Legislature(2011 - 2012)BARNES 124
01/18/2012 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Department of Natural Resources - Division of Agriculture | |
| Adjourn | |
| Overview(s): Department of Natural Resources - Division of Agriculture |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
January 18, 2012
1:02 p.m.
MEMBERS PRESENT
Representative Eric Feige, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Alan Dick
Representative Neal Foster
Representative Bob Herron
Representative Cathy Engstrom Munoz
Representative Berta Gardner
Representative Scott Kawasaki
MEMBERS ABSENT
Representative Peggy Wilson, Vice Chair
COMMITTEE CALENDAR
OVERVIEW(S): DEPARTMENT OF NATURAL RESOURCES - DIVISION OF
AGRICULTURE
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ED FOGELS, Deputy Commissioner
Office of the Commissioner
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Assisted with the overview of the
Department of Natural Resources, Division of Agriculture.
FRANCI HAVEMEISTER, Director
Central Office
Division of Agriculture
Department of Natural Resources (DNR)
Palmer, Alaska
POSITION STATEMENT: Provided the overview of the Department of
Natural Resources, Division of Agriculture.
REPRESENTATIVE DAVID GUTTENBERG
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As a peony farmer, provided comments during
the overview of the Department of Natural Resources, Division of
Agriculture.
BRYCE WRIGLEY, President
Alaska Farm Bureau
Delta Junction, Alaska
POSITION STATEMENT: Spoke about the need to do more to address
agriculture and food security in Alaska during the overview of
the Department of Natural Resources, Division of Agriculture.
RON ILLINGWORTH, President
Alaska Peony Growers Association, Inc. (APGA)
North Pole, Alaska
POSITION STATEMENT: Provided information about the relatively
new cut-flower industry in Alaska during the overview of the
Department of Natural Resources, Division of Agriculture.
ACTION NARRATIVE
1:02:36 PM
CO-CHAIR ERIC FEIGE called the House Resources Standing
Committee meeting to order at 1:02 p.m. Representatives
Kawasaki, Dick, Herron, Gardner, Foster, Seaton, and Feige were
present at the call to order. Representative Munoz arrived as
the meeting was in progress.
^OVERVIEW(S): Department of Natural Resources - Division of
Agriculture
OVERVIEW(S): Department of Natural Resources - Division of
Agriculture
1:03:15 PM
CO-CHAIR FEIGE announced that the only order of business would
be an overview of the Department of Natural Resources, Division
of Agriculture.
1:04:47 PM
ED FOGELS, Deputy Commissioner, Office of the Commissioner,
Department of Natural Resources (DNR) noted that Alaska's $30.7
million agricultural industry, consisting of 680 known farms,
faces a lot of challenges. He explained that DNR is in the
process of developing a strategic plan for purposes of measuring
the Division of Agriculture's success on a year-by-year basis.
Furthermore, the division has been collaborating with other
agencies, divisions, and departments in order to address the
regulatory, leasing, and permitting issues faced by small
farmers, and was instrumental in increasing the agricultural
acreage in Susitna Valley. The division is also responsible for
several marketing programs, including, but not limited to, the
Alaska Grown Program, the Farm to School Program, and the Rural
Village Seed Production Project (RVSPP). He concluded by
mentioning that Alaska's Agricultural Revolving Loan Fund (ARLF)
is doing well, is continuing to meet industry needs, and is even
growing slightly.
1:08:43 PM
FRANCI HAVEMEISTER, Director, Central Office, Division of
Agriculture, Department of Natural Resources (DNR), referring to
pages 2-6 of her PowerPoint presentation and the statistics
included therein, reiterated that in 2010, Alaska's diverse
agricultural industry, located throughout the state, consisted
of 680 farms producing over $30.7 million in cash receipts. She
noted that the average Alaskan farmer is 56.2 years old and
explained that the six top-ranking crops grown in Alaska are:
greenhouse, nursery, and specialty crops, producing 42.3 percent
of the aforementioned cash receipts; hay crops, producing 13.2
percent; cattle crops, producing 7.9 percent; potatoes,
producing 7.7 percent; dairy, producing 5.2 percent; and barley,
producing 2.4 percent. The division's central office [and its
Plant Materials Center (PMC) are] located in Palmer, and its
northern region office is located in Fairbanks; it has 47
employees - 33 full time, 11 seasonal, and 3 non-permanent - and
a total budget of $7.189 million.
MS. HAVEMEISTER, referring to pages 7-10 of her PowerPoint
presentation, went on to explain that the division's mission and
priority are to promote and encourage the development of an
agriculture industry in Alaska. The division's core services
include: land sales and management, such as moving state-owned
land into private ownership with agricultural covenants
attached, and permitting for grazing and other agricultural
purposes; the ARLF, which provides low- and moderate-interest-
rate loans for agricultural development; the PMC, which provides
foundation seed and technical expertise; marketing assistance,
including promoting the Alaska Grown Program; and inspection
services, which allow product to enter into the marketplace. On
the issue of land sales and management, she said that 202
agricultural acres were sold into private ownership in fiscal
year (FY) 2011, [1,300 such acres] will be offered for sale in
FY 13, and that the division is managing eight active grazing
leases covering 179,785 acres, predominately in Homer and
Kodiak, and six active agricultural leases covering 800 acres.
