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Accessory On-Farm Business

About Act 143

Act 143 of 2018 expands opportunities for farmers to diversify operations through on-farm sales of agricultural products as well as educational, recreational, or social events. These accessory on-farm activities can help to increase revenue and improve farm viability.

The law creates a statewide municipal land use category called accessory on-farm business (AOFB) and limits municipal land use regulation of an AOFB. Municipal land use regulation of AOFBs are limited to site plan review and the application of performance standards. In other words, a municipality cannot prohibit a farm from having an AOFB; however, the farm must meet municipal requirements that are in place for any other business in the municipality such as operating hours, building setbacks, curb cuts, etc.

As part of Act 182 enacted in 2022, the Legislature directed the Natural Resources Board to issue a report with recommendations on how Act 250 jurisdiction should apply to agricultural businesses, including accessory on-farm business. The Agency of Agriculture supported this work, including surveying towns and farmers, conducting stakeholder sessions, and supporting a final report to the Legislature, due in January 2023. Read the Natural Resources Board's report.

AOFB Definition

AOFB means activity located on, and accessory to, a farm regulated by the Agency of Agriculture, Food & Markets under the Required Agricultural Practices (RAP) rules, that includes one or both of the following:

  • The storage, preparation, processing, and sale of qualifying products, provided that more than 50% of the total annual sales are from products that are produced on the farm at which the business is located. Qualifying products are those wholly grown raised or produced on a farm or manufactured on-farm from such products.
  • Educational, recreational, or social events that feature agricultural practices or qualifying products, or both. Such events may include tours of the farm, farm stays, tastings and meals featuring qualifying products, and classes or exhibits in the preparation, processing, or harvesting of qualifying products.

An AOFB can generate additional revenue streams for farms in situations where local land use regulations would otherwise prohibit such businesses. Although municipalities cannot prohibit AOFBs, Act 143 authorizes municipalities to review AOFBs under municipal site plan review and for compliance with any performance standards adopted in the bylaws for similar commercial uses. A municipality may adopt a less restrictive bylaw for AOFBs.

Act 143 does not eliminate other permitting requirements, such as those necessary to operate a business.

What is not an AOFB?

  1. A business unassociated with a farm, a business located off-site of the farm, or a business where more than 50 percent of the annual sales are generated from non-qualifying products or from products that were not produced on the farm.  

  1. A business that is devoted wholly to farming activities. This includes the processing and sale of exclusively principally produced products.  

AOFB Determination Process

The Vermont Legislature passed Act 143 in 2018 to support the creation of value-added businesses for farms, while also giving towns authority to ensure that AOFBs meet the necessary and reasonable conditions that the town has set for local businesses, without having the effect of prohibiting the AOFB. Therefore, AOFBs may be subject to municipal site plan review and any performance standards adopted in municipal bylaws for similar commercial activity.

The municipality is responsible for determining whether the proposed business meets the definition of AOFB provided in Act 143. VAAFM can engage in conversations with a farm or municipality around AOFB considerations but does not contribute to the final decision-making process regarding whether a business meets the definition of an AOFB or not. 

In order to operate an AOFB:

  1. Review Act 143 and the AFOB definition to determine if your planned on-farm activities meet the AOFB definition.
  2. Confirm that your farm is regulated under the Required Agricultural Practices (RAP) rules.

If you are unsure if your operation qualifies as a farm or if the municipality requires an official farm determination, see Required Definitions and Determinations. Please note that receiving a farm determination does not override the need to consult with your town.

  1. Contact your municipality to ask about local zoning applicable to your property and any proposed structures and the local process to be considered an AOFB. Determine, alongside your municipality, if your business qualifies as an AOFB. If your municipality requires it, the AOFB will be subject to municipal site plan review and adopted performance standards. Site plan review varies by municipality, but it often involves a public hearing with notice to adjacent landowners and the local community. Contact your zoning administrator to learn about the process in your municipality.
  2. Apply for any additional permits that are required, such as those for zoning, parking, and wastewater. This might include:
  • Contact a Regional Permit Specialist at the Department of Environmental Conservation to understand what permits may be necessary to operate the business
  • Contact your Act 250 District Coordinator to determine if an Act 250 land use permit application or amendment is required
  • If you apply agricultural pesticides on the farm, meet EPA's Agricultural Worker Protection Standard (WPS),and posting signs in the areas of application if the AOFB takes place in the same area.
  1. Begin operating the AOFB and continue to comply with relevant local, state, and federal land use regulations.

Roles and Responsibilities

Farm Responsibilities

A farm is responsible for applying for municipal site plan review and other permits, as necessary. Farms may be asked to provide evidence of the following:

  • Is the farm covered by Required Agricultural Practices rule?
  • Is the business accessory to the primary farm use?
  • Is the business operated by farm owner, one or more persons living on the farm, or a lessee of a portion of the farm?
  • Do the business activities include educational, social or recreational events that feature agricultural practices or qualifying products, or does the business sell qualifying products?

Municipal Responsibilities

The municipality determines whether the business qualifies as an AOFB under Act 143. Municipalities can review AOFBs under site plan review and for compliance with adopted performance standards. Municipalities may adopt more permissive regulations. 

Agency of Agriculture Responsibilities

The Vermont Agency of Agriculture, Food and Markets (VAAFM) has jurisdiction over Vermont farms that meet the thresholds set in the RAPs. Unlike farm businesses and farm structures, which are devoted to farming activities and are under the jurisdiction of VAAFM, AOFB are not under the jurisdiction of VAAFM and may be subject to municipal site plan review. A business should work with their municipality to understand any permits needed. VAAFM does not make AOFB determinations.  

