Small Farmers Deserve Better Support Than The ADC Has Provided

Honolulu Civil Beat
By T.J. Cuaresma –

Twenty-five years after the agency was created, it’s past time for change.

I wonder how many people visit the website of the Agribusiness Development Corp. as often as I do?

I suspect I belong to a very small community of nerds who scour it in hopes of finding pathways to success for local farmers who are interested in growing food to feed the people of Hawaii. The need is urgent.

But if we are looking to the ADC to show the way, my frequent visits to its website and my reading of the minutes of its meetings tell me that we need to do a much better job of providing signposts for those often obscured and difficult-to-navigate pathways to regenerative farming.

Farmers dreaming of leasing a small plot of land from the ADC have their work cut out for them if they even try to penetrate the corporation’s website as I did. It was an exercise in frustration.

The ADC website recently carried a sign on its homepage announcing that the deadline for applications for available land had been extended to April 27. It sounded promising at first glance, though the extension itself tells us that the ADC likely hadn’t received a large enough pool of applications.

If true, this fact is not surprising. The ordinary farmer cannot — and will not — expend the kind of time and effort I have invested in trying to make sense of the ADC’s inventory of available lands.

For example, while several plots are listed on the ADC website as “available,” there is little to no guidance on the condition of the land and how much of it is actually usable and can be farmed.

How can a small farmer afford to put in an application under those circumstances? Even assuming some farmers are dogged enough to try, they will quickly discover hurdles like tax map key numbers not corresponding to City and County records! If only 392 acres in a 580-acre plot listed as available can be farmed, how does a farmer who is not doing the thorough research that I did know this and reflect that knowledge in his application?

More importantly we should be asking: Why does the ADC not make this information visible up front in the interest of transparency and fairness to our small farmers?

After monitoring the ADC website regularly for weeks now, I noticed the minutes of a Feb. 24 board meeting were posted in early April. The delay in posting is concerning but even more concerning is the fact that the submittals, which are supposed to reflect what transpired at the meeting, do not match up with what was actually on the agenda.

While there is nothing on the agenda about more lands available for lease, the submittals for the meeting actually refer to such lands, with none of the clarity a farmer looking for suitable land would need. Also, the minutes reflect a 45-minute discussion of the recent audit that described the corporation as failing to fulfill its mission despite the special powers and significant resources allocated to it.

Those same minutes reference a motion to have a separate meeting devoted just to addressing the concerns raised in the audit. So far, there is no indication if such a meeting has taken place or when it might take place.

At a time when the ADC is facing serious questions about its failure to live up to its mission of diversifying our agriculture to ensure food self-sufficiency, it is deeply disappointing to note that another member has been added to the ADC board — Glenn Hong, former president of Young Brothers — who brings no experience in agriculture that can be applied to right this ship. Testimony submitted in support of his nomination to the board cited his “decades of experience in the maritime and transportation industry (that) give him unique insight into agricultural issues.”

I don’t question Mr. Hong’s finance and accounting background, but how does this improve how our small farmers are served?

The Hawaii Department of Agriculture states quite clearly: “Agribusiness Development Corporation was formed in 1994 to facilitate and provide direction for the transition of Hawaii’s agriculture industry from a dominance of sugar and pineapple to one composed of a diversity of different crops.”

The farmers of Hawaii, many of whom are still waiting for access to the lands that will allow for this transition have yet to see evidence of real meaningful steps in this direction. They have seen neglect leading to the sprouting of criminal enterprises that have led to loss of life that could have been prevented with better security and management of ADC-controlled lands.

Twenty-five years is a long time to wait. It’s past time for change.

House Creates Panel To Probe Land Fund, Agriculture Agency

A resolution to create the special investigative committee cites audits of the DLNR’s land and development fund, and the Agribusiness Development Corp.

Civil Beat
By Kevin Dayton

In a rare move on the last day of session, House lawmakers voted Thursday to create an investigative committee to delve into the findings of state audits of the controversial Agribusiness Development Corp. and a state-controlled special land and development fund.

House Resolution 164 establishing the investigative committee cites critical findings of a 2019 audit of the Department of Land and Natural Resources’ Special Land and Development Fund as well as this year’s audit of the ADC.

The committee will consist of at least five House members who will be appointed by Speaker Scott Saiki, and will have the power to issue subpoenas to compel testimony, according to the resolution.

