$144 MILLION/YEAR TO HAWAII’S ECONOMY

Seed Crop is Hawaii’s Third Largest Agricultural Commodity; Roughly equivalent to Sugar, Pineapple

Honolulu, HI (May 25, 2006) – Seed crop is the third largest commodity in Hawaii’s agricultural economy, where most segments are stagnant or in decline, according to a new economic analysis released today at the May meeting of the Hawaii Economic Association, held at the Plaza Club.

The primary conclusion of the economic study is that the Hawaii seed industry makes significant economic and fiscal contributions to the state’s economy. The industry spends $59 million annually to operate with expected average annual capital expenditures of $14.3 million over the next 10 years, and it has a projected capital expenditure budget of $142 million during the same period. These expenditures generate $144 million of economic activity annually through direct and indirect inputs. This translates to over $7 million in annual tax revenues in the State, $53 million in annual labor income, and over 2,000 jobs.

The study was commissioned by the Hawaii Farm Bureau Federation (HFBF) with funding provided by the Hawaii Crop Improvement Association (HCIA). The analysis was conducted by economist Tom Loudat, PhD, President, TAL & Associates, Honolulu. The Hawaii seed industry data was collected by the Hawaii Field Office Management Team of the U.S. Department of Agriculture’s National Agriculture Statistics Service (USDA-NASS).

“This approach assured non-disclosure of firm-specific, proprietary data and removed any data biases,” said Loudat. “We estimated the seed industry’s economic impacts and contributions to the State of Hawaii using proprietary industry data and the Hawaii Input/Output model. We examined and analyzed value growth, jobs generated, paid compensation and tax contributions.”

Loudat said that—at current farm value levels—the Hawaii seed crop industry’s value contribution to the state makes it the:

• Third largest agricultural commodity with a value contribution that will likely exceed the contribution by sugar¹, the second largest commodity, in the near future and pineapple, the largest commodity, shortly thereafter
  
• Third largest category of diversified agriculture, and the
  
• Largest diversified agriculture crop from a single commodity perspective.

The study estimated the value of the current and potential economic contributions of the seed industry, as represented by both its conventional and genetic engineering plant breeding technologies.

“We were aware of the growing sector of the seed crop industry in Hawaii,” said Alan Takemoto, executive director of the HFBF. “So, we wanted to quantify it more specifically to understand the economic impact it has on the agricultural industry and the economy overall.

In commenting on the results of the study, Takemoto said, “In addition to its significant contribution to the local economy, the seed industry benefits Hawaii in other ways.” He explained that it:

• It provides jobs that are of particular benefit to people living in the rural areas of the state that do not participate in the tourism industry

• A majority of these jobs are high-paying technical jobs that provide opportunities of interest to graduates of our local colleges and universities who otherwise would leave the state in search of good paying jobs, and

• It helps keep open spaces open, and rural spaces rural

Sarah Styan, HCIA’s president elect, said, “The findings reflect a changing agricultural sector in which the seed industry’s value contribution to the state is today roughly equivalent to that of sugar or pineapple.”

Styan says the prospects for growth are excellent due to Hawaii’s year-round growing conditions and its stable political environment. Combined, these attributes give Hawaii a unique competitive advantage in the worldwide seed industry. Other factors include the increasing demand from farmers worldwide for new and better seed crops and from new markets such as biofuel alternatives that could provide even more opportunities into the future.

“The results of the study show the very real benefits and very real opportunities provided by the seed industry. And, they go hand-in-hand with consistent data from some of the worlds most prominent institutions—such as the World Health Organization and the National Academy of Sciences—which show that genetically engineered crops are as safe as conventional crops,” she added.