Hawaii Bill Would Eliminate Agribusiness Development Group

US News and World Report

A bill in the Hawaii Legislature would disband the state’s Agribusiness Development Corporation and transfer its resources to the state Department of Agriculture.

The state’s House Finance Committee unanimously advanced the bill Thursday that would abolish the agency.

The state created the agency in 1994 to help convert former pineapple and sugar plantation land into economically viable farms that would produce a broad range of products. The agency owns and manages 23,000 acres (9,300 hectares) of land and irrigation systems, mostly on Kauai and Oahu. It also has a small property on Hawaii Island.

The state’s House Agriculture Committee had advanced the measure earlier with a 7-1 vote last month, Hawaii Public Radio reported.

A recent state audit concluded the agency was “ill-equipped and struggling” to effectively manage its lands and had done little to fill the economic void left by the decline of the state’s commercial pineapple and sugar producing sectors.

The audit said the agency allowed tenants to occupy properties without approved leases or other agreements and turned a blind eye to criminal activity on its lands. It also found the agency had inconsistent and incomplete record-keeping.

The audit recommended that the agency develop written policies for board oversight, property management and managing files and documents. It also said the agency should create an electronic database of the agency’s lands and create strategic plans to grow and export products from Hawaii.

Fletcher Parker, a farmer, said the agency’s water and land on Kauai have been mismanaged.

“The fact that we have between 85-90% of our food on the island imported from off island is baffling to me,” Parker said in written testimony. “The land needs to be managed properly and resources need to be used for feeding the people of Kauai and possibly the other islands as well.”

Jimmy Nakatani, the head of the corporation, said the agency has made some of the changes that were recommended in the state audit. He called the bill “drastic” and “unwarranted.”

Other opponents of the bill include the state Department of Agriculture, the Hawaii Farm Bureau and a farm co-op that manages land on Kauai land for the corporation.

State Department of Agriculture Director Phyllis Shimabukuro-Geiser said the corporation, known as ADC, could convert fallow, plantation-era farmland faster and more efficiently than her department could, the Honolulu Star-Advertiser reported. She said long-term management of land and water assets would be better suited for her agency.

“The Department believes that the ADC continues to have an important role in the growth and development of diversified agriculture in Hawaii,” she said in written testimony.

Farm development agency may be plowed under by Hawaii lawmakers

The Honolulu Star-Advertiser
Andrew Gomes,

A state agency with special powers to expand diversified agriculture could be nearing a brink of perhaps its biggest accomplishment in 27 years, or disbandment.

The Agribusiness Development Corp. hasn’t been a terribly active agency for most of its existence despite lofty expectations of lawmakers who created the entity in 1994 partly to improve infrastructure of closed sugar and pineapple plantations for new diversified farming endeavors.

This year the agency, which owns irrigation ditch systems on Oahu and Kauai along with 22, 535 acres of farmland mainly on the same islands, has come under fire at the Legislature following a searing performance audit published last month.

On Thursday the House Finance Committee unanimously passed House Bill 1271, which would abolish ADC and transfer its staff to the state Department of Agriculture with the exception of ADC boss Jimmy Nakatani, a former watercress farmer who once led the Department of Agriculture.

HB 1271 has elicited a bumper crop of testimony—197 pages submitted for a Feb. 17 hearing by the House Agriculture Committee, which advanced the measure in a 7-1 vote.

Most testifiers endorsed abolishing ADC, which can issue bonds to acquire land and invest in agricultural enterprises.

Support for the bill outweighed opposition by a 5-1 margin.

Many bill supporters argued that ADC has mismanaged its roughly 18, 000 acres on Kauai by largely leasing the land to seed corn companies, which employ genetic modification technology, instead of more food producers.

“The ADC with so much power and so much control over all this aina has failed, ” Josh Mori, a Kauai organic vegetable farmer, said in written testimony. “They have failed our communities by supporting the companies that have poisoned our waterways and poisoned our air.”

Some ADC critics also cited the audit and litigation over stormwater runoff on Kauai that ADC contends was due to shifting Environmental Protection Agency regulations.

Kauai farmer Fletcher Parker said water and land on the Garden Isle have been poisoned under ADC management.

“The fact that we have between 85 %-90 % of our food on the island imported from off island is baffling to me, ” Parker said in written testimony. “The land needs to be managed properly and resources need to be used for feeding the people of Kauai and possibly the other islands as well.”

Opponents of the bill include the Department of Agriculture, the Hawaii Farm Bureau and a farm co-op that manages the Kauai land for ADC.

