Laney: Plantation closing comes during good times

PO’IPU – Obviously, there is no opportune time for a sugar plantation to close

down.

But, the timing of Amfac Sugar Kaua’i’s announcement to cease

agricultural operations on the island comes at time when the economy is

otherwise robust, and the labor market is improving, according to a First

Hawaiian Bank consulting economist.

Dr. Leroy Laney, economics and finance

professor at Hawai’i Pacific University, speaking at the Kaua’i Chamber of

Commerce quarterly membership meeting and annual Kaua’i economic outlook

gathering at the Sheraton Kaua’i Resort here, said 400 jobs is not a lot,

similar to the number of jobs lost if a major hotel on the island underwent a

large renovation.

Only those hotel jobs would come back.

The land to

soon be removed from sugar by Amfac’s announcement is substantial, and federal,

state and local government officials, as well as private-industry personnel,

have mobilized to determine how to keep much of the land in

agriculture.

Where the Amfac lands are concerned, “It could be that

forestry is a solution,” said Laney. “It won’t employ lots of people, but it

will keep it green.”

It will be difficult to find a replacement crop or

crops for sugar that is as labor- and land-intensive as sugar, he

commented.

The remaining plantations in the state, Gay & Robinson at

Kaumakani, and Hawaiian Commercial & Sugar (HC&S) on Maui, were the

ones Laney figured would survive.

“I’ve always felt their advantage is

having the most fertile lands for sugar in the world,” Laney said of G&R.

“That will keep them in business.”

Maui’s sugar operations have a compact

shape, and parent company Alexander & Baldwin has put lots of money into

improvements at the Pu’unene mill, allowing the Pa’ia mill to close, he

said.

The diversification and consolidation of operations there are good

ideas that may keep sugar on Maui for quite some time, he said.

The state

and island’s major industry, tourism, fuels the strong Hawai’i economy, Laney

commented.

In its marketing efforts, the Kaua’i Visitors Bureau has

concentrated on niche markets, like golfers, and those seeking romance and

adventure.

“One reason for this targeting is to focus on length of stay

rather than sheer numbers of arrivals, and to emphasize quality rather than

quantity,” Laney said.

“It is hoped that higher-spending, longer-staying

quality visitors will alleviate some pressures in a small island environment

that can comfortably accommodate only so many visitors on-island at one

time.”

The presence of the U.S. Navy Pacific Missile Range Facility at

Barking Sands makes Kaua’i the island in the state second-most dependent on the

military, behind O’ahu, Laney said.

“It is hard to overestimate the

economic importance to Kaua’i of the Pacific Missile Range Facility on the west

end of the island. The range also imparts to Kaua’i its own comparative

advantage in attracting firms and development funding,” he

said.

“Experimental agricultural funding may gravitate to the Big Island,

high-tech money for incubator facilities or education may find its way to O’ahu

or Maui, but Kaua’i serves as a magnet for established firms that are connected

in some way as contractors or subcontractors to the missile range,” Laney

said.

Business Editor Paul C. Curtis can be reached at

pcurtis@pulitzer.net or 245-3681 (ext. 224).

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