Resolved, That certified copies of this Concurrent Resolution be transmitted to the President of the United States Senate, the Speaker of the United States House of Representatives, to each member of Hawaii's Congressional delegation, to the United States Secretary of Agriculture, to the United States Secretary of Health, Education, and Welfare, and to the United States Commissioner of the Food and Drug Administration.

Offered by: DAVID C. MCCLUNG,

(and 12 others).

THE SENATE SEVENTH LEGISLATURE, 1973 STATE OF HAWAII

SENATE CONCURRENT RESOLUTION NO. 41

REQUESTING MATSON NAVIGATION COMPANY AND THE FEDERAL MARITIME COMMMISSION TO EXEMPT FRESH AND PROCESSED PINEAPPLE PRODUCTS FROM THE GENERAL INCREASE IN RATES IN THE UNITED STATES PACIFIC/HAWAIIAN TRADE TO BECOME EFFECTIVE MAY 1, 1973

Whereas Matson Navigation Company has announced a general increase of 12% in rates in the U.S. Pacific/Hawaiian Trade to become effective May 1, 1973, which would amount to an annual increase of more than $600,000 for pineapple; and

Whereas pineapple production has been a mainstay in Hawaii's economy and is the State's second largest agricultural industry, having a value of $137 million in 1972; and

Whereas this industry employs 6,200 full-time workers earning $42 million annually and another 12,000 seasonal workers who earn $10 million per year; and

Whereas within about two and one-half years, Hawaii's $137 million pineapple industry will have shrunk about one-third, based on acreage cutbacks and plantation closings announced during the last nine months, these developments having been caused by the high cost to produce and bring Hawaiian pineapple products to the market; and

Whereas costs of shipping and distribution of fresh and processed pineapple products are major factors in marketing on the U.S. mainland, with the cost of the ocean freight portion to the three (3) West Coast ports of Seattle, San Francisco and Los Angeles alone exceeding $5 million annually; and

Whereas Hawaiian pineapple products face serious competition from all food products in the market, including imported foreign pineapple carried by foreign carriers serving a choice of 25 ports of entry along all coastal areas of the United States; and

Whereas plans currently are underway to increase marketing of fresh pineapple for the mainland market, which will contribute to the overall revenue of the U.S. Pacific/Hawaiian carriers and utilize eastbound containers that otherwise would be returned empty; and

Whereas Hawaiian pineapple products are by far the major backhaul container cargo in the U.S. Pacific/Hawaiian Trade; and

Whereas any loss of revenue to the carriers in the U.S. Pacific/Hawaiian Trade from reduction in pineapple tonnage, whether as a result of competition in the market or diversion to carriage by charter vessels to eastern ports, would adversely affect the westbound shippers who would be obliged to carry that part of the cost burden now borne by the eastbound pineapple cargo; and

Whereas as recently as in 1968, ocean freight service for 200,000 tons or 40% of canned pineapple products carried to Gulf and East Coast ports was abruptly and permanently terminated, and shipping and distribution costs on that tonnage were increased 15% to 17%; and

Whereas the public interest in the preservation and strengthening of the agricultural economy of this State as well as the thousands of people directly sharing in the growing and canning would be furthered by any action that would keep Hawaiian pineapple competitive: Now, therefore, be it

Resolved by the Senate of the Seventh Legislature of the State of Hawaii, Regular Session of 1973, the House of Representatives concurring, the Matson Navigation Company and the Federal Maritime Commission be, and they are, hereby requested to exempt fresh and processed pineapple products from increases in ocean freight rates in the U.S. Pacific/Hawaiian Trade announced to become effective May 1, 1973; and be it further

Resolved, That duly certified copies of this Concurrent Resolution be transmitted to Matson Navigation Company and to the U.S. Federal Maritime Commission. Offered by: GEORGE H. MILLS, (and 20 others).

APPENDIX NO. 6

The following is taken from the testimony of Mr. Edwin Okubo, Acting Executive Assistant to Mayor Elmer Cravalho of the County of Maui at the ad hoc pineapple hearing conducted by the Hawaiian Congressional Delegation on October 20, 1973:

In response to this situation, Mayor Cravalho, with the concurrence of Governor Burns, has appointed a Molokai Task Force to seek alternative economic activities for Molokai, and to insure the continuing economic viability of the community. The Molokai Task Force includes approximately 35 Molokai residents, representing a wide cross-section of the community. Assistance is also being provided by various State, Federal and County agencies, together with a Senate Interim Committee appointed by President McClung, and chaired by Senator Henry Takitani of Maui.