The committee is to examine the operations and management of the agencies as well as the audit recommendations, and prepare a report by the start of the 2022 session next January.

The House adjourned for the year moments after approving the resolution in a voice vote.

The 2019 audit of the special land fund found that the DLNR did not have a strategic plan for state lands, and lacked complete or coherent policies and procedures that would enable the department to properly manage its leases and revocable permits.

The House resolution quotes the audit finding that “lack of transparency and accountability hinders the administration of the Special Land and Development Fund.”

Meantime, the ADC audit found the corporation has “done little to fill the economic void created by the closure of the sugar and pineapple plantations,” according to the resolution.

The auditor’s report also found the ADC’s financial records were in such disarray that they were “not auditable.”

In an interview after the House adjourned for the year, Saiki said that “the House wanted to follow up on the two audits that were done previously, because both of those program areas are probably in need of some reform.”

State Agribusiness Development Corporation Executive Director James Nakatani said in a written statement Thursday the agency has already begun to take steps recommended by the auditor.

The ADC and its board “have already begun prioritizing all of the Auditor’s recommendations in order develop a short-term implementation plan and a longer term management structure to ensure ADC can function more efficiently and effectively,” he said in his statement.

The ADC this week completed its process for accepting applications for 1,200 acres in Central Oahu, and agriculture-related tenants are scheduled to be selected later this summer. The remaining vacant parcels should be filled by the end of the year, Nakatani wrote.

“We acknowledge there have been challenges, particularly at our Wahiawa properties with previous community concerns,” he said in his statement. “As mentioned during a House briefing earlier this legislative session, we have spent the past year clearing the area of illegal activity, making the land suitable for farming and providing the necessary irrigational improvements.”

How Hawaii Squandered Its Food Security — And What It Will Take To Get It Back

Honolulu Civil Beat

Hawaii’s reliance on food imports began in the 1960s. To achieve self-sufficiency again, experts say it will take old values and new tools. –

By Brittany Lyte –

Nearly 2,500 miles from the nearest continent, Hawaii spends up to $3 billion a year importing more than 80% of its food — a dilemma that government leaders, economists, farmers, food shoppers and community activists have long tried to solve.

Things weren’t always so grim.

For centuries Native Hawaiians managed a self-sufficient agricultural system distinguished by thriving fishponds and taro, banana, pig, chicken and sweet potato production.

But with the arrival of Westerners, vast stretches of farmland were transformed into sprawling pineapple and sugar cane plantations that exploited cheap land and cheap labor to produce goods that were mostly shipped out of state.

By the 1960s, only about half of the state’s fruit and vegetable supply was produced locally — an important roadmark in the long decline of Hawaii’s food sovereignty. Researchers have found that an island needs to be growing at least 50% of its staple crops — foods like rice, ulu, potatoes, wheat — in order to be self-sufficient if disaster strikes.

The coronavirus pandemic, which raised the risk of shipping disruptions and stoked fears of food shortages, has only exacerbated the archipelago’s vulnerability.

To gain momentum toward the goal of reclaiming self-sufficiency, it’s helpful to examine what’s changed in the half-century since Hawaii last produced roughly half its food.

But as society looks to strengthen the state’s agricultural future, experts emphasize that Hawaii can’t simply revert back to the sustainable food system of the past.

“We’re not in the same environment,” said Noa Lincoln, assistant professor of indigenous crops and cropping systems at the University of Hawaii Manoa. “We have to deal with challenges that our ancestors didn’t have to — new species of weeds and pests and rodents and diseases that just didn’t exist.”

“Our ancestors developed their agricultural practices and methods in an environment that was really different,” he said. “And there’s literally no going back to that.”

But self-sufficiency in the 21st century will require a new system rooted in the sustainable values that guided Hawaii’s pre-Western food system, Lincoln said.

Overreliance On Imports Started In The 1960s

Although Hawaii’s sugar plantations reached peak production in the ‘60s, the decade also marked the start of their long decline.

Statehood in 1959 gave rise to workers’ rights, which raised plantation labor costs. Sugar and pineapple companies responded by moving their operations abroad. Thousands of acres of some of the most viable farmland was gradually lost to development to support a new tourism-based economy.

As plantations declined, diversified agriculture grew. But so did Hawaii’s reliance on food imports — a response to increasing demand by an emerging tourism sector that quickly usurped agriculture as the state’s economic engine.

