Tuesday, December 20, 2016

Weeding in Alaska Ag

Like ripping a band aid off a festering wound, digging into the "real dirt" on Alaska Ag is unpleasant, but necessary. It may seem like the focus of this blog is solely MMM&S, but that is not the case.

The corruption within is widespread and long term. From the fiascoes of the spectacular dairy failures of the past, through to the present,  the Division of Agriculture is awash in poor management. The entire Division appears to be its own little fiefdom, and who is in charge is a fair question to ask. The new Director is not a leader, and it's rumored that two specific individuals are the backbone of operations....who, of course, do things the way they've always been done.

What sort of service you get from these well paid public servants depends on who you are. This is easily verified by the "service" they provide-or not-to their bosses (the public).  The Division is so tardy on some reports, that in other venues they'd be fired for lack of performance.  And it is not because they do not have the staff necessary to collate these reports-no, it is that those who actually perform the real, day to day work, are tasked (sometimes by default) to cover other Division employees' shortcomings. They aren't even cheerleaders for the Division itself, if the main five people have been conspiring to make Ag it's own Department in the Alaska state government. 

And because they are the bastard step child of Natural Resources, they are oft overlooked and ignored and thus, they are free to do as they please...or not, as the case may be.  They don't make waves (now that the pressing problem of MMM&S has been resolved) so what happens there on a daily basis is unknown to the Commissioner of DNR, with a complicit Deputy Director of DNR who tends to take the Divisions' word for it that all is good there.  And in the normal course of affairs this is how is should work, and does, quite successfully....but sometimes, sometimes, a little extra effort by the those further up the chain is warranted.

It is past time that the Division was properly and thoroughly audited....from the paper clips to the policy makers and everything they touch. For the steady drain on state resources over the past umpteen years, they have not managed to create a plan for Alaska agriculture. There is no goal, no 5, 10, or even 20 year plan....no benchmark to seek, no success with legislators in getting suitable lands into the hands of prospective farmers, no rallying phrase to unify the disparate and widely flung elements of growing food in Alaska. None.  So they just keep on....keeping on, with the projects and programs at hand, heads down to their grindstone, never looking up towards the future.

Yes, some weeding is warranted there, for sure.

Now, lest you think the MSBorough has a better record...think again. The Borough too, is replete with failed policies, and projects. In the heady days of high oil prices, the Boro threw money at projects that never came to fruition. Where is that "Agricultural Processing & Product Development Center, anyway? The one the Boro happily spent a half million dollars to design....but was never built. In today's economic reality, it's not likely to come up in the budget any time soon. How many people were paid to produce the snazzy brochure? Write the proposals? Speak before the Assembly?

When it comes to Ag and the MSB, the Borough is the poster child for schizophrenia.  On the one hand, they look back at the past projects (the Colony project of the 30s) with rose colored glasses. The farms, the farmers, the dairies, the big vegetables to astound the world!!  Woot woot, grow Mat Su!  And on the other hand, lust after the cleared farm lands to be turned into yet another subdivision which would go on the tax rolls.  Woot woot! Grow Mat Su (Government!!).  Oh sure, you will be taxed less on Ag lands.....but their whole approach is: How can we get the road paid for, and maintenance for same, in perpetuity? Why, by taxing the tiny fee simple parcels at "fair market value", of course. Never mind that these ag lands only provide for the use of the land. And do look at their requirements for Ag land....you'll be surprised at what it does not include. The Borough could definitely use a prolonged weeding, indeed it could.

There exist cures, or solutions~

There are many 100s of acres of fallow land within the MSB, and the State. It's just sitting there, in the asset column, to someday be of value to the government. Not the residents, mind you, the government.  The Borough (and the State too, for that matter)could resolve some of it's current fiscal issues with a modern day land rush. All it takes is the commitment to benefit the citizens of Alaska, over their desire to fill their own budgets.

Just imagine....releasing land with agriculture suitability, perhaps 10,000 acres. BOOM!  Roads built, utilities arranged, land cleared, homes built, and food grown within five to fifteen years. A reasonable time schedule, not an artificial one that doomed the other ag projects with ridiculous deadlines and parameters and conditions, all figured out by degree carrying idiots in suits-not hard working men and women in muck boots over generations of farm building as in L48.  Charge them a small flat fee a year (and I do mean *small*) and get the heck out of the way as a boom erupts in agriculture. Which will translate into jobs, increased economic activity, building, and so on.  Yes, it can be done, and should. The state and local governments should recognize that the ability to feed it's residents should not be quashed, period. It should get out of the way and let entrepreneurship and innovation and hard work remedy that dismal percentage of locally grown and consumed.  A little coordination between the state, the borough and the feds with their programs, and voila! A real, modern day land rush for farming.

The naysayers will snivel that it's already been done and was a disaster-and it was. The skeptical would say, who's going to benefit-all residents in due time. The .gov would say-we can't do that because that isn't how we do it-and all it takes is resolve and legislation and signing on to a long term goal.

You know, that plan that the Division of Ag does not have?

Yes, that one, or one created by an enterprising citizen who approached elected representatives and insisted: We should feed our own. 

Friday, December 9, 2016

Alaska Ag: And the winner is........

Today, at their "emergency meeting" of the BAC board, they accepted a $300,000 cash offer for the MMM&S plant, equipment, and 3.5 acres of prime Palmer realty. 

Keep in mind, this property just appraised for $860,000. Which seemed way out of line for an aged facility in need of upgrades. When they couldn't get any takers for such a high price, they then dropped it to Boro assessed value, which is $410,000.

Reportedly, Greg G of Mike's Quality Meats is the lucky new owner, at $300,000. 

