Ms. Patty Edmund, Director of Agriculture Policy, Department of Agriculture, testified that the tasks of this office are to get background information and research topics such as WTO and NAFTA. A web page has been established. This web page is available to the public, and is a way to get the latest information on agriculture. The site has links to almost any topic in agriculture that can be researched.

***Distribution of Web address cards***

Senator Dennert asked about a hits record for the web-site. Mr. George Williams, Department of Agriculture, responded that the hits are recorded, but the reports are too new to access as of yet.

Mr. Kevin Fridley, Director, Agriculture Services, explained the budget for his office. He reported that increases in the budget are from increasing ether-net capabilities and e-government services, as well as a fleet increase. Revenue has increased due to a class action lawsuit settlement.

Senator Derby requested information on the lawsuit. Mr. Fridley responded that he would get that information to the committee.

Senator Drake suggested that a reduction in general funds should be reflected in the budget because of the increased fees. Mr. Fridley explained the need for the money is because of the growth in the industry.
Secretary Gabriel added that the general funds budget will be reprioritized.

Senator Drake questioned the increasing revolving funds.

Mr. John Ferris, Director of Agriculture Development, explained the office and the budget. There are currently 6 employees in the office. The FTE cut from the Office of Secretary is reflected here as a $53,931 increase. The additional staff will be a value-added crops marketing expert. A computer update is budgeted at $15,400.

Senate Bill 26 will eliminate the mediation board, and give all authority on loan foreclosures to the secretary.

Secretary Gabriel added that the state is not a lender of last resort and that any loans through the Department of Agriculture work with Bankers.

Senator Drake requested information on the promotion of dairy. Mr. Ferris responded by explaining the contingency on Land O Lakes. Senator Drake asked if the dairy decrease has leveled off. Mr. Ferris replied that August was the first positive growth in milk production. Secretary Gabriel added

that many crop farmers are looking into loaning tracts of land to dairy farmers, which would be beneficial to both industries.

Representative Peterson asked how the ethanol industry might be tied into agriculture development. He questioned why research is not done in this area. Secretary Gabriel responded that research is primarily for new projects. Ethanol is a known success.

Senator Dennert questioned the $19,000 FTE reduction in the Office of Secretary being replaced by a $53,900 FTE in the Development Office. Secretary Gabriel explained that it was the elimination of a secretarial position in his office and the addition of a marketing specialist in the development office.

Mr. Ray Sowers, Division of Conservation and Forestry, explained his budget. He noted that the division proposes the addition of 1 FTE. This individual will be the wild land fire suppression coordinator.

Senator Drake questioned whether this position already exists. Mr. Sowers responded by saying it is spread among three people. Senator Drake asked if just one person could do the job. Secretary Gabriel replied that the coordinator would do more than just what the three currently do, they would deal with the federal government conflict of fire management for the federal vs. the fire suppression of the state.

Representative Derby questioned whether employees from the summer fires were paid the amount promised. Mr. Sowers replied by saying the bills were tremendous and the time it took to pay the bills was much longer than expected.

Senator Burg and Senator Dennert shared concerns about promised amounts not being paid. Secretary Gabriel noted that there was frustration from volunteer fire fighters that were not used, but this was due to the federal government in charge.

Representative Pummel questioned where the bills are paid. Mr. Sowers replies that they are paid through special appropriations.

Senator Dennert questioned the cost to the state for the fires. Mr. Sowers replied that the amount was $2.6 million, because the federal government paid $3.5 million

Senator Kleven asked where the money comes from until the deficit is replenished and Mr. Sowers replied from cash expenses.

Mr. Craig Adkins, State Fair Director, reported that the fair moved the dates back last year, and this allowed more youth to participate in the fair. Additional camping and a changed carnival supplier also contributed to the added youth participation. The livestock, horse shows, and horticulture

booths were all up this year. Efforts have been made to cut expenses.

Senator Greenfield questioned the trends change of admissions from year to year. Mr. Adkins responded by saying that the introduction of the family pass accounts for that change.

Representative Clark asked if measures to insure emergency weather conditions have been taken and Mr. Adkins responded that there is a plan for this contingency.

Representative Pummel asked if there are long term building replacement plans. Mr. Adkins replied that the funds are not there, but it could be an issue in the future.

Mr. Hoscheid, Department of Legislative Audit, asked if the fair plans to get out of debt in the future to which Mr. Adkins responded affirmatively.

Representative Flowers expressed his concern that the legislature is not giving enough value to the state fair and the good it does for the youth.

Mr. Bob Gadd of the Brand Board explained his budget, noting that $3,000 is budgeted for computer support.

Senator Drake questioned if the increase in brand fees has decreased the number of brands? Mr. Gadd replied that it has not, but negative comments were made.

Mr. Randy England from the SD Wheat Commission presented his budget.

****Operating budget is handed out*****