1:12:06 PM
MS. HAVEMEISTER, with regard to the ARLF, explained that it was
statutorily established 58 years ago in AS 03.10.010; that it
provides various forms of loans, including short term, chattel,
farm development, irrigation, product processing, and clearing
loans; that at the end of FY 11, the ARLF's equity was [over]
$22.7 million - up from [over] $22.5 million at the end of FY 10
- and its cash balance was [over] $4.58 million - down from
[over] $4.65 million at the end of FY 10; that during the past
nine-year period, an average of $2.4 million was loaned out
annually, and an average of $2.8 million was repaid annually.
The majority of the loan requests the ARLF received during this
nine-year period was for short-term loans of one to three years.
She then referred to a graph in her PowerPoint presentation
illustrating the comparative loan activity for that same period,
and mentioned that the "large spikes" reflect years in which the
Alaska Board of Agriculture and Conservation reset the interest
rates lower. In response to questions, she recounted the ARLF's
current interest rates on some of the different types of loans
it offers; confirmed that having restrictive covenants on the
land can make it difficult for people to get conventional
commercial loans, particularly given that "agriculture banking"
is very high risk; and agreed to provide the committee with
information about the ARLF's 18 FY 11 loans.
MS. HAVEMEISTER, referring to pages 11-12 of her PowerPoint
presentation, explained that the PMC's mission is to promote the
use of Alaskan-produced agricultural crops for revegetation and
seed production, and that the PMC's primary activities include
the "foundation seed program, the certified potato seed program,
the certified seed laboratory, native plant evaluation, high-
latitude germplasm research, invasive species management,
revegetation technology, conservation plant technology, seed
cleaning and conditioning, ethnobotany teaching garden, rural
village seed production, training/outreach/publications, and ...
a web conference hosting facility." In response to questions,
she provided further details about the PMC, its funding, and its
seed programs/projects, and concurred that the recent lack of
federal funding has been devastating to Alaska's agricultural
community.
1:18:25 PM
REPRESENTATIVE DAVID GUTTENBERG, Alaska State Legislature,
disclosed that he is now a peony farmer.
MS. HAVEMEISTER, referring to the issue of market development
and pages 13-17 of her PowerPoint presentation, reiterated that
the division is responsible for the Alaska Grown Program and the
Farm to School Program, and mentioned that it also provides
industry support, education and outreach, conference hosting,
and a farmers market directory. She added that the division
also acts as a "pass-through" for many grants, such as specialty
crop grants, which peony farmers have received in the past, and
is involved in a federal-state marketing improvement program.
The Alaska Grown Program was launched in 1985 and designed to
highlight Alaska-grown farm products in the marketplace; there
are over 400 farms participating in the program; it has
engendered one of the most recognized brands in the state; and
the statewide advertising campaign associated with the program
reminds people to look for, ask for, and buy Alaska grown.
MS. HAVEMEISTER relayed that some of the program's
accomplishments in FY 11 include: working closely with
retailers to encourage increased support of Alaska grown,
whether it be through direct contact or by providing signage and
other promotional items; providing support to and promotion of
the 33 farmers markets around the state (up from only 13 markets
in 2007), such as multi-agency cooperation to create a farmers
market manual and a farmers market brochure; partnering with
certain local entities for specific marketing campaigns; and
successfully making use of social media. Farmers markets
provide Alaska's producers, regardless of size, with a market
for their product. Furthermore, the increased number of such
markets reflects a growing nationwide interest in knowing where
one's food comes from. The division, she assured the committee,
will continue to explore new marketing/advertising venues in
order to educate the public on Alaska-grown products, and will
continue to work with local chefs to promote the use of fresh,
seasonal Alaska product. One past example of the latter type of
effort involved providing grant funding for chefs to showcase
Alaska-grown products at certain farmers markets.
1:22:24 PM
MS. HAVEMEISTER, explained that the priorities of the Farm to
School Program are to enhance the relationship between producers
and schools; identify and disseminate curriculums that will
increase students' awareness of agriculture in Alaska; work with
officials to develop guidelines and standards for school
gardens; and promote, encourage, and coordinate farm visits for
students. She relayed that some of the program's
accomplishments in FY 11 include assisting the Department of
Environmental Conservation (DEC) in developing food-safety
guidelines for school gardens; [providing] a mini-grant for
local level project funding; launching a farm-to-school
challenge during October, which is National Farm to School
Month; conducting a product feasibility study and developing
recipes for local product; and participating in the national
farm-to-school movement. Involvement in the program by 29 of
Alaska's 53 school districts has exposed approximately 20
percent of Alaska's K-12 students [to the program] thus far.
MS. HAVEMEISTER, referring to pages 18-19 of her PowerPoint
presentation, relayed that in terms of FY 11 education and
outreach efforts, the division hosted 5 conferences, spoke at 19
events, administered 28 grants, produced 25 newsletters,
participated in 356 public-market outreach activities, and
funded 6 marketing campaigns. She assured the committee that
the division is continuing to partner with educators, various
agencies, and the public sector to promote knowledge transfer
within the industry, as well as continuing to support various
agriculture education programs for youth. With regard to the
division's inspection services, Ms. Havemeister indicated that
they include "USDA-grade" [U.S. Department of Agriculture]
inspection and certification; food safety audits, which address
good handling practices (GHP) and good agricultural practices
(GAP); export certification; country of origin labeling; and
cooperative agricultural pest surveys. In FY 11 the division
conducted 90 commercial produce inspections, 250 military and
institutional produce inspections, 2 GHP/GAP inspections, 70
federal phytosanitary inspections, 12 country of origin audits,
12 USDA-grade egg inspections, 3 elk farm inspections, 185 farm
and retail inspections, and 2 brand inspections.
