64
THE SENATE                           S.R. NO.              
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                    SENATE  RESOLUTION
  REQUESTING THE LEGISLATIVE REFERENCE BUREAU TO EVALUATE THE
    AGRICULTURE LOAN SYSTEM IN HAWAII.



 1        WHEREAS, the agricultural sector continues to make a
 2   significant contribution to Hawaii's economy, and is the
 3   business opportunity of choice for many rural communities; and
 4   
 5        WHEREAS, the agricultural sector produces about
 6   $500,000,000 annually of the gross product of Hawaii and
 7   directly employs over forty thousand persons through more than
 8   five thousand five hundred farm and ranch businesses.  The vast
 9   majority (eighty-six per cent) of the farm units are less than
10   ten acres, with reported gross annual revenues of $50,000 or
11   less; and
12   
13        WHEREAS, the business growth in the agricultural sector is
14   the fastest growing segment of our recovering economy; and
15   
16        WHEREAS, rural Hawaii is experiencing a historic change
17   from the once dominant sugarcane and pineapple plantation
18   cropping pattern to a much more diverse and new agriculture as
19   sugar mills and canning plants have been closed; and
20   
21        WHEREAS, this change has been and is being caused, in
22   large measure, by market forces that are controlled outside the
23   State; and
24   
25        WHEREAS, this rural transition requires the conservation
26   and conversion of the improved crop lands and their production
27   infrastructure, such as cleared and graded fields, irrigation
28   and drainage works, and roads and bridges, in order to
29   facilitate the start-up of new agricultural enterprises of all
30   sizes and types; and
31   
32        WHEREAS, examples of new agricultural enterprises include
33   trees for fiber for international markets, fresh produce crops
34   to displace interstate trade to increase self-sufficiency, and
35   new and treated flower and fruit products for interstate
36   markets; and
37   
38        WHEREAS, these new rural enterprises provide sources of
39   needed employment for displaced agricultural workers and their
40   communities; and
41   

 
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                                  S.R. NO.              
                                                        
                                                        

 
 1        WHEREAS, this farm business change creates the demand for
 2   new investment for the modification of production facilities to
 3   deliver new products to local, interstate, and international
 4   markets; and
 5   
 6        WHEREAS, the farm credit system has had to undergo changes
 7   during this transition as the result of mature, corporate
 8   agricultural companies being replaced by a mixture of expanding
 9   or new start-up farm operations of variable financial strength
10   and experience, but with significant investment requirements;
11   and
12   
13        WHEREAS, the public and private farm credit system, which
14   had been devised to respond to the credit demand of the
15   plantation agricultural pattern, may not be adequate or
16   appropriate in today's economy; and
17   
18        WHEREAS, agricultural land and water use rights may not be
19   adequately conveyed to a tenant to provide reasonable security
20   for the extended credit needed for redevelopment needs; and
21   
22        WHEREAS, there is an immediate need for an evaluation of
23   the farm credit demand and supply system and the public and
24   private constraints to those credit transactions; now,
25   therefore,
26   
27        BE IT RESOLVED by the Senate of the Twentieth Legislature
28   of the State of Hawaii, Regular Session of 2000, that the
29   Legislative Reference Bureau is requested to evaluate the
30   agriculture loan system in Hawaii; and
31   
32        BE IT FURTHER RESOLVED that the Bureau is requested to
33   consult with the following state agencies and private companies
34   in conducting its evaluation:
35   
36        (1)  The Department of Agriculture, including the
37             Agricultural Loan Division, and the Aquaculture
38             Development Program;
39   
40        (2)  The Hawaii Farm Bureau Federation;
41   
42        (3)  The College of Tropical Agriculture and Human
43             Resources, University of Hawaii at Manoa;
44   

 
 
 
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                                  S.R. NO.              
                                                        
                                                        

 
 1        (4)  The Department of Land and Natural Resources;
 2             including the Division of Land Management and the
 3             Division of Forestry and Wildlife;
 4   
 5        (5)  The Department of Hawaiian Home Lands;
 6   
 7        (6)  The Office of Hawaiian Affairs;
 8   
 9        (7)  The Department of Business, Economic Development, and
10             Tourism;
11   
12        (8)  The Rural Development, United States Department of
13             Agriculture, Business and Industry Loan Guarantee
14             Program;
15   
16        (9)  The Farm Service Agency, United States Department of
17             Agriculture;
18   
19       (10)  The Hawaii Small Business Development Center Network,
20             a partnership program between the University of
21             Hawaii at Hilo and the United States Small Business
22             Administration;
23   
24       (11)  The United States Small Business Administration;
25   
26       (12)  Major owners of agricultural lands in Hawaii;
27   
28       (13)  Major financial institutions in Hawaii and other
29             banking interests;
30   
31       (14)  Major agribusiness in Hawaii;
32   
33       (15)  Major farm and ranch businesses in Hawaii, including
34             part-time, full-time, and every operating size of
35             growers of food, fiber, and flowers for sale,
36             including aquacultural and maricultural farmers;
37   
38   and
39   
40        BE IT FURTHER RESOLVED that these state agencies and
41   private companies are requested to cooperate with and provide
42   assistance to the Bureau with respect to its evaluation; and
43   

 
 
 
 
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                                  S.R. NO.              
                                                        
                                                        

 
 1        BE IT FURTHER RESOLVED that the Legislative Reference
 2   Bureau is requested to report its findings and recommendations,
 3   including any proposed implementing legislation, to the
 4   Legislature no later than twenty days before the convening of
 5   the Regular Session of 2001; and
 6   
 7        BE IT FURTHER RESOLVED that certified copies of this
 8   Resolution be transmitted to the Acting Director of the
 9   Legislative Reference Bureau; the Chairperson of the Board of
10   Agriculture; the Administrator of the Agricultural Loan
11   Division; the Manager of the Aquaculture Development Program;
12   the President of the Hawaii Farm Bureau Federation; the Dean of
13   the College of Tropical Agriculture and Human Resources,
14   University of Hawaii at Manoa; the Chairperson of the Board of
15   Land and Natural Resources; the Administrator of the Division
16   of Land Management; the State Forester, Division of Forestry
17   and Wildlife; the Chairperson of the Hawaiian Homes Commission;
18   the Chairperson of the Board of Trustees of the Office of
19   Hawaiian Affairs; the Director of Business, Economic
20   Development, and Tourism; the State Director of Rural
21   Development, Hawaii State Office, United States Department of
22   Agriculture; the State Executive Director of the Farm Service
23   Agency, United States Department of Agriculture; the State
24   Director of the Hawaii Small Business Development Center
25   Network; and the State Director of the United States Small
26   Business Administration.
27   
28 
29 
30 
31                         OFFERED BY:  ____________________________