Department of Agriculture Director Phyllis Shima ­bu ­kuro-Geiser said ADC can convert fallow plantation-era farmland faster and more effectively than her department but that long-term management of land and water assets would be better suited to her agency.

“The Department believes that the ADC continues to have an important role in the growth and development of diversified agriculture in Hawaii, ” she said in written testimony.

Umi Martin, a tropical fruit farmer leasing ADC land on Kauai, said in written testimony that abolishing ADC won’t result in better public farmland management or allow more farmers to use such land faster.

Martin, a Native Hawaiian born and raised on Kauai, said that after ADC received the Kauai lands in the early 2000s in the wake of Kekaha and Lihue sugar plantation closures, seed companies moved in because there was no demand from diversified farmers.

Martin added that ADC isn’t perfect, but he said the agency can serve the growing diversified farming community in emerging opportunities.

“Abolishing ADC will stop the momentum and we will find ourselves even more frustrated with the lack of progress, ” he said.

Some of this momentum began building between 2012 and 2018 when ADC acquired, at the direction of the Legislature, 3, 848 acres of Oahu farmland mostly once used for Del Monte and Dole pineapple production near Wahiawa.

Nakatani told the House Agriculture Committee at a special briefing Friday that ADC has been working to develop irrigation infrastructure, including wells and reservoirs along with roads and other things, to allow more diversified farming on the land.

A few farmers, including big local diversified farm operator Larry Jefts, use about half the land and have produced crops in recent years with limited water.

Nakatani said another 1, 200 acres should be ready this spring for farmers who can apply under a process that ranks applications based on criteria including business plans and experience.

Another ADC plan is to develop a crop-processing facility, research greenhouse, storage warehouse, office space, worker housing, farmers market and visitors center on 34 acres near Wahiawa to support diversified farm tenants.

ADC also is preparing 1, 500 acres on Kauai for diversified farm use in the next one to three years, Nakatani told the committee.

Nakatani acknowledged that ADC, which he has led since 2013, has operational issues brought into glaring light by the audit, though he disagreed with the report’s conclusion that ADC has done little to fill a void left by plantations.

ADC deficiencies cited in the 56-page report by state Auditor Les Kondo included a lack of statutorily required market research, no meaningful agribusiness plan, informal tenant arrangements, state procurement rule violations, records in disarray and poor board oversight.

“After almost 30 years, we found that ADC has done little—if anything—to facilitate the development of agricultural enter ­prises, ” the audit said. “The COVID-19 pandemic has highlighted the necessity for a strong and diversified agriculture sector, one that could provide for much of the state’s food needs while producing crops for export. Unfortunately, thanks in part to ADC’s past inaction and its continued lack of direction, focus, and competence, this dream remains as elusive as it was nearly 30 years ago.”

Kondo’s report said Jefts has done site work benefiting ADC in return for rent credit without any paperwork, and that ADC ignored a car chop-shop operation established on the Wahiawa property before the agency’s acquisition.

The audit also said a separate financial audit was called off because ADC hasn’t kept financial records since its inception.

In a formal response to a draft of the audit, ADC didn’t dispute many issues, but said the audit reflects a rudimentary understanding of what it takes to expand commercial agriculture in Hawaii. ADC’s response did refute the auditor’s contention that ADC ignored criminal activity.

ADC said it has worked with law enforcement to root out the chop shops, chicken fighting, over 150 abandoned vehicles, the homeless and drug activities on its Wahiawa land.

Ken Nakamura, an ADC staff member, said at Friday’s briefing that criminals in the overgrown fields had heavy equipment to destroy ADC barriers and weapons to threaten eviction efforts.

“We were literally outgunned, ” he said. “It became so dangerous that even the law enforcement officers did not want to go into the area.”

Nakatani said carrying out ADC’s mission has been difficult with a lack of funding and a staff of 11, of which seven are dedicated to a 27-mile system of tunnels, pumps and ditches transporting water from Windward to Leeward Oahu that ADC received in 1999 as its initial enterprise.

“We talk about we want to move agriculture, but not much money is given to agriculture, ” he said.

Nakatani also said ADC will focus on carrying out audit recommendations.

“It’s not like we turn a blind eye to that, ” he said. “We take it seriously. … We’re under pressure to move agriculture, and we’re trying our best to move it.”

If the full House approves HB 1271, the bill would advance to the Senate where a bill is under consideration to have ADC lease at least half its land to local food producers by the beginning of next year.

