Legislature(2011 - 2012)BARNES 124

01/27/2011 10:15 AM House ECON. DEV., TRADE & TOURISM


Download Mp3. <- Right click and save file as

Audio Topic
10:18:49 AM Start
10:19:19 AM Overview(s): Agriculture in Alaska
11:46:35 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: Agriculture in Alaska - Opportunities TELECONFERENCED
and Innovations
Presentations:
- by Tim Meyers, Bethel Organic Farmer
- "Hydrolicious Micro Greens" by Sioux-z
Humphries, Northern Latitude's Controlled
Environment Agriculture
- "Alaska Seed Potatoes Export to Asia" by
Dr. Jenifer Huang McBeath, Agricultural &
Forestry Experiment Station, UAF
- by Bryce Wrigley, President, Alaska Farm Bureau
                    ALASKA STATE LEGISLATURE                                                                                  
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL                                                               
                       TRADE AND TOURISM                                                                                      
                        January 27, 2011                                                                                        
                           10:18 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bob Herron, Chair                                                                                                
Representative Neal Foster                                                                                                      
Representative Wes Keller                                                                                                       
Representative Cathy Engstrom Munoz                                                                                             
Representative Steve Thompson                                                                                                   
Representative Peggy Wilson                                                                                                     
Representative Berta Gardner                                                                                                    
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Kurt Olson, Vice Chair                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW(S):  AGRICULTURE IN ALASKA                                                                                             
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE ALAN AUSTERMAN                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke to the committee on the subject of a                                                               
missed opportunity for economic development in the state.                                                                       
                                                                                                                                
TIM MEYERS, Owner                                                                                                               
Meyers Farm                                                                                                                     
Bethel, Alaska                                                                                                                  
POSITION STATEMENT:  Described farming techniques on his organic                                                              
farm during the overview on agriculture in Alaska.                                                                              
                                                                                                                                
SIOUX-Z HUMPHREY MARSHALL, Chief Executive Officer                                                                              
NorthernLatitude Controlled Environment Agriculture                                                                             
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Provided  a  PowerPoint  presentation  on                                                             
NorthernLatitude  Controlled Environment  Agriculture during  the                                                               
overview on agriculture in Alaska.                                                                                              
                                                                                                                                
PETE FELLMAN                                                                                                                    
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:  Introduced Dr. Jenifer Huang McBeath.                                                                    
                                                                                                                                
JENIFER HUANG McBEATH PhD, Professor                                                                                            
Plant Pathology and Biotechnology Laboratory                                                                                    
Agricultural and Forestry Experiment Station                                                                                    
University of Alaska Fairbanks (UAF)                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Presented the  report titled, "Prospects and                                                             
Challenges of Alaska Seed Potatoes Export to Asia."                                                                             
                                                                                                                                
FRANCI HAVEMEISTER, Director                                                                                                    
Central Office                                                                                                                  
Division of Agriculture                                                                                                         
Department of Natural Resources (DNR)                                                                                           
Palmer, Alaska                                                                                                                  
POSITION   STATEMENT:     Testified   during   the  overview   on                                                             
agriculture in Alaska.                                                                                                          
                                                                                                                                
BRYCE WRIGLEY, President                                                                                                        
Alaska Farm Bureau                                                                                                              
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:   Provided a PowerPoint  presentation titled,                                                             
"Alaskans Feeding Alaska."                                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:18:49 AM                                                                                                                   
                                                                                                                                
CHAIR BOB HERRON  called the House Special  Committee on Economic                                                             
Development, International Trade and  Tourism meeting to order at                                                               
10:18  a.m.    Representatives   Herron,  Peggy  Wilson,  Foster,                                                               
Thompson, Tuck,  and Gardner were  present at the call  to order.                                                               
Representatives Munoz  and Keller arrived  as the meeting  was in                                                               
progress.  Representative Alan Austerman was also in attendance.                                                                
                                                                                                                                
^OVERVIEW(S):  AGRICULTURE IN ALASKA                                                                                            
              OVERVIEW(S):  AGRICULTURE IN ALASKA                                                                           
                                                                                                                              
10:19:19 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON announced  that the only order of  business would be                                                               
presentations on  agriculture in  Alaska.   He then  introduced a                                                               
surprise special guest  who would share a  missed opportunity for                                                               
economic development in the state.                                                                                              
                                                                                                                                
