03/29/2019 01:00 PM House RESOURCES

            HB  16-LOCAL FOOD PROCUREMENT; LABELING                                                                         
                                                                                                                                
2:08:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR announced  the final  order of  business would  be                                                               
HOUSE BILL  NO. 16, "An  Act relating  to the Alaska  Food, Drug,                                                               
and  Cosmetic  Act;  and  relating  to the  sale  of  milk,  milk                                                               
products, raw milk, and raw milk products."                                                                                     
                                                                                                                                
[Before the committee was the  sponsor substitute (SS) for HB 16,                                                               
introduced  and   referred  to   the  House   Resources  Standing                                                               
Committee on 3/20/19.]                                                                                                          
                                                                                                                                
2:09:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR opened public testimony.                                                                                          
                                                                                                                                
2:10:01 PM                                                                                                                    
                                                                                                                                
ART GRISWOLD, Golden Heart Dairies, said  his two sons have a raw                                                               
milk dairy that  distributes in the Fairbanks  area over one-half                                                               
ton per  week.  Mr. Griswold  expressed his support for  the bill                                                               
which  clarifies  membership  and herd-share  programs.    Golden                                                               
Heart Dairies  has approximately 30  head [of cows] and  seeks to                                                               
expand  to a  100-head dairy  with a  Grade A  program.   He said                                                               
financing  is difficult  for  the dairy  industry  and urged  the                                                               
committee to support "the program."                                                                                             
                                                                                                                                
REPRESENTATIVE RAUSCHER  asked for the location  of [Golden Heart                                                               
Dairies].                                                                                                                       
                                                                                                                                
MR. GRISWOLD said Delta Junction.                                                                                               
                                                                                                                                
REPRESENTATIVE HANNAN asked for a  description of a Grade A dairy                                                               
program.                                                                                                                        
                                                                                                                                
MR. GRISWOLD said to become a  Grade A dairy Golden Heart Dairies                                                               
would have to  construct a creamery and have  Grade A inspections                                                               
made  on  the barns  and  the  dairy.    In further  response  to                                                               
Representative Hannan,  he said  the dairy  would still  sell raw                                                               
milk,  but to  enter the  Grade A  dairy and  retail market,  the                                                               
dairy needs a pasteurization plant.                                                                                             
                                                                                                                                
CO-CHAIR TARR inquired as to  the amount of investment needed for                                                               
the growth of the dairy.                                                                                                        
                                                                                                                                
MR.  GRISWOLD said  the creamery  equipment  costs $700,000;  the                                                               
barns and the new creamery will  cost $1.4 million.  Financing is                                                               
difficult although a portion could be federal loan programs.                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK  asked  how  a  creamery  would  affect  the                                                               
production of the dairy.                                                                                                        
                                                                                                                                
MR. GRISWOLD  advised the investment  in a creamery  would triple                                                               
the dairy's output of milk.                                                                                                     
                                                                                                                                
2:16:53 PM                                                                                                                    
                                                                                                                                
JOHN  ANDERSON  disclosed  he  is   a  member  of  the  Board  of                                                               
Agriculture and  Conservation, Division of Agriculture,  DNR, and                                                               
was  speaking on  his own  behalf in  support of  the bill.   Mr.                                                               
Anderson said  the bill  would solidify the  market for  raw milk                                                               
products  thereby  helping producers  in  the  state and  keeping                                                               
hundreds  of  thousands  of  dollars in  Alaska.    For  example,                                                               
farmers  spend thousands  of  dollars  on feed  and  supply.   He                                                               
cautioned about other  issues such as "the M.ovi  issue" and [the                                                               
lack of] access to farm insurance.                                                                                              
                                                                                                                                
REPRESENTATIVE  HANNAN asked  whether Mr.  Anderson carries  farm                                                               
insurance for his products.                                                                                                     
                                                                                                                                
MR.  ANDERSON  said no.    Country  Financial  is the  only  farm                                                               
insurance company  in Alaska and  if one sells raw  milk products                                                               
it will not issue insurance.                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN surmised farm  insurance is limited because                                                               
raw milk  is available through  herd sharing.  She  clarified her                                                               
question:                                                                                                                       
                                                                                                                                
       Maybe you could help [explain the problem] by just                                                                       
         expanding on what the need for increased farm                                                                          
     insurance coverage is for.                                                                                                 
                                                                                                                                
MR. ANDERSON  explained when farmers  sell products at  a farmers                                                               
market, the farmers market venue requires liability insurance.                                                                  
                                                                                                                                
CO-CHAIR TARR  added the bill has  a very limited scope  and does                                                               
not relate to retail or farmers market sales.                                                                                   
                                                                                                                                
2:22:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  concluded  the bill  would  not  allow                                                               
sales at  farmers markets; however,  a farmer could market  a cow                                                               
share program.                                                                                                                  
                                                                                                                                