Local agriculture could not keep up with the soaring needs for large and consistent quantities of food to supply hotels and other facilities.

To this day, the small-scale farms that make up the bulk of all farms across Hawaii struggle to achieve economies of scale. Roughly 87% of the 7,328 farms statewide generate less than $50,000 annually.

“One of the biggest issues is how hard it is to be a farmer in Hawaii — specifically to make money as a farmer,” said Angela Fa’anunu, a tourism professor at the University of Hawaii Hilo who farms breadfruit on 10 acres near Hilo.

What’s more, the inconsistency between county and state rules for agricultural activities can be difficult for farmers to navigate.

For example, although the Legislature adopted a state law to let farmers sell their farm products on agricultural land in 2012, some farmers have been unable to do so until recently due to conflicting county zoning rules.

“The systems in place, the policies themselves, limit the ability of a farmer to produce,” Fa’anunu said. “The policies themselves are meant to protect agricultural land, but they can be so restrictive that they make it really difficult for a farmer to just get something done.”

Farmers Need More Support, Incentives

More than food sovereignty, advocates claim Hawaii would reap many benefits from growing more food for local consumption: healthier diets, a deeper connection between nature and society, beautification of the landscape.

Replacing food imports with Hawaii-grown alternatives would also strengthen the island chain’s economy.

But the slow pace of progress has frustrated many farmers, citing challenges ranging from the high cost of land to zoning and infrastructure issues.

Many experts agree that more government support is needed to rejuvenate local food production.

The state created the Agribusiness Development Corp. in the early ‘90s to help map out a new plan for Hawaii’s agricultural future. Over the last three decades, the state has given the ADC nearly a quarter of a billion dollars.

But as a scathing report from the state auditor’s office pointed out earlier this year, the ADC has accomplished little. The state has never really figured out what its post-plantation agricultural system should be.

“To me, it’s depressing when I go into the grocery store and the ginger root is coming in from Brazil,” said Bruce Mathews, a professor of soil science at UH Hilo.

“And it isn’t better quality, but it (costs) so much less (money) than what people could sell it for if it was grown here locally. That’s why, without changing some of the policies here, I don’t see how we’re going to move the needle on local food production.”

Today less than 1% of the state budget is committed to agriculture, whereas the plantations that were so profitable in their heyday had the support of generous government incentives.

Reinstating agricultural tax breaks could be key to ratcheting up food security, Mathews said.

“If the state is serious about improving local food production, then we have to realize that most food around the world is to some extent subsidized,” Mathews said. “We have to make it more attractive for people to go into food production so that a person would think, ‘I’d rather go into farming than work at McDonalds.’”

To make that happen, Hawaii needs to invest in agricultural parks, irrigation systems and distribution facilities with the same gusto that it developed infrastructure and amenities to support tourism, said Glenn Teves, a University of Hawaii extension agent on Molokai who grows taro and tropical fruit on his 10-acre Hawaiian homestead farm.

“It’s not enough to make land available for agriculture,” Teves said. “If you’re serious about developing agriculture, you need to look at the big picture and create infrastructure similar to what was done for tourism: airport, convention center, hotels, scenic vistas.”

Community Opposition Slows Big Ag Production

Fierce community opposition to some proposed agricultural projects, such as dairy farms, is another significant hurdle, Mathews said.

On the Big Island, for example, residents were upset when they learned that a dairy had used GMO corn to feed the cows.

The dairy ultimately had to pay environmental fines after it was sued by a community group alleging that the owners violated the Clean Water Act after residents claimed to have found bacteria in brown water downstream from the facility.

The dispute ultimately put the Big Island dairy out of business.

On Kauai, a five-year effort to establish a dairy to reduce the state’s reliance on imported milk crashed and burned in part due to residents’ concerns over the possibility that the dairy could send foul odors and flies downwind to south shore beaches and hotel pools.

Environmental compliance and community pushback isn’t just a problem for dairy farmers, but for many kinds of large-scale agriculture projects in Hawaii, Mathews said.

“I feel that as we become a more suburban and urban society, we’ve become more eco-hypocritical or eco-imperialistic,” Mathews said. “In other words, we don’t want noise, pesticides, pollution in our own backyard — but we don’t mind so much paying for food imported from other places.”