10:19:59 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   ALAN   AUSTERMAN,  Alaska   State   Legislature,                                                               
representing Kodiak  and the Lake  and Peninsula  areas, recalled                                                               
during  his  term as  chair  of  the Subcommittee  for  Commerce,                                                               
Community,  and Economic  Development,  House Finance  Committee,                                                               
the economic development function  of the Department of Commerce,                                                               
Community  & Economic  Development (DCCED)  was dominated  by the                                                               
functions of  community and regional  affairs.  Since  then there                                                               
has  been  a change  of  administration  and personnel,  and  the                                                               
department is  "turning around."   But prior to that  change, The                                                               
Boeing Company  announced plans to  build a plant outside  of its                                                               
home state of Washington, and  sent letters of interest to Alaska                                                               
and  other locations.    The  letter was  received  by DCCED  and                                                               
"floated around inside  the department for two  weeks, going from                                                               
desk to desk looking for somebody  that could respond to them ...                                                               
[and] it ended up on somebody's  desk and just stayed there."  He                                                               
opined this  was a big  missed opportunity, and Virginia  got the                                                               
new plant.   Alaska needs to  make an effort on  an ongoing basis                                                               
to reach  out to industry  and stabilize its economic  base which                                                               
is now  90 percent  dependent on  oil.   Representative Austerman                                                               
expressed his  hope that an  opportunity that the state  does not                                                               
miss is to  market Alaska, not only for tourism  and fishing, but                                                               
as a business  destination.  He pointed out  that the legislature                                                               
invested $17  million in  marketing tourism  last year  and urged                                                               
that  a  fund  of  $30  million be  directed  to  additional  new                                                               
markets, such  as agriculture and  business.  He  emphasized that                                                               
major  manufacturers  are  located  in  places  where  they  were                                                               
invited to come.                                                                                                                
                                                                                                                                
10:24:53 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON restated his plan  for a surprise special speaker at                                                               
each meeting.                                                                                                                   
                                                                                                                                
10:27:50 AM                                                                                                                   
                                                                                                                                
TIM MEYERS,  owner, Meyers  Farm, informed  the committee  he and                                                               
his wife  began farming a  three and  one-half acre farm  in 2003                                                               
and have expanded to  ten acres.  They farm on  land they own and                                                               
land leased  from the state.   Mr. Meyers said they  have success                                                               
planting  crops  outside  in  early  May  and  begin  to  harvest                                                               
cabbages and Napa  cabbages earlier than most farmers.    He said                                                               
people are  amazed at the  crop yields,  as the farm  is strictly                                                               
organic  and no  commercial  fertilizers are  used.   Mr.  Meyers                                                               
opened one acre of leased land  that had never been farmed, added                                                               
1,500 pounds of  ground fish bones and harvested  8,000 pounds of                                                               
potatoes.   From the middle of  June to the end  of September the                                                               
Meyers box a variety of produce for local sale.                                                                                 
                                                                                                                                
10:30:38 AM                                                                                                                   
                                                                                                                                
MR. MEYERS  described their  experiences with  a "high  tunnel" -                                                               
supplied by the U.S. Department  of Agriculture (USDA) - designed                                                               
to  extend the  growing  season.   Last year  they  built a  root                                                               
cellar  that  has the  potential  of  storing 200,000  pounds  of                                                               
crops.  Harvest from the farm  last year included 8,000 pounds of                                                               
potatoes, 7,000 pounds  of cabbage, 800 pounds  of rutabagas, 800                                                               
pounds of turnips, 400 pounds of  beets and 400 pounds of onions,                                                               
the remainder of which is still  being sold from the root cellar.                                                               
Mr. Meyers  related a  publication from  2008 indicated  that the                                                               
soil in  the Kuskokwim  valley and around  Bristol Bay  is highly                                                               
fertile  and is  capable of  supporting sustainable  agriculture.                                                               
In fact,  he opined their  farm is  located in the  most pristine                                                               
organic region  left on  the planet that  has not  been developed                                                               
for agriculture.  The future  expansion of agriculture in Western                                                               
Alaska  is  further  encouraged  by  the  readily  available  air                                                               
transportation  to markets.    He then  described  his system  of                                                               
fertilizing by  adding ground fish  to water, aerating  the water                                                               
for two weeks,  and applying it to  the soil.  The  farm also had                                                               
great success raising turkeys last fall.                                                                                        
                                                                                                                                
