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Could a 10 percent shift in where Hawaii gets its food really add almost $200 million in state revenue and create more than 2,000 jobs?

That’s the claim made by the Republican candidate for governor, James “Duke” Aiona, in a on his campaign website, Sept. 23.

“If we replaced just 10 percent of the food we import with locally grown food, the shift would generate an estimated $188 million in annual sales and create 2,300 local jobs,” Aiona says.

We contacted the Aiona campaign to see how they calculated their numbers and they directed us to Matthew Loke with the .

Loke told Civil Beat that, “the statement is correct,” and provided to back up his claim.

The study, entitled, “Economic Impacts of Increasing Hawaii’s Food Self-Sufficiency” is on the Dept. of Agriculture’s website. It is written by Loke and a colleague, PingSun Leung.

The report says: “Assuming that 85 percent of the food we consumed is imported, this translates to $3.1 billion leaving our state to support agribusinesses elsewhere. If we could replace just 10 percent of these imported foods, assuming we have the available and appropriate resources and infrastructures for such an expansion, it would amount to some $313 million, or $94 million at the farm-gate, assuming a 30 percent farm share. Taking into account the multiplier effects, this $94 million would generate an estimated economy-wide impact of $188 million in sales, $47 million in earnings, $6 million in state tax revenues, and more than 2,300 jobs. This is not a trivial amount.”

There’s a lot of numbers in that statement. So, we’ll walk through this step-by-step.

First, the 85 percent figure that Loke cites in his report is from the , a Colorado-based pro-sustainability group that hopes to “map and drive the transition from coal and oil to efficiency and renewables.” The figure came from a by the institute and has been used by other government sources.

However, Loke’s report admits that coming up with a completely accurate figure of how much food Hawaii imports is close to impossible.

“For example,” the report says. “While customs data provides fairly disaggregated imports of various food items from foreign sources, interstate trade data is rather crude and comparable with the customs data. Furthermore, it is an enormous, if not impossible, task to convert data consistently from the various sources to a common point in the supply chain.”

For what it’s worth, the Rocky Mountain Institute figure does appear to be the best-guess-estimate.

The next figure worth talking about is the $3.1 billion that Loke says represents the 85 percent of imported foods. The claims in Aiona’s statement hinge on this $3.1 billion. If this figure is askew, then it would be impossible to estimate job creation or added local food sales.

The figure, the report says, comes from a five-year-old survey measuring “Annual total food expenditures” in Hawaii. The table below is included in Loke’s report.

The BLS findings aren’t exactly fresh, but the source is credible and the math is correct. Expenditures for food in Hawaii came to $3.7 billion between 2004 and 2005, and 85 percent of that is $3.1 billion.

The rest of the math seems to fall in line with the $3.1 billion estimate.

But what about the “multiplier effects” the report discusses?

The report explains the multiplier effect by giving an example of its application: it says that if you purchase $40 of local produce as opposed to imported produce, and calculate a 25 percent farm share (the farm’s cut of the profits), the local farmer could increase his/her production and sales by $10. The report says that with that added $10, the farmer will purchase additional needs like water, fertilizer, seeds, energy, labor, etc., the bulk of which would come from other local markets. This has a general stimulating effect on Hawaii’s economy by an “indirect impact resulting from the initial direct change of $10 increase in sales of this farmer’s production.”

That all makes perfect sense, even if it is simplified. The report acknowledges that it takes liberties with the multiplier effect, saying in the footnotes that “we are assuming that this farmer has the capacity to increase the production level and still stay profitable at the prevailing farm-gate price. We also assume that the retail price of the local produce is the same as the imported produce.” That’s a lot of assumptions, but for the sake of not being too picky, we’ll say that the multiplier effect used in this way is rudimentary but effective in explaining how buying local might stimulate the economy.

The report goes on to use this method to conclude that Hawaii could gain $188 million in sales with a 10 percent increase in local purchases. Again, it isn’t exactly a precise science but it seems relatively understandable how Loke could arrive at this figure. We’ll give Aiona the benefit of the doubt here.

Finally, how about 2,300 jobs? That seems even more difficult to prove.

The report explains how it came to this figure by using the .

“An increase in the final farm-gate sales of $1 of locally grown fresh vegetables will generate a total of $2.06 in sales, $0.54 in earnings, and $0.078 in state tax revenues throughout the economy,” the repot says. “The employment multipliers are in total jobs per million dollars of final farm-gate sales increase. For example, a million-dollar increase in final farm-gate sales of locally grown fresh vegetables will generate about 26.3 jobs.”

The table below represents the economic multipliers for food and agriculture in Hawaii.

Fair enough. Input-output models are used to anticipate economic trends and even terrorist attacks by government.

But even the report notes that its calculations assume very narrow and specific scenarios.

We can’t fault Aiona for using a government study (that uses other government studies) to back up his statement.

Can we call Aiona’s claim false? Or even slightly misleading?

No.

As far as his statement is concerned, he got his facts from a credible source under the impression that those facts were accurate.