1:24:58 PM
MS. HAVEMEISTER, moving to slide 20, said the division's other
accomplishments in FY 11 include: setting up bi-monthly
teleconferences between the division, the DEC, and those in the
[agriculture] industry so that areas of concern can be
addressed; holding discussions with the Division of Mining, Land
and Water to find ways of streamlining and facilitating the
leasing process; working closely with the Department of
Corrections (DOC) to increase the quantity of Alaska Grown
products that are purchased by the state's correctional
facilities; creating an agriculture advisory panel so that
industry has a venue for providing direct input into the
division's long-range plan; continuing to provide industry with
information and services; nearing completion of a vegetation,
erosion, and invasive weed survey on the Trans-Alaska Pipeline
conducted jointly with the State Pipeline Coordinator's office,
the federal Bureau of Land Management (BLM), and the Alyeska
Pipeline Service Company; nearing publication of a comprehensive
field guide for the identification of Alaska grasses - a useful
tool when addressing revegetation; preparing to print the new
Alaska Forage Manual; publishing the second edition of the
Alaska Coastal Revegetation and Erosion Control Guide; testing
over 600 seed lots; conducting over 800 tests for individuals;
producing over 66,000 pounds of clean seed; moving the RVSPP
forward to six villages - the resulting seeds will be marketed
to local mining, road, and airport projects; and acquiring and
storing plant materials salvaged from the federal Agriculture
Resource Service (ARS) group.
1:27:50 PM
MS. HAVEMEISTER, in response to questions, clarified that the
Rural Village Seed Production Project would be using various
seeds that grow in the particular area that a village is located
in; that the resultant crops would meet the area's revegetation
needs as well as have [a positive] economic impact on the
village; that the aforementioned 66,000 pounds of clean seed
produced by the PMC is grass seed; and that the division
believes the state's ongoing revegetation needs will ensure that
the production efforts by villages involved in the RVSPP are
economically sustainable over the long term.
1:30:11 PM
MS. HAVEMEISTER, regarding how Alaska can become more food
secure, directed attention to the division's long-range plan,
"Alaska's Plan for Agriculture," included in the committee
packets. She said the plan was put together in response to
industry's concern and is an update to the old plan of three
years ago. She offered her belief that the division's role is
to promote and encourage the development of an agriculture
industry and the division does this through its five core
services. She said she asked the agriculture industry to
provide input into the five-year plan because she does not
believe the division can push industry in one direction or
another. She added that the division needs measurable goals
that can be assessed, encouraged, and promoted.
The committee took an at-ease from 1:31 p.m. to 1:37 p.m.
1:37:00 PM
REPRESENTATIVE HERRON offered his understanding that the
governor wants to lead the state on food security and questioned
the tact of waiting for the industry to lead the state.
MS. HAVEMEISTER replied that food security is an important issue
and offered her belief that that is a governor initiative.
However, she continued, agriculture needs increased markets
because without increased markets there is nowhere for this food
to go when there is not a disaster; there needs to be an equal
balance between increased markets and increased production or
the farmers will be devastated. In response to further
questions from Representative Herron, Ms. Havemeister said the
division's internal measurements for achieving food security are
to provide the core services needed to promote and encourage.
These services are: provide land for sale for agricultural
production, provide the loan opportunities to get up and
running, provide the foundation seed and expertise for
production, provide marketing for the agriculture industry, and
provide inspection services to move it into commerce. Regarding
Meyers Farm in Bethel, she said the division has been out to the
farm on at least one occasion and has done a GHP and GAP audit
of the farm's produce handling process. She offered her belief
that the division has also done pass-through grants for Meyers
Farm and said the farm markets under the Alaska Grown Program.
She added that the division also has the ARLF program if the
farm is in need of funding.
1:39:19 PM
REPRESENTATIVE HERRON inquired how the division's collaboration
with the USDA will be changing.
MS. HAVEMEISTER replied that in regard to the USDA's absence,
the division is hoping to be able to pick up part of those
services that the USDA provided for industry. Regarding a
question from Representative Herron about any new innovative
programs at the division, Ms. Havemeister said that Rhodiola, a
rootstock grown in Canada for medicinal purposes, is being
researched at the university and this is being watched by the
division. Also, via a specialty crop pass-through grant, the
division is looking at new marketing initiatives, one being a
restaurant initiative in which the division will provide a
percent of reimbursement to restaurant owners who utilize Alaska
Grown this next summer.
REPRESENTATIVE HERRON related that the governor wants to
warehouse Meals Ready to Eat (MRE) for the military. He
inquired whether Alaska Grown MREs could be developed.
MS. HAVEMEISTER said that with the correct resources it could be
developed, but financial feasibility would have to be looked at.
