THE SUGAR INDUSTRY I N HAWAII:
AN ACTION PLAN
Joyce D. Kahane
Jean Kadooka Mardfin
Researchers
Report No. 9.1987
Legislative Reference Bureau
State Capitol, Room 004
Honolulu, Hawaii 96813
FOREWORD
T h i s s t u d y on t h e s u g a r i n d u s t r y i n t h e State o f Hawaii was p r e p a r e d i n
response t o House Resolution No. 216, H . D . 2, adopted d u r i n g t h e 1987
l e g i s l a t i v e session.
House Resolution No. 216, H . D . 2 (Appendix A ) ,
r e q u e s t e d t h e Legislative Reference Bureau t o make recommendations f o r a n
a c t i o n p l a n f o r Hawaii's s u g a r i n d u s t r y .
T h i s r e p o r t is a r e s u l t of a collaboration o f t h e Bureau's research s t a f f .
T h e c h a p t e r o f t h e r e p o r t which presents an o v e r v i e w o f t h e i n t e r n a t i o n a l ,
n a t i o n a l , a n d Hawaii s u g a r situations was p r e p a r e d b y Joyce Kahane. J e a n
K . M a r d f i n was responsible f o r t h e p o r t i o n o f t h e r e p o r t which discusses t h e
problems and o p p o r t u n i t i e s o f Hawaii's s u g a r i n d u s t r y a n d t h e impacts o f t h e
c l o s i n g o f s u g a r companies i n t h e State. Chapter 5 was j o i n t l y done b y t h e
t w o researchers. Susan Jaworowski conducted interviews w i t h selected s u g a r
company managers on t h e n e i g h b o r islands, as well as p a r t i c i p a t e d i n c e r t a i n
i n t e r v i e w s on Oahu.
We wish t o g r a t e f u l l y acknowledge t h e cooperation a n d assistance o f t h e
Hawaiian S u g a r Planters' Association, t h e sugar companies i n t h e State o f
Hawaii, t h e Department o f Health, t h e G o v e r n o r ' s A g r i c u l t u r e C o o r d i n a t i n g
Committee, t h e I n t e r n a t i o n a l Longshoremen's & Warehousemen's Union, a n d t h e
U n i v e r s i t y of Hawaii College of T r o p i c a l A g r i c u l t u r e a n d Human Resources.
SAMUEL B . K . CHANG
Director
December 1987
T A B L E OF CONTENTS
Page
..
FOREWORD
1.
2.
...
111
....................................................
1
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Organization of t h e R e p o r t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
2
INTRODUCTION
........................................................
OVERVIEW
International
..................................................
3
3
P r o d u c t i o n a n d Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
C o n t r o l l e d M a r k e t s a n d "Free" o r World Sugar M a r k e t s . . . .
8
I n t e r n a t i o n a l S u g a r Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
U n i t e d States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
S u g a r a n d Sweetener M a r k e t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P r o d u c t i o n a n d Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
High-Fructose Corn S y r u p . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A r t i f i c i a l and O t h e r New Sweeteners . . . . . . . . . . . . . . . . . . . . . .
U n i t e d States S u g a r Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
11
13
13
14
14
PROBLEMS A N D OPPORTUNITIES I N T H E
SUGAR INDUSTRY OF HAWAII . . . . . . . . . . . . . . . . . . .
Introduction
Part I
.
..................................................
Hawaii Sugar Companies
..............................
22
23
T h e I s l a n d o f Hawaii . . . . . . . . . . . . .
Kauai . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maui . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oahu . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P a r t II .
T h e Problems
........................................
F a c t o r y Smoke . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Field B u r n i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Field Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Water Pollution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Water S u p p l y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
L i a b i l i t y I n s u r a n c e a n d Workers' Compensation . . . . . . . . . . . .
Urbanization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
29
29
31
34
34
38
38
39
Page
Part I l l .
The Opportunities
..................................
Alternative Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sugar and Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O t h e r Experimentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IMPACTS OF CLOSING SUGAR COMPANIES
Economic Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employment M u l t i p l i e r a n d Income M u l t i p l i e r . . . . . . . . . . . . . . . . . . . .
Impact. o. n S u g a r Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electrtctty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINDINGS A N D A C T I O N PLAN
Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A c t i o n Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
L o b b y i n g in S u p p o r t o f U n i t e d States
S u g a r Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S u p p o r t o f LESA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P u b l i c Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E n e r g y Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O t h e r Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FOOTNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tables
A p p r o x i m a t e Employment b y Occupation
a t S u g a r Companies. 1985 . . . . . . . . . . . . .
C o n t r i b u t i o n t o Hawaii's Total E l e c t r i c Generation
by t h e S u g a r Companies. 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exhibits
Sugar S u p p l y a n d D i s t r i b u t i o n b y C o u n t r i e s . 1985
..
World's 10 L a r g e s t Producing. E x p o r t i n g .
I m p o r t i n g & Consuming Nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
World S u g a r Production. Consumption. i m p o r t s & E x p o r t s
World S u g a r Production. Consumption & Stocks &
Impact o n World S u g a r M a r k e t Prices . . . . . . . . . . .
..........
Page
5.
Percentage o f Farmers' Income A t t r i b u t e d t o D i r e c t a n d
I n d i r e c t S u p p o r t Received From T h e i r Governments . . . . . . . . .
......
9
U . S . Per Capita Consumption o f A l l Sweeteners
i n Pounds
1970-1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
......
12
7.
Hawaii's Sugar Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
......
18
8.
Hawaiian S u g a r Companies,
............... ......
19
9.
Hawaiian Raw S u g a r Cost o f Production. R e t u r n
t o Growers and U . S . Refined Sugar Retail Price
............. ......
21
CPCs Used b y Hawaii's S u g a r I n d u s t r y i n 1984
............. ......
32
6.
10 .
-
1986 (Raw Value)
10-A . Relative Acute T o x i c i t y S u g a r CPCs
a n d O t h e r Familiar Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
......
33
......
36
A g r i c u l t u r a l and O t h e r Water Uses . . . . . . . . . . . . . . .
......
37
Sugar I n d u s t r y Analysis No . 3
......
40
....... ......
42
I r r i g a t e d A g r i c u l t u r a l Land. 1978
......................
.............................
Acreage o f A g r i c u l t u r a l Commodities B y County. 1984
Summary o f Electrical Generation and E l e c t r i c i t y
Used b y S u g a r Plantations: 1981 ...........................
......
46
E n e r g y Generated. Purchased. Sold and Used b y
Raw Sugar Plantations. b y Islands: 1984 . . . . . . . . . . . . . . . . . . .
......
53
......
67
Appendix
House Resolution No . 216. H . D . 2. House o f Representatives.
Fourteenth Legislature. 1987 Regular Session. State o f Hawaii
Chapter 1
INTRODUCTION
House
R e s o l u t ~ o n No.
216,
H.D.
2 (see A p p e n d i x A),
L e g i s l a t i v e Reference B u r e a u t o develop an action
industry,
including
recommendations
plan f o r
requests t h e
Hawaii's s u g a r
designed t o help t h e s u g a r
industry
c o n t i n u e t o c o n t r i b u t e t o t h e State's economic a n d social well-being.
Resolution's
The
rationale f o r t h e State t o help t h e s u g a r i n d u s t r y is t h a t t h e
s u g a r i n d u s t r y has been an i m p o r t a n t i n d u s t r y i n Hawaii,
p i l l a r of t h e economic development o f t h e islands"
"having
been a
a n d "has c o n t r i b u t e d t o
w h a t i s now Hawaii's leading i n d u s t r y , tourism, because e v e r y a c r e p l a n t e d in
s u g a r cane.. .is
an acre f r e e o f concrete,
g r e e n a n d lush,
preserving the
image o f Hawaii w h i c h sustains r e s i d e n t s a n d d r a w s millions o f v i s i t o r s e v e r y
year";
a n d t h a t t h e s u g a r i n d u s t r y has been " h a r d h i t by a reduction in t h e
amount o f
s u g a r consumed b y Americans,
t h e g r o w i n g use o f
alternative
sweetners ( s i c ) , t h e r e d u c t i o n o f f e d e r a l p r i c e s u p p o r t s , a n d competition f r o m
s u b s i d i z e d s u g a r p r o d u c e r s i n f o r e i g n countries".
Methodology
I n o r d e r t o develop an action
plan f o r
Hawaii's s u g a r i n d u s t r y ,
the
p r i n c i p a l data g a t h e r i n g a c t i v i t i e s consisted o f t h e following:
(1)
Reviewing c e r t a i n p r i n t e d material on t h e s u g a r i n d u s t r y , i n c l u d i n g
but n o t limited to, p r i o r studies o n t h e nation's a n d Hawaii's s u g a r i n d u s t r y ;
(2)
industry,
Association,
Interviewing individuals
such
as
sugar
those
whose w o r k is related t o Hawaii's s u g a r
associated
companies,
the
with
the
Governor's
Hawaiian
Sugar
Agriculture
Planters'
Coordinating
Committee, t h e state Department o f Health, t h e I n t e r n a t i o n a l Longshoremen's &
Warehousemen's
Union,
and the
University
A g r i c u l t u r e and Human Resources; a n d
of
Hawaii
College
of Tropical
SUGAR INDUSTRY IN HAWAII
(3)
S u r v e y i n g all
sugar
companies
to
learn
about
their
particular
company, a n d t o o b t a i n t h e i r views on specific measures t h e State can t a k e t o
aid t h e sugar industry.
