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Wednesday, March 15, 2023
Promoting Local Foods in Hawaii; Removing Barriers is Key to Growth
By Keli'i Akina PhD @ 4:08 AM :: 1946 Views :: Agriculture, Small Business

There’s always room for more food — and more ‘food freedom’

By Grassroot Institute of Hawaii, March 16, 2023

There’s always room for more food, says Meagan Forbes, an attorney with the Institute for Justice. That means local restaurants, bakeries and other established commercial food outlets don’t have to see food made in home kitchens as a threat to their businesses. 

Forbes said on this week’s episode of ThinkTech Hawaii’s “Hawaii Together” program that “when there’s food available, it creates a demand for more food, which is good for all food producers. … They can do work in a complementary fashion.”

She joined program host Keliʻi Akina, president and CEO of the Grassroot Institute of Hawaii, to discuss the importance of promoting local food in Hawaii and how removing barriers is key to reducing imports.

As director of legislation and senior legislative counsel at the Institute for Justice, a nonprofit public interest law firm based in Arlington, Virginia, Forbes works to defend and protect civil liberties. 

She described one such liberty as “food freedom,” and said that carving out exemptions for cottage food — which simply means food made in someone’s home — creates economic opportunities, especially for women and people living in rural areas.

Akina noted that local lawmakers “should look at loosening regulations in foods made at home if they really want to encourage the growth of Hawaii’s agricultural sector and diversification for the state’s economy.” 

Forbes agreed. She said that to promote more local food, Hawaii lawmakers could support Senate Bill 756, also known as the Access to Local Food Act, which is making its way through the state Legislature. 

The bill aims to exempt sellers of food made in home kitchens from food establishment licensing that requires the use of a commercial kitchen. It would also allow online food sales, selling foods that require refrigeration, retail sales of shelf-stable food in places such as grocery stores or coffee shops, and shipping the foods between islands.

Forbes said cottage food producers would still need to obtain a permit and complete food-safety training, but removing the barrier of operating out of a commercial kitchen would prevent them from having to take on significant debt to start their business and “really [help] facilitate these made-in-Hawaii transactions where people are wanting to buy Hawaii products.”

She  said Hawaii is one of only three states that don’t have cottage food exemptions created by law, putting it “a bit behind what we’ve seen from a policy perspective with other state Legislatures considering this issue.”

Around the country, she said, permitting cottage foods is “embraced across the aisle” because “it’s just a good policy. It’s pro-opportunity, pro-growth. It’s something that we see people from all walks of life working together because they see that it’s impactful and really makes a difference in people’s lives.”

TRANSCRIPT

3-14-23 Keli‘i Akina hosts Meagan Forbes on “Hawaii Together”

Keliʻi Akina: Aloha and welcome to “Hawaii Together” on the ThinkTech Hawaii broadcast network. I’m your host, Keliʻi Akina, and president of the Grassroot Institute of Hawaii. 

You know, there’s been a big push to diversify Hawaii’s economy in the past several years, and promoting local foods has been one of the major elements of that push. 

Among both state and county policymakers, there’s a real desire to encourage the production of more food in Hawaii that comes from Hawaii, and part of that purpose is to replace the large amounts of imports that come to us from the mainland and abroad.

A good amount of taxpayer funds have been spent trying to bolster Hawaii’s food industry, but are there other strategies that the lawmakers could use to promote local foods? 

That’s the topic of today’s show, and I think you’re going to enjoy our guest.

Joining me to talk about this important issue is Meagan Forbes. She’s the director of legislation and senior legislative counsel at the Institute for Justice — that’s a public interest law firm in Arlington, Virginia. She’s been involved in litigating numerous state and federal cases related to occupational licensing and what we might call “food freedom.” 

Meagan joins me today to discuss something near and dear to the hearts of many residents in Hawaii — and, she knows, across the country — and that’s food.

And in particular, why Hawaii lawmakers should look at loosening regulations in foods made at home, if they really want to encourage the growth of Hawaii’s agricultural sector and diversification for the state’s economy. 

Meagan, I want to welcome you to the program today. Aloha.

Meagan Forbes: Aloha. Thank you for having me.

Akina: Well, I’m so glad you’re taking the time to be with us. 

