Compliance Problems with Small Farms Hamper Use of Former Galbraith Lands

posted in: March 2018 | 0

First, it was a lack of water that constrained the growth of farming on 1,200 of the 1,700 acres of former Galbraith Estate land that the state purchased in 2011 for $25 million. With limited well water and the inability to access nearby irrigation ditches, that lack still exists, but the state Agribusiness Development Corporation (ADC), which manages the land, is working with its larger tenants on plans to build reservoirs. It’s also seeking about half a million dollars from the Legislature to help develop a system that will allow its tenants to use treated wastewater from the Wahiawa Wastewater Treatment Plant.

The main problem the ADC is having now is with the farmers themselves, at least the smaller ones. According to a January 31 report by ADC executive director James Nakatani, of the 10 Galbraith tenants with farms smaller than 85 acres, only one of them, Chuan Produce, has fulfilled the ADC’s requirements that they 1) sign a land license, 2) submit an approved soil conservation plan, and 3) obtain a certificate of liability insurance. And with new federal food safety regulations for small farms ($250,000 to $500,000 in annual produce sales) and very small farms (between $25,000 and $250,000 in annual produce sales) going into effect next January and the following January, respectively, and posing an even greater burden, it’s unclear when or whether they’ll ever get the green light to start farming.

While the Food and Drug Administration isn’t expected to conduct routine inspections associated with its new standards right away, ADC staff have indicated they plan to eventually include a condition in all of its land licenses requiring tenants to obtain Good Agricultural Practices (GAP) certification. A USDA website states that GAP is a voluntary audit that verifies that fruits and vegetables are produced in a way that minimizes risks of microbial food safety hazards. To receive GAP certification for the Galbraith lands, which have highly erodible soils, a soil conservation plan would be required.

As of January 31, only Chuan Produce and Ho Farms, LLC (which occupies 62 acres), had submitted approved plans to the ADC, most had not even signed a land license, and only half of them had insurance.

“We haven’t been able to communicate effectively with them. Maybe that’s our problem,” Nakatani said at the ADC board’s meeting that day. Most of the small farmers are from southeast Asian countries. With regard to the widespread lack of conservation plans, he lamented, “I don’t know exactly how you force these people to do what they’re supposed to do.”

To this, board member Lloyd Haraguchi complained, “I’m tired of working with these people who will not comply.”

Other board members went so far as to suggest that the agency forgo trying to keep small farms on the land and just go with the bigger ones.

“In Hawai‘i, three percent of the farming population produces close to 80 percent of the ag crops … and the rest are, like, really sad. And that’s where we’re at,” said Letitia Uyehara, marketing director for wholesaler Armstrong Produce, Ltd. and former deputy director of the state Department of Agriculture.

“Just to throw it out there, we have Galbraith Estate [lands] and we’re supposed to put farmers on 200 acres. Where does it come from we have to have the small farmers?” asked board member Denise Albano, president of the non-profit Feed the Hunger Foundation. (Currently, the small farms occupy about 300 acres. Two large tenants have licenses for a total of nearly 400 acres.)

Nakatani responded that the requirement to accommodate small farmers was made by the City & County of Honolulu, which contributed $4 million toward the purchase of the Galbraith lands.

“There’s something wrong with that model,” Albano replied.

To these concerns, Nakatani pointed out, “sometimes it’s not an issue with big versus small.” The new food safety regulations are likely to be daunting to any local farmer, he suggested. For example, the ADC was established in large part to manage some of the former sugarcane ditch irrigation systems and facilitate diversified agriculture operations on former plantation lands. Under the new rules, any of the ADC’s tenants served by those irrigation ditches can’t use the ditch water to grow leafy greens. Tree crops, however, can use ditch water.

“We never anticipated we would run into a roadblock like this, food safety. … If you don’t have a conservation plan, we’re not going to allow you to start farming, because that’s not kosher,” he said.

Some farmers have prepared their lands and told the ADC, “We’re ready to farm,” even though they don’t have an approved plan, Nakatani continued, adding, “Sometimes it’s not their fault. They don’t understand. …

“What we don’t want to do is make a mistake that gives us a black eye. … We’re used to giving licenses and leases and saying, ‘It’s up to you.’ [but] we’re trying to build a system … of food safety. We didn’t anticipate it would be so difficult,” he said.

“You can pay me now or pay me later, but it’s irresponsible for us to let it go. … Safety is a priority for us,” he said.

As Kaua‘i board member Sandi Kato-Klutke reported earlier in the meeting, food safety does not seem to be much of a priority on private agricultural land she visited recently. The farm there was in such poor shape, she said, she didn’t want to get out of her car. What’s more, she added that the Kaua‘i Farm Bureau has been telling small farmers, such as the one she visited, that they do not need to abide by the new Food Safety Modernization Act regulations if they make less than $25,000 a year, which is true. Even so, ADC staff said it’s likely insurance companies will still require them to demonstrate some basic compliance before providing any liability insurance.