10:36:50 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARDNER recalled  her  visit to  Meyers Farm  and                                                               
said she was very impressed with the farm and its activities.                                                                   
                                                                                                                                
10:37:26 AM                                                                                                                   
                                                                                                                                
CHAIR  HERRON asked  for  Mr. Meyers'  opinion  on seed  potatoes                                                               
grown in the Kuskokwim area.                                                                                                    
                                                                                                                                
10:37:41 AM                                                                                                                   
                                                                                                                                
MR.  MEYERS   observed  that  growing  certified   seed  potatoes                                                               
requires  three inspections  per  season by  the Plant  Materials                                                               
Center, Division of Agriculture,  Department of Natural Resources                                                               
(DNR). This  region is  right for  growing organic  seed potatoes                                                               
because of the isolation, but  there is a need for infrastructure                                                               
and more cultivated land.                                                                                                       
                                                                                                                                
10:38:15 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE P.  WILSON expressed her surprise  at the shortage                                                               
of land available to grow organic food.                                                                                         
                                                                                                                                
10:39:11 AM                                                                                                                   
                                                                                                                                
MR.  MEYERS  agreed the  shortage  of  fertile land  for  organic                                                               
farming is a concern.   He acknowledged the difficulty of farming                                                               
in  this region  as  there  is no  infrastructure  or history  of                                                               
agriculture.   He has been  invited to the  Resource Conservation                                                               
and  Development, Natural  Resources Conservation  Service, USDA,                                                               
national  conference  in Washington,  D.C.,  to  speak about  the                                                               
farm.   In response to  Representative Peggy Wilson,  he observed                                                               
that the  ground is so  cold produce should  not grow, but  it is                                                               
delicious and very high in  quality.  With sufficient production,                                                               
he opined he "could be shipping it all over the world."                                                                         
                                                                                                                                
REPRESENTATIVE KELLER offered that the  flavor is from all of the                                                               
sunshine.                                                                                                                       
                                                                                                                                
10:42:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARDNER asked whether  Mr. Meyers has knowledge of                                                               
fungus or pest problems.                                                                                                        
                                                                                                                                
10:42:57 AM                                                                                                                   
                                                                                                                                
MR.  MEYERS indicated  no,  in  fact, the  big  problem for  most                                                               
places in  Alaska is  with moose,  but Meyers  Farm is  pest free                                                               
except for root maggots and aphids that are on purchased starts.                                                                
                                                                                                                                
10:44:03 AM                                                                                                                   
                                                                                                                                
SIOUX-Z    HUMPHREY    MARSHALL,   Chief    Executive    Officer,                                                               
NorthernLatitude  Controlled  Environment  Agriculture,  informed                                                               
the committee her company is  an indoor farm located in Anchorage                                                               
that grows  produce year around.   The mission of the  farm is to                                                               
be  commercial  indoor  agriculture  production  leaders  in  the                                                               
northern  latitudes;  to  help  northern  communities  gain  food                                                               
security and  independence; to grow local,  clean, and nutritious                                                               
food.  She explained that  the controlled environment agriculture                                                               
(CEA)  technique used  by her  company is  a hydroponic  nutrient                                                               
film  technique  (NFT),  and  is   not  a  greenhouse,  but  uses                                                               
fluorescent  grow lights,  a temperature  controlled environment,                                                               
and an  air circulation system  housed in an  enclosed warehouse.                                                               
At  the  beginning of  her  venture,  she evaluated  growing  the                                                               
product in a commercial greenhouse  using waste heat from the new                                                               
Anchorage Regional Landfill Gas-to-Energy  power plant.  However,                                                               
it is  necessary to  be adjacent  to the  power plant  to collect                                                               
waste heat  at an economic cost.   Next, a pilot  program growing                                                               
lettuce and basil indoors was  attempted, but because of the cost                                                               
of  the electricity  to power  the  large lights  needed to  grow                                                               
full-sized vegetables, a head of  lettuce cost $20.  Ms. Humphrey                                                               
Marshall then  tried growing  micro greens.   She  explained that                                                               
micro greens  can be  grown in  a rack system  to save  space and                                                               
they  have a  short  growth  cycle, amazing  flavors,  and are  a                                                               
viable product  to market  economically.   In addition,  the rack                                                               
system is  adaptable to a home  or school setting and  uses a low                                                               
amount  of electricity.   Since  September, NorthernLatitude  has                                                               
been growing pesticide-free products  and selling weekly harvests                                                               
to  local  restaurants,  Food  Services  of  America  -  actually                                                               
displacing its  California supplier -  , and Glacier  Valley CSA.                                                               
Future  growth  for  the company  will  include  franchises,  the                                                               
marketing of  growing kits, custom racks,  technical support, and                                                               
expansion into rural communities.                                                                                               
                                                                                                                                
