BRENTWOOD, Calif. — Armed with five-gallon buckets, the customers at Bacchini's Fruit Tree orchard like to pick the best-looking cherries, nectarines or plums, leaving those that are split or damaged on the trees.

The fruit left behind could be a moneymaker for owner Ken Hagen and others who operate small farms in California and sell much of their produce direct to consumers. Instead, it mostly goes to waste because state regulations make it difficult for those farmers to package their produce and sell it in pies, jams or bags of dried fruit at their roadside stands.

"The way the law is, you'd have to put in a septic system, a clean water system," said Hagen, whose wife's family has operated the Brentwood orchard about 60 miles east of San Francisco since 1945. "It makes it cost-prohibitive."

A bill by Assemblyman Dave Jones, D-Sacramento, seeks to help operators of small farms by relaxing the California retail food code.

The law is designed to regulate places where processed food is sold and applies mostly to grocery stores and other retail outlets. In part, it requires those establishments to have clean running water and restrooms.

That's something many small farmers cannot provide at their roadside stands, either because of the location or the cost, which can be $20,000 to $30,000. In many agricultural areas, local zoning ordinances forbid such development.

State law also makes it illegal to sell bottled water or sodas at California's U-pick orchards, which are swarmed on weekends from spring to fall. Jones' bill would change that, too.

"These are overly restrictive and cumbersome laws," he said.

His bill would make it easier for farmers to sell what are referred to as value-added products at their roadside farm stands. Those include salad dressings, olive oil, dried fruit, jam, salsa, pickles, nuts, and dried and canned fruit made from fresh produce.

"There's this huge consumer demand right now for locally grown agricultural products, and we would like to help our members capitalize on that demand," said Noelle Cremers, director of natural resources and commodities at the California Farm Bureau. "It's just common sense to allow them to be able to sell this product."

Under the bill, only products that are processed at state-licensed kitchens and do not need to be refrigerated could be sold at farm stands, according to Jones' office.

"It would be wonderful," said Beverly Beckwith of Oakley, who was shopping for strawberries one recent April afternoon at a fruit stand in the Brentwood area of Contra Costa County. "I don't want those farm stands to go away."

Beckwith said she especially would like to buy pies made with fresh fruit, recalling how her mother used to buy homemade pies from farm stands when she was a child.

Jones' bill also would clarify regulations covering farmers markets. It would codify an ongoing but questionably legal practice in which nonprofit organizations and chefs buy locally grown food to use and resell. Jones wants to ensure that they can keep buying from local farmers.

The bill passed its first Assembly committee earlier this month but must survive several more legislative hurdles before it reaches Gov. Arnold Schwarzenegger's desk.

The Assembly Appropriations Committee, which has been reluctant to approve new spending because of the state's budget deficit, could be its biggest test.

The cost to the state Department of Public Health and California Department of Food and Agriculture to update regulations and write new ones has not yet been estimated, Cremers said.

Farmers say allowing them to process their leftover fruit into other products at the end of the growing season would help provide steadier income year round.

"By giving us the power to do more with our operations, we can do more to help keep agriculture viable in the area," said Hagen, the orchard farmer.