Redefining the Ranch’s Water Transfer Agreement

THE MOLOKAI DISPATCH

Wednesday 7-11-07

In the 1960?s the largest rubber-lined reservoir in the world was built on Molokai supplying Hawaiian Homestead farmers with irrigation water. The massive project tunneled through the island?s main mountain range to brining water from Molokai?s wet north side to the arid plains of Ho`olehua. The project is known as the Molokai Irrigation System (MIS).

In 1975 a water use agreement was formed between the State and developers of the Kaluakoi Hotel. The agreement, still in effect today, allows Molokai Ranch to transport well water from Central Molokai to West Molokai using the MIS.

The current agreement is under scrutiny as a new amendment has been proposed. An upcoming public meeting on Wednesday, July 18 will provide a forum for the details which allow Molokai Ranch the lease of MIS facilities.

The following is an overview of the original agreement and its proposed amendment. Also discussed are concerns of the Molokai Homesteaders and Farmers Alliance, who are advocating a return of the MIS to its intended purpose ? agricultural use.

*The Original Agreement*

In order to supply their development, Kaluakoi planners proposed to lease MIS pipelines. The State believed that by leasing MIS lines to the developers, the people of Molokai would receive profits and revenue beneficial to the island?s economy.

A contract was created that allowed Kaluakoi developers to lease a portion of the MIS for an annual rate of $45,000 during the first 10 years. After that, the amount was to be adjusted in accordance to any increases in the County?s domestic water rates.

In compliance with state regulations, Kaluakoi developers constructed two service connections: one for injecting water into the system, and one for drawing it out.

The developers were permitted to withdraw the equivalent amount of the water they injected. Overall amounts withdrawn could not exceed two million gallons per day.

While the State did agree to provide reasonable maintenance of the system, it also stated that it would not be held ?liable for any interruption, shortage of any loss or damage occasioned thereby.?

In the case of a drought or other emergency conditions, the State reserved the right to prioritize service to MIS consumers over Kaluakoi users. The State also reserved the right to terminate its agreement with Kaluakoi at any time (with a two year notice) if it was determined that ?the capacity of the system is not sufficient to meet the needs of the public for agricultural purposes.?

During the course of the contract, MIS authority was transferred from the Board of Land and Natural Resources to the Department of Agriculture (DOA) (July 1, 1989).

The 20-year contract expired on Dec. 31, 1995 and has since been renewed. When Molokai Ranch acquired the Kaluakoi Resort?s 4,100-acre property in 2001 it also inherited the MIS lease.

Between 1995 and 2006 the contract was extended four times.

*The Current Amendment*

In early 2007 Molokai Ranch and DOA drafted a major amendment to the existing MIS use agreement. The amendment is being discussed and reviewed by community members including: Molokai Homesteaders and Farmers Alliance (MHFA), Molokai Ranch, the MIS board and the Department of Agriculture.

Homesteaders are arguing that the amount withdrawn by MPL be lowered by nearly half. Right now there is a two million gallons per day withdrawal limit which was based on what was thought to be the capacity of the Ranch?s water sources. MHFA points out that this estimate is no longer accurate.

Homesteaders are concerned that the Ranch could use MIS pipelines to transfer water to future developments. The original agreement limited water supply to the Kaluakoi area. The proposed amendment no longer identifies specific locations. Homesteaders want to continue regulating transmitted water to Kaluakoi.

The amendment also suggests that if MIS water should become scarce, the system would have the option of purchasing water from the Ranch?s Well No. 17 supply. But homesteaders disagree. They say purchasing water from the Ranch should never be an option. ?If you need water from [the Ranch], you are mismanaging the MIS,? states a MHFA proposal.

According to the proposed amendment, the Ranch could build its own pipeline from Well No. 17 to the Mahana Pump Station on the west end bypassing MIS facilities altogether. If the Ranch fails to construct the pipeline by 2011, it is stipulated that the current agreement could be extended until 2016.

Homesteaders want the agreement terminated without renewal at the end of the contract. This would force the Ranch off the system within five years. It would allow for the MIS to return to its intended use, servicing Hawaiian homesteaders and farmers.

? 2006 THE MOLOKAI DISPATCH

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Hawaii Monthly Livestock Review

Here is the PDF file for the *Hawaii Monthly Livestock Review* Report.

lvstk071207.pdf

Please visit the website for more information: http://www.nass.usda.gov/hi/

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Contact Information:
Mark E. Hudson, Director
USDA NASS Hawaii Field Office
1421 South King Street
Honolulu, HI 96814-2512

Office: (808) 973-9588 / (800) 804-9514
Fax: (808) 973-2909
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HAWAII MONTHLY LIVESTOCK REVIEW” reports are available on our website http://www.nass.usda.gov/hi/ and also PRINTED monthly. Subscriptions for PRINTED copies are free to those persons who report agricultural data to NASS (upon request) and available for $4 per year to all others.

