Anthony Kauahi, irrigation superintendent for Kekaha Sugar Company, leads a small caravan through dusty backroads, between sugarcane fields to a storm ravine. As members of the state Agribusiness Development Corporation (ADC) pile out of their trucks, Kauahi shows them that the ditch he cleared only a few months ago is now choked with weeds.
A drizzle starts, but stays light and dissipates in a minute. In Kekaha, it’s been dry for the last few years and the farmers expect a heavy rain soon. When the rain finally does come, Kauahi says, the bridge that spans the ditch will be under water.
While most farmers pray for rain, those in Kekaha dread any more than a couple of inches at a time. Before entrepreneurial sugar farmers pumped the plain dry, the place was a wetland, a floodplain where ancient Hawaiians paddled canoes from Mana to Waimea. Without two drainage pumps at Nohili and Kawaiele, one rain of four or five inches could flood the area’s makai fields, the Navy’s Pacific Missile Range Facility, and Kekaha town.
Those old pumps need an expensive upgrade. The land’s natural tendency to flood makes fixing them and Kauahi’s job of clearing the land’s waterways all the more important if Kekaha is to remain the agricultural powerhouse it’s been for the past century.
At the end of this month, Amfac/JMB, Kekaha Sugar’s parent company, will leave Kekaha for good. The company closed operations in November and a skeleton crew has been trying to tidy things up so that Amfac can make a clean exit.
Whether Amfac will be able to do that – with its asbestos-laden mill site to clean, numerous abandoned wells to be capped, and with hazardous waste rumored to be buried on state land it leased from the Department of Land and Natural Resources – is uncertain. At a December 7 ADC meeting in Kekaha, Kaua`i board member Allan Smith described Amfac as an “uncooperative tenant,” likely to “try to get away with the least amount of work.” As of January 3, DLNR Land Division files contained no correspondence between the department and Amfac regarding exit plans or clean-up efforts on the leased land.
Amfac’s mess aside, the state has its own – an even bigger one — to deal with and it’s called the Kekaha irrigation and drainage infrastructure.
Floating Taro
Agriculture on the Kekaha-Mana plain of west Kaua`i has changed drastically over the centuries. According to the book Native Planters In Old Hawai`i by E.S. Craighill Handy, Elizabeth Green Handy and Mary Kawena Pukui, Hawaiians in Mana cultivated taro in these areas by piling swamp earth on partly submerged rafts that floated on the marshy plain.
In the late 1700s, explorers visiting Kekaha noted that in addition to taro, banana, sugar cane, sweet potatoes, gourds, and coconuts were found in abundance. From the mid-1800s through the 1920s, agriculture on the Kekaha-Mana plain “consisted of rice cultivation around the edges of the Nohili and Kawaiele marshes,” states an April 17, 2000 study of the land’s vast infrastructure done for the DLNR by Bow Engineering and Development.
In the mid 1800s, Norwegian immigrant Valdemar Knudsen, a “pioneer trader, planter, and rancher,” Handy and Handy say, leased large portions of government land in Mana for ranching purposes. And with help from his family and hired labor, he “drained about 50 acres of the marsh along Mana Plain and planted the first crop of commercially grown sugar at Kekaha,” writes Chris Cook of The Garden Island newspaper in a December 8, 2000 homage to Kekaha Sugar Company’s legacy.
Knudsen’s nephew H.P. Faye drew up much of the plantation’s design. “Kekaha was initially seen as a shaky investment with a need for great amounts of capital to build a non-resaleable infrastructure of canals, pumps, water systems and other facilities needed to overcome its inherent physical disadvantages,” Cook wrote. “These pioneering years were rough ones for the growers who lacked the abundant water supply found on the verdant east side of Kaua`i.”
As the cane acreage increased, natural springs and intermittent streams proved inadequate, so wells were drilled. Most were “drilled too deep and at locations far too makai (seaward),” the Bow study states. As a result, most wells became salty over time and were abandoned, buried and lost.
“In 1898, the present day Kekaha Sugar Company was founded,” the report continues. “As part of its expansion program, three surface water diversions were constructed to address the failure of the well supply. In 1903, the Waimea Ditch was dug to divert water from the Waimea River to nearby fields. The success of this venture prompted the construction of the Kekaha Ditch in 1905, which carries water from an altitude of about 500 feet on the Waimea River to Kekaha. The ditch was completed in 1907 and the well water quality began to improve. In 1926, the Koke`e Ditch was completed diverting water from Mohihi Stream and the headwater of the Waimea River in the Alaka`i Swamp at an altitude of about 3,400 feet. About one-fourth of the Koke`e Ditch supply has irrigated the highland cane fields below Pu`u Opae reservoir on Niu Ridge, and the balance has irrigated the highland fields east of Koke`e Road.
