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Small Farmers Are Finding Innovative Ways To Get Their Food To Market

Shop local, support small farmers, double food production by 2030 – the messaging around increasing Hawaii’s self-sufficiency in food sounds strong.

But the obstacles in front of Gov. David Ige’s six-year-old pledge to double the state’s food production are numerous. And it’s not just about producing food; it’s about getting it from the farmer to the customer.

Hawaii’s food system is challenged by obstacles unique from the rest of the U.S. because for local food to fill local plates, crops and livestock must traverse Hawaii’s archipelagic makeup and negotiate a supply chain more suited to bigger farming operations like those found on the mainland.

That means dealing with bottlenecks in processing and other intermediary obstacles like the lack of slaughterhouses. That’s where food hubs can help, agricultural insiders say.

Hawaii Ulu Cooperative Operations Production Supervisor Leilani Aveiro blends ulu with chocolate in the professional kitchen located at the warehouse.
Hawaii ‘Ulu Co-operative Operations Production Supervisor Leilani Aveiro blends ulu with chocolate to make mousse at the cooperative’s Kona processing facility. Cory Lum/Civil Beat/2022

These hubs, which act as small farmer-focused food aggregators, could boost the local food supply by 10% by the end of the decade, according to Hawaii Food Hub Hui coordinator Saleh Azizi.

That percentage – calculated by the current size of Hawaii’s spending on food – could be a considerable amount, especially considering there has long been a void in actual data to work from for the gubernatorial pledge to double production, as well as general dissonance between political rhetoric and tangible legislative action to increase local food supplies.

Part of food hubs’ success so far has been their agility in responding to pandemic-borne food supply chain issues, by shortening the distance between farmers’ crops and eventual customers. State lawmakers have recognized the potential for these hubs to do more and passed a bill to pump $1.5 million into the work as part of a five-year pilot program.

But for the 14-member Food Hub Hui to achieve its yet-to-be-finalized master plan, it will need $50 million in the next five years, Azizi says. The hui’s members span the state’s main islands, including Kohala Food Hub, Mālama Kaua’i and Kahumana Food Hub — which is managed by Azizi.

“The major thing here is not just achieving self-sufficiency, it’s supporting the right people behind all of this,” Azizi said. That to him means small, family farmers and low-income and food insecure communities. “And it’s creating a really, really robust local food distribution system.”

At the heart of achieving greater self-sufficiency in this system is the farmer, rather than the outlets between them and customers, which has long been the status quo in Hawaii and the rest of the country.

When a crop is harvested by Hawaii’s typically small farmer, who comprise a majority of Hawaii’s 7,300 farms, accessing a market is the first step. The most convenient markets are informal, or farmers markets, restaurants and hotel markets, but all are cumbersome to reach, requiring time away from farming.

Then there is the often insurmountable task of actually getting products into a grocery store which, for small farmers, means having consistency of volume. But Hawaii’s farmers’ crops are generally diverse.

Market access was part of the impetus for Dana Shapiro to gather eight of her fellow Big Island breadfruit growers to start the Hawaii ‘Ulu Cooperative in 2016, so that they could collectively get their goods to market.

Hawaii Ulu Cooperative Operations Manager Holokai Brown stands next to a machine that peels the ulu or any other rhizome that needs to be peeled.
Hawaii ‘Ulu Cooperative Operations Manager Holokai Brown demonstrates how a specialty machine peels breadfruit, which costs tens of thousands of dollars brand new. Cory Lum/Civil Beat/2022

“Our growers are not monocropping ulu,” Shapiro said. Some of cooperative’s current 124 members could be growing pumpkin, sweet potato or kalo too, which are now part of a growing list of crops taken by the group. “It’s something that we are actually working on right now, our own diversification.”

The cooperative coordinates drop-off sites, from which members’ products are taken to a central processing facility in Kona, then into the greater market or sold through its own platform online. The profits are split between farmers.

And while Shapiro calls the model “altruistic” and admits it’s not going to make any single member rich, it has given them all a market they never had before.