House Committee Advances Bill to Dissolve the Agribusiness Development Corporation

Hawaii Public Radio
By Ku`uwehi Hiraishi –

Hawaiʻi legislators are one step closer to dissolving the state’s Agribusiness Development Corporation (ADC). The 27-year-old entity was initially created to develop economically viable farms to fill the void created by the closure of plantations. But a recent state audit found the ADC has done little to fill that void.

Hawaiʻi lawmakers established the Agribusiness Development Corporation in 1994 to convert the state’s agricultural infrastructure from plantation-style monocrop production to a more diversified agriculture industry.

Over the years, the ADC secured agreements for 2,000 acres of former plantation lands on Kauaʻi and Oʻahu with growers producing a variety of crops for local consumption. But a recent report by the state auditor found the ADC has done little to fill that void. It criticized the agency for a lack of oversight and in many cases non-existent recordkeeping.

House Bill 1271 would disband the ADC and transfer its resources including four staff and an estimated 20,000 acres of land to the state Department of Agriculture.

Jimmy Nakatani, head of the ADC, argues the agency has already made some changes recommended in the state audit and he says the bill is “drastic” and “unwarranted.”

But Koloa resident Jeri Di Pietro, President of Hawaiʻi SEED, says the failures of A-D-C have meant a lost opportunity for local farmers looking to develop their own agricultural business.

“I have come to know many people who want to farm on Kauaʻi. They want to grow healthy food and there is a whole workforce here on the West Side and on the South Shore,” says Di Pietro, “These people, if they were able to get onto the land, they would avoid having to commute into Līhuʻe and would have jobs there to be able to grow our local food for the island.”

The House Finance Committee unanimously approved House Bill 1271, which will now go before the full House for approval.

Bill to Dissolve Agribusiness Development Corporation Passed Out of House Committee

Hawaii Free Press
News Release from House Democratic Caucus, February 19, 2021 –

Honolulu, Hawaiʻi – A bill to dissolve the Agribusiness Development Corporation (ADC) and transfer all its resource except the director to the Department of Agriculture was passed unamended by the House Agriculture Committee on February 17.

HB 1271 is in response to a devastating audit of the ADC that stated that the company – despite being given a clear mission, broad powers, and millions of dollars over the last 25 years – had failed to promote diversified agriculture that would feed the people of these islands and provide employment after the closure of the sugar plantations. Those findings were reaffirmed in an equally scathing report from the University of Hawaiʻi Economic Research Organization (UHERO).

The bill was introduced by Representative Amy Perruso with the support of Representatives Jeanné Kapela, Matthew S. LoPresti, Lisa Marten, Richard H.K. Onishi, Adrian K. Tam, Tina Wildberger, Della Au Belatti, and John M. Mizuno.

“I introduced HB1271 because I believe as lawmakers, we have a duty to protect the common good. When problems with governance emerge, despite our best efforts, we are doubly obligated to move swiftly to address the situation by ending the malpractice and charting a better course,” said Rep. Perruso (D-46, Wahiawā, Whitmore Village, Launani Valley). “That’s what HB1271 does. I’m grateful for the support of my colleagues in moving to repeal this bill that created the ADC in the first place.”

Perruso has heard regularly from several small farmers in her district about the difficulties encountered when trying to secure agricultural leases.

“We should be encouraging our small farmers, not putting up roadblocks or refusing to provide transparency as has been the case with the ADC. Importing 90% of our food puts us in a very precarious position. After more than two decades we are still without the plan that the ADC was supposed to develop to address food self-sufficiency. We cannot simply reproduce the status quo as if nothing is wrong with this attached agency,” Perruso said.

Embattled Agribusiness Corporation Has Powerful Friends

Civil Beat
by Stewart Yerton –

Lawmakers plan to vote next week on a measure to dissolve the Agribusiness Development Corp. –

With the future of a state agency in charge of transforming Hawaii’s old plantation lands into working farms in the balance, battle lines formed Friday between Gov. David Ige’s administration and big agricultural organizations on one side and lawmakers who say the agency has failed in its mission and should be dissolved on the other.

The hearing before the Hawaii House Agriculture Committee produced no result, as the committee voted to defer until Friday a bill that would dissolve the corporation.

However, the hearing made clear that the embattled Hawaii Agribusiness Development Corp. still has powerful supporters – including, with some qualifications, Gov. David Ige’s agriculture chief — who want to keep it around. The ardent support comes despite two recent reports, by University of Hawaii economists and the Hawaii State Auditor, that concluded the 25-year-old agency is a failure.