Hawaii Bill Would Eliminate Agribusiness Development Group

US News and World Report

A bill in the Hawaii Legislature would disband the state’s Agribusiness Development Corporation and transfer its resources to the state Department of Agriculture.

The state’s House Finance Committee unanimously advanced the bill Thursday that would abolish the agency.

The state created the agency in 1994 to help convert former pineapple and sugar plantation land into economically viable farms that would produce a broad range of products. The agency owns and manages 23,000 acres (9,300 hectares) of land and irrigation systems, mostly on Kauai and Oahu. It also has a small property on Hawaii Island.

The state’s House Agriculture Committee had advanced the measure earlier with a 7-1 vote last month, Hawaii Public Radio reported.

A recent state audit concluded the agency was “ill-equipped and struggling” to effectively manage its lands and had done little to fill the economic void left by the decline of the state’s commercial pineapple and sugar producing sectors.

The audit said the agency allowed tenants to occupy properties without approved leases or other agreements and turned a blind eye to criminal activity on its lands. It also found the agency had inconsistent and incomplete record-keeping.

The audit recommended that the agency develop written policies for board oversight, property management and managing files and documents. It also said the agency should create an electronic database of the agency’s lands and create strategic plans to grow and export products from Hawaii.

Fletcher Parker, a farmer, said the agency’s water and land on Kauai have been mismanaged.

“The fact that we have between 85-90% of our food on the island imported from off island is baffling to me,” Parker said in written testimony. “The land needs to be managed properly and resources need to be used for feeding the people of Kauai and possibly the other islands as well.”

Jimmy Nakatani, the head of the corporation, said the agency has made some of the changes that were recommended in the state audit. He called the bill “drastic” and “unwarranted.”

Other opponents of the bill include the state Department of Agriculture, the Hawaii Farm Bureau and a farm co-op that manages land on Kauai land for the corporation.

State Department of Agriculture Director Phyllis Shimabukuro-Geiser said the corporation, known as ADC, could convert fallow, plantation-era farmland faster and more efficiently than her department could, the Honolulu Star-Advertiser reported. She said long-term management of land and water assets would be better suited for her agency.

“The Department believes that the ADC continues to have an important role in the growth and development of diversified agriculture in Hawaii,” she said in written testimony.

Farm development agency may be plowed under by Hawaii lawmakers

The Honolulu Star-Advertiser
Andrew Gomes,

A state agency with special powers to expand diversified agriculture could be nearing a brink of perhaps its biggest accomplishment in 27 years, or disbandment.

The Agribusiness Development Corp. hasn’t been a terribly active agency for most of its existence despite lofty expectations of lawmakers who created the entity in 1994 partly to improve infrastructure of closed sugar and pineapple plantations for new diversified farming endeavors.

This year the agency, which owns irrigation ditch systems on Oahu and Kauai along with 22, 535 acres of farmland mainly on the same islands, has come under fire at the Legislature following a searing performance audit published last month.

On Thursday the House Finance Committee unanimously passed House Bill 1271, which would abolish ADC and transfer its staff to the state Department of Agriculture with the exception of ADC boss Jimmy Nakatani, a former watercress farmer who once led the Department of Agriculture.

HB 1271 has elicited a bumper crop of testimony—197 pages submitted for a Feb. 17 hearing by the House Agriculture Committee, which advanced the measure in a 7-1 vote.

Most testifiers endorsed abolishing ADC, which can issue bonds to acquire land and invest in agricultural enterprises.

Support for the bill outweighed opposition by a 5-1 margin.

Many bill supporters argued that ADC has mismanaged its roughly 18, 000 acres on Kauai by largely leasing the land to seed corn companies, which employ genetic modification technology, instead of more food producers.

“The ADC with so much power and so much control over all this aina has failed, ” Josh Mori, a Kauai organic vegetable farmer, said in written testimony. “They have failed our communities by supporting the companies that have poisoned our waterways and poisoned our air.”

Some ADC critics also cited the audit and litigation over stormwater runoff on Kauai that ADC contends was due to shifting Environmental Protection Agency regulations.

Kauai farmer Fletcher Parker said water and land on the Garden Isle have been poisoned under ADC management.

“The fact that we have between 85 %-90 % of our food on the island imported from off island is baffling to me, ” Parker said in written testimony. “The land needs to be managed properly and resources need to be used for feeding the people of Kauai and possibly the other islands as well.”

