaller than 120 square feet, you don't need a building permit.
- To sell at a farmers market, you have to apply for state certification. The application requires identifying where you grow your food and identifying the food you intend to sell. Your property may have to undergo a state inspection.
- If you deliver your own produce to customers or have them pick it up from you, no license is needed to sell fruits and vegetables.
- You can ship produce to customers within California without a permit as long as you watch for quarantines banning shipments from pest-infected areas. If you ship to other states, California wants to inspect your shipments.
- If you sell to local retailers or restaurants, your town or county may require you to take out a business license.
Other states have different rules. Texas, for example, doesn't require a permit for a food establishment that sells whole, uncut produce. You don't need a permit to sell produce at a Texas farmers market, but if you hand out samples, you have to follow state sanitary requirements.
Selling Produce From Home the Organic Way
As a backyard farmer, you may be well situated to grow and sell organic produce. Organic farming is labor intensive, but the labor for a small backyard plot is less than that for a full-size farm. You don't need a license to sell fruits and vegetables grown organically, but you do need to meet USDA standards for organic labeling.
- To grow organic products, avoid prohibited growing methods, including genetic engineering, ionizing radiation, or sewage sludge
- You have to work under the supervision of a USDA certifying agent.
- If you're selling produce from home in volumes greater than $5,000 a year, you have to complete the USDA certification process. Even if you sell less, you can't use the familiar organic label unless you're certified.
- You must keep detailed records of your organic farming. If you've been farming for more than three years, your records should cover the previous three years.
Cottage Food Production
You may want to do more than sell produce from home. Baking fruit pies, pickling vegetables or making preserves could all add to your backyard farm's revenue streams. However, selling food that's been cooked, baked, canned or otherwise processed might be regulated in your locale or require licensing even if your produce doesn't.
Many states try to make selling cottage foods as easy as possible without compromising public health and safety. State cottage food programs reduce regulations as long as you're selling food that isn't potentially hazardous: bread, cakes and fruit are OK, but meat and omelets aren't going to qualify. The exact decision on which foods are non-potentially hazardous and how you can sell them depends on the state:
- Alabama allows you to sell baked goods and canned jam directly to consumers. Fruit pies, pickles and non-canned jam can only be sold at farmers markets.
- Alaska only allows cottage food producers to sell baked goods and candy.
- Florida doesn't allow canned foods, but you can sell jams, jellies and fruit pies.
- Illinois allows you to sell canned fruit jams, jellies and butters, but no other canned goods. Sweet potato and pumpkin pies are disallowed.
- Massachusetts allows any non-potentially hazardous food.
State laws also differ on whether you can sell to restaurants, retail stores or over the internet, and whether you require a light inspection or none at all.
When you're selling produce from home, it's important to handle food safely, even when the state leaves you unregulated. If negligence gives your customers a case of food poisoning, it can hurt your business and land you in legal trouble.
Your state or county agricultural department should be able to provide you with guidance on selling produce from home safely. California, for example, offers suggestions for small farms:
- If you use manure as fertilizer, be careful not to contaminate your crops.
- When you irrigate, test to confirm the water's not contaminated.
- Train any employees you have in hygiene, food safety and hand-washing. Follow the rules yourself.
- Make sure there's water for washing and cleaning readily available when you work in the yard.
- Don't allow pets or wild animals to wander into your crops.
- Do not handle produce when you're sick.
- Keep all the equipment and any storage bins you use clean and free of contamination.
- USDA: PACA Licensing
- Urban AgLaw: Food Safety
- Lawyers: Growing Your Own Food? Keep It Legal?
- Entrepreneur: Is Your Home Zoned For Business?
- University of California: Farm Stands
- CDFA: Application for Certified Producer's Certificate
- University of California: Selling Locally Grown Produce
- Texas Health and Human Services: General FAQs — Retail Food Establishments
- Texas Health and Human Services: Frequently Asked Questions — Farmers Market
- USDA: Organic Labeling
- USDA: Organic Labeling Standards
- Harvard Law School: Cottage Food Laws in the United States
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com