Hello and welcome to the session. This is Professor Farhad in which we would look at the capital asset pricing model known as CAPM. This topic is covered on the CPABEC section exam as well as the CFA exam, also covered in an Essentials or Principles of Investment course. As always, I'm going to remind you to connect with me only then if you haven't done so, YouTube is where you would need to subscribe. I have 1,800 plus Accounting, Auditing, Tax, Finance, Lectures as well as Excel Tutorial. If you like my lectures, please like them, share them, put them in playlists. If you're listening to this recording, it means you're trying to learn about CAPM, so other people might be doing the same as well. Connect with me on Instagram. On my website, farhadlectures.com, you will find additional resources to complement and supplement this course as well as your other accounting finance courses, CPA, CFA or CMA exam. I strongly suggest you check out my website. The first thing we're going to talk about today is risk premium of the market portfolio. Risk premium is something that we should be familiar with if you are following my course. If not, I'm going to give you an idea what risk premium is, but we need to know about risk premium. I'm sure you know about the risk return trade-off, and this should be a review and simply put, what is a risk return trade-off? We have risk and we have return. And the more risk we take, the more return we expect. Okay? Sometimes we call it the mean variance. The return is the mean and the risk is the variance. Sometimes we call it the mean variance analysis. It's the same thing. And what is that basic idea? More risk should be compensated with more return. If you're going to take risk, you expect more return. You're not a gambler. Gambler will take risk without expecting any return because you're a gambler. As an investor, for you to take an additional position in asserting equity or bond or any type of an investment, you expect additional return to make that additional risk. So you need to be induced to take more risk, induced with more return. Now, what is the expected return? Let's assume you want to buy a stock or equity because we're going to be assuming our investments is equity stocks. So what is your expected return given the fact that there is a risk return trade-off? Well, the expected return, what you expect to return is you want to at least earn the risk free rate. So when you invest, look, when you invest money, you're going to say, what is my risk-free return? What's my risk-free return? What does that mean? It means what happen if I walk into the bank today and deposit all my money there? How much do I get? If I get 2%, that's a risk-free. So that really does not count. But I need to earn at least 10% because I can earn 10% by doing nothing. So my expected return should be 2% plus I need to be compensated for that additional risk. So I need to be compensated. I need to be rewarded for that risk premium. Now, how do I find the risk premium? We'll talk about this a little bit more depending on what type of company you are dealing with, on what type of product they have, in what country you are investing to. So risk premium depend on many things. So let's assume you want 10% to be compensated for your risk premium. So I want 2% because that's safe and I want 10% premium. I expect to earn 12%. So this is what we mean by the expected return. I'm going to show it to you statistically in a different way. So let's assume the risk-free is 2%. Let's assume if you give your money to Uncle Sam, US Treasury Bill, it will earn you 2%. And let's assume the risk premium is 5%. What is your expected return? If I want to invest in your stock and I expect 5% risk premium and the risk-free is 2%, I expect 7%. What is the risk premium for a market portfolio? Now, let's think from a whole market portfolio perspective because simply put, how do we determine the risk premium? Is it the same? No, it changes. So there's an equilibrium for risk premium. So let's look at it from a statistical perspective. Let's think about this. When investors purchase stocks, so when investors start to buy stocks, what happened to that stock price? That stock price generally rises. Not generally. This is what happened. If somebody buying stocks, the stock price rise. As the stock price rise, what happened is you lower your expecting return and premium. So if you bought the stock today at $12 and people kept buying the stocks and now the stocks jumped to $15. If you buy it at $15, well, you should expect lower return than the people that bought it at $12. Why? Because the stock price already went higher because the stock price rises. So what happened is, so let's assume somebody waited until they bought it for $20, they would expect less premium. And what happened as a result, once it gets at $20, less people will start to buy it. As a result, when less people, when they happen, risk premium falls. As the stock price goes up, sorry, as the stock price goes up, you lower the expected return and the risk premium will start to fall. Simply put, you are not rewarded as much anymore because you are buying the stock at a higher price. So what you do then, so when your risk premium falls, what you do is you will take your money and you will switch your money to a risk-free asset. Why? Because it's not worth taking the additional premium. So this is what happened. So notice, so simply put, risk, it's going to go up, then at some point it will go down, then it will go down, then it's then when the stocks are cheap, it will go up again, so on and so forth. So there's an equilibrium. So there's always, it's going to go up and down, that's going to be someplace there's going to be an equilibrium. The risk premium, an equilibrium, the risk premium on the market portfolio must be high enough to induce investors to hold the available supply of stocks. So what happened is you only buy the stock if you have enough risk premium. Of course, we talked about this. If the risk premium is too high, there will be excess demand for securities. Of course, if your risk premium is very high, we want to buy the stock. The stock will start to rise. If it's too low, investors will not hold. If the risk premium is low, if you're not being rewarded, investors will not hold enough stocks to absorb the supply and the prices will fall. So this is what we talked about here. So it will go up, then it will come down. So the equilibrium risk premium of the market is proportional to both the risk of the market measured as the variance of the return. So what's happening to the return? What's happening to the variance of the return? It's going to fluctuate and based on the risk premium will change and the degree of risk aversion of the average investors. If the investors are risk tolerant, they're going to buy the stock. It doesn't matter whether it's going to go to 20 or 25 or 30. I can tell you, for example, Tesla people. Tesla people means Tesla that invest in stocks. I call them Tesla people because they believe in the company. When it comes to Tesla, they don't care. They bid the price up and they keep buying the stock. They believe in it. They don't care about risk. So simply put, to measure the risk premium, it's your risk aversion. How risky you are times the standard deviation of the portfolio. How much the portfolio, the stock is going up and down statistically. We can show this formula as A is the risk aversion. We saw this in another session times the standard deviation of the portfolio. Simply put, the risk premium is the expected return of the minus the risk free rate. This is how we compute the risk premium. So this is an important component of the cap and we're going to be talking about in a moment. So first is the risk premium, expected return minus the risk free rate. Now we need to talk about the beta. What is the beta? Well, we should know about the beta a little bit, but let's review. When you want to measure risk, you compute the standard deviation. The standard deviation of a stock has two components, a systematic risk and an in-systematic firm specific risk. Now beta is the systematic risk. It's the market risk. It's the risk that you cannot diversify. The in-systematic risk, which is the firm specific risk. And if you looked at my previous recording when we talked about diversification, the assumption is we can get rude with enough diversification. We can get rude of this in-systematic risk. Therefore, market does not reward you for this risk, for this in-systematic risk. The market says, look, if you take on in-systematic risk, we will not reward you. Why?  Well, if you can get rude of the in-systematic risk in theory, we're only going to reward you for the systematic risk. So simply put, your reward is based on the beta. Why? Because in-systematic risk, so if you are not smart enough, well, then you're going to bear the in-systematic risk. But what we're saying is if you're not smart, if you are not prudent enough, you will get some in-systematic risk. If you're prudent investor, you should be able to get rude of this and keep only the beta, which is the risk that you cannot diversify. So they will only reward you for the beta. So how do we compute the beta from a beta perspective? Again, if you go to my previous recording, we did this. I'm going to talk about the beta. But basically, it's the standard deviation of the stocks divided by the standard deviation of the market, multiplied by the correlation of the stock and the market together. Well, based on this formula, the greater the standard deviation of the stock, the greater is the beta because the stock volatility is part of the portfolio. So if your stock is volatile, it's going to make the beta higher. Just look at the formula here. If this number is higher, beta will be higher. Same thing. If there's a greater correlation when multiplying by a greater number, you're going to have a greater beta because the stock contribution risk to the portfolio. Because if your stock has a high risk, it's going to contribute to the risk of the portfolio. So simply put, higher beta means a higher risk. If the beta equal to one, it means you have exact, your stock risk is the same as the market. If you have a beta greater than one, your stock has a greater volatility. And I remember when I did this, I showed you Amazon versus Walmart. And if I remember, Amazon stock had a beta of 1.33. And Walmart stock has a beta of 0.32. So Amazon stock will say it's more volatile. It means when the market goes up one point, Amazon goes up 1.33. Same thing. If the market goes down one point, Amazon goes down 1.33. And they measure this by measuring through this formula for a period of time. The same thing for Walmart. Walmart is less volatile. And Walmart, we call it, if it's less than one, it's considered a defensive stock. Now we learn about risk premium. We learn about the beta or basically a review. Let's talk about CAPM. What is CAPM is the expected return of a security giving a certain systematic beta risk because we don't want to talk about the unsystematic risk. So here what we're going to do, we're going to combine beta and risk premium together through this formula. So simply put, here's what we're going to say. We're going to say your expected return is the risk free, which is you're going to earn this plus the risk premium, which we talked about the risk premium, how we compute the risk premium times the beta. So notice what we did. Basically, we took your risk premium. We took your risk premium that you're going to take and we're going to magnify it. We're going to scale it up by the beta. So if you have a high risk premium for your company and you have a high beta, you expect a higher return. Why? Because taking more risk, it's going to reward you. That's basically what it is. If you take more risk and the stock that you're investing in has a high beta, high variation with the market, you'd expect a higher return, more risk, more return. That's basically what we are saying. You are scaling your return based on the beta. So if the beta is one, your return is your risk premium plus the risk free rate. So let's suppose the risk premium of the market