Staple Food Commodities
Value Chain Analysis
Staple food crops are defined as those essential agricultural products required to sustain the island’s population. The primary purpose of focusing on this grouping of agricultural products is to enable HIAP's members to better analyze and understand Hawaiʻi Island's food value chains, the market ecosystem that enables these value chains to function efficiently, and the economic capacity to improve the island's food security. By strategically removing systemic constraints, this analysis aims to promote more inclusive, market-driven growth.
It is important to note that some products in the vegetables category are technically fruits but are included with vegetables due to common usage or processing needs. Additionally, some of the staple food crops produced on Hawaiʻi Island are exported and not consumed locally. Exported crops may be sent to destinations off-island, and it is often challenging to obtain precise data on the portions of production designated for local versus export consumption.
Click on any of the components of the Staple Food Commodities value chain analysis below to explore the details.
System Terms & Definitions
Title | Definition |
|---|---|
Crowding In | The process in which other market actors replicate or adopt successful interventions, leading to broader market transformation. |
Economic Clusters | Geographic concentrations of interconnected businesses, suppliers, service providers, and institutions that collaborate to improve productivity, innovation, and competitiveness. |
Horizontal Linkages | Relationships and connections among businesses or organizations at the same level of the value chain (e.g., farmer cooperatives or industry associations). |
Interventions | Strategic actions designed to address constraints, unlock opportunities, and improve overall system performance. Successful interventions stimulate market-driven growth without creating dependency. |
Market Actors | Individuals, businesses, organizations, or institutions involved in producing, processing, trading, or regulating products and services within a market system. |
Market Systems | A framework that looks at the broader environment in which market actors (farmers, businesses, consumers) operate, including policies, institutions, and support services that shape their interactions. |
Market Systems Development (MSD) | An approach to economic development that seeks to create sustainable and inclusive markets by addressing the underlying constraints and incentives that shape market behaviors. |
Market Systems Facilitation | A strategy that enables market actors to take ownership of solutions, by encouraging partnerships, improving information flow, and aligning incentives to drive market development. Facilitators avoid taking over market functions and instead enable existing actors to succeed. |
Scaling Up | Expanding the reach and impact of an intervention by integrating it into mainstream business practices, government policies, or institutional frameworks. |
Systems Change | A fundamental shift in the way market systems operate, resulting from improved relationships, services, and market conditions that sustain long-term growth and resilience. |
Value Chains | The full range of activities and actors involved in bringing a product from production to final consumption, including input suppliers, farmers, processors, distributors, and retailers. |
Vertical Linkages | Relationships between different levels of the value chain, such as between farmers and buyers, or processors and retailers. |
Market System Map
The system map below outlines the key functions, rules and stakeholders of the island's staple food commodities market system. Clicking on any of the underlined links below will take you to the relevant information associated with that element of the system.
Value Chain Functions
Value chain functions identify the key activities and value additions involved in bringing a product from the initial stages of production to the final consumer. This includes every step from cultivation and harvesting to processing, distribution, marketing, and sales. See a summary of information about each of the core value chain functions for staple food commodities below.
Production
Production of staple food crops on Hawaii Island is characterized by smallholder farms, which face numerous challenges such as high costs of land, water, and inputs, as well as labor shortages. Despite these barriers, the island's fruit sector, for example, saw over 1,300 operations with sales, with significant production of crops like avocados and papayas. However, inefficiencies due to fragmented access to agricultural inputs and technical services hinder scalability and profitability. A market systems approach that strengthens access to affordable resources and technical assistance can help local farmers optimize production and improve resilience to external shocks, like climate variability and global market fluctuations.
Aggregation
Aggregation remains a weak link in Hawaii's value chain due to the geographic dispersion of producers and the lack of centralized hubs. The absence of robust aggregation infrastructure forces small-scale farmers to independently market and transport their goods, increasing costs and inefficiencies. With over 250 vegetable-producing operations but limited aggregation points, farmers are often unable to meet larger market demands or consolidate their supply to improve bargaining power. Collaborative models such as cooperatives or shared aggregation centers, coupled with cold storage facilities, are critical interventions that could reduce costs and better align supply with demand.
Processing
Processing is one of the most underdeveloped areas of the staple food crops value chain, particularly for fruits and vegetables. Hawaii Island producers lack access to cost-effective, shared-use processing facilities, limiting their ability to add value to raw agricultural products. For instance, fruit processing is largely untapped despite the high production of crops like papayas and mangoes. The development of accessible processing infrastructure, including dehydration units, commercial kitchens, and pasteurization equipment, could enable producers to capture higher value in the supply chain by transforming raw products into shelf-stable, value-added goods, such as dried fruits or fruit-based products for export.