Lawmakers have introduced a bill to dissolve the corporation and fold it into the Department of Agriculture. Although only a couple of the bill’s supporters showed up to testify during the virtual hearing, including Anne Frederick of the Hawaii Alliance for Progressive Action, dozens submitted written testimony.

Meanwhile, ADC’s supporters are pushing back. During Friday’s hearing, the corporation was joined by the Department of Agriculture, the Hawaii Farm Bureau, the genetically modified seed industry, and a group called Friends of Waimanalo, which said it has started to work with the corporation.

Of the few who showed up to testify, most merely stood on submitted written testimony. Even Jimmy Nakatani, the corporation’s executive director, did nothing more that read his written testimony. In fact, Nakatani wouldn’t even answer a question posed by the bill’s sponsor, Rep. Amy Perruso, who represents the central Oahu district that includes former plantation land now controlled by the corporation.

In an interview after the hearing, Perusso said she was disappointed by Nakatani’s unwillingness to speak candidly to the committee. However, she said that was not unusual.

“We have great difficulty getting clear, specific, accurate answers from them on all kinds of issues,” she said.

Still powerful players stood behind the ADC with written testimony in support. They included Dole Food Co. Hawaii; the Kauai Chamber of Commerce; Crop Life America, a trade group representing chemical pesticide makers, and Robbie Melton, a former corporation board member who also served as chief executive of the Hawaii Technology Development Corp.

“Their goal is to help farmers and the agriculture industry,” Melton wrote in support. “They have many forward thinking ideas to improve the agri industry in Hawaii.”

But some who have taken a close look at the corporation recently have been unimpressed. For example, the bill cited a report by the Hawaii State Auditor, released in January, that found the 25-year-old corporation has done little to fill the economic void caused by the collapse of Hawaii’s sugar and pineapple plantations.

A report by University of Hawaii economists, meanwhile, called the ADC a “fiasco.”

Perusso pointed out that the ADC is not merely an obscure entity attached to the Department of Agriculture. The corporation has the power to acquire and develop lands for agriculture, and to that end the Legislature in recent years has appropriated more than a quarter of a billion dollars to the ADC, including about $23.4 million for operations and $238 million for capital investments. Despite such large investments, it has been difficult for lawmakers and the public to see how the money has been spent and how well the corporation has been fulfilling its mission.

Meanwhile the corporation and the Department of Agriculture have so strongly resisted attempts to hold the corporation accountable that in 2018 the agency opposed a measure to help the Hawaii papaya industry because the measure also required an audit of the ADC. At the time, Nakatani said he was too busy to be audited, and then-agriculture department director Scott Enright agreed.

Perusso said she was confident that the bill will pass out of the committee next week. In the meantime, she said she was also encouraged by the testimony of the current Hawaii Agriculture Board chair, Phyllis Shimibukuro-Geiser, who suggested that the department could take over the corporation’s key functions of managing land as well as things like irrigation systems.

Even though Shimibukuro-Geiser technically opposed the bill, Perusso said such a move would be a step in the right direction when it comes to getting an out for farmers to use to grow food in Hawaii.

“We need to really focus our attention on small farmers,” she said. “And the Department of Agriculture is the one to do that.”

Lawmakers Must Fix The Agribusiness Development Corporation

Civil Beat

Two new reports reveal that the government agency has failed miserably in its critical mission to diversify ag.

By Civil Beat Editorial Board

In 1992 Dole Food ended pineapple production on Lanai. Just two years later, Hilo Coast Processing shuttered its sugar operations for good, as did Hamakua Sugar, both on the Big Island.

The year 1994 was, not coincidentally, the year the Hawaii Legislature created the Agribusiness Development Corp. to “facilitate the transition of agricultural infrastructure from plantation operations into other agricultural enterprises,” as Act 264 stated.

The ADC’s work would involve analyzing marketing approaches and providing leadership “for the development, financing, improvement, or enhancement of agricultural enterprises.”

The Legislature gave it wide latitude, exempting it from public land trust regulations and from Public Utilities Commission regulations and civil service laws.

ADC’s mission soon grew even more urgent. Beginning in 1995 with the closure of Oahu Sugar and continuing to 2016 when Maui’s Hawaii Commercial and Sugar Company closed — the end of King Sugar — more than a half-dozen more large-scale ag operations folded. (Some pineapple is still grown locally.)

