HONOLULU (HawaiiNewsNow) - From Becker Communications
With the decline of pineapple and sugar production in Hawaii, the local seed industry is now the state's leading agricultural activity and agricultural export.
The seed industry has been in the public spotlight recently with the debate
A new economic report, entitled "Fifty Years of Corn Seed in the Fiftieth State" was commissioned by the Hawaii Crop Improvement Association (HCIA) to summarize the state of the seed industry in Hawaii based on historical analysis.
The economic report was compiled Dr. Paul Brewbaker, who you may know as the former Bank of Hawaii economist, and now with TZ Economics.
The Hawaii seed industry reached its zenith in terms of economic impact between 2010 and 2012, when its value topped $240 million. Since then, the decline in global commodity prices in general has pushed that figure down to about $150 million for the crop year ending in 2016. Central to that decline was the fall of corn prices from $7 a bushel to $3.50 a bushel from 2012 to the present.
According to Brewbaker's report:
"The drop in corn prices is part of a longer-term economic supercycle that has affected the rise and fall of overall commodities prices for decades," said Brewbaker. "This latest supercycle began in the 1980s and encompassed the rise of transgenic food products such as corn in the mid-1990s, as well as the demand for fuel in the early 2000s that caused corn prices to skyrocket due to the need for ethanol."
Brewbaker's report suggests the end of this economic supercycle could lead to another period of growth for the seed industry, as countries such as Bangladesh, Brazil, and China are seriously looking at utilizing genetically modified crops as a way to feed their burgeoning populations.
- The local seed industry differs from conventional agriculture because of its tilt toward research and development.
- Because of the higher skill level and knowledge demanded of the seed industry’s science-based jobs, it generates more economic value added per job than conventional agriculture.
- Hawaii is at the nexus of the seed industry of North America, and as such, will continue to shape the agriculture industry as a whole on the U.S. mainland and beyond.
Assessing the success of the seed industry in creating crops that resists drought, conserve water, and increase farmers' yields. Hawaii's year-round good weather allows greater seed production than on the Mainland.
Brewbaker concludes in his report that, "Few agricultural or non-agricultural R&D activities in Hawaii's modern history have so profoundly improved human welfare worldwide, through contributions to productivity growth, as has Hawaii's corn seed industry."
Other findings in the report include:
- Using a model developed by the Hawaii Department of Business, Economic Development and Tourism (DBEDT), which measures the economic activity generated by an industry among all counties, the 2015 Hawaii GDP impact was $323 million.
- Oahu generated $116 million GDP impact, with 40 percent of that due to breeding/nursery activities, and 60 percent due to seed increase activities.
- Kauai generated $105 million GDP impact, with 53 percent due to breeding/nursery activities, and 47 percent due to seed increase activities.
- Maui and Molokai, combined, generated $102 million of that impact, with 75 percent coming from breeding/nursery activities and the rest from seed production activities.