10:51:16 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARDNER asked  whether  NorthernLatitude has  any                                                               
customers  in  Juneau  and  if  the  company  is  part  of  Robin                                                               
Richardson's Global Foods Cooperative, LLC.                                                                                     
                                                                                                                                
10:51:45 AM                                                                                                                   
                                                                                                                                
MS.  HUMPHREY MARSHALL  responded that  she is  not marketing  in                                                               
Juneau  yet, and  that  she  is interested  in  joining the  food                                                               
cooperative.                                                                                                                    
                                                                                                                                
10:52:08 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON asked  for the cost per  serving of NorthernLatitude                                                               
products.                                                                                                                       
                                                                                                                                
10:52:23 AM                                                                                                                   
                                                                                                                                
MS.  HUMPHREY MARSHALL  said a  container  packed for  sale to  a                                                               
restaurant sells for  $18.  In further response  to Chair Herron,                                                               
she  said  the  warehouse  is   located  at  5801  Arctic  Blvd.,                                                               
Anchorage,   and   she   her  legislative   representatives   are                                                               
Representative Doogan and Senator French.                                                                                       
                                                                                                                                
10:53:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  TUCK  reported  that  the Arctic  Blvd.  area  of                                                               
Anchorage    has   agricultural,    manufacturing,   residential,                                                               
warehousing,  and retail  interests.   He expressed  his personal                                                               
interest in hydroponic systems of food production.                                                                              
                                                                                                                                
10:56:01 AM                                                                                                                   
                                                                                                                                
MS. HUMPHREY MARSHALL invited members to visit her business.                                                                    
                                                                                                                                
10:56:42 AM                                                                                                                   
                                                                                                                                
PETE FELLMAN,  Dairy Farmer, recalled  during the  80's residents                                                               
questioned whether farming could be  successful in Alaska.  Today                                                               
farmers have  proven that farming  can be  abundantly productive,                                                               
and can  help broaden the security  and the economic base  of the                                                               
state.    Alaska  has  invested   a  total  of  $190  million  in                                                               
agriculture,  much   of  which   has  provided  roads,   a  power                                                               
infrastructure,  and land,  and he  urged the  legislature to  do                                                               
everything possible  to enhance the  success of agriculture.   He                                                               
then reminded  the committee  of the  past Taiwanese  seed potato                                                               
project  and  how much  was  learned  about  how to  export  seed                                                               
potatoes from  Alaska.   Now, Alaska has  a great  opportunity to                                                               
export  seed  potatoes  to China,  generating  an  "unbelievable"                                                               
amount to its economy.  Mr. Fellman introduced Dr. McBeath.                                                                     
                                                                                                                                