portfolio is eight. So this is, we're going to say this is eight percent. The risk premium is eight percent. Sometimes they give you the risk premium. Sometimes they give you the expected return and the risk free and you have to find out the risk premium. Here, they're giving us the risk premium and beta is 1.2, beta 1.2. The risk premium predicted for this stock is eight times 1.2, 9.6. So this, all of this here now is 9.6. So you are taking a risk of eight percent times the beta of the market. And let's assume that the T-bill rate is 3%. Here's what happened. The expected return would be 12.96, which is your market risk premium plus the risk free rate. So it's the 3% plus the 9.6. If your beta was 1.1, what we did is we lowered your beta to 1.1, your risk premium will be 8.8, 1.1 times 8%. And your expected return will be 11.8, which is 8.8 plus 3%. If your beta is 1, well, if your beta is 1, what you're going to do, your risk premium is exactly 8 because the market is not contributing anymore to your return. Your expected return is 8 plus 3 is 11%. If your beta is 1.5, and here we're talking about maybe a tech company where it has a high volatility, it moves more with the market, then it's riskier. Then what's going to happen, your risk premium is 8 times 1.5, which is not 8, 8 times 1.5. It means 8.5. It should be 12. And plus 3, the risk free rate, so your expected return is 15. So notice what we are saying. We are looking at one factor, and that's beta because in this example, all what I did is I changed the beta. And as I change the beta, hopefully you notice, if beta goes up, your return goes up. If beta goes down, your return goes down. And I hope this makes sense because the only thing that's affecting your return, that's what we're assuming. We're dealing with one factor. The only thing that's affecting your return is the market risk, not firm specific risk. Why not? Because we can diversify that firm specific risk. We don't have to worry about it. Now, is this through? Well, we're going to talk about a multi-factor picture. Just going to get a better picture because you could have more factor. But for now, the CAPM tells us when you buy a stock in a portfolio, it's the risk premium times the beta plus the risk free rate is your expected return. And hopefully this make sense. In the next session, I will cover something very related to this session, which is the security market line. The reason I don't want to cover it here because I don't want the recording to be too long. And to explain the security market line, I'm going to have to re-explain a lot of the stuff that I just explained. So you guys will be better off if I cover the security market line, which is very, very much connected to CAPM, basically CAPM and visually in a separate recording. If you like this recording, please like it and share it. And I'm going to ask you again to visit my website farhatlectures.com for additional resources for your courses, this course, other courses, your professional certification. Good luck, study hard and stay safe.


going to places in Vermont without broadband. It's a rural part of the state house. Rural part of the state house. Well, rural Vermont is here, of course, so if that would make sense. So thank you, everybody, for joining us for this. I know that the topic is one that a number of people care about. And thank you for showing up. I am going to, I'm cutting my teeth on facilitation right now. So I'm going to ask that we maintain a respectful discourse and that kind of like during committee, if somebody who's on, in order to keep it organized, I'm going to ask that you let me kind of call on people to make sure that it's an organized process instead of a rowdy conversation where it's hard to keep track and manage the flow. Because I think that it behooves all of us to be as efficient as possible. And I know it doesn't make a lot of sense in some ways, but it's our first meeting. And in order to get a site visit into Vermont compost today, because especially for the legislators who haven't been there, I think it's a real educational experience. And so that when the conversation is about maybe Google culture or buffer zones and whatnot, that we have a real idea because we've been there and we've seen it, which is different than having this theory that's kind of floating around. So we can see it in practice. And I think that that is a real benefit to people who believe that. I'm going to, especially after reading the summary of relevant legal provisions, I'm wondering how we can move forward. So, and I've said it before, but I'll say it now, so that these facilities can maintain kind of their financial liability and run well. So for us, I have my comfort zone. Everybody's being so quiet. It makes me nervous. What I asked everybody there was, I know, I know. So I'm going to go ahead and open it up right now and ask, and Mike, thank you for being here, because I know just because the session is over that you're still up to your eyeballs with things to do. For those who haven't had a chance to read through this, how do you feel about doing kind of a broad recap on it? Sure. Can we maybe do an introduction? Oh, yes. OK, we don't all know each other. OK, I'm sorry. Great idea. Introduction. I'm Sharon Pegard. I'm on the House AG and Forestry Committee. And I volunteer to facilitate this working group. Ben Gauthier, I work for the UNF Resources Solid Waste Program in Pennsylvania. John Bravan, I work for Vermont Shipping Department. Carl Hammer, I own the Vermont Compost Company. Kathy Jamison, Solid Waste Program Manager at Vermont TEC. Kara Erickson, General Manager of Vermont Compost Company and Representative for Poultry Farmers for Compost Forge. Michael Grady, Legislative Council. Caroline Gordon, former Vermont. Tom Bach, I'm the Representative from Chester. I sit on the AG and Forestry Committee. Lisa Ransom, Gro-Pompost. Andrew Stander, a policy consultant for rural Vermont. Eliza Perrell, Clouds Path Farm. Clouds Forever, Park Circle Farm. Representative Vicki Strong from Albany. Here to represent my constituents and to be part of the conversation on this committee. Josh Kelly, ANR, DEC, Solid Waste Program. And Kara, you want to introduce yourself? You are the person walking the perfect timing. Karen Jigir, Vermont Agency of Agriculture. I'm going to save the hot seat for you. We know you like that seat. It's my seat. So one of them? Josh Kelly, ANR, DEC, Solid Waste Program. So you would like me to review the memo? It's to the level of detail that you feel is necessary. You don't have to go through it like you are marking by line on draft legislation. I have copies as well. So I think the first main question or the first provision of law that is a question is whether compost operations on a farm are farming. So generally, legally, there is a definition or actually three definitions of what is farming under the law. And it's there because to clarify that not everything that happens on a farm is farming. And it's important to recognize that because farming is afforded significant exemptions and or allowances that others that are not farming do not have. And the key, the main definition that's used for defining farming is the active 50 definition. That's under. Do I get it right that all the other definitions of the three reference that one definition. And then there's the RP definition that's a little different in wording, but essentially the same. They are all very similar. The RP definition actually only has one word difference, but there are about 32 definitions of farming or farm or agricultural operations in statute. Some of them include compost, most of them do not. And the key ones for purposes of the RP is and the definition under 10 BSA Chapter 215, which is the chapter that regulates. It's where the agency is given the authority to regulate under the RAPs, the medium farm operation permit and the large farm permit that they use the active 50 definition. And the key definition or the key component of that definition is whether or not a product is principally produced on a farm. It specifically is the onsite storage preparation of sale of agricultural products principally produced on a farm. Because I don't read that definition to, in any other way, have compost qualify as a farm. So then you need to look at what is principally produced. The Natural Resources Board has a definition of that for Act 250, and it's generally more than 50% either by weight or volume of the ingredients are from the farm grown or produced on the farm. So you would have to look at the compost product and determine whether or not 50%, more than 50% of it was from the farm. And that's key because farming is exempt from local zoning. Farming is exempt from Act 250. Compliance with the RAPs, an activity that complies with the RAPs or is subject to the RAPs, gets a presumption that they are complying with water quality requirements, and multiple other presumptions or exemptions I won't go into. Can I ask a question on page two at the bottom? Somebody says, in contrast, the RAPs define principally produced differently than me, more than 50% either by weight or volume of raw agricultural products that are stored prepared or sold at the farm are also grown or produced on the farm. And I know that, you know what, I hate cameras. Never mind. I'm crossing that with a question that I have in my mind for something further down the line. It's a good point because the NRB definition of principally produced leads to what's called the blueberry muffin question. It's like, if the farm stand is selling a blueberry muffin and it's the only thing that it is selling, do you look and see whether the farm stand, it's the only thing it's selling on that particular day, do you look and see if that farm over the course of the year has been selling 50% or more products that are produced, principally produced on the farm, or do you look at that actual product? And the NRB has looked at the actual product. And then they look at that blueberry muffin and think the flour is not from the farm, the sugar is not from the farm, baking powder, anything that's in it except the blueberries are not from the farm. And they say that that is not an agricultural product and the sale of that is not farm food. So that's when you go to the RAP definition, you don't get to the blueberry muffin issue because it's not about the ingredients, it's about the raw product. That 50% of the raw agricultural product that's stored, prepared or sold at the farm are also grown or produced on the farm. But agricultural product is defined as any raw agricultural commodity. You don't believe the agency construes compost to be a raw agricultural commodity. And so you don't get principally produced for compost under the RAPs because it's not a raw agricultural commodity. You have to focus on the active 50 definition. In reading the elaboration on how this subsection or E of the definition of farming could fit the purpose of incorporating compost, I was all the time wondering whether that is really the right passage of the farming definition to put it under even though I acknowledge the effort being made. I'm wondering whether it's been tried to subsume that under the cultivation or other use of land for grown food because on-site storage is not compost. Compost is a process where material is being transformed. So the pure storage of a product is something different. And I think this provision is originally intended to be for the products that the farms actually producing and then selling but not about this resource compost that is then applied to the land as a fertilizer. This definition of farming also does not mention fertilizers. So I am using E because that is what the Natural Resources Board has used in the past when looking at compost facilities in Carl. You could probably confirm that because that was one of the key issues when they were looking at your two sites. Yeah, well many, many, many iterations happened over time. We did make a division which stipulated that when compost came from a site other than the site where we were feeding chickens so the enemy in their finding and the ultimate issuance of the F-150 permit