But, even though the trend was painfully obvious and thousands of people were losing jobs, ADC was slow to act.

It wasn’t until 2003 that it assumed management of the Kekaha Sugar operation (which halted for good in 2000) and not until 2012 that it made its first land purchase (1,227 acres of former pineapple plantation lands in Wahiawa owned by the George Galbraith Estate). And it wasn’t until 2017 that ADC issued its first license for those lands.

Indeed, the Agribusiness Development Corp. has transformed into an organization that mainly purchases farm land but does little with it.

Today, 27 years after its founding, the ADC has not become “the entity the Legislature envisioned,” one that would develop an agriculture industry “to stand as a pillar” of the state economy alongside tourism and the military, according to the audit, which is rightly described in news reports as “scathing.”

Instead, it has been a complete “fiasco,” in the words of a University of Hawaii economist.

The one-two punch of the state audit and the UHERO analysis, both released last month and both coming at a time when the state is hungry for new revenue sources in the wake of the novel coronavirus calamity, is a serious wake-up call.

The responsibility for the ADC’s failure falls to the agency’s leadership, of course, but mostly with the organization that created it: the Legislature. They made it; they own it.

It’s encouraging that House Speaker Scott Saiki and Senate President Ron Kouchi are troubled by the reports. Saiki, who has promised a public hearing on the ADC, described the agency as “dysfunctional,” which is an understatement.

We are worried, though, that this may become less of a concern as the Legislature continues its 2021 session restricted by deep budget deficits. Will the end result be yet another task force to study the issue?

The ADC itself seems resistant to change, with Executive Director Jimmy Nakatani previously claiming it could not be bothered to get audited because it was “too busy.”

Too busy doing too little, it seems. Nakatani himself is quoted in the audit as saying, “No one here has a deep agricultural background.”

But there is more good news amidst these shameful findings: Other legislators are already working on constructive plans for the ADC.

Sen. Mike Gabbard, chair of the Agriculture and Environment Committee, has scheduled a hearing next week on his bill to require the corporation to annually lease at least 50% of its land to businesses primarily focused on local food production. The bill notes that the ADC manages over 22,000 acres of public agricultural lands “with significant potential to shape” the state’s goal of greater food self-sufficiency.

That’s an idea that deserves attention. As Civil Beat’s new series, Home Grown, points out, Hawaii imports more than 80% of what we eat.

We are pleased as well to see that Gabbard’s House counterpart, Rep. Mark Hashem, has authored a companion bill to Gabbard’s. Both also require the ADC and the Department of Agriculture to submit reports to the Legislature on leasing activities. (Hopefully, Mr. Nakatani can make the time.)

Even if the bill passes, we are a long way from true diversification, let alone returning ag to its premier status as an economic driver. Seed crops, coffee, cattle, macadamia nuts, aquaculture, papayas, bananas and other island agricultural commodities generate around $400 million of revenue a year of the state’s total GDP of $97 billion in 2019 — that is, pre-COVID-19.

But agriculture must be a part of our economic future. If the ADC is to play a role, lawmakers would do well to review the 28 recommendations in the auditor’s report, including the first one:

“Update and revise its mission statement to reflect the corporation’s purpose more completely as intended by the Legislature to address, among other things, facilitating the development of Hawaii-based agricultural enterprises and strategies to promote, market, and distribute Hawaii-grown agricultural crops and value-added products in local, national, and international markets.”

Barring that, lawmakers should take a look at another proposed bill this session, one that references the auditor’s report directly: Dissolve the ADC and transfer all lands and staff — “except for the executive director” — to the Department of Agriculture.

Contact Key Lawmakers
Senate President Ron Kouchi

House Speaker Scott Saiki

Hawaii State Legislature HB1271 – Agribusiness Development Corporation; Department of Agriculture; Repeal

Measure Status HB1271
Report Title: Agribusiness Development Corporation; Department of Agriculture; Repeal
Description: Dissolves the agribusiness development corporation and transfers all lands and staff, except for the executive director, to the department of agriculture.
Package: None
Current Referral: AGR, FIN

Sort by Date Status Text
1/27/2021 H Introduced and Pass First Reading.
2/1/2021 H Referred to AGR, FIN, referral sheet 3

S = Senate | H = House | D = Data Systems | $ = Appropriation measure | ConAm = Constitutional Amendment

Bruce Mathews responds to UHERO agricultural report: There are more things to consider than GDP

UH Hilo Stories

Dean of UH Hilo’s College of Agriculture, Forestry, and Natural Resource Management: Ultimately, revitalizing Hawaiʻi’s agriculture will depend on strong and productive relationships among farmers, consumers, agricultural scientists, and governmental and non-governmental agencies related to food production and distribution.