11:00:30 AM                                                                                                                   
                                                                                                                                
JENIFER  HUANG  McBEATH  PhD,   Professor,  Plant  Pathology  and                                                               
Biotechnology  Laboratory, Agricultural  and Forestry  Experiment                                                               
Station,  University of  Alaska  Fairbanks  (UAF), expressed  her                                                               
excitement about presenting  a project "which is 20  years in the                                                               
making."   She assured the  committee that her  project addresses                                                               
the  question  of "how  to  market  Alaska"  that was  raised  by                                                               
Representative Austerman earlier  in the hearing.   In fact, when                                                               
she is in  contact with officials from the  Taiwanese and Chinese                                                               
governments,  she  presents only  the  potential  and quality  of                                                               
Alaska's agriculture.  Today, Alaska  is the only exported source                                                               
of  seed potatoes  for  the  largest seed  potato  market in  the                                                               
world:  Taiwan  and  China.    Dr.  McBeath  provided  background                                                               
information on the project and  noted that the project is complex                                                               
because  it  involves  the international  trade  of  agricultural                                                               
products.  It  is known that Alaska has 12  million acres of land                                                               
suitable for agriculture, but a  limited portion is farmed due to                                                               
its small  local market and  long distances  to consumers.    She                                                               
pointed   out  the   challenges   to  agricultural   development:                                                               
isolation;  harsh  climatic  conditions; conversion  of  farmland                                                               
from wilderness; small domestic  market.  Further challenges from                                                               
the political  climate are:   inconsistent  agricultural policies                                                               
that  lead  to the  failure  of  projects; dependency  on  multi-                                                               
national  oil   and  mining  corporations   that  leads   to  the                                                               
colonization of Alaska by corporations; reluctance in the long-                                                                 
term investment  of state funds  in agricultural  development and                                                               
research; lack  of infrastructure,  such as  storage or  roads to                                                               
the  Yukon-Kuskokwim  Delta;  ignorance of  diseases  and  pests.                                                               
These challenges have resulted in  small professional farms - 400                                                               
acres is considered  a big farm in Alaska -  and the inability to                                                               
"dream big."                                                                                                                    
                                                                                                                                
11:08:20 AM                                                                                                                   
                                                                                                                                
DR.  McBEATH  stated that  opening  the  export market  to  China                                                               
changed this  situation.  In  1989, after the problems  to Alaska                                                               
farming caused by  bacterial ring rot (BRR), she  developed a new                                                               
concept  of  a  lab  test  that  resulted  in  disease-free  seed                                                               
potatoes.  The  concept was based on scientific  lab testing, and                                                               
produced the very best seed potatoes  in the world.  However, the                                                               
relationships   among  Alaska   seed   potato  production,   U.S.                                                               
interests and the interests of  China and Taiwan are complicated,                                                               
and must  be mutually  beneficial, thus  the exportation  of seed                                                               
potatoes must  satisfy the  needs of  all of the  parties.    Dr.                                                               
McBeath provided a history of  the activities from 1988-2003 that                                                               
allowed Alaska to  gain access to Chinese  and Taiwanese markets,                                                               
beginning with the  BRR epidemic, and noted  "how complicated the                                                               
issue is  and how time-consuming"  the process was.   She advised                                                               
the committee  that a 20-year process  is not a long  time in the                                                               
international  agricultural  trade;  in  fact,  The  Netherlands,                                                               
which is the largest exporter of  seed potatoes in the world, had                                                               
already  spent  20  years negotiating  for  the  Chinese  market.                                                               
Between  1988-1989 BRR,  which is  a quarantined,  zero-tolerance                                                               
disease devastating to  a far, became epidemic in  Alaska with an                                                               
incidence  rate  of  15  percent,  and  the  Alaska  Farmers  and                                                               
Stockgrowers  Association  asked Dr.  McBeath  to  solve the  BRR                                                               
problem and develop a market for  Alaska seed potatoes.  By 1990,                                                               
Dr.  McBeath had  developed a  lab-test  system for  disease-free                                                               
seed potatoes.  Due to  high production and transportation costs,                                                               
the  most appropriate  market for  Alaska seed  potatoes was  the                                                               
international  market   and  in  1994,  she   was  successful  in                                                               
establishing  export   protocols  to   Taiwan  for   Alaska  seed                                                               
potatoes.    Taiwan and  China are worthy markets because at that                                                               
time both  countries refused any  imports of seed potatoes.   The                                                               
"greatest prize  in agriculture  in the  world of  seed potatoes"                                                               
was  achieved in  2003  when China  signed  export protocols  for                                                               
Alaska seed potatoes.                                                                                                           
                                                                                                                                
