GMO, by the numbers

LIHUE — Seed companies on Kauai are a political “hot potato” but according to the numbers they are majors employers that bring a stabilizing effect to Kauai’s economy.

Seed crop industries have been present in the state for half a century, and there are currently 45, including Kauai-based parent seed corn operations, DuPont Pioneer, Syngenta, DOW AgroSciences and BASF.

The company’s have an estimated $220 million annual economic impact, said Kauai Chamber President and CEO Randy Francisco.

A recent Farm Bureau study found that that the seed industry employs about 1,400 people in Hawaii, and accounts for about one-third of the contribution made by agriculture to Hawaii’s economy,” said J. Kenneth Grace, Ph.D., Interim Associate Dean and Director for Research at the College of Tropical Agriculture and Human Resources, University of Hawaii at Manoa.

“Beyond that, they contribute to agricultural diversification and help to keep land in agriculture that might otherwise be used for other, nonagricultural purposes,” he added.

The Kauai Chamber of Commerce credits seed corn and coffee with diversifying the agriculture industry of the island since the decline of sugar and pineapple.

There are significant but small numbers of nurseries and macadamia nut growers, but GMOs as an industry offer stability and steady demand to keep residents employed, according to the KCC annual report.

Downturn ahead?

Seed industry activities generate $29.4 million in tax revenues to the state. While the annual growth rate has exceeded 8 percent for over a decade, company officials say they expect a cyclical downturn to cut output by a third in the coming years.

The seed companies collectively operate on less that 10 percent of the available agricultural acreage in Hawaii — or roughly 25,000 of 280,000 acres, said Steven Lupkes, Kekaha Research Station manager for BASF. They farm on about 7,000 acres at any given time as part of an integrated pest management program.

Mark Phillipson, spokesman for Syngenta on Kauai, said the seed industry is entering a slow down  in part from industry improvements and consolidation of trait development crops with fewer rows and less water, land and labor, he said.

“It doubled every year and now I’d have to say that the last two years have leveled off,” Phillipson said.

Job count

The Hawaii seed industry employs 1,397 individuals, according to the latest Thomas Laudat and Kasturi Prahlad “Hawaii’s Seed Crop Industry: Growth, Current and Potential Economic and Fiscal Contributions” report in February. This is nearly 100 less than was reported in 2009.

Laurie Yoshida of DuPont Pioneer’s Waimea Research Center and Kekaha Parent Seed locations, said her company has about 350 full-time employees and 150 temporary seasonal employees at its peak statewide, and around 160 full-time employees and 100 seasonal employees on Kauai.

“DuPont Pioneer uses local businesses for supplies, contractors, vehicle maintenance, facility maintenance, visitor housing, shipping and other assorted service needs,” Yoshida said.

The neighbor island seed companies have comprised 12.4 percent of ag-related jobs since 2009. They maintain 20 percent growth with earnings at 11.1 percent higher than the state average, according to the Laudat report.

“This report doesn’t break out Kauai data but we estimate that Kauai accounts for about one-third of the financial impact,” Phillipson said.

The report notes that direct annual contributions of the seed companies to the Hawaii economy from expenses alone equals $239.4 million, and 33 percent of ag-related contributions. Seed industry labor income equals $69.2 million and 28.1 percent of ag sector labor income.

Stable industry

Lupkes, who also chairs the Kauai Workforce Investment Board, said the stability of the industry was apparent during the economic downturn.

The unemployment rates for Kauai in 2010 and 2011 were 8.5 percent and 6.5 percent respectively, Lupkes said. The Waimea and Kekaha unemployment rate by comparison was significantly lower at 4.5 percent.

“The major employers on the Westside would be (Pacific Missile Range Facility), the hospital and the seed industry,” Lupkes said. “Low unemployment affects other small businesses like restaurants, shops and other small retailers. Small businesses were not impacted as severely in Waimea and Kekaha during the recession as they were on other parts of the island.”

George Costa, the county director of the Office of Economic Development, said the seed companies are an important part of Kauai’s economy. Not only do they provide hundreds of jobs, but those jobs are diversified between skilled, unskilled, management and technical and scientific positions, he said.

“They also support other businesses on Kauai that provide goods and services to the seed companies,” he said.

Costa estimates that seed companies contribute more than $1 million to maintain the irrigation systems on the west side.

“Having this stable base in one aspect of agriculture allows us to focus on expanding other types of ag, such as through the Kauai Grown program and our efforts to create a Kauai ‘food hub,’” he said. “Seed companies currently utilize only roughly 20 percent of our available ag lands, leaving us plenty of room for organic, conventional farming, ranching, Aquaculture, floriculture, and more.”

Economic impact

Dist. 16 State Rep. Dee Morikawa said this is the “hot potato topic” for the west side community she serves. The seed companies are the major employers and an economic driver in the community.

The seed companies continue to fall under fire regarding potential pesticide hazards that residents and others say impact health, Earth, and long-term property values of farms and homes.

“There is no doubt that the seed companies contribute to our economy,” Morikawa said. “However, people need to be assured that their health isn’t being affected by seed company operations.”

Mayor Bernard P. Carvalho Jr. said the seed companies have contributed to the economic and social well-being of Kauai for decades.

The seed companies fill a void in demise of the sugar plantations, with employees who are our families, friends and neighbors, he said.

“Recognizing the importance of the benefits they provide, while seeking to insure best practices are employed at all times, is the balance that I’m hopeful we can reach through the current discussions relating to their business,” he said.

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