Q. Should I have a written agreement in place with members who participate in my farm’s Community Supported Agriculture program?
Community Supported Agriculture (CSA) is an alternative model of agricultural food distribution which first originated in Europe in the 1960’s and has since become increasingly popular in the United States over the past three decades. Under a CSA model, a farmer offers for sale to the public a certain number of “shares” of the anticipated harvest at the onset of the growing season. A “share” typically consists of a box, bag, basket, or other defined quantity of vegetables, fruit, or other farm products. In exchange for purchasing their shares, members of the CSA receive a weekly distribution of seasonal produce each week throughout the farming season.
The CSA model offers advantages to both the farmer and the consumer. From the farmer’s perspective, a CSA provides payment and increased cash flow early in the season. The consumer, in turn, benefits from receiving a wide variety of seasonal farm produce which is both exceptionally fresh and at a lower cost than retail prices. At the heart of the CSA relationship, however, is the concept of shared risk. Under the traditional agricultural model, the farmer alone bears the risk that his or her investment in the crops may result in a less than anticipated harvest due to weather, insects, or other natural events. Under a CSA model, the consumer shares and accepts some of that risk – if some or all of the harvest ends up being less than expected, the consumer’s weekly share distribution may be less without a refund or adjustment of the initial share price paid in advance.
Why You Might Want a Written Agreement for Your CSA
While not legally required, it is generally advisable that a CSA relationship between a farmer and a consumer be memorialized by some form of written agreement. With or without a written agreement, a farmer who accepts advance payment from a consumer for products to be delivered in the future is entering into a commercial transaction having legal implications for both sides. A written agreement which clearly outlines the parties’ mutual expectations regarding the transaction may help to avoid misunderstandings down the road which can lead to a legal dispute. The written agreement need not be lengthy, complex, or filled with legal jargon in order to be effective – the goal is to simply state what the consumer can expect in exchange for their share purchase and to address in advance potential contingencies which may arise during the course of the relationship.
What Should Go Into Your CSA Agreement
The agreement should define the share price paid, the number of weeks during the season over which a share of the harvest will be distributed, and how a “share” quantity is defined (i.e., box, basket, bag, etc.). The agreement should indicate the types of produce or other products which will be harvested in the upcoming season, and the anticipated period in which they will be available. Most significantly, the agreement should recite that the consumer is sharing the risk of a partial or total crop failure – while the farmer will apply his or her best efforts to generate a bountiful share each week, the actual quantity and type of produce available for distribution each week may vary and the consumer, along with other members of the CSA, is agreeing to share the risk that the amount of produce available for distribution may less than the “share” anticipated.
The agreement should also address the opposite scenario – that is, that the harvest generates more produce for distribution to CSA members than anticipated. While “extra” produce can be added to a CSA member’s weekly share to accommodate some surplus production, there is likely a limit as to how much extra produce a CSA member can use without it ultimately going to waste. The agreement can address this situation by reserving to the farmer some discretion in determining what to do with a surplus harvest, such as donating the food locally or making it available for sale to others.
The written agreement can also be used to address certain details as to how the relationship will work in practice. How are weekly shares to be distributed? Is the share delivered to the consumer, or is the consumer responsible for picking up their share at one or more designated pick up locations? What happens to the consumer’s weekly share if they fail to pick it up? Does the consumer need to return the box or bag from last week’s share for reuse? Addressing these and other practical issues in advance in a written agreement may avoid headaches during the season and, more importantly, disappointed consumers who may be disinclined to participate in the CSA again.
Do you have a written agreement for your farm’s CSA program? Our real estate attorneys in Albany can help. We will make sure the CSA relationship is clearly laid out and protects you and your customers. Get in touch with us today to schedule your free consultation with our team.