Spud vision

SPROLE, Mont. - Let your mind wander to Sprole, Mont.

It's an old country elevator site about 65 miles west of Williston, N.D., on U.S. Highway 2.

It's far from population centers, but the leaders of the Assiniboine and Sioux Tribes on the Fort Peck Indian Reservation have a vision for this place. It's a vision of a land bristling with irrigation pivots and bringing economic prosperity to an otherwise impoverished region.

The Fort Peck potato dream would start with a 15,000-acre regional project that the tribes will develop for a cost of $45 million. The money would go for four 13,000-horsepower pumps, pipelines and 127 circles of center pivot rigs, and experienced producers would come in and lease it.

"The soils are so perfect here for potatoes, and onions and carrots - high-value crops," says Thomas "Stoney" Anketell, one of 12 members of the tribal council board, based in Poplar, Mont., about five miles to the west of Sprole. "It's sandy loam, and that's just ideal."

In a tour on the recent Mon-Dak Ag Open, the Fort Peck folks attracted interest from dozens of economic development and potato industry top people, some from the Red River Valley. All were thinking about how the might be developed and how the irrigation could attract processing plants in a high-stakes game that could involve hundreds of thousands of acres ultimately and put the region on the map.

The new dream

Anketell, 52, has been working on irrigation dream for eight years.

He holds a bachelor's degree in petroleum land management from Rocky Mountain College in Billings, Mont. In 1989, he started his professional career with the Bureau of Indian Affairs, managing oil and gas leases for the agency. All leases go through the BIA, which is the security for people who want to invest on a reservation where the politics can shift quickly.

Anketell served a stint on the tribal council from 1995 to 1997 and then was defeated and went back to his BIA job.

In 1998, a group of farmers and economic development officials from the Williston area traveled to Hermiston, Ore., to look at irrigated potato country in the high desert.

"They started looking at the land here and realizing it was ideal for potatoes and high-value crops, based on climate, soils and water," Anketell says. "The growing season is almost identical to Idaho."

At the time, Dennis Whiteman was the local agency BIA superintendent for the Fort Peck Reservation. Whiteman, a member of the Northern Cheyenne tribe in Montana, retired in Wyoming. He had been superintendent on a reservation in Fort Hall, Idaho, where he'd seen irrigation development turn good profits for tribes elsewhere and tried to convince the Fort Peck people that they were missing some opportunities.

"He said, 'You have a million acre-feet of water a year and it's worth a quarter-billion dollars a year - if you use it,'" Anketell recalls. "He said, 'If you don't use it, it's not worth squat.'"

He assigned Anketell to figure out how to get the irrigation project done for the Fort Peck tribes.

"I saw the big picture," Anketell says, but he quickly acknowledges, "I had no idea what I was getting into - what the real value of this water was to my tribes. Now my eyes are open."

Anketell helped secure BIA feasibility studies, verifying that the soils were appropriate and that the Missouri River irrigation water was of high quality. A 1999 report determined that a 15,000-acre pilot project would cost $30 million. The BIA brought in Fred Ziari owner of IRZ Consulting of Hermiston to do the engineering-feasibility studies.

Despite the possibilities, Anketell says the idea ran into serious opposition. Council members at the time let the project languish, not wanting to change the region's lifestyle and character. Some were personally involved in the cheaper lease rates and may have had a conflict of interest, Anketell thinks.

"They were just afraid of change, I think, more than anything," Anketell says. "They didn't want outsiders coming in, and they won."

He says many of today's land leases are for nonirrigated wheat farming, which bring in $12 to $16 an acre. Farmers who want to continue with that kind of farming won't be able to compete with the $300 an acre - maybe someday $500 an acre - that irrigated high-value crops such as potatoes should command.

But Anketell says that also will bring tens of millions - maybe billions over the years - to the tribes.

This vision is shared by John Morales, 40, a shirt-tail cousin to Anketell and the current tribal chairman, elected in 2005. Morales made two stops with the Mon-Dak Ag Open tour, expressing his strong support for the project.

"Irrigation is the main reason I quit a great job with the BIA and ran for the council," Anketell says. "I took a hell of a pay cut, and I'm still suffering from that. It was my main platform, and I ran with Chairman Morales. It was one of five platforms of the Morales-for-chairman platform. Wind energy and health care were other key platform points."

Red, blue and white

Anketell says the project itself is really a small part of the larger reservation.

The reservation is roughly 115 miles wide long by 55 miles deep - some 6,325 square miles. Within that are three categories of land, quite often designated by red, blue and white shapes on local maps.

The red parcels are "tribal" - owned by the tribe - which accounts for some 17 percent of the total.

The blue parcels are "allotted" land parcels - owned by individual Indians and their heirs, accounting for about 26 percent. Individual Indians were able to acquire lands through allotments until the government stopped that in 1934. The proceeds go to heirs under the so-called "fractionated interest" system.

The majority - 57 percent - is owned by non-Indians, usually white farmers, designated by white shapes. This is taxable and often is called "fee" land. This land has shifted from a trust patent (from an allotment). This is under the jurisdiction of the state and county. This land has slowly been acquired from allotment holders over the years.

Anketell says the ownership sale to non-Indians has happened when the Indian family that owns the land needs money for some reason. The Indians will sell it for a "one-time shot-in-the-arm."

