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Community Forum: Why WhistlePig is not a farm

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Posted on February 28, 2013 |
By Ron Shems



This week’s writer is Ron Shems, chair of the Natural Resources Board, the agency that administers Act 250.

There has been a lot of press coverage of a recent letter issued by Act 250 on whether the WhistlePig LLC distillery is “farming” for Act 250 purposes. The complete story should be heard.

It is important to note first that WhistlePig is not operating a farm on its Shoreham land. Nothing grown by WhistlePig is now being used to make whiskey. Rather, WhistlePig is presently running a multi-million dollar business for importation, storage, bottling and distribution of Canadian rye whiskey.

In February 2010, WhistlePig asked Act 250 whether the conversion of an existing barn on its property into office and warehouse space and a packaging and trucking facility for its business required an Act 250 permit. In April of 2010, Act 250 formally told WhistlePig that an Act 250 permit was needed because it proposed to construct improvements for its business on its 500-acre parcel.

Rather than apply for a permit as other businesses routinely do, WhistlePig chose to ignore the law and proceeded with construction and operation of its facility. Only recently has WhistlePig filed an application for an Act 250 permit for its illegal construction. The discussion could end here, but it is important to explain why this distillery is not a farm.

WhistlePig intends to grow rye on its land and to use this rye in the making of some or all of its whiskey. It has asked Act 250 if the distilling, bottling and distributing of this whiskey qualifies as “farming.”

Of course, WhistlePig’s intent to make whiskey from its rye does not absolve its present commercial or industrial operation from complying with the law.

An Act 250 permit is not required for activities that most people think of as farming — dairy farms, raising farm animals or bees, maple sugar houses, orchards, greenhouses and the like, nor is a permit required when a farmer sells agricultural produce from his farm. We do not regulate roadside farm stands that sell corn, strawberries or cider. Further, a farmer is free to grow produce, add value to it, and then sell it at the farm, as long as more than half of the final agricultural product comes from the farm. Thus, a farmer is free to bake and sell blueberry pies, as long as more than half of the pie (by weight or volume) consists of blueberries grown on the farm.

The Legislature established this “principally produced” or “one-half” test with input from farmers and after careful deliberation. This test draws a line between farms that are truly farms and blueberry pie bakeries that are disguised as farms. Farms do not require Act 250 permits; bakeries (and other commercial enterprises) do.

Because knowing what ingredients go into WhistlePig’s rye whiskey and how much would be grown on its land is essential to determining whether WhistlePig can meet the “principally produced” test, Act 250 asked WhistlePig for this information. WhistlePig refused to answer. The law is clear: A person who wants to be exempt from Act 250 must provide information supporting the exemption. Once again, the discussion could have stopped here.

Nonetheless, we decided that WhistlePig’s question deserved an answer and we went out to learn what goes into the making of rye whiskey. What we learned is that added water makes up 60 percent of the volume of rye whiskey and 73 percent of its weight. Because of this, the WhistlePig project does not meet the “principally produced” test and it does not qualify as “farming” under the law, even assuming what WhistlePig would not confirm — that all of the rye whiskey’s other ingredients are grown on the farm.

WhistlePig states that all of the added water that will go into its whiskey will come from wells on its farm. If water is an “agricultural” ingredient then all of the ingredients in WhistlePig’s whiskey will come from its land and it is therefore engaged in “farming.” But the Vermont Supreme Court disagrees. In the case of Virginia Houston v. Town of Waitsfield, et al., 162 Vt. 476 (1994), a landowner wanted to pump well water from her land to sell as bottled water. She argued that “raising” the water from its underground source, qualified her project as “agriculture.” The Supreme Court disagreed, making the commonsense conclusion that water is not an agricultural product.

Should water be included when figuring the percentages of the final product?

There are good reasons why the amount of added water must be counted. If it were not to be considered, then every bottled water or soda factory could qualify as “farming” if the factory grew a raspberry bush on its land and squeezed a little raspberry juice into its beverage. Clearly, such a result would turn the commonsense notion of what is “farming” on its head.

Act 250 supports value-added farming, and we are always trying to strike the right balance between the benefits from such activities and the need to address the impacts to Vermont’s natural resources and the quality of life of those who live in the neighborhood of any project. In this case, the WhistlePig distillery is not a farm; it is a whiskey factory, and it should be subject to the same requirements as any other business so that the environment is protected and its neighbors are given the opportunity to address its impacts. This is all that the Act 250 letter requires.

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