Agriculture Division grapples with managing vetoes
Decision makers in the Department of Natural Resources are in the same boat as Alaska farmers when it comes to making sense of what Gov. Michael J. Dunleavy’s budget vetoes mean for the state’s agriculture development programs.
Nobody seems to know.
Division of Agriculture Director David Schade referred questions about how the agency will revamp its operations to Deputy DNR Commissioner Brent Goodrum, who oversees Agriculture and other arms of the department.
“We’re in a state of flux,” Schade said, presuming the vetoes are not overridden by the Legislature.
DNR spokesman Dan Saddler said department officials are working to implement the reductions and would be able to talk about the changes at a later time.
Department commissioners and other agency leaders have mostly been excluded from the budgeting process in the Dunleavy administration.
Dunleavy cut the Division of Agriculture budget by more than 60 percent, from approximately $5.1 million to $2 million, on June 28 as part of his $444 million of vetoes to enable the state to pay larger Permanent Fund dividends.
The governor’s vetoes followed roughly $280 million in operating budget reductions passed by the Legislature.
He chose to eliminate “lower priority programs” in the Division of Agriculture including the Marketing, Agricultural Veterinarian, Farm to Institution, Agriculture Inspections, seed production and pest research programs.
Budget documents indicate lower priority programs in the North Latitude Plant Material Center in Palmer will also be cut by more than $1.1 million and $319,000 to administer the state’s active Agriculture Revolving Loan Fund was removed as well.
DNR officials told the House Resources Committee in February that the state had 55 loans totaling $7 million in the Agriculture Loan Fund.
How the state will oversee what many feel could become a highly successful new crop in Alaska, hemp, is also unclear. The governor vetoed $375,000 of receipt authority, or the ability to accept fee revenue, from the division’s budget; he also struck through the state’s ability to accept $559,000 in federal agriculture development grants and matching funds.
Office of Management and Budget documents detailing the reductions explain that “The State’s fiscal reality dictates a reduction in expenditures across all agencies.”
Former Gov. Bill Walker signed Senate Bill 6 last year, authorizing the state to develop a pilot project for industrial hemp growers. Since, the state has been working to develop regulations and plans to allow farmers to start growing industrial hemp. The receipt authority in the budget was intended to be for fees the department collected from prospective hemp farmers to get approved for the crop.
SB 6 was championed by Palmer Republican Sen. Shelley Hughes, who has largely supported the governor’s plan to drastically cut the budget and state services.
Alaska Farm Bureau Executive Director Amy Seitz said she is also trying figure out how the state and its growing agriculture industry will adjust while noting that much of the blocked federal money was for pass-thru federal specialty crop block grants the Division of Agriculture accepts on behalf of Alaska farmers and then distributes.
The specialty crop grants are available in some form for “almost everything that’s not livestock,” Seitz said, and they are often used to support value-added crop endeavors.
There have already been awardees assigned for this year,” she said of the grants. “My understanding is right now they’re saying those grants are going to have to be sent back to the feds so those projects won’t have funding.”
Seitz added that the prospect of an industrial hemp industry was of interest to many farmers.
She also wondered how the popular Alaska Grown program will be handled as the $1.5 million marketing section of the division’s budget was reduced by approximately 80 percent.
Alaska is one of few states to have a growing agriculture industry. As of 2017, Alaska had 990 farms and had added more than 300 in the previous decade, according to the U.S. Department of Agriculture’s Census of Agriculture. Alaska’s farm product sales brought in $70 million in 2017 as well, according to USDA figures.
In June, the Division of Agriculture hosted its first round of business-to-business international trade meetings between Alaska farmers and local food manufacturers and Canadian brokers in conjunction with the Western U.S. Agriculture Trade Association. The state’s membership in the organization helped connect the Canadian buyers with the Alaska producers, participants said.
According to Seitz, it’s also unknown whether the state will continue to provide Good Agriculture Practices and Good Handling Practices audits that are a prerequisite for farmers to get their products into many grocery chains.
“Are the grocery stores going to be able to buy local products — or who’s going to take that on?” she wondered.
She added that the Northern Latitude Plant Material Center has long been the primary location for a wide range of research, such as what species perform best in Alaska in addition to seed cleaning and other services.
“I think it’s going to be harder than people realize,” Seitz said. “I’m really concerned that it’s going to hurt.”
Elwood Brehmer can be reached at [email protected]