“With the draining of the Nohili and Kawaiele Marshes in 1922 and the continued expansion of sugarcane acreage, another period of well development took place in the 1920s – 1930s. Initially, this consisted of batteries of closely spaced drilled wells, but Maui-type shafts [tunnels that skim fresh water off the top of the basal aquifer] located along the foot of the bluffs subsequently replaced theseÉ All eight of the shafts remain in use today, three for potable supply and the other five for irrigation,” the report states.
In 1988, Chicago company JMB Realty bought Amfac, parent of Kekaha Sugar Co. Shortly afterward, federal price supports for sugar were lowered, even as production costs rose. Not only did Amfac cut the number of its employees, but it began to ask for and receive cuts in rent on its state leases. The state acquiesced in large part because the plantation supported the lives of so many on Kaua`i (it had 465 employees in 1997).
Last October, the state Board of Land and Natural Resources gave 12-month permits to sugar company Gay & Robinson, seed companies Pioneer Hi-Bred International and Novartis (now Syngenta Seeds, Inc.), shrimp farm company CEATECH, and Amfac’s diversified agriculture specialist Wally Johnson, allowing them to use lands formerly leased by Kekaha Sugar Company. They were given free rent for the first six months in exchange for maintaining the infrastructure that the sugar company was leaving behind.
Despite the agreement, it seems likely that the federal and state governments will be footing most of the bill for the operation and maintenance of the elaborate system next year.
No provisions were included in the Kekaha permits requiring permit holders to provide evidence – photos, monthly reports – of maintenance work, but Kaua`i state land agent Sam Lee says that “To the extent that operating the infrastructure is necessary for their sustenance,” the farmers are maintaining what they need to.
“Currently, at least up until February 28, which is Amfac’s exit date, Amfac is continuing to be in the lead position so far as maintenance and that kind of thing goes,” Lee says. “Certainly by March 1 the burden of O&M will fall to the tenants.”
At meetings held by the Agribusiness Development Corporation in December, the group of farmers knelt before the agency asking for help. Maintain the infrastructure for us until we get organized, they asked. And the ADC, whose mission it is to support diversified agriculture, agreed.
“Syngenta (Novartis) and Pioneer Hi-Bred are competitors,” said Ernie Diaz of CEATECH at the December 7 meeting in Kekaha. “It’s not easy to go in together to operate. The ADC is an ideal entity to give us structure and provide supportÉ None of us, singularly or combined have the ability to bring up to speed the infrastructureÉ ADC could be perched to move inÉ[and] develop a maintenance program.”
A couple of weeks later, at the ADC’s December 21 meeting, board member Allan Smith moved that the ADC should “take a leadership role” in the coalition on West Kaua`i and in maintaining the irrigation and drainage system and related agricultural lands.
Since then, the ADC has been scrambling to take over the water discharge permits from the Department of Health and line up a workable electricity plan. On January 12, the ADC received a right of entry from the Land Board to pursue the permits and electricity plans.
Keep on Pumping
Amfac’s most recent lease of state lands in Kekaha expired in 1994. The lease and subsequent extensions required Amfac to maintain the infrastructure to the satisfaction of the DLNR. Anthony Kauahi once had four men to clean the irrigation and drainage system. Now that Amfac has all but left Kekaha, he has two to clean the 122 miles of canals and other waterways, and it’s taken them a year to do just half the job.
Maintaining a system that has evolved over a century, is built to twist natural processes, and includes highlands as well as lands below sea level will not be easy or cheap.
First, there are the Nohili and Kawaiele pumps that keep the water table below root level to “desaturate” the ground and keep the area from flooding. If the pumps fail, which they often do, and the land floods, the soil’s salinity increases, reducing productivity and ruining crops. What’s more the pumps, which push excess water out to sea, are the only things protecting 50 to 100 Kekaha homes and Kekaha town itself from flooding.
According to the Bow Engineering study, operation and maintenance for the pumps alone cost $311,000 a year. In addition, both pumps need upgrades that are estimated to cost a total of $4,378,000.
