Opinion ID: 2581050
Heading Depth: 2
Heading Rank: 1

Heading: Diversified Agriculture

Text: On appeal, HTF argues that 2,500 gad for each and every acre in diversified agriculture, including fallow acres not being irrigated, results in an allocation approximately double what the leeward farmers actually need. The Water Commission does not address this issue in its answering brief. After reviewing the Water Commission's analysis on remand, we hold that the Water Commission's allocation of 2,500 gad per cultivated acre for diversified agriculture was not clearly erroneous. In Waiãhole I, this court noted that the uncertainty of water needs for diversified agriculture appears to stem largely from the embryonic state of diversified agricultural operations. Id. at 162, 9 P.3d at 474. Notwithstanding this uncertainty, this court held that permit applicants must still justify their proposed uses insofar as circumstances allow. At the very minimum, applicants must prove their own actual water needs. Id. at 161, 9 P.3d at 473. Restated, permit applicants must ... demonstrate their actual needs and, within the constraints of available knowledge, the propriety of draining water from public streams to satisfy those needs. Id. at 162, 9 P.3d at 474. This court also held that the Water Commission must articulate its factual analysis with reasonable clarity.... Id. at 164, 9 P.3d at 476. This court then vacated the Water Commission's adoption of the 2,500 gad figure for diversified agriculture because the Water Commission failed to address and explain contradictions in the record regarding the Water Commission's assignment of 2,500 gallons per day to as much as two or three times the acreage actually planted, resulting in a per-acre duty apparently approaching that of sugar.... Id. at 163, 9 P.3d at 475. On remand, the Water Commission addressed this court's concerns. The Water Commission first clarified the terms arable, cultivated, and planted as follows: Arable land is land that is able to be cultivated but not necessarily in cultivation. Cultivated land goes through the cycle of being plowed, planted, harvested, plowed under and left to rest (either with or without cover crop), then plowed and planted, etc. Planted means when the plants are actually present. So you may be planted three or four months a year, but you're in cultivation continuously throughout the year. D & O II at 74. In analyzing the difference between applying gallons of water per acre per day to planted acres and cultivated acres, the Water Commission noted that the evidence that farming practices involved rotation among fields made it difficult to specify what a particular acreage's water needs were. Thus, the Water Commission decided an average water use of acreage under cultivation was the most appropriate method to use. D & O II at 77-78 n. 59. The Water Commission next noted the testimony of two leeward farmers, Larry Jefts (Jefts) and Alec Sou (Sou): At the original hearing, Jefts testified on what he believed were the water needs per acre of cultivated land, making further distinctions of the water needs while crops were growing (e.g., planted) and while the land was between crop cycles: Generally, I would say we need an average of about 3,500 gallons per acre per day. Much water is used while the crops are growing. The first day of planting can perhaps use a peak of as much as 54,000 gallons per acre. From the second day through the day of harvest, the usage may be as much as 10,000 gallons per acre per day. For example, this amount might be used during the 75-90 day crop cycle for watermelons, bell peppers and tomatoes. The amount of water used varies depending on the crop cycle, the weather, and other factors. In between crop cycles, somewhat less water is needed for remaining uses such as cover crop[.] .... Sou made a clear distinction on water demand between cultivated and planted acreage, stating that he had a water demand for cultivated land of 1,800 to 54,000 gad, a comfortable zone for him to pursue his farming plans being an average of 3,500 gad. This is an average on land over a period of years, considering fallow land, etc. In contrast, average water usage is about 7,500 gad while plants are in the ground and being irrigated. D & O II at 75-76 (citation, emphases, quotation marks, and parenthetical omitted). The Water Commission then considered the following evidence regarding current water uses and expected water needs: Sou testified that he can live with the 2,500 gad until full build out indicates more is needed. His annual average use on the lands he has leased from Robinson Estate has decreased from 1,346 gad in 1998, to 1,455 gad in 1999, and to 1,204 gad in 2000.... [H]is subtenants have averaged water use from 1,579 gad to 2,662 gad.... Jefts now averages 1,000 to 1,300 gad for about 1.1 crop cycles on all arable acres that he leases from Campbell Estate, and averages 1,380 gad for about one crop cycle on all arable acres he leases from Robinson Estate. He plans to increase to 1.9 crop cycles per year, based on 2,500 gad as the limiting factor in increasing productivity.... .... ... The Commission concludes that the uncertainties to leeward farmers' build-out plans from the events listed above reasonably affected their capacities to carry out the plans they originally espoused in the original 1995-1996 hearings. D & O II at 120-21. Based on the foregoing, the Water Commission concluded that 2,500 gad for acres under cultivation or planned to be under cultivation is a reasonable water duty for