The Oregon Legislature recently passed House Bill 4153, a legislative milestone that fundamentally updates how agricultural commerce operates within the state. For decades, Oregon’s land use laws have prioritized the protection of agricultural land and the prevention of urban sprawl. While these protections have successfully preserved farmland, they have also created rigid constraints for operators seeking to diversify their revenue streams through direct-to-consumer sales and agritourism, which has led to more family farms being sold and consolidation in the market—something that Oregon’s groundbreaking land use system was meant to fight against.

House Bill 4153 addresses these challenges by establishing an entirely new permit category for “farm stores” on land zoned for exclusive farm use or mixed farm and forest use. This bill offers farmers the ability to diversify revenue streams without compromising their primary agricultural operations.

HB 4153 provides specific provisions that detail the newly permitted activities, the structural requirements for compliance, and the strategic opportunities now available to agricultural enterprises. For farmers, understanding these statutory changes is important for maintaining compliance and securing a sustainable, profitable future.

Expanding the Definition of Agricultural Commerce

The most prominent shift introduced by HB 4153 is the transition from the traditional “farm stand” model to the “farm store” designation. This change allows landowners significantly more flexibility in how they structure their retail spaces and market their goods.

Replacing Income Limits with Spatial Boundaries

Under previous regulations, non-farm retail sales and promotional events were strictly limited, capped at 25 percent of a farm stand’s total annual sales. Operators may have found this financial metric difficult to track, manage, and prove during regulatory audits.

HB 4153 eliminates this income restriction. Instead, it implements a spatial restriction, limiting a farm store to dedicating no more than 25 percent of its permanent, enclosed floor area to the sale of incidental retail items (i.e., non-farm items such as gifts). The legislation allows farm stores to utilize up to 10,000 square feet of permanently enclosed structures. This predictable metric allows business owners to stock branded apparel, gifts, and related merchandise without the worry of exceeding a fluctuating revenue threshold.

Redefining the Local Agricultural Area

The new legislation also broadens the geographical scope of what constitutes local agricultural sourcing. Previously, sourcing requirements could be restrictive for border-adjacent operations. HB 4153 explicitly expands the “local agricultural area” to include all of Oregon, as well as any adjacent county in California, Idaho, Nevada, or Washington that shares a border with the Oregon county where the farm store is located.

Structuring Your Farm for Future Growth

To prevent commercial development from overtaking active farming, HB 4153 establishes acreage and operational thresholds that properties must meet to qualify for a farm store permit. The legislation requires that a specific portion of the land remain actively employed for farm use.

The qualifying criteria are tiered based on the size of the tract:

• 80 acres or more: At least 45 acres must be employed for farm use.
• 40 to 79 acres: At least 25 acres must be employed for farm use.
• 20 to 39 acres: At least 15 acres must be employed for farm use.
• Fewer than 20 acres: At least 10 acres must be employed for farm use, or the farm unit must have earned at least $10,000 in cumulative gross farm income over the preceding two years.

These requirements are intended to ensure that the core focus of the property remains agricultural.

New Avenues for Agritourism and Events

For many land owners and operators, the most highly anticipated aspect of HB 4153 is the formal legalization of various agritourism activities. Previously, many of these activities operated in a legal gray area or required difficult-to-obtain temporary permits, leading to frequent disputes or overly restrictive conditions on farm stands.

The legislation now explicitly defines “agri-tourism activity” as operations conducted to promote the farm, attract visitors, and generate commercial, entertainment, or educational value. Allowed activities now clearly include:

• Farm-to-table meals
• Educational exhibits and classes
• Farm tours
• Crop mazes
• Animal petting and feeding exhibits
• Play structures
• Hay or tractor rides
• Other seasonal or holiday events

The bill also permits the use of temporary structures and mobile vending units in conjunction with these agritourism events.

Processing and Food Service Regulations

The preparation and sale of food have also been clarified. HB 4153 expands the definition of “processed farm products” to include items transformed through cooking, baking, heating, drying, mixing, grinding, churning, cutting, or freezing. Before this legislation, extensive processing often triggered reclassification into industrial land use, creating difficult regulatory hurdles.

Farm stores are now permitted to sell beverages and prepared food items ready for immediate consumption. They may also install on-site commercial kitchen facilities licensed by the Oregon Health Authority. However, the law provides a clear boundary: these kitchen facilities cannot be operated in a manner that functions as a traditional cafe or a drive-through dining establishment, and the food service must remain a supplementary feature to the farm store and the broader agricultural operation.

Local Regulation and Siting Standards

To provide statewide consistency, HB 4153 preempts local governments from banning farm stores entirely. Counties retain land use jurisdiction and the ability to adopt siting standards, but their regulatory authority is strictly limited to specific logistical categories.

Local governments may only regulate:

• Access, egress, and parking
• Traffic management
• Noise management
• Hours of event operation
• Sanitation and solid waste

Key Takeaways from HB 4153

HB 4153 is expected to take effect in January 2027, pending Governor Tina Kotek’s signature. In advance of that timeline, local jurisdictions may begin evaluating updates to their local land use codes so they are prepared to implement the new use category.

The legislation is designed to expand opportunities for agricultural operations to engage the public, but it does so within clear guardrails. While it allows for licensed on-site kitchen facilities and the sale of prepared food and beverages, it explicitly prohibits the facility from functioning as a standalone cafe or drive-through dining establishment. Any dining components must be tied to the agricultural experience, such as fee-based farm-to-table meals designed to educate the public about agricultural production.

It also provides flexibility for on-site retail sales, allowing farmers to offer incidental non-farm retail goods such as branded merchandise or specialty items. However, these retail offerings must remain secondary to the agricultural use and are limited to no more than 25 percent of the total floor area within permanent, enclosed farm store structures.

Overall, the bill creates new opportunities for farms to diversify their operations while maintaining a core focus on agricultural production and education.

This article summarizes aspects of the law and opinions that are solely those of the authors. This article does not constitute legal advice. For legal advice regarding your situation, you should contact an attorney.