REPRESENTATIVE HERRON, in response to Co-Chair Feige, said that
he was talking about manufacturing the MREs in Alaska as well as
using Alaska products in the MREs.
1:41:24 PM
REPRESENTATIVE GUTTENBERG, surmising that an increase of local
produce would displace imported produce, asked whether the
division has been working with supermarkets to make sure that
that happens.
MS. HAVEMEISTER responded that the division is working with Fred
Meyer, Carrs, and Safeway to carry Alaska Grown products, but
pointed out that the division has no control over what the
supermarkets choose to carry. While the state has the ability
to produce more, that market is currently limited to what the
stores are willing to carry of Alaska Grown. In further
response, Ms. Havemeister said the division's efforts in this
regard have been somewhat successful, as Alaska Grown is seen in
those stores. Because it is private enterprise she cannot
mandate that stores carry more Alaska Grown - it is done through
forming relationships and encouraging them to promote local and
what is best for the state's economy.
1:43:00 PM
REPRESENTATIVE GUTTENBERG noted the university is researching
the antioxidant and brain-food side of Alaska blueberries and
asked whether the division is working with the researchers to
develop those markets. Relating that Dr. Patricia Holloway at
the "experimental farm" has had requests to send some of that
blueberry stock outside so other people could experiment, he
related his concern for losing a uniquely Alaskan crop to others
wanting to take advantage of it.
MS. HAVEMEISTER replied she is aware of that product and the
division's marketing department has kept in contact; however,
harvesting wild blueberries is not considered a farmed product.
REPRESENTATIVE GUTTENBERG urged that the division keep track of
the research project involving a line of Fairbanks blueberries
that look more like grapes than wild blueberries.
MS. HAVEMEISTER responded that she knows the gentlemen producing
these berries.
1:44:14 PM
REPRESENTATIVE MUNOZ, in regard to increasing product demand,
inquired whether the division is finding success in Southeast
Alaska with the three aforementioned supermarkets because she
has not personally seen any Alaska Grown produce.
MS. HAVEMEISTER said the division has not had a lot of success
because it is cheaper for Fred Meyer to bring produce up from
Seattle. She urged that when people are shopping they approach
the produce manager to ask where the Alaska Grown is.
1:44:57 PM
MS. HAVEMEISTER, referring to page 22 of her PowerPoint
presentation, shared some of the comments made by industry for
how production could be increased within the state. These
comments included the need for more agriculture land, incentives
to produce, assistance with input costs because product value
has not kept up with the increasing costs, the need for more
young farmers, and that industry is interested in agriculture
land sales of less than 40 acres. These comments also
identified the need to connect agriculture land owners not
currently in production with those that are looking for
agriculture land, as well as an interest in localized or
mobilized processing units. She added that Homer is putting
together a local food hub by pulling together the area's
producers to work cooperatively to find out what everybody has
for sending to the local stores. She offered her belief that
the Homer hospital is purchasing Alaska Grown.
MS. HAVEMEISTER closed her presentation saying that the division
continues to work diligently for industry. She said that as a
member of an agriculture family she understands the industry's
importance. While agriculture is an industry with challenges,
those challenges can be overcome with state support of the
division's core services and industry's input on where it would
like to go.
1:46:20 PM
MS. HAVEMEISTER, in response to Co-Chair Feige, said that the
division has considered sales and leases of the agriculture land
in the Matanuska-Susitna area. She noted that most of the land
in that particular management plan is fairly rural. While the
division does not have any immediate plans on moving that
agriculture land into the sales, she offered her belief that it
is still a plus for the agriculture industry of Alaska to have
it as designated land since the agriculture covenants will be
kept until the land is offered for sale. In further response,
Ms. Havemeister confirmed that most of that Matanuska-Susitna
land is still forested and staff at the Division of Agriculture
has talked with the Division of Forestry about timber sales to
clear that land before offering it for sale. Responding to
additional questions from Co-Chair Feige, Ms. Havemeister said
the Division of Agriculture is hoping to pick up some of the
slack from the closure of federal USDA research. She added that
while the university level is most appropriate for much of that
research, the Plant Materials Center is willing to assist the
industry. She affirmed that the division would go into the
budgetary process with the aforementioned in mind.
1:48:48 PM
CO-CHAIR FEIGE, observing that most of the division's marketing
seemed to be in-state, asked whether there has been any effort
to grow international markets.
MS. HAVEMEISTER replied that the division has not done a lot of
research on export markets because in-state production is
currently being sold throughout the state and there has been no
surplus to sell. Responding to another question from Co-Chair
Feige, she explained that the division certifies organic foods
through a partnership with Washington State's Department of
Agriculture, which comes up to Alaska to conduct the organic
inspections. The division does not do the inspections because
the process requires three certified people; however, the
division does a cost-share with the producers for the
inspections. Responding further, she affirmed that the demand
is being adequately served by subcontracting to Washington.
1:50:37 PM
CO-CHAIR SEATON, regarding the aging of Alaska's current
farmers, said a system is needed for growing the next generation
of farmers but he did not see that in the presentation. The
education aspect of agriculture seems to have fallen through the
cracks. He presumed that the division does not have a budgetary
request for a Future Farmers of America (FFA) coordinator.
