Bids open Oct. 19 on 2,000-acre Nenana Totchaket Agricultural Project

Bids will be opened Oct. 19 on 2,000 acres of state lands west of Nenana that are being auctioned for agriculture.

It’s the first phase of the Nenana Totchaket Agricultural Project. Hopes are that there will be subsequent phases, and that the area will become another center of farming and livestock raising.

If that happens it will be a boost for Alaska’s small farm industry and also for the nearby Nenana community, once a bustling transit center for freight moving on steamboats down the Tanana River to villages and gold miners along the Yukon River.

Nenana Totchaket has been talked about for decades. Farmers have long been interested because of its good soils and favorable growing conditions.

One hundred and forty thousand acres of state land have been set aside for agriculture but lack of infrastructure and access was a major impediment.

A 11-mile gravel road was built west from the Nenana River by Doyon Ltd. as part of an oil and gas exploration program, but year-around access is needed and getting a bridge across the river became the key challenge.

The bridge is now been built thanks to a combination of federal funds secured by the Nenana Native Association, the local tribe, along with proceeds from the sale of state transportation bond approved by the Legislature an Alaska voters. The Legislature made additional funds available this year.

Given that support over several years the state Department of Natural Resources has moved ahead with the first land offering this year for the project.

It’s a strategic move that is aimed at diversifying Alaska’s small agriculture industry mainly centered in the Matanuska-Susitna valley, where farmers mainly serve Anchorage with seasonal vegetables, and Delta, east of Fairbanks, where barley and other grains as well as livestock are grown for local markets.

In Alaska’s early days local farms provided most of the food and all of dairy products needed at the time. However, improvements in shipping from the Lower 48, particularly highly efficient container shipping, allowed food and milk to be imported at lower costs than it could be produced by local producers.

That has made Alaska now 95 percent dependent on food imported from the Lower 48 which also makes the state vulnerable to supply disruptions.

Alaskans got a taste of that when grocery shelves went empty during the pandemic in 2020.

It was a rude wakeup call. By itself Nenana Totchaket won’t make Alaska self-sufficient in food but it will be a step along the way.

The project is on lands a few miles west of Nenana, has been discussed since the late 1970s. In 1982 the Alaska Agricultural Action Council noted its potential in recommendations to the Legislature and governor, who was Jay Hammond at the time.

In 2014 the Department of Natural Resources designated 148,502 acres in the area for farming in its Yukon Tanana Area Plan. The project is well located in terms of regional infrastructure. The Parks Highway, the major Fairbanks—Anchorage highway link, passes through Nenana, as does the Alaska Railroad. The Healy-Fairbanks Intertie, Golden Valley’s regional power transmission line, passes nearby.

In early 2000 the City of Nenana acquired an easement across the area to assist Doyon in its oil and gas exploration. Doyon built 11 miles of road and three bridges to support its work, and agreed with the city to leave the infrastructure in place when the exploration was completed.

After the bridge was completed in 2020 planning for the agricultural project was stepped up, including public hearings held by the DNR. Soil studies began in 2021 in cooperation with federal agencies, and the information is now available for bidders.

The soil is typical of other parts of Alaska that now supports farming. It appears well-drained and with few rocks, am advantage. The area is 400 feet lower than the Delta area and thus warmer. That gives it 10 to 14 more growing days. “It’s anticipated that farmers will be able to plant earlier,” said Erik Johnson, a DNR natural resource specialist at the Alaska Division of Agriculture.

Surveys and clearing of brush for lot lines of the Phase 1a subdivision were completed in 2021.

The sealed-bid offering underway now totals 2,045 acres in 27 tracts that vary from 20 acres to 320 acres. The smaller parcels, more suitable for vegetable-growing for example, are in the eastern part of the project nearer the Nenana River bridge and the Nenana community. Smaller tracts would be good for family farms, or for young people who want to get into farming and gain experience. Larger tracts, likely more suited to grains and livestock growing, are further west.

State officials aren’t telling bidders what to grow – an important lesson from earlier state-led agriculture projects. Instead, farmers are being given flexibility to make decisions on their own. However, bidders will have to develop a farm development and land conservation plan as part of the sale agreement but state officials will allow changes if circumstances require.

“It will be up to the farmers to decide what agricultural purpose they purchase the land for,” said Johnson, the Division of Agriculture’s coordinator for the project. “The State is not pushing one type of crop, livestock, or agricultural use over any other,” he said.

There will still be some requirements for the new landowners, however.

“The development requirement starts when the land contract is finalized and the owner has five years from that date to complete the planned development,” Johnson said.

Tim Shilling, a DNR land manager with the Division of Mining, Land, and Water said, “25 percent of the cropland soils must be improved to a farmable condition within five years of issuance of the sale contract.”

“The parcel must be maintained in that condition throughout the term of the sale contract and the improvement must be completed and maintained prior to issuance of a patent,” to the land, he said.

The farm conservation plan is approved by the state agriculture director, but it will also be reviewed by the local Soil and Water Conservation District, an advisory panel of people familiar with farming in the region, and who advises the agriculture director, Johnson said.

“If the farm plan can’t be followed there will be a conversation about how the plan can be modified, whether the parcel can be transferred to another farmer or if it is be relinquished to the state,” he said.

Non-farming uses of land that support farming are allowed, for example a machinery repair ship, but these will be approved on a case-by-case basis by the state agriculture division, Johnson said.

Meanwhile, the approved buyers can pay for the land at an interest rate 3 percent above the prime federal lending rate, which currently works out to about 9 percent, Shilling said.

“DNR land sales are a bit different from a traditional mortgage in that a purchaser enters into a land sale contract. The purchaser is not ‘borrowing’ money from the State, rather they are under a contract to pay for the land over time to receive patent as title,” or final title, Shilling said.

Agricultural auctions are offered in the same manner as the state’s non-agricultural sealed bid auctions, such as for recreation sites. The primary difference is that there is no limit to the number of parcels purchased, and there are no residency requirements. Also, corporations, businesses, and non-residents are eligible to bid for agricultural parcels, Shilling said.

While the initial infrastructure like bridges and the road are built the state Department of Transportation and Public Facilities is continuing to make road improvements, including year.

A plan is being discussed with the city of Nenana for road maintenance. Because the area is outside the city limits some form of road service area involving local property owners is the most likely mechanism for maintenance.

Electrical service is more straightforward. It will be by Golden Valley Electric Association of Fairbanks, or GVEA, the regional electric cooperative. Using state funds approved this year power transmission lines will be built into the project as they are needed.

Despite the potential, the bottom line question is whether there is really demand for new farms in Alaska and whether they can survive economically.

There’s no way of really testing the demand until the bids opened.

The DNR is optimistic, however: “We regularly receive inquiries about agricultural land sales.” Shilling said.

“We have been contacted by potential purchasers as an opportunity to purchase raw land and start a new agricultural operation as well as current farmers who are interested in expanding and diversifying their current farming operation,” he said.

A number of inquiries are from the Lower 48, where there are experienced farmers concerned about effects of climate change. “It appears the American west is getting hotter and dryer. Aquifers across the nation are being depleted faster than they can be replenished,” Johnson said.

Those changes are bad for the Lower 48, and the nation, but they will also help Alaska grow more of its food.

“University of Alaska Fairbanks scientists say Alaskan climate trends are increasing the amount of growing days and the amount of rainfall in the Nenana Region,” Johnson said.

“This creates an opportunity for new crops or increased yields of existing crops,” he said. That will make Alaska, and Nenana, attractive.