I’d like to tell you about a Farm Loan program for sustainable alternate energy projects, which we are introducing in this session of the Legislature. It will help Hawai‘i farmers become less dependent on fossil fuel. The money it saves will also make local farmers more competitive with imported produce.

This bill will help to answer the question: “How can we get more farmers to farm?” The answer is: “If farmers make money, more farmers will farm.”

The rapid increase in world population occurred in parallel with the discovery and use of oil in agriculture, all in the last 150 years. Oil provides power to, or is a component of, tractor fuel, fertilizers, synthetic chemicals, plastics, irrigation, cooling, packaging and transportation. Oil provided the food for the world population explosion. If world oil supplies decline, it is reasonable to assume that food production in Hawai‘i will also decline.

We are now starting to realize that oil is a finite resource and that we have reached the point where oil supplies have entered a period of permanent decline. This has serious implications for those of us living in Hawai‘i, out in the middle of the ocean. We import more than 80% of our food.

Although the decline in world oil supplies will likely not occur overnight, we need to start producing more food for ourselves now. If we start now and the worse never occurs, we will have lost nothing. But if we don’t start and the worse does occur and we run out of food, our grandchildren and great-grandchildren will never forgive us for our shortsightedness.

Here are the essential elements of the Farm Loan program for sustainable alternate energy projects:

1. It is meant for full time farmers

2. It is limited to $1.5 million dollars per project

3. The term length is 40 years

4. Downpayment is 15%

5. The interest rate is 5%

6. It is to be funded for 10 million dollars

7. Wind, solar, biofuel, hydro and other alternate energy projects qualify

The High Tech Business Investment Tax Credit, Act 221, provides 100 percent state income tax credit for non-fossil, fuel-energy related technology. Although farmers qualify for Act 221, farmers often cannot finance these types of projects by themselves. And obtaining investors to accomplish alternate energy projects often leaves very little of the project value for the farmer.

The Farm Loan program for sustainable alternate energy projects leverages Act 221.

The farmer retains the benefit of the alternate energy project, which goes straight to his bottom line. And he gets 100 percent of the state income tax credit.

If a farmer can make money, more farmers will farm, and this will help us achieve our objective of producing more food locally. It also keeps money circulating inside our economy. The cost-to-benefit ratio of this project is very, very good.

See the proposed bill here.