Opponents of the bill include the Department of Agriculture, the Hawaii Farm Bureau and a farm co-op that manages the Kauai land for ADC.

Department of Agriculture Director Phyllis Shima ­bu ­kuro-Geiser said ADC can convert fallow plantation-era farmland faster and more effectively than her department but that long-term management of land and water assets would be better suited to her agency.

“The Department believes that the ADC continues to have an important role in the growth and development of diversified agriculture in Hawaii, ” she said in written testimony.

Umi Martin, a tropical fruit farmer leasing ADC land on Kauai, said in written testimony that abolishing ADC won’t result in better public farmland management or allow more farmers to use such land faster.

Martin, a Native Hawaiian born and raised on Kauai, said that after ADC received the Kauai lands in the early 2000s in the wake of Kekaha and Lihue sugar plantation closures, seed companies moved in because there was no demand from diversified farmers.

Martin added that ADC isn’t perfect, but he said the agency can serve the growing diversified farming community in emerging opportunities.

“Abolishing ADC will stop the momentum and we will find ourselves even more frustrated with the lack of progress, ” he said.

Some of this momentum began building between 2012 and 2018 when ADC acquired, at the direction of the Legislature, 3, 848 acres of Oahu farmland mostly once used for Del Monte and Dole pineapple production near Wahiawa.

Nakatani told the House Agriculture Committee at a special briefing Friday that ADC has been working to develop irrigation infrastructure, including wells and reservoirs along with roads and other things, to allow more diversified farming on the land.

A few farmers, including big local diversified farm operator Larry Jefts, use about half the land and have produced crops in recent years with limited water.

Nakatani said another 1, 200 acres should be ready this spring for farmers who can apply under a process that ranks applications based on criteria including business plans and experience.

Another ADC plan is to develop a crop-processing facility, research greenhouse, storage warehouse, office space, worker housing, farmers market and visitors center on 34 acres near Wahiawa to support diversified farm tenants.

ADC also is preparing 1, 500 acres on Kauai for diversified farm use in the next one to three years, Nakatani told the committee.

Nakatani acknowledged that ADC, which he has led since 2013, has operational issues brought into glaring light by the audit, though he disagreed with the report’s conclusion that ADC has done little to fill a void left by plantations.

ADC deficiencies cited in the 56-page report by state Auditor Les Kondo included a lack of statutorily required market research, no meaningful agribusiness plan, informal tenant arrangements, state procurement rule violations, records in disarray and poor board oversight.

“After almost 30 years, we found that ADC has done little—if anything—to facilitate the development of agricultural enter ­prises, ” the audit said. “The COVID-19 pandemic has highlighted the necessity for a strong and diversified agriculture sector, one that could provide for much of the state’s food needs while producing crops for export. Unfortunately, thanks in part to ADC’s past inaction and its continued lack of direction, focus, and competence, this dream remains as elusive as it was nearly 30 years ago.”

Kondo’s report said Jefts has done site work benefiting ADC in return for rent credit without any paperwork, and that ADC ignored a car chop-shop operation established on the Wahiawa property before the agency’s acquisition.

The audit also said a separate financial audit was called off because ADC hasn’t kept financial records since its inception.

In a formal response to a draft of the audit, ADC didn’t dispute many issues, but said the audit reflects a rudimentary understanding of what it takes to expand commercial agriculture in Hawaii. ADC’s response did refute the auditor’s contention that ADC ignored criminal activity.

ADC said it has worked with law enforcement to root out the chop shops, chicken fighting, over 150 abandoned vehicles, the homeless and drug activities on its Wahiawa land.

Ken Nakamura, an ADC staff member, said at Friday’s briefing that criminals in the overgrown fields had heavy equipment to destroy ADC barriers and weapons to threaten eviction efforts.

“We were literally outgunned, ” he said. “It became so dangerous that even the law enforcement officers did not want to go into the area.”

Nakatani said carrying out ADC’s mission has been difficult with a lack of funding and a staff of 11, of which seven are dedicated to a 27-mile system of tunnels, pumps and ditches transporting water from Windward to Leeward Oahu that ADC received in 1999 as its initial enterprise.

“We talk about we want to move agriculture, but not much money is given to agriculture, ” he said.

Nakatani also said ADC will focus on carrying out audit recommendations.