How did you get involved in the issue of food policy? And share a little bit as well about your background that our viewers could know about you.

Forbes: Sure. Well, at the Institute for Justice, I’ve been there for several years now, and I started working at the Institute for Justice as an attorney litigating civil rights cases. 

The Institute for Justice is a national nonprofit public interest law firm. We work to protect civil liberties, and one of the civil liberties that we work to project is economic liberty. 

We help to protect people’s ability to earn a living, and we work with entrepreneurs across the country who are trying to climb the first rung of the economic ladder. And that’s how we ended up working in this food policy space.

After litigating for some time, I began working on state legislation across the country, and we started working with many entrepreneurs who were trying to start food businesses in the state, in their states, and were running into obstacles. 

And especially cottage food entrepreneurs — people wanting to sell just homemade food that they’re making in their home kitchen, just starting out — are running into regulatory barriers. 

So I began working in this space, in particular, to help these entrepreneurs overcome those barriers.

Akina: Well, Megan, that sounds very fascinating. And you used a term there — cottage foods — that some of us are not that familiar with. 

In fact, when we think about cottage industries related to farming, we reflect upon the fact that farmers in Hawaii grow pineapple; sugar cane, traditionally, in the past; fruits and vegetables, now; coffee; and so forth. 

But what do we mean by cottage foods, and what is really the process involved in that?

Forbes: Cottage food is an industry term for food that’s made in a home. So when we say cottage food, we simply mean homemade food made by a private person working in their private home kitchen, and it’s a growing industry. 

It’s small, but we’re seeing interest in selling and buying homemade food across the country. A lot of people are interested in buying local, and there’s a growing movement in responsible sourcing and wanting to make sure you know where your food’s coming from. 

So it’s a growing industry and provides a lot of opportunity for people who are just starting out wanting to start a food business.

Akina: Well, thank you. You know, here in Hawaii, there’s been a concerted effort to have more foods, quote, “Made in Hawaii.” 

And the state and counties [have] spent a lot of money on grants trying to bolster local agriculture as well as adopting regulations that are intended to create markets for local food, such as by requiring our public schools, for example, to buy local — or at least up to a certain point. 

In your estimation, are there other strategies that could work, or strategies that could work along with this, to help Hawaii lawmakers promote more local food?

Forbes: Sure. Well, there’s a bill that’s being considered at the Legislature this session, the Access to Local Food Act, which I think would also help to bolster the state’s local food economy and make it easier for people to consume local food and not having to import so much food from the mainland. 

It also could lead to less expensive food options, too, that are both healthy and wholesome. So there are a lot of benefits to it. 

This bill would create an exemption from food establishment licensing for people who are wanting to sell food made from their home.

People would still get a permit and complete food-safety training, just as people who work in restaurants complete food-safety training. But then once they do that, they would be able to sell a wide variety of foods to consumers, as long as there are certain safeguards in place through labeling to make sure that consumers know what they’re buying.

Akina: Well, Meagan, you’re talking about difficulties some people have in selling food from their home, and before we get into that any more, just in general, what are the challenges to cottage food industries in Hawaii?

Forbes: Well, the challenge really is a commercial kitchen. To become a licensed food establishment in the state, you have to build or work in a commercial kitchen, and that’s quite expensive. 

In Hawaii and across the country we see that it costs thousands and thousands of dollars to build or rent commercial kitchen space, and that creates a barrier to being able to start a food business. It makes it very difficult to be able to start and simply start selling food to consumers.

It’s costly, and a lot of times you see people taking on significant debt to be able to start a business, which can make it difficult to get out of that debt and actually become profitable. 

So cottage food exemptions, like the exception that the Access to Local Food Act, would create, helps remove that barrier of a commercial kitchen that’s required to become licensed and just make it easier for people to start out.

Akina: Well, how extensive are the regulations that inhibit the development of cottage food. For example, when it comes to making cookies at home that you’d sell at a baseball game or making lemonade and offering that at a stand. or other kinds of foods — packaging jams and jellies and selling them — and so forth? 

What kinds of barriers, in addition to the need for a commercial kitchen, do our entrepreneurs at home run into?