Organization o f t h e Report
T h e r e p o r t is p r e s e n t e d as follows:
Chapter 1 introduces t h e report.
C h a p t e r 2 p r o v i d e s an o v e r v i e w o f t h e i n t e r n a t i o n a l , national, a n d state
sugar situations.
C h a p t e r 3 discusses t h e problems a n d o p p o r t u n i t i e s o f t h e Hawaii s u g a r
industry.
C h a p t e r 4 describes t h e impacts o f t h e c l o s i n g o f s u g a r companies in t h e
State.
C h a p t e r 5 r e p o r t s t h e Bureau's f i n d i n g s a n d action plan
Chapter 2
OVERVIEW
Hawaii's
sugar
industry,
like other
States, has faced economic a d v e r s i t y .
sugar
in t h e
operations
United
T h e problems t h a t c o n f r o n t t h e sugar
i n d u s t r y a r e t i e d closely t o political a n d economic forces a t t h e international
a n d national levels.
sugar industry,
Therefore,
p r i o r t o examining t h e specifics o f Hawaii's
a b r i e f discussion o f t h e b r o a d e r i n t e r n a t i o n a l and national
s u g a r situation, which impinges o n Hawaii's s u g a r operations, is presented.
International
P r o d u c t i o n a n d Consumption
Sugar,
a h i g h l y t r a d e d commodity,
c o u n t r i e s i n t h e w o r l d (see E x h i b i t 1 ) .
is p r o d u c e d i n about one h u n d r e d
T h e European Economic Community,'
p r o d u c e d about t w e n t y - o n e p e r c e n t of t h e t o t a l w o r l d p r o d u c t i o n i n 1985,
a n d t h e Soviet Union, Brazil, Cuba,
with
India, a n d t h e U n i t e d States,
t h e European Economic Community,
together
p r o d u c e d o v e r half o f t h e world's
s u g a r (see E x h i b i t 2 ) .
Cane s u g a r is s u i t e d t o t r o p i c a l a n d s u b t r o p i c a l areas,
w h i l e beet s u g a r is g r o w n i n cooler temperate climates.
sugar
crop
year,
the
total
world
production
of
such as Hawaii,
I n t h e 1985/1986
sugar
amounted
to
approximately 98.1 million metric tons. 61.7 million m e t r i c tons produced f r o m
sugarcane a n d 36.4 million metric tons f r o m sugarbeets (see E x h i b i t 3 ) .
A b o u t seventy nations e x p o r t e d about 29.8 million m e t r i c tons of sugar
t o approximately one h u n d r e d a n d f i f t e e n countries.
Approximately seventy-
f i v e p e r cent of w o r l d s u g a r consumption occurs w i t h i n countries where t h e
sugar
c r o p i s produced,
and therefore only twenty-five
w o r l d ' s consumed s u g a r is i n v o l v e d in international t r a d e
'.
p e r cent of
the
Exhibit 1
.
SUGAR SUPPLY AND DISTRIBUTION BY COUNTRIES 1985
(Mettic Trns
.Row Voiue)
(Te cmvert to Short Tons. multiply by 1.10231
NJRM AMERICA
...........
.............
TOTAL . . . . . . . . . .
Coiado
USA
...........
...........
...........
...........
........
E.E.c.~ . . . . . . . . . . .
Finlord . . . . . . . . . . .
Fremh Terr.e . . . . . . . .
Gerrmn Dcm. Rep. . . . . . .
Gibioltor . . . . . . . . . .
)*rqory . . . . . . . . . . .
Ic.ionj
...........
Malt. . . . . . . . . . . . .
i.brra7 . . . . . . . . . . .
Po1anj. . . . . . . . . . . .
Portugal . . . . . . . . . . .
Rormnia . . . . . . . . . . .
Spoinf . . . . . . . . . . . .
Swedm . . . . . . . . . . .
Svitzerionj . . . . . . . . .
Turkey . . . . . . . . . . .
U.S.S.R. . . . . . . . . . . .
Yugorlavio . . . . . . . . . .
Albanio
Av~trio
Bvigoria
Cyprus
Czcchoriavokio
TOTAL
CEI.mUIL AMERICA
Bahnor
...........
............
.........
.. .. .. .. .. .. .. .. .. ..
miti . . . . . . . . . . . .
.Hwduror . . . . . . . . . .
hrmta . . . . . . . . . . .
Mcxico . . . . . . . . . . .
N t h. Antilies . . . . . . . .
c*
Dominican Rep
El Solvodot
Cmlermla
+OVM AMERICA
Arpentina
Bolivia
Brozi1
Chile
..........
...........
............
............
..........
...........
Gvyom . . . . . . . . . . .
P.roguoy
..........
Per" . . . . . . . . . . . .
Surimm . . . . . . . . . .
*-my
...........
Colombia.
Ec&
ISiAL
65. 329
364. 435
5.475. 398
429.764
33.W
468.1811
II5.W
0
8YO.W
13.860. C40
102.532
0
797.972
0
579. W5
0
0
0
1 .wo. 9M)
IS. W
585.W
1.090. W
368. 658
138.833
1.397.831
8.6W.W
970.W
0
40. 566
204. 666c
0
248. 319
4.280. 366
6. 828
0
221. 705
0
43. 806
0
0
0
186. 307
4. 176c
132.6Mc
0
4. 510
326
308. 109
175. I09
IS. 3 4 F
31.801. 995
5.872. 765
0
0
77. 840
95.530
101. 414
109. 520
0
230,W.W
7.889. 240
920.699
278. 926
M0.W
M.W
235. 095
210. W
3.491. 559
0
250.W03
160. 313
27. 455
80.W
0
14.534,22l
TOTAL
Venzvela
60. W
5.415. 398
..........
..........
1.187. 761
i75.W
8.455. 4%
351. 086
1.366.893
M
0
m
.
257.688
W. W
710.W
10. W
90.470.W
13.453. 912
0
3. 075c
7.209. W8
721. 607
115. 479
127. 76Ac
0
102. 484
152. ll3=
66. 194
0
36. 566c
77. 737
25.189
62.046C
0
8,872.632
157. 176
16.876c
2.608. 706
0
294. 934
25. 3 9 6
230. 386
0
9 0 . w
0
4. 451'
0
3.028. 467
SUGAR SUPPLY AND DISTRIBUTION BY COUNTRIES. 1985 (cont.)
(Metric T w -Raw Volvel
.
(To cmvert to Y a r t Tans ~ l t i p iby
l 1.10231
C-IES
Prodvctian
KRRY
Imports
C-mptian
MSTRWTKW
txportr
............
............
........
..........
............
..........
.............
.............
__..........
hw . . . . . . . . . . . .
hrdon. . . . . . . . . . . .
Kampuchea . . . . . . . . .
Koreo. D.P.R.
........
Korea Rap. of . . . . . . . .
Kuwait . . . . . . . . . . .
Lao. O.P.R.
.........
Lebonm . . . . . . . . . . .
hrm
Chim
Chim (Toivonl
bkm, Koog
Indio
1ndmsio
CM
C q
lllr~l
~~~
.
...........
.........
..........
.........
..........
..........
............
...........
........
........
. ........
TOTAL . . . . . . . . . .
Pokiston
Persi~
Gvlf
Philippiner
Swdi Arobio
S i m r c
Sri Lmka
Srrio
Thailand
Vietmrn. 5.R.
Y e m n Arob Rep
Y c m n Dem Rep
AFRICA
...........
...........
............
*Igerio
Angola
Benin
. . . . .. .. .. .. .. .. ..
.........
. . ........
............
...........
............
&Nndi
Comer-.
U.R.
C o p Verdc
Cent Afri Rep
Chod
Conaror
Congo
...........
. . . .... .. .. .. .. .. ..
Cobat . . . . . . . . . . . .
6 6 i a ...........
Gww . . . . . . . . . . . .
.
Djibovti
Egypt h o b Rep
Ethiopio
. . . .. .. .. .. .. .. .. ..
.........
uwo. . . . . . . . . . . .
Liberia . . . . . . . . . . .
Libyo . . . . . . . . . . . .
Mada)oror . . . . . . . . .
Molowi . . . . . . . . . . .
Mdi. . . . . . . . . . . . .
Mouritonio . . . . . . . . . .
Mauritius . . . . . . . . . .
Marace . . . . . . . . . . .
Gvim
Gvirro Birrov
t v q coast
22.293. 442
.
1 1 116. 595
30.071.836
3.292. 704
SUGAR SUPPLY AND DISTRIBUTION BY COUNTRIES. 1985 (cent.)
(Metric Taos
(Toc o m n t t o Uwt T-
.Row Value)
.
multiply by 1.1023)
S(RPLY
Prdvctirn
Imports
7.607. 485
3.265. 276
. .. .. .. .. .. .. .. .. .. .. ..
...........
...........
Ytrro Leone . . . . . . . . .
bmalio . . . . . . . . . . .
b o t h Africa . . . . . . . . .
Sudan..... . . . . . . .
Svoliland . . . . . . . . . .
Tonrmio. U.R. . . . . . . . .
Tqo . . . . . . . . . . . .
Tunisia . . . . . . . . . . .
Vgd0 . . . . . . . . . . .
Zaire . . . . . . . . . . . .
Z'ZrrbiG . . . . . . . . . . .
Zimb*wc . . . . . . . . . .
