Rep. Tom Trail's Presentation to the Idaho Joint Finance and Appropriations Committee

February 19, 2009

INTRODUCTION

Madam Chairman and Members of the Committee:

     I want to thank you for this opportunity to speak on behalf of the House Agricultural Affairs Committee. We have had a busy session in the committee so far, with about 15 pieces of legislation. We accept the Governor's recommendations regarding the Department of Agriculture's reductions, but we do have some concerns which I will share with you later.  We applaud Director Gould's leadership in taking the department through a very extensive zero-budgeting exercise.  This helped the department to be in a much better position to make priorities needed to adjust to our current economic situation.

AGRICULTURAL ECONOMY

     Fortunately in Idaho, our agricultural sector is the strongest part of the economy. Hay, potatoes, wheat and other crops were at all-time highs and so were gross farm receipts, according to the University of Idaho.  Idaho farmers are maintaining the lowest debt to asset ratio since 1960.  This is an indicator of sustainability.

     In 2009, economists predict that farm net profits will fall.  However, agriculture represents the largest and most stable component of our economy. Agricultural exports rose over 8% in 2008 and contributed significantly to the State's economy — 20% of the sales, 17% of the jobs and 17% of the GDP. Over 20,000 jobs are dependent upon our agricultural export trade. Mexico and Canada are our two most important trade partners. Economists predict that the exports from the agriculture sector will be flat in 2009, but with the stronger dollar, this will still benefit the Idaho economy.

     The dairy industry is suffering some serious economic times, with the price of milk below $10.00/hundredweight.  Financial stress often causes depression and may even lead to suicide. Last year, several farmers in the Grangeville area committed suicide when caught with future contracts they could not meet, resulting in bankruptcy.  We recently learned that five dairy farmers in California committed suicide when they went bankrupt.  Senator Corder, Senate Agricultural Affairs Committee, has provided leadership with his committee in bringing together the resources needed to help troubled producers. Resources are being brought together with health service and banking professionals to focus on early detection and counseling.

INVASIVE SPECIES

     Many states are budgeting to fund programs to combat invasive species.  Florida alone has budgeted $100 million; California, Utah, Washington, Colorado and other states are budgeting millions of dollars to combat invasive species.  Some federal funding is also involved.  Some funds target aquatics and do not include funding for noxious weeds.  The figures mentioned are state funding, but some federal assistance also comes to states.

     Zebra and quagga mussels appear to be Idaho's greatest threats. Once these invasive species get established, there is practically no means of combating them.  Permanent damage to waterways and fisheries, and a negative impact on hydropower, can occur. Once established, damage could be in the hundreds of millions of dollars.  California has now quarantined a number of their prime fishing lakes because of the fear of the invasion of the quagga mussel.

     It has been suggested that the quagga could become a tool of bio-terrorism. Imagine someone bringing up a barrel of water from Lake Mead and putting quagga-laden water into Idaho waterways, domestic water supplies, etc.  It has been suggested that Homeland Security should be contacted for possible grant money to protect against the threat.

     Representative Anderson and I are working with Senator Corder and his committee, requesting intent language in the department's budget to support the director in the use of emergency warrants to combat this threat.  One of the goals will be working with the Senate Committee to change the language of the current invasive species language to provide for multiple dedicated funds and for purposes not aquatic. The solution will be found working with both the public and private sector.

SOIL CONSERVATION

     I met this morning with members of the Soil Conservation office.  In response to Governor Otter looking for "shovel ready" projects, there is an estimated $5 to $8 million of "shovel-ready" projects ready to go within the 51 local soil conservation districts.  This would also create employment for Idahoans.

     Funding for the soil conservation districts has increased over the years from city and county sources.  State funding has remained relatively flat and will be substantially reduced this year. Local districts are able to leverage one dollar of support into at least nine to ten times. The House Agricultural Affairs Committee is in support of funding 100% of the commission's 2-1 matching requests.  This, of course, will be difficult with current economic conditions. These conservation projects contribute to improving the well-being and quality of life of all our citizens.

CONCLUSION

     Senator Corder and I have worked closely together with our committee members, the Idaho Department of Agriculture, the U.S. Department of Agriculture, the University of Idaho's College of Agriculture and Life Sciences, and the private sector.  Bringing all of these entities together will produce a synergistic effort to solve Idaho agricultural problems.

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