SB2695 SD1.DOC

THE SENATE	S.B. NO.	2695
TWENTY-SIXTH LEGISLATURE, 2012		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO LIVESTOCK FEED.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The cost of feed for livestock production in Hawaii can constitute up to seventy per cent of total production costs, which is in contrast to costs for mainland producers where feed amounts to nearly fifty per cent of total production costs. In Hawaii, in 2007, there were five dairies and six egg farms of significant size, with combined gross annual revenues of $26,400,000. Currently, there are only two dairies and four egg farms of significant size, with combined gross annual revenues of $16,250,000. Since 2007, two dairies and four egg farms have gone out of business primarily due to the rising cost of feed for livestock animals and the resulting increases in production costs. Since October 2010, the cost of poultry feed alone has increased approximately $60 per ton and is expected to rise even further.

Currently, one dairy and the four remaining egg farms are threatened by closure. Such closures would heighten the State's dependence on imported foods and threaten the State's food security and ability to achieve adequate levels of agricultural self-sufficiency. Self-sufficiency is critical to Hawaii's food security and ability to respond effectively in the event of natural disasters or disruptions in transportation.

The closure of local dairies and poultry farms also means that children and adults throughout the State will no longer have the option of selecting fresh, locally produced milk and eggs. Consumers have often expressed interest in obtaining locally produced milk, but unfortunately, the dairies do not produce enough milk to meet public demand. The public has expressed a similar interest in island-fresh beef, pork, chicken, and eggs.

Locally produced fresh beef, milk, pork, chicken, and eggs provide essential nutrition to consumers. However, these kinds of food are perishable, and imported products create a greater risk for food spoilage and resultant food-borne illnesses because of the increase in time needed to transport these products from offshore farms to Hawaii consumers.

Without these local agricultural businesses, all beef, milk, pork, chicken, and eggs would have to be imported into the State, requiring up to ten days of shipping before being sold to consumers. An increased shipping time reduces the expected shelf life of fresh milk and eggs.

The purpose of this Act is to create a livestock feed feasibility pilot project to assess the viability of growing and processing livestock feed within the State, and implement a livestock feed program on department of agriculture land.

SECTION 2. The department of agriculture shall implement a livestock feed feasibility pilot project. The project will research the viability of and to the extent possible develop a livestock feed program to be conducted on department of agriculture land, as determined by the chair of the board of agriculture.

SECTION 3. (a) After the livestock feed feasibility pilot project begins operations, the department of agriculture shall assess the implementation of the pilot project pursuant to section 2 of this Act and submit a report to the legislature no later than December 31, 2014.

(b) The assessment by the department of agriculture shall consider the following information regarding livestock feed growth and processing outcomes:

(1) The inputs and infrastructure required for the processing of livestock feed;

(2) Types of plants for livestock feed use;

(3) Start-up and year to year operational costs of a livestock feed facility;

(4) Projected revenue stream of a livestock feed facility;

(5) Parcels of land to be used for the livestock feed program; and

(6) Prospective markets for processed feed.

(c) The department of agriculture shall determine whether to continue, expand, or end the livestock feed feasibility pilot project based on the results of the department's assessment.

SECTION 4. There is appropriated out of the agricultural development and food security special fund the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2012-2013 for the livestock feed feasibility pilot project.

The sum appropriated shall be expended by the department of agriculture for the purposes of this Act.

SECTION 5. This Act shall take effect on July 1, 2012.