A small state agency has been granted a sizeable war chest and power to purchase and preserve O'ahu agricultural land in the rapidly urbanizing Kunia and 'Ewa areas.

The Legislature this year appropriated $9.2 million for the state Agribusiness Development Corp. to buy land the agency could lease to farmers for up to 55 years, in an effort to help prevent the paving over of private farmland with residential and commercial development.

"This is kind of historic," said Alfredo Lee, executive director of the agency that is run with a staff of three. "I think people realized that once the land is gone, it's gone."

The measure, Senate Bill 837, also allows the agency to issue revenue bonds to buy agricultural land to sustain and preserve viable ag enterprises, provided the governor approves.

The appropriation and financing power expands the scope of the agency established by the Legislature in 1994 to help transition 400,000 acres of state-owned land and infrastructure from defunct plantation operations into diversified farming.

Previously, the agency was used once to acquire private land and infrastructure in 1999 after then-Gov. Ben Cayetano requested an emergency appropriation from the Legislature to buy O'ahu's Waiahole ditch irrigation system for $8.5 million from Amfac JMB/Hawaii.

Lee said it is hoped that the new appropriation and bond power can be tapped as opportunities arise, though he added that it was unfortunate that the failure of similar bills introduced over the last few years allowed prime land previously identified by the agency to be sold to private buyers.

"We knew we came to the game late," he said.

Lee said the agency particularly was interested in buying Wahiawa land owned by the George Galbraith Trust, which is dissolving this year and is selling 2,100 acres formerly leased for pineapple production. The deadline to bid on the Galbraith land was in January.

Not much ag land is available or deemed suitable for purchase in 'Ewa, where city planning policy directs the bulk of urban growth on O'ahu, Lee said.

Still, there are at least a few major parcels on the market today, including roughly 2,000 acres of more than 7,000 acres in Kunia that the James Campbell Co. began seeking to sell several years ago.

Campbell Co. spokeswoman Theresia McMurdo said the Agribusiness Development Corp. recently met with Campbell officials and expressed interest in an 854-acre parcel, half of which has been used for ranching and half for pineapple production.

"We're just in early talks with them," McMurdo said.

The parcel is listed for sale by CB Richard Ellis at $9.2 million and is one of two Kunia Campbell parcels on the market for that price. Six other parcels are either sold or are under contract to be sold.

Whether the Legislature's appropriation is used will depend in part on a tentative purchase agreement being reached, and the state Budget and Finance Department approving the spending.

Such approval could be influenced by the state government's financial health, which has been strong recently. Ultimately, the governor would have to release money for a purchase.

Gov. Linda Lingle has yet to act on SB837. She could sign the bill or let it become law without her signature after July 10. A veto is not expected, in part because the state Department of Agriculture supported the bill's intent.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.