Distribution
Distribution for staple food crops on Hawaii Island faces challenges due to the island’s isolation, high transportation costs, and the need for improved cold chain logistics. Many small farmers, especially in remote regions, struggle to transport perishable goods like leafy greens and fruits efficiently, leading to post-harvest losses and missed market opportunities. Only a few central distribution networks exist, leaving over 400 fruit and vegetable producers with limited access to streamlined, cost-effective logistics. Investments in cold storage and collaborative distribution models that pool resources across producers can help stabilize supply, reduce waste, and improve the reliability of local and export markets.
Marketing
Marketing efforts for Hawaii Island’s agricultural products are fragmented, with many producers unable to capitalize on the strong potential of the "Hawaii" brand. Despite high local production, market data shows a lack of coordinated marketing strategies to raise consumer awareness about locally grown fruits and vegetables, both within Hawaii and in export markets. While some efforts, such as the promotion of Hawaii-grown papayas in Japan, have proven successful, most farmers are left marketing independently with limited access to larger retail or export channels. Strengthening cooperative marketing initiatives and focusing on Hawaii-branded value-added products could significantly increase demand and provide producers with greater market access.
Sales
Sales of staple food crops, particularly in local markets, are constrained by competition from cheaper imports and a lack of established sales channels. In 2022, for example, over 1,300 fruit producers and 600 livestock producers reported sales, but many were unable to expand beyond small-scale operations due to limited access to high-value sales outlets. Direct-to-consumer sales and farmers' markets are key for small producers, but these are not enough to fully capture market potential. Initiatives that foster closer partnerships with retailers and food hubs, as well as efforts to improve online and direct sales channels, are essential to expanding the reach and profitability of Hawaii Island’s agricultural products.
Supporting Functions
The supporting functions within Hawaiʻi Island's agricultural sector are critical to enhancing the productivity, sustainability, and competitiveness of the local agricultural value chains. These functions include input supplies, information, infrastructure, finance, support services, and training and education. Below is an overview of each of these key areas, emphasizing their role in supporting the staple food commodities being analyzed.
Input Supplies
The availability and cost of input supplies, such as seeds, fertilizers, and equipment, are major challenges for Hawaii Island producers. Due to the island's isolation, input costs are significantly higher than on the mainland, and supply chain disruptions can leave producers without access to essential resources. The high cost of imported inputs also impacts the profitability of small-scale farms. Efforts to localize input production, such as seed banks and community-based fertilizer production, could help reduce costs and increase resilience. Additionally, cooperative purchasing arrangements could enable producers to buy inputs in bulk, reducing costs and improving access to essential supplies.
Information
Access to market information, including pricing, demand trends, and new technologies, remains limited for many producers on Hawaii Island. The data highlights that many farmers lack the ability to make informed decisions about what to grow, when to harvest, and where to sell their products. This results in missed market opportunities and inefficiencies in the value chain. The development of digital platforms that provide real-time market data, as well as improved access to research and extension services, would help producers better align their production with market demand and optimize their operations for profitability.
Infrastructure
Infrastructure limitations, particularly in transportation, storage, and processing facilities, are a major bottleneck for Hawaii Island’s staple food value chain. The geographic isolation and lack of cold storage and distribution centers make it difficult for producers to maintain product quality and access distant markets. In particular, the fruit sector, with over 1,300 operations, suffers from high post-harvest losses due to inadequate cold chain logistics. Investing in infrastructure, including centralized processing hubs, better transportation links, and improved cold storage facilities, would significantly enhance producers' ability to add value to their crops and reach new markets, both locally and abroad.
Finance
Access to finance is one of the most critical constraints facing Hawaii Island's agricultural producers. Traditional financial institutions are often reluctant to lend to small-scale farms due to perceived risks, and the cost of capital remains high. In 2022, few producers reported accessing formal loans, with most relying on personal savings or informal loans from family and friends. Programs such as the USDA’s Value-Added Producer Grants (VAPG) and the Hawaii Department of Agriculture's loan program have helped some producers, but more innovative financial solutions, such as microloans, cooperative financing, or crowd-funding models, are needed to meet the needs of smallholders and niche market growers.
Support Programs & Services
Support services, including extension services, technical assistance, and business advisory, are critical components of the agricultural value chain on Hawaii Island. However, the data highlights a significant mismatch between the demand for these services and their availability. The report points out that extension services, like those provided by the University of Hawaii’s College of Tropical Agriculture and Human Resources (CTAHR), are spread too thin, with only a limited number of agents serving the entire island. This leaves many producers without access to essential support. Expanding the reach of these services, particularly through public-private partnerships and digital platforms, would improve the technical and business capabilities of small and medium-sized producers.
