For Hawaii agriculture to successfully transition from its pineapple and sugar plantation past to a future where locally produced food has a bigger role in the local diet, Gov. David Ige believes both small and large farms must play a part.

That could include massive greenhouses that Costco Wholesale Corp. is considering for the islands and expansion of small operations like Kahumana Organic Farms & Cafe in Waianae, which recently doubled its production in a single year.

Since taking office in 2014, Ige has talked about doubling food production statewide by 2020.

To help achieve that goal, acting agriculture board chair Phyllis Shimabukuro-Geiser says the governor’s budget request for the next two years includes $12.5 million in agricultural loan money to support new and existing farms, including those affected by natural disasters in 2018. There’s also $12.5 million in capital improvement money to maintain irrigation systems.

“It really is about changing the systems that support agriculture to support local food production rather than sugar and pineapple,” Ige told Civil Beat.

Cory Lum/Civil Beat

The governor likens his agricultural vision to the state’s renewable energy policy, which calls for using thousands of rooftop solar systems as well as massive industrial wind and solar farms to produce virtually all of the state’s electricity by 2045.

About 7,000 farms are spread across the islands, according to U.S. Department of Agriculture data, but most are small. Only about 3 percent of those farms had sales of $250,000 or more in 2017, the most recent year for which data are available. In addition, Hawaii’s most lucrative crops aren’t exactly feeding the populace.

In 2017, Hawaii’s top commodity wasn’t meant for food at all; it was seed crops grown for export. Seed crops were valued at more than $120 million in 2017. That was down from previous years — they peaked at approximately $239.4 million in 2012, according to the USDA — but still more than twice the No. 2 commodity, macadamia nuts, which chalked up about $53.9 million. Cattle ranked third with $43.9 million in sales followed by coffee with $43.8 million.

“Costco is hoping to come in here and grow most of their produce.” — Rep. Richard Creagan

While Shimabukuro-Geiser said smaller farms are essential to help the state reach its goal, large farms have played a major role in finding markets for products like bananas, melons, bell peppers, tomatoes and grass-fed beef.

“Outside investments by bigger farms can contribute to increased production of greenhouse produce, citrus and eggs,” she said in an email.

One major outside investor eyeballing the islands’ farming potential is Costco.

The company is considering building massive greenhouses to grow much of the produce it sells in Hawaii, said Rep. Richard Creagan, chairman of the House Agriculture Committee. Creagan said he has spoken about the project with Costco’s Hawaii representative, Luis Salaveria, who until November was director of Hawaii’s Department of Business, Economic Development and Tourism.

“Costco is hoping to come in here and grow most of their produce,” Creagan said. “They’re very committed to that. The goal they talk about is 200 acres of greenhouses.”

“I’ve met with their executives, and they are serious about it,” Ige said.

The idea is that Costco could invest money it nows spends on shipping into large-scale farm operations, Ige said. That could mean fresher food to sell here at the same cost as produce grown elsewhere and shipped in.

Ige said he asked Costco whether Hawaii really can compete, given high costs of labor and land.

“The response I get back is, ‘Absolutely,'” the governor said.

Richard Galanti, Costco’s chief financial officer, said he knew about the greenhouse project but declined to comment on it during a brief phone conversation.

The Costco greenhouse project could profoundly affect agriculture in Hawaii, just as Costco has profoundly affected the way people buy groceries, Creagan said. A trip to Costco is a regular weekend activity on the Big Island, with people from as far away as Hilo making the pilgrimage to Costco’s Kona store.

“Costco – I don’t know about here on Oahu but certainly on the Big Island — really has changed our lives,” Creagan said.

Cory Lum/Civil Beat

While Costco considers a large-scale project, tiny Kahumana Organic Farms in Waianae is also growing.

The 23-acre operation went from producing 40,000 pounds of crops in 2016 to 81,000 in 2017, said Christian Zuckerman, Kahumana’s farm manager. He reckons the numbers for 2018 will be around 100,000 pounds.

“We’re doing our part,” he said.