CO-CHAIR TARR  stated a  farmer can  provide information  about a                                                               
herd  share  program,  but  no  sales  are  allowed  at  farmers'                                                               
markets.                                                                                                                        
                                                                                                                                
2:23:45 PM                                                                                                                    
                                                                                                                                
AMY  SEITZ,   Executive  Director,  Alaska  Farm   Bureau,  Inc.,                                                               
informed the committee the Alaska  Farm Bureau promotes expanding                                                               
economic opportunities  for farmers and  ranchers in Alaska.   In                                                               
Alaska,  95 percent  of purchased  food  is imported,  and it  is                                                               
important  to  foster  continued  growth  in  agriculture.    The                                                               
proposed  bill  takes steps,  such  as  security for  herd  share                                                               
programs by  allowing access to expanded  products, improved food                                                               
security,  and keeping  food dollars  in  the state.   Ms.  Seitz                                                               
urged the committee to support passage of the bill.                                                                             
                                                                                                                                
2:25:16 PM                                                                                                                    
                                                                                                                                
SUZY CROSBY,  spokesperson, Cottonwood Creek Farm,  expressed her                                                               
support for HB 16.  She  said the bill would protect "herd share"                                                               
from changes made  by a state official, and includes  the sale of                                                               
value-added  products  in the  definition  of  herd share.    She                                                               
referred  to a  legal opinion  that if  a person  has a  right to                                                               
drink raw  milk, they have the  right to have the  milk made into                                                               
products.  Also, there are  three benefits to broadening the term                                                               
herd  share  to  include  value-added products:    producers  can                                                               
utilize a surplus  of milk by making chevre;  consumers have more                                                               
locally  made  products  available;   the  state's  "closed  loop                                                               
scenario" between producer and consumer remains intact.                                                                         
                                                                                                                                
2:29:31 PM                                                                                                                    
                                                                                                                                
COURTNEY MUNSON said she consumes  raw milk and participates in a                                                               
herd  share program.   She  expressed  her support  for the  bill                                                               
because  raw milk  and raw  milk products  are important  for the                                                               
health of her family.  In  addition, the bill supports local food                                                               
security, the food economy, and  a close connection with the food                                                               
supply.                                                                                                                         
                                                                                                                                
2:32:05 PM                                                                                                                    
                                                                                                                                
LESLIE TOMPKINS  said she has  members in  a herd share  of goats                                                               
and cows.   She expressed  support of  the "new language"  in the                                                               
bill and of previous testimony related to value-added products.                                                                 
                                                                                                                                
2:33:41 PM                                                                                                                    
                                                                                                                                
GIANA THOMAS said  she is in support  of HB 16.  As  a herd share                                                               
owner, the  bill recognizes  her rights,  and also  helps support                                                               
food security.   Alaska has  only one  public dairy and  if there                                                               
are  no longer  third-party  inspections, all  dairies will  herd                                                               
share.  Ms. Thomas explained  why pasteurization is necessary for                                                               
very  large  dairies;  however, small  farm  dairies  know  their                                                               
animals and procedures.   Ms. Thomas further explained  she has a                                                               
goat herd  and seeks  to offer  a herd  share in  sheep; however,                                                               
sheep  are  seasonal milkers  and  to  offer a  year-around  herd                                                               
share, she needs to include sheep  cheese.  She pointed out sheep                                                               
milk  and sheep  cheese  would  be a  valuable  niche market  for                                                               
Alaska.                                                                                                                         
                                                                                                                                
REPRESENTATIVE RAUSCHER  asked for the  price of a gallon  of raw                                                               
milk.                                                                                                                           
                                                                                                                                
MS. THOMAS  said the true  cost is approximately $10  per gallon.                                                               
In  further response  to Representative  Rauscher, she  explained                                                               
she has  a one-seventh  share and  picks up  one gallon  per week                                                               
from a  goat that  weighs approximately 150  pounds; a  cow would                                                               
give 8-10  gallons per day  depending on  the feed and  the cow's                                                               
condition.  The  number of shares depends on how  one manages the                                                               
milk and milk products, and she provided examples.                                                                              
                                                                                                                                
2:40:55 PM                                                                                                                    
                                                                                                                                
CANDY BATES  said she is  in support of the  bill.  She  said she                                                               
has  a calf  operation and  has  dairy cows.   She  said she  has                                                               
concerns about insurance and need  the support of the legislature                                                               
to grow agriculture and livestock [industries] in the state.                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN asked  Ms.  Bates for  the  number of  her                                                               
shareholders and how many cows are milked.                                                                                      
                                                                                                                                
MS. BATES  said she  has a feedstock  operation that  breeds cows                                                               
and has 35  milk cows.  Her  farm produces cows to  sell to local                                                               
homesteaders for hand-milking by their owners.                                                                                  
                                                                                                                                