described the line which was when we brought compost we had made an East Montpelier to Montpelier that became a commercial enterprise requiring an active F-50 permit. Just to be clear Montpelier had zoning we had for compost making so in our case we commercial composting is allowed use in the ag district and we had zoning that was ultimately mooted by the decision of the NLR of the Resources Board and the findings of the Commissioner of Agriculture at the time which said that the feeding of the chickens and anything that derived from that including the compost we made from that was farming when we started to commingle with ingredients from other places it became commercial and so that was the finding at that time. Right and it's because the way the chickens where you were having some food residuals that you still were principally producing that product from what was on the farm. Well and I should say at the time the distinction was we had a leasehold in East Montpelier that was on the dairy farm where a lot of the manure was coming from it is a place where we have a solid waste permit and have had since 2000 or so. So that material that we were making near because of the separate ownership in other words because it was another corporation involved Fairmont Farms that if Fairmont Farms owned all of Vermont compost or vice versa if Vermont compost had owned Fairmont Farms there would have been no I-250 jurisdiction as I recollected. So it was the bringing of that material that we had made as part of a leasehold on a separate site that made it commerciality at our site and it was affirmed that the process of bringing food from the community bringing manure from the dairy farm bringing equine manure and all the other things that we bring on to the farm to manage the food to feed the egg layers all of that compost was farming so that was at that time. I'm sorry to interrupt I have a man named Tom Gilbert trying to call into the phone here we're going to try it sometimes this works well and sometimes this does not work well so we'll see if this is a lucky time. Does that drive with your recollection? I think that that's an accurate summary of what happened. Since we're waiting there's a little subtext here because at the time the commissioner of agriculture made two affirmations pursuant to Title 24 and pursuant to Title 20 that our whole operation was farming. Right. Right to the six-court bag and it was but and since even though the pros at the time was the same in Title 24, Title 20 and Title 10 the natural resources board was entitled to disregard actually a third opinion penned by Michael Duane where in the secretary said they thought it was farming even in Title 10 but it's not at was not then at the discretion of the secretary as it was in 24 and 20. The natural resources board has its own separate authority to make an interpretation. They differed at that time. Right. The J.O. said that they the way that they got to 50% was unique but it was their jurisdiction. I just wanted to follow up on that. My interpretation of the law when I then later read the definition of a farm and it then says that a farm the annual gross income must exceed the annual gross income from a composting operation on that also I thought okay then that definitely implies that composting is always part of farming always part of the farm. It can be part of the farm I'm not saying that it it never can be part of the farm it has to just fall under one of the legal criteria for being farming and I don't think it's cultivation or other use of land for growing food because it's not growing food it's not and that's essential especially when we look at how degrading many practices have been in the past. I mean I understand the argument that's not how it has been applied by the Natural Resources Board in the past. And that's often not the law that's just an interpretation of the law. What administrative body in our court? They aren't the court but the Supreme Court has looked at the issue as well and has used principally produced as well for zoning purposes. I just wanted to offer a suggestion that we're getting into the weeds here. It might be more helpful to let Mike finish giving the overview before we go down the rabbit holes. Sure. There'll be plenty of rabbit holes. Well thank you for letting me address that confusion at that point. So there's that question of whether or not it's farming and whether or not the products principally produced on the farm. The RAPs do say that they allow for and regulate the composting up to a thousand cubic yards of food residuals on a farm per year. So that is another way that a compost facility can qualify as farming under the RAPs. And so that first question, is it farming is a key question. There's also part of that question which I'll come to later, is whether the importation of food residuals just for the importation of food residuals is allowed because anecdotally some farms are not composting at all. They are just importing the food residuals and either using it as feed or just having it land applied to the ground. And so no compost, agricultural product involved. They're just importing it. So then there's the application of Act 250 to compost production. As I said earlier, well, let me back up. Act 250 covers commercial development. If you qualify as commercial development you need permits from the Natural Resources Board to operate. There are exemptions from that permit. One of which is for farming, which we just went through. And one of which is there are six different exemptions for different types of compost facilities. And I'm not going to go through all of them, but they're on page four. These are the exemptions that when this issue arose in 2008 and led to the compost working group. These are the recommendations largely of the compost working group. They went through the legislative process and are not exactly what the compost working group recommended. But this is a way that a compost facility could be exempt from Act 250. It doesn't mean that they are farming. It doesn't mean that it's exempt from Act 250. And then local zoning, farming, basically those activities regulated by the RAPs are exempt from municipal bylaws including zoning ordinances. Again, you're back to what is farming, what is the definition under the RAPs. There's also the accessory on farm business that was added into 24VSA 4412. Whether or not a compost facility that isn't farming could qualify as an accessory on farm business. I think it will be difficult for them to do that because they have to be a qualifying product. And it's whether or not they're an agricultural, horticultural, viticultural, or dairy commodity. As I said earlier, I don't believe that the agency considers compost to be a raw agricultural commodity. And then you get to the solid waste certification. I think you've all seen the letters from A&R and from the agency of AG that the agency does not consider importation of food residuals as farming. A&R has authority under the solid waste chapter for the disposition of solid waste including certification of facilities that manage solid waste. And the A&R solid waste rules have requirements for organic management that apply to compost facilities and may require a small, medium, or large certification for a facility. And then you get to water quality. Many of the water quality issues are federally driven. You cannot have a direct discharge under the Federal Clean Water Act. You cannot, you may need a storm water permit if you fall underneath one of the four storm water permits that are federally required. There are also state water quality requirements. I focused on the direct discharge, the NITDS discharge. If you have a direct discharge under a compost facility even if it is a farm that it will need a permit from A&R. A&R doesn't issue an EPA can require. You can't legislate that away because it's under the Federal Clean Water Act. You have to go to Congress to go away. And that was a actual scenario. I did have a pipe running into a water of the state. And it was not permitted. The Clean Water Act may also require that certain industrial activities be covered by a NITDS storm water permit called the multi sector general permit. The multi sector general permit does not apply to farms or more specifically farmland. They don't really define what farmland is. But the multi sector does apply to solid waste facilities. And they do have some definitions of solid waste facilities. And it's arguable that compost facilities fall underneath that definition. So you can't really change that either. That's a federal law. If A&R, EPA said that you were a solid waste facility, a compost facility was a solid waste facility you might need coverage under the multi sector general permit. There are other water quality requirements I could go into but I won't. I'm just going to skip the commercial feed provisions. There are multiple food, drug, administration rules regarding commercial feed. First, the FDA regulates food and food includes food for other animals. Food cannot be adulterated if it is sold or even held in sanitary and unsanitary conditions. It can't be misbranded. And many other requirements apply to the people that supply the food residual for commercial feed. Specifically under THISMO's new rules there are requirements for how it needs to be stored, labeled, sometimes treated in order for it to be used as a commercial feed. All of the FDA rules are incorporated by reference as Agency of Agriculture rules so they are enforceable not just by FDA but by the Agency of Agriculture. And the Agency of Agriculture has its own requirements for commercial feed that require registration of that feed in order for it to be provided as food for an animal. So you can't really change the FDA requirements. They are federal, but they are incorporated by reference as state law. I have a question on page 10 in the I think it's the last the last bit of the first paragraph. It says the rule exempts farms from the facility requirements but only if the farm is devoted to the growing and harvesting of crops the raising of animals are both. The farm exemption includes facilities that pack or hold food such as eggs provided that all food used in such activities is grown, raised or consumed on that farm or another farm under the same ownership. And this is the animal feed, correct? We're still on animal feed that we're talking about so it's claiming that the only exemption is if you produce that feed yourself on your on your farm. And you don't want to read my wrote-in-my-notes when I was reading that earlier today. That is also the new FISMA rule and it's relatively new and so you're going to be working through the country's going to be working through questions like that over the next five to ten. You didn't include the income threshold associated with the application of FISMA in here? I did not and you're right and FISMA phases in over time based on farm income and facility income. I didn't do that Tom I was moving quickly I had to do this on Friday and stuff. The other part just to share and point on this because I've actually spoken to FDA quite a bit on this and they felt that this did not apply to this situation and one of the things that we talked about too was like there are actually many other feeds like you could buy silage from another farm and it doesn't need to be a sort of feed or you know and so I was just curious if there are you know I think there's a variety of thresholds that they use as a screen to say does a practice require this just to begin with and I think that was the part that I didn't quite see on this was you know how with those screens applied how that actually does because for instance they did not feel that FISMA would affect this practice and it was because they went through like a variety of sort of six criteria to see whether it applied and income was one of them but the others were like the sale versus you know you know we don't buy that material right and Caroline I just wanted to add that also law of course even though the conflict is older since 2012 is the universal recycling law so that means any person who generates any amount of food residuals show by July 