“It’s not like we turn a blind eye to that, ” he said. “We take it seriously. … We’re under pressure to move agriculture, and we’re trying our best to move it.”

If the full House approves HB 1271, the bill would advance to the Senate where a bill is under consideration to have ADC lease at least half its land to local food producers by the beginning of next year.

House Committee Advances Bill to Dissolve the Agribusiness Development Corporation

Hawaii Public Radio
By Ku`uwehi Hiraishi –

Hawaiʻi legislators are one step closer to dissolving the state’s Agribusiness Development Corporation (ADC). The 27-year-old entity was initially created to develop economically viable farms to fill the void created by the closure of plantations. But a recent state audit found the ADC has done little to fill that void.

Hawaiʻi lawmakers established the Agribusiness Development Corporation in 1994 to convert the state’s agricultural infrastructure from plantation-style monocrop production to a more diversified agriculture industry.

Over the years, the ADC secured agreements for 2,000 acres of former plantation lands on Kauaʻi and Oʻahu with growers producing a variety of crops for local consumption. But a recent report by the state auditor found the ADC has done little to fill that void. It criticized the agency for a lack of oversight and in many cases non-existent recordkeeping.

House Bill 1271 would disband the ADC and transfer its resources including four staff and an estimated 20,000 acres of land to the state Department of Agriculture.

Jimmy Nakatani, head of the ADC, argues the agency has already made some changes recommended in the state audit and he says the bill is “drastic” and “unwarranted.”

But Koloa resident Jeri Di Pietro, President of Hawaiʻi SEED, says the failures of A-D-C have meant a lost opportunity for local farmers looking to develop their own agricultural business.

“I have come to know many people who want to farm on Kauaʻi. They want to grow healthy food and there is a whole workforce here on the West Side and on the South Shore,” says Di Pietro, “These people, if they were able to get onto the land, they would avoid having to commute into Līhuʻe and would have jobs there to be able to grow our local food for the island.”

The House Finance Committee unanimously approved House Bill 1271, which will now go before the full House for approval.

Bill to Dissolve Agribusiness Development Corporation Passed Out of House Committee

Hawaii Free Press
News Release from House Democratic Caucus, February 19, 2021 –

Honolulu, Hawaiʻi – A bill to dissolve the Agribusiness Development Corporation (ADC) and transfer all its resource except the director to the Department of Agriculture was passed unamended by the House Agriculture Committee on February 17.

HB 1271 is in response to a devastating audit of the ADC that stated that the company – despite being given a clear mission, broad powers, and millions of dollars over the last 25 years – had failed to promote diversified agriculture that would feed the people of these islands and provide employment after the closure of the sugar plantations. Those findings were reaffirmed in an equally scathing report from the University of Hawaiʻi Economic Research Organization (UHERO).

The bill was introduced by Representative Amy Perruso with the support of Representatives Jeanné Kapela, Matthew S. LoPresti, Lisa Marten, Richard H.K. Onishi, Adrian K. Tam, Tina Wildberger, Della Au Belatti, and John M. Mizuno.

“I introduced HB1271 because I believe as lawmakers, we have a duty to protect the common good. When problems with governance emerge, despite our best efforts, we are doubly obligated to move swiftly to address the situation by ending the malpractice and charting a better course,” said Rep. Perruso (D-46, Wahiawā, Whitmore Village, Launani Valley). “That’s what HB1271 does. I’m grateful for the support of my colleagues in moving to repeal this bill that created the ADC in the first place.”

Perruso has heard regularly from several small farmers in her district about the difficulties encountered when trying to secure agricultural leases.

“We should be encouraging our small farmers, not putting up roadblocks or refusing to provide transparency as has been the case with the ADC. Importing 90% of our food puts us in a very precarious position. After more than two decades we are still without the plan that the ADC was supposed to develop to address food self-sufficiency. We cannot simply reproduce the status quo as if nothing is wrong with this attached agency,” Perruso said.

Embattled Agribusiness Corporation Has Powerful Friends

Civil Beat
by Stewart Yerton –

Lawmakers plan to vote next week on a measure to dissolve the Agribusiness Development Corp. –

With the future of a state agency in charge of transforming Hawaii’s old plantation lands into working farms in the balance, battle lines formed Friday between Gov. David Ige’s administration and big agricultural organizations on one side and lawmakers who say the agency has failed in its mission and should be dissolved on the other.

