How does the Produce Safety Rule qualified exemption work?

Short answer

A farm must satisfy both § 112.5 tests for the applicable calendar year.

1. During the preceding three-year period, the average annual monetary value of food sold directly to qualified end-users must have exceeded the average annual monetary value of food sold to all other buyers.
2. Average annual monetary value of all food sold during that preceding three-year period must have been less than $500,000, adjusted for inflation using 2011 as the baseline.

Both tests apply. A tie in the sales comparison does not satisfy “exceeded.” This page does not state a current adjusted ceiling because the official annual adjustment table was not included in the retained source set.

21 CFR 112.3

Who is a qualified end-user?

For this rule, a qualified end-user is either the consumer of the food—where consumer does not include a business—or a restaurant or retail food establishment located:

• in the same State or the same Indian reservation as the farm that produced the food; or
• not more than 275 miles from that farm.

The distance and location test applies to the restaurant or retail food establishment branch of the definition. The definition does not make every wholesaler, distributor, institution, or other business a qualified end-user.

21 CFR 112.6

The exemption replaces many requirements with modified duties; it does not erase Part 112

An eligible farm remains subject to Part 112’s general provisions, records requirements in Subpart O, compliance and enforcement provisions in Subpart Q, and withdrawal provisions in Subpart R.

When a food-packaging label is required for food that would otherwise be covered produce, the label must prominently and conspicuously include the name and complete business address of the farm where the produce was grown. When no food-packaging label is required, that name and complete address must be prominently and conspicuously displayed at the point of purchase on a label, poster, sign, placard, contemporaneous documents, or, for Internet sales, an electronic notice.

For a domestic farm, the complete business address includes street address or post-office box, city, State, and ZIP code.

21 CFR 112.7 and Subpart O

Sales records and an annual eligibility review must support the exemption

The farm must keep adequate records showing that it satisfies both § 112.5 criteria, including a written record that the farm performed an annual review and verification of continued eligibility. Ordinary sales receipts need to be dated, although § 112.7 removes the otherwise applicable signature-or-initial requirement for those receipts.

Required records generally must be accurate, legible, indelible, and created when the documented activity occurs. The § 112.7(b) eligibility record must be reviewed, dated, and signed within a reasonable time by a supervisor or responsible party.

Part 112 generally requires records to be retained for at least two years after creation. Records used to support the three-year qualified-exemption calculation must be retained as long as necessary to support the farm’s status for the applicable calendar year. Offsite records must be retrievable and available onsite within 24 hours of an FDA request; electronic records accessible onsite are treated as onsite.

21 CFR Part 112, Subpart R

FDA can withdraw the qualified exemption under specified conditions

Section 112.201 permits withdrawal during an active foodborne-illness investigation directly linked to the farm, or when FDA determines withdrawal is necessary to protect public health and prevent or mitigate an outbreak based on farm conduct or conditions material to the safety of the otherwise covered produce.

Before issuing an order, FDA must provide written notice of the circumstances and an opportunity to respond in writing within 15 calendar days after receipt. A withdrawal order must tell the farm to comply with the applicable requirements within 120 calendar days after receipt—or another FDA-agreed reasonable timeframe based on written justification—or appeal within 15 calendar days.

Filing an appeal or requesting a hearing does not delay or stay FDA administrative or enforcement action unless the Commissioner determines that a stay is in the public interest. The regulation also provides a path to reinstatement when FDA determines the material problems have been adequately resolved and continued withdrawal is unnecessary. Receiving an actual notice or order is a fact-specific enforcement matter; use the order and current FDA instructions rather than this summary.

Official authority

Read the current regulation

21 CFR 112.5 — eligibility criteria ↗

21 CFR 112.6 — modified requirements ↗

21 CFR 112.7 — exemption records ↗

21 CFR Part 112, Subpart R — withdrawal ↗

The retained official Part 112 XML has SHA-256 06df225fd1f215190270405ab116d3032dfcd45e3db00af55ec258c508853035.