Given that growing the next generation of farmers is identified
as a priority, he inquired whether the division has a budgetary
request through the governor's office to enhance education and
other activities in this regard.
MS. HAVEMEISTER said that at this time the division does not.
1:52:54 PM
CO-CHAIR SEATON related that during his confirmation hearing
last year, DNR Commissioner Dan Sullivan committed to elevating
agriculture from its position of "step-child." Co-Chair Seaton
requested that a message be given to the commissioner that to
fulfill that obligation there must be some budgetary numbers.
He asked that the division prepare a budgetary item for
educating the next generation of farmers, including FFA, and
submit it through the channels. Then, if the item does not get
funded, the legislature and the governor must take the
responsibility.
1:55:47 PM
REPRESENTATIVE KAWASAKI, in regard to the 202 acres sold in 2011
and the 1300 acres to be offered for sale in 2013, asked whether
all of the land that is offered is usually purchased.
MS. HAVEMEISTER replied yes; the division offered seven parcels
in 2010 - four were offered through the outcry auction and three
were offered over the counter - and all were bought.
REPRESENTATIVE KAWASAKI, noting that the industry's number one
comment was the need for more agricultural land, inquired why
only 1300 acres are being offered for sale in 2013.
MS. HAVEMEISTER responded that she does not believe it is a
problem, just a process to go through for the Division of
Mining, Land and Water to do the surveys and make the
preliminary decisions and final findings. In regard to
availability, she said there is agricultural land out there that
is not in production, and a key tool would be to connect those
who are looking to produce with those who have land that is
ready to produce but not producing, which the division is
currently looking into.
1:57:28 PM
CO-CHAIR FEIGE posited that most of the in-state hay and barley
production goes for animal feed and since some parts of
agriculture feed off the other parts, an increase in cattle or
elk would cause other increases. He directed attention to the
five-year grazing [permit] included in the committee packet and
observed that the permit has all kinds of conditions and can be
cancelled on a 30-day notice for cause or not. Given the amount
of money to purchase cattle this creates a lot of risk to the
business decision. Additionally, the permit has no provision
for first right of refusal at the end of its five-year term. He
urged the division to remove such roadblocks to making a
business decision by looking at some of the terms on the sale
and lease of state land.
2:00:25 PM
MS. HAVEMEISTER commented that a long-term lease would be more
appropriate for the kind of producer Co-Chair Feige is speaking
of because it provides guaranteed use of that land for 25 years.
She related that the division has several grazing leases in
Kodiak, with one being for a cattle operation on Sitkinak Island
which has a mobile slaughter facility that it built using both
USDA funds and private funding. In further response regarding a
permit versus a lease, she explained that the process for
getting a permit is shorter than the process for getting a
lease. In response to Representative Gardner, Ms. Havemeister
said the Sitkinak Island cattle operation sells online, as well
as through Kodiak, and is operated by Bob Mudd and his son.
2:01:38 PM
CO-CHAIR SEATON, directing attention to the land use permit in
the committee packet, noted that permits are not leases and
under the term of permit there is no public notification, which
has become an issue. Additionally, a permit holder could spend
$10,000 for fencing and then have the permit taken away without
cause with only a 30-day notice; for example, a new division
director with a different view could take the permit away. If
it is for cause, the permit holder could be required to take
down the fence immediately. He added he is glad to see that the
department's electronic billboard system now posts leases when
they are granted.
2:04:57 PM
MR. FOGELS responded that in general, and not specific to just
agriculture, the department has a number of tools for letting
people use state land. The more secure a person's land tenure,
the more careful the department must be before making an issue,
and a good example of this is a lease versus a permit. In many
instances, permits can be issued to applicants for short-term
activities; they are typically easy to give out, are quick, and
are a lot cheaper than leases, and the notice requirements are
less. In exchange for that the applicant does not have near as
secure of a land tenure position. For a secure land position,
an applicant needs to ask for something more like a lease where
there would be a commitment to use the land long term. This
would cost more and may require an appraisal and surveys, a
process that takes much longer. In many cases it is up to the
applicant to tell the department what he or she wants so the
department can lay out the tools available for the applicant to
choose from. Mr. Fogels acknowledged that the Homer permits
were given without public notice and did not go over very well,
so the department pulled them back to re-do. To issue
agricultural grazing, leases, and permits, the Division of
Agriculture and the Division of Mining, Land and Water must work
in tandem. This is because the authority to actually issue the
authorization lies within the Division of Mining, Land and Water
while the expertise in agriculture resides in the Division of
Agriculture. He said someone wanting a long-term tenure to the
land would be best served by an agricultural lease of some kind.
2:07:37 PM
CO-CHAIR SEATON reiterated his concern that, given the amount of
investment required, a permit with a 30-day vacation for no
cause is something the state should not do if it wants
agriculture to survive. He urged development of a better tool
with more security, such as a first right of refusal.
REPRESENTATIVE GUTTENBERG relayed that seven or eight schools in
Fairbanks have a "gardens-in-schools program," with each school
generating about 1500 pounds of food a year. The Calypso Farm
and Ecology Center is behind this model of success; the farm
itself does not do the program but rather enables the teachers
to do it. The students are excited about growing things and the
program incorporates a science and math curriculum. He
suggested that to grow future farmers the state could adopt this
program and have gardens in all of its schools.
