House panel hears bill to ease farmland leasing, lower costs for Alaska growers

The Alaska House Resources Committee heard testimony on legislation that would change how the state leases agricultural land to farmers, shifting from appraisal-based pricing to below-market rates and merit-based selection.

House Bill 296 would create a new leasing program allowing farmers to select state parcels and apply to rent them at rates below market value. Costly appraisals and surveys would only be required if the Department of Natural Resources commissioner deems them necessary. The bill would also allow DNR to add a merit-based component to agricultural land sales rather than awarding parcels solely to the highest bidder, using a regulation-based scoring system.

Representative Donna Mears said the bill makes it easier for farmers to lease state land and for DNR to ensure state land sold for agricultural purposes remains in agricultural production.

The legislation responds to testimony that current appraisal methods price farmers out of state land. Emily Garrity, owner-operator of Twitter Creek Gardens in Homer, told the committee she applied in April 2023 to lease 4.5 acres of state land near her existing two-acre vegetable operation. Initially estimated at $1,000 per year, the lease fee jumped to $9,360 annually after DNR required an appraisal.

Garrity said the land was appraised at $117,000, which sets a lease fee at a record high value for agricultural land use of $9,360 per year for 4.5 acres. That works out to over $2,000 per acre.

She noted the four other active crop production leases statewide carry annual rates between less than $1 and $90 per acre, according to information she provided the committee. Grazing leases start at 3 cents per acre, and the Kenai Peninsula Borough leases agricultural land for $15 per acre.

Alaska has only four active crop production leases statewide, while an estimated 90 individuals actively seek farmland through the Alaska Farm Link Program, according to testimony from Margaret Adsett of the Alaska Farmland Trust.

Adsett said the challenge is not the lack of interest in farming, but a lack of affordable and accessible land. She noted that in the Mat-Su Borough alone, more than 3,000 acres of farmland have been lost over the last decade, while developed land increased by 23,000 acres. Fee-simple land in the core Mat-Su area now sells for $45,000 to $75,000 per acre.

The bill would also give DNR authority to assess civil penalties for violations of agricultural covenants rather than using the extreme measure of repossessing land. Rachel Longacre, chief of operations for DNR's Division of Mining, Land and Water, said current law provides no middle ground for enforcement.

Longacre said oftentimes there is farm housing or residential housing to support the farming activity on the land. She said literally the state would be taking away somebody's home. This bill helps provide civil penalties to help encourage that enforcement, she said.