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| While CTAHR research has shown that Hawaii’s residents and visitors alike place a high value on agriculture’s “pretty face,” planners and politicians find aesthetic preferences difficult to factor into their considerations—they need numbers. With some people dismissing agriculture in Hawaii as “dead” with the passing of “King Sugar,” CTAHR’s economists have looked at the numerical data and asserted that rumors of agriculture’s demise are unfounded. Recent analysis by PingSun Leung of the Department of Molecular Biosciences and Bioengineering, collaborating with Matthew K. Loke of the Hawaii Department of Agriculture, is now available in a detailed report, Agriculture’s Contribution to Hawaii’s Economy—An Update, which is also summarized in a brief, 1-page document. |
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| What is agriculture? Agriculture is often misunderstood as being only farming. Agriculture is actually an intricate economic system involving agricultural producers, processors, manufacturers, and marketers. The list given here shows the main areas that contribute market data to build a picture of agriculture’s role in Hawaii’s economy. And the pie charts below show the relative contributions of the main areas of agricultural market activity to each of four ways of looking at agriculture’s contribution to Hawaii’s economy. |
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| What is the contribution of agriculture to Hawaii’s economy? Agriculture generates $2.4 billion, 4% of total business sales in Hawaii’s economy, and 5% of Hawaii’s employment (38,350 jobs)—see the table below. Thus agriculture is a significant contributor to Hawaii’s labor and revenue base. And although the overall value of agriculture declined as sugar production ceased, expansion of opportunities for agricultural uses other than sugarcane has resulted in an increase in the various agricultural enterprises often referred to as “diversified agriculture.” Between 1992 and 2000, the sales value of diversified agriculture increased at an annual rate of 3.8%, as shown in the graph below. |
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| Are there contributions that could be attributed to agriculture but aren’t because of how the economic appraisal is determined? Yes, there are many contributions of agriculture not included as “agriculture” in most economic appraisals. Some examples CTAHR economists consider include |
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| The value people place on “agriculture’s pretty face” is illustrated by attitudes toward open space. CTAHR economists Linda Cox and Gary Vieth, in the Department of Natural Resources and Environmental Management, have explored how “public” valuations can be accounted for. Their survey, summarized in What is Oahu’s Open Space Worth, described residents’ opinions about how lands formerly planted to sugarcane should be used. Most people thought that keeping those lands in open space (that is, similar to the way they appeared when planted to sugarcane) is important or very important. Almost everyone surveyed wanted at least half of the sugarcane lands kept in open space, and over half wanted all of those lands kept in open space. Less than one in ten favored development of the lands for nonagricultural uses. In another document, Resource Use Decisions: Public vs. Private Evaluations, these researchers explored how “nonmarket” values of agricultural lands and activities impact our economic landscape. Then, in The Importance of Open-Space Value for Land-Use Policy in Hawaii, they proposed a way for planners to place a “market,” dollar value on the sentiments of Oahu’s residents regarding the value of open space. CTAHR’s economists have shown, in their different approaches to evaluating agriculture’s role in Hawaii’s economy, that agriculture is poised to play an expanded role. Statewide, diversified agriculture is providing more jobs, more opportunities, and increasing its contribution to the gross state product. On Oahu, residents and visitors have declared their preference for keeping lands open and “green.” And agriculturists themselves keep looking to CTAHR’s economists, including Leung, Cox, and Vieth, as well as Stuart Nakamoto (Department of Human Nutrition, Food, and Animal Sciences) and Kent Fleming (Department of Tropical Plant and Soil Sciences), for ways to improve their operating efficiency and profitability with the help of cost-of-production analysis guidelines and spreadsheets. Policy makers need to weigh many economic, social, and environmental considerations. Peoples’ valuations of their environment and lifestyle can be considered as important as “hard” market data. Oahu’s citizens’ preferences for how they want central Oahu to appear may affect how the island’s water resources are allocated, which may affect opportunities for growth in agricultural entrepreneurialism and employment, and in import substitution and expanded self-sufficiency in Hawaii’s agricultural production. CTAHR’s agricultural economists continue their contribution to Hawaii by showing how public preferences and agricultural activities exert a dynamic influence on Hawaii’s economy. |
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| *GSP = gross state product |
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Posted March 4, 2002
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