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VALUE CHAINS

INFORMATION review

Agribusiness Services

Hawai'i Island

Challenges, representing problems and needs identified during the planning workshop or during the data collection process, are clustered below into a set of root cause constraints.

Challenges
Root Cause
Workforce Development Gaps in Service Provision
There is a need for improved training and education programs to build a skilled workforce within the agribusiness services sector. Limited availability of trained professionals affects the quality and reach of services provided to producers.
Lack of Specialized and Tiered Training Programs
There is a gap in the availability of training programs that cater to different levels of farmers' expertise, particularly intermediate-level ("missing middle") training. This limits farmers' ability to advance their skills, adopt advanced practices, and respond to evolving market demands.

Limited investment in agricultural education and career development

The shortage of skilled professionals in the agribusiness services sector stems from limited investment in agricultural education, training programs, and career development pathways. There is a systemic underfunding of specialized educational programs that focus on agribusiness services, such as technical assistance, compliance support, and advanced agricultural practices. Additionally, careers in agribusiness services are perceived as less attractive due to low wages, limited advancement opportunities, and a lack of awareness about the sector's importance. This results in fewer individuals pursuing careers in agribusiness services, leading to a workforce that is insufficient in both quantity and expertise to meet the needs of producers. The educational system's disconnect from industry needs further exacerbates this issue, as curricula may not align with the practical skills required in the field.

Challenges
Root Cause
Lack of Available Data and Market Information
Insufficient access to reliable market data and demand information constrains decision-making for both service providers and producers. This results in inefficiencies in service delivery, pricing, and market opportunities.

Fragmented data collection systems due to lack of coordination and investment

Insufficient market information and data are a result of fragmented data collection systems caused by a lack of coordination among government agencies, service providers, and producer organizations. This fragmentation is compounded by inadequate investment in data infrastructure and market research. Without a centralized or collaborative approach to data collection and sharing, efforts are duplicated, resources are wasted, and critical market intelligence remains siloed. Additionally, there is a lack of incentives and mechanisms to encourage stakeholders to gather and disseminate valuable information. This prevents stakeholders from accessing reliable data needed for informed decision-making, strategic planning, and identifying market opportunities, ultimately hindering the growth and efficiency of the value chain.

Challenges
Root Cause
Disconnect between available services and producer needs
There is a disconnect between the services available and the actual needs of producers, leading to inefficiencies and underutilization of available support.
Lack of Coordination Among Stakeholders
There is limited coordination among service providers, producers, government agencies, and industry groups, hindering collaboration and the development of unified strategies to address systemic issues like service provision, market access, and workforce development.

Lack of effective coordination and communication among stakeholders

There is a significant lack of coordination and communication among service providers, producers, government agencies, and industry groups. This fragmentation leads to a disconnect between the services available and the actual needs of producers. Without effective platforms for stakeholder engagement and feedback, service offerings may not align with the diverse and evolving requirements of the agricultural community. This misalignment results in underutilization of services, inefficiencies, and missed opportunities for collaborative problem-solving to address systemic issues such as market access and workforce development.

Challenges
Root Cause
Limited Private Sector Participation in Service Provision
The private sector struggles to offer affordable, tailored services to a fragmented and diverse producer base, constraining the sector's growth and innovation potential. This limits the development of a robust agribusiness services market.
Decrease in Agricultural Service Jobs
A significant decrease in private sector agricultural service jobs (14% from 2013 to 2022) and government agriculture employees (45% decrease) has reduced the availability of support services for producers. This decline exacerbates challenges in accessing necessary agribusiness services.

Overreliance on declining government support

The private sector's limited participation in agribusiness service provision stems from market failures such as insufficient demand aggregation, high operational costs, and perceived low profitability in serving a fragmented producer base. Historically, government agencies and non-profits have filled this gap, offering services often at low or no cost. However, a significant decrease in agricultural service jobs—14% in the private sector and 45% in government agencies from 2013 to 2022—has reduced the availability of these services. Producers' expectations of free or subsidized services discourage private investment, further limiting the development of a robust private agribusiness services market.

Challenges
Root Cause
High Transaction Costs for Service Providers
The small scale and dispersion of farms increase the transaction costs for service providers, making it less attractive to offer services to small and remote producers. This reduces the availability of services for those who may need them most.
High Costs and Challenges in Farm Equipment Access and Maintenance
Farmers face high costs and logistical challenges in accessing and maintaining farm equipment due to harsh environmental conditions, and high import costs. Farmers are wary of shared usage models or rental equipment due to biosecurity risks.
Affordability of Agribusiness Services
The cost of agribusiness services is often prohibitive for many farmers, especially small-scale and part-time producers. High fees for business, financial, and technical services limit access to crucial support needed to enhance productivity and profitability.

Fragmented, small-scale producer base leads to high costs and low economies of scale

Hawaiʻi Island's agricultural sector is characterized by a multitude of small-scale and part-time producers who are geographically dispersed and cultivate a diverse range of crops. This fragmentation results in high transaction costs for service providers, as reaching and serving numerous small clients scattered across the island demands significant time and resources. The lack of economies of scale makes it challenging for service providers to offer affordable services, leading to high fees that are often prohibitive for producers. Additionally, the small scale of operations limits producers' ability to collectively bargain for better service rates or access shared resources like equipment, exacerbating the affordability issue.

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