While that's history, all three categories of land would be involved in the Sprole project, which actually has its own ownership mix. In this project area, tribal lands account for 42 percent of the total, while allotted land accounts for 30 percent and the fee land is 28 percent.

"The reason this is so different than the breakdown for the whole reservation is that the soil here was so sandy here that the white man didn't want it," Anketell says. "The soil is not conducive to dryland wheat farming. But that'll be the most valuable farmland in Montana, if we convert it to center pivots."

The land already is leased, so leases will have to expire, or the project will have to convince the lessee that it's in their best interests to work with the project. Much of the land is in Conservation Reserve Program contracts and also would have to expire or be bought out.

Water must be moved about five or six miles from the Missouri River and must be lifted about 170 feet. Groundwater is relatively high in "salts" and isn't suitable.

"Right now, the water and power will cost about $43 an acre, compared to Hermiston, Ore., at about $160," Anketell says.

The tribes pay 1.5 cents per kilowatt hour on the west end project.

A pivotal election

Oct. 27, the current council stands for election. It does so every two years, and the whole council is up.

Anketell says he's very concerned that the council and chairmanship will fall into the opposition to irrigation. The project is in its infancy and is easier to undermine it before it gets going.

"Right now, it's a concept, a theory," Anketell says. "It's so close to reality. We're at the point where it could go either way. We're either going to get it done or we're going to stay in poverty. That's 100 percent how I feel."

There already are opponents to the irrigation project on the current council.

"It will certainly be our opposition's position that this irrigation thing is not beneficial to the tribes," Anketell says. "Maybe they like going broke. A very few people make a lot of money farming."

He says one council member has 1,600 acres leased in the project area and also is opposed to the chairman's politics.

Or maybe they like the $2-per-acre lease rate for pastureland or the $12 to $18 figure they pay for farmland, Anketell says. The current low rates are "heavily subsidized by our tribe," he says, and the lease prices have been kept down for "several generations."

Right now, a rate of about $30 an acre is the top agricultural lease on the reservation, he says.There typically are 70 to 80 people running for the 12 council spots. In addition, another three to five will run for each of the top spots - chairman, vice chairman and sergeant-at-arms.

There are 12,000 members of the tribe, counting babies. About 3,000 of those are in the town of Poplar. There are about 4,100 eligible voters, and the election usually draws about 60 percent of those - some 2,500 people, Anketell says.

If elected, Morales says, he'd raise capital for the project any way he can.

Anketell says the tribe won't use its own money to raise the $45 million for irrigation.

Instead, they'd start by approaching the Bureau of Reclamation for a 50-50 cost-share.

The project should qualify for "new market" tax credits, for another 30 percent of the total. That could trigger guaranteed loans through the Department of Interior.

The tribes also could sell bonds.

"For the rest, we have an investment banker," Anketell says. "If we can come up with 50 percent, they'll finance the rest."

Morales says that if he gets the chance, he'll approach tribes that have money - often from gambling - for intertribal commerce investments.

"I don't know if that's been successful anywhere, but it's something we think will work," Anketell says. Those 'gaming tribes' are looking to diversify."

The Fort Peck tribes don't have gambling money.

"We're not near any population centers," Anketell says, noting that Poplar is 320 miles from the nearest major shopping mall. His tribe isn't likely to strike gold with gambling.

"The only successful gaming tribes are next to population centers, like New York City, Miami or Minneapolis. There are only a handful of tribes that have made gambling a very lucrative business."

Anketell says he's betting on agriculture.

A key to the long-term success of irrigation there is to bring in processing plants.

Anketell says this seems more likely today than ever before.

With the tribe's water rights and soils, Anketell can see the region ramping up to 150,000 to 200,000 acres - part of a big goal of expanding to 500,000 irrigated acres within 150 miles of Williston.

Pacific Northwest potato growing areas have become limited by water limitations and land competition at a time when Asian economies and appetites for frozen potato products are expanding. The Williston area was in heavy competition for the siting of a Simplot plant, which went to Portage la Prairie, Manitoba, but that choice has become less profitable as the differential between the two currencies has dwindled.

The reservation also has a 60 percent to 70 percent unemployment rate, he says. Processors who locate plants on the reservation itself can receive certain tax benefits for hiring tribal members, and rapid depreciation on equipment.

Other locations for a possible plant include Williston or Trenton, N.D., just southwest of Williston, near the famous confluence of the Yellowstone and Missouri rivers. Most of the big names in barley malting and potato processing have been assessing the issue.

Transportation is a big key.

Right now, it costs farmers $2,200 an acre to grow, store and transport potatoes to plants in Jamestown, N.D., and Grand Forks, N.D., Anketell says. If a local plant could be built, that would shave $700 off that figure in transportation costs.

"That savings could be split between the landowners and the producers," he says.

Current lease-holders probably would be compensated for making way for spuds.

"We wouldn't kick them off. We hope they'd foster a relationship (with potato growers) and learn to grow the potatoes themselves and slowly develop the financial wherewithal to do this. But we can't be held hostage either.

"We have 12,000 people to think about. They need health care. They need education, and the federal government has cut (funding). We have to decide whether we're going to allow ourselves to live in poverty - a Third World way of life. Or prosperity for the next seven generations."