Forbes: There are other barriers that are in place. And I should mention that right now Hawaii has a cottage food exemption already that’s been created by rule, but it’s a lot narrower than what this legislation that I’m talking about that’s being considered at the state Capitol in terms of what it allows. 

So, for the example of speaking about shelf-stable food like cookies, that’s allowed to be sold right now. But one barrier that continues to exist is that you can’t ship the products, so you wouldn’t be able to ship between islands. You’d have to become commercially licensed and become a licensed food establishment to do that. So it creates barriers to getting food to consumers. 

You also can’t sell your food in a grocery store, for example, or at a coffee shop. You can only sell direct to consumer right now. 

And then finally, there is a complete prohibition on selling food that requires time and temperature control for safety. So that’s really just a fancy word for food that requires refrigeration to be safe. 

And though consumers and producers are able to navigate that, and consumers are able to talk with producers and make sure that, you know, they know where the food’s from and how it’s been handled, that’s completely prohibited right now. 

So if a consumer wants to buy that from someone who is not a licensed food establishment in the state, they’re not allowed to right now. 

So this bill would allow that too.

Akina: Now, you mentioned that some of these regulations are in place in order to ensure safety and health for the public, which is a concern probably of legislators and most responsible people. 

How do you balance the need to be concerned about public safety, but the need to give opportunities to entrepreneurs and individuals to do business?

Forbes: That’s a great question, and food safety is so important. It’s something that when you’re thinking about food policy, it’s always in policymakers’ mind, and rightfully so. 

What we know about cottage food is that it’s inherently safe. Consumers often know the producers who they’re buying the food from. 

Producers also have a lot more to lose if someone were to become sick than a big business would have; their business would not last long if someone were to become sick. 

And then I’ll add that just nationally, across the country in states that have expanded their cottage food laws, we just don’t see issues with food safety.

At the Institute for Justice, we have submitted public records requests across the country looking for reports of foodborne illness, outbreaks of foodborne illness, and they’re rare, and in most states non-existent. 

We just don’t see these issues because first of all, when you’re talking about shelf-stable food, it’s inherently safe. And when you’re talking about food that requires time and temperature control for safety, there are other safeguards in place because of that personal producer-to-consumer relationship that we see with this type of food sale.

Akina: Well, you’re talking about some of the data that comes from across the nation. Well, how do our laws regarding cottage foods in Hawaii stand up in comparison to other states?

I take it that there are some states that must be much more lax than Hawaii. Where are we as you do a national survey?

Forbes: Well, Hawaii is one of the few states that does not have a cottage food exemption that’s been created by law, which is kind of interesting. 

In Hawaii, the cottage food exemption is fairly new — it was promulgated by rule in 2017 — and it’s narrower than what we see in other states. 

There are six states that have expanded their law completely to allow for time and temperature control for safety food to be sold And even some of these states allow it without a permit or food-safety training — and like I said, we haven’t seen issues with food safety in those states.

And then every other state, with the exception of just a handful — Kansas, Georgia and, I believe, Hawaii, it’s just those three — have statutes that have created cottage food exemptions.

So Hawaii, by not having a statute, actually is a bit behind what we’ve seen from a policy perspective with other state Legislatures considering this issue and deciding what the state policy is without having people doing it through the administrative process. 

So I think this bill that’s being considered right now is great because it’s policymakers getting together, legislators considering what’s best for the people of Hawaii and what food policy they want to set when it comes to selling homemade food and local food.

Akina: Well, Meagan, this bill that you’re referring to here in Hawaii right now is Senate Bill 756, and we have testified on it at the Grassroot Institute. It’s an opportunity for us to update our policy here in the state of Hawaii. 

Would you just quickly describe the bill again and state what you feel are its merits — what are the reasons that our legislators should go forward and pass this? 

And as we talk right now, we’ve just passed the crossover, and fortunately, this bill is still alive, but it still has several weeks to go before we’ll know what’s going to happen with it in the long run.

Forbes: Sure, yes. So this bill, it’s called the Access to Local Food Act. It would create the ability for people to be able to sell food that they make in their home kitchen without having a lot of the restrictions that we see in place, both in Hawaii and across the country. 

