Export Root Cause Analysis

Export Commodities

Hawai'i Island

Root Cause Analysis of Key Challenges

Systemic Constraints

Potential for System Change

Fragmented Market Information Systems and Lack of Data Infrastructure

The absence of integrated and accessible market information systems, due to underinvestment in data infrastructure and coordination mechanisms, leads to information asymmetry and inefficiencies in the agricultural value chain. This systemic issue hinders effective decision-making by farmers and other stakeholders, resulting in mismatched supply and demand and limiting market access, especially for small-scale producers.

Enhancing biosecurity measures is pivotal for safeguarding agricultural productivity. Producers can test collaborative approaches to pest and disease management, such as coordinated monitoring or shared response strategies. By piloting these initiatives, producers can evaluate their impact on reducing crop losses. Successful models can be scaled up, fostering a proactive biosecurity culture within the agricultural community that protects staple food commodities and contributes to overall sector resilience.

High Energy Costs and Lack of Sustainable Solutions

Hawaiʻi's energy sector is heavily reliant on imported fossil fuels due to its geographic isolation, resulting in some of the highest energy costs in the nation. This dependence affects the agricultural sector significantly, particularly for producers engaged in energy-intensive activities like drying, processing, and cold storage of export commodities such as macadamia nuts and coffee. The systemic issue lies in the limited investment in renewable energy infrastructure and energy-efficient technologies within the agricultural sector. Contributing factors include inadequate access to capital for renewable energy projects, insufficient policy incentives, and a lack of technical expertise or awareness among producers to implement sustainable energy solutions.

Addressing this root cause requires a systemic shift towards sustainable energy integration within the agricultural sector. A market systems development approach can facilitate partnerships between agricultural producers, renewable energy providers, financial institutions, and policymakers. By developing accessible financing models and providing technical assistance, producers can adopt renewable energy technologies and energy-efficient practices. Policy interventions could include creating incentives such as tax credits or subsidies for renewable energy investments in agriculture. Capacity-building initiatives can raise awareness and build technical expertise among producers. These systemic changes can reduce energy costs, enhance profitability, and improve the competitiveness of Hawaiʻi's export commodities in global markets while contributing to environmental sustainability.

Inadequate Biosecurity Infrastructure and Policy Implementation

Insufficient funding, coordination, and enforcement of biosecurity measures have led to inadequate pest and disease management services on Hawaiʻi Island. This systemic lack of robust biosecurity infrastructure increases vulnerability to pests and diseases, resulting in crop losses and higher costs for farmers, particularly affecting fruit and vegetable production.

Access to reliable market information is essential for informed decision-making. Producers can pilot data-sharing initiatives or develop networks that provide timely market insights, pricing trends, and demand forecasts. By evaluating the benefits of improved information flow, producers can adapt production plans to better meet market needs. Scaling up these initiatives can lead to a more transparent and efficient market system, enhancing opportunities for staple food commodity producers to optimize profitability.

Lack of Coordination Among Stakeholders

The export commodities value chain in Hawaiʻi is fragmented, characterized by weak institutional frameworks and a lack of effective collaborative mechanisms among stakeholders. Historical factors, such as the transition from plantation economies to smallholder farming, have led to a dispersed industry structure with many small-scale producers operating independently. This fragmentation is exacerbated by limited trust, inadequate communication channels, and the absence of strong industry associations or cooperatives. As a result, there is poor horizontal coordination among producers and weak vertical linkages with processors, distributors, and marketers. This systemic issue leads to inefficiencies, such as duplicated efforts, underutilized resources, and missed opportunities for collaborative marketing, joint investment in infrastructure, and advocacy.

A market systems development approach can address this fragmentation by strengthening institutional frameworks and fostering collaboration across the value chain. Facilitating the formation or enhancement of producer associations, cooperatives, or clusters can build trust and improve communication among stakeholders. Establishing platforms for regular dialogue, information sharing, and joint decision-making can align objectives and strategies. Encouraging collaborative initiatives—such as shared marketing campaigns, collective bargaining with buyers, or joint investment in processing facilities—can enhance efficiencies and market competitiveness. Policy support to incentivize collaboration, such as grants for cooperative projects or streamlined regulations for collective enterprises, can further promote coordination. By transforming the value chain into a more cohesive and collaborative system, stakeholders can leverage shared resources, reduce costs, and better position Hawaiʻi's export commodities in the global market.

Regulatory Frameworks Misaligned with Small-Scale Farming Needs

Regulatory systems and compliance requirements are predominantly designed for large-scale commercial operations, lacking adaptation or flexibility for small-scale farmers. This misalignment results in disproportionately high compliance costs and complexities for small farms, restricting their ability to expand infrastructure and meet food safety standards. The systemic lack of tailored regulations and support mechanisms inhibits growth and market access for small producers.

To ensure the sustainability of the agricultural sector, it's important to make farming more accessible to new and young producers. By piloting initiatives that lower entry barriers—such as resource-sharing models, access to mentorship, or innovative financing mechanisms—existing producers can help create pathways for newcomers. Demonstrating the success of these approaches can inspire systemic changes that support the next generation of staple food commodity producers, ensuring the continuity and vitality of the sector.