Other ~ f r i c o h . . . . . . . .
Niger
Nigeria
Rwdo
*oi
TOTAL
..........
8.013. 863
2.547. 183
OCEAMA
..........
.............
.........
......
.. .. .. .. .. .. .. ..
TOTAL . . . . . . . . . .
WORLD TOTAL . . . . . .
I\u.tralia
3.438. 516
366. 717
Fiji
New Zealand
Pwua New Guinea
Western
Other Oceania'
0
30. 050
2. 5 W
0
0
380
176.e
679b
346b
12.778b
76A.398
35. 723
170. W O O
26. 620
3. W O O
12. WIP
2.651. 624
419. 143
0
11. 3 8 s
0
0
3.837. 785
i88.183
1.011. 741
3.081. 950
99.0011. 236
26.350.567
9 7 . W . 399
27.525. 465
Eltimated.
b As i e w r t e d bv s w n t r i e r of oriain
& reported b; c w n t r i e r of dedinatim
d Eur-n
E c ~ o m i cCommunity-&lgivm.
tknmork. Fronce (Metropoiitan. Cuadeia~pe.Mortinique. Reunion.
Guiano). Federal Republic of Cermony. Greece. Ireland. ltoiy. Luxembourg Netheiiondr. and United Kingdom
e Including St . Pierre h Miguelon. New Caiedmia m d Fr-h
Poiynerio
f Pminruio M(i ~ I c o lrlonds
~ ~ c only
9 l m l u d i L~e c r o r d ond Windword
s l.m.d s
. . . .l .
including ~ q u o t o r i aGuinea,
i
St Heieno. 500 T o m and Syrchellcr .
inrluding P r r i f i c Idondr
0
.
C
.
?
'
Source:
.
.
.
.
.
.
Hawaiian Sugar Manual. 1987 (Hawaii:
1986). pp . 23.25
.
Exhibit 2
WORLDS 10 LARGEST PRODUCING, EXPORTING, IMPORTING & CONSUMING NATIONS
1985 -Metric Tons, M i l l i o n
EEC
USSR
Brazil
Cuba
India
USA
Chino
Mexico
Australia
So. Africa
Total
Source:
13.9
8.6
8.5
7.9
7.0
5.4
5.2
3.5
3.4
2.5
65.9
-
Cuba
EEC
Australia
Brazil
Thoifand
So. Africa
Dom. Rep.
Philippines
Mauritius
Fiji
7.2
4.3
2.7
2.6
1.8
1.0
0.7
0.6
0.6
0.4
21.9
-
USSR
USA
China
Jopan
India
EEC
Canodo
So. Korea
Empt
Iron
Hawaiian Sugar Manual, 1987 (Hawaii:
4.8
2.3
2.2
2.0
1.8
1.3
1.2
0.9
0.7
0.6
17.8
-
USSR
EEC
lndio
USA
Chino
Brazil
Mexico
Japan
lndwria
Poland
1986), p. 21
Exhibit 3
WORLD SUGAR PRODUCTION, CONSUMPTION, IMPORTS 8 EXPORTS
I9sSIe4
Millions, Metric Tms Ra Value
-
.. .. .. .. ..
. . . .. .. ... ...
. .. ..
.
.
.
.
. . .. .. .. .. .. ..
.. .. .. .. .. ..
.
. . .. .. .. .. .. .. .. ..
Total* . . . . . . . . .
North America
South Amrica.
Central America.
Coribbeon.
European Community.
Other West Europe.
Eost Europe.
U.5.5.R.
North Africa
Other Africa
Middle East
Asia
Oceania
Source:
&et
Production
C
z
Total
Consumpticn
2.8
0.4
0.0
0.0
14.4
1.0
5.5
8.3
0.5
0.0
2.0
1.5
0.0
6.4
12.8
1.8
8.5
0.0
0.0
0.0
0.0
1.4
5.9
0.3
20.9
3.7
9.2
13.2
1.8
8.5
11.8
10.9
0.9
11.5
14.4
1 .O
11.5
36.4
61.7
-
Hawaiian Sugar Manual, 1987 (Hawaii:
5.5
8.3
1.9
5.9
2.3
21.4
3.7
F
98.1
1.3
6.0
13.3
imports
3.2
0.1
--
0.1
3.0
0.5
1 .O
5.5
2. I
0.7
3.2
I.O
7.6
6.6
0.1
0.9
0.3
8.1
5.1
26.1
1 .o
-
0.2
-
-
97.6
27.5
29.8
1986), p. 21.
I .O
2.8
7.8
3.0
0.1
3.3
3.0
SUGAR INDUSTRY IN HAWAII
A
t o t a l of 97.6 million m e t r i c t o n s o f s u g a r was consumed i n t h e 12-
month p e r i o d f r o m October 1985 t h r o u g h September 1966 (see E x h i b i t 3 ) , w i t h
the
excess
sugar
supplementing
the
estimated a t 46.8 million m e t r i c t o n s .
surplus
sugar,
known
as
the
existing
world
sugar
stock-piles,
T h e existence o f a l a r g e s u p p l y of
"world
residual
sugar
market",
serves t o
depress s u g a r p r i c e s , w h i c h i t has i n r e c e n t years fsee E x h i b i t 4 ) .
C o n t r o l l e d Markets a n d "Free" o r World S u g a r M a r k e t s
A s well as b e i n g one o f t h e world's most t r a d e d food commodities, s u g a r
is also a h e a v i l y r e g u l a t e d commodity.
measures
to
insulate
themselves
Most governments
from
market
price
have established
fluctuations
and
consequently much o f t h e s u g a r p r o d u c e d i n t h e w o r l d is t r a d e d i n c o n t r o l l e d
markets.
Governments
protect
their country's
sugar industry
b y a v a r i e t y of
domestic s u g a r programs,
s u c h as g o v e r n m e n t o w n e r s h i p o f all o r p a r t s o f a
sugar industry,
price supports,
quotas,
l o n g - t e r m t r a d e agreements t h a t
prices.
For
example,
in
embargo,
c o n t r o l l e d prices,
g r o w e r a n d e x p o r t subsidies,
p r i c e s u g a r above " f r e e "
Australia,
protection
has
and
o r world sugar
included
an
import
a n d a system f o r pooling proceeds f r o m h i g h e r
p r i c e d domestic c o n t r a c t sales w i t h lower p r i c e d g o v e r n m e n t - s u p p o r t e d e x p o r t
sales.
In Japan,
levies o n s u g a r imports have been u s e d t o subsidize h i g h -
cost domestic p r o d u c e r s .
I n Brazil, a government agency has set p r i c e s and
has been t h e sole e x p o r t a g e n t . 3
States
are
supported
by
Farmers p r o d u c i n g s u g a r i n t h e U n i t e d
t h e g o v e r n m e n t a t a h i g h e r level t h a n farmers
g r o w i n g o t h e r crops, a n d t h e U n i t e d States a n d Japan p r o v i d e t h e h i g h e s t
level o f g o v e r n m e n t s u p p o r t t o s u g a r , compared w i t h c e r t a i n o t h e r c o u n t r i e s
fsee E x h i b i t 5 ) .
European
T r a d e agreements o u t s i d e o f t h e w o r l d m a r k e t i n c l u d e t h e
Economic
a n d Pacific nations;
Community's
Lome Convention w i t h
African,
Caribbean,
and b a r t e r agreements between Cuba a n d Soviet
Bloc
countries.
T h e p r i c e o f s u g a r u n d e r s u c h c o n t r o l l e d arrangements does n o t r e f l e c t
t h e price of
sugar on t h e
world
market.
Under
preferential
and
trade
agreements o f t h e c o n t r o l l e d m a r k e t , s u g a r p r i c e s averaged t w e n t y - o n e cents
Exhibit 4
W O R L D SUGAR PRODUCTION, C O N S U M P T I O N & STOCKS & IMPACT
O N W O R L D SUGAR MARKET PRICES
1973-19a6-RmvaIua
k r
yeor
Oct./Sept.
Metric
Metric
tau
tam
production conwmption
Staks, metric tam
a a
&
World rugar
mrket
No. II cmtroct
cents per ib.*
80.0
78.5
81.7
86.3
92.7
91.3
64.6
88.5
IW.6
101.3
96.5
100.2
98. I
IW. I
World m d e t for surplus, 'bornefes" urgar, f.0.b. Caribbean.
b BoKd on 25% ' W e of thumb" held to be desirable.
Preliminary.
d Estimate.
Calendar yeor, weroge.
0
Source:
H a w a i i a n Sugar Manual,
1987 (Hawaii:
1986),
p. 2 2
Exhibit 5
P e r c e n t a g e o f F a r m e r s ' income A t t r i b u t e d t o D i r e c t and
1 n d i r e c t S u p p o r t R e c e i v e d From T h e i r G o v e r n m e n t s
25-49%
10-24%
Beef
Austral iaX
Canada
U.S.
Canada
EC
Ta i w a n
New Zea l a n d *
Rice
Tha i l a n d *
Austral iau
Soybeans
Canada
U.S.*
Taiwan
Taiwan
U.S.
Austral ia*
EC*
U.S.*
EC
U.S.+
Ta iwan*
EC
A u s t r a l iaU
Taiwan*
Canada*
EC*
Canada
EC*
EC*
U.S."