By Bruce Mathews – Dean of the College of Agricultural, Forestry, and Natural Resource Management, UH Hilo.

On January 21, the University of Hawai‘i Economic Research Organization (UHERO) published a brief by Sumner La Croix and James Mak entitled “Reviving Agriculture to Diversity Hawai‘i’s Economy,” describing limited potential for agriculture to be a major source of economic growth in Hawaiʻi over the next 10 to 15 years. They noted that doubling food production would only increase state GDP by 0.15 percent, however there are certainly a host of other factors for Hawaiʻi to consider besides GDP such as contributions to nutrition, food security, and the pervasive local cultural value of aloha ʻāina (Leung and Loke, 2008; Gupta, 2014; Meter and Goldenberg, 2017).

A week prior to the UHERO brief there was a scathing Honolulu Civil Beat article by Stewart Yerton entitled “Auditor: State Agriculture Agency is Failing to Fulfill Mission,” describing the massive failings of the state’s Agribusiness Development Corporation (ADC). This was followed in Civil Beat by Jessica Terrell’s article and passionate plea entitled “Hawaii’s Food System Is Broken. Now Is The Time To Fix It.”

These publications and others coupled with the overall anxiety of the COVID-19 economic crisis has led to considerable commentary and discussion about the agriculture system in Hawaiʻi being in dire need of revitalization. Realistically, there is little new in these 2021 publications that was not discussed after the near complete demise of the sugarcane industry by the end of the past century (Suryanata, 2000; Suryanata, 2002).

More than 20 years later we are still on the same quest to identify a set of new field crops that could take the place of sugarcane and pineapple (La Croix and Mak, 2021). Perhaps sugarcane could even make a limited comeback as the longer ratooning, more fertilizer efficient, and higher soil carbon storing energycane hybrids which could contribute to more sustainably fueling future tourist-packed jets in place of imported fossil fuel (Parachini, 2018; ʻImiloa, 2021). If the fuel option fails the cane juice can always be distilled into agricole rum! Importing a large portion of our food (~85%) and fuel (~92%) while repeating the same discussions that took place over the past two decades only serves to further highlight Hawai‘i’s questionable ecological footprint and ability to serve as a model for tropical island sustainability.

Agricultural education and entrepreneurship

Some of the stakeholders participating in the discussions correctly add that agricultural education is also in need of curriculum improvement and broadening. Since most of today’s undergraduate students did not grow up in the agricultural sector, quality hands-on practical experiences are required to gain workforce competencies in addition to theoretical classroom instruction.

Furthermore, greater internationalization of agricultural curriculum and inclusion of business entrepreneurship, finance, and life-cycle analysis is key in a globalized but environmentally threatened world (Bruenig and Shao, 2012; Tomar, 2014; Van Raalte and Van Riel, 2014). At UH Hilo, we desperately need to bring back the agribusiness specialty with a dose of bio-economy and the commercialization of bio-innovation. Much excitement has been created this semester through Angela Faʻanunu’s special topics class entitled Sustainable Agribusiness and Island Food Systems and funded by a donor as part of a joint initiative between the UH Hilo’s College of Agriculture, Forestry and Natural Resource Management (CAFNRM) and the College of Business and Economics (COBE).

There is a desperate lack of horticultural entrepreneurship throughout the Pacific Islands and breeding of improved fruit and vegetable cultivars for the region has largely collapsed due to a lack of long-term public sector support and little interest from private investors (Markham, 2013). Traditional crop production curricula have tended to focus on the science and theory of yield without adequate consideration of market analysis and raising net income while protecting the environment. Successful growers in Hawaiʻi tend to monitor wholesale prices of produce at terminals throughout the Pacific and their ability to reliably supply the local market in the face of generally intense import competition.

Economics, technology, and land

Arita et al. (2014) and La Croix and Mak (2021) point out that Hawaiʻi’s agricultural sector is hampered by approximately 40 percent higher labor and input costs relative to other U.S. farms and that our operations lack economies of scale. Nearly all fertilizer and most soil amendments are imported. Furthermore, there are often gaps in technology such as automation, robotics, environmental control greenhouses, sensors, and overall precision management of inputs. Hawai‘i’s farm production may already be a much as 20 percent less efficient on average, than U.S. farms overall (Arita et al., 2014). While we cannot compete in today’s economy solely by implementing farming practices of the past, we can certainly be informed by their knowledge (Van Raalte and Van Riel, 2014). Unfortunately, an inconvenient truth is that in the absence of long-term assurances of some form of subsidies or tax breaks that many areas of Hawai‘i’s agriculture will not be able to compete against less expensive imports.