Then there are the roads, which Amfac used to maintain. The roads must be cleared of derelict sugar cane, which is a fire hazard, and must be kept drivable, since they lead to Polihale State Park. Bow’s study estimates it will cost $310,000 a year to maintain the roads. Add annual O&M costs of $770,000 for the Kekaha and Koke`e ditches that provide the lands’ water, $265,000 for drainage canals and ditches, and $1,150,000 for the electrical system, and the cost comes to $6,034,000 for the first year.
The Pacific Missile Range Facility, Kekaha’s anchor tenant, has $3 million in federal funds to help operate the pumps. In addition, the state Legislature is expected to allocate $3 million in state funds to help Kekaha.
“The Legislature, we understand, supported by a request from DOA [state Department of Agriculture], will be asked, or may be asked, to provide funding, in the realm of $3 million, for capital improvements to infrastructure, which is different from daily ops and maintenance costs. That has yet to materialize, but we’re told there is support for the idea that there should be funds appropriated to upgrade the systems out there, including irrigation, roads, etc.,” says land agent Lee.
While the coalition has said that its members will pay their fair share of costs, CEATECH’s Landis Ignacio says that the Bow numbers have been artificially inflated. Ignacio, a former Kekaha Sugar worker, says Amfac exaggerated its labor costs to make its years of operating and maintaining the system seem more valuable to the state.
The Bow study estimates that after capital improvements are made, annual O&M costs would be about $1.8 million – too high, according to the ADC and coalition members.
Last month, ADC consultant Mark Hubbard revealed his own cost estimate in which the coalition’s lone sugar farmer – Gay & Robinson – farms only 1,200 acres of the available 7,000. Hubbard managed to whittle costs down to $1.5 million under this scenario. Even so, Hubbard wrote in a January 23 progress report to the ADC, “Estimates to date do not indicate a break-even position,” as estimated revenues came to just $993,500.
Whatever the scenario, it seems government funds will safely cover operations during the transition of the system from Amfac to the state. The future is more uncertain.
Once the Navy’s $3 million is gone, there is no guarantee more will come. The same can be said of the state money, which has yet to be approved by the Legislature.
And there still remains the issue of power to deal with.
High Energy
When March 1 comes around, “We’ll flip a coin,” to determine the party responsible for providing electricity, said state Department of Agriculture Director Jimmy Nakatani at an ADC meeting last December.
DLNR Land Division Administrator Dean Uchida joked, “It’s not gonna be us.”
On that day, Kaua`i Electric will need a new customer of record to take Amfac’s place in the Kekaha system. While the ADC has positioned itself to take that role, board members last month were already devising plans to wriggle out from under KE’s thumb and provide cheaper electricity on their own.
Early in negotiations, the farmers’ coalition struggled with the energy issue. When it was landlord to many of the current tenants, Kekaha Sugar provided cheap, bagasse-derived electricity and controlled distribution through a switch at its mill site. Kaua`i Electric even relied on the hydro-plants on the plantation’s leased land to serve users in Koke`e.
The ADC and the coalition have toyed with a few ideas. Some in the coalition have said that there is no need to worry about Kaua`i Electric’s high rates because the hydro plants could cover nearly everyone’s needs. This is true, if Gay & Robinson limits its own electrical demands.
Another possibility is to have Gay & Robinson step into Kekaha Sugar’s shoes and operate Kekaha Sugar’s mill in addition to planting its abandoned cane lands.
Either possibility is attractive since the result would be cheaper energy costs. But both share the drawback of lacking security in the case of a hurricane or other disaster.
Gay & Robinson’s president Alan Kenneth claimed his company could supply pumped water to the coalition at a low cost but G&R has been wary of taking on Amfac’s considerable expenses and liabilities. This has caused negotiations to drag on for months and has cast a dark shadow over the possibility that G&R would assume mill operations. In fact, the G&R delays, which Kenneth attributes to Amfac’s foot-dragging in negotiations, have thwarted efforts to move forward with any kind of concrete plan.
The coalition has proposed that ADC take over Kekaha Sugar’s role as electricity provider. Last month, talk of minimizing reliance on KE (moving and taking over Kekaha Sugar’s electricity grid, going hydro and renting backup generators) dominated discussion among ADC members. While the ADC is eager to pursue their cheaper options, Uchida has advised them against it.
Dealing with “Kaua`i Electric is a whole other can of worms,” he told the ADC in December. “Operation and maintenance costs will be on the operator if it decides to be the service providerÉ. If you [the ADC] step in, you provide O&M, you have to bill your users.”