The incremental gains reflect the nonprofit farm’s approach to growth, Zuckerman said. It hasn’t had the money to clear and irrigate all of its land at once. Kahumana is planning a fundraiser in March to help pay for further expansion to about 31 acres.

Asked if the state has provided any support to Kahumana, Zuckerman said, “The quick answer is, ‘No.’”

Kristen Jamieson, Kahumana’s education and outreach manager, said the farm doesn’t plan to apply for state money, but instead will seek financial support through activities like its fundraiser, as well as grants and donations.

“I don’t think we have any plans for loans,” she said.

‘Agricultural Villages’ And An Audit

Creagan, meanwhile, has another vision to spur development of small farms: clusters of housing on farms, which he calls “agricultural villages.” The idea is to let farmers, workers and people who simply want to be part of such communities live on working farms.

“We don’t have a food crisis, really, but we do have a housing crisis,” said Creagan, a medical doctor who also owns a small farm on the Big Island. “So this addresses both of those.”

Creagan has a bill that would amend the state’s land use law to allow for such farm villages; however, the measure faces a steep climb with referrals to several committees that must be cleared by Feb. 15 to merely stay alive in the House.

Stewart Yerton/Civil Beat

More likely to pass is Creagan’s call for an audit of the Agribusiness Development Corp.

The Legislature created the corporation in 1994 to convert former pineapple and sugar lands to other productive uses “for the economic, environmental, and social benefit of the people of Hawaii.” To that end, the corporation acquires and manages land, irrigation systems and other infrastructure to support the agriculture industry. It has acquired large tracts of former pineapple land in Central Oahu near Wahiawa.

Over the last several years, the Legislature has appropriated more than a quarter of a billion dollars to the ADC, including about $23.4 million for operations and another $238 million for capital investments.

Lawmakers have repeatedly called for an audit of the ADC. The latest attempt last session died after the agency said it was too busy to be audited. This session, Creagan has more leverage because the corporation’s operating budget has been removed from the base budget that passed out of the House last week, and Creagan’s committee will get to decide whether to approve its operating budget in a separate bill.

Creagan said it could make sense to make the audit requirement part of the budget bill to make the corporation accountable and improve its operations, not to hinder them.

“We don’t want to destroy something that’s useful,” he said.

Shimabukuro-Geiser said the ADC is crucial to the state’s effort to increase food production.

Not everyone thinks the state’s agriculture policy should be based on food sustainability, as Ige has said.

“You’ll rarely hear me using the word ‘sustainable,’” Shimabukuro-Geiser’s predecessor, Scott Enright, told the House Finance Committee in a budget briefing in January. “We’ll never be sustainable in terms of food in this state.”

Instead, he said, the focus should be on economic growth.

Enright left his position as agriculture board chair soon after that hearing. Ige replaced him with acting chair Denise Albano on Jan. 16, but she announced her resignation for personal reasons less than two weeks later. Albano was replaced by Shimabukuro-Geiser, who had served as Enright’s deputy since 2015.

Smaller Can Be Better

Even with big investors like Costco poised to step in, there’s certain to be a market for produce from small organic farms like Kahumana, says chef Ed Kenney, an early supporter of Hawaii’s farm-to-table movement.

Kenney serves produce from small farms at his restaurants Town, Mud Hen Water, Mahina & Sun’s and Kaimuki Superette, where a dish of roasted carrots and root vegetables from Kahumana and its neighbor, Mao Farms, is a menu mainstay.

Stewart Yerton/Civil Beat

Kenney commended Ige’s goal of producing more food in Hawaii, but he said it’s important to emphasize quality as well as quantity.

Kenney said the benefit of small farms is that their missions often go beyond producing commodities.

Smaller, diversified farms typically try to regenerate the land to keep it fertile, to nurture a broader community of farmers, and to build up a new generation of farmers — qualities that are not typically part of the equation with large farms, he said.

“It’s a great idea to have quantitative goals,” Kenney said. “But it doesn’t address the qualitative issues.”