Was taking what amounts to a $560,000 (at the most) or a $110,000 loss, good for the agriculture community? Too early to say, but there is hope that a real business person can turn around the "we do it that way because it's always done that way" mentality that permeates Alaska Ag-and MMM&S in particular. Governments and government employees are not rewarded for efficiency, but small business relies upon finding the most economical operating model to grow and succeed. 

Was the offer a wise business move by Mike's Meats? Again, one cannot say at this point. It's a lot to gamble on this plant, with it's terrible operating loss history. Will the community be at least as well served? Surely, with better management, the plant will prove to be viable and provide better service than is currently available. Perhaps there are plans to expand the capacity beyond the ten percent pittance it is utilized today. But regardless of that, many are breathing a little easier, knowing the plant will stay open.

That Alaska Correctional Industries sign will just have to go, though!

Monday, December 5, 2016

At long last, a bright light appears for Alaska Ag

The current (and past) activities of MMM&S, the BAC in it's role with the ARLF, and the Division of Agriculture, have spelled nothing but trouble for years. Between bureaucratic bungling, feuds and favors, little has propelled Alaska Ag forward into the forefront, except the continued negative press their mishandling has generated. And deservedly so...because these are the stewards tasked with "managing" the resource...even if they have all seemingly forgotten our state's constitutional mandate. You remember, the part about "all Alaskans"?

For the CBC of Alaska Ag, you are part of their exclusive group via land, marriage, or crop, and the rest of Alaska agriculture does not exist. This would include every hobbyist, homesteader, home owner with a garden plot and a few head of livestock, and so on. Many thousands of Alaskans truly are "agriculture", whether they realize it or not. Most would not include the locavore, the "local when I can find it" consumer, but a person with wider vision would accept and welcome their inclusion because every single person who consumes "Alaska grown" plays a role in ag's success or failure. 

For some, this situation does nothing but strengthen their determination, their resolve, and their commitment to Alaskan agriculture.  To persevere in the face of such opposition takes a certain chutzpah, and an appreciable amount of courage......but adversity can be overcome...as this recent FB post proves:

Proudly announcing the formation of Alaska's Gold Standard Meat Co-op!  This group endeavor will provide to the small producer, a state of the art processing facility to meet the growing demand for locally sourced proteins. Competitive pricing, with attention to detail that you, and your customers, demand. This USDA kill, cut and wrap facility will be Southcentral located with flexible hours. Come find us on Facebook, and join our community.....together, we can all grow Alaska ag! Ask to join up at Alaska's Gold Standard Meat Co-op on Facebook.

Authored by Alex Davis, of AD Farms.

Direct Facebook link here;  https://www.facebook.com/groups/674776696032906/

Sunday, December 4, 2016

Alaska Ag....where truth is stranger than fiction

In the "who did not see that coming" category.....

The BAC, in charge of the ARLF assets, has more than just the slaughter plant they oversee. Their actions concerning the troubled MMM&S plant included (so it's rumored) declining an offer that would have been full asking price over three years. Now, not having been present at their executive session, one can wonder why this offer was deemed not responsive, and the reasons for not accepting a low ball offer from the other respondent are unknown.

But what is now known, is that they have issued an OTC sale (packet information on the BAC website)  That sale price was lowered to the $410,000 Matanuska Susitna Borough assessed value as the previous blog post stated. The OTC opens on Monday, and while a deadline was not easily found, it's fairly certain that the new price is going to generate a lot of interest.

Also known, and verified by news reports, is the fact that our premiere Alaska brewing company was in negotiations to purchase the Mat Maid property. For substantially more than the Boro assessed value, by the way.

The brewing company naturally, is reportedly rethinking their offer, and may withdraw it completely.  Or perhaps they will be graced with the same sweet deal as the OTC price.....no one knows for sure at this point. But that would be a better deal than the original RFP for MMM&S.....which was (and I am quoting a very astute friend here) "Someone can buy it, kind of, I'll still have a say in running it and in a couple years I'll charge you more for the deed."

So what the BAC did was essentially shoot themselves in the metaphorical foot, in order to dispose of the troubled MMM&S facility. This may end up costing the BAC and ARLF a substantial loss of anticipated revenues on all its' current asset inventory.

Folks, you can't make this stuff up!

Friday, December 2, 2016

Alaska Ag: Second verse, same as the first!

And the winner is.........

(drum roll please)


The BAC rejected both RFP responses at its meeting yesterday.

According to a story in the ADN, the Board, in it's collective wisdom, has decided to nearly halve the asking price on the next go-around. From the original broker's opinion (In October of this year) of $860,000, down to the assessed value of $410,000.  There is sure to be another RFP quite soon, reflecting this change.

Which puts the property itself within reach of local land developers, not just concerned parties who see an opportunity to continue running the MMM&S facility.

It's fairly obvious that the "blue sky" broker's price was not based in reality, otherwise there would be a new operator at the helm. Since there are no comparables within state boundaries, and the plant looses money under the management of the state, one can only speculate where this $860,000 figure originated. That aside, the takeaway should be: How competent is the BAC to handle this, if, after three unsuccessful RFPs, they are finally realizing the plant is not worth what the market will support? And if this is how they conduct asset management, what else is going sideways there?

Edited to add:  Former Gov. Sean Parnell wrote to DNR Commissioner Andy Mack in July of this year on behalf of Denali Meat Company, regarding the RFP for the sale of the plant. The letter brings up a number of problems with the RFP as it was written, and of particular note, touches on the BAC itself:

The BAC is not qualified to evaluate private sector bidder's proposed operations plans for the meat plant, nor has any criteria been established for the BAC to approve or disapprove such a purchase. Instead, qualified independent professionals should evaluate and score any proposed plans. 

Maybe they should take a look back at history, and remember when former Gov. Palin fired the entire board.

The Never Ending Story of Alaska Ag continues........