Socioeconomic Barriers to Attracting and Retaining Farm Labor

Structural socioeconomic factors—such as the high cost of living, lack of affordable housing, low agricultural wages compared to other sectors, and limited social support—create significant barriers to attracting and retaining a stable farm labor force on Hawaiʻi Island. These systemic issues make agricultural jobs less viable and unattractive to potential workers, leading to labor shortages that constrain farm productivity and scalability, especially for small farms.

Transitioning to diversified agriculture can be facilitated by experimenting with new farming practices and market approaches. Producers can pilot diversification projects—such as introducing new crop varieties or adopting sustainable practices—to assess their viability and market acceptance. Sharing outcomes and lessons learned can encourage wider adoption among producers. This strategic shift can enhance resilience, open up additional revenue streams, and strengthen the position of staple food commodities within a more diverse agricultural landscape.

Systemic Underinvestment in Essential Agricultural Infrastructure

Chronic underinvestment by both public and private sectors in critical agricultural infrastructure—such as processing facilities, aggregation centers, and cold chain logistics—has led to significant gaps on Hawaiʻi Island. This systemic issue results in high transaction costs, substantial post-harvest losses, and reduced access to high-value markets, making it difficult for small farms to scale up and remain competitive.

Building capacity within the agricultural workforce is crucial for adapting to evolving challenges. Producers can test collaborative training programs or establish knowledge-sharing networks to enhance skills and competencies. By focusing on areas like modern farming techniques, financial management, and regulatory compliance, these initiatives can improve productivity and innovation. Scaling up successful programs contributes to a more skilled and adaptable producer base, strengthening the overall performance of staple food commodity production.

Underinvestment in Agricultural Education and Workforce Development

Persistent underinvestment in agricultural education, training programs, and extension services has led to significant gaps in workforce development and skill acquisition. This systemic issue leaves many farmers ill-equipped to navigate the complexities of modern farming practices, compliance requirements, and financial management, limiting productivity and the ability to access higher-value markets.

Addressing labor shortages requires innovative strategies that can reshape how labor is accessed and utilized within the agricultural sector. By exploring collaborative models that enhance labor efficiency—such as shared labor pools or flexible scheduling—producers can pilot new approaches to optimize the existing workforce. Implementing technology or mechanization where feasible can also alleviate labor demands. Testing these solutions on a small scale allows producers to assess their effectiveness and scalability, potentially transforming labor dynamics in a way that benefits staple food commodity production without imposing unsustainable costs.

Challenges, representing problems and needs identified by stakeholders, are clustered below into a set of root cause constraints.

Challenges

Data Gaps in the Value Chain	Data collection, especially from smaller farms and backyard producers, is insufficient. Without comprehensive data, it is difficult to make informed decisions regarding market opportunities and areas for improvement within the value chain.
Market Access and Promotion	Smaller producers struggle to access international markets due to limited promotion and branding efforts. Expanding the promotion of Hawaii’s premium agricultural products and establishing unified marketing strategies is seen as a priority.
Lack of Available Data and Market Information	Insufficient access to reliable market data and demand information constrains decision-making for both producers and buyers. This results in inefficiencies in pricing, production volumes, and market opportunities.
Misalignment of Supply and Demand	There is a frequent misalignment between farm production and market demand. Poor demand forecasting and issues with harvest timing lead to inefficiencies, resulting in food waste and revenue losses for small-scale producers.

Root Cause Constraint

Fragmented Market Information Systems and Lack of Data Infrastructure

Challenges

High Energy Costs

Processing facilities, especially for energy-intensive processes like drying and roasting, face high energy costs. These costs impact profitability for macadamia nut and coffee producers, prompting interest in renewable energy solutions.

Root Cause Constraint

High Energy Costs and Lack of Sustainable Solutions

Challenges

Pest and Disease Management	Coffee and macadamia nut producers face persistent challenges from pests such as the Coffee Berry Borer and macadamia felted coccid, which lower yields and increase costs. Research into pest-resistant varieties is critical for mitigation.
Pests and Plant Diseases	Insufficient services and high costs for pest management make it challenging for small farmers to protect crops from pests and diseases. This leads to lower productivity and increased financial strain on producers.

Root Cause Constraint

Inadequate Biosecurity Infrastructure and Policy Implementation

Challenges

Lack of Coordination Among Stakeholders

There is limited coordination between producers, government agencies, and industry groups, hindering collaboration and the development of unified strategies to address systemic issues like transportation, market access, and workforce shortages.

