What makes a farm a farm? That's a question the state's Environmental Court will have to sort out as it considers WhistlePig whiskey, a company that wants to make whiskey from rye that it grows itself.
Act 250 officials ruled in February that the Shoreham-based company is not a farm, and is therefore subject to state oversight.
But the company is appealing that decision. Farm advocates say what happens next could affect value added farming across the state.
Standing outside an old barn that WhistlePig uses to store its whiskey - whiskey it currently imports from Canada, Zach Withers points to the rye fields.
"Up here this field just on the other side of this pasture - both of those are planted with rye - about 92 acres right now," Withers said.
WhistlePig whiskey first hit the market in 2010. Withers, one of about a dozen employees, says the first crop of winter rye was planted this past fall. The plan he says is to build a distillery, finalize the sale of additional nearby farmland and grow enough rye to make the whiskey on-site.
"We don't have a distillery yet - but the distillery would take a bushel of grain which is worth $7.75 and after ten years of aging under our label you can sell it for $1,700 dollars," Withers said.
That's because WhistlePig sells for about $80 dollars. Clark Hinsdale, director of the Vermont Farm Bureau, says WhistelePig owner Raj Bhakta's endeavor is a classic example of value added agriculture that the state should be promoting.
Instead, he says a decision by Geoff Green, a district coordinator for Natural Resources Board, does just the opposite and imposes additional Act 250 hurdles.
"And in the jurisdictional opinion Geoff Green says that even if he grew all his own rye he would not be a farm if he was making rye whiskey, because the primary ingredient is not rye, but water. And we have a great deal of trouble with that interpretation," Hinsdale said.
Because, Hinsdale explains, it goes way beyond distilleries and could affect all kinds of value added agriculture in Vermont: like large maple syrup producers who sell the purified water they remove during osmosis; or cheese producers who sell whey - a watery cheese byproduct.
But Ron Shems, chairman of Vermont's Natural Resources Board, which administers Act 250, disagrees.
"We have to draw the line between what is a real farm and what is essentially - to put it to one extreme a big box store that happens to have a garden plot," Shems said.
Shems says according to the legislature's definition of a farm - 50 percent of whatever the farm makes has to come from that farm.
"WhistlePig right now is not growing anything that goes into its whiskey," Shems said.
And Shems says even if the company someday grows all its own rye, when it comes to whiskey, water is the main ingredient - not grain.
"And I want to stress that this is added water, this isn't just water that is naturally occurring as it is in milk or apple cider or maple syrup," Shems added.
Vermont Agriculture Secretary Chuck Ross wouldn't comment on WhistlePig specifically, citing the company's pending appeal. But he says the case brings up important issues that the state is grappling with as agriculture developments grow and evolve beyond the traditional definition of a farm.
"And we have to figure out what kind of policy and regulatory pathway we want to provide for these evolving rural enterprises - And that I see as an opportunity to grow businesses, grow economy and grow jobs and if we do it in the right way we'll grow the working landscape in a way that Vermonters will endorse," Ross said.
But Ross admits Vermont's not there yet. He says state officials are actively working to clarify the process and determine what if any regulatory changes or legislative action may be needed.
