JUNEAU -- A state audit concludes that Alaska's attempt to grow a business exporting seed potatoes probably is not economically viable.

The fact that Alaska has virus-free potatoes, and can certify them to the satisfaction of Asian buyers, has spurred hopes of developing a billion-dollar market since 1994. Bryce Wrigley, president of the Alaska Farm Bureau, said Alaska is the only state from which Taiwan and China will accept seed potatoes.

Despite the audit's conclusions, Wrigley said he believes that a "tremendous opportunity" remains.

The audit was conducted by the Division of Legislative Audit earlier this year. It found that program expenditures of $5.5 million in state and federal money appear to have produced revenues of $250,000 to $750,000, according to Monday's Juneau Empire.

State funding for the export certification is funneled through the Alaska Manufacturing Extension Partnership. Executive Director Eric Downey said he and other officials in the Department of Commerce, Community and Economic Development found the auditors' conclusions persuasive.

The problem was that the state developed a testing program that could produce the virus-free potatoes demanded in the Asian markets, but the state's fledgling potato industry could never capitalize on it, he said.

"This is a case overall where one part of the industry development, the testing and certification side, got a little bit ahead of the industry and business development side," Downey said.

Despite multiple test shipments to Taiwan and China over the years, with a high of 100 tons in one year, the industry never developed enough of an overseas market, he said.

Downey said he expects the state to wind down involvement in the export seed potato business and to return some of the $600,000 appropriated by the Legislature for the program this year.