A first-of-its-kind tax credit that could provide Hawaiian farmers up to $50,000 aims to spark a farming revolution in the island state.
Passed earlier this month, the state’s Food Production Tax Credit would go to new organic farmers who are looking to get started, said state Rep. Christopher Lee. The Oahu Democrat introduced the tax credit hoping to get younger people more interested in farming as the average age of Hawaiian farmers rises, and he believes it could be a guide to other states around the country.
Agriculture has a long history in Hawaii, usually in large, plantation-style farms that export pineapples and other tropical fruit to the mainland and abroad. Lee envisions a different future with smaller, organic farms that keep their food in Hawaii and are tended to by millennials.
“What we wanted to do is figure out how we can help all these new people who want to do things differently than the large-scale, plantation-style agriculture which has predominantly taken place in Hawaii,” he said.
Each farmer could receive up to $50,000 in tax credits for expenses. The state capped the amount of total credits handed out in one year at $2 million. Lee said those amounts could be raised in the future if the credit shows positive results.
Between 30 and 100 farms could end up taking advantage of the tax credit in the first year or two, he said. The credit expires at the end of 2021.
In addition to helping new farms get off the ground, the tax credit could be a boon to local markets, Lee said. Hawaii imports most of its food, which makes for one of the highest cost-of-living rates in the country.
If more farms start growing organic food locally and that food stays in Hawaii, it would help lower food costs, Lee said.
“We import nearly 85 percent of our food, and we’re entirely dependent on that for daily life,” he said. “It’s clearly a drain on our local economy and we really need to take steps to make it easier for our local farmers to produce food for us locally.”
Ashley Lukens, director of the Hawaii Center for Food Safety, said the appeal of the tax credit goes across the aisle. Democrats can get on board with the environmentally responsible practices of organic farmers, while Republicans are happy to see small businesses get a boost.
Lukens said she was surprised when she found out other states haven’t instituted a similar tax credit. She said the tax credit represents a sea change in how agriculture in Hawaii, and possibly other states, will work.
“What this bill does is show the beginning of a new vision of the future of agriculture in Hawaii,” she said. “It’s one where the state plays a proactive and supportive role in promoting the kind of agriculture that would preserve the environmental integrity of our state.”
Hawaii’s economy for generations has been based on tourism and agriculture, sending pineapple and sugar across the world. But globalization is stripping away Hawaii’s agricultural advantage, Lukens said.
The tax credit will help farmers pay for organic certification, which could help restore part of that advantage, Lukens said. While many smaller farmers on the island adhere to organic farming practices, it’s hard for them to get certified due to the high cost. Using the tax credit to get that official stamp of approval would be a big step, she said.
“This is certainly not a silver bullet … but for me this really shows the state is getting in the game of promoting an alternative form of agriculture,” she said.
