A state agriculture agency that’s already getting scrutiny from legislators because of its resistance to being audited is looking to make a major property acquisition on Kauai.

The deal would include about 100 acres now leased to a seed company.

House Bill 2426 is scheduled for a conference committee hearing Monday. It would provide up to $6 million to the Hawaii Agribusiness Development Corp. to acquire land near Waimea on Kauai’s west side.

A “condominium property regime” has been established on the 400 acres, county property records show, which could allow some of the land to be used for homes, although the current owner has said it has no plans to do so.

The ADC’s executive director, James Nakatani, testified that buying the land “may significantly increase the available agricultural land on Kauai for food production and may offer many possibilities to boost the economic viability of the west Kauai community.”

But some lawmakers assigned to the conference committee have expressed concerns, and are calling for greater accountability from the ADC and for the corporation to focus on helping build up smaller farmers to create a diversified agriculture industry.

The Legislature established the ADC in 1994 to help redevelop Hawaii agriculture as the sugar and pineapple plantations that had long dominated the economy began shutting down, laying off hundreds of workers and releasing tens of thousands of acres of farmable land and millions of gallons of irrigation water.

In addition to taking over about 18,000 acres of former cane fields on Kauai and the Waiahole irrigation system on Oahu, the five-employee corporation has been using legislative appropriations to acquire agricultural land and infrastructure. Since 2010, the ADC has paid about $71 million to acquire approximately 3,400 acres, mainly from old plantation companies like Dole Food Co. and Castle & Cooke.

What’s not clear, said Rep. Richard Creagan, who chairs the House Agriculture Committee, is how effective the ADC has been. The agency has not submitted annual reports to the Legislature as required by statute, and planning reports filed under another law have been incomplete.

In light of the potential land deal, Creagan reiterated his call for a management audit of the ADC. He said the ADC may be doing a stellar job, but lawmakers have no way to know.

“This is not so much draining the swamp as it is blowing the mist away,” said Creagan, who is on the conference committee that will determine the fate of the bill to purchase the land, as well as a separate measure, Senate Bill 3087 would require an audit of the ADC.

Nakatani has said an audit, which typically requires agencies to turn over documents and information to analysts, would be too onerous for his small staff to participate in. State Board of Agriculture Chairman Scott Enright has also testified that the ADC staff is too busy for an audit.

The 400 acres ADC has targeted to acquire in west Kauai is now owned by Kikiaola Land Co., said Jim Beaver, Kikiaola’s board secretary.

Founded as Waimea Sugar Co. in the late 19th century, Kikiaola has remained family owned even as the sugar industry has declined. Its current generation of owners has little agriculture expertise and therefore leases about 100 acres to Hartung Brothers Inc., a Wisconsin-based grower which took over Syngenta’s seed farming operations last year.

Beaver said Kikialoa believes another owner could put the rest of the land to use and help stimulate the local economy, where one of the only major employers is the U.S. Navy’s Pacific Missile Range Facility.

“We would like to see more vitality come into west Kauai,” he said.

Kikiaola owns another 200 acres on the makai side of Kaumualii Highway, including the Waimea Plantation Cottages, but isn’t selling that.

Hartung Brothers primarily grows corn and soybeans on the mauka property, said Joshua Uyehara, general manager for Hartung Brothers’ Hawaii operations.

Rep. Cynthia Thielen questioned why the state needs to buy land that is already being used by a large agribusiness. According to its website, Hartung Brothers has several offices in the midwestern U.S. and operates sites in Ontario, Canada, as well. In addition to seed corn, the company produces beets, cucumbers, peas and other produce.

“Why are we supporting a major corporation that can certainly do its own leasing, funding, et cetera, without government assistance?” Thielen asked.

As Senate Ways and Means Committee Chairman Donovan Dela Cruz sees it, the issue is about the future of agriculture in Hawaii. Dela Cruz said he agrees with Thielen that the state should build a diverse industry and not hitch its economic future to a handful of big agriculture companies.

But, he said, developing an industry will not happen overnight.

“You can’t have aspirational goals without an implementation plan,” said Dela Cruz, who is the driving force behind a venture involving the ADC called the Whitmore Project, which is located in his central Oahu district.

In any case, buying the Kauai land will ensure it remains used for agriculture, he said.

“The fact that the taxpayers will own that property for future generations versus some mainland or foreign company is a good thing,” Dela Cruz said.

The fate of the bills affecting the ADC will be determined in the next two weeks. Lawmakers have approximately a week to craft final bills in conference committees and a week to bring them back for final final votes by May 3.

Join the conversation in-person at Civil Beat’s upcoming Civil Cafe event, “Legislative Wrap-up 2018,” on Wednesday, May 2, at noon at the Capitol. Go to our RSVP page to register and for more information.

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