One of the challenges with scaling up has been the fragmentation of agricultural lands through rural gentrification, real estate speculation by the super-rich which drives up land costs, and the associated barriers to securing longer-term leases critical to obtaining investment capital. Some farmers spend considerable time commuting and moving equipment between fields and the short-term leases provide little incentive to conserve or improve the soil. Gentrification and rural real estate speculation has also resulted in much agricultural land being fallowed long-term or otherwise underutilized creating gentrified wastelands of land inequality. Owners of such lands benefit from lower real estate taxes for ag land despite the limited actual farming activity.

Furthermore, these owners often lack expertise in agriculture and when they attempt to farm they often fail. Some actually try to seek advice but are frequently taken advantage of by those lacking professional credentials who promote pseudo-science or unproven inputs and practices. As predicted by Kelly (1981) following closure of several of the smaller sugarcane plantations, the most common agricultural use of former sugarcane lands tends to primarily default to poorly managed, unimproved, low-input pastures.

Given the challenges of agricultural profitability in Hawaiʻi and elsewhere in the tropics many small farmers feel like they are on a niche/boutique/luxury/higher-value crop treadmill to sustain a modest living that is typically buffered by other sources of income (Bittenbender, 1999; Suryanata, 2000; Arita et al., 2014; Rueda et al., 2018). A similar situation exists for aquaculture due to the high costs of imported feed and other inputs (Belton et al., 2020; Farmery et al., 2021). Producing locally produced animal protein for the masses other than pasture-finished beef cattle generally means developing locally produced corn-soy feedstocks and by-catch/by-product fishmeal. Certain island Southeast Asia countries have rapidly progressed in this area during the past 20 years.

[See also Dean’s Column: Travels to Indonesia, Malaysia, and the Philippines, November 2016, Nihopeku]
Traditional food-based agricultural crop production tends to have very low profit margins when competing globally against less expensively produced imported products. Inevitably, most of the people want a significant amount of food products that can’t be economically produced or processed in Hawaiʻi. While freedom to choose is part of liberal democracy so is the ability to conduct marketing campaigns. La Croix and Sumner (2021) emphasize that if Hawaiʻi’s consumers can be convinced it’s worthwhile to pay a bit extra for local produce/food then a lot of the challenges will take care of themselves. We still have a long way to go in developing consumer support to pay premiums for local products (Loke et al., 2015).

This being said, there is still the social caveat that in the absence of market interventions by government much of local food production is likely to remain beyond the budgets of most consumers. It is worth noting, however, that on the island of Hawai‘i and the other neighbor islands, quite a few hunt, fish, gather, share, and trade food collected from the land and sea, thus reducing their food costs.

It’s difficult to imagine significantly moving the needle on local food production without subsidies and tax breaks. Such market modifying polices may gain increasing support if it becomes apparent that the global food system is nearing a tipping point which would result in international agri-commodity battles. Unfortunately, sustainable agriculture rhetoric has largely become a mantra for politicians and social change advocates.

Some potentially unique opportunities may emerge with mid-scale corporate bio-economy (fossil carbon replacement) technologies that rely on bioprocessing of sustainably produced, tropical-perennial biomass crops grown on marginal lands to generate high value organic chemicals, including advanced biofuels, while storing soil carbon (Matlock and Mathews, 2019). While such technologies may never be fully advanced in Hawaiʻi there is no reason why we can’t attract research and development investment and once again be a leader in tropical agricultural technology innovation like we were 50 years ago. Many old-timers remember that we once had the worlds highest sugarcane production levels based on innovation, advanced knowledge and technology while having better worker safety than most competitors. If bio-economy technologies can be developed at scale in Hawaiʻi they could be a major source of economic growth. Similarly, we could start manufacturing our own green ammonia nitrogen fertilizer from renewable energy resources such wind, hydro, geothermal, solar, etc. (Smith and Torrente-Murciano, 2021).