2020 separate food residuals from other solid waste arranged for the transfer of food residuals to a location that manages food residuals in a manner consistent with the law I guess and then the hierarchy of recycling food residuals says they have to be presented for the consumption by animals first and then composting so when that we're talking also about this policy goal that is implemented by that and I think it's time to acknowledge that what the poultry farmers are doing is basically doing exactly that as presenting food residuals as an option to deal with this upcoming way whatever you want to call it matter and incorporating it in a compost but also allowing chickens to forage on it so that we have this value added approach to the use of these materials and we are also known by what we've been discussing in the last session that the haulers don't want to deal with it and that this is a serious option to actually give an approach to this upcoming problem I think maybe one of the things we might have jumped over and our eagerness to get into the more interesting parts of this is kind of like the overall matching information or goals or maybe even the common ground that we all hold and so maybe you might want to take a moment on that like you introduced your goal or maybe maybe you could take a moment just to generally talk about that because I think there is a lot of common ground in this room but I think we also need to know exactly what Michael's talking about what's the current lay of the land of the current legislation as before us and I think we need to have both of those conversations thank you Kathy the the piece that Mike is speaking to is the actual the practice that has existed the legislative the statute and some precedent and and as I have said earlier you know the larger goal as I see it is that we want to see the success and the survival of these facilities and know that it's being done well and that is the 20,000 foot goal for me and facilitating the group I feel like I'm not magic so it requires that everybody be part of this conversation and contribute what they have to it and I am going to ask that people be open to options they may not have considered and to trust in the good faith of all the participants in this group but and that's so for me and if we want to go around I think for those who are the stakeholders in here and say what your larger goals are and if you're okay with that I'm going to take some notes just because my brain does way better with notes and I think from a nurse perspective that we value a variety of options used for managing and as you pointed out the hierarchy does include multiple options for the use of food waste and that we would like to see food waste used when appropriately managed and that variety of options in the hierarchy and so how can we make sure that's a long-winded answer to say we'd like to see food waste managed so that it doesn't impact the environment of the public health and neighbors but is used as a value of resource so for the group of poultry farmers how many people in the room are familiar with Fred Kirshman I couldn't hear that Kirshman I said how many people in the room are familiar with Fred Kirshman the writer there were three total I don't know Wes Jackson Fukuoku so the reason why I asked that is that these are people that have kind of been agricultural pioneers they look at state laws and problems in agriculture problems with the environment problems with our relationship to the planet and independently and try to make things right and make the world a better place and so the group of poultry farmers we don't have the same tools that AG has that DEC has but we're independently trying to solve all of these problems we're trying to improve soil health we're trying to improve agricultural systems relate to groundwater and the overall ecosystem the nutrient cycles of the state and the region so when I think about goals you know really the goal is to improve the overall ecosystem of the state and the region and we just have a very different set of tools and so this is an opportunity right now that we all have that we can come in here and we can go tit for tat and we cannot make any progress or we have a chance to recognize that we all want to do the right thing we're all trying to move in a good direction and so let's step into a real leadership role and try to do something right what's the next I'll say I agree with both what you're saying I suggested during the last session that in order to accomplish this in order to bring more people into this and we wish everybody wants to do we may have to change or suggest we change 10 BSA to change that definition and I think at that time there was some reluctance because I think it's kind of a domino effect there's other aspects of the law that fall under that but if we could track that through to change that law and be able to talk about what these two folks both talked about encourages it in its practice it's a good practice we all agree with that under the right permitting make it safe for everybody yet bring more people into it and still allow farmers to maintain all the advantage they have as being declared as farms is that possible you have whatever legislative authority the body has if you want to make that change the issue will be how to define it as farm and then you have the equity issue the people that have gone through all the requirements have gotten all the permits are complying with the law what about then maybe there still has to be a primitive practice I'm not denying that somehow you're going to have to look at all those things you want to talk about the neighbors, the impact all those things we talked about and somebody has to deal with it but change farming that will allow this to be called a farming practice this would allow the big issue allowing farmers to continue to be call themselves farmers act as farmers and have the advantages of being a farmer and it's just how you do it my question was what will happen if we change 10 VSA when Stephanie Smith caught her she said there's a series of other laws that are tied to this that have to be changed also could I go next just because I got a follow on to that part was that a yes okay thank you this is Tom okay so I'm going to agree with everybody and not restate what's been stated but I do think basically our goal here is to think of this in terms of how it sets precedent for trying to align food systems with ecological models and reflecting ecological systems as best as possible that's consistent with farm to plate, working lands URL, all of the other state goals but I think with this aside from sort of the more global intent here I think part of what we need to arrive at is sort of really as a group understanding how we arrived at this moment so there's a lot of assumptions in a lot of the language that keeps getting used that I think is important to unpack a little bit so Mike your response just then about you know how do we define this as farming well I mean shoot Michael Dwayne and Kathy Jamison have both been defining this as farming through legal renderings for a while so I think the better question really in a case like that is more of like is the precedent that what changed that put us in a position where it's no longer farming it's not a question how do we make it farming it's why is it now no longer farming I think with this MIU process too I think it's you know this you know there's a lot of review here from the standpoint of composting operations we are not a composting operation we're a laying and feeding operation and so again you know I think we have to sort of like make sure we don't get trapped in past circumstances that were over different issues and make sure we're asking the right questions so we can get the right answers and I think it's a group if we can do that then we can create adequate transparency that would allow us to clarify how best to proceed but if we can't do that then we're stuck in a circular conversation you know and so my real hope is that we can take the time together to understand really genuinely what has shifted on the landscape that would precipitate changes and then respond to those specific issues as opposed to more general issues Thank you, first Caroline and Les? Yeah I just didn't have the chance to state our rule of a month goals yet of course we also overarching the support of what Sharon has said that it's about a big farm viability issue but also of course what Court has said that it's the it seems to be the right thing to do for the environment and as a small because the organization of course we want to shepherd with the poultry farmers group that this becomes a solid legal thing that is not just for the existing poultry farmers but under these premises of the universal recycling law the serious farming practice that is viable for the future of farming and for many other farmers you have to come and thereby also strengthening the relationship from between the consumers to what they generate as food residuals and then go to the farms to bring their food residuals to bring it back to the life cycle and we see these food residuals as nutrients and not as waste and I personally see potential in law amendments as I think how it's just when as we talk about it I think we might come to the conclusion it is also just a practice that is not grabbed quite by the way it is now and I'm sure we find a better solution Years ago when we had the composting moratorium and spent quite a long time talking about how that should look going forward seemed to me what I felt then was that the definitions and the laws as they were organized didn't have adequate coverage over the operational things that were taking place so it needed to be reorganized basically to deal with the changes that had taken place that were not addressed initially when the law was put together and I feel that way right now I feel like we're kind of trapped in definitions that don't apply really to what we're doing because it hasn't been looked at under the lens of the law and under the lens of how is this a good thing for the state and the whole so I think ultimately there's going to have to be sort of I don't know what's going to have to change but we can pigeonhole in the existing definitions what we're trying to do and make it work out in any other way that would be like I'll come back and kind of fix I don't think that's the way to approach this I think that if we decide those of us who are doing this think it's a really good idea and an important way to manage the large stream of waste that we have in the state 25% of landfill was food waste by weight I believe and it's alive and so to have that managed in a way that is beneficial is important I believe and I think we can do that I think scale is an important part of this and that's what came up in the other composting discussion is how do you address scale and what is reasonable to address scale and the problems that can occur are mitigated at different scales in different fashions I think we're probably going to have to fall back on that as well I don't know what that looks like yet but I'll be fully working on it working it through with you I want to say that one of the things that's been on my mind about this is that we say we'll update statute we'll update statute the rule right now with Act 250 going through some renovations I think that it would be a very challenging time to try to legally redefine farming I think that those who are I think it would make people nervous in the Act 250 realm who are trying to perhaps narrow the scope of what is outside of Act 250 so I'm a little bit wary of that and I'm not saying that that's not the right way for it I'm just saying that that's a concern that I have Carolyn? To that definition of farming I also studied law and what really disturbs me about it as a lawyer that there's a legal principle of legal certainty so that basically means that any person should be able by navigating through the law by headlines and so forth find what's the law and farming is getting more and more complex and there's a lot of young farmers that want to start farming and that have tremendous