Living with Regulations 



V\!illiam Zweigbaum 



Today's agriculturalists are continually being chal- 

 lenged by an increase in both the numbers and 

 complexities of federal, state and local regula- 

 tions with which they must comply. The specific regu- 

 lations affecting a business vary widely with the 

 specific business activities, size of operation, business 

 organization, asset ownership and local government. 

 Historically, agriculture has been exempted from many 

 regulations, including — for almost twenty years — the 

 paying of social security taxes. For example, most 

 small businesses with even one employee must pay 

 federal unemployment taxes and comply with OSHA 

 regulations. However, most agricultural businesses 

 with less than ten employees are presently not sub- 

 ject to either of these. 



There is little doubt that agricultural firms will be 

 exempted from fewer regulations in the future and will 

 have to adapt accordingly. It is important for busi- 

 nesses to investigate and review regulations which 

 may pertain to them at a very early stage in the op- 

 eration or addition of a new enterprise. We've all 

 heard the phrase "ignorance of the law is no excuse" 

 and the impacts of starting up an operation that is not 

 in compliance with ALL of the appropriate regulating 

 entities (i.e. federal, state and local governments) ex- 

 poses the business operation to fines, penalties, legal 

 fees, shut-down of activities, possible jail sentences, 

 and additional paperwork. Additionally, non-compli- 

 ance increases the business' exposure to liability 

 claims in the event of an incident that leads to civil 

 suit. 



There are many regulatory agencies which must be 

 dealt with in the development of a business. The spe- 

 cific activities and areas of jurisdiction of each agency 

 are too numerous to recount in this article. Instead, 

 this will serve to remind or inform those involved in 

 agricultural businesses of the types of regulations with 

 which they must comply and direct them towards the 

 appropriate agencies for additional information. 



Local regulations show most variation and must be 

 checked with the appropriate officials in the munici- 

 pality in which the business will be operating. Local 

 regulations may include, but are not be limited to: 



1 . Zoning laws 



2. Local permit and inspection requirements 



3. Restrictions of business activity (such as requiring 

 specific percentages of product sold to be pro- 

 duced on the premises, defining the types of prod- 

 ucts or activities allowed, or setting operating hours 

 and/or traffic patterns) 



4. Physical and structural requirements (setbacks from 

 roads, parking specifications, signage restrictions, 

 etc.) 



5. Real estate assessments and taxation 



State and federal regulations are more consistent. 

 Although federal regulations apply to everyone, if 



other rules on a particular matter are more restrictive 

 or specific, the regulation which is most restrictive or 

 specific takes precedence and must be followed. The 

 specific rules which apply to a given business will be 

 dependent on the types of activities involved, use of 

 hired labor, size and scale of the operation, and fed- 

 eral and state tax laws. Federal and state regulations 

 which might affect an agricultural business include, 

 but are not limited to: 



1. Business licensing and inspections (usually involv- 

 ing the Department of Agriculture, Department of 

 Public Health, Department of Environmental Ser- 

 vices and specific state licensing boards) 



2. Business registration (generally the Secretary of 

 State or the State Attorney General's office) 



3. Inspection of products and facilities and compli- 

 ance with weighing and grading standards (Depart- 

 ment of Agriculture and Department of Public 

 Health) 



4. State taxes on sales, profits and business activities 

 fall under the jurisdiction of the Department of 

 Revenue Administration 



5. State and Federal Labor Laws such as worker com- 

 pensation, tax withholding, worker protection, child 

 labor, equal employment opportunity, verification 

 of eligibility for employment, unemployment taxes, 

 etc. are covered by Departments of Labor, Employ 

 ment Security, Social Security Administration, Inter- 

 nal Revenue Service and the Immigration and 

 Naturalization Service 



6. Interstate transport of products and animals is 

 overseen by the Department of Agriculture and the 

 U.S. Animal and Plant Health Inspection Service 



7. Federal Income taxes are regulated by the Internal 

 Revenue Service and the Social Security 

 Administration 



This article should help both new and existing busi- 

 nesses become aware of the many regulatory agencies 

 with which they must deal. Each business operation 

 will have to determine which of these regulations and 

 agencies are applicable. Once the need for compli- 

 ance has been determined, the business operator will 

 have to begin learning the mechanics of meeting 

 those requirements or engage the services of others. 

 Even if outside resources are used (such as book- 

 keepers, accountants, attorneys, tax preparers, indus- 

 try councils, etc.), it is in the best interest of the 

 business manager to maintain familiarity and oversight 

 of all activities. 



For additional informalion you can request publications. Review 

 of Selected State and Federal Laws that Apply to Agri- 

 cultural Employers or Business Development Checklist 

 from your county Cooperative Extension Office or contact: Bill 

 Zweigbaum, Agricultural Business Management Specialist. UNH 

 Cooperative Extension. 302B \ames Hall, 56 College Road. 

 Durham, NH 03824 (phone-. 603-862-1700). 



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The Plantsman 



