Reviving Agriculture to Diversify Hawaii’s Economy


Hawaii state policymakers have identified agriculture as a sector capable of substantial expansion as part of the state’s efforts to diversify the economy. Agriculture has, however, been in decline in Hawaii for the last 40 years despite the presence of two state programs designed to keep lands in agriculture (the Important Agricultural Lands (IAL) program) and to employ unused agricultural to produce diversified agriculture products (the Agribusiness Development Corporation (ADC)). We conclude that ADC’s emphasis on land acquisition has made it a costly, disorganized and ineffective program while the state and counties have failed to fulfill their promises to landowners participating in the IAL program. Neither program is capable of achieving the state’s economic diversification goals. Both need to be totally revamped or shut down. Moreover, we find that even if Hawaii farmers double food production, this would only increase state GDP by 0.15 percent. The bottom line is that policymakers and citizens seeking a more diversified economy in the next 10 or 15 years will need to look well beyond a revival of Hawaii agriculture if their vision is to be fulfilled.


12 thoughts on “Reviving Agriculture to Diversify Hawaii’s Economy”

  1. An outstanding and important paper that amply reveals a basic flaw in how our political leaders cope with agricultural issues. I am oversimplifying, but the state has focused more on preserving an agricultural landscape that preserves views for tourists and myths about living on the land, and less on actually helping farmers earn a living. If our farmers can live well, earn a profit and attract new generations to their farms, the views will follow.

    1. If people appreciated farmers and if the government understood how difficult it is to farm there would be the beginning something understanding of why we don’t have food self-sufficiency form housing needs to be approved immediately there’s different regulations from the different departments but certainly a farmer needs to be comfortable on the farm they need to have access to cheap rent free land free water Production credit production money tax credits we need to make it so exciting and worthwhile to become a farmer that everybody will want to do it the federal state and city county agencies do not do anything really affects the harsh realities of the difficulty of farming and if they could just back off and let’s and let people get back into farming and be enthusiastic and it all come together

  2. The vast majority of food is consumed in processed form.
    Agriculture will therefore remain limited until a larger food processing industry develops in Hawaii.

  3. The authors make a compelling case that Hawaii’s programs in pursuit of diversification into agriculture are cost-ineffective. One might add that “diversification” is a surreptitious way to promote self-sufficiency, known to economists since Adam Smith to be welfare-reducing. If there is really a case for diversification, then that case can be made explicit and the instrument for its pursuit chosen accordingly. For example, if the goal is to stabilize government revenue, then prudent financial management of occasional revenue surpluses is indicated. Likewise, if government promotion of agriculture is warranted on market failure or poverty alleviation (e.g. nutritional) grounds, then that case can be made as well and government programs designed accordingly.

    1. Your comments are right on the mark. I doubt that reviving agriculture will contribute much to diversification. Given the antiquated administration and regulatory machinery that the state uses to promote/enforce regulations/manage assets, there is a lot of room for reform that would help to set a better institutional framework for prospective farmers.

      1. Well the government could have done a lot of things with sugar and Pine cave Den certainly they could have taken all of land from the corporations that contaminated and said we’ll take it from here none of that happened the water tables are polluted the dirt’s polluted there’s heavy metals deep into the ground now and the government just let the big 5 Escape without any penalty I mean Alexander Baldwin show me last remaining part of that party but they sold their big land Holdings here and reality is that if you look closely at the law anybody that contaminates a piece of property and every owner there there after is responsible the ATC may not have been managed to well they didn’t have enough resources to manage the the program that they’re doing but I can say one thing at least they did something and I’m not sure if it was their job to lease out the properties or or make them viable or make the growing of new crops profitable and help the farmers but no one really offers that much help the department of AG isn’t much help the government in general just wants to talk and talk and talk and pretend like they’re doing something because a report is generated or a study but it never comes to anything so basically it’s everyone in the state’s fault for not making the politicians do their job

  4. Unfortunately, Hawaii’s Constitution mandates the State to “promote diversified agriculture” and “increase agricultural self-sufficiency.” On the other hand, the Constitution’s Preamble and General Power provisions assert that that government is “for the people” and is enjoined “to promote the general welfare.” The welfare of Hawaii’s citizenry is promoted through the pursuit of comparative advantage (the employment of labor and other resource in their highest and best social use), but the pursuit of self-sufficiency advances comparative DISadvantage. It may be possible to resolve this paradox by focusing agricultural programs more narrowly on nutritional needs and the preservation of native Hawaiian cultural practices.

    1. Sumner La Croix

      Of course, “increase agricultural self-sufficiency” doesn’t necessarily mean becoming self-sufficient. In the current context, “increasing agricultural self-sufficiency” could well be achieved by the state doing a better job of regulation, infrastructure maintenance. and promotion of branded Hawaii products –“Kauai coffee”.

      1. Though I admire both authors, and love you dearly, you write as true Economists who see only one future ahead–a continuation of certain trends of the past–with no thought that anything might disrupt the current situation where importing food is cheaper than growing it locally, and so we shouldn’t waste time thinking about and preparing for–indeed in seeking and encouraging–alternatives. In which case, hope climate change, sea level rise, energy uncertainties and all the other factors of the Anthropocene Epoch are a hoax!

  5. Sumner La Croix

    Jim, it’s great to hear from you and to get your clear straightforward feedback! As one of the co-authors (La Croix) of the recent State of Hawaii Energy Office report on the feasibility of a carbon tax, I want to note that we clearly see the fundamental need for Hawaii, the US, and the global community to respond to climate change, sea level rise and energy uncertainties. Just because you disagree with our critique of malfunctioning state and county programs plagued by antiquated bureaucratic and administrative machinery, there is no reason to jump to the conclusion that we think climate change is a hoax. Our point is that ADC and IAL in their current forms are just terribly ineffective ways to respond to the many problems in Hawaii’s agriculture. I encourage you to read the State Auditor’s Report on ADC and then reflect on whether this program is helping Hawaii farmers prosper in the 21st century. The new UHERO brief by Michael Roberts is also a must read as it provides a much more detailed analysis of the current state of farming in Hawaii. My best, Sumner

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