Corn
Da i r y
New Zea l a n d *
Sugar
Wheat
Austral ia*
*net exporter
Source:
National Journal,
July 4,
1987,
p. 1 7 2 0
EC*
Japan
South Korea
South Korea
Canada*
Japan
South Korea
Japan
Japan
South korea
Japan
U.S.
South korea
Ta i w a n
Japan
SUGAR INDUSTRY I N H A W A I I
a p o u n d while s u g a r t r a d e d o n t h e w o r l d s u g a r m a r k e t averaged s i x cents a
p o u n d in 1986.*
It is estimated t h a t sixteen p e r c e n t of t h e s u g a r consumed
was t r a d e d a t w o r l d s u g a r m a r k e t p r i c e s . =
S u g a r p r i c e s a r e said t o b e among t h e most unstable i n i n t e r n a t i o n a l
t r a d e because o f t h e r e l a t i v e l y small shares o f t h e w o r l d s u g a r p r o d u c t i o n
freely traded i n international markets.
D u e t o t h e small a n d l a r g e l y residual
c h a r a c t e r o f t h e w o r l d s u g a r market,
world
crop
changes
and
g o v e r n m e n t s u g a r policies t e n d t o have d i s p r o p o r t i o n a t e e f f e c t s .
shifts
in
I n periods
o f c r o p f a i l u r e , governments may t e m p o r a r i l y r e s t r i c t e x p o r t s t o meet domestic
needs,
thus
intensifying
exceeds domestic
needs,
world
p r i c e increases.
supplying
nations
may
I n p e r i o d s when o u t p u t
attempt
surpluses o n t h e world market, lowering t h e world price.
to
"dump"
their
A n o t h e r source o f
i n s t a b i l i t y is t h e inability o f s u g a r p r o d u c e r s t o a d j u s t p r o d u c t i o n r a p i d l y i n
response t o c h a n g i n g economic c o n d i t i o n s . '
Therefore,
t h e w o r l d s u g a r p r i c e is n o t a competitive p r i c e t h a t f u l l y
r e f l e c t s u n d e r l y i n g cost a n d demand conditions.
A considerable f r a c t i o n of
s u g a r sold o n t h e m a r k e t is s u g a r t h a t cannot b e absorbed b y p r e f e r e n t i a l
systems, o r consumed i n t h e p r o d u c i n g c o u n t r i e s , o f t e n i n h i g h l y p r o t e c t e d
markets.
'
I n t e r n a t i o n a l S u g a r Agreement
T h e U n i t e d States a n d more t h a n s e v e n t y o t h e r c o u n t r i e s e n t e r e d i n t o
t h e l n t e r n a t i o n a l Sugar Agreement o f 1977, w i t h t h e main o b j e c t i v e o f p r i c e
s t a b i l i t y a n d a second goal o f r a i s i n g developing e x p o r t i n g c o u n t r i e s ' e a r n i n g s
b y increasing t h e international sugar trade.
T h e Agreement
i n s t i t u t e d an
e x p o r t quota a n d r e s e r v e stocks system t o s u p p o r t w o r l d s u g a r p r i c e s w i t h i n
t h e a g r e e d - u p o n p r i c e range,
pound,
i n i t i a l l y b e i n g eleven t o t w e n t y - o n e cents
a n d l a t e r raised t o t h i r t e e n t o t w e n t y - t h r e e cents a p o u n d .
responses a r e t r i g g e r e d a t specified p r i c e s t o maintain
a
Various
prices within t h i s
range, such as quotas when s u g a r p r i c e s a r e low, f r e e t r a d e when p r i c e s a r e
moderate,
range.
a n d stock releases as p r i c e s r i s e t o w a r d t h e u p p e r e n d o f t h e
O V E R V l EW
However,
t h e Agreement
has n o t been e f f e c t i v e i n maintaining w o r l d
s u g a r p r i c e s w i t h i n t h e p r e s c r i b e d range,
Economic Community,
exporter,
p r i m a r i l y because t h e European
t h e w o r l d ' s l a r g e s t s u g a r p r o d u c e r a n d second l a r g e s t
i s n o t a member,
a n d t h e r e f o r e has n o t been constrained t o h o l d
s u g a r o f f t h e m a r k e t d u r i n g times o f low s u g a r p r i c e s . '
A n o t h e r way t h a t t h e i n t e r n a t i o n a l s u g a r problem is b e i n g addressed i s
t h r o u g h t h e General Agreement o n T a r i f f s a n d T r a d e .
A t t h e 1986 meeting in
U r u g u a y , s u g a r was i n c l u d e d i n t h e agenda o f t r a d e t a l k s by t h e n i n e t y - t w o
n a t i o n o r g a n i z a t ~ o n'.
U n i t e d States
S u g a r a n d Sweetener M a r k e t
T h e U n i t e d States s u g a r a n d sweetener m a r k e t consists o f a v a r i e t y o f
p r o d u c t s , as follows:
K i n d o f Sweetener
Per cent of t h e Market
Sucrose sugar (cane and beet sugar)"
41
Dextrose and glucose c o r n syrups
15
H i g h - f r u c t o s e c o r n syrup
31
Saccharin and o t h e r n o n - c a l o r i c sweeteners
12
Honey and e d i b l e syrups
As
seen
above,
.01
domestic a n d i m p o r t e d cane s u g a r a n d domestic beet
s u g a r c o n s t i t u t e d f o r t y - o n e p e r c e n t o f all caloric sweeteners used.
six
per
cent of
the
sweeteners
consumed
f r u c t o s e , glucose, a n d d e x t r o s e c o r n s y r u p s .
has
risen
decreased
since
while
1970.
the
However,
the
consumption of
d r a m a t i c a l l y (see E x h i b i t 6).
were
Forty-
c o r n sweeteners:
high-
T h e consumption o f sweeteners
consumption
high-fructose
of
corn
refined sugar
syrup
has
has
risen
Exhibit 6
US. PER CAPITA CONSUMPTION OF ALL SWEETENERS IN POUNDS
Col.
Yeor
-
1970
1971
1972
1973
1974
1975
1976
1977
1978
I979
1980
1981
1982
I983
1984
1985
1986
*
Ref
U. A.
Beet
Cone
- -31.3
30.6
30.3
30.2
25.8
30.1
32.0
29.8
27.4
26.5
26.9
25.6
25.4
23.1
21.5
NA
NA
- 1970 - 1986
NON- (L LOW CALORIC
S1NEI
-
CALORIC SWEETENERS
-
Minor Colorico
-
-
Totol
-<
High
25.0
22.9
25.3
24.7
20.8
24.6
22.4
22.9
22.9
21.1
24.3
21.5
23.5
24.0
21.8
NA
NA
Edible
Totol
b n y syrup Tot01 :alorict
1.0
0.9
1.0
0.9
0.7
1.0
0.9
1.0
1.1
1.0
0.8
0.8
0.9
1.0
1.0
1.0
1.0
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
Saccharin
on a lo1
b
--
1.5
1.4
1.5
1.4
1.1
1.4
1.3
1.4
1.5
1.4
1.2
1.2
1.3
1.4
1.4
1.4
1.4
A
Dry basis.
b Moy not add precisely d w to rounding.
Source:
Hawaiian Sugar Manual, 1987
- (Hawaii:
1986), p. 15.
coloricc
OVERV l EW
Production a n d Consumption
I n t h e U n i t e d States,
f r o m f o r e i g n sources.
s u g a r is g r o w n domestically and is also imported
In 1986, t h e U n i t e d States p r o d u c e d s e v e n t y - e i g h t p e r
c e n t of t h e s u g a r consumed, and t h e remainder was imported f r o m t h i r t y - n i n e
nations, r e g u l a t e d b y c o u n t r y - b y - c o u n t r y quota allocations.
"
Sugarcane is g r o w n and milled i n Florida, Hawaii, Louisiana, Texas, and
i n t h e Commonwealth o f Puerto Rico.
in
it averages t w o years.
Hawaii where
sugar-producing
Rico.
Sugarcane is a one-year crop,
However,
Florida is t h e leading raw cane
followed by Hawaii,
state,
Hawaii
produces
the
except
Louisiana,
most
sugar
Texas,
per
and
acre.
Puerto
Sugarcane
g r o w e r s in Hawaii a n d t h e t h r e e Mainland states s u p p l y about 3.26 million
s h o r t tons o f s u g a r .
Sugarbeets
western
Dakota.
states,
"
are
grown
in
predominantly
about
twelve
i n Minnesota,
mid-west,
great
plains,
California,
Idaho,
and
and
North
Sugarbeet g r o w e r s p r o d u c e d 3.33 million s h o r t tons o f beet s u g a r in
1986.
Domestic a n d imported raw s u g a r is r e f i n e d in refineries located i n 20
states.
l 3
High-Fructose Corn S y r u p
The
United
States
sweetener
market
has
been t r a n s f o r m e d b y
the
i n t r o d u c t i o n i n t h e 1970's o f a process f o r mass-producing h i g h - f r u c t o s e c o r n
syrup.
has
As shown i n E x h i b i t 6,
moved t o one o f
high-fructose
has
shared importance w i t h o t h e r
corn s y r u p .
made t h e g r e a t e s t
products,
cereal,
f r o m a c l e a r l y commanding position, sugar
and
especially
T h e markets i n w h i c h h i g h - f r u c t o s e c o r n s y r u p
inroads
bakery
p r o d u c e d mainly f r o m corn,
sweeteners,
are the
soft
products.
drink
market,
High-fructose
frozen
corn
dairy
syrup
is
although it can also b e p r o d u c e d f r o m wheat,
potatoes, cassava, a n d o t h e r starches.
