In Gov. David Ige’s latest State of the State address, delivered Monday, he acknowledged a certainty the COVID-19 pandemic has underscored: While diversifying Hawaii’s tourism-based economy is a must, it won’t be easy.
In a call for a “multipronged” approach toward greater diversification, he proposed a future featuring a more robust technology sector and referenced decades past, in which agriculture served as a principal player. Given Hawaii’s wealth of natural resources and year-round growing conditions, agriculture should also play a leading role in our economic reset.
Further, as the state presses onward with stabilization, recovery and resiliency efforts, we will stand a better shot at thriving in the so-called new normal by striving to avoid repeating past mistakes. To that end, deserving of attention is a stinging new audit of Hawaii Agribusiness Development Corp. (ADC), which was created by the state in the mid-1990s to help fill the void created by the departure of the sugar and pineapple industries. It’s a long-overdue wake-up call.
With shuttering plantations freeing up vast stretches of ag land and irrigation water, the public corporation was charged — a quarter century ago, and now — with taking a lead role in converting those agribusiness assets into a “dynamic growth industry.” But the state auditor’s report found that ADC has done little toward achieving its statutory purpose.
Also, a brief issued last week by the University of Hawaii Economic Research Organization (UHERO) asserted that while ADC has succeeded in buying some land and irrigation systems, it was unclear whether those purchases were being put to proper use.
It seems clear from the auditor’s report and UHERO brief that any proper assessment of ADC is clouded by disarray in record-keeping and a board of directors that imposes little to no accountability.
Since 2012, when former state Department of Agriculture Deputy Director Jimmy Nakatani began serving as ADC’s executive director, just three annual reports (2012, 2018, and 2019) have been submitted to the governor and Legislature. The public deserves — and state law requires — far more transparency.
In the audit, Nakatani admitted that it is “on him” that the annual reports were not consistently prepared. However, he also maintained that the report “is a waste of time,” adding: “Who reads these reports? I would rather spend the time working on projects instead of the annual report.” This stance, of course, is unacceptable for a sizable business operation, especially a public one.
Legislators and others should be reading annual reports, which mark progress and setbacks, as they help verify whether an agency is on track. Because the reports have been handled in a cavalier manner, it’s not surprising that the audit also found ADC has not kept an inventory of its land portfolio or a complete list of its projects, which hampers its ability to effectively manage its diverse holdings.
The state gave ADC unique exemptions and flexibility. Among other things, it can acquire, own and sell land; lease or sell its lands to agricultural enterprises and farmers without having to go through a public auction process. Toward that end, ADC received more than
$250 million from the state in recent years. It would be useful to know if the money was well-spent.
Even so, Nakatani described ADC’s powers as exaggerated, and potentially burdensome. Also, leadership on its board contended that progress is slowed by short-staffing. Both points speak to the need for more vigilance at the state’s legislative level. Failure to nip early missteps — including failure to draft foundational agribusiness goals and objectives — as well as rein in more recent wrongheaded management has contributed to four decades of agriculture in decline.
As state leaders chart a fresh path toward expanding economic diversification, ADC’s challenges must be addressed with swift corrective action.