The state agency set up to convert Hawaii’s farmland from plantations that primarily produce pineapples and sugar for export to more economically viable farms that grow a variety of crops has failed in its mission, an audit published Thursday found .
Hawaii Agribusiness Development Corp. comes at what some consider a critical time for the state’s tourism and military-dependent economy as the COVID-19 pandemic has underscored the need for diversification.
The company was founded more than 25 years ago to support this by reviving Hawaii’s agriculture that was once a pillar of jobs and income.
However, the Hawaii State Auditor said this did not happen.
In a characteristically damning assessment, the auditor found that neither the company nor its board of directors were even aware of the tasks of the state authority. Even basic duties, such as the legally required drawing up of plans, were ignored according to the audit.
“ADC has not become the entity that legislators envisioned – one that would develop an agricultural industry that would stand alongside tourism and the military as a pillar of the state economy,” the exam reads. “After almost 30 years, the economic gap created by the cessation of plantation production is largely unfilled.”
In addition to its ambitious mission, the company has extensive powers including the ability to buy and hold land and water resources and conduct market research.
In recent years, the legislature has allocated more than a quarter of $ 1 billion to the ADC, including approximately $ 23.4 million for operations and $ 238 million for capital investments. However, it has sometimes been difficult for lawmakers to determine where that money has gone and how well the company has fulfilled its obligations.
As Civil Beat reported in April 2018, some lawmakers were upset that the ADC had not even submitted annual reports to the legislature at this point, as required by the Enabling Act.
When lawmakers called for a test at the time, agency executive Jimmy Nakatani told lawmakers he was too busy for such a test. Scott Enright, then chairman of the US Department of Agriculture, also resisted the audit on the grounds that ADC staff were too busy.
But the exam found, whatever Nakatani did to make an exam too arduous, it did not seem like he was running a tight ship.
Records are out of order or do not exist
“We have struggled to pinpoint exactly why ADC is having trouble managing the lands it has acquired in 2012, in part because the company’s records and filing system are in disarray,” the audit reported.
“Documents were stacked under the desks and kept where space would allow. The staff hastily compiled tenant files after we requested them, but the files they provided were disorganized and often were missing important documents like board approvals, license agreements and proof of insurance, ”she added.
Documents that are essential for the day-to-day operations of a company that manages land and property, such as inventories and tenants’ lists, did not exist, the auditor found.
The auditor also noted that the Agency has not drawn up a statutory plan “that would define and establish the objectives, objectives, guidelines and priority guidelines for the company’s agricultural development strategy”.
The reason, according to the auditor: “The manager thinks such a plan is unnecessary: ’I’ve got everything up here,’ he said, pointing to his head.”
In the company’s response, released as part of the audit, Nakatani defended the agency, saying that some alleged issues were irrelevant. While Nakatani admitted the agency lacks the plan required by law, he said it doesn’t stop the company from doing good business on land purchases.
He also said it was an enormously difficult task transforming Hawaii’s agricultural sector.
“Converting former pineapple and sugar lands into diverse uses is not just about digging up pineapple plants and putting lettuce in their place,” he wrote.
You can find the full audit report here.
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