Sugar plantation gets reprieve
By Andrew Gomes
Advertiser Staff Writer
Alexander & Baldwin Inc. won't stop farming sugarcane on Maui this year despite huge financial losses incurred in recent years — but it's still uncertain how much longer Hawai'i's last sugar plantation will exist.
The company announced late Thursday night that its subsidiary, Hawaiian Commercial & Sugar Co., will continue planting the crop for at least another year.
The decision means that harvesting will likely continue through early 2012.
A&B previously said that $45 million in losses over the last two years would prompt it to make a decision by the end of last year whether to shutter HC&S.
Favorable sugar prices and expectations of higher crop yields based on projections for better weather led the company to back HC&S for at least another year, according to A&B's chief financial officer, Christopher Benjamin, who took over command of HC&S in March.
A&B's sugar business now has another year to perform before the operation is reassessed around the end of this year.
A&B's long-term plan is to convert the plantation to a biofuel farm, and the company intends to craft a strategic plan toward that goal this year.
A&B is exploring ways to produce biodiesel or ethanol from sugar or other plant feedstock, as well as generate electricity from biofuels, solar and wind.
"We believe that there is no better location in Hawai'i for a renewable energy farm, but we will only be able to achieve that long-term potential if we remain a viable sugar plantation in the near term," Benjamin said.
However, HC&S' future also hinges on its access to water — access that is being contested in two separate cases, largely by taro farmers in East and West Maui.
"HC&S' financial viability depends largely on improving sugar yields, and water is the single biggest prerequisite to doing so," Benjamin said. "Further clarity regarding HC&S' future remains dependent on both the East and West Maui water decisions."
The taro farmers have been fighting for more than 20 years for a greater share of water diverted from streams by a 74-mile network of HC&S irrigation ditches connected to the East Maui watershed.
The farmers say HC&S fields blanketing Maui's central plain use so much stream water that there isn't enough left to feed taro fields, and that the diversions violate provisions of the state Constitution protecting their cultural practices as Native Hawaiians.
The Native Hawaiian Legal Corp. has long pressed the case with the state Board of Land & Natural Resources. Several years ago it stopped HC&S from obtaining a 30-year lease, and has continued to fight for water rights.
In recent months, the state Commission on Water Resource Management has been in the final stretch of work to establish new flow standards for 19 East Maui streams.
Flows for eight streams were set by the commission in 2008. The standards helped some farmers but left others angry that more water wasn't restored.
"It's not enough," said Lyn Scott, whose family farms a 2-acre parcel in Honopou shared with her cousin and aunt that used to be farmed by her grandparents and other relatives.
Scott said there's only enough water from Hono-pou Stream for about half of the terraced plot.
"Our taro patch is really suffering," she said. "Financially, I'm not making any money."
Alan Murakami, an attorney with the Native Hawaiian Legal Corp., said farmers' needs haven't been adequately addressed by the Water Commission, and that his group is considering filing another legal challenge, depending on the commission's decision.
Murakami said sugar is an antiquated industry that is improperly using water that should be feeding stream life, taro and brackish shoreline habitats.
"I don't think HC&S will be around in five years, maybe even two," Murakami said. "It's like propping up Chrysler in Hawai'i."
A similar challenge to HC&S use of water from four West Maui streams is also before the Water Commission. In that case, a contested case hearing has been held and commission member Lawrence Miike, acting as a hearing officer, recommended restoring half the diverted water to the streams.
The full commission is considering the recommendation and could make a decision in the coming months.
HC&S has said that significantly reducing its water supply will force it to cease operations, putting many on Maui out of work. Supporters of the taro farmers have said Water Commission members shouldn't be swayed by what they view as threats by HC&S.
Isaac Moriwake, an attorney with Earthjustice representing plaintiffs Hui o Nā Wai 'Ehā and Maui Tomorrow Foundation Inc., said A&B's latest announcement was not meaningful as far as the contested water cases are concerned.
"We didn't hear anything new from them," he said. "A&B needs to stop passing the buck ... and respect public water resources."