T h e success o f
high-fructose corn s y r u p
is d u e t o i t s being p r i c e d
c o n s i s t e n t l y lower t h a n s u g a r a n d i t s technical s u b s t i t u t a b i l i t y f o r sugar.
It
SUGAR INDUSTRY I N H A W A I I
is as sweet o r sweeter t h a n r e g u l a r s u g a r .
However,
limited because i t is commercially available o n l y
i t s widespread use is
i n l i q u i d form,
effectively
l i m i t i n g i t s use t o i n d u s t r i a l applications w h i c h a r e n o t dependent o n s u g a r ' s
c r y s t a l l i n e s t r u c t u r e a n d o t h e r f u n c t i o n a l p r o p e r t i e s of i t s d r y state.
a
low-cost
crystalline
fructose
product
be
developed,
a b s o r b i n g more o f t h e s u g a r m a r k e t c o u l d be
insignificant
amount
of
crystalline
fructose,
the
substantially
a
at
Should
potential
greater.
substantial
for
An
price,
is
c u r r e n t l y sold i n t h e U n i t e d States.'.'
A r t i f i c i a l a n d O t h e r New Sweeteners
Saccharin a n d aspartame a r e t h e main commercially available non-caloric
sweeteners i n t h e U n i t e d States.
appear
limited
to
soft
drinks
Market
because
gains
of
of
these
technological
g o v e r n m e n t approvals needed f o r use i n v a r i o u s p r o d u c t s .
of
such
products
makes
up
only
a
small
portion
of
two
sweeteners
limitations
and
Total consumption
the
United
States
sweetener m a r k e t .
U n i t e d States S u g a r Legislation
S u g a r legislation i n t h e U n i t e d States dates back t o 1789, when t h e f i r s t
A c t o f t h e f i r s t Congress placed an i m p o r t d u t y o n s u g a r t o raise revenues
f o r t h e government.
S u g a r t a r i f f s p r o v i d e d a major source o f r e v e n u e t o t h e
f e d e r a l government, u n t i l income a n d c o r p o r a t e taxes w e r e i n s t i t u t e d e a r l y i n
this century.
Modern s u g a r legislation dates f r o m 1934, when t h e f i r s t S u g a r A c t was
passed.
T h e basic p r i n c i p l e s o f t h e A c t w e r e followed i n subsequent sugar
acts o v e r t h e succeeding f o r t y years,
d i s c o n t i n u e d by Congress.
national
sugar
policy
u n t i l 1974,
From 1974 u n t i l
i n t h e U n i t e d States.
chaotic f o r most American sugar p r o d u c e r s .
when t h e S u g a r A c t was
1981,
This
t h e r e was
seven-year
n o cohesive
p e r i o d was
Excess w o r l d p r o d u c t i o n , f a i l u r e
t o achieve an e f f e c t i v e I n t e r n a t i o n a l Sugar Agreement,
a n d l i t t l e c o n t r o l of
subsidized s u g a r imports i n t o t h e U n i t e d States t h r e a t e n e d t h e s u r v i v a l o f t h e
domestic s u g a r i n d u s t r y .
A t t h e same time,
h i g h - f r u c t o s e c o r n s y r u p began
OVERV l EW
p e n e t r a t i n g t h e l i q u i d sweetener market,
a s h r i n k i n g market.
A f t e r 1976,
i n t e n s i f y i n g p r i c e competition w i t h i n
Is
v a r i o u s a d m i n i s t r a t i v e a n d legislative measures designed t o
h e l p t h e U n i t e d States s u g a r i n d u s t r y w e r e passed.
I n 1981,
s u g a r was
i n c l u d e d as a permanent p r o g r a m w i t h o t h e r major farm commodities i n national
f a r m p o l i c y legislation, T h e A g r i c u l t u r e a n d Food A c t o f 1981, known as t h e
Farm Act.
T h e law is designed t o keep U n i t e d States s u g a r p r o d u c e r s i n business
by p r o t e c t i n g them f r o m competition f r o m subsidized f o r e i g n s u g a r imports, t o
h e l p t h e c o u n t r y maintain some s e l f - s u f f i c i e n c y i n s u g a r p r o d u c t i o n , a n d t o
p r o v i d e consumers w i t h an ample s u p p l y o f s u g a r a t reasonable p r i c e s .
cash
payments o r o t h e r governmental g r a n t s a r e involved,
intent
of
Congress
that
the
program
be
administered
No
a n d it was t h e
without
cost
to
Congress.
Elements o f t h e p r o g r a m i n c l u d e a nonrecourse s u g a r loan p r o g r a m u n d e r
w h i c h s u g a r processors o f r a w cane o r r e f i n e d beet s u g a r can place s u g a r
under
loan
to
the
Commodity
c o l l a t e r a l f o r t h e loan.
Credit
C o r p o r a t i o n w i t h t h e s u g a r as f u l l
Loan rates were set a t an average o f seventeen cents
p e r p o u n d o f r a w sugar,
a n d a u t h o r i t y t o impose i m p o r t fees o r quotas t o
s u s t a i n t h e p r i c e o f s u g a r i s also p a r t o f t h e p r o g r a m .
T h e s u g a r p r i c e s u p p o r t p r o g r a m in t h e 1981 law was e x t e n d e d i n t h e
Food
Security
September 30,
Act
of
1985,
with
minor
changes,
technically
until
1990, b u t w i l l c o n t i n u e t o c o v e r t h e s u g a r i n d u s t r y u n t i l 1991,
because o f t h e n a t u r e o f t h e c r o p y e a r .
T h e minimum loan r a t e is eighteen
cents
t h e bill.
per
pound
through
the
life
of
Congress
directed
the
A d m i n i s t r a t i o n t o e x t e n d t h e i m p o r t quotas.
Opponents o f t h e s u g a r p r o g r a m a r g u e t h a t it conflicts w i t h a t r a d e
l i b e r a l i z a t i o n p o l i c y , especially t h e e f f o r t t o eliminate i m p o r t quotas;
costs o f t h e p r o g r a m a r e i n excess o f t h e benefits;
that the
and that t h e program
maintains h i g h - c o s t s u g a r p r o d u c t i o n i n t h e U n i t e d States,
while r e s t r i c t i n g
SUGAR INDUSTRY I N HAWAII
t h e possibilities o f e x p a n d i n g p r o d u c t i o n where s u g a r can b e p r o d u c e d more
cheaply.
Moreover,
l6
heralded Carribean
as
one
Basin
analyst
put
it,
"While
President
Reagan's
I n i t i a t i v e a n d o t h e r aid projects a r e designed t o
promote political a n d economic s t a b i l i t y a n d c o n t r o l illegal migration a n d d r u g
trade,
repeated s u g a r
direction".
"
quota c u t s since 1982 have w o r k e d i n t h e opposite
Proponents of s u g a r s u p p o r t s contend t h a t t h e U n i t e d States
s u g a r i n d u s t r y is b e i n g made t h e scapegoat f o r economic conditions i n T h i r d
World countries, a n d t h a t t h e p r i o r i t y of t h e U n i t e d States government should
b e t o safeguard domestic
countries.
Also,
eventually
become
industries,
r a t h e r t h a n t h e economies o f f o r e i g n
w i t h o u t a p r i c e - s u p p o r t system,
entirely
dependent
on
the
t h e U n i t e d States
volatile
world
would
market
determine who would s u p p l y t h e s u g a r consumed i n t h e U n i t e d States,
to
how
much would b e supplied, and a t what p r i c e .
T h e latest proposal t o change t h e c u r r e n t s u g a r p r i c e s u p p o r t system
was i n t r o d u c e d i n t o Congress b y Senator B i l l Bradley, s u p p o r t e d b y t h i r t y f o u r lawmakers,
p r i m a r i l y f r o m u r b a n areas, on November 17, 1987."
There
a r e now t h r e e b i l l s b e f o r e Congress designed t o achieve these p u r p o s e s . "
Bradley's
legislation
would
reduce t h e s u g a r
p r i c e s u p p o r t f r o m eighteen
cents t o t w e l v e cents a p o u n d o v e r t h e n e x t f o u r years and increase t h e
s u g a r i m p o r t quota b y 500,000 tons p e r year f o r f o u r years.
A spokesman
f o r Hawaii's s u g a r i n d u s t r y said t h e proposal would d r i v e most o f Hawaii's
s u g a r companies o u t o f business i n t h e n e x t t w o years."
It is probable t h a t
t h i s bill w i l l die i n t h e Senate because i t does n o t have t h e s u p p o r t o f t h e
Senate Committee o n A g r i c u l t u r e ,
Nutrition,
and Forestry.