So how do we better advantage our small farmers while revitalizing agriculture overall? We should explore the facilitation of professionally managed cooperatives to provide small farmers greater power in the marketplace to obtain credit, share equipment, purchase inputs, coordinate sustainable production, safely wash, store (cold storage is key), package, and market their products (Tomar, 2014; Rueda et al., 2018; Oberlack et al., 2020). Food Safety Modernization Act (FSMA) compliance with respect to post-harvest handling is often difficult for individual small farmers. Simultaneously, consideration needs to be given to attracting some mid-size investors to help carry the various agricultural sectors. It is possible for this to be done in a mutually beneficial partnership with successful cooperatives and well-supported contract farming arrangements (Tomar, 2014; Oberlack et al., 2020). Such approaches are being increasingly pursued elsewhere in the tropics.

Advanced data analysis

Coordinated production can also be facilitated by mid-size entrepreneurs through small farmer participation in contract growing programs. A success story on the Big Island is the Calavo Growers’ papaya operation. Their growers are regularly updated on the production practices which lead to the greatest profitability per acre under different soil types and land use histories. This information is largely derived by Calavo’s modeling of the mandatory field management practice data provided by the farmers, Calavo data on yield, culls, etc. for each farmer and growing area, coupled with periodic soil and plant tissue testing.

According to Chantal Vos of Calavo and Norman Arancon, a professor of horticulture at UH Hilo, grower production practices have greatly improved with this approach of studying the overall farmer practices and then routinely providing group feedback on what works the best under different conditions.

There is certainly room to encourage much greater on-farm research work and compilation of agricultural relational databases by university faculty and farm service providers. Those who adapt an analytics mindset will increasing have an advantage. The pressure to find efficiency and drive productivity creates the need for advanced data analysis that can find the multiple factors that can increase overall profitability by 10 percent in today’s operating environment where there is often no silver bullet.

The agricultural programs and extension/outreach across the 10-campus University of Hawaiʻi System need to be revamped to better serve the small farmers, industry, and the local food security aspirations of the populace. Furthermore, the populace needs to be better informed on our relationship to the land and sea and what it takes to produce food locally and globally in an environmentally friendly, economically viable, and socially just manner. While some are no doubt already doing a great job this will mean better instilling such commitment across the board and for leaders to facilitate improved public-private partnerships, links to producer organizations, and on-farm research.

Most of the producer organizations are also in need of internal strengthening. Future academic hiring should also take into consideration industry experience and community outreach in addition to the traditional academic parameters such as research publication and formal course instruction.

Ultimately, revitalizing Hawaiʻi’s agriculture will depend on strong and productive relationships among farmers, consumers, agricultural scientists, and governmental and non-governmental agencies related to food production and distribution.

Literature Cited

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Bruce Mathews is a soil scientist currently serving as dean of the College of Agriculture, Forestry, and Natural Resource Management at the University of Hawai‘i at Hilo. A 1986 graduate of UH Hilo, Mathews joined the university in 1993 as a temporary assistant professor of soils and agronomy and became a tenure-track assistant professor two years later. His areas of research include plant nutrient cycling and soil fertility as affected by environmental conditions and crop management, assessment of the impact of agricultural and forestry production practices on soil, coastal wetlands, and surface waters, and the development of environmentally sound and economically viable nutrient management practices for pastures, forests and field crops in the tropics. He received his master of arts in agronomy from Louisiana State University and his doctor of philosophy in agronomy and soils from the University of Florida.


Hawaii State Legislature SB335 – Measure Title: RELATING TO AGRICULTURE

Measure Status – SB335
Report Title: Department of Agriculture; Agribusiness Development Corporation; Diversified Agriculture; Leased Lands; Reporting Requirements; Local Food Production; Enterprise –
Description: Requires the Department of Agriculture and Agribusiness Development Corporation to annually lease at least fifty per cent of land leased or up for lease renewal to operations whose primary business is local food production beginning 1/1/2022. Requires the Department of Agriculture and Agribusiness Development Corporation to submit reports to the legislature on leasing activities. –
Companion: HB827
Package: None
Current Referral: AEN/EET, WAM
Introducer(s): GABBARD, INOUYE, KEITH-AGARAN, KIM, LEE, MISALUCHA, MORIWAKI, Chang, Ihara, San Buenaventura, Shimabukuro

Sort by Date Status Text
1/22/2021 S Introduced.
1/22/2021 S Passed First Reading.
1/25/2021 S Referred to AEN/EET, WAM.
2/2/2021 S The committee(s) on AEN/EET has scheduled a public hearing on 02-12-21 3:05PM in conference room 224.

S = Senate | H = House | D = Data Systems | $ = Appropriation measure | ConAm = Constitutional Amendment