Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 945
                                        H.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Economic Development, to which was
referred H.B. No. 945, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this measure is to authorize the Department
of Agriculture to process, market, and display agricultural-
related commercial operations conducted by lessees in its
agricultural park complexes.

     Testimony in support of this measure was received from the
Board of Agriculture, the Office of Hawaiian Affairs, Hawaii Farm
Bureau, Big Island Farm Bureau, Hawaii Island Landscape
Association, and Keahole AG Park Association, including fifteen

     Your Committee finds that agriculture can help lead Hawaii
toward economic recovery, as it is one of the growth industries
in Hawaii.  Your Committee finds that efforts should be made to
stimulate economic activity in agriculture, especially when there
is no need for the State to use public funds to do so.

     Currently, farmers in Hawaii are only allowed to sell
products that they can directly raise on their agricultural lots.  

     Your Committee finds that including commercial activities
relating to the agriculture industry within agricultural parks

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can only serve to increase the viability and stability of our
Hawaiian farming enterprises.

     Your Committee finds that there are numerous economies of
scale that may be realized when the processing, production, and
even marketing aspects of agricultural products are centralized
in a few locations.  Small producers will be able to tap into
resources and venues that otherwise would be outside their reach
given their scale of production.  

     This measure will serve to complement the State's effort to
promote diversified agriculture.  This measure will additionally
benefit both farmers and the State because farmers will have an
outlet for their products at the market value, through their
promotion, displays, and marketing efforts.  More farmers in
return, will benefit the State with a significant increase in
employment opportunities. 
     Your Committee recognizes the concern of the Board of
Agriculture regarding the origin of products being sold and the
need for monitoring requirements to determine if such products
are acceptable for sale in agricultural parks.  Hence, the Board
of Agriculture will control products offered for sale through
amendments to the agricultural park program administrative rules.

     As affirmed by the record of votes of the members of your
Committee on Economic Development that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 945, H.D. 1, and recommends that it pass Second
Reading and be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic

                                   LORRAINE R. INOUYE, Chair

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