problems and their act together is because it's getting so complex so a definition of what is farming does not belong in Title 10 somewhere in conservation down below it belongs on the top of Title 6 so that anyone who is a farmer can find it at first sight and then it shouldn't be referenced with a number anywhere so that people have to make a huge effort to find it somewhere in the booth I think it's definitely time to look at that and to replace it where it belongs that's my way of background I used to work in Solway's program and I was the point guy I ran the composting program at the time that those jurisdictional opinions were rendered in fact I crafted those jurisdictional opinions one for Kathy's signature with the assistance of Michael Duane and that was very much a collaborative effort it was very much born out of Mr. Hammer's situation that was causing some concern to folks in the neighborhood and ANR and so we were having the same kind of confused discussion where people were asserting depending on who spoke to either farming or heavily regulated as a Solway's management activity requiring certification full blown public process so we poured over this and we poured over the law and Michael Duane at the time was the assistant AG that was attached to the agriculture food markets so he was representing them in his capacity as assistant attorney general those jurisdictional opinions kind of getting to Michael Grady's concern that he raised and it's a legitimate concern if you it's about equity if you suddenly change shift the paradigm such that folks who have not chosen or have not historically been permitted now forever exempted from permitting and those that sought to comply are going to somehow be penalized because they put all that work effort in seeking and receiving their permits I understand that but the longer kind of precedent in this regard was one exempting these types of activities and I actually got involved assisting the farmers because there was a sudden the sudden paradigm shift is ANR certain jurisdiction requiring certification and saying an AG frankly and we've had these conversations there saying that we no longer see this as a farming activity when there would be a council like Duane with their input with their obviously their nod said it was farming so I think the problem at this point in time that for the farmers and for the legislature is that ANR is attempting a major paradigm shift in fact has done that and it's underway and the inequity is to the communities that have been regulated or served under the prior jurisdictional opinions that I speak of so as Caroline said I think it's really a bad public policy and a very vague approach as a former regulator to suddenly shift the regulatory regime and basically point out folks as violators of law when they have done nothing but comply with the law as they understood it and as it was as they were schooled by the Attorney General the highest authority in the law in the state of Vermont so that's kind of my historical perspective. Before Kathy responds can I ask you can you briefly state your perspective of what success would look like in reasonably broad terms? There are any number of scenarios right? My concern is that and I think Caroline really alluded to it is that we are dependent on farmers thankfully in Vermont we still have farmers that you look at Long Island as an example being brought up now composting facilities massive composting facilities I will underscore massive I grew up down there I know Gatpank I know this facility massive facility that because they don't have farms anymore Gatpank when I was a kid was all farms and now people remember us having been farms but it's not farmed anymore it's like someone has remembered farms in Montpelier or something it's way less rural but that is a commercial operation by any definition and it's no surprise that it's polluting groundwater on it sandy gravelly glacial outwash regime that Long Island is sold sourced aquifer so what we're talking about here are farmers legitimately taking food residuals that has not been discarded into the waste stream but it's been like separated so it doesn't become a solid waste and then it gets reutilized as a feed for animals and there's some discussion about whether that comports with federal law but in the end I think that should continue to be our goal and I don't think A&R should be telling farmers how to feed their animals and what to feed I think it should be solely within jurisdiction of AAFM and A&R needs to they've got enough to do they need to be expanding jurisdiction at this point in time just a follow up thank you John John left the program in 2009 about 10 years ago and a lot has happened and I think we're all here today because the way we are managing food waste has evolved so since 2009 we've had our two compost study reports we've had University Recycling Law and the one thing that we did in 2009 and kind of these two reports we were silent on using food waste for feeding chickens but these reports were important at that time because it was a lot of overlap and overstepping of how we managed composting and I thought this helped bring clarity to that and moved forward and we started a regulatory program where people did know what was expected of them and we do have six regulated facilities that are on farms that don't have chickens that are managing food waste successfully and we are all here today and I think the common ground is we want to see can this practice continue because it is important in the University Recycling but can it continue in a way where it's meeting all the goals and objectives that were set out 10 years ago when we were looking at composting that because it wasn't on the table 10 years ago but Kathy just quickly since you are sort of providing some historical context I mean it was we actually have the memos from 2007 so what from the time that you signed your name on that letter 10 now has shifted in that policy realm like sure many things have sort of gone on but I don't think any substantively anything has changed that would affect this but maybe you could enlighten us not to throw anyone out of the bus sorry Kerry but I think what happened was we started to see more practice of using unprocessed food waste to feed poultry some of you folks are doing a great job and some not so much and so there started complaints coming in and agency bags started to get some of these complaints and I shouldn't speak for Kerry so then agency bag had a memo a decision of looking at this practice and we've met with you folks a couple of times over the course of a couple of years trying to you know find out is there some sort of middle ground and I'll just turn it over to Kerry I don't want to chase it too far but just I mean I think what we're looking for and never have gotten is actually not like that more people are doing it because that's not a reason to like necessarily change the interpretation I think we're looking for a more substantive like why is the reasoning that was applicable in 2007 no longer applicable in 2017 I think that needs to come from agency bag because there was a decision made by agency bag that this practice is not viewed as farming and I think that's what is bringing us to the table today so Kerry do you wish to I think you just got volunteered Kerry so Tom as far back as we can go like the interpretation was never about what a farm was accepting that all those letters refer to keeping poultry raising chickens not how they're managed no they reference the practice of feeding food scraps including Kathy's letter that said specifically we don't regulate the feeding of animals and so therefore when these materials are fed to those animals we don't regulate that you have to be qualifying some of the ways well at that point in time we did not agency bag did not have any agency natural resources sorry did not have any clarification that this practice wasn't farming and we have since received them John but this gets down to Caroline brought up consistency in interpreting law and surety to the regularity of community regulatory agencies cannot create jurisdiction from whole cloth they're granted jurisdiction jurisdiction removed or expanded by this body under the stone as soon as the government what's gone on here is a whole shift of saying we have no jurisdiction this is ANR because it does not meet the definition of a waste when it's being fed to livestock that was done again just discussed and now the agency is saying because we have complaints if the agency has concerns with that the fact that they lack jurisdiction then their obligation is to say we're concerned these are listed concerns this is why we think we need to have expanded authority and we would like jurisdiction to regulate these as such and they need to come here and have the full-blown process public process grant them that and if they're successful they can then do what they desire to do the problem is John they did that they did that they changed a lot the compost study group in 2010 came here with the proposal included ANR adopting in-rules requirements for the management of organic waste that is in the compost study committee report in 2009 that was for the composting operation we're talking about the feeding but if part of what you're talking about is what was recommended by the compost study committee right and that ended up in the block the committees the committees were given the proposal and they approved the proposal but the committee I don't understand the law that a lot changes the ANR adopted rules not happy statutorily in this house that gave expanded ANR's authority to now create a rule expanding its jurisdiction from what it was because they have the existing authority to adopt rules for the management of solid waste but the opinion of the AG was that it's not a waste if it's being fed to chickens the AG did not object to the rule when it was proposed they could have done that so this is the problem I'm going to ask us to remain very respectful and Kurt you have your hand up yeah so this in the conversations that this is where we get into some of the nuance that you know Michael's memo did not address and some of the conversations we carry in Kathy we all acknowledge that it's a really gray kind of mucky area and that's because we are not just composting we are using a composting process for the feeding raising and management of poultry and that's the little nuance that brought this whole group together here today that's why we don't have other just straight composters we have poultry farmers and so I think and again to what I said before I don't think it's going to benefit us to really get into and am I wrong to say that we've all recognized that it is pretty gray and murky I feel like we've been in this room and there was verbal acknowledgement that it's like yes there's a shift and agencies are entitled to shift their interpretations but I feel like we've been here before and we've all acknowledged that it's not really that solid and that there is a need for some clarification on it I'd like to hear from Kerry but with with respect to the solid waste rules when a material is discarded it's pretty clear it's a solid waste we hadn't exerted jurisdiction before because we had assumed it was being managed as an animal feed when we were informed it doesn't qualify as farming does it meet the Vermont commercial feed law I couldn't hear that Kathy could you inform that it doesn't qualify as what? as farming and that it doesn't meet the Vermont commercial feed law we said then it is discarded solid waste again these are like so Mike and I'm curious so hold on Tom let me wait for a moment and Mike has gone to take a phone call I'd like to let Kathy finish we can spend a lot of today talking about this decision or at some point move on about how are we going to move forward with the present landscape and that's probably your call but I think it's important to hear from agency back because we're talking about agency back while they're in the room but we're not talking about the agency behind this fact so I'm going to Caroline calling you and then I want to shift our direction and then I