Vermont agriculture leaders brief committee on governor’s FY26 budget; federal funding pause raises anxiety

Secretary Anson Tebbetts and senior staff from the Agency of Agriculture, Food and Markets presented the administration’s fiscal 2026 budget request to the Agriculture Committee on Feb. 14, detailing how state, federal and fee revenues are expected to flow through the agency and cautioning that a temporary pause in some federal reimbursements has created uncertainty for producers and grant recipients.

“Our mission: facilitate, support, and encourage the growth and viability of agriculture while protecting the working landscape, human health, animal health, plant health, consumers, and the environment,” Secretary Anson Tebbetts told the committee as he opened the presentation.

Committee members heard that the agency’s proposed FY26 operating budget totals roughly $59 million and is funded by a mix of general fund (about 21%), federal funds (about 40%), special funds from fees and licenses (about 35%), and interdepartmental transfers (about 4%). Nicole Dubuque, the agency’s chief operating officer, walked members through those fund flows and line-item changes, including a $1.7 million increase tied to USDA Dairy Business Innovation Center (DBIC) grants and a $450,000 increase in Lake Champlain Basin Program transfer funds.

Dubuque summarized position and program changes: the agency reported 144 classified positions and six exempt positions in its rolls; staffing shifts include bringing an attorney position in-house and adding two limited-service positions tied to federal resilient food infrastructure grants. She said most division budgets are level-funded aside from these targeted federal and interdepartmental awards.

Financial Director Amy Mercier answered questions about the agency’s ability to process federal reimbursements, saying the agency has submitted grant claims and continues to receive reimbursements, but that processing is “a little paused” in some systems. “We’ve been able to submit those through the various federal systems,” Mercier said. Dubuque added that the agency is “on the tarmac in a holding pattern” while a change in federal administration settles in, and that some programs that were underway nationally have been put on pause — creating anxiety for providers and farmers who have completed work but are awaiting federal payment.

Officials reviewed program highlights and outcomes the agency said the FY26 request sustains: Working Lands investments reported roughly $18.8 million committed across farm, food and forestry projects that leveraged about $30.9 million in matching funds, supported projects in all 14 counties, and helped create more than 540 jobs. The agency said the Northeast DBIC — one of four regional DBICs nationwide that Vermont administers for the Northeast — has awarded roughly $11.6 million to Vermont dairy farms and processors through 25 awards, with average awards near $92,000 (range reported $10,000–$1 million).

Food safety and inspection work was described as largely status quo, with increased inspection counts after earlier staffing additions. Agency staff also highlighted the Vermont Agriculture and Environmental Laboratory (VAEL), which provides testing for environmental monitoring, consumer protection and animal health; officials said VAEL’s percent of test results issued without recall or correction was about 99.7%.

The agency reviewed carry-forward and one-time appropriations the presentation reported as obligated in grant agreements but not yet expended, including roughly $5.9 million in one-time funds for working lands, organic milk and food safety projects and other multiyear efforts; the agency said those sums remain tied to existing grant contracts.

On animal health, staff reiterated the agency’s testing efforts for recent high-profile diseases. Tebbetts and staff said they have not detected the dairy-associated strain in Vermont dairy products and that the state is continuing testing and coordinating with USDA-certified labs. The presentation also referenced recent adjustments to the federal milk-pricing formula (federal milk order) that have raised the pay price per hundredweight for producers; Tebbetts and committee members said they hope that pricing change remains in place.

Committee members asked for additional detail on a handful of items — including decreases to Natural Resources Conservation Council funding and Clean Water Board grants — and staff noted those changes track recommendations made by the Clean Water Board and other grantors. Staff also said the agency plans to publish an updated dairy economic impact statement in early March.

The meeting produced no formal committee votes. Agency staff offered to provide members with a copy of the slide deck and contact information for a staff member to help troubleshoot constituent issues tied to agency programs and grants.