However,
it is
possible t h a t such a p r o v i s i o n may b e attached t o another v e h i ~ l e . ~ '
T h e most recent news f r o m Washington,
D.C.
is
t h a t a 25 p e r c e n t c u t
was o r d e r e d b y t h e Reagan Administration i n t h e s u g a r i m p o r t quota f o r 1988,
t o about 750,000 t o n s .
industry,
A l t h o u g h t h i s appeared t o b e good news f o r t h e sugar
showing an a p p a r e n t willingness
to
use quotas t o p r o p u p t h e
domestic s u g a r prices, as r e q u i r e d b y t h e 1985 s u g a r provisions o f t h e Farm
Act,
s u g a r i n d u s t r y officials wondered i f t h e administration had n o t c u t t h e
quota more t h a n
needed,
t o b r i n g t h e s u g a r s u p p o r t p r o g r a m u n d e r more
intense f i r e by legislators,
t h e State
Department,
consumer
groups,
and
OVERV 1 EW
others,
to
have
the
sugar
program
terminated
prior
to
its
scheduled
T h e r e is also a o n e - y e a r p l a n t o i m p o r t 400,000 tons of s u g a r
expiration.
f r o m t h e Caribbean a n d t h e Philippines, i n t h e 1988 fiscal y e a r , i n addition t o
t h e s u g a r c o v e r e d b y t h e i m p o r t quotas.
T h i s o n e - y e a r plan,
p u s h e d by
S e n a t o r Daniel Inouye, would n o t depress s u g a r p r i c e s because t h e e x t r a tons
A s u g a r i n d u s t r y e x e c u t i v e stated
would be re-exported after being refined.
t h a t t h i s p l a n would "remove some o f t h e heat" generated b y t h e i m p o r t quota
cut. Z2
C e r t a i n i n d i v i d u a l s associated w i t h Hawaii's s u g a r i n d u s t r y perceive t h a t
t h e success o f s u g a r i n Hawaii is r e a l l y o u t of t h e i r hands,
and t h a t
its
s u r v i v a l depends h e a v i l y o n t h e c o n t i n u a t i o n of domestic p r o t e c t i o n f o r s u g a r
because o f t h e n a t u r e o f t h e w o r l d s u g a r m a r k e t , t h e lack o f an international
s u g a r agreement, t h e diminished consumption of sucrose i n t h e U n i t e d States,
a n d t h e p e n e t r a t i o n o f h i g h - f r u c t o s e c o r n s y r u p i n t o t h e sweetener m a r k e t .
One o b s e r v e r wrote,
the "...sugar
i n d u s t r y o n Kauai s i t s on a precarious
p e r c h as i t watches t h e approach o f 1991, t h e y e a r federal p r i c e s u p p o r t f o r
If p r i c e s u p p o r t s a r e n o t renewed, many p r e d i c t t h e imminent
s u g a r ends.
demise o f sugar, n o t o n l y on Kauai,
t o M r . Francis S. Morgan,
S u g a r Company, " . . . t h e
first,
b u t throughout the state".23
According
President a n d Chief E x e c u t i v e O f f i c e r of Hamakua
t w o c r i t i c a l i n d u s t r y requirements f o r t h e f u t u r e a r e
t o c o n t i n u e t o reduce o u r costs, a n d second, t o maintain t h e essential
features of t h e sugar provisions of t h e
e x p i r a t i o n i n late 1991 . " 2 *
i n Washington,
D.C.,
it
Farm Act,
a t least t h r o u g h t h e i r
A c c o r d i n g t o a member of Senator lnouye's s t a f f
is
too
soon
to
predict
the
fate
of
the
sugar
p r o v i s i o n s o f t h e Farm A c t . "
Hawaii
T h e State's
s u g a r companies
a r e located along t h e coastlines o f f o u r
i s l a n d s o f t h e State (see E x h i b i t 7 ) .
I n 1986,
184.181 acres o f t h e State's
l a n d was devoted t o sugarcane,
w i t h 21,000 acres used f o r purposes such as
m i l l sites,
irrigation
private
roads,
and
Hawaii's p r e s e n t s u g a r situation,
harvested;
production;
tons
of
systems.26
Exhibit
8
describes
i n r e g a r d t o t o t a l caneland acreage; acreage
sugar
harvested
per
acre;
number
of
Exhibit 7
HAWAII'S SUGAR ISLANDS
Source:
Hawaiian Sugar Manual, 1987 (Hawaii:
1986), p . 4 .
Exhibit 8
HAUCIIAN
SUGAR COWP~.HIES,
1986 ( P a d Value1
ions
parer:
CompaPy
Company
iota I
Cane
Acreage
Piodiicr eon
Sugar
Tons)
narvesred
Per A c r e
(snort
N O . of
employee^
69.072
BIG ISLAND
34,688
C.
Brewer and
c o . . Lid.
16.018
C. Brewer a n d
CO.. LZd.
15.743
2,623
46,099
35,890
7.611
2.597
150 y r . round
50-75 seeaonal
43.155
2.678
6.35'
14,936
no s i r e r 12.379
nate c r o p s
"0
4,812
25.855
14.023
11.832
I811.181
L)
nare
I ter-
crops
SUGAR INDUSTRY I N H A W A I I
employees;
d i v e r s i f i c a t i o n o f crops;
a n d t h e percentage o f island e l e c t r i c i t y
s u p p l i e d b y each company.
In
1986,
sugarcane.
tons,
t h e Hawaii s u g a r
i n d u s t r y p r o d u c e d 1,042,452
T h e average tonnage o f
r a n g i n g f r o m 9.56 t o
sugar
16.53 tons
tons of
p e r h a r v e s t e d acre was
p e r acre.
S u g a r companies
raw
12.47
have
d i v e r s i f i e d t h e i r operations t o some e x t e n t , g r o w i n g crops s u c h as macadamia
nuts,
coffee,
oranges,
cocoa,
chinese tallow,
protea,
corn, alfalfa, landscape materials, a n d foliage plants,
a n d slaughterhouse.
Big
Island,
employment
and
at
tea,
potatoes,
sweet
a n d o p e r a t i n g a feedlot
A s u b s t a n t i a l p o r t i o n o f t h e e l e c t r i c i t y on Kauai, t h e
Maui
sugar
is
purchased from
companies
in
the
sugar
companies.
State
totals
6,510
Approximate
individuals,
o c c u p y i n g f a c t o r y , f i e l d , clerical, s u p e r v i s o r y , a n d o t h e r positions. 2 7
Increases i n raw s u g a r p r o d u c t i o n ,
a n d lower f u e l costs,
i n addition t o o p e r a t i n g efficiencies
enabled t h e i n d u s t r y t o reduce i t s average cost of
p r o d u c t i o n i n 1986 (see E x h i b i t 9 ) .
a t o n a n d 15.61 cents a p o u n d .
T h e 1986 cost of p r o d u c t i o n was $312.10
T h i s was $20.67 a ton,
p o u n d below t h e costs o f p r o d u c t i o n in 1985."
a n d one c e n t a
T h e sugar i n d u s t r y reduced
i t s costs seventeen p e r cent, f r o m 1982 t h r o u g h 1986.
I n o r d e r f o r t h e sugar
i n d u s t r y t o be competitive, a n d s u r v i v e as a major component o f t h e American
sweetener i n d u s t r y , t h e i n d u s t r y is aiming t o make a similar gain, b y t h e e n d
o f 1991, t a r g e t i n g t h e average cost o f s u g a r t o b e in t h e t w e l v e c e n t a p o u n d
range."
Moreover,
Grocery
the
product
sugar
industry
ideas w h i c h
include "turbinado"
is p u r s u i n g new m a r k e t i n g strategies.
are being
examined
by
the
sugar
industry
s u g a r , r a w s u g a r t h a t has n o t been r e f i n e d t o t h e p o i n t
of whiteness, w h i c h may d r a w o n consumer i n t e r e s t i n less processed foods,
and "left-handed"
looks a n d tastes
industry
sugar,
a product still
like o r d i n a r y sugar,
i n t h e development stage,
b u t has
no calories.3D
is a t t e m p t i n g t o stimulate a demand f o r s u g a r ,
advertisements on television t o promote s u g a r . "
Also,
which
the
b y using generic
Exhibit 9
HAWAIIAN RAW SUGAR COST OF PRODUCTION, RETURN
TO GROWERS AND US. REFINED SUGAR RETAIL PRICE
Cents Per Pound
- Average Annual - 1960 - 1986
0 U. 5. price gronvlatcd wgor or retail.
b * a r o i i cost of productiw (raw voiue k i d is ~ c i g h t dwerage onnual cost of p r d w e r r h o 7.1and mill wgoicon. Swrce: HSPA. (Note: From 1956-1971. cost o f tronrportotiiln o f raw a',):
o d molouel r m paid by the producers; since 1972 by Can: t h w costs !-we h e n riightiy lover t.i
they w w l d hwe been r i t h w l the chomp, but returns hove 5ecn ,educed by ?he r a m ornouot.!
c Returns 10 b r o i l probners represent mler of
*igor and m o ~ o s e r5~ Can. Does ~1 tnc!L*
compliance p q m n t r made v d e i the U. 8. Sugar Act ~ h i c h$erinimted in $974. Such p o l n ^ ' %
averaged l e u mm, 112 cent p r pound. Doel no$ imlude plrmentr under the 1977 U S . p r w o ' -
rhich o m t e d to 2-310 cents
Source:
wr mund fw
4 c r m mly.
Hawaiian S u g a r Manual 1987, (Hawaii:
19861, p . 6 .
Chapter 3
PROBLEMS AND OPPORTUNITIES
IN T H E SUGAR INDUSTRY O F HAWAII
l ntroduction
In 1981 t h e r e p o r t e n t i t l e d "Hawaii's S u g a r I n d u s t r y " b y B r u c e Plasch
( h e r e i n a f t e r r e f e r r e d t o a s P l a s c h ) ' w a s r e l e a s e d b y t h e s t a t e D e p a r t m e n t of
Planning a n d
Economic Development
Economic D e v e l o p m e n t ) .
