About Act 143
Act 143 of 2018 (24 V.S.A. § 4412 (11)) expanded opportunities for farmers to diversify operations through on-farm sales of agricultural products or by hosting educational, recreational, or social events that feature agricultural practices or qualifying products. These accessory on-farm activities can help increase revenue, improve farm viability, promote agritourism, and spur economic development.
The law created a statewide municipal land use category called accessory on-farm business (AOFB) and restricted how municipalities could apply zoning regulations to AOFBs. Specifically, municipal land use regulation of AOFBs is 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, municipalities may require AOFBs to meet municipal requirements in place for other businesses, 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 for how Act 250 jurisdiction should apply to agricultural businesses, including accessory on-farm businesses. The Agency of Agriculture supported this work, including surveying towns and farmers, conducting stakeholder sessions, and supporting a final report to the Legislature submitted in January 2023. Read the Natural Resources Board's report.
2024 Changes to AOFB
In 2024, the Legislature passed Act 181, which expanded AOFBs’ ability to sell qualifying products that are not produced on the farm where an AOFB is located, added new types of eligible products, and created related Act 250 exemptions. The municipal zoning language was amended to enable Vermont farms to freely work together to sell their products and Act 250 was amended so eligible AOFBs no longer need an Act 250 permit to “construct improvements” for their storage and sales of “qualifying products” (as defined in the law) and other listed eligible products.
In addition, AOFBs no longer need an Act 250 permit to construct improvements for the preparation and processing of “qualifying products,” but only when more than 50% of the annual sales of the prepared or processed qualifying products are from products produced on the farm where they are being sold. Local farms working together to develop shared supply chains, market their products, facilitate direct sales, and utilize the best sales locations should allow farms to collaboratively improve their economies of scale, increase their market reach, and provide more fresh and healthy food to Vermonters and visitors.
These changes include:
- AOFBs may now sell qualifying products from their farm and other farms. Previously, a majority of an AOFB’s annual sales had to be generated from qualifying products produced on the home farm, so sales of other farms’ products was proportionally limited, and an AOFB could not quite double its overall sales by including other farms’ products. Now, eligible AOFBs may sell other farms’ qualifying products without meeting a minimum production threshold. The goal is to help all farms by enabling them to work cooperatively to sell their agricultural products. As an example, if an AOFB farm annually sold $5,000 in blueberries, the most it could previously sell of its neighboring farm’s maple syrup was $4,999 annually. Now, the blueberry AOFB farm can sell an unlimited amount of its neighbor’s maple syrup and other qualifying products from other farms.
- In addition to selling all ‘qualifying products,’ eligible AOFBs may now sell products that name, describe, or promote the farm or AOFB, and may sell bread or baked goods regardless of whether the bread or baked goods are also “qualifying products.” This expansion allows AOFBs to sell items like t-shirts, hats, and coffee mugs that advertise their business, and bread from a local baker or their neighbor’s muffins.
- Until Act 181 passed in 2024, the AOFB designation exclusively applied to municipal zoning and it was inapplicable to Act 250. “Farming” is exempt under Act 250, but AOFBs are defined differently than “farming,” so AOFBs could be regulated by municipalities for site plan review and performance standards, and also need an Act 250 permit. Now, eligible AOFBs that store or sell “qualifying products,” products that name, describe, or promote the farm or AOFB, and/or bread and baked goods are exempt from Act 250 and do not need an Act 250 permit for any improvements related to those activities. The Act harmonized municipal and Act 250 standards to create a clear path for farms to sell both their products and agricultural products from other farms. The goal is to help farms remain viable and to increase the availability and access to Vermont food.
