These 2 Companies Are Putting Big Money Into Hawaii’s Agricultural Future. Will Their Bets Pay Off?
A pair of companies backed by a billionaire and a pension fund are trying to revitalize fallow farmland in the state.
02-15-21
On Lanai, where shreds of black plastic in the soil are the last vestiges of the island’s defunct pineapple fields, a sliver of long-abandoned farmland is getting an encore — and a reinvention.
In six high-tech greenhouses, a futuristic vision of food-growing is underway — one in which nutrient density and flavor are automated.
It doesn’t matter that the red dirt below the greenhouse is eroded or peppered with plastic that once served as Dole pineapple plantation’s weed control. In fact, the hydroponic tomatoes and leafy greens grown here by Sensei Ag don’t depend on soil at all.
The ag-tech company founded by Larry Ellison, the Oracle founder who owns nearly all of Lanai’s acreage, and Dr. David Agus, a physician, and medical researcher, is pioneering tools to produce affordable food in places like Lanai that — despite its history as an agricultural plantation — lack traditional farming essentials like water and fertile soil.
Sensei Farms Lanai, a two-acre indoor farming pilot project by Larry Ellison’s Sensei Ag, produced 35,000 pounds of produce in less than three months last year. Sensei Ag
In doing so, the company is redeploying a scrap of neglected farmland into active agriculture in an attempt to buck an unsettling trend: Hawaii imports more than 85% of its food.
Hawaii has tens of thousands of acres of fallow former sugar and pineapple plantation lands. There are many reasons why this land isn’t being used for farming — inadequate infrastructure, soil erosion, the sky-high price of agricultural real estate. All of these challenges and more make growing food on old plantation acreage unaffordable for most farming operations.
Putting more of this stagnant acreage into food production, however, is a worthwhile goal, experts say, because it could help the state wean itself off of a reliance on the cargo ships and planes that deliver food supplies to the islands.
“When you bring up Hawaii to anyone anywhere on earth, what they think of is paradise on earth,” said Vincent Mina, president of the Maui Farmers Union United. “But what paradise do you know of that brings in 85% of its food?”
State Efforts Have Fallen Short
Re-fashioning former sugar and pineapple plantations into viable food farms is what the Hawaii Agribusiness Development Corp. was designed to do.
However, a scathing state audit in January said that the 25-year-old state agency has so far failed its mission because “the economic void created when plantations ceased production remains mostly unfilled.”
Larry Jefts, one of the state’s largest produce producers, recently expanded his farm footprint with access to ADC lands in Central Oahu that had lain fallow since Del Monte stopped pineapple production nearly two decades ago.
The problem, according to Jefts, is not that the ADC is inert. It’s the state’s poor land use policy that has allowed some farmland to be developed, as well as society’s lack of commitment to local agriculture.
The Agribusiness Development Corp. has failed in its mission to reinvent Hawaii’s agricultural sector, two recent reports say. Office of the Auditor
“The problem is there’s no will here,” Jefts said. “Good farm ground is coming out to go into solar energy farms because the people who own it can make more money in solar. If they charged that much money to the farmers, the farmers would fail and imported foods would take over.”
Yet while Jefts is farming on a portion of the 1,200-acre Whitmore Project — land left vacant by Del Monte in 2004 and then acquired by the ADC for local agriculture in 2012 — hundreds of acres attached to the project remain fallow almost 10 years later.
That’s in part due to the time-intensive, bureaucratic process of securing money, permits, and contracts to build and repair the infrastructure required to make more of the acreage farmable, said Sen. Donovan Dela Cruz, a champion of the project.
It’s one thing to acquire the land, he said. But it’s another challenge entirely to ready it for farmers who need water, roads, electricity for refrigeration, and food safety-compliant facilities in order to make their businesses financially viable.
“With our state, there’s so many good intentions but just no money to put through to implementation,” said Kirsten Oleson, associate professor of ecological economics at the University of Hawaii College of Tropical Agriculture and Human Resources.
“If we’re serious about doubling production of food that is grown and eaten here, it would take some time to rethink policy and some pretty large and potentially risky investment that the state’s coffers don’t have.”
While state efforts flounder, a pair of new agriculture companies backed by a billionaire and a pension fund are stepping in with lofty goals to revitalize fallow farmland with diversified agriculture operations that aim to help Hawaii wean itself off of imported foods.
A Billionaire’s Bid To Boost Food Security
On Lanai, Sensei Ag is sidestepping many of the traditional high-yield farming requirements: lots of land, lots of water, lots of hard manual labor.
Founded by Oracle billionaire Larry Ellison, left, and medical researcher David Agus, Sensei Ag’s goal is to grow food that is more sustainable and nourishing than if it were farmed traditionally.
Sensei Ag
Although the company’s two-acre greenhouse farm is just a scrap of the 20,000 farmed acres that earned Lanai the moniker of the world’s largest pineapple plantation, yields from hydroponics can be far greater than those from conventional soil farming.
Sensei Ag CEO Sonia Lo projects the company will harvest 500,000 pounds of food for statewide consumption in 2021, including Swiss chard, basil, tomatoes, cucumber and eggplant.
“What we’re doing is we’re competing against the likes of Organic Girl that’s coming in from California or Earthbound Farms,” Lo said. “It’s pretty straightforward given that our stuff is a day old or two days old by the time it gets on a shelf as opposed to two weeks or three weeks old.”
Hydroponic growing is capital-intensive, however. Sensei Ag’s approach benefits from the fact that it’s bankrolled by Ellison, one of the richest people in the world.
Lo declined to reveal the amount of financial investment it took for the Lanai pilot project to achieve its inaugural harvest last October, but she acknowledged the role of Ellison’s wealth.
