John Dobovan is the founder and CEO of Maui Phoenix Farms LLC.
Also, let them live on leased ag land. And alter the current property tax structure too.
Legislative debate over which regulatory agency should oversee aquaculture ignores the elephant in the room. Thomas Heaton’s Civil Beat article on Jan. 19 detailed the ongoing tug of war between the Agribusiness Development Corp and the Hawaii Department of Agriculture for dominion over the future of Hawaii’s aquaculture industry.
While this is an interesting topic, it obscures the real problem. HAAA president and long-time aquaculturist Ron Weidenbach was the lone voice recognizing that what the industry needs most is investment.
Our company is a case in point. I put 10 years and my life savings into creating : Hawaii’s first rainbow trout aquaponics farm, producing both trout and organic baby watercress.
The facility was only one-third of an acre but we were able to produce at least a portion of over 200,000 meals annually with no chemical fertilizers, herbicides or pesticides. We produced beautiful organic watercress using processed fish waste as fertilizer. We recycled virtually all of our water and discharged zero waste.
But like so many other undercapitalized small businesses still working to secure financial footing, staying the course amid numerous natural disasters from the pandemic to storms while also testing and improving a novel production system proved difficult.
The Covid shut down hurt us badly. Our sales were cut by 75% overnight and our revenue plummeted while our rent and electricity costs increased. We received no support from either the state or county with those operational expenses: there was ample support for renters but not businesses.
When Maui County finally announced rent and utility support for businesses, it was limited to bars and restaurants. Farmers got zero.
And then a freak island-wide power outage in August 2022 cut off both electricity and water. We lost $60,000 worth of fish and crop production and, along with it, our lease. Ironically, we had just reached profitability and had far more demand for our trout and produce than we could possibly meet.
But that was just the first commercial test of our trout aquaponics system design. Our intent was to expand to full scale and use our farm as a model to create numerous small partner farms, spawning a new industry for Hawaii and producing millions of pounds of nutrient-dense food.
We had completed our initial research and development but had no room to expand and the property manager would not allow us to host farm tours or trout fishing at that location, which would have made us highly profitable. We already knew that we had to move on and I had been actively seeking capital partners.
As things now stand, we have all of our tanks and equipment, a skilled and dedicated core team, established customers, proven proprietary technology and huge market demand for our products but no way to build out a bigger farm. It appears that I’m much better at raising trout than capital.
Fundamental Changes Needed
We need to make some fundamental changes so that farmers who know how to care for the land can spend their time doing that — not putting together investment pitches.
We need to support our small farmers, because if there’s anything we’ve learned from more than a century of plantation ownership and the legacy of untended agricultural lands, is that corporate, unilateral control of our food system and natural resources threatens our chances for survival, as evidenced by the wildfires that devastated Maui last year. Agricultural lands, when properly managed, reduce the risk of wildfires, thereby saving lives while also providing food so that we can thrive.
We also need better jobs to keep our children in Hawaii. Modern, high-tech agricultural can offer that, while also stimulating our economy in ways that extractive businesses cannot. Hawaii imports at least 85% of our food, draining $6 billion out of the state annually.
And the dire reality is that too many of Hawaii’s food producers — farmers, ranchers and fishers — are old guys like me. It’s imperative that my generation pass on our knowledge and experience as well as our operations, so that future generations can thrive.
Here are some suggestions:
Alter the current property tax structure. Agricultural land needs to be used for agriculture. Our present tax system subsidizes speculation on agricultural lands, allowing the price of ag land to spiral out of farmers’ reach while irreplaceable ag lands are transformed into sprawling luxury estates.
Farmers must be allowed to live on leased ag lands. Current Maui County policy prohibits this, even in government-run agricultural parks. My fish are like my children. What parent puts their kids to bed and then drives half an hour to sleep in a separate house? Emergencies tend to happen in the dead of night and we have to be there. At the same time, our community has an acute shortage of affordable housing. Allowing farmers to house employees on-site relieves pressure on the rental market, reduces commuting-associated carbon emissions, protects against agricultural theft and increases the quality of life for farm families.
Farmers need greater access to capital. While the state does offer a very helpful agricultural loan program, loans are a terrible way to fund a startup (as I know all too well from experience). What is needed is equity investment. There is a lot of buzz about high-tech investment in Hawaii with spectacular amounts of federal and state dollars combining with private capital to fund high-tech startups. But none of that capital has gone to agricultural producers. I’m a firm believer in the need for better technology; our company is developing a radical new aquaculture design that can transform the industry.
We cannot meet the world’s increasing food demand without new and improved technology. But if tech investment is focused entirely on growing capital rather than food, what are we going to eat?
Tech is the business of today. Food is the business of the future because there is no future without food. Many people talk about these problems. Some of us are actively working on them, especially farmers because we are the hardest working people you’ll ever meet. We’re not asking for a hand out, just a hand up.
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I'm remiss I got here a bit late. But these two are just so important. And they really go hand in hand. There's a lot of backlash to gentlemanly farms. And they are a problem, to the extent that they are a problem. But the whipping boy for all of those problems ends up being the common farmer. The logic somehow becomes if you've got an overpopulation of gentlemanly farmers, go have the full time farmers buy a second plot of land in the city to camp on. It's maddening. It leads to the gentlemen having two homes, the farmers none, and four plots of land producing nothing.At the end of the day, the only way to fix this is through tax structures. Tax ag land in such a way that it devalues the asset class from an investment perspective. And also, allow residential uses of ag zoned land, but tax them (& resort/commercial uses) at nosebleed rates which only get offset by agricultural revenue from the same parcel. Actual farmers will have no problem generating tax offsets. Those not producing will have financial incentive to start. Those rich enough to not care, will pay $$ taxes.
heluhelu·
11 months ago
If farming was a better business opportunity you would have greater access to capital. Simple as that.
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