- AOFBs that prepare or process “qualifying products” are also now eligible for an Act 250 exemption, but the scope of the exemption is narrower for qualifying product preparation and processing than for qualifying product storage and sales. To be exempt from Act 250, a majority of an AOFB’s annual sales of prepared or processed qualifying products must come from products produced on the farm where the business is located. The differentiation between sales and processing is intended to retain some scope/scale parameters for farm processing operations. To repeat the blueberry farmer example from above, if the AOFB wanted to use its $5,000 in blueberries to make blueberry smoothies, its smoothie processing activity would only be exempt from Act 250 if its annual smoothie sales were less than $10,000, if blueberries were the only ingredient grown on the farm. If the farm expanded operations and grew $10,000 in blueberries, then it could process up to just under $20,000 in annual smoothie sales. If a majority of an AOFB’s annual sales of processed products are derived from qualifying products produced on other farms, the AOFB’s processing activity remains subject to Act 250. So, if the farmer with a $5,000 annual blueberry crop wanted to operate a smoothie plant with $50,000 in annual sales derived mostly from off-farm products, Act 250 would apply to the “commercial” smoothie operation.
- Act 181 also clarified the definition of “accessory” in accessory on-farm business by specifying that an AOFB’s revenues may exceed the revenues of its underlying farming operation.
- Act 181 did not amend the definition of educational, recreational, social events, or farm stays for municipal zoning or create a related Act 250 exemption. Instead, the Act 250 exemption created in Act 181 for the above-described AOFB activities expressly states it does not apply to the “construction of improvements related to hosting events or farm stays as part of an accessory on-farm business.” Accordingly, the law did not change for these activities, and they remain subject to Act 250 as applicable.
For more information, please refer to this fact sheet.
AOFB Definition
AOFB means activity located on a farm regulated by the Vermont Agency of Agriculture, Food & Markets (VAAFM) under the Required Agricultural Practices Rule (RAPs), that includes one or both of the following:
- The storage, preparation, processing, and sale of qualifying products, provided that the qualifying products are produced on a farm; the sale of products that name, describe or promote the farm or accessory on-farm business, including merchandise or apparel that features the farm or accessory on-farm business; or the sale of bread or baked goods. Qualifying products are more fully defined in statute, but they are essentially agricultural commodities or products grown, raised, or produced on a farm or manufactured on a farm from farm commodities.
- 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.
AOFBs are intended to enable farms to generate additional revenue streams from activities that farms are well-equipped to do but exceed the traditional “farming” definition. Accordingly, the land use carveout ensures that municipal zoning bylaws do not prohibit AOFB activities. Although municipalities cannot bar AOFBs from operating, municipalities may require AOFBs to undergo site plan review and conform with any performance standards adopted in their bylaws for similar commercial uses.
Alternatively, municipalities may choose to adopt less restrictive bylaws to permit and/or encourage AOFBs to engage in additional activities that may further benefit farms.
The AOFB provisions in Act 143 (2018) and Act 181 (2024) impact municipal zoning and Act 250 —they do not eliminate other permitting requirements, such as those necessary to operate a business. And only some AOFB activities are exempt under Act 250, so AOFBs may be required to apply for an Act 250 permit or amend an existing permit; please reach out to your Act 250 district coordinator to learn more.
What is not an AOFB?
- An AOFB must be on a "farm." A business not located on a “farm” is not an AOFB. A “farm” in this context is one that is subject to the Required Agricultural Practices Rule.
- A business located on a farm is not an AOFB when it is not engaged in the permissible accessory on-farm business activities defined by 24 V.S.A. § 4412(11).
- A farm that is exclusively engaged in “farming” as defined by Act 250 (10 V.S.A. § 6001(22)) and the Required Agricultural Practices Rule is not an AOFB. A farm that is exclusively “farming”—including the on-site storage, preparation, and sale of agricultural products principally produced on the farm—is not engaged in “accessory” on-farm business activities and is simply “farming.”
AOFB Determination Process
Act 143 was enacted in 2018 to enable farms to develop value-added businesses to support their farms, while also empowering towns to require AOFBs to meet many zoning conditions the town establishes for other local businesses. Specifically, 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 a business meets the AOFB definition in Act 143 as amended. VAAFM can participate in conversations with a farm and/or municipality about AOFB issues but does not determine whether a business is an AOFB.