11:15:48 AM                                                                                                                   
                                                                                                                                
DR. McBEATH  observed very  few people realize  the value  of the                                                               
lab-test disease-free  testing program  that allows Alaska  to be                                                               
the only state in the U.S., as  well as the world, to export seed                                                               
potatoes to  Taiwan and  China.   Other accomplishments  are that                                                               
Alaska  is one  of five  U.S.  states permitted  to export  table                                                               
stock potatoes  to Taiwan;  one of two  U.S. states  permitted to                                                               
export asparagus; the only state  in the U.S. permitted to export                                                               
carrots  to   Taiwan.    She  stressed   that  the  international                                                               
requirements that are needed for  these accomplishments are based                                                               
on the lab-test disease-free certification  for:  potato viruses;                                                               
bacterial  ring   rot;  late  blight;   phytoplasmas;  nematodes.                                                               
Addressing  those  who question  the  need  to fund  the  testing                                                               
program, she emphasized that testing  results in the world's best                                                               
seed potatoes.   The  procedure for  testing begins  with samples                                                               
taken  in the  field,  which are  then returned  to  the lab  and                                                               
tested.    Dr. McBeath  continued  to  explain  that all  of  the                                                               
activities from  2003 to today,  have cost the state  very little                                                               
money because her travel to  Taiwan and China also includes talks                                                               
paid  by the  federal government  and other  organizations.   For                                                               
example, as a  result of her trip to Kunming,  Yunnan, as an U.S.                                                               
Embassy Science Fellow to the  World Potato Congress, exportation                                                               
of 20 tons  of Alaska seed potatoes became the  first shipment of                                                               
seed   potatoes  of   foreign  origin   entering  China   through                                                               
commercial channels since  1949.  She indicated  she has provided                                                               
a  written report  titled, "Prospects  and  Challenges of  Alaska                                                               
Seed  Potatoes  Export to  Asia,"  in  the committee  packet  for                                                               
members to review.   She concluded her  presentation after noting                                                               
that  through   her  research  she   developed  a   plant  growth                                                               
microorganism  that will  enhance  growth  during Alaska's  short                                                               
growing season.                                                                                                                 
                                                                                                                                
11:24:57 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARDNER asked  about  the  incident in  2008-2009                                                               
when 40 tons  of seed potatoes were ordered  by Chinese interests                                                               
but none were available.                                                                                                        
                                                                                                                                
DR.  McBEATH explained  that  in  2008, 40  metric  tons of  seed                                                               
potatoes were ordered through former  Senator Therriault by a Mr.                                                               
Shen,  but  the state  did  not  appropriate  money in  2007  for                                                               
testing, thus the seed potatoes could not be exported.                                                                          
                                                                                                                                
REPRESENTATIVE GARDNER  asked how appropriations are  made to the                                                               
program.                                                                                                                        
                                                                                                                                
DR.  McBEATH indicated  appropriations are  made directly  to her                                                               
program; in fact,  UAF does not want her program  included in its                                                               
budget  request  because  of   the  funding  ceiling.  Therefore,                                                               
appropriations sometimes come through  DNR, or through the Alaska                                                               
Manufacturing Extension  Partnership, Inc. (AMEP)  which partners                                                               
with DCCED.                                                                                                                     
                                                                                                                                
11:27:53 AM                                                                                                                   
                                                                                                                                
CHAIR  HERRON asked  for the  net harvest  from 40  tons of  seed                                                               
potatoes.                                                                                                                       
                                                                                                                                
11:29:06 AM                                                                                                                   
                                                                                                                                
DR. McBEATH estimated a harvest of "10 times."                                                                                  
                                                                                                                                
11:29:12 AM                                                                                                                   
                                                                                                                                
FRANCI  HAVEMEISTER,   Director,  Central  Office,   Division  of                                                               
Agriculture, Department of Natural  Resources (DNR), informed the                                                               
committee  the Division  of Agriculture  has cooperated  with and                                                               
supported  the  abovementioned  program  for  many  years.    She                                                               
recalled  two  weeks ago  she  was  in  Delta and  witnessed  the                                                               
packing of trucks  ready for shipment.  The  division conducted a                                                               
satisfactory quality inspection at that  time.  She expressed the                                                               
division's optimism  about the program, and  affirmed farmers are                                                               
interested  in participating.    Ms.  Havemeister reiterated  the                                                               
success  of  Alaska's  farm   production  and  acknowledged  that                                                               
"marketing continues to be an issue for us."                                                                                    
                                                                                                                                
11:31:03 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON  referred to Dr.  McBeath's comments on  the state's                                                               
agricultural policy  and said  the committee  would want  to work                                                               
with the division to examine her concerns.                                                                                      
                                                                                                                                
