KEKAHA — A recent state audit of the Agribusiness Development Corporation has led to the formulation of a bill that could put an end to the agency. The debate on what to do with the audit is currently in the state Legislature.

The state’s House Finance Committee unanimously advanced the bill Thursday that would abolish the agency.

The state Office of the Auditor’s 56-page report that led to the bill claims that ADC has failed to support the development of diverse agriculture and finding ways to boost the farming economy during its 25-year existence.

The report states: “We found an agency that is generally unaware of its unique powers and exemptions, and has done little if anything toward achieving its statutory purpose.”

The state Legislature established the ADC in 1994. On Kaua‘i, ADC manages 55.9% of the land in Kekaha and 26.4% of land in Kalepa, according to James Nakatani, executive director of the ADC. The corporation also manages land in central Oahu, Mokuleia, and a small amount of land on Hawai’i Island.

In Kekaha, ADC manages a total of 12,592 acres, of which 7,511 is tillable acreage. Only 3,990 acres are currently in crop production. That is a little over 53% of occupancy, according to Nakatani.

In Kalepa, ADC manages a total of 5,946 acres of land, of which 4,306 is tillable acreage, and 94% of that land is in crop production.

“Kalepa is an area right out of Lihu‘e, and Kalepa crops, sweet potatoes, one of the crops that is kind of surprising. There is a high demand on the mainland market. This is one crop we should keep our eye on,” he said.

State Rep. Amy Perruso, who represents portions of Wahiawa on O‘ahu, introduced House Bill 1271, which would dissolve the ADC. This would be beneficial for small farmers seeking access to land to farm because ADC has refused to lease land to small farmers, Perruso said, and, further, corporate farmers face few barriers and benefit from state subsidies.

Some don’t believe the audit calls for dissolving the ADC, including Mike Faye, who heads Kekaha Agricultural Association. KAA works with ADC to manage lands on Kaua‘i’s Westside. Faye said KAA is self-supported. They do not receive any money from the state to manage 12,000 acres of land. Instead, their licensees support it. He also said KAA does not manage the properties, they manage the infrastructure.

“The audit was scathing, perhaps an important look at what is going on,” Faye said. “The recommendations by the auditor did not say abolish ADC. Better oversight is what we are suggesting. We have a good relationship with ADC. I am disappointed that the audit portrayed the ADC in such negative terms.”

KAA manages 60 miles of ditches, 40 miles of roads and 40 miles of the power-distribution system, and has been developing a 500-acre, diversified-agriculture operation, prior to the audit, said Faye.

“We got our legacy farmers that have been considered a problem at first, and after working one on one with them we are helping them make their products stable, teaching them about discipline and diseases that may affect their product, which helps them be more profitable,” Faye said.

In testimony on the bill, Kaua‘i farmer Fletcher Parker said the lands that are being held by ADC are some of the most fertile and accessible agricultural lands on Kaua‘i, and they are being mismanaged.

“As an actual farmer I can tell you first hand that being able to get on good farming land is one of the hardest parts when it comes to food production for a small-scale farmer,” Parker said. “One of the most alarming results of this mismanagement is the poisoning of the land and water around the Westside of Kaua‘i.”

Kaua‘i farmer John Kochiss echoed Parker.

“I can only imagine how different our agriculture and food supply would be if this organization had been doing its job the last 27 years,” Kochiss said.

“There are so many smaller-scale farmers who would love to have access to some of this prime land, and love and care for it as if it was their own. I am one of them, farmers who believe in regenerative practices and who love and respect the land.”

House of Representatives Majority Floor Leader Dee Morikawa, who represents the Westside, Ni‘ihau and portions of the South Shore, said she has grave concerns about this bill.

“What ADC has done on the Westside of Kaua‘i is huge,” Morikawa said. “If not for the excellent maintenance of the ditches around Kekaha town, the town would sustain major flood damage. Further, the promotion of agriculture is visible in Kaua‘i and, in my opinion, is moving in the right direction.

“ADC may need some administrative adjustment, but to do a drastic move may not be in the best interest for sustainable agriculture. This bill may pass the House, but I don’t know what will happen on the Senate side,” Morikawa said.

HB1271 has cleared both the House Agriculture and Finance committees, and is now headed to the Senate.


Stephanie Shinno, education, business, and community reporter can be reached at 245-0424 or

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