May Egg Production Down 17 Percent From A Year Ago
Hawaii egg production totaled 6.9 million (19,167 cases) in May 2007, down 17 percent from May 2006. The average number of layers on hand during May 2007 was estimated at 367,000, down 3 percent from April 2007 and down 18 percent from May 2006. The average rate of lay during May 2007 was 1,880 per 100 layers (60.6 percent rate of lay), up 1 percent from May 2006

May Cattle Marketings Up 10 Percent From 2006
Total cattle marketings for May 2007 is estimated at 7,500 head, up 10 percent from May 2006. Cumulative cattle marketings for 2007 through May totaled 24,000 head, down 1 percent from the same period a year ago.

May exports up 12 percent from year ago
Exports of steers and heifers totaled 6,500 head in May 2007, up 12 percent from a year ago. Exports of steers totaled 3,900 head during May 2007, 3 percent higher than a year ago. Total export of heifers was also higher in May 2007 compared to a year ago at 2,600 head, a 30 percent increase. Cumulative exports for 2007 totaled 19,500 head of steers and heifers through May, down 2 percent from the same period a year ago. Cumulative exports of steers for 2007 stands at 11,500 head, down 1 percent from 2006. Exports of heifers showed a larger decrease through the first five months of 2007 at 8,000 head or down 4 percent from a year ago. Exports of other classes of cattle were not included.

Average live weight up 2 percent
The average live weight of steers and heifers exported from Hawaii in May 2007 was 418 pounds, up 2 percent from May 2006?s average live weight of 412 pounds.

Commercial Beef Production Up 5 Percent
Hawaii commercial beef production (local slaughter) during May 2007 totaled 582,000 pounds, up 5 percent from May 2006. Cumulative beef production (local slaughter) through May 2007 totaled 2.6 million pounds, up 7 percent from a year ago. Commercial kill totaled 1,000 head in May, unchanged from May 2006. Average live weight per head was 1,085 pounds in May 2007, up 6 percent from the average live weight per head in May 2006.

Commercial Pork Production Down 5 Percent
Hawaii commercial pork production during May 2007 totaled 316,000 pounds, down 5 percent from May 2006. Cumulative pork production for the first five months of 2007 totaled 1.4 million pounds, down 7 percent from a year ago. Total hog kill was 1,900 head in May 2007, down 5 percent from a year ago. Average live weight per head was 219 pounds in May 2007, down 4 percent from the 227-pound average a year ago.

May Milk Production Down 35 Percent From Year Ago
Hawaii?s dairy cows produced 3.3 million pounds of milk in May 2007, down 35 percent from a year ago. Cumulative milk production for the first five months of 2007 totaled 18.9 million pounds, down 25 percent from the same period in 2006.

May?s Cow Herd Down 26 Percent From Year Ago
Hawaii?s cow herd, both dry and milking, numbered 3,200 head in May 2007, unchanged from April 2007 but down 26 percent from May 2006. Average milk per cow is estimated at 1,020 pounds for May 2007, down 14 percent from last May?s average of 1,185 pounds per cow.

Average Farm Prices

Most Livestock Prices Remain Higher Than Year-ago Averages

Steers and heifers
The average dress weight farm price for steers and heifers is estimated at 99.0 cents per pound for May 2007, down 1 percent from April 2007 but unchanged compared to a year ago.

Cows
The average dress weight farm price for cows is estimated at 55.0 cents per pound in May 2007, up 2 percent from April. Compared to a year ago, the average dress weight farm price for cows was up a penny from May 2006.

Market hogs
The average dress weight farm price for market hogs is estimated at $1.17 per pound for May 2007, down 2 percent from April 2007. Compared to a year ago, the dressed weight for market hogs was down 8 percent this May.

Milk
The average farm price for milk was $27.40 per hundredweight during May 2007, up 1 percent from April 2007. Compared to a year ago, the May 2007 average farm price for milk was 10 percent higher.

Eggs
The average farm price for a dozen eggs was $1.12 in May 2007, up 2 percent from April 2007 and 14 percent higher than a year ago.