The Task Force, which has been broken up into five different sub-committees, has been working for many months in an attempt to firm up recommendations and proposed solutions. We have, to date, proceeded in the following areas:

1. We have conducted a comprehensive survey of affected employees and their families in order to obtain a profile of the people involved, together with their attitudes and desires. Several factors during the course of this study, which involved the cooperation of the Maui Community College and the Office of Economic Opportunity have emerged significantly:

(a) The vast majority of the population has no desire to relocate from Molokai. They have either been born and raised on the island, or have spent considerable years on the island. They feel Molokai is their home, and are hopeful that they will be able to remain.

(b) Many of the residents (approximately 90%) feel that agriculture should continue as a major factor in the island's economy. However, a significantly lesser number (approximately 70%) indicated a desire to actually be employed in agriculture. This attitude has been confirmed by a similar study conducted by the University of Hawaii's College of Tropical Agriculture for the Hawaiian Homes Commission where only approximately 50% of the respondents indicated an interest in farming; further, among the youth of the community, only approximately 5% of the respondents expected or aspired to a career in agriculture.

(c) A significant number of persons favor development of a limited visitor industry on the island, and would seek employment in this field.

(d) A large percentage of the community seeks to acquire their own homes, possibly even without the plantation camp areas where they are presently residing. Molokai has a relatively low percentage of homeownership.

2. In the area of agriculture, we have consummated an agreement with the Hawaiian Homes Commission to participate in a test program for the raising of alfalfa and soybean. In addition, a tomato operation (both greenhouse and field) will be started in the near future, working in conjunction with Lokahi Pacific, a community development corporation. In conjunction with this, working together with the Department of Education and the College of Tropical Agriculture, a training program for persons interested in vegetable crop farming will be initiated in November of this year.

3. We have been in negotiations with several potential resort developers, both on the west end and east end of the island. There are at least three projects which appear to be relatively promising. However, while the Task Force is obviously seeking employment opportunities in this field, we are nevertheless equally concerned that any resort development maintain the unique quality and character of the island of Molokai.

We believe that visitor development on Molokai should emphasize the native culture, scenic beauty and historic significance of Hawaii. The Task Force, therefore, has compiled a comprehensive inventory of historic sites on the island as part of its work.

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4. Other economic possibilities are also being explored, including, in its very preliminary stages, the potential of an oil refinery operation. This is a very tentative possibility, which we are not in a position to discuss at any detail at this time.

5. Manpower and re-training needs are also being explored. Although specific re-training programs will have to be implemented at a later date, depending upon the economic alternatives which emerge, the Task Force is nevertheless planning to initiate basic courses in general education and construction trades in the near future.

6. Housing is also an area of vital concern to the community. We have been attempting to secure commitments, with varying degrees of success, from the companies involved, as to their policies for providing housing for employees who retire, are terminated, or who obtain other employment. One vital project, which would have provided ninety fee-simple, single family house and lot packages, has been stymied due to the freeze of federal housing funds, more specifically, the FHA 235 program.

We have attempted to provide the committee here this morning with some insight as to what has been occurring on Molokai. We are very appreciative of the concern and expressions of assistance provided by our Congressional delegation, and anticipate a continuation of this cooperative relationship.

With your indulgence, we would like to turn our attention to the pineapple industry in general, rather than the Molokai situation specifically. We, in the State of Hawaii, have seen over the years a substantial decline in the industry. We have seen this on all islands, and we have lived with it on Maui, with the termination of the Baldwin Packers operation in Lahaina, Libby and Haserot in the up-country area, and now with the announced phase-out of Dole and Del-Monte on Molokai. It appears very possible that within the foreseeable future, the County of Maui will have the only remaining pineapple operations in the State. So, our stake in the future of the industry is obvious.

Let me first assure the members of Congress, the industry representatives and labor, that the County of Maui whole-heartedly supports the continuation and preservation of this vital industry. Historically we have been an agriculturally oriented community. We believe that this rural orientation has done much to shape the values and attitudes which are unique to Hawaii and more so to Maui. Many of our parents and grandparents have literally given their lives in support of the pineapple industry. We recognize this, and we appreciate it.

But, we also believe that we must face some of the hard realities of the situation as it exists today. As I mentioned earlier, after 1975, we will have only two major pineapple operations within the County of Maui. Dole Company on Lanai has already announced its intention to create a resort-residential community on that island; granted while also providing that existing pineapple lands shall be protected. Maui Land and Pineapple Company has likewise announced plans to create a resort-residential community in Lahaina, some of it on lands presently in productive agricultural use. Additionally, lands belonging to the company in Kahului, adjacent to the cannery, are presently being developed as a major shopping complex.