Yet while the cost to build a state-of-the-art greenhouse is out-of-reach for most farmers, indoor farming offers growers a chance to capture significant long-term financial savings since producing food this way requires significantly less land and water than traditional outdoor farming.
According to Lo, Sensei Farms Lanai requires about 10% of the amount of water it would take to produce a similar harvest in the dirt.
With this in mind, Sensei Ag’s mission includes efforts to make greenhouse farming more accessible. The company is aggregating risk assessment data in hopes that it will encourage banks to finance indoor growing mechanisms such as greenhouses and vertical farms. The company is also writing a playbook for people who want to build a successful indoor farm business, Lo said.
The rise of this kind of high-tech, high-yield farming could be a key to making Hawaii-farmed foods more competitive, according to Jesse Cooke, vice president of investments and analytics at the Ulupono Initiative.
“Using a hydroponic system, you could guarantee that every week you would have the same amount of quantity and the same quality (of produce) — and that’s what you need to sell to a large grocer,” Cooke said. “A lot of outdoor operations can’t guarantee that because they’re at the whim of nature itself.”
Brian Miyamoto, executive director of the Hawaii Farm Bureau Federation, agrees that indoor farming could be a game-changer — if Hawaii farmers can figure out how to raise enough capital to build the infrastructure without sabotaging future profits.
“We can grow a lot of things here in Hawaii as far as food products,” Miyamoto said. “What we struggle with is doing it competitively — that’s why we import so much.”
Hawaii can’t rely on billionaires to make the upfront investment in high-tech indoor farming, Oleson said. Rather, the state needs to follow in the footsteps of other countries that enacted public policies to encourage this kind of agriculture.
In places like Israel and the Netherlands, high-tech greenhouses are important food production tools, Oleson said.
Beyond policy and economics, Oleson said there are aesthetic and cultural considerations associated with scaling up indoor farming in the islands.
“You’re not looking across rolling green landscapes, you’re looking at lands with big infrastructure on it so there’s sometimes social pushback,” Oleson said. “I’m not a Native Hawaiian, but I would be very curious to know the response of the local community to that kind of agriculture because it’s very divorced from the earth.”
Will Mahi Pono’s ‘Serious Amount Of Money’ Pay Off?
On Maui, a partnership between a California farm management company and a Canadian pension fund is producing food on fallow land resulting from the 2016 closure of the state’s last sugar grower.
Since Mahi Pono bought 41,000 acres of Hawaiian Commercial & Sugar Co.’s former sugar cane fields in 2019, the company has begun growing some of Hawaii’s top food imports — potatoes and onions — in hopes of winning over some of that market share.
Mahi Pono’s mission to produce foods that Hawaii imports heavily and that are agriculturally possible to grow here is a smart one, according to Oleson. But she said it could be difficult for the company to compete with the price point for potatoes and onions imported from the mainland.
In 2016, Hawaii’s last remaining sugar grower shut down an operation that had run for 146 years. Now the 40,000 acres are owned by Mahi Pono, the marriage of a California farm management company and a Canadian pension fund. The company is growing produce with plans to reduce the state’s reliance on imports. Courtesy: Mahi Pono
It might also prove hard to convince consumers to pay more for locally grown potatoes and onions as opposed to more perishable produce.
“Potatoes and onions can sit on a boat and the quality doesn’t decline quite as fast, but all of us know what happens when you buy a box of spinach from Costco and if you don’t eat it that night it turns to slime,” Oleson said. “So the concern is growing foods locally where the freshness really matters.”
But Mahi Pono is growing more than just root vegetables. The company planted over a half million avocado and breadfruit trees, as well as rows of trees to shelter crops from the wind. The company plans to plant its 1 millionth tree by the end of June, according to community relations director Tiare Lawrence.
The company is also growing produce ranging from tangelos and finger limes to broccoli and eggplants, and it’s leasing affordable land and water to small farmers for an annual fee of $150 per acre.
Ultimately, Mahi Pono’s staple crops will be citrus, papaya, macadamia nuts, and coffee, Lawrence said.
And while the company is exporting papayas to Canada, and eventually plans to export coffee, macadamia nuts, and citrus to markets outside the state, the majority of the food produced by Mahi Pono will feed Hawaii’s people, Lawrence said.
“I personally think these lands can be brought into production,” Lawrence said. “We’ve seen it across Hawaii where farmers have been able to take former sugar and pineapple lands and turn it into a thriving farm and I refuse to entertain doomsday scenarios.”
Mahi Pono is growing red, yellow, and white potatoes with the goal of stealing away some of the Hawaii market share from mainland-grown potatoes. Courtesy: Mahi Pono
But the farm enterprise faces many challenges.
With an average wind speed of 30 miles per hour in the Central Maui plains, there are erosion issues, as well as crop damage from pests, deer, and pigs.
“We really can’t plant a field unless we fence it in, so that adds to our costs,” Lawrence said.
There’s also the problem of the former plantation’s aging, outdated infrastructure.
“Mahi Pono has spent a serious amount of money in updating the irrigation systems and making repairs to wells,” Lawrence said.
If Mahi Pono can surmount these challenges and find success, Cooke of Ulupono said the operation will be an example to follow.
“If they can get it up and running, that could be one of the hugest transformations that Hawaii has seen, especially going towards local food for local consumption,” Cooke said. “The worry is that it doesn’t work and somehow the land gets zoned residential and a housing development goes up.”
“Hawaii Grown” is funded in part by grants from the Ulupono Fund at the Hawaii Community Foundation, the Marisla Fund at the Hawaii Community Foundation, and the Frost Family Foundation.
Brittany Lyte is a reporter for Civil Beat. You can reach her by email at blyte@civilbeat.org or follow on Twitter at @blyte
Use the RSS feed to subscribe to Brittany Lyte's posts today