do agree with Kathy like the moving forward part is where we need to start focusing but yes it would be great to have Michael in the room for this interpretation of mine as I understand how I learned law that as soon as a term is defined the more specialized term basically takes away from the general term so we have the specialized definition of food residuals that means they're not solid waste but they are because food residuals are managed as solid waste have composting facility and we have a whole section in our solid waste rules regarding food residuals and that definition is in that section of that rule and we have permits always facilities that manage food scraps but it turns on discarding and if someone is separately collecting and not discarding putting in a trash can on the curb it doesn't become a waste that's an important term folks but these people are paying money to get rid of it restaurants schools and whatnot well some of them are could you remind me your name? thank you all of these importations as you're calling them we do not charge people for the actual food residuals we charge a fee for hauling the material not for the material that is a big distinction one thing I would definitely like to do and then I have a feeling it's going to take more than one meeting to do this I hope we don't get a parking ticket I'll definitely get one it's two hours first it's two hours that was my time but I would like to look it's pretty clear this is going to take more than one meeting and I would like to look forward to the calendar and look at September 19 September 24th and determine whether that's going to be a morning or afternoon and then do the same thing for the October days then we have August 1st? yes we have August 1st but that one is already determined to be morning September 24th and a lot of people said that worked for them and since we're doing these half days because Dante wouldn't put anyone through a full day of debate that may not I think four hours is plenty of time for trying to do this in a day so who in the primary stakeholder group can do morning okay let's do morning what's the time exactly? oh yes hey Sharon oh thank you I'm sorry you're being treated a little bit like a second-class person but that's because you have a disembodied voice okay so we've got that for September 24th we'll be a morning meeting come to 1 and then in October on the 8th It's going to be beautiful. The mornings will be chilly. Let's go for the afternoon. About 30 to 4? Yes, you can do 12.30 to 4 on October 8th at the table. It's October 8th when you're here on the right day. And heaven forbid, we need one more date. That would be October 15th. And I would like to do that again on the afternoon schedule. But are we good for that? I really wish my calendar would stop. Okay, so we've got that nailed down. So the moving forward, what I am thinking right now is that one reason why we're getting stuck at some of the back and forth is because this feels a little bit like sometimes the partisan stuff, right? Where there's this goal, the overarching goal is that these be viable functioning farms that are also being run well, I think that there's a real breach in the perception of the path to get to that place. And I think that's one reason why this conversation hasn't moved forward. And I'm going to apologize up front for not being an experienced facilitator, but I'm the one who volunteered. I think you did a great job. You kept me in line. I just practiced. I have my kids haven't been young at home for quite a while. Otherwise I would have been like, hey! So this is, and I'm going to throw this out there, my perception is that the agencies would like, and I know this, to see the shift into A&R jurisdiction because the agency bag has had no tools to manage issues. And so, I'm getting you to talk. No, it seems a little bit today like we're wasting a lot of time trying battle lines. That said, it's always been a square peg round hole issue. The RAPs manage water quality. The issues around water quality aren't necessarily the ones that we're concerned about at a compost facility. The RAPs only address water quality. They don't address the things that the program at the Agency of Natural Resources can address. The solid waste management practices, the best management practices. We don't have resources beyond what we're using for water quality to enforce the RAPs. So if you were to put all these other sort of concerns, essentially the original path we started down was the Agency of Natural Resources would develop best management practices for these facilities. And the Agency of Ag would implement them. But we don't do residuals management. Instead of creating another program at the Agency of Ag, why not use the one that already exists? That's how we got to where we are today, in my opinion. We can talk about whether that's the appropriate place for it to be or not, but if we keep going back on what happened in the past, how many neighbors Carl pissed off, or who wasn't, we're going to be having this exact same conversation for months from now. Caroline. That was also my impression. I think it's good to just revisit a little bit the conflict, but I think our goal was to also just set an agenda and start being organized in our approach here. People have had a chance to, I'm sure everybody here has given it thought. And my guess is that the people who have the word farm in their title or our farming advocacy nonprofits are going to view that the steps forward, the best steps forward differently than the agencies, but I'm going to, you know, if we, this is going to sound maybe a little strange, maybe it makes sense to side by side draw two different counts forward and instead of bickering about it, sit down with each other and say, well, if the path forward was through A&R, this is how we would do it so it would be as good as possible. And it would function in a way that does not harm these farmers. I'm going to call them farmers. And then maybe we can also sit down side by side and while we're doing that, say, and if this instead was, if legislation redefined feed and farm and farming, if we were able to do that, what that path would look like and how we could do it as well as possible. Then we're going to not be going back and forth about, well, this is what's not, this isn't okay and that's not okay, but we have a picture of two paths forward and wherever we come out of it, because without legislation, we know which way it's going to happen and I think it moves all of this door together and I, you know, one reason why the farmers in the room get a little more fired up is because they're afraid they're going to lose their butts. That's what, you know, what's on the line for them isn't an awkward or challenging time in an agency, it's losing their facility. It's, and so how do we start having this conversation about, you know, well, what's the next step if we want to do this path well and what's the next step for doing this other path well? And I know that, Nikki, how long is your commute? An hour and 15 minutes or so. That's not so bad. Tom's is longer than that. Okay, how long is your commute? Two hours. Two hours. But it's well worth it. Love you, Tom. It was a nice drive. It was a nice drive. Better than in January? Definitely. Kurt? Just to make a suggestion, I think that's an excellent idea and I think one thing that can kind of help sort of grease the wheel a little bit is if maybe because we are limited in time in meeting opportunities that if there was sort of a subcommittee or a subgroup that looked at the federal regulations, you know, especially relating to FISMA and the FFCA, I think it was, just because that, from my understanding, is partially going to determine what the state can and cannot do. So I think, you know, and I know there's some debate between myself, Tom, Carolyn, Mike, and Kerry about the applicability of that. And so I wonder if kind of removing that from the subject at this point, if that would help us focus on what we can do in the state. And then once we start to develop some pathways, we can be like, okay, what we think is the best path in the state, does that line up with federal law? Do I need to answer it to the federal law? Are you still there, Tom Gilbert? That's my point. I am. Okay, I'm just checking the picture because it was so quiet. No dogs barking. Okay. So I'm going to ask those in the stakeholders, how do you feel about that suggestion, Curt's suggestion to have a subgroup that does that? I think it's an excellent idea. My question is, should that be answered first because as Mike and Brady pointed out, we cannot change the federal law. We don't have that authority. You're not what? We don't have the authority to change the federal law. No, but I really don't know how the federal law affects this myself. So it would be good for me to know. So you say you want to be on that subgroup? No, but I think these two should be on that subgroup. How do you feel about that? I think in an ideal world, we would have had that answered already, but I think there's been enough debate and discussion around it that if we continue to move forward with your outline and then have this other group sort of working parallel to get some clarity on that and so we might find... Mike, please. So what we're talking about right now is moving forward, and so the suggestion by our wise chair was to work on two paths moving forward. What if it was under ANR, what if it was under AG and Curt had great suggestion of maybe we should have a subgroup looking at what are the federal requirements because we can't change the federal rights? Regarding feed. Regarding feed. And then my question is should that happen first? And do you see, here's my Michael Grady question, with respect to the federal laws, because it wasn't clear to me when I read the last section, is there the potential for this practice to be prohibited by what you're reading in federal law? And yes, so I think we need clarity of that. So that's why we use the term of art, allowing access. Just to... I'm raising my hand, like I'm still raising my hand. Okay, Tom, yes, Tom. Still raising. I'm fine. I think creating a structure to help us get out of debate and get focused on outcome is a very good idea. I'm supportive, but I must say, and I don't mean to be a stick in the mud, this is a very dangerous moment where if we don't choose how we go forward wisely, we will only perpetuate sort of the problem. And so I would just use actually Mike's review here as a good example. Like, this whole review, 12 pages or whatever it is, is based on a premise that I don't think we have consensus about. Like, he asked the question, is composting farming? And that's not the question we're asking. It never has been the question we're asking. It's a question that got asked under a different auspices in the previous study committees. That's not the question to hand. So we're sort of, now we have this document that almost becomes sort of part of the fact trail, and it's based on an assumption that's not accurate to our conversation. And I think that with a lot of these things, that we're slowly, there's like a game of erosion happening that is, you know, we don't have a common baseline from which we're building from. And so I don't know how we kind of get past those things without digging into them versus to clarify them. So I would really like to, you know, like Mike Dwayne and Kathy's letters aren't even referenced in here. We're not even challenging the assumption of why does the oversight of odor management matter with this practice more than it matters with dairy farms? Well, I think I can answer that for you because for the same reason that dairy farms would probably be treated very differently if they mismanaged their mortality compost because rotting carcasses are different than manure, which is regulated in a really different way. Well, I mean, believe me, if you live next to an LFO with a liquid manure system like the people at Bradford next to a whatnot farm, I'm sure the agency gets a lot of calls on this thing. So, you know, you have six farms getting teased out here. And Tom, I can tell you, I live next to the