The state auditor recently completed a long-awaited audit of the operations of the state Agribusiness Development Corporation, declaring: “We found that ADC has done little — if anything — to facilitate the development of agricultural enterprises…the ADC has yet to develop an agribusiness plan…ADC did not follow the state procurement process…the ADC has yet to provide the necessary leadership to facilitate the transition of agricultural lands…after almost 30 years since its creation.”
Read the complete audit at files.hawaii.gov/auditor/Reports/2021/21-01.pdf.
The ADC is a quasi-public/private entity responsible for managing between 21,932 acres and 37,837 acres of state-owned agricultural land. Some 57% of the lands they manage are in Kekaha, 28% in Kalepa, the east side, and 15% located in central O‘ahu.
Note: The ADC claims 28,000 acres for the Kekaha lands in their 2018 annual report and 12,000 acres for the same Kekaha lands in their 2019 annual report. As the audit states over and over again, the ADC records are incomplete and in disarray.
According to the audit: “…the Agribusiness Development Corporation was created to develop an ‘aggressive and dynamic’ agribusiness-development program to fill the economic void created by the closure of sugar and pineapple plantations; the agency has done little to fill the void…”
The ADC’s failure to grow and diversify local agriculture here on Kaua‘i, where a majority of the state-owned land they manage is located, is painfully obvious.
Instead of transitioning the former sugar lands of Kekaha into local food production with the prime agricultural lands leased out to local farmers and ranchers, the ADC has just converted the land from sugar plantations to GMO plantations. Rather than develop these lands into what could have been a thriving mecca for diversified local food production, the ADC chose the easiest and most profitable path forward and simply leased most of these lands to DuPont, Dow, Syngenta and Becks. In recent years these companies have all changed their names, but not their business models.
The vast majority of corn grown by these companies is not for food, but rather for research and/or for seed production that ends up on the mainland as cattle feed, high fructose corn syrup and ethanol.
Meanwhile, local farmers and ranchers who actually do produce food for local consumption are stuck in a frustrating and perpetual search for good agricultural land, reliable irrigation and affordable long-term leases. To their credit, Hartung Bros. (formerly Syngenta), which is a major ADC tenant, has begun growing actual food for local consumption, albeit in very small amounts relative to their total acreage.
The audit is a damning expose of mismanagement, misdirection and misapplication of state resources that has gone on for over 25 years. The mission of the ADC is to strengthen and diversify agriculture, and to efficiently manage state-owned agricultural lands. Clearly they have failed.
Actual findings from the audit include:
• ADC has yet to create a meaningful Hawai‘i agribusiness plan;
• ADC does not conduct market research, a statutory requirement;
• ADC’s land management is inconsistent, incomplete and, in many cases, there is non-existent record keeping. For example, prospective tenants occupying lands without signed written agreements;
• ADC does not keep a land portfolio inventory nor a complete list of projects;
• License terms and conditions are inconsistent with board approvals;
• Vacant properties are home to criminal activity;
• The ADC board is aware that ADC is not fulfilling its statutory requirements, but it does not hold its executive director accountable.
Kaua‘i legislators have so far been quiet on the issue.
Not so for House Speaker Scott Saiki, who less than seven days after the audit was made public launched a probe clearly intended to remove the state auditor.
That’s correct. Instead of demanding the removal of the ADC executive director and a restructure or dismantling of the ADC, Saiki has announced an investigation of the state auditor, and has proposed to kneecap their operations via a 50% budget cut.
It’s not entirely clear that Saiki’s displeasure with the auditor is directly tied to the ADC audit. The truth is we will never know for sure.
But if it looks like a duck, walks like a duck, and talks like a duck, then, yes, it is probably a duck.
To say the optics are bad is an understatement. Either the timing of his announcement was just extremely unfortunate and the issues are not connected, or the state auditor is being punished for calling out the failures of the ADC.
The primary question now is for our own three representatives and our state senator, who also happens to be the Senate president: How will they vote on ADC bills headed to them in the coming weeks?
Will our legislators have the courage to abolish the ADC and transfer its responsibilities back to the state Department of Agriculture? Or will they support reforming or restructuring the ADC, placing Band-Aids over the ugly parts and give them another 25 years? Or will they do nothing?
My personal hope is that they will support the independence of the auditor’s office, abolish the ADC and focus 100% on helping our local farmers and ranchers.
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Gary Hooser is the former vice-chair of the Democratic Party of Hawai‘i, and served eight years in the state Senate, where he was majority leader. He also served for eight years on the Kaua‘i County Council, and was the former director of the state Office of Environmental Quality Control. He serves presently in a volunteer capacity as board president of the Hawai‘i Alliance for Progressive Action and is executive director of the Pono Hawai‘i Initiative.
