Understanding a value chain best starts with the people in the value chain we seek to benefit most - the Producers. Below is a summary of the available information on the island's export commodities producers in Hawai'i County from the 2022 USDA National Agricultural Statistics Service (NASS) Agricultural Survey. As the available data specifically for export commodities producers is limited, we can note the data across all farms in the County as indicative of the demographics of the export commodity producers, though noting that they only represent approximately 30% of all agricultural producers on the island. Some key statistics of note about the island's producers includes the following.

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• Advanced Age of Farmers: The average age of farmers is 61 years, with a significant portion (around 46%) of producers being 65 years and older. This raises concerns about the sustainability of the farming population, as fewer younger producers are present (only 6% are under 35). This advanced age signals potential challenges for future farming capacity unless younger farmers are encouraged to enter and remain in the sector.

• Number of Beginning Farmers: The data shows 951 producers have been operating their farms for 5 years or less, which accounts for about 15% of the total producers. This indicates some level of new entry into farming, though it is relatively modest compared to the overall producer population.

• Gender Distribution: Male producers account for about 57% of the total producers, while female producers represent 43%. This suggests a notable presence of women in farming, although men still dominate slightly in terms of producer numbers.

• Internet Access: There is a strong presence of technology adoption, with 2,896 farms (about 80%) having some form of internet access. The predominant methods of access include broadband and cellular data plans, highlighting a reasonable level of digital connectivity which could support innovations and market linkages.

• Off-Farm Employment: A significant number of producers (65%) work off-farm, with many (about 34%) working more than 200 days off-farm. This suggests that a large portion of farmers may rely on off-farm income, potentially indicating challenges in achieving full-time viability from farm operations alone.

• Land Tenure: The majority of farms are fully owned (2,623 farms) compared to part-owned or leased land. This level of ownership provides stability but could limit opportunities for new entrants if land availability is restricted.

• Income from Farm-Related Activities: The data reveals income diversification through farm-related activities, such as custom work, agri-tourism, and gross cash rent. However, income from these activities varies widely, with some categories like agri-tourism showing significant growth potential ($9,338,000 in 2022 compared to $1,569,000 in 2017).

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Key Challenges for Producers in the Export Commodities Value Chain

• High Transportation Costs: Producers face steep transportation costs due to Hawaii’s geographic isolation, which raises shipping prices and impacts the competitiveness of export products such as coffee, macadamia nuts, and flowers in international markets.

• Logistical Inefficiencies: Inefficiencies in transport logistics, including inadequate cold chain management and delayed shipment times, cause increased costs and risks of product spoilage, especially for perishable goods like tropical flowers and seafood.

• Pest and Disease Management: Significant pest and disease challenges, such as the Coffee Berry Borer, Coffee Leaf Rust, and macadamia felted coccid, are threatening yields and increasing the need for costly and time-intensive pest control measures.

• High Labor Costs and Shortages: The availability of skilled labor is limited, and labor-intensive sectors like coffee and floriculture struggle to find workers, particularly during peak harvest times. High wage rates also make it difficult for producers to remain competitive.

• Limited Processing Infrastructure: Many producers lack access to local processing facilities, forcing them to ship raw products off-island for processing. This adds significant costs and reduces the ability to create value-added products locally.

• Cold Chain Management: Maintaining a consistent cold chain for products such as tropical flowers and perishable seafood is challenging, leading to post-harvest losses and reduced product quality for export.

• High Energy Costs: The cost of energy, particularly for processing and cold storage, is a significant burden on producers. This impacts profitability, especially in energy-intensive processes like nut drying and coffee roasting.

• Permitting Delays: Producers face delays and complications when trying to obtain necessary permits for farm-related activities, including construction of processing facilities and new farm infrastructure, hindering growth and expansion.

• Workforce Development Gaps: Producers report insufficient access to training programs and agricultural education, particularly in export-related industries. This limits the development of specialized skills needed for pest management, processing, and sustainable practices.

• Market Access and Promotion: Producers struggle with gaining access to international markets and building strong marketing strategies that promote the Hawaiian brand. There is a need for coordinated marketing efforts and stronger partnerships with buyers.

• Data Gaps in the Value Chain: Producers face challenges in accessing timely and accurate market information, which hampers decision-making, crop planning, and responding effectively to market demand trends.

• Lack of Coordination Among Stakeholders: There is a need for stronger coordination and collaboration among producers, processors, distributors, and government entities to address systemic issues across the export value chain, including pest control and infrastructure development.