leeward diversified agriculture. D & O II at 136 (emphases added). It is the Water Commission's daunting task to synthesize the evidence and reach a conclusion while balancing various interests and accounting for the public trust. In the instant case, the Water Commission considered testimony that each planted acre, depending on the crop, require anywhere between 1,800 to 54,000 gallons of water per day, and averaging 7,500 gallons per day. In diversified agriculture, farmers plant only one-third to one-half of their cultivated acres at any given time. In addition, because rotating the fields in diversified agriculture makes it difficult to specify the water need for a particular acre, the Water Commission decided to consider average water use for cultivated acres. Based on the evidence presented, the Water Commission concluded that 2,500 gallons of water per cultivated acre per day was sufficient for diversified agriculture. Inasmuch as the Water Commission articulated its reasoning with sufficient clarity in its D & O II, we cannot say that the Water Commission's decision was clearly erroneous. The Water Commission's allocation of 2,500 gallons of water per cultivated acre per day appears to be based on the best information currently available. In reaching our conclusion, we carefully considered HTF's argument that the Water Commission's allocation of water exceeds the amount actually used by the farmers in the past. Although past water use is a good indication of actual water needs, it is not the only means of determining actual water needs. An applicant must be able to present evidence of, and the Water Commission may consider, projected water needs that are real and supported by evidence. Moreover, any uncertainty in issuing permits for future actual water needs was properly offset by the Water Commission's condition that the applicant show actual use of the permitted amount within four years of the D & O II and the Water Commission's mandate that any unused permitted water must be released into windward streams. Accordingly, this court affirms the Water Commission's allocation of 2,500 gallons of water per cultivated acre in diversified agriculture per day. However, the Water Commission must keep in mind that nine years have passed since the first contested case hearings and diversified agriculture is no longer in its embryonic stage. As such, this holding does not condone a blanket application of 2,500 gad to all future allotments of water for diversified agriculture. Instead, the Water Commission must continue making decisions based on the best information available.
HTF next argues that Jefts failed to demonstrate an actual water need for 2,500 gad for every acre leased. After reviewing the record, we hold that the Water Commission clearly erred by allotting 2,500 gad to all 267 acres of land in Field Nos. 115, 116, and 145. In Waiãhole I, this court vacated Campbell Estate's allotment of 1.19 mgd for Field Nos. 115, 116, 145, and 161, consisting of 145 total acres multiplied by 2,500 gad because basic information regarding current and projected use were not included in the Water Commission's FOFs in the D & O I. [19] Waiãhole I, 94 Hawai'i at 164, 9 P.3d at 476. On remand, the Water Commission entered the following findings: In order to convert the land to diversified farming operations, Jefts had to knock down the ratoon cane, till the fields compacted after sugar planting, and adjust the pH component in the soil. The effort to adjust the pH level may take several years, and he hoped that, in three to four years, things will begin.... .... By the time of the remanded hearings, Jefts had concluded that the optimum crop mix for him in Kunia was about 1.9 crop cycles per year. .... On his Campbell Estate leases, Jeft currently averages between 1,000 to 1,300 gad for about 1.1 crop cycles on all of the arable acres that he leases. At his projected optimum crop mix of 1.9 crop cycles per year, 1,000 to 1,300 gad should nearly double but not exceed 2,500 gad.[ ] His projection to 1.9 crop cycles per year is based on 2,500 gad as a limiting factor in increasing productivity. Based on all of his Robinson leases, approximately 1,093 tillable (arable) acres, his average gallons per acre per day has increased as follows: 792 gad in 1998; 936 gad in 1999; and 1,380 gad in 2000. Jefts now has all 1,093 tillable (arable) acres in cultivation, averaging about one crop cycle per year.... Jefts's build out plans are event driven. These events are primarily the events that reduce the risk profile that give him the confidence that he can run a successful farming operation.... .... Gentry and Cozzens did not exercise its option to purchase Fields 115, 116, and 145 by the expiration date of November 1999, and in February 2000, these fields were leased to Jefts for diversified agriculture.... Jefts had begun to clear the land and put in the infrastructure to get water on the former Gentry lands, and had completed 188 acres (of the 267 acres) at the time of the remanded hearing. D & O II at 82-84, 88. As such, according to the D & O II, Jefts is currently using 1,000 to 1,300 gad at 1.1 crop cycle on the land leased from Campbell Estate. In 2000, he averaged 1,380 gad at one crop cycle on the land leased from Robinson Estate. Jefts testified that he intends to increase to 1.9 crop cycles as limited by the 2,500 gad allotment. Moreover, Jefts has consistently increased productivity and water use each year on the lands leased from Robinson Estate. Based on these factors, Jefts has established