Root Cause Constraint

Lack of Coordination Among Stakeholders

Challenges

Permitting Delays	Lengthy permitting processes, particularly for infrastructure projects like cold storage and processing facilities, delay necessary investments. Producers face significant challenges navigating Hawaii’s regulatory and permitting framework.
High Labor Costs and Shortages	Labor-intensive crops like coffee and flowers are heavily impacted by Hawaii’s high wage rates and a shortage of skilled workers. The difficulty of attracting seasonal workers during peak harvest periods further exacerbates this issue.
Complex Food Safety Compliance	Small farmers face difficulties complying with the Food Safety Modernization Act (FSMA) and other food safety standards. The cost and complexity of compliance prevent many from accessing certain markets and limit their ability to scale.
High Transaction Costs for Small Farms	The lack of aggregation infrastructure leads to high transaction costs for buyers and processors when dealing with small farms, reducing the incentive to source from local smallholders.
Workforce Housing Challenges	A lack of affordable housing and allowances for farmworkers to live on the farm creates challenges for attracting and retaining labor. These housing barriers make it difficult for workers to remain in rural farming areas.
Permitting and Regulatory Delays	Lengthy and complex regulatory processes, such as building permits and environmental compliance, disproportionately affect small farmers. These delays hinder the timely expansion of farms and limit infrastructure development.
Compliance	Stakeholders consistently identify the high costs associated with compliance, permitting, and infrastructure development as major barriers to inclusive agricultural development.

Root Cause Constraint

Regulatory Frameworks Misaligned with Small-Scale Farming Needs

Challenges

Workforce Development	There is a need for improved training and education programs to build a skilled workforce, particularly for aquaculture, floriculture, and macadamia nut production. Limited extension services and training resources further compound the issue.
High Labor Costs and Shortages	Labor-intensive crops like coffee and flowers are heavily impacted by Hawaii’s high wage rates and a shortage of skilled workers. The difficulty of attracting seasonal workers during peak harvest periods further exacerbates this issue.
Workforce Housing Challenges	A lack of affordable housing and allowances for farmworkers to live on the farm creates challenges for attracting and retaining labor. These housing barriers make it difficult for workers to remain in rural farming areas.
Cost and Availability of Farm Labor	The high cost and limited availability of farm labor are critical barriers to farmers' ability to maintain operations. This issue stems from competition for labor with higher-paying sectors and unattractive employment conditions for farm labor.
Misalignment of Supply and Demand	There is a frequent misalignment between farm production and market demand. Poor demand forecasting and issues with harvest timing lead to inefficiencies, resulting in food waste and revenue losses for small-scale producers.

Root Cause Constraint

Socioeconomic Barriers to Attracting and Retaining Farm Labor

Challenges

Cold Chain Management	Maintaining the cold chain is critical for export commodities like flowers, fruits, and seafood. The absence of adequate refrigerated facilities and inefficient cold chain logistics leads to higher post-harvest losses and reduced quality.
Limited Processing Infrastructure	There is a lack of local processing facilities for export crops, forcing producers to rely on off-island processing, which increases costs and risks. Investments in local processing facilities for macadamia nuts and coffee are essential.
Logistical Inefficiencies	Inefficient distribution networks and a lack of cold storage facilities increase the risk of product spoilage during transportation. These inefficiencies disproportionately affect perishable products, such as tropical flowers and seafood.
High Transportation Costs	Hawaii's geographic isolation makes it difficult for producers to compete in international markets. High shipping costs and fuel prices significantly impact the profitability of crops like macadamia nuts, coffee, and floriculture.
Limited Cold Chain Capacity	Inadequate cold storage and distribution infrastructure for perishables (especially fruits and vegetables) result in post-harvest loss, lower quality produce, and missed opportunities in high-value markets.
Inadequate Aggregation and Processing Facilities	Hawaiʻi Island lacks sufficient aggregation and processing facilities, making it difficult for small-scale farmers to reach markets efficiently and profitably. This infrastructure gap exacerbates post-harvest loss and limits access to markets.
Compliance	Stakeholders consistently identify the high costs associated with compliance, permitting, and infrastructure development as major barriers to inclusive agricultural development.

Root Cause Constraint

Systemic Underinvestment in Essential Agricultural Infrastructure

Challenges

Workforce Development	There is a need for improved training and education programs to build a skilled workforce, particularly for aquaculture, floriculture, and macadamia nut production. Limited extension services and training resources further compound the issue.
High Labor Costs and Shortages	Labor-intensive crops like coffee and flowers are heavily impacted by Hawaii’s high wage rates and a shortage of skilled workers. The difficulty of attracting seasonal workers during peak harvest periods further exacerbates this issue.
Pests and Plant Diseases	Insufficient services and high costs for pest management make it challenging for small farmers to protect crops from pests and diseases. This leads to lower productivity and increased financial strain on producers.
Aging Producer Workforce	With an average age of 61 and reduced access to extension services, Hawaiʻi Island's agricultural workforce faces a challenge in transferring knowledge and skills to new farmers. This creates gaps in productivity and sustainability.
Inadequate Technical Assistance	Limited access to technical support services, such as extension programs and research institutions, constrains farmers' ability to implement modern farming techniques and business practices, particularly among small farms.
Workforce Housing Challenges	A lack of affordable housing and allowances for farmworkers to live on the farm creates challenges for attracting and retaining labor. These housing barriers make it difficult for workers to remain in rural farming areas.
Cost and Availability of Farm Labor	The high cost and limited availability of farm labor are critical barriers to farmers' ability to maintain operations. This issue stems from competition for labor with higher-paying sectors and unattractive employment conditions for farm labor.