But as the cooperative has grown, so too has its need for better infrastructure. And while the Legislature allocated $1.1 million to upgrade the state-owned building housing the cooperative’s facility, it fell short this year of funding the requisite $700,000 for the building to meet Hawaii County code.

Delivering food to Oahu, the state’s largest market, from any of Hawaii’s other main islands requires transport by air or sea, an exclusionary prospect for the small farmer because of cost or required volume — the minimum for sea cargo, for example, is one standard-sized pallet.

For marine transportation, perishability of crops and volume needs to be considered; for air freight, farmers need to be cognizant of cost.

According to a 2021 Hawaii Department of Agriculture survey of farmers, the cost of shipping is the third largest barrier to expanding the state’s agriculture.

Shipping containers stacked at the Young Brothers shipping area located at Piers 39 and 40 in Honolulu Harbor.
Young Brothers has a monopoly on Hawaii’s inter-island shipping, which is hard for small farmers to access due to the size of their crops. Cory Lum/Civil Beat/2022

Notwithstanding the hurdles, every month Young Brothers – the state’s sole interisland shipping company – transports roughly 13 million pounds of agricultural products between Hawaii’s seven main ports, according to senior sales and marketing manager Keith Kiyotoki.

Young Brothers, which would only respond to questions by email for this story, has more than 85 local farmers and food producers on its client list, according to Kiyotoki. A majority of agricultural products go between Hilo and Honolulu, while the most popular products are bananas and papayas.

And though farmers in Hawaii have access to U.S. Department of Agriculture subsidies of up to $8,000 for transportation costs and Young Brothers expounds the virtues of its 30% discount on shipping agricultural products, 85 farmers and food producers accounts for less than 2% of the state’s farms. This is again an area where food hubs have come to help.

Farm Link, which is part of the Food Hub Hui, is an Oahu business that works in much the same way as its hui colleagues. In doing so, it bears the extra financial and logistical burden of interisland transport, though a key difference is that it functions as an online grocery store rather than prescribing weekly boxes of vegetables and fruits.

CEO Claire Sullivan says it coordinates with 150 farmers and other suppliers to collate food in ports for eventual delivery to Oahu, using a freight-forwarding system she used while in a previous role at Whole Foods Market.

Otherwise, without such freighting solutions, it would be cost-prohibitive, Sullivan says.

The state appears to at least recognize that the conventional food supply chain ostracizes the small farmer, and that it’s smart to invest in food hubs and create programs that funnel local food into state agencies and schools.

But the supply chain remains an issue, as wholesalers and retail outlets demand volume and consistency on behalf of their customers — something only bigger farms can provide right now. Then there is the amount those middlemen – distributors, wholesalers, value-adders and customers – are willing to pay.

Just how much the average farmer in Hawaii receives in the conventional chain is uncertain due to lack of  data, but the USDA estimates the average American farmer in 2020 received 16 cents for every dollar spent on food. The middlemen get the lion’s share.

“That’s exactly what we’re trying to change,” Azizi said. “We’re completely changing who benefits from buying food.”

Azizi says 70 cents on the dollar is the norm for the approximately 1,200 farmers in Hawaii using food hubs. Even still, food hub sales grew almost 80% in 2020 and 24% last year, bringing their sales to $14.9 million.

According to Azizi’s draft master plan, over the next five years the food hubs would collectively contribute $5 million to the $50 million needed to increase production. Half the remaining $5 million would be split between county, state and federal governments, while the rest would have to come from philanthropic organizations, he says.

“Through this interaction with our farmers we’ve noticed that they actually start producing more food,” Azizi said. “Because once they get compensated fairly for the food, then they end up doing more of it and they feel part of the system.”

Farm Link Hawaii delivery person, Jimi Cortez unloads an early morning pickup of interisland farmed vegetables and more, offloading at the Farm Link Hawaii warehouse.
Farm Link Hawaii delivery person Jimi Cortez unloads an early morning pickup of vegetables and more, offloading at the Farm Link Hawaii warehouse in Kalihi. Cory Lum/Civil Beat/2022

At the end of the day, for a cooperative or food hub to succeed, profit still matters, according to Jesse Cooke, Ulupono Initiative investments and analytics vice president.

