The state Land Use Commission heard lots of argument Friday about how Hawaii’s farm industry would be affected by building 11,750 homes on land in Ewa leased by the second-largest vegetable farm in the state.

The state Department of Agriculture has indicated it is OK with the proposed development called Ho’opili. But three opponents challenged the position of developer D.R. Horton’s Schuler Division that agriculture in Hawaii won’t be harmed.

Community group Friends of Makakilo, the Sierra Club Hawaii Chapter and state Sen. Clayton Hee are contesting Schuler’s plan before the commission, which is conducting a hearing two days a month to decide whether 1,554 acres on Oahu’s Ewa plain should be converted from agricultural to urban use.

Economist Bruce Plasch, a Schuler consultant, told commissioners that Ho’opili likely won’t negatively affect food production in Hawaii.

Plasch testified that lots of available land on Oahu exists for Schuler’s main tenant, Aloun Farms, to relocate as development progresses gradually through 20 years.

Plasch said Thursday that roughly 30,000 acres of fallow farmland is available on Oahu. He added Friday that he believes other farmers would step in to meet demand if Aloun shut down.

Sierra Club attorney Tatyana Ceruloo asked Plash how much of those 30,000 acres lacks viable water sources to grow Aloun crops, which include onions, sweet corn, beans, broccoli and melons.

Plasch said he was unsure, except to say that on the North Shore about 10,000 acres lack suitable water.

Kioni Dudley of Friends of Makakilo questioned whether land on the North Shore was less ideal for Aloun because rainier conditions exist that make mold and rot more of a problem.

Eric Seitz, an attorney representing Hee, established that most Aloun crops have no track record of successful commercial production on the North Shore.

Plasch acknowledged that Aloun might have to grow different crops, or different varieties in the case of melons.

The consultant said Aloun operators are smart farmers who he expects will successfully make the transition to other land, but if they don’t, Plasch said he is sure others will. "I think other farmers will step in to fill the void," he said.

Plasch said competition actually would become fairer among farmers without Aloun on the Ho’opili site because Schuler and previous landowner Campbell Estate charged Aloun discounted rent to make farming attractive on a site slated for development.

Aloun pays $213 a year per acre, and has saved an estimated $1.1 million since it leased the site in 1994, according to Plasch. Aloun also is able to sublease 100 acres to another farm, Fat Law’s Farm, for $690 a year per acre and splits the proceeds evenly with Schuler.

Plasch said some Dole Food Co. land on the North Shore is leased for $280 a year per acre, while the average charged at state ag parks was $375 last year.

If the commission refuses to urbanize the land, Schuler President Mike Jones said Schuler might seek a higher-paying tenant such as deep-pocketed seed corn producers or sell the land.

Benjamin Kudo, an attorney representing Schuler, suggested that the developer has no duty to find replacement land for Aloun, which accepted low rents for what was understood to be temporary use. He also noted that the University of Hawaii-West Oahu and state Department of Hawaiian Home Lands, which also leased land to Aloun nearby, didn’t arrange replacement land when their development projects proceeded.

Schuler ran into trouble previously over the farm-impact issue during separate hearings in 2009 that were ultimately terminated because the developer didn’t split the project into phases.

In 2009 the Department of Agriculture refused to support Ho’opili, which is on land designated by the city to accommodate urban growth. The department said if the commission was inclined to urbanize the site, then Schuler should be required to obtain an easement committing 1,407 acres of equivalent prime farmland elsewhere on Oahu for farm use in perpetuity.

In May, Schuler revised its plan to designate 251 acres for farming, including 159 acres for commercial use, 84 acres of home gardens and eight acres of community gardens.

The Agriculture Department, in a July letter to the state Office of Planning, said it wouldn’t object to the Ho’opili plan if Schuler carries out its urban farming commitment.

"While DOA has a primary responsibility for the protection of agricultural resources, it is also important that our recommendations acknowledge long-standing county land use plans," said the letter signed by department Director Russell Kokubun.

"Although the urban agriculture initiative does not completely compensate for the loss of agricultural land, it provides an opportunity to incorporate agricultural production within an urban development scenario," the letter continued. "In this regard, it does allow for an appropriate transition from agricultural to urban land uses."