Sand Hollow Project Would Expand Leasable, Irrigated Land

The Department of Natural Resources (DNR) Southeast Region Office is working through the logistics of enabling an unleased trust parcel to generate revenue for the Common School trust for a long period of time.

In 2011, the Quincy-Columbia Basin Irrigation District offered DNR a new water service contract which will enable the department to develop and irrigate a previously undeveloped parcel, called the Sand Hollow property.  The water source would be the Sand Hollow Wasteway which carries run-off water, which is considered non-natural water created from the Columbia Basin Irrigation Project managed by United States Bureau of Reclamation (USBOR). To access the wasteway water, DNR proposes to build a small portion of the project on USBOR lands.

After obtaining the Water Service Contract, DNR has been actively marketing the parcel to find qualified bidders interested in a “development lease,” where permits, permissions, land preparation, and an irrigation infrastructure could be pursued.  In February 2013, DNR signed a lease with MTA Farms, who is currently working through the process of designing and building a system with assistance from the department’s Southeast Region. The system (see concept map) will serve State trust-lands in this area for a long time to come.

After being developed, this parcel, relatively valued at $1,000 per acre, will likely increase in value by six to eight times in the current market. In addition, this previously unused parcel will begin to produce yearly revenues – another trust land success story for K-12 education.

Chad Unland
DNR Southeast Region

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Changing Attitudes Improving Farm Health and Productivity

Minimum-till field

Minimum-till field near Dusty, Washington. Photo: Dale Warriner/DNR.

I’ve seen a lot of changes in my 35-year career with the Department of Natural Resources (DNR), and it has become clear that changes which are sustainable come from changes in attitudes. One example is in the soil and water conservation arena. It used to be painful to drive through the Palouse after a rainstorm and see the severe soil erosion. Today, there still are fields that erode more than they should, but not nearly as many as in years past. These improvements came from changes in attitudes about the importance of controlling soil erosion for sustained farm health and profitability. My hat’s off to the conservation organizations that have made great efforts over the years in educating producers and landlords about conservation farming.

One of DNR’s early soil conservation programs started in the early 1980s when DNR implemented the Resource Protection Agreement (RPA) Program. The end product was a conservation plan on state lands developed through the joint efforts of the then Soil Conservation Service, (now, the Natural Resources Conservation Service), our lessee, and DNR to reduce soil erosion on trust lands. That plan set minimum standards for surface residue, tillage, seeding date, waterway and stream protection, and identified critical areas prone to erosion. Many acres of steep land were retired to grass, riparian areas were expanded, grass waterways established, and tillage reduced.

The successor to the RPA program was the Ecosystems Standards for State Agricultural and Grazing Lands that was enacted by the 1993 Washington State Legislature. It established minimum standards for conservation and protection of all land and stream types managed by DNR and the Washington Department of Fish and Wildlife. The RPA program was a culmination of efforts by state land management agencies, state and federal and regulatory agencies, tribes, conservation districts, and special interest groups from across the state. It was no easy task to reach consensus with such a diversified group, but in the end common sense prevailed and a good product was produced.

Every agricultural or grazing lease issued today includes a Resource Management Plan (RMP).   By signing the lease, the lessee agrees to meet the conditions of that plan. DNR is flexible in allowing modifications to the RMP to meet a lessee’s changing needs.

On the horizon is a new deep furrow drill (seeder) for tillage-based summer fallow that is being developed by Washington State University. It allows retention of high quantities of grain residue and eliminates several conventional tillage operations to reduce soil erosion in the drier wheat producing areas of Washington. When those drills are fully developed and available, DNR will encourage its lessees to try them.

These efforts are, I hope, clear evidence that DNR remains committed to move forward and adapt to conserve state trust lands for current and future generations beneficiaries.

Dale Warriner
Acting Columbia Basin District Manager, Southeast Region

Plans for Expanded Marketing of Expiring Leases

DNR leased landThe Department of Natural Resources (DNR) serves as a trust manager with a fiduciary responsibility: to keep lands productive and generate revenue for the trusts, in perpetuity. State law requires that we obtain Fair Market Rent (FMR) when leasing state trust lands. Our lessees’ right to the leased property does not extend beyond the term of the existing lease agreement. When a lease expires, the State, at its option may choose to take a lease to public auction, or renegotiate a new lease with the existing lessee, which allows for bids from other interested parties. 

When DNR decides to negotiate the re-lease of a parcel with an existing lessee, there is still an opportunity for other qualified interested parties to let us know they are interested in the lease. They do this by submitting an offer called a “bonus bid” on the lease. The bonus bid packet must include evidence of required managerial and financial qualifications of the bidder, a deposit payment of $100, a plan of operation for the land, and a cash bid amount proposed by the bidder. 

The existing lessee may match the bonus bid. If they do, negotiations continue with the bonus bid amount serving as an additional one-time payment along with the negotiated FMR rent. If the existing lessee does not match the bid, or negotiations fail for some other reason, the lease is more widely marketed for public auction, with the bonus bid amount set as a minimum bid.

In the past, DNR has received feedback that it is difficult for other interested parties to learn about leasing opportunities, and there isn’t enough time to learn about the characteristics of the land and DNR’s leasing terms to submit a bid proposal. Per state law bidders may only submit a bid proposal during the 30 day period following the date the lease is advertised (160 days prior to lease expiration), and before negotiations commence with the existing lease.

DNR is working to improve transparency, efficiency and trust revenues by posting more information on our DNR website about our agricultural and grazing lands, leases, and the bidding process. Expanding our marketing of expiring leases is one way we can validate the value of our leases with a public process. This will also provide an additional opportunity for other farmers and ranchers to bid on leases of state land.

Over the next few months we plan to post more information on upcoming lease expirations, required forms, and a description of the process for placing a bid on an expiring lease. One tool will be an interactive map that allows users to zoom in on a lease parcel and see the size and location of the state lands, and individual leases. When you click on a parcel on the map for which there is an upcoming public auction or lease expiration, additional information to help bidders will be available online.

I plan to attend industry events and I’m available to give a presentation to your commodity group to share information about leasing opportunities and the application process. By providing more information earlier, potential bidders will have the information they need well in advance of lease expiration. This process still allows the existing lessee a first right of refusal (by matching a bonus bid). 

By Kathleen Beach, Lease Marketing Section Manager, DNR  Southeast Region

Genetically Modified Wheat Found in Oregon

wheat fieldThe US Department of Agriculture (USDA) earlier this year announced the discovery of what appears to be volunteer genetically modified wheat growing on an Oregon farm. The USDA confirmed that the wheat is glyphosate-resistant (Roundup Ready) wheat, a Roundup Ready wheat that Monsanta tested in several states from 1998 to 2005 before discontinuing the program in 2005. An update concerning this issue on the Monsanto corporate blog, Beyond the Rows. The blog also includes links to official statements from the USDA and Monsanto.