Regulatory constraints on Hawaii Island, particularly in land use, water rights, and compliance with federal mandates like FSMA, create barriers to growth for small-scale producers. State-level regulations—such as prohibiting the use of catchment water systems in commercial kitchens—add another layer of complexity, particularly for producers engaged in value-added processing. These challenges are not limited to smallholders but affect the entire value chain, as compliance with these regulations raises costs across the board and inhibits the development of diversified, sustainable operations.
The restrictive nature of Hawaii’s regulatory environment is closely linked with the issues in Finance and Infrastructure. Many producers lack the financial resources to comply with complex regulations, particularly those requiring capital-intensive investments in processing facilities or water systems. Moreover, without streamlined regulatory processes, even well-financed operations struggle to scale. The Hawai'i Island Agriculture Partnership (HIAP) has been advocating for regulatory reforms to address these bottlenecks, focusing on easing land-use restrictions and water policies. If successful, these reforms could unlock the potential for significant growth in both staple food and value-added processing sectors. Further collaboration between regulatory bodies and producer organizations is necessary to ensure that reforms benefit all players across the value chain, from smallholders to large operations.