( n o w t h e D e p a r t m e n t of
Business and
T h a t s t u d y was i n t e n d e d to:
(1)
A n a l y z e w h e r e Hawaii's s u g a r i n d u s t r y was h e a d e d ,
(2)
Recommend w a y s t o s t r e n g t h e n t h e s u g a r i n d u s t r y a n d / o r make a
smooth t r a n s i t i o n t o r e p l a c e m e n t a c t i v i t i e s , a n d
(3) A s s e s s t h e e f f e c t of t h e s u g a r i n d u s t r y o n land u s e , w a t e r u s e ,
transportation,
and
other
private
and
government
decisions.
R e g a r d i n g t h e s u g a r i n d u s t r y in Hawaii, Plasch s a i d : '
In
conclusion,
industry
should
the
long-term
reflect
outlook
cautious
for
optimism.
~ a ~ a i i ' ssu g a r
Most
sugar
p r o d u c e r s w i l l p r o b a b l y s u r v i v e , h u t w i t h modest p r o f i t s e x c e p t
f o r t h o s e o c c a s i o n a l y e a r s when world s u g a r p r i c e s a r e h i g h .
Hawaii s u g a r o p e r a t i o n s , however, t h a t a r e p o t e n t i a l c a n d i d a t e s
f o r b e i n g c l o s e d i n c l u d e p r o d u c e r s t h a t have r e l a t i v e l y h i g h
p r o d u c t i o n c o s t , l a c k t h e f i n a n c i a l r e s o u r c e s needed t o s u r v i v e
y e a r s of abnormally low s u g a r p r i c e s , o r u s e l a n d f o r which
t h e r e a r e more p r o f i t a b l e u s e s , such a s u r b a n i z a t i o n .
H o u s e Resolution No. 216, H . D . 2 (19871,
a s k e d t h a t a n action plan f o r
t h e s u g a r i n d u s t r y be d e v e l o p e d b a s e d u p o n a s t u d y of all f a c t o r s a f f e c t i n g
t h e industry.
Whire some c o n d i t i o n s s u c h a s oil p r i c e s h a v e c h a n g e d s i n c e
PROBLEMS AND OPPORTUNITIES
1981, t h e Plasch s t u d y was a comprehensive review of t h e s u g a r i n d u s t r y and
many
of
its
findings
are still relevant today.
Therefore,
g i v e n t h e time
limitations o f p r o d u c i n g an action p l a n f o r t h e Hawaii s u g a r i n d u s t r y b y t h e
1988 legislative session,
t h e Bureau has used t h e Plasch s t u d y as t h e basis
u p o n which t o b u i l d t h i s p a r t o f t h e r e p o r t .
I n o r d e r t o determine what has
happened t o Hawaii's s u g a r p r o d u c e r s since 1981,
t h e B u r e a u reviewed t h e
problems i d e n t i f i e d by Plasch which increase t h e cost o f operations and which
t h r e a t e n Hawaii's s u g a r i n d u s t r y ' s already s h a k y p r o f i t margins.
Information
was
government
collected
agencies,
through
interviews
(or
questionnaires)
l a b o r leaders, and s u g a r company operators.
T h i s c h a p t e r is d i v i d e d i n t o t h r e e p a r t s :
remaining s u g a r companies i n Hawaii,
opportunities
companies
with
for
vary
the
industry.
so t h a t
in
(1) a s h o r t d e s c r i p t i o n o f t h e
( 2 ) problems i n t h e i n d u s t r y , and (3)
The
problems
some operations
affecting
individual sugar
environmental
issues
are
of
foremost concern w h i l e in o t h e r cases t h e problem is one o f pressures f r o m
urbanization.
I n general,
t h e problems i d e n t i f i e d b y Plasch continue t o b e
t h e i n d u s t r y ' s problems t o d a y .
P A R T I.
The
following
questionnaires.
HAWAII SUGAR COMPANIES
information
has
been
gathered
from
T h i s information is intended t o be b r i e f ,
p r o v i d e h i g h l i g h t s of each operation.
t h a t company a r e described.
interviews
and
and is meant t o
!f relevant, special problems faced b y
E x h i b i t 8 i n c h a p t e r 2 also p r o v i d e s a c h a r t
comparing t h e operations of s u g a r companies in Hawaii.
Since t h e Plasch r e p o r t was published,
down i n 1982.
Oahu
Sugar,
t h e Puna s u g a r company s h u t
A l l o t h e r s u g a r operations a r e s t i l l
Pioneer Mill,
i n business,
including
a n d t h e Hilo Coast Processing Company (HCPC)
w h i c h were i d e n t i f i e d b y Plasch as h a v i n g p o t e n t i a l l y s h a k y f u t u r e s .
The
o v e r a l l p i c t u r e o f t h e sugar i n d u s t r y is one o f streamlining, developing costs a v i n g methods, and increasing y i e l d s .
SUGAR INDUSTRY IN H A W A I I
T h e I s l a n d of Hawaii
T h e s u g a r companies o p e r a t i n g on t h e i s l a n d of Hawaii a r e Hilo Coast
Processing Company (HCPC),
C. B r e w e r ' s Ka'u A g r i b u s i n e s s , a n d Mauna Kea
A g r i b u s i n e s s , a n d t h e independently owned Hamakua S u g a r Company.
The
Hilo
Coast
Processing
Company
c o n s i d e r i n g s h u t t i n g d o w n i t s operations
areas,
water
has
recently
announced
receives
unless it
relief
it
in
is
two
relief f r o m EPA regulations r e q u i r i n g t r e a t m e n t o f HCPC's mill waste
a n d i t s c o n t r a c t t o sell e l e c t r i c p o w e r t o t h e
company.
local
electric
utility
'
Plasch's assessment i n 1981 o f HCPC's operations was:
r e c e n t l y t h e H i l o Coast s u g a r i n d u s t r y was u n p r o f i t a b l e ,
o f $32.5 million.
A t i t s c u r r e n t cost o f p r o d u c t i o n ,
"From 1976 u n t i l
accumulating d e b t s
it will p r o b a b l y remain
u n p r o f i t a b l e d u r i n g t h e occasional p e r i o d s o f low w o r l d s u g a r p r i c e s . " "
The
H i l o Coast
Processing
Company
S u g a r Company a n d f r o m e i g h t y - n i n e
U n i t e d Cane Cooperative.
dwindling.
processes cane f r o m Mauna
i n d e p e n d e n t cane farmers
Kea
called t h e
T h e number o f independent cane farmers has been
I n 1974 t h e r e were 450 independent cane farmers.
Independent
f a r m e r s g r e w s u g a r o n land r a n g i n g f r o m 5 acres t o 480 acres a n d p r o d u c e d
a b o u t 14,858 s h o r t t o n s o f s u g a r i n 1986 w h i l e Mauna Kea p r o d u c e d 78,434
short tons of sugar.
HCPC processed a t o t a l o f 93,292 s h o r t t o n s o f r a w
s u g a r f o r Mauna Kea a n d t h e independent farmers.
HCPC operates f o r t y - s i x
p r o v i d e s about
HCPC's
major
weeks o f t h e year,
19 p e r c e n t of
concerns
the
have been
Big
Island's
meeting
EPA's
employs 500 people a n d
electricity
r u l e on
requirements.
water
quality
s t a n d a r d s a n d seeking an increase i n t h e r a t e o f r e t u r n o n e l e c t r i c i t y sold t o
t h e local e l e c t r i c u t i l i t y . '
HCPC ( a n d Hamakua Sugar Company)
l a r g e amount o f dirt.
processes cane w h i c h contains a
T h e EPA has set limits o n t h e amount o f soil t h a t can
b e d i s c h a r g e d i n t o t h e ocean.
T h e state DOH issues p e r m i t s w h i c h allow
PROBLEMS AND O P P O R T U N I T I E S
d i s c h a r g e of t h e mill's waste w a t e r if it meets national s t a n d a r d s .
There has
b e e n disagreement between t h e State a n d €PA o n w h e t h e r HCPC's d i s c h a r g e
w a t e r s meet these standards,
A c c o r d i n g t o t h e HCPC,
b u t t h e State has c o n t i n u e d t o issue p e r m i t s .
t h e a l t e r n a t i v e would b e a s h u t d o w n of operations
( s e e also t h i s chapter, section o n w a t e r p o l l u t i o n ) .
T h e second problem faced b y HCPC is i t s r e t u r n o n e l e c t r i c i t y sold t o
t h e p o w e r company.
HCPC's l o n g - t e r m c o n t r a c t t o sell e l e c t r i c i t y t o Hawaii
E l e c t r i c L i g h t Company (HELCO) a t a f i x e d r a t e o f r e t u r n has been d e s c r i b e d
as u n p r o f i t a b l e b y t h e s u g a r company.
A c c o r d i n g t o p u b l i s h e d news r e p o r t s ,
w h e n HCPC negotiated i t s c o n t r a c t i n t h e 1970s, t h e p r i c e o f oil was $2.80 a
barrel.
Today oil i s a b o u t $19 a b a r r e l .
l e g i s l a t i o n t y i n g t h e cost o f
HCPC's c o n t r a c t p r e d a t e d f e d e r a l
p u r c h a s e d power t o t h e p r i c e o f o i l .
