Cottage food producers want income cap raised

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Capital News Service

LANSING – Cottage food producers in Michigan are asking for more leeway in the laws to do business.

A 2010 state law allows Michigan residents to sell food produced at home – such as jams and jellies, bread, baked goods and popcorn – without needing inspections.

Proposed legislation would raise the $25,000 cap on gross annual income, allow third-party delivery systems and change the requirement that home addresses be placed on each label. 

“Women of modest means of living in rural areas” make up much of cottage food producers,  according to the Institute of Justice, a national nonprofit public interest law firm that supports the cottage food industry.

“We know who will benefit — it’ll be those exact women trying to take care of their families,” said Jamie Cavanaugh, an attorney for the Institute of Justice who testified in favor of cottage food law change at a recent state Senate committee hearing. The bill has already passed the full House and is before the Senate. 

The gross income cap is at the top of Cavanaugh’s list of changes he would like to see to Michigan’s cottage food law.

“When you subtract out any of the carrying costs and ingredient costs that bakers have, especially with inflation and cost of food rising, that leaves producers with very little potential profits,” Cavanaugh said.

Michigan’s food law is in the minority when it comes to income caps, especially an income cap as low as $25,000, according to the Institute of Justice. More than 30 states have no limit on gross income, including other states in the Midwest like Wisconsin, Indiana and Ohio.

Cavanaugh said that opposition to raising or eliminating the income cap generally comes from existing commercial bakeries or grocers’ associations.

“By putting an income cap on what you can sell in a year, all that does is signal that the government is trying to protect other businesses from competition,” Cavanaugh said.

“A home kitchen naturally limits how much cottage food a baker can produce,” Cavanaugh said. “You don’t have a commercial size oven, you don’t have multiple ovens in your house. You are just not going to be able to produce an unlimited amount of baked goods or cottage foods.” 

The Department of Agriculture and Rural Development  defines cottage foods as “non-potentially hazardous foods that do not require time and/or temperature control for safety can be produced in a home kitchen (the kitchen of the person’s primary domestic residence) for direct sale to customers at farmers markets, farm markets, roadside stands or other direct markets.” 

Advocates  thought the bill would  increase the cap to $100,000 instead of  just increasing it to $40,000, Cavanaugh said.  “Of course we are in support of any increase, but we hoped it would have been higher to be in line with what other states are doing.”

Amanda Hamann runs her own home bakery called Above Measure Cookies in Midland, under the cottage food laws. She reached out to Rep. Annette Glenn, R-Midland, about the major issues facing cottage food producers. Glenn sponsored the bill that would loosen restrictions on cottage food. 

While Hamann said she is happy that some changes are finally under discussion, she too was disappointed in the income cap. 

“The income cap being set at $40,000 is not ideal, especially now with prices rising the way that they are in the last few months and it’s not really a livable wage,” Hamann said. “It’s expensive to use quality ingredients. If you Googled what the price of a gallon of vanilla is right now, you’d probably pass out.”

Michigan cottage food producers  must put their own address on every label in case there is a problem with the product. Hamann supports the proposed change that would allow these producers to use a registration number from the Michigan State Product Center in place of an address. Customers would then essentially use the product penter as a middleman if there are any issues and cottage food producers wouldn’t need to have their address on every label.

“We are basically handing out our private, personal information to everyone who takes our product,” Hamann said. “You don’t want to be handing out your information to people that you are not even seeing.”

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