What it would allow is for people to be able to sell shelf-stable food in a variety of ways, including shipping the food to consumers, allowing consumers to buy that food online — I should say, too — before shipping it, which would be incredibly helpful for businesses.

Allowing retail sales of shelf-stable food, allowing grocery stores to sell shelf-stable homemade food. And really helping facilitate these made-in-Hawaii transactions where people are wanting to buy Hawaii products. 

It also would allow food that requires refrigeration, and that type of food would be allowed as long as producers are selling it directly to consumers. So there needs to be a face-to-face transaction, which helps to ensure safety with handling and delivery, and it gives the consumer the opportunity to ask questions about the food, which is also very great for protecting food safety. 

And then, you know, just taking a step back and thinking about the policy implications of this and how this will benefit Hawaii. Across the country, we see that cottage food — the cottage food industry in general and the ability to sell cottage food — creates a lot of opportunity, especially for women and for people living in rural areas.

A lot of times it creates opportunity in areas of the state where there is limited opportunity, so it will open up avenues for opportunity that are not currently available. 

We also see that it creates jobs. It also increases tax revenue for the state, which is great. 

So there are a lot of benefits to cottage food and allowing broad cottage food sales.

Akina: Nonetheless Meagan, regardless of these many benefits, there are some opponents to SB756 who say that we have all the freedom we need right now for cottage farms or cottage industries to succeed in food because we’ve got a lot of farmers markets. 

That’s been a growing trend here in the islands — large farmers markets all over the island where people do sell their goods and a wide variety of goods ranging from raw produce to actually prepared meals.

 How would you respond to that, and how might these farmers’ markets actually benefit from SB756?

Forbes: There’s always room for more food. I think, you know, consumers want to have greater options, and what we see with a lot of different areas — for example, with food trucks, we see when there are food trucks present, restaurants benefit. Same thing with cottage food. 

There actually was a national study that was done that found a positive correlation between the presence of cottage food businesses and brick-and-mortar bakeries. 

So a lot of times with food, when there’s food available, it creates a demand for more food, which is good for all food producers.

And then when it comes to farmers markets, farmers markets benefit from having a broad variety, a diverse array of food that people can choose from when they’re at the market. So I think this would actually benefit farmers markets by having more food available that people can select from and purchase from — more options for consumers. 

You know, with cottage food, another thing that’s really interesting is a lot of times cottage food producers are meeting a demand that other commercial food businesses might not be meeting.

We see a lot of specialty goods, such as kosher food, gluten-free food. We see food that just might not be food that big food establishments are making, but cottage food producers will identify the demand and satisfy it. So that’s an added benefit as well.

Akina: Well, since the pandemic, we’ve seen a lot of restaurants continue to have very big challenges in doing business. One of those is finding enough workers, and the rising costs of raw materials has really made inflation a real problem for our restaurants, and prices have gone up. 

But what I hear you saying, however, is that the promotion of cottage foods is not going to really be a problem in terms of competition against restaurants and commercial establishments. In fact, you speak of it as if they could work in a complementary fashion. 

I’m sure there are people who might be a little bit skeptical of this. Do you have any response to that?

Forbes: Yes. Well, they can do work in a complementary fashion. They do often in many states.

Wyoming, for example, has one of the oldest cottage food laws, I believe it just celebrated its eighth birthday. And Wyoming has had — it’s received national recognition for creating access to local food and for growing the economy, and growing it for all. 

And we see in Wyoming an interest in selling food at retail locations. And Wyoming actually just expanded its law even further to clarify that these types of sales are allowed, which is fantastic to see.

We see states that have taken steps to expand their cottage food laws, continuing to take steps to expand it more, because they see the benefits of it, so this is definitely a step in the right direction. 

And then — there was one more thing that I wanted to add, and it slipped my mind. I’m trying to recall. My apologies. I was going to add one more.

Akina: No, one of the things I did want to ask you was really about how cottage foods would work in terms of the competition they might pose for restaurants and so forth.

Forbes: Yes, thank you.

Akina: A lot of people are fairly sensitive to competition in any form here in Hawaii. For example, in the whole issue of housing, one of the topics is short-term vacation rentals. 

And right now we’re seeing fierce competition between hotel operators and short-term vacation rental operators, and the spirit of that competition kind of spills over into other discussions. And I just wanted to get your further response to that with regard to cottage foods and established restaurants, and maybe some of what you’ve seen across the country with regard to how they work together.

