Farm to Table Enterprises - Managing Legal Risks

There are various legal risks that could damage the income and reputation of a farm, restaurant, or owner of a company that purchases produce from a local farm. Risk management and assessing the possible threats and danger to the enterprise is crucial to keeping business running and preventing legal matters from endangering the commerce.

Mitigating and assessing possible risks of legal complication and damage to the farm situation is essential. The owner of a farm or someone connected to the farm to table enterprises may need to review the guidelines of food and continued preparations for the situation along with the administrative side. Legal risks could range from the damage of pesticides on produce to the possibility of a chef preparing food incorrectly and harming guests. Managing the risks is difficult unless the parties are aware of all the factors. Even then, it is important to hire experts and lawyers to assist with the process.

Four Areas of Risk Management

There are
four important factors when reviewing the farm to table enterprise. These consist of the production and yield factor, market price and surrounding risks, the financial aspects and biosecurity issues. The owner of the enterprise may require different experts and professionals to handle the various aspects. Other experts involved in these matters may include the tax professional or lawyer and a business lawyer to help assess company matters that could cause legal issues with customers or clients. Once the factors are known, it is important to break them down to understandable levels.

Production Risks

Some legal issues may arise through production in how much output the farm or business situation accrues each month or year. If the output is lower than expected, this could cause issues with the deal. Many risks with these arrangements arise through weather, climate and crop problems through rain or equipment. Failures in tools or complications through infestations could decrease productivity. Crop insurance and policies with livestock or diversification with produce could mitigate these risks. The farm owner may need to speak with an insurance carrier professional. He or she may also need to hire a lawyer to mitigate the damage with the business arrangements.

Market Prices

Some seasons could provide better market prices than others. If the public or private business arrangements do not yield the same profit as previously, this could require the farm owner to make other arrangements or to do business with another restaurant or company. The prices for produce often fluctuate greatly depending on what the customer wants to eat and how diverse the selection is. When the farmer only has one crop, he or she may experience vastly different market risks and legal complications in progressing through business deals with this small selection. There are market strategies the farmer may take advantage of with produce.

Financial Risks with the Enterprise

Some farmers run into multiple problems at the same time. Financial risks occur when the owner is unable to meet obligations due to a lack of cash or credit. The legal risks increase when the farmer is incapable of meeting deadlines, fulfilling contracts or keeping agreements with arrangements and clients. If under a contract, this could lead to a breach and a loss of a client or customer. It is crucial to implement various strategies and assess the risks of financial legal complications with the farm to table enterprise. Some prevent items may include insurance policies and understand the true obligations the farmer makes.

Biosecurity Risks

The biosecurity with the farm to table enterprise involves the biological complications that may arise through the produce, disease, weed plants, effects of chemicals and pests. Livestock disease could cripple a contract or agreement for meat. Crops infested with pests could die or decay. Weeds may kill many plants, and chemicals could harm the harvest and future produce supplied to a client. Providing security for these matters is more complex and may require additional steps or multiple forms of attack such as insurance, special agents and certain types of soil. The farmer will need to assess these risks through crop rotation, understanding the different farming needs based on the land and how to provide through backup crops.

Legal Help for Legal Risks in the Farm Enterprise

The farmer may need to hire a lawyer to assess and review contracts with clients, engage in risk assessment for the business and to support the farmer through legal entanglements in court. The lawyer will work hard to protect the client through the farming enterprise.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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