11:31:34 AM                                                                                                                   
                                                                                                                                
DR. McBEATH  said, "As a  person in  science, many times  I might                                                               
not be diplomatic enough to state my point of view."                                                                            
                                                                                                                                
11:32:01 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON  said Dr. McBeath's  testimony and  presentation was                                                               
appreciated,  and pointed  out the  importance of  establishing a                                                               
dialog between the committee and the director.                                                                                  
                                                                                                                                
11:32:29 AM                                                                                                                   
                                                                                                                                
BRYCE  WRIGLEY,  President,  Alaska Farm  Bureau,  expressed  his                                                               
intent to  share information that  reflects the attitude  of most                                                               
of  the farmers  and ranchers  in Alaska  regarding their  future                                                               
opportunities.   Various  land surveys  conducted in  Alaska have                                                               
identified  8.9  million-18.4  million  acres of  land  that  are                                                               
suitable  for  some  form  of agriculture.    In  1976,  Governor                                                               
Hammond approved  a plan to  invest a  portion of oil  revenue to                                                               
develop renewable  resources, including agriculture.   During the                                                               
following years,  84,000 acres in  Delta were sold by  the state,                                                               
and the  land was cleared  and planted raising  primarily barley.                                                               
The governor's  10-year plan for  agriculture called  for 500,000                                                               
acres  to  be  in  production  by  1992,  a  substantial  portion                                                               
intended  for growing  barley  to fuel  meat  production and  for                                                               
export to  Pacific Rim countries;  however, in 1982 the  plan was                                                               
abandoned  and there  was  no further  development  for about  30                                                               
years.  Also  during those years, markets did not  keep pace with                                                               
production, and  grain surpluses  prompted farmers to  scale back                                                               
acreage   under   cultivation.       Additionally,   the   Alaska                                                               
Agricultural  Action Council  was  disbanded.   Even under  these                                                               
circumstances, he  assured the committee that  Alaska farmers and                                                               
ranchers  continue   to  work  in   all  facets   of  agriculture                                                               
production and to  search for new markets  for grain, vegetables,                                                               
meat, and  milk products in  order to create  diversified markets                                                               
and  stabilize  the   industry.    One  possibility   for  a  new                                                               
agricultural  product to  market is  biomass for  fuel; in  fact,                                                               
barley,  hay, straw,  and canola  oil are  already available  for                                                               
biomass to generate  heat and electricity.    Mr. Wrigley advised                                                               
that  as  a  result  of the  federal  mandate  requiring  federal                                                               
facilities  to use  renewable  energy, the  U.S.  Army post  Fort                                                               
Greeley is looking at converting to  biomass fuel and using up to                                                               
15,000 acres  of barley to  generate 275 billion  British thermal                                                               
units (Btus)  of heat.  He  provided a comparison of  barley as a                                                               
home heating  fuel source,  and stated that  it costs  50 percent                                                               
more  to heat  a home  in the  Interior with  fuel oil  than with                                                               
barley.   Substantial  savings for  the  state would  be seen  if                                                               
barley  were included  in AEA's  Power Cost  Equalization program                                                               
that is used to supplement heating  fuel in the villages.  Barley                                                               
fuel has a  one-year harvest cycle, which is much  less than wood                                                               
or oil;  is safer to ship  and store than fuel  oil; agricultural                                                               
sales "turn  over" in a  community more often than  receipts from                                                               
oil.   Mr. Wrigley then  turned to the  subject of the  export of                                                               
seed potatoes and  reiterated that seed potato farming  has a 25-                                                               
year history  in Alaska.   Private  investors plan  to eventually                                                               
raise 50,000  acres of  seed potatoes  for export  to China.   If                                                               
this  program grows  as planned,  direct sales  of seed  potatoes                                                               
would  exceed  $300 million.    Crops  planted for  rotation  and                                                               
livestock could  add an additional  $75,000 million, and  grow to                                                               
over  $3  billion  of  economic   activity  to  Alaska  when  the                                                               
multiplier of  direct sales in  agriculture is calculated.   As a                                                               
matter of fact, last week 100  tons of seed potatoes were shipped                                                               