Forbes: Yes, and thank you for reminding me. I just remembered what I was planning to mention. So, here’s a great example from another state where we saw the cottage food line improve recently. It’s in Iowa. 

In Iowa, Iowa recently enacted a law expanding their cottage food. And we saw quite often in Iowa, cottage food producers helping restaurants and providing things to help make restaurants’ lives a little bit easier. 

Cottage food producers wanted to be able to sell, for example, cream cheese — homemade cream cheese — that could be put with bagels. And that was a benefit of the reform there that cottage food producers would be able to do that. 

And restaurants wanted to be able to offer that without having to have their staff do some of these things. And consumers, of course, love the variety, so everyone benefits, and competition is always a good thing. 

Consumers, especially, benefit when there’s competition.

Akina: One of our lawmakers mentioned something quite interesting recently, and that is that promotion of cottage foods could be a partisan issue. 

What have you seen in your experience across the country — is this a partisan issue or is this something that is embraced across the board?

Forbes: This is embraced across the aisle. We see Democrats and Republicans supporting this. It’s just a good policy. It’s pro-opportunity, pro-growth. 

It’s something that we see people from all walks of life working together because they see that it’s impactful and really makes a difference in people’s lives.

Akina: So then, Meagan, from where do we see the greatest resistance, and how have you seen that responded to across the country?

Forbes: The greatest resistance that we typically see comes from licensed food establishments. Some — not all, but some — express concern because there’s this idea that if you had to jump through hoops, other people should have to jump through hoops too. 

And, you know, what we always say when we hear this type of opposition is that selling cottage food has natural limitations, and it can really be a stepping stone to getting to that point.

A lot of times, regulators want to see everybody fully licensed. But as we’ve already discussed today, there are certain obstacles that are in place that can make it really difficult for people to do that. 

So, this is a stepping stone. It helps people get to that point. And just because some people had to jump through hoops and, you know, face unnecessary obstacles in the past doesn’t mean that we should continue to keep those obstacles in place for people in the future. 

So, it really is time to remove them so people can have a chance to start food businesses without having to incur all the debt that we’re seeing entrepreneurs have to incur.

Akina: Well, what you’ve had to share has been very informative, and I’m sure my viewers think that as well. So, I hope you’ll allow me to close with a more philosophical question to you. 

In your work at Institute for Justice, I know that you’re dealing with government regulation in a broad array of industries and practices and so forth. In general, do you see that government regulation at a very high level is helpful for the cultivation of freedom and entrepreneurship? Or does it pose certain challenges across the board in many areas that really need to be — in which we really need to have some updating?

Forbes: Regulation certainly can pose challenges, especially for entrepreneurs who are just starting out — and entrepreneurs who might not fit the classic mold. 

And what we’re seeing now is that there’s so much innovation, and a lot of times outdated or protectionist regulations can stand in the way. 

So it’s really a great time to reassess what regulations are needed; and when there are unnecessary regulations, whether they should be lifted to give people the freedom to pursue their calling.

Akina: Meagan, is there anything else you’d care to add before we close today?

Forbes: I just want to add that, first of all, thank you so much for having me today. I really appreciate the opportunity to talk about this. 

We at the Institute for Justice have been working with many cottage food producers in Hawaii. They actually reached out to us a couple of years ago when we first started talking about this. They reached out to us and were looking for ways to be able to sell their cottage food and different avenues of selling their cottage food. 

So we’re so grateful to see that the Legislature is listening to their concerns and responding to their concerns to help create opportunity, both for them and for many others in the state.

Akina: Well, Meagan, thank you very much for joining us today. We appreciate your expertise a great deal.

Forbes: Thank you for having me.

Akina: And to my viewers: Our guest today has been Meagan Forbes of the Institute for Justice, where as an attorney, she works on food policy and other issues for the betterment of the citizens of the United States. 

Thank you for being here today. I’m Keliʻi Akina, president of the Grassroot Institute [of Hawaii]. You’ve been watching “Hawaii Together” on ThinkTech Hawaii.

 We’ll be back again with you next time. Until then, aloha.

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