Training & Education
Training and education are vital to enhancing the skills and knowledge of producers on Hawaii Island, yet gaps remain in both technical and business training. As of 2022, educational initiatives such as those by GoFarm Hawaii and the University of Hawaii at Hilo provide crucial support, but many farmers report a lack of access to more advanced training, particularly in areas such as farm management, ag-tech, and marketing. Additionally, traditional Hawaiian agricultural knowledge is increasingly recognized as a valuable resource, but more integration with modern techniques is needed. Expanding training programs, including virtual and peer-to-peer learning, could help close the knowledge gaps and empower farmers to adopt new technologies and practices.
Rules
The Rules within the Staple Food Commodities market ecosystem encompass various legislative, regulatory, and informal frameworks at the county, state, and federal levels. These rules significantly impact the operations of farmers, ranchers, and other stakeholders, influencing everything from land use and water access to food safety and marketing standards. Below is a detailed summary of stakeholder feedback on compliance issues and suggested changes in legislation, categorized by the type of rule and the level of government.
County Rules
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Building Permits and Property Taxes: Stakeholders expressed concerns over the cumbersome and costly process of obtaining building permits for agricultural structures. The time-consuming nature and the complex requirements for compliance often discourage small farmers from expanding their operations. Additionally, property tax policies were highlighted as a barrier, particularly when agricultural land is reassessed at higher rates that do not reflect its productive value. There were calls for more agricultural exemptions and streamlined processes to make compliance more feasible for small-scale farmers.
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Ag Tourism Permits: Permitting for ag tourism activities, such as farm tours, faces specific challenges, including requirements for infrastructure like bus turnarounds, which many farms lack. Stakeholders recommended revisiting these regulations to promote ag tourism without imposing prohibitive costs on farmers.
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Wastewater and Water Access: Access to clean water and wastewater management were recurring issues. The current Department of Health rules make it difficult for farms and commercial kitchens, particularly those on catchment systems, to meet compliance standards. There were suggestions to modify these rules to better accommodate the unique needs of agricultural operations on the island.
Hawaiʻi State Rules
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Department of Health (DOH) Regulations: State-level regulations, particularly those enforced by the DOH, present significant barriers to food manufacturing and processing. For example, the strict rules around wastewater and the difficulty in getting permits for commercial kitchens were cited as major hurdles. There is a call for the DOH to adopt more flexible policies that consider the realities of local farming and food production.
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Cottage Laws and Food Safety Modernization Act (FSMA): Stakeholders discussed the need for expanding the range of products allowed under the state's cottage food laws, which would enable more small-scale producers to legally sell homemade goods. Additionally, compliance with the FSMA poses challenges, especially for small farms that struggle with the costs and complexities of meeting federal food safety standards.
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Agricultural Tourism and On-Farm Housing: There is strong support for legislative changes that would allow for on-farm housing for labor, recognizing the critical need for affordable and accessible housing for farm workers. This would also help address the broader issue of housing availability on the island.
Federal Rules
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Food Safety Modernization Act (FSMA): The FSMA is a significant federal regulation affecting local farmers, particularly in terms of compliance with food safety standards. The cost and administrative burden of meeting these requirements can be overwhelming for small producers. Stakeholders suggested that there should be more federal support and guidance to help small farms comply without compromising their financial viability.
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H2A Program and Labor Regulations: The federal H2A program, which allows farms to hire foreign labor, was criticized for being overly complex and difficult for small farms to navigate. Simplifying this program or providing more support for small farmers to use it effectively would help alleviate labor shortages.
Suggested Changes in Legislation
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Streamlining Permitting Processes:
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Simplify the process for obtaining building permits for agricultural structures.
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Introduce more agricultural exemptions for small-scale operations.
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Water and Wastewater Management:
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Modify DOH regulations to better support farms using catchment systems and alternative water sources.
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Develop clear guidelines and support for wastewater management that is feasible for small farms.
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Supporting Ag Tourism:
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Adjust infrastructure requirements to make ag tourism more accessible for small farms.
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Promote policies that support the growth of ag tourism without imposing undue financial burdens.
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Expanding Cottage Laws:
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Broaden the scope of allowable products under cottage food laws to support small-scale producers.
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Provide education and resources to help producers comply with these regulations.
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Enhancing On-Farm Housing:
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Legislate to allow on-farm housing for labor to support the agricultural workforce.
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Provide incentives or support for developing affordable housing for farm workers.
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Federal Support for FSMA Compliance:
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Increase federal assistance and resources to help small farms meet FSMA requirements.
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Consider tiered compliance standards based on farm size and capacity.
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By addressing these challenges through legislative and regulatory changes, stakeholders believe it is possible to create a more supportive and sustainable environment for Hawaiʻi Island's agricultural sector.
Challenges
Challenges, needs and systemic constraints to the efficient functioning of the staple food commodities value chain have been identified by stakeholders in multiple surveys, discussions and workshops. This feedback is continuously updated, synthesized and summarized to enable a collective understanding of the system needs and strategies for addressing them.
