Governor’s spike of sugar money termed `good compromise’

LIHU’E – A bill to help keep Kaua’i sugar alive has received unexpected backing from Gov. Ben Cayetano.

The governor used his line-item veto authority to reduce from $5 million to $2.5 million the amount of money the Legislature put in the state agricultural loan revolving fund to help Kaua’i sugar companies stay in business.

But he signed the bill-one he indicated he might totally veto-“to finance major sugar cane operations on Kaua’i” at the request of state Rep. Ezra Kanoho (D-13th District), who amended and helped get the bill passed in the state House, Senate, and joint House-Senate conference committee.

“I think it was a good compromise,” said Kanoho, noting he convinced Cayetano not to veto the entire bill.

“At one point it appeared that he would veto the bill. Then, he promised not to veto it, but that it would be unlikely that he was going to release any of the funding,” Kanoho said. “So it came out as a very pleasant surprise that at least there was some funding available.

“But it’s still his option, in any case, to release all or just a part of the funding. So the entire $5 million is still available. At least the option and the opportunity are still on the table.” During this year’s legislative session, “there were still a lot of questions on Amfac’s continued survivability, and what the intentions may be,” Kanoho said. “And because they weren’t planting all of the acreage which was harvested, it seemed to indicate that it was just a matter of time before they closed.

“And Gay & Robinson couldn’t continue alone, with their amount of acreage, to sustain the (bulk sugar) terminal at Nawiliwili. So they needed more acreage, and they probably would need more acreage to make the ethanol plant really viable. So this was all intended to enable Gay & Robinson to continue cultivating, planting the Kekaha acreage should Amfac decide to pull out.” Alan Kennett, president of Gay & Robinson, had no comment when asked about the governor’s action or if G&R, Amfac and the state were negotiating on any of the details Kanoho described.

Nearly all of Amfac Sugar Kaua’i’s Westside acreage is on land leased from the state. The company, which last week furloughed about a quarter of its 400 employees after deciding to halt planting, formerly operated as Kekaha Sugar Co.

Gay & Robinson’s parent company, Robinson Family Partners, owns about 51,000 acres of land on Kaua’i and grows sugar around its mill at Kaumakani and on surrounding acreage.

Besides Cayetano, legislators in the House and the Senate were opposed to the loan legislation, Kanoho said. On the Big Island, state loans to try to keep Hamakua Sugar afloat didn’t keep the company alive, leaving the state short millions of dollars.

“‘Deja vu’ was the exact term-that we would run into the same problems as Hamakua,” Kanoho said of certain opposition to the Kaua’i sugar loan legislation. “Although, in Hamakua’s case, most if not all of the money was paid back, because there was sufficient collateral. And in this case, we’re quite certain that there would be that kind of collateral, even if it was just the cane which was planted in the ground. Because the harvested value would far exceed the loan amount.” In his veto message, Cayetano said, “Although the additional funding to be provided by this bill is clearly needed, the agricultural loan revolving fund may not be able to fully support all of the funding needs.

“This bill would appropriate $2.5 million out of the general revenues of the state for fiscal year 2000-01 for deposit into the agricultural loan revolving fund, but will appropriate twice that amount-$5 million-out of the agricultural revolving fund to finance major sugar operations on the island of Kaua’i,” Cayetano continued. “Due to the increased demands on the revolving fund resulting from recent enactments, the fund is not expected to have sufficient moneys to provide the additional $2.5 million.” The bill also appropriates up to $800,000 to help Big Island papaya farmers fight the papaya ringspot virus, which is decimating crops, particularly in the Puna district.

Business editor Paul C. Curtis can be reached at 245-3681 (ext. 224) or pcurtis@pulitzer.net

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