largest dairy farm in the state. So I do understand manure even if milk has been dumped in the pit first. But I guess a bigger point is certainly those odors are real and impacting in why these odors that might be associated with this are getting more attention than, you know, at the end of the day, they're both odors and I don't know why the agency not being equipped with the odor regulation for one part of the bag is being interpreted as different than another. And I really am not meaning to obfuscate, but I don't know how we actually move forward in good faith without understanding the fundamental question that's in front of us. And this whole thing with Mike, I mean, we asked the wrong question. So I hear what you're saying and I'm going to say that, you know, different odors imply different health risks and I think that that's where that comes to. The smell of rotting flesh is a... I don't think that's a scientific statement. Okay, so I hope that we as a group can agree to move forward with a bifurcated path so that we can't... I think what you're asking, Tom, is for something that is going to be a little bit like asking for a consensus that is not going to happen. And I really want to start building some skeletal path forward, putting down some bones forward because there is going to be change and I want us to be sure that as it happens, you know, and three people in this room right now have to get re-elected to be around for a significant period of time so we may not even be in here in a year, right? So if this conversation needed to happen again, this is who's showing up right now and I think it's really important for us to start building paths forward. I think Kurt asked an excellent question and Mike, you didn't have a chance. I don't think to really hear Kurt's suggestion, the subcommittee, which I think is an excellent idea.  I, in my heart, believe composting is farming. But I am not a queen, I am a facilitator, so we've all got to come to this together. I'm not suggesting that we try to arrive at consensus at this moment. I think though that it would be important to have consensus around what the questions are that we're really asking or else we continue. If you don't have the right question, you're not going to get the right answer. I think we need to be very careful of the assumptions because the assumptions guide everything else. That's all I'm saying. I'm not trying to get to the end before we even start, but I do think there are some basic assumptions built into the question that when Mike sat down to do this on Friday, and I realize you've got a very heavy load, Mike, and I very much respect your work. But this whole thing is built on a certain question that wasn't the question at hand to begin with. And so that slow erosion puts us in a different conversation. I'll leave it at that. Tom, what is the question? It is the feeding of... Why is this no longer a livestock feeding practice when in the past it has been considered a livestock feeding practice? The assumption built into here is composting operations, which is not what the six people in this room are doing. That's a secondary part of the whole process, but nowhere in the law does it prescribe what you have to feed your hands. And so even the reference to the commercial feed law, that doesn't even apply to what people are doing. So the assumption that that's even relevant is a very dangerous one. It suddenly makes the legislators feel like, actually, wow, there is something on the books that's problematic here, but it's not. It may not. It may not. The law says farming is the feeding of poultry, basically, and there's nothing that says you have to feed a commercial certified feed. And that is for people who manufacture feed, none of which have any implication in this. Right, but that goes to the definition of what a renderer is. A kind of renderer, the person that's supplying you the food residuals be considered a renderer and therefore be covered under the federal. And going back to the beginning where you said that there's income thresholds and a phase in, and that's true, and that's not in the memo. And I can revise the memo to reflect that. But for instance, what's the difference between a dairy farmer going to a local brewery and collecting spent grain? There really isn't a difference. Those same requirements apply. But they don't. That is covered under FISMA. It's under FISMA. The grains and yeast and all of that, that's under FISMA. Not in such a way that it's, I mean, then why isn't the agency cracking down? I mean, every single brewery in the state, that's how they get rid of their grain. It's allowed that there are requirements for how it's done. Okay, but that's not the conversation that we're having right now. I mean, I don't mean to chase this too far and I don't want to bog this down, but like I just think we need to be very thoughtful so that we do end up in a place where we have actually answered the core questions and we haven't kind of done none of those like intellectual curves, like swimming in the ocean where you start like really going off your mark. All right, so I'm going to ask for Carl Hammer and then Buzz, and then I want to get back to how we're going to start moving forward. Carl? Yeah, well, I was, you know, obviously the change of policy raises some interesting questions of equity for the people who've utilized those decisions. So then speaking for our operation, where, you know, obviously states and agencies are not held to a stoppable in the way that private entities are, but it does raise some serious equity questions as you prosecute an enterprise over decades based on stated. But the other thing, the big news in this perhaps is that this strategy of feeding poultry is historically substantial. USDA published lots of pamphlets to recommend it during the Second World War. And our calculations suggest that all 300 million hens in cages could amply be fed with squandered food resource in this country. So, you know, from my perspective, I've talked for a second about the business situations. These are not high margin business practices raising eggs in this strategy. We like to hope that we can be solvent, very volatile pricing on the tipping side has really changed the economic. These are, it would be much easier to abandon producing these eggs than from a business perspective. I mean, we have produced eggs now appear two miles from here every day, every year since 1998. We have produced eggs for sale without purchasing grain on skiving a little piece of this otherwise squandered resource. Because that would seem to be big news to me. That's big news. So, Tom to Tom's point, not to belabor it, but the question is, how is what we're doing different from composting? We have composting involved, but that's not all we're doing. And that's the definition trap again. You know, we're caught in that, and we need to bust our minds out of that and recognize, as Carl just said, that the removing of the grain from the feeding and the producing of compost from my farm, I don't need to buy fertilizer. I have a 10-year plan to fertilize my 45 eggs with 250 birds. It'll all be done, restored by fertility after 50 years of hay removal and zero fertility management. So that's a huge benefit for me as a farmer trying to restore my soil without having to get caught in a fertility modality and doing it in a way that's beneficial for my little community because I'm removing waste. So this definition thing of like, oh, is composting allowed on the farm? We already know all those laws and statute some exceptions. We need a different umbrella to hold over our heads and say, here's what we're doing, here's how it should look, and here's how we're going to do it. That's what I would like to say. And so I think that might be where doing this bifurcated, the bifurcated paths forward. I think makes sense because here, and what I'm going to ask in this is that there be the devil's advocate because just like with the legislative process, if you don't have the devil's advocate, you end up turning out work that is less stellar than it could be. There needs to be somebody saying, well, how's that going to work? I'm not, yes, guys. There's plenty of devils. We're not insuring them. You know what? I've got like one of my shoulders is really weighed down and waiting for the angels to show up. Right. Right? So in terms of your bifurcated approach, my suggestion would not be ag or A&R. It would be farm or not farm. The terminology is fine. They kind of, and, you know, I think that's reasonable and there's certainly overlap in the Venn diagram for those different. I just want to be clear that, you know, it's not just A&R. If we're talking about not being ag, it's not just about going to A&R and I think that's an important part to track out. Yeah. And losing the farming definition that you guys have been operating under. I understand that that's really big. Did rulemaking happen? Did rulemaking without process, did rulemaking without process occur between the time in 2006 and 2007 when these decisions were rendered and the agreement that has emerged between these agencies? And Carl, I'm going to be honest with you. I don't know the answer to that question. And I, and that conversation is one that I don't think is going to help us move forward with the bifurcated paths in order to have paths forward because change is coming and we want to make sure that we are stepping forward into it instead of having it pounce on us, like a coyote on the hunches of a house cat. Oh, no. Well, if you take up Kurt's idea of having a committee specifically dive into somebody's questions, and then Carl's question would be an appropriate one too. And let me clarify, I'm sorry, my cats survived a coyote attack two nights ago which is why I've made references to it. Full circle. That was a full circle. Thank you. I appreciate it. Very much for you. And I think we should take a break. I think now is a good time for break. We've been at this for almost two hours. Tom, you can just put your phone on hold or whatnot. I want to get up and stretch. I want to give people a chance to go to the restroom. Would it be possible for you guys to just call me back on this number when you're ready so I'm able to step away from my desk for a second? You know, Tom, I don't really know how to operate the gadget I'm looking at right now. Okay, that's fine. I can do it, Tom. If I have your phone number, which I think I do. Yeah, I wrote it down. Okay. Ten minutes. Yeah. Seven, four, five. Eight, zero, zero, six. Good spaceship. Ah. Where's that object? I'll give you some questions. Oh, oh. She has spurs, and she's starting to act in range, screeching noises, but she's still late. She was coming in forward. She was coming forward. She was coming forward. She was coming forward. She was coming forward. Four, five, eight, zero, zero, six. It's not available. That's a tone. Please record your message. You've finished recording. You may hang up or press one for more options. Hey, Tom. It's Michael Grani. This is a working group calling you back. Try to do what you did the last time. Eight to eight, two, two, three, one. Thanks, bud. I have another number for him. I was in 7033 that you tried. Okay. We can try again. Yes. Eight to two, five, three, three, seven, zero, three, three. Hey, Tom. It's Michael Grani. You're back. I'm going to slide down here and reflect. So we're back on it. And I think I'm realizing where I need to, I need to step up a little bit is that I'm going to try to really keep the most of the conversation between the stakeholders and occasionally, you know, there is something that people who are in the room or on the phone, you know, in retrospect want to add to the conversation. I'm going to ask you to do so through your representative. So, but that doesn't mean you won't have a voice here. There, there will be times where I will call on people who are not any actual stakeholder group. But I want to keep this on track. And I think that's going to make it easier to stay on track. So, so Curt and Kathy, would you be willing to be that subgroup? No, because I don't really understand the federal feeding laws. And that's not my area