Report Title:

Agribusiness incubators; Appropriations

Description:

Appropriates $500,000 for development of the agribusiness incubator initiative.

HOUSE OF REPRESENTATIVES

H.B. NO.

315

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to agribusiness incubators.

 

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

SECTION 1. The legislature find that agriculture in Hawaii, which represents a $2,400,000,000 industry that employs more than thirty-eight thousand, has the potential to double to nearly $5,000,000,000 in the next three to five years. Approximately one hundred thousand acres of valuable Hawaii farmland lie fallow following the last decade's retrenchment in the sugarcane and pineapple industries. Those fallow acres offer a rare window of opportunity for agricultural development. If ways are found to use them profitably in agriculture, the value of agriculture could double and the green spaces so vital to Hawaii's lifestyle and tourism image would be preserved.

The legislature further finds that to have a realistic hope of using those one hundred thousand acres in agriculture, new agricultural products must be identified and innovative ways sought to process, package, and market them. Ways must be found to help agricultural entrepreneurs identify opportunity and build long-lasting businesses that make enough money to sustain their families and those of their employees, allow for expansion, pay for their land, and contribute significantly to the economy of the State. One way to foster the development of these businesses is to create a statewide agribusiness incubator program. Such a program would provide space, technology, technical expertise, business expertise, and financial incentives to help entrepreneurs establish a foothold with minimal risk before spinning off into independent businesses.

Major factors in the failure of new businesses are: lack of capital, unrealistic marketing objectives, poor management skills, lack of knowledge of technical and regulatory requirements, and isolation from other entrepreneurs and professionals. Each of these factors would be addressed in an agribusiness incubator program.

Businesses generally graduate from an incubator environment in two to three years and generate economic benefits for their communities including job creation, increased tax revenue, revitalized communities, and site improvements. The National Business Incubator Association reports that eighty-seven per cent of incubator graduates remain in business after five years, compared to only twenty-five percent of those who developed their businesses without incubator assistance.

The legislature further finds that the University of Hawaii's college of tropical agriculture and human resources (CTAHR) is uniquely suited to develop and manage the agribusiness incubators. CTAHR has a presence on all major islands through its extension offices and its existing network of experiment stations located throughout the state. CTAHR, in cooperation with the university's college of business administration, has also recently won a grant of more than $486,000 from the U.S. Department of Commerce to manage the Hawaii manufacturing extension program. The manufacturing extension program has a proven record of assisting existing businesses to improve their profitability.

The purpose of this Act is to appropriate funds to the University of Hawaii to enable CTAHR to develop agribusiness incubators.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $500,000 or so much thereof as may be necessary for fiscal year 2003-2004 for the development of the agribusiness incubator initiative.

The sum appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 3. This Act shall take effect on July 1, 2003.

INTRODUCED BY:

_____________________________