Act 175, New Procurement Law

The Honolulu Advertiser ran an article – Hawaii law may hurt farmers; Bid process could bring more outside competition – last week. It talks about Act 175, the new law that requires state agencies to gather competitive bids before buying food and other agricultural products.

Although there was a preference for local agricultural products in the previous law, the Hawaii Administrative Rules exempted local products from the law that required open competition, transparency of government purchasing practices, and additional preferences such as small business ones.

The state could have chosen to give preference to local produce with this new law; they just chose not to.

From the Advertiser article:

While the intent of the law is to support local growers, not all officials are convinced that will be the effect….Competitive procurement is expected to draw more Mainland competition, even with the 15 percent advantage given to local growers.

Farmers are incredulous. Prior to enactment of Act 175, state agencies purchased very little from local farmers. What’s to lose?

“If … it becomes a competitive process, we’re not sure exactly what the effect would be – whether it would be positive or negative, because nobody has any experience with that,” said state Agriculture Director Sandra Lee Kunimoto. “But the farm bureau and the farmers felt it was worth trying to see if it would increase the purchase of local goods.”

State Procurement Office Administrator Aaron Fujioka agreed. “It didn’t have to be competed, and it could be all purchased local from local companies locally grown,” Fujioka said. “The prior exemptions allowed agencies, if they chose, to purchase only from local companies and locally grown fresh produce and meats. They could have done that. Now that choice is no longer available. It has to go through a formal, more structured process.”

State agencies could have chosen to buy local produce, but they all chose not to. Out of 650 Big Island Farm Bureau members, I know of only one who sells to state agencies – and she has to go through a third party. Hawai‘i farmers know it is impossible to get produce into the schools and other state agencies.

We farmers welcome a formal, more structured process. But this time we want to help structure that process.

According to the state Procurement Office, state agencies purchased $6.63 million of fresh meat and produce from November 2005 through January 2009. The average award was about $7,400. The top three suppliers during that period in terms of dollar volume of sales were Love’s Bakery ($907,813), Meadow Gold Dairies ($511,295) and Mikilua Poultry Farm ($500,000). The top three suppliers in terms of number of awards were: Ham Produce (162), Hilo Products (133) and Armstrong Local Produce (132).

Procurement Office data suggest that most fresh food and produce purchased by state agencies came from local wholesalers and retailers. What isn’t clear is whether those local firms acquired their produce from local farms.

That is exactly the problem. It’s as if the state procurement office is saying: “Since we are buying from a local wholesaler, it must be local produce.” Farmers just shake their heads and go back to farming.

Farmers have known for years that the system is broken. There is no data to show how much of the state procurement is locally grown foods. How would the state know if their policy of “supporting local” is working?

The state says, “We support local farmers.” Farmers think, “It’s not what you say; it’s what you do.”

Farmers shake their heads. We know that the more fresh vegetables we import, the more inspectors we need and the higher the risk of invasive species.  We have more endangered species here in Hawai‘i than in the whole rest of the United States.

“The Big Island farm bureau polled their members, and they’ve got 650 members – and they only had one producer selling on a regular basis to the state and one who shipped their first shipment this year,” Connally said. “Their sense was their products were not going into the state facilities.

“If the farmers see that there’s a steady market available, then they can produce for that market.”

It’s what I keep saying: “If the farmers make money, the farmers will farm.”

Food security; the dangers of exporting our economy because of rising oil prices; protecting our endangered species – when we are truly supporting local farmers, we are addressing all of these concerns.

The world has changed and we no longer have the luxury of bumbling along. For the sake of future generations, we need to get serious.

Farmers understand this very clearly. This is not rocket science.

Farmers who are interested in helping push implementation forward can contact their legislators, the governor’s office and the state procurement office.

It may not be in the farmer’s nature to be vocal, but we need to make some noise.

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