VAAFM protects and maintains water quality by requiring farm operators to meet standards outlined in the Required Agricultural Practices rule. VAAFM also issues farm determinations and approves alternative setbacks from those required under municipal bylaws, as outlined in the Required Agricultural Practices rule. Please note that a farm determination does not override the need to connect with your town to ensure all regulations and processes are followed. 

Please note that while VAAFM can issue a farm determination in regard to the RAPs, it cannot issue a determination as to whether a proposed activity constitutes AOFB under Title 24 of the Vermont Statutes Annotated (“Municipal and County Government”). 

Frequently Asked Questions (Products)

 A “qualifying product” means a product that is wholly:

  • an agricultural, horticultural, viticultural, or dairy commodity, or maple syrup;
  • livestock or cultured fish or a product thereof;
  • a product of poultry, bees, an orchard, or fiber crops;
  • a commodity otherwise grown or raised on a farm; or
  • a product manufactured on one or more farms from commodities wholly grown or raised on one or more farms.

To qualify as an AOFB based on sales of qualifying products, at least 50% of the total annual gross sales, in dollars, from the farm business must be generated through the sale of products produced on the farm at which the business is location. The municipality is responsible for making this threshold determination. An example of this could be a farmer that operates a farm stand selling vegetables grown by the farmer (a product produced on the farm at which the business is located), and also sells cheese made by a neighbor (not produced on the farm at which the business is located). The income generated by the sale of the cheese must be less than 50% of the income generated in total by the farm stand to meet the criteria of an AOFB.  

A farm store selling exclusively principally produced products on-site is a farm business, but not an AOFB. Any farm operator engaged in farming activities utilizing only their own principally produced products does not need to undergo municipal site review to engage in this business. The farm structures that may be used for these farming activities, such as a farm stand to sell principally produced products, will still need to meet state and local requirements for municipal setbacks and noticing prior to construction (RAPs Section 9). 

If you sell a non-qualifying product at your business, such as a hat with your farm’s logo, you exceed the scope of statutory authority of an AOFB. However, towns are allowed to be more permissive than statute and can allow for this sale. Reach out to your municipality for more information. 

Frequently Asked Questions (Activities)

A “farm stay” means a paid, overnight guest accommodation on a farm for the purpose of participating in educational, recreational, or social activities on the farm that feature agricultural practices or qualifying products, or both. A farm stay includes the option and focus for guests to participate in such activities. 

Tastings are events dedicated to the consumption and comparison of food or beverages. Such events are characteristic of AOFB. Events that include the tasting of alcoholic products that meet the definition of principally produced will likely be considered AOFBs, subject to confirmation by the municipality. (Note: if the tasting includes the consumption of alcohol, additional permits may be required through the Vermont Division of Liquor Control) Samples are portions of food or beverage that are available to potential customers to taste during normal operation of the farm. Offering samples may not make a business an AOFB unless it meets the definition in other ways. 

Frequently Asked Questions (AOFB Regulations)

Site plan review is part of municipal permitting process. It allows the municipality to evaluate the suitability of the site, focusing on access, internal circulation, and parking for vehicles; landscaping and screening; exterior lighting and sign design. The review may also include other matters as specified in the local land use bylaws, including performance standards adopted for similar commercial uses. 

The process is usually as follows:  

  1. The farm submits an application to the municipality where the farm/AOFB is located. This may involve submission of maps, fees, and other materials for review by the local regulatory body.

  1. A hearing is scheduled to consider the application. This hearing is publicly noticed, and surrounding property owners and/or occupants are given notice of the hearing.  

  1. At the hearing, applicants may be required to present their case and answer questions posed by the regulatory body. Others in attendance may make statements or provide their own evidence.  

  1. After the close of the hearing, the regulatory body has 45 days to issue a decision. The decision may include conditions to ensure the welfare of the public and neighboring properties.  

The municipality decides whether to require site plan review for pre-existing AOFBs. Factors that the municipality may consider include:  

  • Is the business already permitted, or was a determination made that no permits were required (the business was “grandfathered in”)?  

  • Will or has the operation or land use changed since initial review/decision by the municipality?  

  • Does the municipality have less restrictive land use bylaws addressing AOFB than what is outlined in Act 143? If so, the town’s less restrictive bylaws would apply.

AOFB do not require a farm to have a farm determination, unless the municipality requires it. If a farm or municipality requests, VAAFM can offer an official farm determination based on thresholds established in the Required Agricultural Practices (RAPs). Receiving a farm determination does not override the need to consult your town. Importantly, farms do not need a farm determination to engage in farming activities, unless required by their local municipality.

AOFBs are still required to comply with Act 250 where applicable; that will vary based on the details of each AOFB. An Act 250 permit may be required when a farm constructs or renovates a structure to house an AOFB. Contact your Act 250 District Coordinator for more information on this topic or to request a Jurisdictional Opinion.

If your business is on conserved land or under an easement, you need to consult with the land trust to ensure you are complying with any applicable regulations. 

The Department of Taxes will review the eligibility for an AOFB to operate on land enrolled in Current Use on a case-by-case basis. They will determine, among other things, the size, scope, and infrastructure needs of the AOFB. Please see the Current Use website for more details and contact information.