an actual water need of 2,500 gallons of water per cultivated acre per day. As such, this court affirms the Water Commission's allotment of 2,500 gallons of water per cultivated acre per day to Jefts. However, the D & O II is devoid of any finding that Jefts adduced evidence establishing an actual need to water all 267 acres of land in Field Nos. 115, 116, and 145. The D & O II merely states that [a]t the time of the remanded hearings, Jefts had completed clearing the land and putting in the irrigation infrastructure for 188 of the 267 acres. D & O II at 137. Jefts testified on remand that [a]bout 188 acres, referred to as the Gentry option area, has been in our possession for a little over a year, was brought into cultivation the middle of last year. Planting began late last year, and we're now finishing the first planted cycle on that property. Thus, the record evinces that Jefts cultivated or planned to cultivate only 188 acres of land in Field Nos. 115, 116, and 145. In his written testimony, Jefts was asked, Are arable acres synonymous with acres being cultivated? Jefts responded, For the lands that I lease from Campbell Estate, currently, no, but very soon, yes. Before I can begin cultivating any piece of land, I need to clear it and put in infrastructure, including the infrastructure to get water there. I recently did that with 188 acres of the Gentry option lands. Although this statement implies that Jefts intends to convert all arable lands leased from Campbell Estate into cultivated lands, the Water Commission failed to make any finding that all 267 acres of land in Field Nos. 115, 116, and 145 were arable and, thus, to be cultivated. In summary, Jefts presented sufficient evidence of, and the Water Commission made reasonably clear findings that, Jefts's actual water need is 2,500 gallons per cultivated acre per day and that Jefts had cultivated or planned to cultivate 188 acres of land in Field Nos. 115, 116, and 145. However, because the Water Commission failed to enter any finding that Jefts adduced sufficient evidence to establish that he planned to cultivate all 267 acres of land in Field Nos. 115, 116, and 145, we vacate the Water Commission's allotment of 2,500 gads for 267 acres and remand for further proceedings consistent with this opinion. Any allotment awarded by the Water Commission to Jefts on remand is subject to Campbell Estate meeting its burden of proving, and the Water Commission finding, that no practicable alternative sources of water exist.
Finally, HTF argues that Garst Seeds, formerly ICI Seeds, failed to establish an actual water need for 2,500 gad. Although the Water Commission did not err by allotting 1,800 gad for 115 acres of land in Field Nos. 146 and 166, the Water Commission clearly erred by allotting 2,500 gad for 229 acres of land. In Waiãhole I, this court held that the Water Commission's year round allocation of 2,500 gad for the 344 acres of land in Field Nos. 146 and 166 had no basis in the record and was clearly erroneous. Waiãhole I, 94 Hawai'i at 164, 9 P.3d at 476. This court then vacated the allocation of water and remanded for further proceedings. Id. On remand, the Water Commission found that Garst was using approximately 600 gad over 344 acres. [20] Due to the mono-type crop operation using spatial isolation, two-thirds of its acres are idle at any given time. Thus, Garst's actual water need was approximately 1,800 per planted acre. [21] Because Garst adduced sufficient evidence of, and the Water Commission clearly articulated findings that, Garst's actual water need is 1,800 gallons per planted acre and 115 acres (approximately one-third of the total acres) are planted, this court affirms the Water Commission's allocation to that extent. However, the Water Commission failed to make adequate findings that clearly articulate Garst's actual water need of 2,500 gad for the remaining 229 acres (approximately two-thirds of the total acres). The Water Commission justifies this award by finding that Garst Seed is in negotiations to better utilize the isolation acres for its mono-type crops: 1) with USDA on conservation type crops to be used on the idle ground; 2) with HARC to plant on the isolation acres; and 3) with Jefts to do a land `swap', whereby Jefts would plant on some of Garst Seed's land and Garst would plant an equal amount of acreage on Jefts's lands. D & O II at 123. The Water Commission, however, failed to make findings on the acres to be used, the crops to be planted, and the water needed as to each group. Paul Stuart, a Campbell Estate witness and a Garst Seed employee, first testified that the crops developed with the USDA would be cover crops that require minimal maintenance and minimal water. These crops would be grass-like and very drought tolerant. Stuart testified next that the collaboration with HARC was in the discussion stages and [t]here's no firm commitment there. Stuart did not state the amount of acres to be used if the negotiations are successful. Finally, although Stuart testified that the land swap with Jefts is in effect right now, Stuart did not testify as to the amount of acreage swapped. Absent basic information on current acres used or projected acres needed, the Water Commission clearly erred by allocating 2,500 gad for 229 acres. As such, we vacate this allocation and remand for further proceedings. Again, any decision by the Water Commission regarding an allocation to Garst is subject to Campbell Estate's establishing, and the Water Commission finding, that no practicable alternatives exist.