2:10:51 PM
BRYCE WRIGLEY, President, Alaska Farm Bureau, first noted that
he is encouraged to hear the committee's awareness of the
importance of the state being able to feed its residents by
expanding agriculture. Alaska's food security situation
requires a look at the current structure of the agency whose
mission it is to support the development of agriculture. The
Division of Agriculture lacks support from the Department of
Natural Resources (DNR), he charged. Despite DNR's assertions
that it wants to see agriculture succeed, it has not been
supportive of the issues needed to make agriculture happen. He
said he did not know whether this is because the division has
not requested it or because the department has shot down the
request. He suspected that when the division's requests do not
fit into the larger DNR priorities those needs are not approved.
While oil and gas is rightly DNR's biggest priority, the problem
is that after taking care of that priority there is no time left
to deal with agriculture.
2:12:32 PM
MR. WRIGLEY said the state should be growing enough food to be
able to provide for itself if a barge does not come in.
Agriculture has consistently taken a back seat to other resource
development over the past 30 years, which is astounding given
the state's dependence on outside food. A dynamic agriculture
industry would benefit Alaska in more ways than just growing
food. For example, agriculture could help address many of the
social ills in the state's rural areas because it connects
people with the land and promotes industry, pride, and self-
reliance. He maintained that DNR's lack of support is
demonstrated by the northern office being more like a closet
without a sign than an office, and that after six months a new
manager has yet to be hired to replace the one that retired. He
offered his belief that DNR and the Division of Agriculture made
no serious effort to stop the Agricultural Research Service
(ARS) from pulling the plug on its critical research base in
Alaska. No new agriculture development projects have been
planned, he added, and it has been four years since any land has
been moved into private hands for farming.
2:14:35 PM
MR. WRIGLEY charged that virtually nothing has been done to
protect the potato industry in the four or five years since an
incident of bacterial ring rot, a potato disease, was raised at
a Board of Agriculture and Conservation meeting. The seed
potato sale agreements and opportunities for China and Taiwan
that have been talked about for 20 years may now be a pipedream
because of the ring rot. He further charged that DNR refused to
deposit funds from the Matanuska Maid closure into the
Agricultural Revolving Loan Fund (ARLF) until the legislature
requested it be done. He said DNR and the division have failed
to fully and aggressively explore new markets for agriculture
products, two examples being Chinese seed potato sales and using
Delta Junction barley as a biomass fuel at Fort Greely.
2:17:04 PM
MR. WRIGLEY applauded Co-Chairs Feige and Seaton for their
pursuit on leases. He pointed out that some leases have been
waiting 10 years to be renewed, creating problems for the permit
holder owning cattle on those leases and needing to put in
fences, wells, and other working facilities. He agreed with the
co-chairs that this needs to be looked at and that the right of
first refusal is a good suggestion, provided that cattle are
being grazed on the lease and a management plan is being
followed. He offered his understanding that every time those
leases come up for renewal, the "highest and best use of the
land" must be revisited before the leases can be re-let. Mr.
Wrigley said he wonders about the state's vision for agriculture
because it is following a course that maintains the same level
of agricultural activity rather than growing it. There must be
opportunities, he continued, given that 95 percent of Alaska's
food comes from Outside. He reported that at a recent Farm
Bureau meeting he attended in Hawaii he learned that Hawaii
imports 85 percent of its food. However, Hawaii has a very
aggressive plan to increase food production and that plan is
supported by the highest levels of state government, including
the governor.
2:19:00 PM
MR. WRIGLEY suggested that one way to preserve agricultural land
use would be to release utility land for sale for home building
so that homes are not built on agriculture land. Also, to get
land into public lands more quickly and efficiently, pioneer
access roads could be built instead of large expensive roads.
He said there are places in Alaska that would grow crops better
than the land in Delta Junction, but this cannot happen until
the land is put into private ownership. Incentives could be
attached to encourage the development of agriculture; for
example, production credit incentives could be given for certain
crops that the state deems to be more important than others.
Another type of incentive could be tax breaks for farm land that
is kept in agricultural production over time. Additionally, in
places where there is tax, farm buildings should be taxed at the
lowest single-use rate. He also suggested adopting discounted
fares for agricultural products transported on Alaska's ferry
and railroad systems.
2:22:04 PM
MR. WRIGLEY urged that the state get serious about agriculture
and food security. He said the agriculture community is tired
of hearing that the state cannot move agriculture forward
because the budget is not there, or the authority is not there,
or the legislature and administration are too caught up in other
things. The current structure is not working, and one day
Alaska residents could wake up with no food and no immediate
prospects for getting it. For example, after Hurricane Katrina
it took two weeks to get food to New Orleans, a single city only
100 miles from the bread basket of America and with an excellent
transportation system, while Alaska is 1500 miles from its food
supply, has widespread communities, and frequently has extreme
weather. The current situation in Nome of Alaska's only ice
breaker accompanying a Russian tanker loaded with foreign diesel
should be setting off alarm bells in everyone's head, he
continued. Given the benefits from agriculture of food, jobs,
security, purpose, work ethics, and hope, it is a tragedy that
so much time must be spent trying to convince state officials
that agriculture needs to be a priority in spite of being a
comparatively minor part of the state's economy. He concluded
by urging the committee to hear HB 191, which would re-instate a
Department of Agriculture whose single focus would be improving
Alaska's ability to feed itself. He said he will submit to the
committee written suggestions for a viable agriculture plan.
