A suite of bills to boost agriculture is set to be introduced this coming legislative session with the goal of bringing Hawaii closer to other states when it comes to helping farmers.
Transportation, organic operations, kalo farming and workforce retention are priority issues in the bills, which will be put forward alongside a list of others focused on increasing food security in the islands.
The incentives are aimed at addressing the high cost of doing business in Hawaii, the logistical issues of marketing produce and competing with products coming from the mainland.
Lawmakers also plan to focus next session, which begins Wednesday, on farming and ranching challenges related to water, land, marketing, and pest and disease issues. The deadline to introduce bills is Jan. 25.
Tax incentives are often a hard sell at the Legislature. Last year, one that would have cut taxes for kalo farmers was vetoed by former Gov. David Ige, who cited concerns that the bill’s language could lead retail businesses to claim tax breaks.
A kalo farmer-focused bill will be introduced again this session, aimed at kalo growers earning more than $10,000 each year, according to Rep. Cedric Gates, the newly appointed chair of the House Agriculture and Food Systems Committee.
The bill would exempt qualifying farmers from general excise taxes on machinery, feed and seed, among other expenses. States throughout the U.S. exempt qualified farmers from such costs, but Hawaii only exempts farmers from paying excise tax on fuel.
A strong package of incentives – along with organic agriculture, specifically – have the backing of Gov. Josh Green, who at a House Finance Committee briefing Tuesday said tax credits could help make agriculture a key driver for Hawaii’s economy.
“A majority of other states do a lot more to help support farmers than Hawaii does currently,” Gates said. “We want to make sure we’re doing everything we can to help increase food production.”
Hawaii has offered tax credits for certified organic farming before, thanks to a law passed in 2016, but that benefit ended in 2021 after not being utilized much. Forty claims were made between 2018 and 2020, amounting to less than $200,000. It had an annual $2 million cap.
Just under 120 of Hawaii’s more than 7,000 farms would be eligible for the organic farming credit, according to U.S. Department of Agriculture statistics.
A bill to revive the tax credit will appear in the coming session, along with another to subsidize transportation costs for livestock, crops and feed.
Young Brothers has estimated it ships 13 million pounds of agricultural products between Hawaii’s seven main ports each month.
The U.S. subsidizes agriculture by about $20 billion annually, mainly focused on cotton, soy, corn, wheat and rice. Subsidies are provided to safeguard farmers from demand and market volatility, as well as climate variability, while also helping stabilize food prices for customers.
Green said it was up to the committee to decide what agricultural incentives would be best while he underscored how difficult it was for farmers to make ends meet.
“If we don’t incent those businesses then I don’t think we’ll really see much change,” he said.
The governor alluded Tuesday to finding a resolution to Act 90, a law enacted almost 20 years ago that called for the transfer of appropriate agricultural lands from the Department of Land and Natural Resources to the Department of Agriculture.
Ag groups have lobbied for years to find a solution to the issue. Ranchers have predominantly been concerned about what they say are inadequate conditions under DLNR leases, such as land tenure.
Senate Majority Leader Dru Kanuha echoed Green’s sentiment in a list of the majority’s legislative priorities.
Green says passing custody of certain parcels from DLNR to DOA is “not necessarily a bad thing.”
Hawaii Farm Bureau Executive Director Brian Miyamoto says other than Act 90, a priority for the organization, the bureau will be revisiting legislation that failed last year, including a state ag land lease bill that was vetoed.
House Bill 1705 would have allowed DOA to extend leases for farmers on agricultural park lands for an additional 30 years, which raised concerns given how many farmers are struggling to find land.
State agricultural park leases are relatively cheap, but high demand for parcels has created long waitlists.
“We want to encourage new farmers, but we need to support those who are actually already farming,” Miyamoto said.
The agriculture department’s budget request for the coming year includes $21.6 million for capital improvement projects for fiscal year 2024, which starts July 1, including $2 million for miscellaneous work to be done at Kahuku Ag Park.
Green’s proposed budget includes $55.3 million for DOA operations.
The department is requesting an additional $800,000 for the current fiscal year and an extra $900,000 for 2024.
Newly appointed DOA Chair Sharon Hurd’s presentation to the Senate Ways and Means Committee was cut short on Wednesday. WAM Chair Donovan Dela Cruz said the department was unprepared, and rescheduled it for Friday.
Farmers and ranchers were buoyed by the 2022 legislative session, with the launch of several pilot programs and the passing of bills that might help make their businesses more sustainable.
Lawmakers supported the implementation of a $1.35 million food hub pilot program, following the hub’s success in addressing food security issues during the pandemic.
Food Hub Hui coordinator Saleh Azizi said the group will seek $3 million this session, which will help its 14 members expand operations. The hui is also seeking the implementation of a new specialist extension agent role at the University of Hawaii’s College of Tropical Agriculture and Human Resources to help food hubs develop their businesses.
The idea is supported by both House and Senate ag committee chairs, Azizi said.
The next legislative session runs through early May.
“Hawaii Grown” is funded in part by grants from the Stupski Foundation, Ulupono Fund at the Hawaii Community Foundation and the Frost Family Foundation.
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Thomas Heaton is a reporter for Civil Beat. You can reach him by email at theaton@civilbeat.org or follow him on Twitter at @thomasheaton__
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Hawaii's Farms Are Small And Hard To Sustain. Can Tax Incentives … – Honolulu Civil Beat
