Challenges & Opportunities
Hawai'i Island
Challenges
Root Cause
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. |
High Input Costs | The high costs of imported agricultural inputs, such as seeds, fertilizers, and equipment, significantly raise production expenses. This reduces profitability and scalability, especially for small and beginning farmers. |
Lack of Support for Transition to Diversified Agriculture
The decline of the sugar plantation industry was not accompanied by adequate investment and policy support for developing a diversified agricultural services sector. This systemic oversight has led to a gap in critical support services—such as technical assistance, equipment repair, and access to affordable agricultural inputs—impairing the growth potential of small farms and the overall agricultural economy on Hawaiʻi Island.
Challenges
Root Cause
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. |
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.
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
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.
Challenges
Root Cause
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. |
High Barriers to Entry for New and Young Farmers
Systemic barriers—such as limited access to land, capital, education, and training—make it challenging for new and young farmers to enter the agricultural sector on Hawaiʻi Island. Combined with insufficient succession planning for aging farmers, these issues contribute to a demographic shift that threatens the future sustainability of the island’s agricultural sector.
Challenges
Root Cause
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. |
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.
Challenges
Root Cause
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. |
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.
Challenges
Root Cause
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. |
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.
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
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
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
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. |
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.
Challenges
Root Cause
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. |
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.
Challenges
Root Cause
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. |
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.
Challenges
Root Cause
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. |
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.