The hearing before the Hawaii House Agriculture Committee produced no result, as the committee voted to defer until Friday a bill that would dissolve the corporation.

However, the hearing made clear that the embattled Hawaii Agribusiness Development Corp. still has powerful supporters – including, with some qualifications, Gov. David Ige’s agriculture chief — who want to keep it around. The ardent support comes despite two recent reports, by University of Hawaii economists and the Hawaii State Auditor, that concluded the 25-year-old agency is a failure.

Lawmakers have introduced a bill to dissolve the corporation and fold it into the Department of Agriculture. Although only a couple of the bill’s supporters showed up to testify during the virtual hearing, including Anne Frederick of the Hawaii Alliance for Progressive Action, dozens submitted written testimony.

Meanwhile, ADC’s supporters are pushing back. During Friday’s hearing, the corporation was joined by the Department of Agriculture, the Hawaii Farm Bureau, the genetically modified seed industry, and a group called Friends of Waimanalo, which said it has started to work with the corporation.

Of the few who showed up to testify, most merely stood on submitted written testimony. Even Jimmy Nakatani, the corporation’s executive director, did nothing more that read his written testimony. In fact, Nakatani wouldn’t even answer a question posed by the bill’s sponsor, Rep. Amy Perruso, who represents the central Oahu district that includes former plantation land now controlled by the corporation.

In an interview after the hearing, Perusso said she was disappointed by Nakatani’s unwillingness to speak candidly to the committee. However, she said that was not unusual.

“We have great difficulty getting clear, specific, accurate answers from them on all kinds of issues,” she said.

Still powerful players stood behind the ADC with written testimony in support. They included Dole Food Co. Hawaii; the Kauai Chamber of Commerce; Crop Life America, a trade group representing chemical pesticide makers, and Robbie Melton, a former corporation board member who also served as chief executive of the Hawaii Technology Development Corp.

“Their goal is to help farmers and the agriculture industry,” Melton wrote in support. “They have many forward thinking ideas to improve the agri industry in Hawaii.”

But some who have taken a close look at the corporation recently have been unimpressed. For example, the bill cited a report by the Hawaii State Auditor, released in January, that found the 25-year-old corporation has done little to fill the economic void caused by the collapse of Hawaii’s sugar and pineapple plantations.

A report by University of Hawaii economists, meanwhile, called the ADC a “fiasco.”

Perusso pointed out that the ADC is not merely an obscure entity attached to the Department of Agriculture. The corporation has the power to acquire and develop lands for agriculture, and to that end the Legislature in recent years has appropriated more than a quarter of a billion dollars to the ADC, including about $23.4 million for operations and $238 million for capital investments. Despite such large investments, it has been difficult for lawmakers and the public to see how the money has been spent and how well the corporation has been fulfilling its mission.

Meanwhile the corporation and the Department of Agriculture have so strongly resisted attempts to hold the corporation accountable that in 2018 the agency opposed a measure to help the Hawaii papaya industry because the measure also required an audit of the ADC. At the time, Nakatani said he was too busy to be audited, and then-agriculture department director Scott Enright agreed.

Perusso said she was confident that the bill will pass out of the committee next week. In the meantime, she said she was also encouraged by the testimony of the current Hawaii Agriculture Board chair, Phyllis Shimibukuro-Geiser, who suggested that the department could take over the corporation’s key functions of managing land as well as things like irrigation systems.

Even though Shimibukuro-Geiser technically opposed the bill, Perusso said such a move would be a step in the right direction when it comes to getting an out for farmers to use to grow food in Hawaii.

“We need to really focus our attention on small farmers,” she said. “And the Department of Agriculture is the one to do that.”

Lawmakers Must Fix The Agribusiness Development Corporation

Civil Beat

Two new reports reveal that the government agency has failed miserably in its critical mission to diversify ag.

By Civil Beat Editorial Board

In 1992 Dole Food ended pineapple production on Lanai. Just two years later, Hilo Coast Processing shuttered its sugar operations for good, as did Hamakua Sugar, both on the Big Island.

The year 1994 was, not coincidentally, the year the Hawaii Legislature created the Agribusiness Development Corp. to “facilitate the transition of agricultural infrastructure from plantation operations into other agricultural enterprises,” as Act 264 stated.

