KEKAHA — The biotechnical seed engineering industry generated $105 million in gross domestic product on Kauai in the 2015-16 crop year, according to a report released last week by the Hawaii Crop Improvement Association.
That’s including multiplier effects, and is part of the $323 million in total economic impact the seed industry has had on Hawaii in that crop year.
“It seems to me, looking at the data, that this is the new normal for the industry,” said Paul Brewbaker, owner of TZ Economics, and the economist who developed the report.
As it approaches its 50-year mark of existence in Hawaii, the seed industry’s value has dipped from $240 million at its peak in 2010-12, and is now sitting at around $150 million in the crop year ending in 2016.
Brewbaker said the decline in the industry’s value has to do with two different factors: the age of the industry itself, and the recent global commodity price decline.
The seed industry climbed in value from the 1970s until just after 2010, as it grew as an industry. Once the industry matured, the increasing value leveled off.
The second factor, particularly the drop in corn prices by nearly half, had an impact on the seed industry’s bottom line because the demand for corn seed dropped with farmers when corn prices fell.
“The demand for seed probably has been re-scaled downward, but the R&D (research and development) part of the picture is less changed,” Brewbaker said. “Having developed genetic improvements, there is a market for those improvements — farmers want the more vigorous varieties if they can get their hands on it.”
In Hawaii, the seed industry occupies 23 percent of all agricultural activities, based on 2014 estimates. Total seed out-shipments from Hawaii totaled 7.4 million pounds in the 2015-16-crop year and was down about 27 percent from the 10.2 million pounds during the peak years.
In 2015, the industry provided 2,110 jobs in Hawaii. Taking into account the economic chain of events surrounding products created by the seed companies, the industry provided 2,758 jobs in 2015.
On Kauai, the seed industry employed 927 people in total.
The report comes as good news for HCIA, according to Bennette Misalucha, executive director of the organization.
“Despite the many challenges that the industry has faced, the report demonstrates that the seed industry continues to positively impact the state, benefiting not only Hawaii’s farming sector, but also the economy overall,” Misalucha said.
While the seed industry has had an economic impact on Hawaii, critics say there’s been more than just money created on the archipelago.
“The impacts of the chemical corporations on Kauai, and across the island chain, have been devastating,” said Jeri Di Pietro, of Hawaii SEED. “It has perpetuated the mono-crop culture and it gives nothing to the community.”