Dunleavy continues food security initiative with CROP Act, with loans and crop insurance

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Gov. Mike Dunleavy on Friday introduced the “CROP Act,” (Capital access, Revenue protection, and Open Procurement Act” as he continues his work strengthening Alaska’s food security.

According to the American Farmland Trust, there are just 990 farms in Alaska, comprising 849,753 acres of land, less today than the 881,585 acres that were under cultivation in 2007. The market value of the farming products in Alaska annually is $3,531,000 in goods sold directly to retail markets, institutions, and food hubs for local or regionally branded products.

With a generally warming weather pattern, farming is becoming more viable in the north.

“Alaska’s reliance on importing so much of our food creates a vulnerability. While we can’t change the weather, we can change policy to optimize Alaska’s agricultural output,” Dunleavy said. “Farming has always come with risks that are outside of man’s control. However, the CROP Act will reduce financial risks and cultivate an economic environment where Alaska’s food producers can succeed and Alaska can be more self-reliant. Furthermore, the legislation will also keep a greater percentage of money spent on food circulating within Alaska rather than flowing to producers out of state.”

House Bill 296 and Senate Bill 211, will hopefully reduce risks and put some incentives into growing of food. Its main mechanism is simply adjusting existing Alaska statues.

“Governor Dunleavy’s CROP Act addresses financial policies that restrict some farmers from reaching their full potential to put more Alaska Grown food on Alaskans’ tables,” said DNR Commissioner John Boyle in a statement. “This legislation will provide better loan options for the agricultural industry, make critical crop insurance less risky, and ensure that State of Alaska purchasing power is invested back into Alaska.”

Earlier in the Dunleavy Administration, the governor pushed to open up more agricultural land outside of Nenana. The Legislature funded the first phase of the project, which opens up more than 100,000 acres for food farming. The Legislature funded the first phase of the project in its 2022 budget.

There are three major components of the CROP Act: Increasing access to and availability of agricultural loans, revising crop insurance premium subsidies, and stimulating state spending on Alaskan agricultural and fisheries products.

Agricultural Revolving Loan Fund Improvements

The bill amends the Agricultural Revolving Loan Fund by repealing outdated loan limits and allowing the Board of Agriculture and Conservation to set new limits in regulation. It expands the range of loans to include shipping costs and refinancing. The CROP Act would provide a $4 million capital injection into the fund – the first capital injection since 1986.

Crop Insurance Updates

The bill amends existing law requiring the state to provide premium support to farmers for crop insurance policies. The bill provides for a staggered level of support in which the State will pay the full farmers’ shares for revenue protection policies offered in Alaska for four years, and partial support in the following years provided farmers contribute to a minimum level of coverage.

Crop insurance premium support will incentivize increased planting and provide an asset that can be leveraged for farm improvements. With an increased in-state supply of feed grains, Alaska’s livestock producers can grow their herds with less risk, and meat processors will also benefit from increased production.

The bill provides an initial level of $4 million for premium support payments. That amount accounts for current acres in production and potential growth.

Revised Preference for Alaska Grown and Harvested Products

Dunleavy would repeal limits on state agencies’ purchases of Alaska grown or harvested products for five years.

Under current law, any entity receiving state funds, including state agencies, school districts, and municipalities, are required to purchase Alaska grown or harvested products so long as they are no more than 7-15% more expensive than a comparable product from outside of the state. In place of percentages, the bill will require eligible entities to purchase an available Alaskan agricultural or fisheries product if the product is of “like quality” compared to a product harvested out of state.

Alaska’s farmers often struggle to enter retail channels because of corporate requirements for regular and dependable deliveries to secure shelf space. By providing access to market through institutional buying power, Alaskan producers will have the ability to scale up with less risk and to reach a level of production that can meet the requirements of retail customers.

To mitigate potential increased costs due to mandatory purchase of Alaskan products, the bill contains three protective measures: a five-year sunset that reverts the amended provisions back to current law, a requirement that Alaskan producers submit accurate wholesale pricing lists in response to solicitations, and an annual reporting requirement to the Legislature.

19 COMMENTS

    • The oil money came in and they passed it out like candy. Do you really believe that if you sold the AKRR and the Ferry, anything would would change? Farming is attacked in the form of high property taxes.

