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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)

Frequently Asked Questions (Activities)

Frequently Asked Questions (AOFB Regulations)