LOS ANGELES — As election day approaches, opposition has swelled against a proposed Hawaii constitutional amendment intended to allow bonds to boost agriculture.
Constitutional Amendment 2 on Tuesday's ballot would broaden the definition of special purpose revenue bonds originally aimed at preserving land for agricultural use to include all agricultural enterprises on any type of land.
Detractors say the measure has been promoted as a boon to small farmers, but is more likely to be used by large agricultural companies.
The amendment's supporters say that only 6% of Hawaii land has been classified important agricultural land since an amendment was passed several years ago allowing owners of land preserved for agricultural use to use special purpose revenue bonds.
Even the small percentage of landowners who have the designation have failed to make use of the bonds, according to information the Local Food Coalition, the measure's authors, posted on their website.
The coalition says the amendment would allow farms, ranches, nurseries, aquaculture and others to invest in starting or growing their agricultural operations.
The state issues the tax-exempt private activity bonds, which are repaid by the borrowers with no recourse to the state.
"I don't get a sense that the credit worthiness of small farmers makes them a good prospect for these bonds," said Bart Dame, a leading figure with the Progressive Democrats of Hawaii. "It would more likely benefit mid-sized or transnational companies."
Hawaii's small farmers can't get long-term leases, because landowners don't want to encumber the land with long-term leases because they want to leave the land open for future development, Dame said.
That makes it difficult for farmers to get loans to make improvements to their property, he said, but would also likely preclude them from qualifying from financing through a special purpose revenue bond.
Dame argues that the Local Food Coalition has presented the measure as being beneficial to small farmers, because there is a lot of sympathy for small farmers among voters.
The debate gathered momentum after state Sen. Laura Thielen came out against the amendment in her blog on Oct. 12.
Thielen wrote that she spoke to one of the measure's advocates who said the state needs to improve its agricultural infrastructure to include such things as fixing the irrigation systems and building food processing facilities.
While Thielen agrees that more needs to done to support agriculture in the state, she said in her blog that she is not convinced special purpose revenue bonds are the way to go about it.
"The critical flaw for me is this: If you can't qualify for a loan from a bank, then you are not going to quality for an SPRB," Thielen wrote.
She contends that the measure opens the door to a "broad variety of developments that may or may not meet the intended goal."
"When I weigh the risks between the hoped-for projects and the possibility of unintended consequences, I come down on the side of 'no,'" Thielan wrote.
