HILO, Hawaii >> Farms in Hawaii could become “zero waste” if a state-funded demonstration project proves viable.

The state’s Agribusiness Development Corp. is proposing to build a $1.5 million facility at Shipman Business Park in Keaau that would grow algae from leftover produce, in particular, papaya. The algae could then be used for animal feed or biofuel, the Hawaii Tribune-Herald reported Wednesday.

Ken Nakamoto, project manager, said the Pacific Basin Agricultural Research Center has successfully grown algae from papaya in its lab, but the state wants to see if it could be done on a larger scale.

“What we’re trying to do at our facility is take it to the next step,” Nakamoto said.

He said about 35 percent of the crops farms produce are unmarketable. He hopes this process could give them a way to make some money off what would otherwise be tossed, and make livestock feed more affordable.

“PBARC has shown it can be done in a test tube,” he said. “We are trying to show we can do it on a commercial scale.”

Nakamoto, whose agency operates under the state Department of Agriculture, said the demonstration facility would be small and sit on a lot next to the Pacific Biodiesel facility.

Construction could be done by the end of next year, according to a draft environmental assessment.