Question of the Week
I'm interested in starting a Community Supported Agriculture (CSA) operation, are there any permits or insurance requirements I should be advised of?
Answer: Thank you for requesting information from ATTRA on what insurance or permits would be advisable for a new Community Supported Agriculture operation.
Insurance needs of the rapidly expanding CSA movement in the U.S. are currently under discussion by the insurance industry. Some companies are now offering products for CSAs.
A University of Florida bulletin (http://edis.ifas.ufl.edu/CD019) summarizes the way Henderson and Van En approached these matters a decade ago.(1)
Henderson and Van En discuss the legalities involved with a CSA. "Most CSAs carry standard liability insurance. As separate coverage, liability can be very expensive; as part of a farm insurance package, the price is more reasonable. You should try to get a liability policy that includes a stated level of medical expenses paid out without a lawsuit. Some CSAs have additional liability as a special form of 'pick-your-own' farming operations. The rates for 'pick-your-own' will be lower if you specify that you do not use synthetic pesticides and members do not use equipment, horses or ladders. Pick-your-own coverage will allow members to help harvest and to use hand tools. Keep a first-aid kit handy."
"A CSA can adopt a variety of legal structures. Each group should determine which form is most appropriate. Some CSAs are 'sole proprietorships' or partnerships; in other words, both farm and CSA business are the property of the farmers. Other CSAs separate the CSA from the ownership of the land. The land may be held as a sole proprietorship, a partnership, or a corporation, while the CSA is an unincorporated associate or is incorporated as a nonprofit corporation. Groups of farmers can organize as farmer-owned cooperatives. There is no set structure in the law for food co-ops or buying clubs, so groups of consumers can change the corporate structure that suits them best in forming a CSA. Institutional CSAs usually hold both the land and the CSA as part of a nonprofit corporation. Each form has advantages and disadvantages. The details of these legalities will vary from state to state."
An up-to-date discussion of potential insurance needs of CSAs has been published on-line by the American Association of Insurance Services (AAIS). The main concerns are landowner liability, product liability, and exposure of individuals on a CSA board of directors to lawsuits filed against them personally.
Many farmers obtain product liability insurance through membership in the Farm Bureau; this may be an option for CSAs. An NCAT colleague suggests The Midlands Group web site www.sustainablefarminsurance.com. Insurance options tailored to sustainable farming specifically mention CSAs. Oregon is one of the states where coverage is offered.
Permits that may be needed will vary by locality and may depend on the organization’s structure and product mix.
A useful tool is the National Agricultural Law Center’s Glossary of definitions supported by case law—especially emphasizing those arising from aspects of sustainable agriculture.
1) Henderson, Elizabeth, & Robyn Van En. 1999. Sharing the Harvest. White River Junction, VT: Chelsea Green Publishing Company.
AAIS staff. 2007. “Big gardens” that need CGL policies. AAISinsight. Spring. 4 p.
Community Supported Agriculture
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