Hawaii Weekly Crop Weather Report

Here is the PDF file for the *Hawaii Crop Weather* (crop progress and condition) Report for the week ending *July 8, 2007*

current_hi070807.pdf

Please visit the website for more information: http://www.nass.usda.gov/hi/

USDA NASS Hawaii Field Office
1421 South King Street
Honolulu, HI 96814-2512
1-800- 804-9514

Agricultural Highlights

Fruits

Bananas
Orchards in windward areas of Hawaii island were in fair to good condition. Warm temperatures and good soil moisture were ideal for growth. Field activities remained normal. Banana Bunchy Top virus incidences remained isolated in the Puna and Kona areas. Oahu orchards were in fair to good condition. Fields in windward Oahu remained in fair condition. Leeward and central area fields were experiencing a seasonal upswing. Irrigation levels were at heavy levels during the week because of the dry weather. Kauai?s orchards were in good to fair condition.

Papayas
Orchards in the Puna area of the Big Island were in fair to good condition. Warm, humid conditions with abundant sun boost growth in most orchards. Soil moisture was adequate, and field activities continued on a normal schedule. New plantings made good progress. On Oahu, fruit development and ripening were good with the increased day length and sunny and dry weather conditions. Mealy bugs were mostly under control while Ring Spot virus kept lowered production in some fields. Orchards on Kauai continued to make fair to good progress during the week. Spraying to contain the insect population was stepped up during periods of calm weather to contain an increase in infestation.

Vegetables

Chinese Cabbage
The Big Island?s Waimea crop continued to make steady progress. Irrigation was regular and heavy to maintain crop progress in the Puukapu and Lalamilo farm lots. Conditions in the Volcano area were ideal for crop development.

Head Cabbage
The Big Island?s Waimea crop was in generally good condition. Heavy irrigation was required to keep crop progress normal. The Volcano crop improved as soil moisture was adequate and days were sunny. On Oahu, some fields were abandoned to control the increasing pressure from the diamondback moth infestation.

Semi-head (Manoa) Lettuce
On Oahu, planting remained steady, however, crop progress was slowed by the high temperatures and drying winds. Moderate to heavy insect infestation and some disease damage continued to lower yields. Spraying to control insects remained active. Planting on Kauai remained light but steady with fair plant progress.

Dry Onions
Maui?s crop was being challenged by continuous dry and warm conditions. The lack of rainfall has eliminated the threat of rot, but the overall dry conditions were detrimental for crop progress. Bulb size has decreased. The overall crop was in fair condition.

Sweet Corn
Fields in the windward areas of the Big Island benefited from passing showers and sunny conditions. Seedling growth was steady and rapid. Planting and harvesting were steady. On Oahu, favorable weather conditions allowed the plants to make good progress with heavy supplies available from central Oahu fields. There were some reports of light worm damage during the week. Isolated windward fields experienced some growing problems which were expected to slow harvesting.

Maui Pineapple Company

Maui Pineapple Company, Ltd. (MPC) is a subsidiary of Maui Land & Pineapple Company Ltd. , and is the USA?s largest grower, processor, and shipper of Hawaiian pineapples. MPC is the only producer of Maui-grown pineapples. The company was established in 1909, and is based in Kahului, Maui, Hawaii. It currently cultivates and processes approximately 6,000 acres of two varieties of pineapple: extra-sweet Maui Gold? and Maui Gold Organic pineapple.

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Hawaii Crop Weather Weekly Report

Here is the PDF file for the *Hawaii Crop Weather* (crop progress and condition) Report for the week ending *July 1, 2007*

current_hi070107.pdf

Please visit the website for more information: http://www.nass.usda.gov/hi/

USDA NASS Hawaii Field Office
1421 South King Street
Honolulu, HI 96814-2512
1-800- 804-9514

Agricultural Highlights

Fruits

Bananas
Big Island orchards made generally good progress. Soil moisture was adequate. Sunny and warm periods benefited fruit development. Young and newly planted orchards in Pepeekeo made steady progress. Oahu orchards were in fair to good condition. Fields in windward areas remained in fair condition. Leeward and central Oahu fields made good progress. Irrigation levels were at heavy levels during the week due to a lack of rain and gusty winds. Kauai?s orchards were in good to fair condition.

Papayas
Conditions in the lower Puna area of the Big Island were ideal for orchard progress. Daily showers provided sufficient soil moisture. Sunny and warm periods provided a boost to flowering and fruit set. Field activities such as spraying for disease and weed control were active. On Oahu, fruit development and ripening were good with the increased day length and dry weather conditions. Mealy bugs and Ring Spot virus lowered production in some fields. Orchards on Kauai continued to make fair to good progress during the week. Spraying to contain insect populations was stepped up to contain an increase in infestation.

