Agency of Agriculture proposes $61.2M FY2027 budget, seeks to drop certain clean-water fees for medium and large farms

The Agency of Agriculture, Food and Markets presented its proposed fiscal 2027 budget to the legislature, asking for a total appropriation of $61,191,197 and describing targeted investments to reduce costs for dairy farmers and strengthen the agency’s business office.

The governor’s proposed budget is roughly 1.8% higher than FY2026, the agency said, and reflects a mix of funding sources: about 22% general fund, roughly 33% federal funds, about 40% special funds, and a small interdepartmental transfer component. Secretary Hanson Tabitz called the package "largely level funds with targeted investments" and framed the agency’s role in supporting agriculture while protecting public, animal and plant health.

Tabitz highlighted three items as particularly important for farmers: 1) the release of about $3.5 million in federal funds for the Northeastern Dairy Business Innovation Center (DBIC), which supports farm infrastructure and processing projects across multiple states; 2) a request for a single new position in the agency’s small business office to help manage an increasing volume of federal and state grant flows and speed payments to producers; and 3) a proposal to eliminate existing annual clean-water fees on medium and large farms.

"We need more help making sure we take in the money and get that money out the door as quickly as possible for our farmers and producers," Tabitz said in support of the new business-office role. Agency staff said the office has not grown despite a doubling of federal dollars in recent years.

On fees, Tabitz described a plan to remove an annual clean-water fee line that the agency shows in its budget at about $2,515,100; he said the medium-farm fee is $1,500 and the large-farm fee is $2,515 per operation. The agency estimates about 131 farms would benefit and that the general-fund net impact to cover water-quality programs would be on the order of $230,000. "This is not solving the economic issues our farmers are facing," Tabitz said, but he added that removing the fee would be "one bill off the pile" for affected farms.

Committee members responded that even modest relief can be meaningful. One senator noted the proposal had already been "deeply appreciated" by farmers who contacted the committee after the governor’s budget address.

The presentation also included detailed performance metrics across agency programs. Staff reported 717 verified produce farms in the WinWAM database and 15 produce-safety inspections for the most recent year reported; working-lands grants were described as level-funded with metrics showing grantees’ net-income and FTE impacts; and the VAIL laboratory reported roughly 35,489 analytical tests and service to about 90 Vermont-based projects. Food-safety inspections and recall metrics were presented as part of an overall compliance snapshot.

Tabitz and staff discussed federal funding volatility. They said some federal block grants and USDA programs had been trimmed or delayed; the agency showed a separate, larger disaster-recovery appropriation of about $31,750,000 that was appropriated in the December 2024 continuing resolution but remains subject to USDA agreement execution after federal administrative changes and other delays. On the DBIC funds, staff said a recent round of funding that had been delayed is now released and the program has resumed grant activity.

The committee did not take any formal votes during the presentation. Tabitz said the agency will work with members on roughly 17 related bills and miscellaneous language in upcoming weeks and offered to provide follow-up material on specific line items and performance measures.

"We appreciate the committee’s expertise and we look forward to working with you," Tabitz said at the close of the presentation.

Next steps: agency staff offered to provide more detail on specific line items and performance metrics, and the committee noted it will shepherd related statutory language and budget language through the legislative process.