2:26:18 PM
RON ILLINGWORTH, President, Alaska Peony Growers Association,
Inc. (APGA), first noted that the agricultural property he lives
on near North Pole has agricultural covenants. He said that
unlike any of Alaska's other agricultural, timber, fish, or
mineral products, Alaska's cut flower industry for peonies has
no competition from anywhere else in the world. This is because
peonies bloom in Alaska in July, August, and September, and
nowhere else in the world during this time. He related that as
of December 2011 his association had 98 members and of those, 17
have a marketable quantity of peonies, which is 500 plants in
the ground. The peony farms are located from Homer on up to
North Pole and Delta Junction. In 2011, about 10,000 cut stems
were sold at an average price of about $4 per stem. The stems
were shipped to the Lower 48, Canada, and Japan, and there were
more inquiries than the growers could meet.
2:29:00 PM
MR. ILLINGWORTH related that in 2009 the U.S. wholesale cut
flower business was a $433 million industry. While there is no
specific data for U.S. peony cut flower production, the Dutch
Flower Auction, the biggest floral auction in the world, sold 50
million cut peonies in 2008, with that number expected to reach
100 million stems this year. Alaska farmers currently have over
50,000 peony roots in the ground and are continuing to add over
10,000 roots per year. He explained that peonies reach maturity
in about 5 years, at which time 10 cuts per plant can be taken.
This means that by 2015 growers will be producing about 500,000
cuts per year which, at $2-$4 per stem, equates to between $1
and $2 million per year in sales. At 2,500 to 5,000 plants per
acre the production value is $50,000 to $100,000 per acre.
Buyers worldwide have indicated a strong interest, he continued,
including a buyer in London who has a standing order for 100,000
stems a week as soon as Alaska's growers can produce them.
2:31:10 PM
MR. ILLINGWORTH addressed how public officials can be of help to
the Alaska peony industry. He said assistance in marketing
could be provided by putting information about the Alaska peony
industry into all of the state's marketing efforts, as is
currently done for the oil, mining, fishing, and forestry
industries. Assistance with small business development could
also be provided, such as incubator support to get a new
business started. He pointed out that the peony industry
currently provides about 75 seasonal jobs and this number is
anticipated to double over the next 5 years. With 80 percent of
all cut flowers being imported into the U.S., mostly from South
America, Alaska has a huge opportunity to become the center for
U.S. peony production during the summer. The top months for
weddings in the U.S. are June and August, followed by September.
According to a recent publication, he related, one of the top
three flowers for weddings is the peony. With the exception of
June, Alaska growers could easily cover the wedding market.
2:33:51 PM
MR. ILLINGWORTH, continuing with how public officials can be of
help, noted that conducting research on the farm is difficult,
costly, and essentially beyond the growers' technical abilities,
so assistance is needed in this regard. The loss of ARS has
impacted peony growers just as it has the other agricultural
sectors. Research is needed to learn more about plant
physiology, post-harvest handling, post-harvest storage, and
full-chain management. He reported that due to funding issues
the university recently cut the faculty involved in peony
research from full time to three-quarter time. The university
cannot pick up the loss of ARS without additional resources, he
said. The peony association has started to do research itself
using a small U.S. Department of Agriculture (USDA) pass-through
grant from the state. The association would support increased
funding for research, whether through the university, the
Division of Agriculture, or dedicated funding to the association
for focused research. He pointed out that there is no need for
facilities they already exist throughout the state and are
available for use; therefore research could be done without any
increase in infrastructure.
2:37:22 PM
MR. ILLINGWORTH said the amount of land needed for growing
peonies can be as little as one or five acres; he has 40 acres,
which is a huge amount of land for peonies. He added that he is
in the process of increasing the number of peonies in the ground
and hopes his farm will be at 15,000 roots in the next few
years. While a lot of land is not needed, it does take several
people to do the cutting, bud grading, packing, marketing, and
shipping. Some of this work is seasonal and some is year round.
The peony industry is going to create jobs in the state, as well
as create interest in the state for peony growing. It is a
sustainable industry that does not require large investments of
land or structures.
2:39:40 PM
MR. ILLINGWORTH advised that to grow the next generation of
farmers there must be farms. It does not do any good to have
programs in schools if there are no farms for people to go to or
for youth to work. He related that a young man who worked on
his farm as a junior in high school is now in college majoring
in greenhouse management. He also told about a peony growing
program conducted in a local school for one year where the kids
researched and chose the varieties and then planted them on his
farm. He concluded by saying that the cut flower peony growing
industry in Alaska is strong and getting stronger. The seven-
year-old industry has sold thousands of dollars of merchandise
and within the next couple of years the industry will be
approaching $100,000 per year. He said his own farm is
generating $5,000.
2:42:59 PM
CO-CHAIR SEATON clarified that in his earlier comments he did
not mean to say the division had not submitted budget requests,
only that he did not know whether it had. He said it needs to
be ensured that the Division of Agriculture forwards its
requests to advance agriculture. He asked what would be the one
thing the legislature could do that would be the most helpful in
advancing the peony industry forward.
