While a farmers’ market must have agricultural products sold within it, the market does not need to have nonagricultural products. The decision to include or exclude nonagricultural products is yours to make.
The broad category of nonagricultural products includes both food items other than fresh produce grown by a California farmer and nonfood items. Because certified farmers’ markets allow only the sale of fresh produce by the farmers who grew the crops, these nonagricultural products are technically not within the certified farmers’ market. They are within “an area adjacent to the certified farmers’ market.”
If you choose to allow space for the sale of nonagricultural food items, be aware that those items must be produced in an approved manner — either in a certified kitchen in accordance with the California Retail Food Code or in a home kitchen in accordance with the California Cottage Food Law.
Of these two options, preparation in a home kitchen is less expensive for the business, but it is also much more limited. Foods prepared under the Cottage Food Law are subject to the following restrictions that are not imposed on foods prepared in certified kitchen:
- Only “non-potentially hazardous” foods, as defined in the Cottage Food Law and supplemented by the California Department of Public Health, can be prepared in home kitchens for sale. Potentially hazardous foods generally are those that include cream, custard or meat or other ingredients that require careful temperature control for food safety.
- A Cottage Food operation cannot have gross annual sales in a calendar year of more than $45,000 in 2014 or $50,000 in 2015 and beyond.
- Cottage Food operations cannot have more than one full time employee other than the Cottage Food Operator or members of the Operator’s immediate family or household.
- Foods prepared in a home kitchen can only be sold within that county, unless the permit holder has received specific permission from another county to allow sales within that county.
The Cottage Food Law went into effect on January 1, 2013. A full discussion of how to work within the Cottage Food Law to develop a home-based food business is beyond the scope of this document, but links to additional information are included in Appendix D.
If you decide to have nonagricultural food items as a part of your market, you will need to provide documentation of how these food items are being produced to the county environmental health department as a part of your application for a health permit for the market.
The city of San Jose allows only one nonagricultural producer to sell in the area adjacent to the certified farmers’ market for every five agricultural producers selling in the certified section of the market, if the market is operating as a “small certified farmers’ market” under city zoning rules. If you have less than five agricultural producers, you would either have to exclude nonagricultural producers or complete the paperwork to act as a “general farmers’ market” instead of a small farmers’ market if you wish to bring in a nonagricultural producer. As the city’s definition of a small certified farmers’ market does not allow more than 15 agricultural producers, you would not be able to have any more than three nonagricultural producers in your market.
Some farmers’ markets allow the sale of nonfood items as well. Some restrict the eligible products to local hand-crafted items while others are broader. Many nonfood items are subject to sales tax. Be sure to make it clear to your vendors that they are solely responsible for applying for a Sellers’ Permit, collecting sales tax, and making payment to the California State Board of Equalization.
The decision about which nonfood items, if any, to allow into your farmers’ market should be based upon what is best for your market and your community. If your goal is food access and the space you have available for your farmers’ market is limited, you may decide that these products are not a high enough priority to occupy the limited space. If the market’s goal is local economic development and you have a larger space available, then the inclusion of nonfood items could be much higher priority.
The city of San Jose’s certified farmers’ market ordinance does not specifically speak to the sale of nonfood items but they would likely be considered as nonagricultural producers or vendors and subject to the limits in small farmers’ markets as noted above.