The difference is the level of profit food hubs are seeking, their willingness to truncate the supply chain and the level of transparency they have with the farmer.

“Farmers that sell their product to conventional distributors, a lot of times they don’t know where their product is being sold,” Cooke said.

Island Naturals is one Big Island business specializing in local produce. Thomas Heaton/Civil Beat/2022

Despite the apparent incompatibility of Hawaii’s supply chain and agricultural producers, it still works.

“You can get your product to where you want to get it,” Cooke said. “Is it going to be more costly in Hawaii and more complex? Yeah, but it can get there.”

But what exactly is hampering the local supply chain is another question, with a historical boneyard of decimated local industries.

Cooke is blunt about Hawaii’s food supply and its issues.

“The biggest problem with the supply chain is the need for shipping and imports and the expense it adds,” Cooke said. “That’s destroyed value chains or complete supply chains.”

For Hawaii ‘Ulu Co-op, the value adding is done in Kona, in an aggregation site where its starchy crops are turned into flour or ready-to-cook packs, among other things, which in turn deals with perishability issues in shipping.

But for Farm Link, as soon as products reach its Kalihi warehouse in Honolulu, they are separated and organized into a system to maximize efficiency for onward delivery.

That means sifting out spoilage and grading products by size, a process many small farmers cannot do or is simply out of their control, which is also a reason grocery stores might not take their product.

Farm Link Hawaii workers preparie orders to be delivered at their warehouse located in Kalihi.
Farm Link Hawaii workers prepare orders to be delivered at their warehouse in Kalihi. Cory Lum/Civil Beat/2022

“Certainly, for the chain grocery stores, that’s very challenging because they want the uniformity and they will often sell by ‘the each,’” Sullivan said. Selling “the each” — charging customers  by unit — is far easier in the continental U.S. because many mainland producers are able to grade themselves.

Still, Sullivan says, Farm Link maintains a 40% margin, but because it foots the supply chain costs, its farmers and producers keep 60 cents of the retail food dollar.

Cooke says Farm Link has been particularly successful in retail and marketing, while the ulu cooperative has succeeded in overcoming production obstacles.

Then there is MA‘O Farms on Oahu, he says, which since 2000 has developed its own strong brand, which is equally important in scaling up to both create and meet demand.

Co-founder Gary Maunakea-Forth says the demand has long outweighed supply. The farms’ organic produce is “hard to grow, easy to sell,” he says, but has found its way into several of the large grocery stores and up to 20 restaurants on Oahu.

The nonprofit has grown to potentially produce 480,000 pounds of food this year from 40 to 50 crops, and it has just broken ground on a new 13,000-square-foot processing facility.

Maunakea-Forth says its own supply chain is complicated but is divided about  70/30 between retail and wholesale outlets, though hurdles remain.

But as the organization continues to grow, its supply chain is evolving, he says.

Farm Link Hawaii's delivery person, Reagan Cline carries two boxes to a delivery in the Salt Lake area.
Farm Link Hawaii’s delivery person Reagan Cline carries two boxes to a delivery in the Salt Lake area. Cory Lum/Civil Beat/2022

Conversations around eating local produce and eating organic are often identified as luxuries, which food hubs are also aiming to address.

One government initiative has been the implementation of the DA BUX Double Up Food Bucks program, available to people who qualify for the federal Supplemental Nutrition Assistance Program, which effectively doubles local purchasing power for those on the program and increases farmers’ earnings.

And this is where food hubs have tried to address the accessibility gap, between low income areas and nutritious, local food.

For Farm Link, it means delivering the food to the customer, given the lack of accessibility to local food in local grocery stores, which is where Sullivan believes Hawaii farmers would prefer their crops being sold.

“But they don’t have the avenue. The supply chain doesn’t extend into those communities in meaningful ways,” Sullivan said.

And that should be of equal consideration, she says, because it’s also about ensuring good, local food gets to the customer no matter their income or location.

“Hawaii Grown” is funded in part by grants from the Ulupono Fund at the Hawaii Community Foundation and the Frost Family Foundation.