Under Act 250, the Natural Resources Board and its successor "Land Use Review Board" (in the compliance/enforcement context) or the Board’s district coordinators (upon a request for a jurisdictional opinion) may determine whether an Act 250 permit or permit amendment is required for the construction of improvements for an accessory on-farm business. Such a determination may be requested by filling out the Jurisdictional Opinion (JO) Request Form.
In order to operate an AOFB:
- Review 24 V.S.A. § 4412(11) and the AOFB definition to determine if your planned on-farm activities fit within the AOFB definition.
- Confirm that your farm is regulated under the Required Agricultural Practices (RAP) Rule.
If you are unsure whether your operation qualifies as a farm subject to the Required Agricultural Practices Rule or if your municipality requires an official farm determination, see Required Definitions and Determinations. Please note that farm determinations state whether a farm is required to follow the Required Agricultural Practices Rule and VAAFM’s determination does not override the need to consult with your town about AOFB activities. For most farms, it is easy to determine whether they meet a minimum threshold in the RAPs without consulting VAAFM.
- Contact your municipality to ask about local zoning applicable to your property and any proposed structures and the local process for operating as an AOFB. Determine, in consultation with your municipality, whether your business qualifies as an AOFB. If your municipality requires it, the AOFB will be subject to municipal site plan review and any applicable 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.
- Apply for any additional permits that are required, such as those for wastewater and any other applicable state or local permit. Your actions might include:
- Contacting a Community Assistance Specialist at the Department of Environmental Conservation to understand what permits may be necessary to operate the business;
- Contacting your Act 250 District Coordinator or fill out a JO Request Form to determine if an Act 250 land use permit application or amendment is required;
- If you apply agricultural pesticides on the farm, you must comply with EPA's Agricultural Worker Protection Standard (WPS),and post signs in the areas of application if the AOFB takes place in the same area.
- If your AOFB will be involved in any agritourism activities, limit your liability by meeting the requirements of notice and warning established in 12 V.S.A. §§ 5871-73.
- Begin operating the AOFB after obtaining the required permits/approvals and continue to comply with relevant local, state, and federal land use regulations.
Roles and Responsibilities
Farm Responsibilities
A farm is responsible for determining whether its proposed AOFB needs to apply for municipal site plan review or other permits and for following all related requirements. Farms may be asked to provide evidence of the following:
- Is the AOFB on a farm?
- Is the farm subject to the Required Agricultural Practices Rule?
- Is the AOFB operated by a 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 store, prepare, process, or sell qualifying products and/or other eligible products?
Municipal Responsibilities
The municipality determines whether the business qualifies as an AOFB under the statutory definition. Municipalities may require AOFBs to undergo site plan review and/or to comply with pertinent adopted performance standards. Alternatively, municipalities may be more permissive and allow AOFBs to engage in more activities than state law mandates.
Agency of Agriculture Responsibilities
The Vermont Agency of Agriculture, Food and Markets (VAAFM) has jurisdiction over Vermont farms that meet the minimum eligibility thresholds established in the Required Agricultural Practices Rule (RAPs). Farms subject to the RAPs are required to comply with the Rule’s requirements and municipalities do not separately regulate Required Agricultural Practices, including the siting or construction of farm structures. VAAFM does not determine whether a business is an AOFB or regulate its qualifying activities. An AOFB should work with its municipality to ensure it is meeting municipal requirements.
VAAFM protects and maintains water quality by requiring farms to comply with the standards described in the Required Agricultural Practices Rule. VAAFM is also willing to issue ‘farm determinations’ to notify farms whether they are subject to the RAPs, and evaluates requests for alternative setbacks for farm structures as described in the Required Agricultural Practices Rule. Please note that a farm determination does not override a farm’s need to connect with its town to ensure compliance with all applicable municipal AOFB regulations or processes.
Please note that while VAAFM can issue a farm determination to assess whether a farm is subject to the RAPs, it cannot issue a determination stating whether business activities constitute an AOFB under state law (24 V.S.A. § 4412(11)).