  1. Putting the best farmland in the valley under houses by raising taxes so high that farmers sold out to developers is representative of government causing a problem. Giving away money to farmers is not the answer. If the State would give grocers a tax break for buying Alaska produce, milk and meat, and lacal government would drop taxes to near zero for farming land, farming might make a comeback in Alaska. The state has repeatedly given money away attempting to perform miracles on the supply side but if their is so USDA inspector and no buyers, you are just throwing money into a deep, unproductive well.

    • ALL property taxes should be eliminated. I’m not opposed to paying taxes (the legitimate functions of government do cost money), but it is absurd that I should be required to pay rent to the government every year for the “privilege” of owning my own land.

  2. What is long needed is a venue for Alaska farm products. The large grocery stores do a lousy job of pretending to carry local produce and other goods. If you want to buy locally grown produce you have to drive to the valley and find it for yourself. This would be a great way for the state to encourage food security by investing in itself. Too many farms are becoming subdivisions and you can’t blame the farmers. Private enterprise has not been enough help except for farmers markets that are hit and miss, so maybe the government should be more proactive.

    • Paola, In general you are absolutely correct and I wholeheartedly agree. One however shouldn’t limit this principle to just Private Industry. NGO’s and Government Monopoly’s are even worse. One need look no further than to our Public Education system to see the march of folly carried forth with Government funded enterprises.

      I operate an Egg Ranch and garden, however despite my efforts at economy I’ve learned I can purchase an 18 pack of eggs at Costco for what it costs to produce a single egg in my Hen House. But then it’s not about growing food as much as its about entertainment, personal satisfaction and keeping one rooted in nature.

  3. In order to reach this goal, the state must hit critical mass where there is sufficient production to support trading floors, processing, and marketing as year-round industry. Ten thousand acres is a drop in the bucket, we need a hundred thousand more acres in production of climate tolerant crops and livestock which can compete with Kansas. Every year, tens of thousands of acres of prime farmland are paved or built over around the world, and in the Matanuska Valley, and the United States is no longer the great breadbasket that it once was. In fact, the greatest enemy of food security is the federal government, with tax policies favoring big businesses, and farm programs rewarding removing land from production. That is what destroyed agriculture in Alaska, when too many succumbed to ‘farming the government’ rather than trying to compete with land speculators, deep pocketed big business and the government. I am not Malthusian, but I do realize that the trajectory of communities, the state, the nation and the world are not sustainable. I hope that this governor realizes and acts properly with long term policies in mind and not just short-term gain. Jay Hammond started the Ag Projects, and with a stroke of his pen, Bill Sheffield dismantled them, bankrupting most who poured their lives into unkept promises.

  4. I too am against subsidies but in the case of Alaska farmers, it may be necessary to even the playing field, and in this case will benefit many Alaskans. The government regulations put too much burden on the local farmers and make it impossible to offer their products even to the local market. Having our state government behind them if for no other purpose than to streamline and to advocate is not much of a fiscal burden. Then there is the more local problem, with the Municipality of Anchorage having even more restrictions on food products. It is currently illegal to sell even a jar of homemade jam within the confines of Anchorage, or an egg from a non-factory chicken. You have to be an outlaw to be a farmer, and make side deals to purchase a good product.

  5. One thought I have is what will happen if the farmers cannot “pay back” their loans? Will the farms be seized by the government?
    Additionally after reading this part in the article, “…the governor pushed to open up more agricultural land outside of Nenana. The Legislature funded the first phase of the project, which opens up more than 100,000 acres for food farming.” There sure seems to be quite a bit of action in Nenana. How interesting. Maybe this farming is going to be put to use feeding all of the prisoners in the 2 million person FEMA camp up in the interior (by Eielsen AFB?)?

    Unmanned drone flights
    ‘https://alaska-native-news.com/acuasi-completes-first-drone-flight-from-nenana-to-fairbanks-international-airport/69845/

  6. The Legislature funded the first phase of the project? Does anyone recall the Pt. McKenzie Dairy project? All of a sudden lawyers and doctors became dairy farmers and maybe a few legislators too.

  7. Another 40 million dollar joke by the Dunleavy administration that will do nothing for food security I beg you to go read the the food security task force report

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