Instead, Uchida suggested having the utility, Kaua`i Electric, be the service provider. “We met with KE on this issueÉ. We can pull [transmission] lines directly to the pumps. KE would be responsible for everything up to end user point,” he said.
Shortly before the ADC December meetings, the DLNR had “begun to lay the groundwork to develop a contingency plan, assuming we have the worst-case situation, to keep power available to users who need power for critical health, safety, and agricultural purposes,” according to a letter by former DLNR director Tim Johns. Johns provided several copies of the letter to the coalition, asking everyone involved to provide the DLNR with a map showing the critical installations and their power requirements by December 15, 2000, so that Kaua`i Electric could devise a plan for March 1.
No responses were found in lease files at the DLNR’s Land Division, but ADC Executive Director Alfredo Lee says that he has discussed ADC’s options with Kaua`i Electric and Hubbard says that the ADC is working on temporary service agreements with the utility.
“Most likely, the ADC will be the customer of record,” the ADC’s Lee says. However, last month members of the ADC board made it clear that, while it had agreed to be the customer of record, long-term use of KE power to operate the drainage pumps was out of the question.
“It’s easy to say, ‘KE, you take care of everything,'” Nakatani said at last month’s ADC board meeting. “But CEATECH will take its own generators. They don’t want to pay KE,” which recently charged the company 27 cents per kilowatt-hour. He also urged ADC staff and its Kekaha consultant Mark Hubbard to be in close contact with Uchida. “DLNR is working on its own with KE, [but] It doesn’t make sense. On the one hand, [DLNR] is talking about giving easements to KE [to add electricity infrastructure]. On the other hand, we want to do something different,” he said.
How will the ADC pay for the electricity?
“ADC has some money but will not be able to carry everything for the year,” Lee says. “Initially, we’ll get the meters installed and have the first month [electricity] payment. After that, we will have to figure out our next step and get money into a fund. The PMRF [Pacific Missile Range Facility] has money. I’m trying to swing that money. I think [the coalition] is willing to pay some. It’s such a short time frame. I’ve asked the ADC to let me concentrate on securing the NPDES permits first, then work on becoming the [KE’s] customer of recordÉ [By the end of February], I want to be in compliance.”
The seeming inevitable fact that KE will take over as power provider – at least temporarily – casts into doubt the feasibility of undertaking diversified agriculture on more than 7,000 acres of former sugar lands. At its peak, Kekaha Sugar was a $20 million a year industry. It minimized energy costs with hydropower from two plants and bagasse from its own harvest. The hydro plants can produce a little over 1 megawatt of power, but only one is currently operating. Without the cheap bagasse, tenants may have to buy power from Kaua`i Electric at the high rate of 23 cents a kilowatt-hour or more.
“The pumping system uses 10 million kilowatts a year. At 23 cents per kilowatt-hour, that’s $2.3 million just for pumping. That’s too expensive,” says Owen Moe, an Amfac-worker-turned-consultant for Gay & Robinson.
Will those who fill the vacant lands be able to afford the electricity costs? The coalition generally seems agreeable to paying retail rates for some of the system’s small pumps. Paying KE retail costs for the bigger components, such as the drainage pumps, is not acceptable.
While G&R has hinted that it might occupy most of the available lands, Gay & Robinson’s president Alan Kenneth has said, “The best cane lands are the most expensive.” (They are upland, where irrigation water must be pumped uphill.) “Without the bagasse plant, I don’t know if 7,000 acres is realistic,” he said.
“DLNR can give good lease rents, but if [water] carrying costs are so high, it’s not going to work,” Nakatani said at last month’s ADC meeting. ADC chairperson Lindy Sutherland added that the worst-case scenario would be, “Nobody wants to farm and we still need to keep Kekaha from flooding.”
Despite the headaches, both Nakatani and Sutherland seem confident that things will work out.
“If sugar could do it, [the coalition] can do it,” Sutherland said. Nakatani added, “Kekaha Sugar is closer to paying for itself” than any other agriculture system in the state.
Who’s Going To Bite?
“PMRF is your anchor tenant. They can’t move,” Uchida told the ADC board in December. Apart from that facility, though, the question of participation in paying costs of running the water system is still unsettled.
Steve Kai of Pioneer Hi-Bred has told the ADC board that all of the coalition participants are willing pay their fair share of operation and maintenance costs.
“Only Gay & Robinson is up in the air,” Kai said. “That’s a problem because they’re potentially the largest user.” Kai proposed that the ADC develop a long-term partnership with the coalition similar to the one it has with Waiahole Ditch water users on O`ahu. (On O`ahu, Central O`ahu farmers buy water from the ADC, which operates the Waiahole Ditch).