to  China, and  next year's  sales  are anticipated  to be  about                                                               
2,000  tons.   Mr.  Wrigley  furnished a  chart  that showed  the                                                               
current value of  agricultural products raised in  Delta alone is                                                               
about  $9.5 million  per year.    Since March  2010, seed  potato                                                               
exports  to China  may  add  $30 million  with  an additional  $3                                                               
million  in increased  barley production  and  rotation crops  by                                                               
2015.   The  export program's  long-term goal  is to  grow 25,000                                                               
tons of potatoes  in the Tanana Valley resulting  in $108 million                                                               
in direct exports, and $24.7 million  in other crops, for a total                                                               
in  excess  of $132  million.    He  explained that  an  economic                                                               
multiplier  captures the  economic  activity  generated by  money                                                               
that circulates in a community  after the original point of sale.                                                               
For agriculture, the  multiplier commonly used is  eight or nine,                                                               
meaning that the  total economic activity to  the Delta community                                                               
from  farm sales  could  be $1  billion per  year.   Mr.  Wrigley                                                               
observed that  Alaska has become  lax in its production  of food,                                                               
thereby  putting  its  food  supply   at  risk.    Disruption  of                                                               
transportation is not uncommon and  could cause food shortages in                                                               
Alaska  villages  and  cities.     In-state  production  of  food                                                               
provides security  from shortages due to  natural disasters, such                                                               
as Hurricane Katrina.  He warned  that there is less capacity for                                                               
Alaskans to  feed themselves now  then there  was at the  time of                                                               
the  1964  Good Friday  Earthquake.    Furthermore, there  is  no                                                               
emergency storage  of food  set aside for  Alaska in  Portland or                                                               
Seattle, and  if there  were, it  would be  2,000 miles  away and                                                               
would serve  no purpose  during a  transportation emergency.   He                                                               
stressed  that  Alaska's  emergency   storehouse  should  be  the                                                               
fields,  field lots,  bins, and  cellars of  Alaskan farmers  and                                                               
urged a return to the  1980s' agricultural plan to identify goals                                                               
and actions, bring  industry leaders into planning,  and create a                                                               
synergistic  effort.   Fortunately, foods  from every  food group                                                               
can be  grown in Alaska to  provide enough to sustain  life in an                                                               
emergency.   Although these  foods are not  grown in  quantity at                                                               
this  time, the  production of  meat, milk,  and cheese,  and the                                                               
processing  of  vegetables  to  store  for  the  winter,  can  be                                                               
reintroduced.  Although grain production  is prolific, milling is                                                               
needed   to   supply   residents  with   locally   grown   flour.                                                               
Greenhouses located in rural Alaska  could improve the quality of                                                               
nutrition  in remote  areas.   Mr. Wrigley  pointed out  that the                                                               
state spends millions  of dollars to address  social illnesses in                                                               
rural   areas,  and   suggested   that   the  reintroduction   of                                                               
agriculture, with traditional values  and self-reliance, may cure                                                               
the underlying problems.   Because Alaska agriculture  is a small                                                               
industry   facing   competition   from  outside   suppliers   and                                                               
government  policies  and   regulations  that  prevent  "start-up                                                               
operations",  it is  critical that  there be  a healthy  business                                                               
climate.     The   long  process   of  building   an  agriculture                                                               
infrastructure in Alaska  must begin now, before  a food shortage                                                               
emergency arises.   Mr.  Wrigley concluded  that Alaska  lacks an                                                               
agriculture  culture that  understands how  food is  raised, with                                                               
good and bad  years, but that farmers will continue  to plant and                                                               
be successful.                                                                                                                  
                                                                                                                                
11:45:55 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE P.  WILSON expressed  her support  for agriculture                                                               
in Alaska.                                                                                                                      
                                                                                                                                
11:46:35 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee on  Economic Development,  International Trade                                                               
and Tourism meeting was adjourned at ll:46 a.m.                                                                                 

Document Name Date/Time Subjects
EDT 1.27.11 MicroGreens - NLC Powerpoint.pdf HEDT 1/27/2011 10:15:00 AM
EDT 1.27.11 Bios and Summaries.docx HEDT 1/27/2011 10:15:00 AM
EDT 1.27.11 Alaska Seed Potatoes Export to Asia, Prospects and Chanllenges 2010b.ppt HEDT 1/27/2011 10:15:00 AM