The County of Maui has supported these alternative uses of land, in recognition of the fact that we must realistically provide for the future needs of our community. We believe, as do most people, that employment in pineapple will not increase. If anything, it will continue to decrease, and possibly eventually terminate. Therefore, we must be prepared to face this possibility. Dr. Tom Hitch, of the First Hawaiian Bank, in a recent address to the business leaders of our community, while optimistic in most areas of Hawaiian econome activity, could not generate the same optimism for pineapple.

We in the County administration would like to see pineapple continue. We want to have the people of our community who are presently employed in this sector continue to be employed. We want to achieve a balance between urban development and agriculture, which we believe has been essential in shaping our community. The question which must be answered, and which you seek testimony on this morning, is whether government should provide, through various measures, substantial assistance to the pineapple industry. Our answer to this is a qualified yes.

We believe that assistance to the industry could come in the following areas: (1) As we are well aware, pineapple is a very labor intensive operation. It is also apparent that it is becoming more and more difficult to find persons, particularly younger people, who are willing to work in this industry.

Therefore, we believe that it is essential that we continue to permit the importation of labor from outside the United States, not on a permanent basis, but on a temporary work visa basis, in order to meet the labor needs of the industry.

(2) It is also our feeling that Hawaii must be provided with flexibility to meet the environmental standards for protection of our air and water resources. Some of the rigid guidelines proposed by the Environmental Protection Agency regarding matters such as agricultural burning, control of fugitive dust and particulate matter, use of pesticides and other similar concerns, may create extreme hardships for agriculture in general.

We urge that environmental standards be established with some degree of flexibility, with criteria meeting the needs of the local community, subject if necessary, to concurrence by the Federal Government.

(3) We agree that Hawaii's pineapple industry should be adequately protected from foreign competition. This may be done by establishing and enforcing sufficient standards to preclude low-quality, low-grade pineapple from invading the mainland U.S. market. We would also agree that higher tariffs to reduce competition from foreign producers is desirable. While certain local producers maintain foreign operations, others, such as Maui Land and Pineapple Company, do not.

However, we believe that if foreign-based competition is to be effectively excluded from the mainland U.S. marketplace, the industry should likewise agree to maintain their present local operations on a permanent basis, and to limit foreign production to a pre-determined level, necessary only to maintain a competitive position with other fruit products in the United States.

What we are extremely hesitant about, however, is the type of assistance to pineapple, such as a direct subsidy or tax relief, which has the potential effect of merely providing additional risk capital to large corporate entities to invest in other areas, and in other activities. It is a well-known fact that virtually all of the large pineapple companies maintain operations in foreign countries such as Kenya, Thailand and the Philippines. We would like to see the industry remain viable ... but with the absolute safeguards that any benefits arising out of legislation, either Federal and State, would accrue directly to the people of Hawaii. This is our major concern. We would also like to request that consideration be given to the following areas, which will not only aid the pineapple industry, but development of our agricultural economic base in general.

(1) Assistance in the development of water resources, which can be used for both agricultural and domestic needs. You are all aware of the recent drought conditions which we encountered on the island of Maui. The problem is not that water resources are not available. Rather, it is a problem of development and transmission. With substantial federal funding, we can insure the co-existence of both urban and agricultural development, in the best interests of our community.

(2) Assistance in the development of an adequate intra-state transportation system, and protecting of transportation links with the Mainland. One of the major problems which we face on Molokai, for example, is inadequate facilities for both air and water transportation. By taking a "business as usual approach" to the problem, it is unlikely that many of us will be around, when, for example, Kaunakakai Harbor is improved. We ask for your consideration and assistance in this area.

...

(3) Housing is another important aspect of total development. In the County of Maui, we have an extremely progressive and effective program, which was proceeding expeditiously to meet the needs of our community. We are all familiar with the plantation camps . . . many of us grew up in them. For years, our people have lived in such sub-standard conditions. The County of Maui was well on its way to resolving this problem, together with assistance from private industry, when the housing freeze came. Whatever problems the 235 program had in other areas. for example, it was certainly working well here. Recently, a high-ranking Federal housing official told us that rental-subsidy funds are available, and that this would apparently be the thrust of the Administration's program.

This type of program can only work where there is an existing inventory of homes to be rented. This is not true, either in the County of Maui, or in the State of Hawaii. Additionally, our people prefer to own their own