ECON 919 - Agriculture and the state budget

Mar 29, 2019

 


Alaska has a long history of agriculture, but it’s always lingered in the background behind fishing and more recently, oil and gas as a mainstay in the economy. The governor’s proposed budget includes numerous cuts that would affect agriculture across the state and could even make some parts of the ag economy go away altogether.

 

 


One of our guests on this week’s Kenai Conversation about agriculture was Heidi Chay, District Manager of the Kenai Soil and Water Conservation District. She pointed out that the state Division of Agriculture was cut by 50 percent over the past four years. The governor’s budget reduces what’s left by 60 percent.

“What that does is eliminates the Alaska Grown marketing program, which is the second oldest statewide marketing program in the country, and really does a lot to raise awareness of Alaska-grown products and has opened a lot of doors to getting Alaska-grown products into schools, into institutions like prisons and into grocery stores," Chay says.

Staffing cuts could also make it more difficult for existing farm businesses to continue if inspections can’t be made. That could threaten the state’s only operating dairy, which has been making headlines and it could be a big blow for the Peninsula’s expanding peony industry. Alaska is home to half the world’s peony growers and it’s a half a billion dollar market.

“For a peony grower to export their flowers to California and anywhere else in the world, they need a phytosanitary inspection ticket from a state department of agriculture that says their peonies are free of pests. So if that capacity were to disappear, then you’ve put the brakes on a rapidly growing industry, which would be very unfortunate," Chay says.

Now, sort of backing up a bit from marketing ag products we know do well in Alaska, the first step is simply finding out what sort of ag products do well in Alaska. That’s handled at research farms, and guess how those fare in the proposed state budget.

“We used to have a federal research farm in Alaska. We lost that not too long ago. The university’s research capacity has been steadily whittled away to almost nothing, so the agricultural research to figure out the crops that work, not just new crops, but varieties of apples and asparagus and potatoes and et cetera that work for our rapidly changing climate is happening almost exclusively at the Alaska Plant Materials Center, which is the research farm of the division of agriculture, and they’re talking about losing most of their staff there," Chay says.

Seed potatoes could be spared, but otherwise, any research that could drive innovation in Alaskan agriculture may be left up to trial and error by farmers. All these proposed cuts, especially at the university, could also affect the home gardener as the university’s extension service is spread even thinner.

“Its role is to get good, quality information out of the university, into the hands of the general public," Chay says. "If you went into our cooperative extension office on K-Beach road, you could find all sorts of information about every aspect of growing food, preserving food, taking care of forests, watching out for pests, many aspects of home economics. The cooperative extension would then of course be subject to this very large cut to the university system, and we’ve seen many successive years of cuts. Our own office has thankfully remained opened while other cooperative extension offices across the state have closed and consolidated. But what’s happened is the staff here at the local office has carried more and more statewide administrative responsibilities, which means less capacity to offer that one on one  assistance that’s so valuable.”

You can hear more from Heidi Chay and about the agriculture scene on the Kenai here.

And now this week’s number: 94 cents. That’s the increase in the price of a barrel of north slope crude over last year, as laid out in the state’s spring spring revenue forecast. Total price is $68.90. While the price is up ever so slightly, the production forecast goes the other way, down to barely more than half a million barrels a day into the TAPS line.