The trust purchased development rights to the property from landowner Kip Dunbar, a third-generation rancher, with $1.1 million from the state Legacy Lands program and $1.2 million from the U.S. Department of Agriculture's Farm and Ranch Lands Protection Program. Last week, the permanent conservation easement was recorded with the state's Bureau of Conveyances.

Trust officials declined to disclose the approximate $2.3 million purchase price of the Kainalu Ranch development rights, but the figures were released by Molly Schmidt, Legacy Land Conservation Program coordinator for the state Department of Land and Natural Resources.

"Though my children and I have no intentions of leaving Moloka'i, this agreement has given us the assurance that these lands will remain in agriculture and open space no matter who may come to own them in the future," Dunbar said to The Maui News.

The trust worked with the Natural Resources Conservation Service's Pacific Island Area office in Honolulu to initiate the first award of Farm and Ranch Lands money in Hawai'i, trust officials said.

The federal program "serves to protect farmland for agricultural production and, more importantly, keeps the farmer/rancher in agriculture," said Dale Bonar, trust executive director. "While the purchase of a permanent agricultural easement does not provide the landowner with the same level of financial benefit that might come from developing the property, it provides the incentive for an owner to stay in farming.

"Just as important, it may be the only way heirs could keep the land since its value is reduced, thus reducing probate taxes," Bonar said.

Larry Yamamoto, director of the NRCS' Pacific Island Area, said: "We are pleased that the Farm and Ranch land Protection Program is available as a tool to help protect Hawai'i's important agricultural land. ... Keeping agricultural lands available for our grandchildren and their grandchildren is critical for sustaining Hawai'i's future."

Federal funds are available to purchase conservation easements on lands that are: privately owned, large enough to sustain agricultural production, accessible to markets and have adequate infrastructure and agricultural support services. Landowners retain rights to use the property for agriculture in perpetuity.

Interim Department of Land and Natural Resources Chairman Allan Smith said the state's Legacy Lands program "came along at a time that the state of Hawai'i was recognizing the urgency and value of protecting important agricultural lands."

Enacted into state law in 2005, the program derives its funding from 10 percent of the real estate conveyance fees. About $5 million has been generated yearly for easement acquisitions.

Smith said the funds are critical in providing matching money for federal and foundation grants.