Some Kaua’i papaya farmers are leaving their fruit to rot on trees, rather than take a loss when harvesting, treating and shipping costs add up to more than they can get for their product at market. The math is quite
Some Kaua’i papaya farmers are leaving their fruit to rot on trees, rather than take a loss when harvesting, treating and shipping costs add up to more than they can get for their product at market.
The math is quite simple: Farmers now get 60 cents a pound for their fruit, mostly in southern California markets. It costs 28 cents to 35 cents a pound to treat the fruit to eliminate fruit flies (necessary to gain entry into California markets), and 30 cents a pound to fly fruit to the mainland. Each cardboard box that holds 10 pounds of fruit costs 50 cents. That 63 cents to 70 cents a pound in expenses does not include cultivation and harvesting costs.
Even Irrigation Technology Corp., which built its own treatment plant in Hanama’ulu to process its fruit grown in Po’ipu, couldn’t make a go of it in today’s market.
“They’re less than 50 percent of the prices a year ago, and they weren’t very good a year ago,” said company president Michael D. Farrell. “I mean, you’re getting about $6 a box on the mainland (for a 10-pound box of papaya), and there’s $3 in shipping and $3 in packing and treating,and 50 cents for the box. You’re already in the hole before you’ve grown it.”
So Irrigation Technology has quit growing papaya on the Po’ipu land it leased from Alexander & Baldwin, and its Hanama’ulu facility is for sale, Farrell said. The company still employs 40 people on Kaua’i in its irrigation operations.
“Farming is a tough gig in the islands. It really is,” Farrell said.
Competition from Brazil, which has taken to growing the same Sunrise variety Kaua’i farmers have been harvesting for 30 years, has depressed the west coast price Kaua’i farmers used to enjoy for the fruits of their labors, said Bill Spitz, agricultural specialist with the county Office of Economic Development.
“It costs them more to harvest” than leave the fruit on the trees, said Alfredo Lee, executive director of the state Agribusiness Development Corporation. “The papaya pricing has dropped to a point that is not even profitable for the growers to export.”
Many farmers, when faced with the added costs of treating and shipping fruit, turned instead years ago to on-island and in-state markets for their product. That worked to some extent, but the local market is much smaller than the mainland one.
Bill Jessup, who operates The Koloa Packing Co. (the disinfestation facility near Lihu’e Airport), said a flood of red-flesh papaya from Big Island and competition from Brazil and Belize have depressed mainland markets. Depressing local farmers further is the fact that through an international agreement, Brazil, which has more fruit flies than Hawai’i, doesn’t have to treat fruit before sending it to California, Jessup explained.
Further, he said, Brazil’s government subsidizes growers’ freight costs, making it even less expensive for Brazilian farmers to get their fruit to California markets.
In the meantime, Agribusiness Development Corporation has applied to take over the lease of the tropical fruit disinfestation facility near Lihu’e Airport, which is owned by the University of Hawai’i and leased to Koloa Packing.
It’s tough for a small businessman to make a go of things at the disinfestation facility when three-fourths of the growers are behind on their payments for treatment, Jessup said.
“We can’t operate that way. And the mistake I made initially was to grant credit,” a $100,000 blunder that is taking legal and collection actions to attempt to counter, he said.
Still, the plant is treating about 100,000 pounds of fruit a month, and is on the verge of being certified to treat fruit for shipment to Japan, a huge and lucrative market, said Jessup.
Once the Japan market opens, more Kaua’i farmers will plant papaya, he predicted.
Currently, the disinfestation plant can treat only papaya. But modifications are in the works to retrofit the facility to handle other types of fruit, which now fetch a better price than papaya.
Jessup will have a word of advice for the new operator, when one is selected: Don’t offer credit to farmers.
Mike Strong, whose Kahili Farm Nursery sends between half and two-thirds of all papaya treated through the plant, added another bit of advice: Turn away the first unscheduled fruit presented for treatment.
While he said Agribusiness Development taking over the lease (which still needs to be approved by the UH Board of Regents to operate the disinfestation facility is a good thing, Spitz has some concerns.
“The difficulty will be in how you get someone in there to operate it, and how you do it,” he said.
Roy Oyama, president of Kaua’i County Farm Bureau, said the bureau is working with various entities to ensure the viability of the disinfestation plant and papaya industry on the island.
Keeping papaya farmers in business helps the entire island and agricultural industry, he said.
“If we can’t do crops profitably, no one benefits,” said Oyama. “This is a whole community event.”
The plant can eventually become a treatment facility for crops other than papaya, he said.
“So I’m trying to stabilize first of all papaya production; its price to the grower as well as to the plant, so both sides survive,” Oyama said. “And in the meantime, additional crops can be promoted or grown in the island, like rambutan, longan, lychee, mangoes.
“We know that if we can have this niche market opening up, we can benefit from a stronger agricultural direction or economy for Kaua’i, because that’s money staying on the island instead of money going out.”
Though Strong likely could benefit most from the opening of the Japan market, he doesn’t plan on aggressively pursuing it. He admits to knowing little about the Japanese market, except that it has its problems, too, such as finding suitable marketing people in Japan.
“The little bit of time and energy I’ve got I’m devoting to expanding my pineapple business and my tree crop, which is longan, rambutan, mangosteen, rather than trying to learn a whole bunch of stuff about the Japanese market,” Strong said.
It would be too much like starting over, when he can concentrate on things he’s been doing for many years, he added.
Lee, of Agribusiness Development, said his agency doesn’t want to operate the plant.
“Our intention is to keep the facility open and make sure that there’s a facility for the farmers, more than anything else,” Lee said. “Because we don’t want the papaya industry to suffer.”
The state has several entities interested in running the facility, Lee said. Agribusiness Development may be able to help the operator with technical and marketing assistance, he added.
“We want to help the next operator to increase the volume and be successful. That’s our intent,” he added. “One of the issues is not enough volume going through” the plant.
Allan A. Smith, Kaua’i member of the Agribusiness Development board, said the Farm Bureau could likely take a lead role in subleasing the facility from Agribusiness Development.
Jessup said the state agency (part of the state Department of Agriculture) might be able to go the self-insurance route, saving $1,000 a month, and negotiate a better lease rate with the university, further giving the plant a better chance for survival.
Mark J. Andrews, associate director of the university’s Office of Technology Transfer and Economic Development, said the university would not charge Agribusiness Development rent.
Without the plant, there is no agriculture on Kaua’i, Strong said. What the island needs is an irradiation facility, which can treat papaya and other fruits for mainland and international export, he concluded.
Staff Writer Paul C. Curtis can be reached at mailto:pcurtis@pulitzer.net or 245-3681 (ext. 224).
