‘Little farmers’ denied state land designation

Several of Hawaii’s biggest companies and landowners have qualified to claim tax credits and other benefits for preserving agricultural land in perpetuity. But a hui of small farmers couldn’t convince a state commission earlier this month that they deserve the same.

A farm cooperative that owns 854 acres in Kunia once largely planted in pineapple and sugar cane sought to have its land designated as "important agricultural land" under a state program so small farmers who bought 5-acre plots can tap tax credits for farm investments.

But the program’s gatekeeper, the state Land Use Commission, was divided on whether the land is appropriate for the designation.

Commission members were split 3-3 (with three members absent) over approving or denying the petition by Kunia Loa Ridge Farmlands at a meeting April 5.

The divided vote sets the stage for a more comprehensive contested-case hearing before the LUC in which it would take six votes to approve Kunia Loa’s petition and five votes to deny it.

The decision was the first important ag land petition heard by the LUC that wasn’t approved, even though there have been elements of controversy with a couple of earlier cases that involved large amounts of marginal land.

Ray Iwamoto, a local attorney representing Kunia Loa, acknowledged that the petition by the small farmers was unique, but he argued that Kunia Loa is just as qualified for the designation as Alexander & Baldwin Inc., Castle & Cooke, Grove Farm Co. and Parker Ranch, all of which were granted important agriculture land designation.

"You have approved the big boys," Iwa­moto said, referring to the firms that are among Hawaii’s biggest private landowners. "(Kunia Loa) is a project of small, little farmers. It is the little guy."

A couple of the approved petitions for large landowners included marginal land. Those cases involved 56,772 acres on Hawaii island for Parker Ranch used for cattle grazing, and 11,026 acres on Kauai for Grove Farm Co. despite very poor soil conditions on 6,000 of those acres.

The main issue for Kunia Loa’s petition is the availability of water for irrigation.

Iwamoto said Kunia Loa has a guaranteed allocation of 714,000 gallons of water per day plus any water not drawn by other members of an association that manages well water in the area.

Iwamoto also said there is the equivalent of about 2.7 million gallons per day presently unused and available to Kunia Loa. The property will have three reservoirs to store 5 million gallons of water, he added.

But the state Department of Agriculture and state Office of Planning opposed Kunia Loa’s petition because there isn’t what they deem to be a sufficient long-term water supply.

Both departments contend that Kunia Loa’s guaranteed daily water supply is enough to sustain farming on only 193 acres based on what Kunia Loa envisions for the site, including fruit trees, vegetables and cattle.

Earl Yamamoto, a staff planner with the Agriculture Department, called Kunia Loa’s water allocation "woefully" inadequate. "It will not lead to optimal plant growth," he told the LUC.

Yamamoto estimated that 3,700 gallons per acre daily would be needed for productive diversified agriculture in the area. If Kunia Loa farmed only pineapple — one of the least thirsty crops — it would take 1,100 gallons per acre daily, Yama­moto said. But the property’s guaranteed daily supply amounts to just 836 gallons per acre daily.

Iwamoto countered that the present supply of water available to Kunia Loa farmers is abundant and that if farmers become limited in the future to 714,000 gallons per day, then they can adjust what they grow.

"They believe they have (an adequate) source of water, and they will adjust their crops to the (water supply)," he said.

Debbie Lui-Anderson, a partner in a company that organized the farm co-op and sold parcels to small farmers, told the LUC that some endeavors such as aquaponic farming take as little as 50 gallons of water per day.

Aquaponics irrigates plants with water from fish tanks that is continually recirculated.

Tim Hata, a planner with the city Department of Planning and Permitting, supports Kunia Loa’s petition. "We feel there is enough water to do some agriculture," he told the LUC.

The Planning and Permitting Department also indicated that county planners likely would apply to designate Kunia Loa’s property as important ag land under a county process in its early stages, though the LUC would still be the authority to approve or deny county petitions.

Under state law, private landowners were offered incentives to voluntarily seek the important ag land status, which restricts the use of land to agriculture potentially in perpetuity.

The incentives include low-interest loans and state tax credits for farm-related investments, as well as expedited permitting for ag processing facilities and permission to build employee housing.

A more controversial benefit allows important ag land owners to urbanize land equivalent to 15 percent of the acreage protected, allowing residential development as a trade-off for protecting farmland from future potential development. But so far, every applicant under the law, including Kunia Loa, has waived all rights to claim the urbanization benefit.

The Office of Planning told the LUC it is concerned about Kunia Loa becoming "gentleman farm" estates on which people build homes and do little commercial farming.

Iwamoto said homes are prohibited under farm lot ownership deeds and that necessary infrastructure for homes such as paved roads and electricity aren’t being developed on the property. He also said that the farm lots were created under a state law that expressly prohibits residential dwellings.

"The notion of farm dwellings is absolutely not an issue and should not be of concern to any governmental agency," Iwa­moto said in a written response to Office of Planning concerns.

LUC member Lance Ino­uye said Kunia Loa’s petition has much merit but doesn’t appear to have enough water and good soil qualities to be deemed important ag land. He introduced a motion to deny the petition, but only two other members — Ernest Matsu­mura and Ron Heller — joined the motion.

Commissioners Kyle Chock, Chad McDonald and Nicholas Teves Jr. voted against denying the petition. All six members then voted to have a more in-depth hearing on the petition.

The contested-case hearing will allow Kunia Loa and the state and county agencies involved in the case to have expert witnesses, such as hydrologists and agronomists, testify in a trial-like proceeding before the LUC. No date has been set yet for the hearing.