University of Hawaii economists recently released a report supporting a scathing state audit that shows Hawaii Agribusiness Development Corp. (ADC) is failing to deliver on its mission to transform the Hawaii agriculture industry, according to Honolulu Civil Beat.
The ADC was set up over 25 years ago by the state with the mission of converting Hawaii’s agriculture from being dependent on economically declining plantations producing mainly pineapples and sugar to crops that are more economically viable.
A recent audit by the Hawaii State Auditor found that the agency had done little to achieve that mission and was in complete disarray, kept poor or non-existent records and had a board of directors that did not even seem to know their duties. The agency had not even submitted a legally required plan defining its objectives and policies because its executive director, Jimmy Nakatani, said he had the necessary information memorized in his head.
“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,” the audit said. “After nearly 30 years, the economic void created when plantations ceased production remains mostly unfilled.”
Sumner La Croix, co-author of the report and a professor emeritus of economics, called the situation a “fiasco” in an interview.
University of Hawaii Economic Research Organization's (UHERO) report, titled “Reviving Agriculture to Diversify Hawaii’s Economy,” examined ADC and found that it has done little to help Hawaii Agriculture as pineapple and sugar plantations have mostly gone away. The report found that, adjusted for inflation, Hawaii’s crop values have plunged from $2.15 billion in 1980 to $583.5 million in 2017, a decrease of 73%. The report attributed the massive decrease to “massive decreases in the value of sugar, pineapple and livestock production.”
The report did find that the ADC had some success in buying land and irrigation systems, particularly on the islands of Kauai and Oahu, but found little indication that the land was being put to good use in growing produce
“Its other activities beyond acquiring land are kind of vague,” La Croix said. “We’d like to know what they are doing.”
UHERO noted that ADC only just recently began providing annual reports to the Legislature, but pointed out that the reports are not very good.
“Their annual reports are absolutely dismal,” La Croix said.
The UHERO report also took a more broad look at the state’s important agricultural lands program, and found certain segments of the program underwhelming.
“So far, the IAL tax credit has benefited very few producers and, until actual production data on IAL lands become available, it appears to be much ado about very little,” UHERO reported.
The report comes at a time when the COVID-19 pandemic, which devastated Hawaii's tourism industry, has underscored the need to diversify Hawaii’s economy.