REPRESENTATIVE  HANNAN questioned  whether some  farms have  meat                                                               
shares.                                                                                                                         
                                                                                                                                
MS. BATES  said others  do, but  she sells beef  by a  quarter or                                                               
one-half.   Her involvement with  milk cows is to  produce better                                                               
genetics for the  cows in Alaska.  In  response to Representative                                                               
Rauscher, she said a milk cow costs $2,500-$3,500.                                                                              
                                                                                                                                
2:45:08 PM                                                                                                                    
                                                                                                                                
PETE  KENNEDY,  attorney, Weston  A.  Price  Foundation, said  he                                                               
agreed with testimony from Ms.  Crosby related to the benefits to                                                               
the  state:   more food  dollars  in the  state from  value-added                                                               
products and  more opportunities  for farmers.   He  noted value-                                                               
added products have a better safety record than does fluid milk.                                                                
                                                                                                                                
REPRESENTATIVE  HANNAN asked  Dr.  Gerlach how  many herd  shares                                                               
operate in the state.                                                                                                           
                                                                                                                                
2:47:14 PM                                                                                                                    
                                                                                                                                
ROBERT  GERLACH, VMD,  State Veterinarian,  Office  of the  State                                                               
Veterinarian,  Division of  Environmental  Health, Department  of                                                               
Environmental Conservation, informed the  committee the Office of                                                               
State Veterinarian does  not keep a record of the  number of herd                                                               
share operators or of  the number of farms in the  state.  He has                                                               
heard  there may  be one  or two  dozen in  the Matanuska-Susitna                                                               
valley and more in the Interior.                                                                                                
                                                                                                                                
REPRESENTATIVE  HANNAN questioned  whether  Alaska  has only  one                                                               
commercial dairy licensed to sell retail products.                                                                              
                                                                                                                                
DR. GERLACH said  correct.  Havemeister Dairy has a  permit for a                                                               
dairy farm and  for a pasteurization plant;  another facility has                                                               
a permit to supply blow molding milk containers for the dairy.                                                                  
                                                                                                                                
REPRESENTATIVE HANNAN  inquired as  to how  to bring  the state's                                                               
raw  milk  and  cheese  into full  commercial  retail  operations                                                               
across Alaska.                                                                                                                  
                                                                                                                                
DR.  GERLACH  advised  current  state  regulations  prohibit  the                                                               
distribution  or   sale  of  raw   milk  to  consumers.     State                                                               
regulations  do not  prohibit an  individual  from consuming  raw                                                               
milk, or from consuming raw milk  acquired by owning a portion of                                                               
an animal through  a "share operation."  Dr.  Gerlach pointed out                                                               
18 AAC 32.010 allows the consumption  of raw milk by the owner of                                                               
an animal  for that  person's personal use,  but does  not permit                                                               
the processing  of that  milk into  products for  distribution to                                                               
owners.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  RAUSCHER  asked  for  the  precautions  that  are                                                               
necessary related to raw milk.                                                                                                  
                                                                                                                                
DR. GERLACH said  raw milk is considered a  high-risk product for                                                               
foodborne pathogens for  two reasons:  cattle and  goats can shed                                                               
pathogens directly  into the milk  and the environment  where the                                                               
milk is harvested, and where  the animal lives, can contribute to                                                               
pathogens  being transferred  into the  milk.   He said  national                                                               
studies  have found  12 percent  of milk  collected from  Grade A                                                               
dairies and  raw milk dairies  contain pathogenic bacteria.   The                                                               
state milk program  inspects farms to ensure  animals are healthy                                                               
and monitors  the transfer  of milk to  the processing  plant; if                                                               
the  raw milk  has  a  higher bacterial  count  the  milk is  not                                                               
processed.  In addition, the state  lab tests for the presence of                                                               
adulterants such as antibiotics.                                                                                                
                                                                                                                                
MS.  THOMAS corrected  her previous  testimony that  the cost  of                                                               
milk [from her herd share] is $10 per half gallon.                                                                              
                                                                                                                                
2:54:57 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR,  after  ascertaining  no one  further  wished  to                                                               
testify, closed  public testimony on HB  16.  She noted  the bill                                                               
will create  small business opportunities  for farms  and dairies                                                               
and freedom  for consumers; her  personal experience is  that the                                                               
[herd share] animals are well cared for.                                                                                        
                                                                                                                                
REPRESENTATIVE HANNAN  observed there  were dairies  in Anchorage                                                               
and Southeast Alaska  not so long ago; she  expressed her support                                                               
for  the  expansion  of the  dairy  and  agricultural  industries                                                               
whenever possible.                                                                                                              
                                                                                                                                
2:59:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TALERICO moved  to  report SSHB  16, Version  31-                                                               
LS0215\U, out  of committee  with individual  recommendations and                                                               
the accompanying  fiscal notes.   There being no  objection, SSHB
 was reported from the House Resources Standing Committee.