When the Land Board gave the coalition members their permits last October, a handful of farmers, including Native Hawaiians, expressed interest in getting onto Kekaha lands. Judy Na`u Stewart, a Native Hawaiian, told the Land Board that she has wanted to lease land since 1993 and that she’s trying to form a local coalition. A portion of the Kekaha Sugar lease was supposed to be returned to the state Department of Hawaiian Home Lands, but has remained under DLNR management, a situation she objected to.
“DHHL doesn’t want it, but Hawaiians want it,” Stewart said, adding that she opposed issuing permits to the coalition until Native Hawaiians were consulted.
Stewart and the other farmers who expressed interest were told to keep in touch with the DLNR and the state Department of Agriculture. Neither the ADC nor the DLNR have records of any follow-up by the farmers, but the Kaua`i Farm Bureau has said it has received a request for 100 acres in Kekaha for a vineyard, and some interest has been expressed in growing citrus, flowers, strawberries and vegetables for local use.
Alfredo Lee says that while he hasn’t heard from other interested farmers, any new additions would probably join the coalition under the umbrella of the Kaua`i Farm Bureau.
In addition to new farmers wanting to get on the land, says state land agent Sam Lee, people already raising pigs, bees, and cattle want in on waste valleys. There are also a few small users – including some taro farmers – that have agreements with Amfac to use water.
Some involved in the transition had qualms about ongoing livestock operations, including a shambling piggery.
“Do you want them [the livestock] in or not?” Sam Lee asked the coalition and ADC members at the December 7 meeting.
“Diversified ag means ALL ag,” replied Kitagawa, supporting the operations.
“We didn’t know it was that diversified,” Sam Lee said. “The piggery doesn’t meet Health Department code. It can’t stay. Who’s going to evict them?”
At a meeting last month, Nakatani worried that the current small users might become a problem. “They’re getting water for free. They need to pay some kind of assessment, maybe be required to maintain their portion of the ditch.”
Much of the Kekaha land is not set up for small farming – it’s divided into 40-acre plots, and the irrigation pumping stations serve large blocks of 600 acres apiece.
“It’s difficult for small farmers to get in, but not impossible,” says Kenny Gray, seed stock manager for Syngenta. “Anything above the main track road doesn’t flood. Small farms could run during the summer only. If they got flooded during the winter, they’d be done with,” he says.
Gray adds that the state’s requirements for leases in its Kekaha ag park, where CEATECH is now, were difficult for small farmers to meet when leases were put out for bid years ago. “Only one farmer met the qualifications to get a lease. CEATECH took the rest of the land,” Gray says.
A Leadership Role
Who will ultimately farm the land is one of the many questions that will only be answered as events unfold. It will probably take months to determine how electricity will be provided, a decision that will, in turn, determine what the operation costs will be and who can afford to farm in Kekaha.
While the ADC has assumed a “leadership” role, many of answers to these questions will be influenced by the DLNR, which owns the land and is ultimately responsible for the land’s condition.
“We haven’t got an understanding of who’s doing what,” Alfredo Lee says. “We’re just putting out fires. The DLNR is the landlord, and the ADC is the operator. If we operate for the long term, it’ll be a different story.”
Whether the ADC will ever be the long-term operator is another unanswered question. While the ADC board’s vote last December to help the coalition was unanimous, individual board members were divided on what form that help should take.
One member thought the ADC should merely help organize the coalition, and leave the electricity issue alone. Board member Kitagawa wanted the ADC to take an aggressive leadership role.
“We have to be risk takers and go beyond the organizing part, and take on responsibilities,” he said, adding, “I don’t know how to deal with the fact that we don’t have the bucks, [but we’ll] get help from the Legislature.”
On the opposite spectrum, ADC member and Leeward O`ahu farmer Larry Jefts cautioned that the ADC was “missing a substantial opportunity” if it moved too quickly to smooth over the return of Kekaha Sugar land and infrastructure to the state. “You won’t get the real commitments [by] preserving too much infrastructure.”
A somewhat similar situation exists in the Hamakua area of the Big Island, where the irrigation system abandoned by the sugar company is being maintained by the state. “The Hamakua ditch will never pay for O&M,” Jefts said. “We should get a solid upfront plan and protect only those resources that are neededÉ. Abandon the parts you don’t need.”
— Teresa Dawson
Volume 11, Number 8 February 2001
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