HB2417 HD1

SECTION 1. The legislature finds that Hawaii’s agricultural industry faces an uncertain future. With the demise of large-scale, plantation agriculture, our farmers and ranchers have concentrated their efforts in diversified agricultural endeavors, including macadamia nuts, coffee, papaya, and floriculture. Diversified agriculture offers enormous opportunities. However, these smaller-scale industries also face numerous challenges, both from within the state and from competition abroad.

The legislature finds that a carefully organized and implemented statewide agricultural cooperative would provide farmers with a viable means of overcoming some of these challenges. A statewide agricultural cooperative that includes farmers from the entire range of agricultural industries in Hawaii would represent a powerful force to address the needs of Hawaii’s farmers, and would provide much needed assistance in areas like product marketing, distribution, pre-sale agreements, and transportation.

The legislature further finds that the department of agriculture is the most appropriate state entity to help facilitate the establishment of the statewide agricultural cooperative.

The purpose of this Act is to establish a process for the planning and establishment of a statewide agricultural cooperative by July 1, 2009.

SECTION 2. The department of agriculture shall plan for the establishment of a statewide agricultural cooperative by July 1, 2009. In its planning efforts, the department of agriculture shall consult with a wide variety of organizations, enterprises, and individuals, including:

(1) The agribusiness development corporation;

(2) The department of business, economic development, and tourism;

(3) The Hawaii Farm Bureau Federation;

(4) The Hawaii Agricultural Research Center;

(5) The University of Hawaii college of tropical agriculture and human resources;

(6) Organizations representing each of the major crops produced in Hawaii;

(7) Individual agricultural enterprises;

(8) Entities involved in processing or packaging of agricultural products;

(9) Distributors, wholesalers, and retailers of agricultural products, including the military;

(10) Transportation companies and organizations, including shipping and trucking; and

(11) Venture capitalists and other similar entities involved in business investment and finance.

SECTION 3. (a) On or before December 31, 2008, the department of agriculture shall submit a comprehensive report to the legislature on its plans to establish the statewide agricultural cooperative. The report shall include:

(1) A summary of its planning activities to date;

(2) A business plan for the statewide agricultural cooperative, including annual projections; and

(3) Proposed legislation to establish the statewide agricultural cooperative by July 1, 2009; provided that the proposed legislation shall include the items specified under subsection (b); and provided further that the legislation consider the information received in the consultations specified in section 2.

(b) The proposed legislation to establish the statewide agricultural cooperative by July 1, 2009, shall include the following provisions:

(1) The statewide agricultural cooperative shall be headed by a board of directors, with members appointed from private and public agencies and organizations; provided that the board of directors includes members representing secondary industries related to agriculture such as retail, wholesale, and distribution; processing and packaging; transportation; banking, finance, and venture capital; business marketing and product development; and renewable energy involving biomass;

(2) The statewide agricultural cooperative shall be a voluntary program for agricultural enterprises; provided that those who choose to opt in shall agree to abide by all of the rules and guidelines set forth by the statewide agricultural cooperative;

(3) The statewide agricultural cooperative shall assist and support its members by:

(A) Increasing efforts to market and add value for products produced by members;

(B) Improving distribution, packaging, and market pricing for products produced by members;

(C) Ensuring adequate food safety and quality standards to promote consistent, reliable, and safe products produced by members;

(D) Providing cost-effective solutions in addressing issues relating to transportation of products;

(E) Providing technical support to members;

(F) Implementing crop coordination to maximize efficiency and meet market demands; and

(G) Negotiating pre-sale agreements to ensure a consistent stream of buyers for member products;

and

(4) The statewide agricultural cooperative shall consider plans to convert to a private entity owned by its members by July 1, 2010.

SECTION 4. This Act shall take effect on July 1, 2034.

HOUSE OF REPRESENTATIVES	H.B. NO.	2417
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII