Owner calls iffy acreage farmland

Kauai’s second-largest private landholder wants the state to designate about 11,000 acres it owns as "important agricultural land" under a 2005 state law, but advising agencies are divided on whether the entire area deserves the special status.

Grove Farm Co. and an affiliate recently petitioned the state Land Use Commission to qualify two big tracts of land near Lihue and Koloa under a state law intended to protect farmland in perpetuity.

But much of the land — about 4,000 acres — isn’t used for agriculture and includes ravines and gulches. Most of the land — about 6,000 acres — is rated as having "very poor" soil under University of Hawaii criteria.

Grove Farm said the property it seeks to designate is suitable for growing biofuel crops, and that it intends to lease about 10,000 acres of the area to a partnership that includes Grove Farm, Kamehameha Schools and Maui Land & Pineapple for growing eucalyptus and bana grass to burn and generate electricity for Hawaiian Electric Co. on Oahu within the next five years.

Presently, Grove Farm leases close to 5,000 acres of the area to ranchers raising cattle, which the LUC in an earlier case determined to be appropriate for the important agricultural land, or IAL, designation.

Grove Farm filed its petition with the LUC in November. In recent weeks, county and state agencies have commented on the proposal with diverging views.

The director of Kauai County’s Planning Department, Michael Dahilig, supports the petition.

The state Department of Agriculture said the petition contained limited information that "raises concerns that the quality and characteristics of some of the petitioned lands fall short of what we believe to qualify as IAL." Yet the department recommended approving the designation for all 11,000 acres with the exception of two small reservoirs.

The state Office of Planning recommends that only 4,717 acres be granted the designation given the ravines, gulches and poor soil covering most of the property.

The agency said it supports biofuel crop production but noted that Grove Farm’s petition indicates that the biofuel company, Hawaii BioEnergy LLC, has only a lease option.

"There is presently no commitment to such use," the Office of Planning said in its comment letter.

Grove Farm argues that the steep parts of the land support streams and drainage that are vitally important for agriculture.

Carl Evensen, a natural resource management specialist with the UH College of Tropical Agriculture and Human Resources, said in a comment letter that it’s "not entirely convincing" that ravines and gullies should be designated IAL, but he recommended the designation for all 11,000 acres.

The LUC has scheduled a public hearing for 1 p.m. Friday at the State Building in Lihue to consider the designation.

Grove Farm’s petition will be another important and early test in how the state’s IAL law is used, and perhaps more important, what legacy it creates in terms of the future of farming in Hawaii.

The law passed in 2005 as Act 183 established provisions for designating such land. In 2008 another law added incentives for landowners to seek such designation. The incentives include tax credits for investments in agriculture facilities, loan guarantees, placement of employee housing on prime farmland and expedited permitting for processing facilities.

There also is a controversial benefit that allows landowners to take 15 percent of the acreage designated as IAL and develop it for urban uses including housing. However, all applicants to date including Grove Farm have waived rights to claim this benefit.

To date, five IAL petitions have been granted. The first was for 3,773 acres on Kauai owned by Alexander & Baldwin Inc. and used to grow coffee and seed corn. The LUC approved the petition in 2009.

A&B also designated 27,102 acres on Maui at its Hawaiian Commercial & Sugar Co. plantation as IAL in 2009.

The largest IAL designation was for 56,772 acres of cattle ranch land on Hawaii island for Parker Ranch in 2011.

A Grove Farm affiliate, Maha‘ulepu Farm LLC, obtained IAL designation for 1,533 acres on Kauai that supported taro, seed corn, fruit trees, forage crops and ranching in 2011. About 90 percent of the area has "good" soil.

The fifth approved petition was for 679 acres owned by Castle & Cooke on Oahu used for diversified farming. The company had sought to designate 902 acres, but the LUC rejected 223 acres predominantly occupied by a reservoir and gulch.

Despite the five designations, none of the landowners has applied to claim any benefits provided for under the law.

But one other benefit to landowners that voluntarily seek IAL designation is not having county government officials select land for protection.

Under the law, counties are required to select appropriate lands, including privately owned property, for IAL designation. But they can’t impose the protection on more than half of any private landowners’ holdings.

So if a landowner voluntarily designates half his land as IAL, the other half in effect becomes protected from such designation.

Robert Harris, executive director of the Sierra Club’s Hawaii chapter, is concerned that landowners are trying to designate marginal or poor land as important ag land. By doing so, the landowner could avoid having the state force the IAL designation on better-quality farmland, which may have more value in the future for urban development.

"It’s problematic," Harris said. "There is clear cherry-picking. The Land Use Commission needs to be looking at these lands that are going to be able to maximize agriculture in Hawaii."

Grove Farm, which owns roughly 40,000 acres on Kauai and is owned by AOL co-founder Steve Case, said its intent is to preserve and protect agricultural land.

"For nearly 150 years, Grove Farm has remained focused on building a more sustainable island community," Marissa Sandblom, a company vice president, said in an email.

Grove Farm dates back to the 1850s, and for more than 100 years was a family-owned sugar cane plantation. But as the sugar industry waned in Hawaii in more recent history, the company has converted many acres of prime farmland for urban development.

The 11,000 acres intended for IAL designation were largely part of sugar plantation operations, though the Office of Planning said sugar cane was grown on only 3,239 acres of the subject area.

About 25 tenants lease the Grove Farm property, mainly for ranching. Diversified agriculture is concentrated on 80 acres.

There are also several reservoirs on the property, including one that covers 415 acres and supplies irrigation for farming in the region.