The ADC’s work would involve analyzing marketing approaches and providing leadership “for the development, financing, improvement, or enhancement of agricultural enterprises.”

The Legislature gave it wide latitude, exempting it from public land trust regulations and from Public Utilities Commission regulations and civil service laws.

ADC’s mission soon grew even more urgent. Beginning in 1995 with the closure of Oahu Sugar and continuing to 2016 when Maui’s Hawaii Commercial and Sugar Company closed — the end of King Sugar — more than a half-dozen more large-scale ag operations folded. (Some pineapple is still grown locally.)

But, even though the trend was painfully obvious and thousands of people were losing jobs, ADC was slow to act.

It wasn’t until 2003 that it assumed management of the Kekaha Sugar operation (which halted for good in 2000) and not until 2012 that it made its first land purchase (1,227 acres of former pineapple plantation lands in Wahiawa owned by the George Galbraith Estate). And it wasn’t until 2017 that ADC issued its first license for those lands.

Indeed, the Agribusiness Development Corp. has transformed into an organization that mainly purchases farm land but does little with it.

Today, 27 years after its founding, the ADC has not become “the entity the Legislature envisioned,” one that would develop an agriculture industry “to stand as a pillar” of the state economy alongside tourism and the military, according to the audit, which is rightly described in news reports as “scathing.”

Instead, it has been a complete “fiasco,” in the words of a University of Hawaii economist.

The one-two punch of the state audit and the UHERO analysis, both released last month and both coming at a time when the state is hungry for new revenue sources in the wake of the novel coronavirus calamity, is a serious wake-up call.

The responsibility for the ADC’s failure falls to the agency’s leadership, of course, but mostly with the organization that created it: the Legislature. They made it; they own it.

It’s encouraging that House Speaker Scott Saiki and Senate President Ron Kouchi are troubled by the reports. Saiki, who has promised a public hearing on the ADC, described the agency as “dysfunctional,” which is an understatement.

We are worried, though, that this may become less of a concern as the Legislature continues its 2021 session restricted by deep budget deficits. Will the end result be yet another task force to study the issue?

The ADC itself seems resistant to change, with Executive Director Jimmy Nakatani previously claiming it could not be bothered to get audited because it was “too busy.”

Too busy doing too little, it seems. Nakatani himself is quoted in the audit as saying, “No one here has a deep agricultural background.”

But there is more good news amidst these shameful findings: Other legislators are already working on constructive plans for the ADC.

Sen. Mike Gabbard, chair of the Agriculture and Environment Committee, has scheduled a hearing next week on his bill to require the corporation to annually lease at least 50% of its land to businesses primarily focused on local food production. The bill notes that the ADC manages over 22,000 acres of public agricultural lands “with significant potential to shape” the state’s goal of greater food self-sufficiency.

That’s an idea that deserves attention. As Civil Beat’s new series, Home Grown, points out, Hawaii imports more than 80% of what we eat.

We are pleased as well to see that Gabbard’s House counterpart, Rep. Mark Hashem, has authored a companion bill to Gabbard’s. Both also require the ADC and the Department of Agriculture to submit reports to the Legislature on leasing activities. (Hopefully, Mr. Nakatani can make the time.)

Even if the bill passes, we are a long way from true diversification, let alone returning ag to its premier status as an economic driver. Seed crops, coffee, cattle, macadamia nuts, aquaculture, papayas, bananas and other island agricultural commodities generate around $400 million of revenue a year of the state’s total GDP of $97 billion in 2019 — that is, pre-COVID-19.

But agriculture must be a part of our economic future. If the ADC is to play a role, lawmakers would do well to review the 28 recommendations in the auditor’s report, including the first one:

“Update and revise its mission statement to reflect the corporation’s purpose more completely as intended by the Legislature to address, among other things, facilitating the development of Hawaii-based agricultural enterprises and strategies to promote, market, and distribute Hawaii-grown agricultural crops and value-added products in local, national, and international markets.”

Barring that, lawmakers should take a look at another proposed bill this session, one that references the auditor’s report directly: Dissolve the ADC and transfer all lands and staff — “except for the executive director” — to the Department of Agriculture.

Contact Key Lawmakers
Senate President Ron Kouchi
senkouchi@capitol.hawaii.gov
808-586-6030

House Speaker Scott Saiki
repsaiki@capitol.hawaii.gov
808-586-6100