Some USDA freezes lifted but $1.7M in Vermont local-food grants were terminated, agency says

Abby Wellard of the Vermont Agency of Agriculture, Food and Markets told a legislative committee that federal freezes on a number of USDA-funded programs have begun to lift, allowing grant awards already approved to move forward and federal reimbursements to be filed. She also said two locally administered programs that had been committed to Vermont — Local Food in Schools and Childcare (LFCC) and a Local Food Purchase Assistance (LFPA) round — were terminated, leaving $1,700,000 in planned support unavailable.

Wellard said the Resilient Food System Infrastructure (RFSI) grant program “has been unfrozen,” and the agency has staff and awards ready to execute. The agency reported three staff positions supported by the RFSI funds (about 1.9 full-time equivalents) and said it had $3,000,000 in grants ready. Of that, infrastructure awards for six projects totaling $2,000,000 were sent to recipients, and roughly $1,000,000 in additional RFSI awards — covering 13 approved projects — remain pending a final internal review by USDA's Agricultural Marketing Service (AMS) before they can be executed.

Nut graf: The committee heard that while some federal programs are again moving money and reimbursing state costs, other federal-funded initiatives that supported school meal programs, childcare food access and farm-to-food-bank purchases were canceled, and uncertainty about federal staffing and program allocations is complicating delivery and planning for Vermont farms, food hubs and community partners.

Wellard described RFSI as a one-time appropriation distributed through AMS, funded with American Rescue Plan Act (ARPA) dollars. She said the program was designed to support “middle of the supply chain” investments — aggregation, processing, distribution and other value-added infrastructure — and that awards were split between smaller equipment grants and larger infrastructure grants (she described infrastructure awards as sized to support larger investments, up to roughly $250,000 per project as a design target). Named examples of project recipients she cited as the type of business that could qualify included Vermont Bean Crafters, Meyers Produce and the Vermont Farmers Food Center.

The agency also described two terminated programs. Wellard said the LFCC program had been budgeted at $1,200,000 and the LFPA round at just under $500,000; both were committed to the state in January but the agency received termination notices for those programs on March 7, 2025. Together the two cancellations total $1,700,000. Wellard said that since 2022 the agency has distributed about $1,350,000 through the combined LFPA and LFCC efforts in Vermont and that those awards have benefited more than 80 unique farms to date. She said the funds that were terminated would have supported roughly 20 additional unique farms and would have provided food or funding to about 92,000 Vermonters — a figure she described as the sum of approximately 83,000 K–12 students, about 4,000 children in childcare programs and about 5,000 recipients reached by the LFPA program.

Wellard told the committee that some other previously frozen programs have now been released. She said Dairy Business Innovation Center funds that were frozen have been cleared, allowing the agency to issue new awards and submit claims for federal reimbursement for earlier payments. The agency also reported that some AMS and other program lines remain under review: for example, one small project under the Federal-State Marketing Improvement Program (FSMIP) and certain AMS market-news price-reporting funds were still frozen or under review at the time of the testimony.

Committee members pressed for clarity about federal staffing that supports these programs. Wellard said communication from federal program offices had been limited and uneven while freezes and reduction-in-force planning unfolded at USDA. She said she understood “a dozen or so” Natural Resources Conservation Service (NRCS) positions in Vermont had been affected and that several UVM research positions and some U.S. Fish and Wildlife staff were also impacted, but she identified herself as not being the subject-matter expert on federal staffing numbers and offered to try to gather clearer counts.

Members also raised concerns about conservation districts and other locally delivered services that rely on federal pass-through funds; Wellard said that during the freeze there was a risk those entities might need to furlough staff because federal pass-through payments were on hold, but she could not provide a comprehensive status update because the situation was changing rapidly.

The committee discussed other federal funds that remain in process. Wellard described a separate disaster-relief pot that includes an estimated $220,000,000 targeted to the six New England states (and available also to Hawaii and Alaska) whose allocation method was still being finalized; states had been asked to submit loss data for 2023 and 2024, and the federal office had not yet finalized allocations or eligibility rules. She also said the agency had been in contact with the congressional delegation, which is seeking additional intel from states and local partners because federal communications have been inconsistent.

Lawmakers and farmers raised the indirect effects of recent tariffs and supply-chain shifts. Committee members described a new 25% tariff on some imported sawdust and other inputs from Canada and said that higher prices and reduced availability for equipment and raw materials were already affecting some dairy and value-added producers.

Wellard said the RFSI funding was a one-time ARPA appropriation and was not in the regular farm bill; if LFPA or LFCC funding were to be reestablished by Congress she said reinstitution would likely happen as an FY2026 appropriation rather than filling the near-term gap. She added that the agency had been prepared to obligate the $1,700,000 it expected to distribute across the two programs over the next 18 months, and that staff and partners were ready to implement those awards before the termination notices were received.

Ending: Committee members asked the agency to return with more detailed counts on federal staff in the state, up-to-date allocations for the New England disaster assistance pot, and a fuller assessment of local impacts on conservation districts, community food programs and farm customers. Wellard offered to follow up with additional detail and to invite tariff-task-force staff to brief the committee on specific supply-chain and cost impacts.