Makes a grant-in-aid for fiscal years 2003-2004 and 2004-2005 to the Hawaii Farm Bureau Federation for agricultural research and market development. Appropriates funds for pineapple research. (SD1)

A BILL FOR AN ACT

Part I.

SECTION 1. The legislature finds that research and market development is critical for the continued growth of Hawaii's agricultural industry. In order to provide the necessary support for the transition of Hawaii's agricultural industry, more resources must be directed towards agricultural research and market development.

The importance of agricultural research is the basic foundation for Hawaii's agricultural industry. The Hawaii Agriculture Research Center and the University of Hawaii college of tropical agriculture and human resources are two very important research organizations that assist the entire agricultural community. For the past few years, funding for all agricultural research has declined dramatically. It is critical to maintain and increase the level of funding to keep Hawaii's agricultural industry competitive in the global market.

Market development is another key component to expanding the opportunities for Hawaii's agribusinesses. Hawaii's small size and isolated location provide challenges to the farmer in the global marketplace. Considerable effort and funds are needed to develop new markets, to expand existing markets, and to support new and existing crops.

The legislature finds that it is in the public interest to support and foster the growth of Hawaii's agricultural industry. Therefore, the purpose of this part is to provide the necessary funds for agricultural research and market development.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $        , or so much thereof as may be necessary for fiscal year 2003-2004, and the sum of $        , or so much thereof as may be necessary for fiscal year 2004-2005, as a grant-in-aid to the Hawaii Farm Bureau Federation. The money shall be apportioned to provide $       for research and $       for market development for fiscal year 2003-2004, and $       for research and $       for market development for fiscal year 2004-2005.

SECTION 3. The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.

Part II

SECTION 4. The legislature finds that the Hawaiian pineapple industry is a leader among Hawaii's agricultural commodities and a strong component of the State's economic base. According to the Hawaii agricultural statistics service, Hawaiian pineapple production was reported at $96,300,000 farm value and estimated at three hundred twenty-three thousand tons. The three pineapple companies pay $6,200,000 in state taxes, employ up to three thousand people with payrolls totaling more than $57,000,000, and generate $53,000,000 of ancillary support business with the airlines, ocean shipping, box manufacturing, construction and distribution industries.

The legislature also finds that losing this industry would economically damage the State, as well as jeopardize the viability of our rural communities. The industry helps to preserve a "green" Hawaii, with more than twenty-two thousand acres of pineapple fields on Oahu and Maui, many of which preserve view plains, as well as significant historical and archeological sites. In addition, the industry maintains and improves water systems that benefit the entire State.

The legislature further finds that Hawaii's pineapple industry has met shifts in market demands and increased global competition through added value products like fresh chilled or cut pineapple, sweeter, low-acid premium fresh fruit, and pineapple salsa. However, Hawaii's pineapple industry continues to face increased competition from countries that have lower labor, land, and water costs, and less stringent environmental requirements.

Ongoing research and development are essential in ensuring that this industry can compete effectively with outside competition. Research can also lead to improvements in the quality and quantity of pineapple production in Hawaii. In partnership with the State, the industry provides an estimated $190,000 of in-kind support to current research appropriations. In addition, the three pineapple companies conduct more than $1,410,000 of proprietary research annually.

The purpose of this part is to appropriate funds for pineapple research.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2003-2004, and the sum of $ , or so much thereof as may be necessary for fiscal year 2004-2005 for pineapple research.

SECTION 6. The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.

SECTION 7. This Act shall take effect on July 1, 2003.