Sugar grower’s cutback
poses quandary for state
LIHUE >> Gay & Robinson's announcement yesterday that it will stop planting sugar cane on 4,000 acres of state land has state officials wondering what to do with the property.
Gay & Robinson did not say it was vacating the land, only that it would stop farming it after next year's harvest. But it was clear that if Gay & Robinson stops farming the property, it also will stop maintaining it.
The sugar company is part of a consortium of west Kauai agricultural companies that agreed to take over the state land formerly leased by Amfac/JMB's Kekaha Sugar Co. Amfac shut down sugar operations on Kauai in late 2000.
The new tenants do not have to pay rent but they agreed to maintain the immense and very complex irrigation and drainage systems built by Amfac over a century of farming the land.
The Department of Land and Natural Resources has said repeatedly the Kekaha property is the best farm land owned by the state. Without constant maintenance, the water systems would rapidly deteriorate and the ability to farm the land would be lost. That would diminish its value considerably.
Gay & Robinson took over 4,000 acres of the property to expand its sugar operations.
"That's a big chunk of land," said Alfredo Lee, executive director of the Agribusiness Corp., a state agency that manages the Kekaha property.
"If Gay & Robinson decides to completely vacate it, it's going to be hard to find a tenant to take it over."
Without a new tenant, the cost of water system maintenance may have to be absorbed by the other members of the consortium, he said,
Gay & Robinson is the largest land owner on Kauai and one of only two sugar companies remaining in Hawaii.
The company is hoping to diversify to add ethanol production from molasses to subsidize the sugar business. But it says the future of that project depends on the success of several bills now in the Legislature, including a tax credit.
Meanwhile, the cutback immediately eliminates between 15 and 25 of the company's 310 jobs, said Alan Kennett, president and general manager of Gay & Robinson. The planters -- who are among the best paid employees on the plantation -- have bumping rights and the workers laid off will be less skilled employees with the least seniority, Kennett said.
The addition of the old Amfac lands has given Gay & Robinson record harvests in terms of tonnage the past two years. This year's harvest is scheduled to come in at 65,000 tons.
But the price of sugar has dropped dramatically this year, to $350 a ton from $380 last year. Kennett said the price drop will cost the company $2 million in lost revenue.
The old Amfac land is less productive and thus less profitable than the 7,500 acres of Gay & Robinson land, which the company has long boasted is the most productive sugar land in the world.
Gay & Robinson will harvest 1,200 acres of the Amfac land this year and about 1,700 acres next year, but none of the land will be replanted, Kennett said.