Out of Control Policy Blog

...and Privatization: Alaska-Style

Tacking on to my last post, from Reason's Annual Privatization Report 2008:

In August 2007, the Alaska Board of Agriculture and Conservation announced its decision to privatize Matanuska Maid Dairy, a state-run dairy enterprise. The 71-year old dairy was a private cooperative until 1985, when the state bought it out of bankruptcy. Over the past two years, Mat Maid has lost nearly $700,000. According to Board member Kristin Cole, the dairy should have been privatized a long-time ago as it "was never intended that the state be the owner of this asset long-term."

From my read of the background story on this, Gov. Palin didn't come on board immediately , but she did eventually:

Governor Sarah Palin today accepted the recommendation of the Creamery Board to look at options to transition the Mat Maid Dairy into the private sector. The decision comes following a 10-week evaluation of the state's oldest dairy by the Creamery Board and an appointed task force.

Governor Palin replaced the Creamery Board earlier in the summer after Mat Maid executives announced the dairy would shut down without evaluating the consequences the closure would have had on the state's dairy industry. The new board was charged with taking a fresh look at Mat Maid's operations while cutting costs and increasing sales. Non-critical expenses were immediately cut in an effort to temporarily bring Matanuska Maid to a break-even point without using outside funds.

"I applaud the hard work by the members of the Creamery Board and the task force," said Governor Palin. "Because of recent market forces that are beyond our control, including the soaring price of outside milk, I agree with the board's decision to look at other options for Mat Maid.

"Continuing operations through the summer has put us in a better position to attract potential buyers. Privatizing Mat Maid will provide our local farmers with options, something they didn't have three months ago, so I am please to accept the Board's recommendation."

» Reason's Annual Privatization Report 2008
» Reason's Privatization Research and Commentary

Leonard Gilroy is Director of Government Reform


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