Vegetables

Head Cabbage
The Big Island?s Waimea crop was in fair to good condition. Heavy irrigation was required especially in the Lalamilo area. Routine spraying was controlling insect and disease losses. New plantings made good progress. The Volcano crop was in fair condition. Plantings have increased, but made slower progress due to the dry conditions. New plants were in good condition on Oahu. Insect infestation was at light to moderate levels. Maui?s crop remained in fair to good condition. Insect pressure was higher in the major growing areas, but farmers were closely monitoring conditions to ensure timely spraying.

Dry Onions
Most fields on Maui were developing at a slower rate due to hot and dry conditions. Average bulb size has decreased. Overall, Maui?s crop was in fair condition.

Sweet Corn
On Oahu, favorable weather conditions allowed the plants to make good progress. Some reports of light worm damage were reported during the week. Isolated windward fields experienced some growing problems. Big Island fields were in fair condition. Soil moisture was adequate and resulted in improved growth.

Other Crops

Coffee
The Big Island?s Kona coffee orchards made good progress due to adequate soil moisture levels. Coffee cherries were in the green stage of development. On Kauai, Isolated rains during the week benefited some fields. Showers at the upper elevations kept reservoir levels stable which allowed for good irrigation of all fields. Gusty trade winds were unfavorable for most fields and offset some of the benefits of irrigation.

Ginger Root
Plantings in the windward areas of Hawaii Island made good progress as daily showers raised low soil moisture levels. Sunny periods also helped to boost crop growth.

Sugarcane
Harvesting, planting, and milling activities were active on Kauai during the week. The summer showers which are typically at the upper elevations kept reservoir levels steady and allowed irrigation levels to keep up with the plant?s needs. Some insect infestation was reported with increased vigilance for control.

Watermelons
Harvesting on Oahu was active and supplies for the Fourth of July holiday are anticipated to be heavy.

Hawaii Weekly Crop Weather Report

Here is the PDF file for the *Hawaii Crop Weather* (crop progress and condition) Report for the week ending *June 24, 2007*

current_hi062407.pdf

Please visit http://www.nass.usda.gov/hi/ for more information.

USDA NASS Hawaii Field Office
1421 South King Street
Honolulu, HI 96814-2512
1-800- 804-9514

Agricultural Highlights

Fruits

Banana
Oahu orchards were in fair to good condition. Fields in windward Oahu remained in fair condition maintaining light to moderate harvesting. Leeward and central Oahu fields made good progress with active harvesting at seasonal highs. Irrigation levels were heavy during the week due to the dry days. Overall harvesting on Oahu was expected to be at moderate to heavy levels. East Hawaii orchards are in fair to good condition. Operations remain normal and harvest is active. Banana Bunchy Top virus incidences remain isolated in the Puna and Kona areas. Harvest is active.

Papaya
Orchards in Puna are in fair to good condition. Soil moisture improved early in the week due to light and scattered rainfall. Overcast conditions with sunny periods are beneficial to fruit development and field operations. Seedlings in the Kapoho area are making good progress.

Vegetables

Head Cabbage
The crop in Waimea is in generally good condition. Light insect damage on outer leaves was noticed. Irrigation is keeping crop progress about normal. Harvest is active. The crop in Volcano improved with light showers and soil moisture. Maui head cabbage has continued to make relatively steady progress through the warm weather conditions. Insect population is increasing and growers have been diligent in monitoring their fields and maintaining a timely spraying program. This has enabled the head cabbage crop to maintain steady yields. Increased irrigation has been necessary to maintain steady growth and development for the crop. The overall condition of the head cabbage crop is good.

Sweet Corn
Oahu harvesting remained active as favorable weather conditions allowed the plants to make good progress with good market supplies from windward and central Oahu fields. Some reports of light worm damage during the week were noted. East Hawaii corn fields benefited from recent trade wind weather. Light rains have improved germination and growth rates for young seedlings. Planting and harvesting are steady.

Cucumbers
Pickings from most Oahu fields were at moderate to heavy levels and anticipated to continue increasing as plants remained in active harvest. Melon fly infestation and light pickle worm damage has affected crop yields in some areas during the week. Irrigation levels were heavy as the dry weather continued in most crop growing areas.

Dry Onions
The dry onion crop has been affected by the prolonged warm and dry growing conditions. Some fields continued to show signs of stress and may become more susceptible to insect damage and disease. The average bulb size has also decreased. The dry onion crop is in fair to good condition.

Coffee
Coffee orchards in South Kona are benefiting from almost daily afternoon showers in mountain regions. Ka`u orchards have received less moisture, but misty conditions and cloud covered afternoons are beneficial for development of the current crop.