No White Elephants

The fact that so few Galbraith farmers are actually farming has made planning for a processing and packing facility in the area nearly impossible, Nakatani said. At the meeting, member Yukio Kitagawa asked about the status of funding for the facility, which is a key component of the Whitmore Village Agricultural Development Plan, of which the Galbraith lands are a major part.

Last year, a request for $4 million to design and build the facility was whittled by the Legislature down to $650,000. Those funds are now being used to help make the old Tamura Warehouse, purchased in 2013 for $4.49 million, usable.

This year, the ADC’s request for $15 million for a 75,000 square foot food safety-certified post-harvest facility did not make it into the governor’s budget bills.

While Kitagawa seemed concerned that such an important piece to the Whitmore project lacked any significant funding, Nakatani said he wasn’t really worried about it given the compliance and irrigation issues facing the agency, as well as the lack of actual farming occurring.

“If we don’t get the people on the land and farm it, then why would you do the other half? One of the issues is the farmers can’t get on the land. We have a conservation program that’s not adaptive to the movement of agriculture,” he said, noting that the Department of Land and Natural Resources, not the Department of Agriculture, administers the state’s soil and water conservation program.

“What’s the projected time frame for the packing and processing facility in Whitmore?” Kitagawa asked.

Nakatani replied that it depends on how fast farming happens. “Right now, we don’t have the masses. We’re happy with planning and design funds at this time,” he said.

He added that his agency’s priority is to build a reservoir that can supply clean water to the farmers. The new food safety rules include strict requirements on the amount of E. coli in irrigation water, which may complicate the state’s and Honolulu’s efforts to use treated wastewater from the Wahiawa Wastewater Treatment Plant as a major water source to the Galbraith lands.

“The priority right now is to get Galbraith up and running,” and the ADC’s tenants there haven’t even been able to tell him what they would want in a post- harvest facility, despite repeated inquiries, he said.

“I don’t want to spend $15 million on this white elephant and nobody uses it. … That’s what we struggle with, how to design something that will be useful. And it will continue to be a struggle until these guys come onboard and say, ‘This is what we need,’” he said.

Bills

Meanwhile, the flow of money to acquire hundreds of acres of agricultural lands mostly owned by Dole and Castle and Cooke in the Whitmore area has continued unabated. Last year, the Legislature appropriated $23.7 million for the purchase of several parcels there totaling more than 300 acres. That’s in addition to the roughly $70 million already spent on lands formerly owned by the Galbraith Estate, Dole Food Co., Castle & Cooke, and others. All tolled, the ADC should soon control some 3,100 acres of farmland in the Whitmore area, according to a staff report.

What’s more, Senator Donovan Dela Cruz introduced bills last year and this year to establish a special fund dedicated to the purchase of agricultural lands. Last year’s failed. This year’s is still alive and, like last year’s Senate Bill 433, seeks to siphon money from the state’s Barrel Tax, which is already distributed across the Department of Health’s environment response revolving fund, the energy security special fund, the energy systems development special fund, and the agricultural development and food security special fund, as well as the general fund.

The Department of Budget and Finance stated in testimony that it had serious concerns with increasing the distribution of the Barrel Tax beyond what is established in Section 243-3.5, of Hawai‘i Revised Statutes, while several others, including representatives from the ADC, the Ulupono Initiative, the Trust for Public Land, and the Hawai‘i Cattlemen’s Council, supported the measure.

“Quality agricultural land is one of the main prerequisites for local food production. Yet, living in an island community that faces constant pressure for development means the amount of quality agricultural land is becoming scarcer for farmers and ranchers to access. This fund will help keep key lands in agriculture and provide expanded opportunities for farmers and ranchers to obtain access to high-quality land at affordable rates,” Ulupono general partner Kyle Datta stated in testimony to the Senate Committees on Agriculture & Environment and Water & Land.

Although there doesn’t appear to be much standing in the way of the state’s expenditure of millions of dollars more on lands to add to the ADC’s inventory — especially given that the mastermind behind the Whitmore Village plan, Sen. Dela Cruz, is chair of the Senate’s powerful Ways and Means Committee — there are a few who are not so fond of the practice.

In a bill introduced last year that called for an audit of the ADC, R.R. Kemble had this to say: “Sufficient Irrigation water at affordable rates is one of the most critical components for production agriculture. ADC’s ongoing acquisition of fallow Dole and Castle and Cooke agriculture land at premium purchase prices should be carefully reviewed. Much of the lands being acquired have no water allocation. Available ground water resources for the area are limited. Given the state’s investment in purchasing the Galbraith lands, the audit should help the agency define its priority of developing and placing into service an irrigation water system for the area. The audit needs to look into why ADC needed almost four years to secure a final environmental assessment for water infrastructure projects after the State’s purchase of the Galbraith lands.”

Nakatani and Department of Agriculture director Scott Enright testified against the bill, which ultimately failed. Nakatani noted that his entire staff consists of four people and that an audit would pose an undue burden on them.

— Teresa Dawson

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