2:44:35 PM
MR. ILLINGWORTH responded that peony growers need research money
in particular for nutrition fertilizing, fertilization studies,
and phenology studies. To do that well for a five-year period
would take up to $500,000 [per year]. In response to further
questions, he said it would take one to two people to do the
work over a five-year period because it takes several years to
conduct the trials, see the results, and do an evaluation. He
estimated that this would require a budget of about $500,000 per
year for five years and the funding could come through either
the university or the Division of Agriculture. If through the
university, it would have to come through the governor's budget
and would have to be specifically identified for work in the
aforementioned areas rather than just general. If through the
Division of Agriculture, the research could then be conducted by
people at the university or by other researchers, such as those
individuals who used to work for ARS.
2:48:10 PM
MR. ILLINGWORTH, in response to Co-Chair Feige, confirmed that
it takes up to five years from the time a peony is planted to
when cuts can be taken. He explained that some cuts can be
taken after the third year, but it is best to not take much
because the cut stem has green leaves on it and the plant needs
to be storing up to begin real production after four or five
years. The plants last 30 years or so and each plant will
provide 10 cut stems, with 10 or more left on the plant in the
field. In further response, Mr. Illingworth said that he is
currently receiving $4 per stem and $5 per stem for the more
popular varieties. At a price of $4 per stem, and 5,000 mature
plants in the ground supplying 10 stems per plant, the income
would be $100,000 per acre.
The committee took an at-ease from 2:50 p.m. to 2:54 p.m.
REPRESENTATIVE GUTTENBERG, after disclosing that he is a member
of the Alaska Peony Growers Association, informed members that
peonies are a high-demand cut flower throughout the world. The
peony is the national flower of China and at the time peonies
blossom in Alaska there is no other competition in the world.
Last year growers exported peonies to Hawaii. The association
is not looking for mega-project help, he related, only for the
basic support of agriculture that every farm state in the U.S.
has. One of the problems with the loss of Alaska's scientists
is that if a grower finds something wrong with a plant, the
plant material will be too degraded to investigate by the time
it is received by a scientist elsewhere. He said Palmer is the
national repository of peony seeds in the nation and that is
being lost because of federal cuts. Further, the seed potato
plant for the state is unique to Alaska and there are things
that need to be developed for this. He offered his agreement
with some of Mr. Wrigley's statements.
2:58:51 PM
CO-CHAIR SEATON requested that the Division of Agriculture put
forth a budgetary framework that would accomplish the peony
research assistance mentioned by Mr. Illingworth. He then said
that people do not apply for leases because it takes 10 years to
get them and a business plan cannot be undertaken when this is
the case. He requested Mr. Fogels to address a resolution for
this leasing issue.
MR. FOGELS replied that this issue crosses over to another huge
issue that DNR has been working on over the last year - the
permitting efficiency initiative that DNR is pushing to scrub
DNR's permitting processes from top to bottom. He said the
legislature supported significant new resources specifically to
the Division of Mining, Land and Water to eliminate DNR's
backlog and to make improvements, and the department will be
reporting to the legislature on that. In regard to leasing, he
said all the processes are being looked at, including
improvement in how quickly authorizations are processed for
grazing leases and permits. New people are working on those and
additionally the department is looking for better ways to do
business. The goal is to eliminate the backlog as well to make
it so there is not this kind of backlog again.
3:01:54 PM
MS. HAVEMEISTER, in response to Co-Chair Seaton, agreed to
notify legislators when the agriculture advisory panel is
scheduled to meet.
MS. HAVEMEISTER, in response to Co-Chair Feige, confirmed that
she is aware of the barley biofuel project at Fort Greely
mentioned by Mr. Wrigley, and said that she set up a couple of
meetings for Mr. Wrigley with the Alaska Industrial Development
and Export Authority (AIDEA) and the Alaska Energy Authority
(AEA) regarding the alternative energy program available there.
In response to a further question from Co-Chair Feige about
whether she has weighed in with the U.S. Department of Defense
as to whether that is a good project, she said she has not.
CO-CHAIR FEIGE requested Ms. Havemeister to look into that and,
if the division feels it is warranted, to provide a letter of
support to the Fort Greely folks who are working the barley
project because it would triple the market for barley, which
would be of benefit to the Delta Junction area.
3:03:11 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 3:03 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Division of Ag Newsletter.pdf |
HRES 1/18/2012 1:00:00 PM |
|
| DNR - Div. of Ag - Land Use Permit Undeer AS 38.05.850.pdf |
HRES 1/18/2012 1:00:00 PM |
|
| House Res. - Div. of Ag Plan Draft 1.19.12.doc |
HRES 1/18/2012 1:00:00 PM |
|
| AK Peony Growers Assoc. Inc. HRES 1.18.12.pdf |
HRES 1/18/2012 1:00:00 PM |
|
| Horticulture in AK - An Emerging Market in Specialty Cut Flowers - HRES 1.18.12.pdf |
HRES 1/18/2012 1:00:00 PM |
|
| House Resources - Div. of Ag. 1.18.12.ppt |
HRES 1/18/2012 1:00:00 PM |