of expertise. So sorry to decline on that one. I think it should be someone that's more. Kerry, would you be willing to move? Thank you. Okay. So, and is this something that you feel you can do via email so that you're more efficient use of time, even though you are reasonably local? So that, you know. So aren't the proceedings as worked or public documents? That's a good question. I would say technically no, because there's no legislative authority for it wasn't created by legislation. The MOU was never actually finalized. So you don't even have the arguments that the MOU created the public body, public agency. With that said, I think following the public records act and open meeting law to the extent possible to provide greatest transparency is probably advisable. And I think it's worth talking about how much we want to dive into FISLA. What if we land on a bottom line that would sort of prohibit this activity without rendering the material first? So just to follow that up, I think we talked about if we should do this as a parallel attract, if we should do this at the beginning, or maybe something we reference at the end. And I think saving it to the end or only dealing with it when it is at us is really necessary. So we'll put that on hold, so have a subgroup that's sort of like in the wings and if we need it we can trigger it. Yeah. Okay. And so... Yeah, if there's not more help needed I could also help. Okay. I think with your law background that could be handy. Right. Okay. And sort of the reason there is we have, we're a lab prosecutorial discretion with what laws we choose to enforce a way, but we don't waive it in FDA's face. And if you have a staff who make this as they say, we're waiving this in FDA's face, that puts the agency in a difficult spot. And it puts the feds on notice. It puts them on notice. Yeah. I mean, we're clearly doing it in some other areas in the state. Sure. But choosing not to waive that flag is... Okay. Okay. If we don't have to, but we certainly can. I hear you. I hear you loud and clear. And I think with that perspective that it makes sense to... So the FISMA subgroup will be kind of the if needed... Kirk, Harry and Carolyn. And the EFCA. Yeah. Yeah. So in looking at the two potential paths forward, in order to make sure that we have the devil's advocate and kind of an effective way to move forward with that, clearly I think that Kathy, as part of the voice of what that would look like with A&R having jurisdiction, one of the things I would really like to have is... What updating of the rules has happened so far with regarding... Because you had talked about going through a rule update. And part of that was like one of the examples... The only one I can pull up is, you know, there was a limit to the height of windows, which just makes sense. So in 2012 we adopted rules and we are... This summer we're going to have preliminary draft rules for the public to review prior to starting the formal rulemaking. Okay. So if we are going to have suggestions on changes to our rules, this is the time to be looking at them. Yeah, okay. That's important. So we definitely want to weigh in as a group. It kind of makes... Actually it adds a little more importance, I think, to the time that this group... And I'm really glad that we're able to have a July meeting and not lose our August meeting. So we have these two paths, these two potential paths forward. And there's not a whole lot of overlap except for the goals, you know, the broader goals, but there are areas of overlap. And I'm wondering the best way to kind of organize that work to lay out these paths forward. I'm wondering if it makes it... I think as a group, the stakeholders' perspectives, because it is a small stakeholder group, should weigh in on both of them. And I think there are kind of natural leaders for each side. Kathy, obviously, I just said you for the A&R path. I'm wondering... Kurt, Caroline, and Kerry... Yeah, I'm not going to do that, too. Yeah, I'm not going to do that, too. The vision for moving forward... So, Sharon, if I may... Oh, yes, please, yes, yes. So one path forward is the rules that Kathy's about to problem me. It does not require any additional legislation. The other is the area you're exploring. And I think that's not a subgroup, right? That's what everybody's here to talk about. So we have two paths. One, Kathy's got years invested in drafting. And so the group collectively will look at that. I don't know if it's worth breaking into a subgroup to talk about what the other path would look like. Right, and I think we all need... But I think where the lead voice for each path... We all bring different things to the table. And obviously... But I'm trying to figure out how to... We can't talk about both paths at exactly the same time. Those are two different conversations sometimes. Sometimes they're more similar. So I'm wondering if what we want to do is we want to... dedicate a certain amount of time. So I was thinking at 3 or 3.30, we could go to Vermont Columbus because that's part of what we were going to do today. Aside from... It's going to rain on us. It's totally going to rain on us. The issue is thunder and lightning. Oh, chickens don't get lightning struck. I think we'll be okay. Is that true? No, it's not true. I'm not aware of it. Just grab a chicken. Right, so just grab a chicken and you'll be fine. The regulators always show up when it's raining. Yeah, that's right. We like rain. We read it right. So do we actually want to cut and go to that now before the sky opens up on us? I think that's a good idea. I have four seats in my car. According to the radar, it's staying south of the computer. The electrical activity, you mean? Yeah, everything is south of the computer. I'm seeing a pretty bear cloud. Well, for the next couple of hours and then later on... Okay, okay. I think that the site visit should be a priority. And then... And then you will just develop an agenda for the new proposal for the next meeting. And then I think there are going to be some e-mail conversations and that you start putting some bones of flesh out having the conversation next time. I feel like there's a lot of conversation to have and Kathy, I'm going to trust that you can kind of draw out some of what you've been working on. With respect to rulemaking. With respect to rulemaking. Can you share already these prospective rules with the group? I'm sorry? Could you already share the prospective rules with the group? We can share a preliminary draft soon. And how close is that? We're meeting on the composting section of our rules internally next Tuesday, I want to say. To just finalize everything. And then after that we should have something. The whole intent initially was to get something out to the stakeholders that we were interested in before we went to the legislative process. So that was the intent all along. But I think next Tuesday it should be wrapped up. So that's kind of the time for that. I have a structure question. Two, almost three years ago when some of this conversation really started in earnest about Ag's position on this practice. There was some conversation about using the MOU, the wastewater MOU structure of which is Ag enforces nonpoint source on farms until and unless Ag throws up their hands and says to ANR, we can't get this bad actor to accept help fixing things. And whether any kind of MOU, so whether we could take a step back, re-acknowledge that it's clear in statute that feeding poultry is farming, that there could be, that the particular practice we're engaged in has caused complaint problems that where complainants have felt they were batting back and forth between agencies. And the agencies have felt like they kept falling on them in ways that they couldn't manage. But that we would retain that sort of structure. There was some discussion about whether that's worth the example. That the Ag would do the best practice carrot thing and ANR would be standing there with their baseball bat. Walk in softly, walk in softly and carry the big stick. I think you got a roll switch. I'll take the bat. So, Carl, what you would need to do is, with the water MOU there's a threshold. When that threshold is crossed, that's when everything is triggered that's supposed to go to ANR. And what would that threshold be? That seems like that's the question we should be asking. You know, as opposed to just throwing it all up right out. I mean, that's the part that I think we're missing on is that the assumption is to like, oh, there's one red flag there for the practices out versus, you know, look at how Ag responds whenever there's a dairy farm out of compliance. It throws all of its resources at that. So what I'm hearing is maybe that is the first step forward in the other path that we design as an option is saying this is what it looks like. And I think that that is a very reasonable foundation to start from. It would prevent us from engaging all those challenges around Title 24 jurisdiction municipalities, which affects a lot of the practitioners, not us. But keeping it in farming and then finding a way to enforce a best practice regime was what we started to try to do a couple years ago. We met at the annex a couple times. We started to try to develop a best practice guidance document. And that process didn't really progress very well. Could you share that guidance, that draft too? Well, there was a single draft that came out of the agency that I had basically and there were no responses to any discussion about it. So many of us responded and literally nothing happened. So I think that that's actually, that sounds like the beginning of the conversation for that one path forward. I think that, you know, unless somebody says I hate that, here at the table. And it's raining. Just a little. And I, some people might say that I'll probably melt if I get wet, but I don't talk to them anymore. Good news is, if it's raining, we're not getting any tickets. That's right. But you might have gotten to take it all. No, I didn't. Sweet. It's a little bit more accurate. It's not going to get any more than this. Okay. It's already here. It's looking like pretty good. I don't, I don't have rain jacket. I don't care.  You think I'm joking? I wouldn't keep it on. A really hot jacket for tomorrow. There's a great green. Oh, there was. Is the meeting breaking up right now? I think we're going to break up. I think that's about as far as we can get today. And now I have a better idea of where I need to apply my skills. And what we'll do is we'll have some email conversations. And you can be in touch with your representative. And I appreciate everybody for showing up and being here. Thank you. Especially for those of you who are not working and are getting, you know, the parks that we're here right now. Sharon, I just have a question before we break it. Yes, Tom. Is Mike's summary now part of a legislative record? Um, no. Practically no. No. It's part of, it's a tool for us and he's going to revise it. Mike, would it be okay to submit some additional questions that might be included in your review? Yeah, sure. Okay. Would we pass this through you, Sharon? Yeah. Well, why don't you email me those questions? Or when you say pass them through me, do you mean like ask right now, get permission to say them or email them to me? Yeah, just email, just have you, you know, in case other people have things, then you can compile them and give them the mic. That's, that's ideal. Thank you. Because that is, that's preferable. Yeah. Thank you very much. Um, go ahead and email me. Do you have my email address? Okay, I'll do that. Okay. Great. Thank you, Tom. Okay. Great. Thanks for hosting. Yep. Um, so, glad I'm wearing sandals. Add boots. Actually, is there, Carl's there, clothes, toe, shoe, um, policy at your farm? Because I have boots in the car. Absolutely. We like people to side themselves with, Yeah, clothes, toes. Yeah. We like the place to be suitable for open-toed high heels at all times. That is, I'm all set then, Carl. Over arching gold and running. It has been stated as set. Come on, fishie. Uh-huh. There we go. But um, yeah. Remember just grab a chicken. Chicken is not going to start my life.