Thus
HCPC, u n l i k e o t h e r p r o d u c e r s o f a l t e r n a t e e n e r g y , did n o t receive p r o t e c t i o n
f r o m fluctuations i n oil prices.'
This
problem
is
T h e HCPC c o n t r a c t continues u n t i l 1994.'
presently
being
studied
by
the
Public
Utilities
Commission w h i c h i s examining t h e rates b e i n g p a i d t o s u g a r companies
Hawaii w i t h
firm
section 269-27.2(c),
power
contracts which
preceded
PURPA
in
regulations a n d
Hawaii Revised Statutes, which established f l o o r p r i c e s t o
e n c o u r a g e t h e development o f a l t e r n a t e sources o f e n e r g y .
T h e commission's
r e p o r t is expected t o b e s u b m i t t e d t o t h e l e g i s l a t u r e p r i o r t o t h e c o n v e n i n g o f
the
1988
Regular
Session.
Early
news
reports
( t h r o u g h t h e Public U t i l i t i e s Commission) w i l l n o t
indicate
that
". . . i n t e r v e n e
the
State
t o h e l p Hilo
Coast improve c o n t r a c t c o n d i t i o n s . " *
L i k e HCPC, Hamakua S u g a r has also s t r u g g l e d against many odds t o s t a y
i n business.
It employs a b o u t 1,000 people.
c e n t o f t h e island's e l e c t r i c i t y .
alternative crops,
are
local
grocery
cutting
markets.
Hamakua's feedlot a n d slaughterhouse,
cost-saving
b y p r o d u c t s s u c h as bagasse,
Hamakua supplies about 7 p e r
activities.
Cattle
are
fed
like
sugarcane
t h e n s l a u g h t e r e d a n d o f f e r e d f o r sale t h r o u g h
Through
careful
marketing
techniques,
such
as
meat as requested instead o f i n t h e usual mass p r o d u c t i o n method,
Hamakua has been successfully competing w i t h mainland beef.
SUGAR INDUSTRY IN HAWAII
A n o t h e r c o s t - s a v i n g move was closing one of t w o mills and o p e r a t i n g t h e
remaining mill a t capacity t o p r o d u c e h i g h g r a d e sugar, which gets a b e t t e r
p r i c e f r o m C&H,
t h e California
refinery.
Hamakua Sugar
is committed t o
s t a y i n g i n t h e s u g a r business f o r as l o n g as possible.
K a ' u Agribusiness,
s u g a r division.
oranges,
a C.
B r e w e r Company,
K a ' u has d i v e r s i f i e d
employs 434 w o r k e r s i n i t s
i n t o macadamia
nuts
(3,600
acres),
a n d coffee (1 acre each) and may n o t s t a y i n s u g a r if i t becomes
It has 16,018 acres i n sugarcane.
unprofitable.
Mauna Kea A g r i b u s i n e s s has about 1,700 acres i n macadamia n u t trees,
a n d plans t o s t a y i n s u g a r as
l o n g as possible.
It has
15,743
acres
in
sugarcane a n d i n 1986 p r o d u c e d 78,434 s h o r t tons o f sugar.
Kauai
Kauai has f i v e s u g a r companies:
company,
Kekaha and
Lihue which
Gay and Robinson, a p r i v a t e l y owned
are
Amfac
subsidiaries,
McBryde,
an
Alexander a n d Baldwin company, a n d Olokele, a C. B r e w e r company.
Gay
possible.
Robinson
&
In
Sugar
Company
1986 it p r o d u c e d
plans t o s t a y i n s u g a r as
20,375
processed by Olokele Sugar Company.
short
tons
of
sugar
which
was
Gay & Robinson p r o d u c e d t h e most
tons o f s u g a r p e r h a r v e s t e d acre o f all s u g a r companies i n t h e State:
tons.
l o n g as
16.53
T h e n e x t h i g h e s t f i g u r e s were f o r Olokele Sugar a t 14.26 t o n s and
Oahu S u g a r a t 14.20 tons p e r h a r v e s t e d acre.
L i h u e Plantation
produced
78,941 s h o r t tons o f s u g a r i n 1986 a n d about
28 p e r c e n t o f Kauai's electrical power.
It employs 550 people a n d has 167
acres i n a l t e r n a t e crops.
Kekaha S u g a r plantation p r o d u c e d 54,012 s h o r t tons of s u g a r i n 1986 a n d
had a t o t a l o f 8,351 acres i n sugarcane.
Chinese tallow,
a n d protea.
About 2.8
generated by Kekaha Sugar Company.
It has d i v e r s i f i e d i n t o cocoa, coffee,
p e r cent of
Kauai's e l e c t r i c i t y is
PROBLEMS AND OPPORTUNITIES
Olokele S u g a r Company employs 220 people a n d supplies almost 1 p e r
c e n t o f Kauai's electrical needs t h r o u g h h y d r o e l e c t r i c p o w e r .
It w i l l t r y t o
s t a y i n business f o r as l o n g as possible (10 y e a r s o r more) b y c o s t - c u t t i n g
measures s u c h as s h a r i n g equipment,
a n d w o r k i n g cooperatively w i t h o t h e r
p l a n t a t i o n s l i k e Gay a n d Robinson.
M c B r y d e S u g a r Company employs a b o u t 440 w o r k e r s a n d has 12,379 acres
in
sugarcane c u l t i v a t i o n ,
acres).
more t h a n
half
of
which
is
leased
land
(7,061
I t supplies about 7 p e r c e n t o f Kauai's electrical needs t o t h e island
e l e c t r i c u t i l i t y company, Kauai E l e c t r i c Company.
Maui
Maui has t h r e e s u g a r companies:
Alexander
company,
and
Baldwin
a n d Pioneer,
company,
Hawaii Commercial S u g a r (HCES), a n
Wailuku
Sugar
an Amfac s u b s i d i a r y .
Company,
a
C.
Brewer
T h e Maui companies r e p o r t e d
t h e u n i q u e problem o f n o t h a v i n g enough w o r k e r s .
HC&S s u g a r
lands r e c e i v e o n l y
15 inches of r a i n annually a n d s u g a r
g r o w i n g p r e v e n t s t h e area f r o m becoming a wasteland.
35,000 acres i n cane.
H C t S has more t h a n
HC&S supplies 17 p e r c e n t o f Maui's e l e c t r i c power a n d
c o u l d employ 1,300 people, but about 90 o f these positions remain vacant d u e
t o a l a b o r s h o r t a g e on Maui.
Wailuku A g r i b u s i n e s s w i l l b e o u t o f s u g a r by t h e e n d o f 1988.
w i l l t a k e t h e place o f f o r m e r
pineapple,
sugar
lands.
b u t t h i s w i l l e x p a n d t o 2,500
acres a r e i n macadamia n u t s .
Pineapple
T h e r e a r e now 600 acres i n
acres a f t e r 1988.
A n o t h e r 1,300
T h i s company employs about 150 y e a r - r o u n d
a n d between 50 t o 75 seasonal w o r k e r s .
Plasch r e p o r t e d Pioneer Mill Company t o b e one o f t h e lowest p r o d u c e r s
i n t h e State a n d one w i t h h i g h p r o d u c t i o n costs.
Pioneer was
considered
t h r e a t e n e d by urbanization a l t h o u g h t o a lesser e x t e n t t h a n Oahu S u g a r . '
A c c o r d i n g t o HSPA data f o r 1986, Pioneer p r o d u c e d 13.43 t o n s of s u g a r p e r
SUGAR INDUSTRY IN HAWAII
h a r v e s t e d acre w h i c h
is n o t as good as Gay & Robinson's 16.53 tons p e r
h a r v e s t e d acre, b u t h i g h e r t h a n M c B r y d e ' s 9.56 tons p e r h a r v e s t e d acre.
Oahu
T w o s u g a r companies a r e located o n Oahu, Waialua Sugar,
a Castle and
Cooke company, a n d Oahu Sugar, an Amfac Company.
Waialua S u g a r r e p o r t e d i n e a r l y 1987 t h a t i t would s h u t down o v e r a t w o
year p e r i o d .
A n e f f a r t t o b u y t h e plantation t h r o u g h an employee stock
ownership plan f e l l t h r o u g h i n J u l y 1987.
However, on September 24,
1987
Castle & Cooke announced t h a t Waialua would b e o p e r a t i n g f o r a t least two
more years unless w o r l d s u g a r p r i c e s f e l l d r a s t i ~ a l l y . ' ~Waialua employs 430
people and t h e latest news t o keep it open u n t i l 1989 postpones t h e day of
r e c k o n i n g f o r these employees.
A c c o r d i n g t o HSPA data f o r 1986, Waialua S u g a r p r o d u c e d 13.78 tons o f
s u g a r p e r h a r v e s t e d acre.
Plasch r e p o r t e d t h a t " t h e major concern o v e r Oahu Sugar Company is t h e
long-term
threat
from
urbanization.
The
pressures
for
urbanization
are
intense, as indicated b y recent development t r e n d s , economic incentives, and
r e c e n t plans a n d proposals.
If t h e r e s h o u l d b e excessive loss o f l a n d a n d
water
Oahu
to
urban
use,
then
Sugar
Company
will,
in
time,
lose i t s
economies o f scale a n d b e f o r c e d t o close. ""
A t t h e time
Plasch made t h i s
18,240 acres f o r sugarcane.
o f about 4,000
prediction,
Oahu Sugar Company
As o f 1986, 14,023 acres were i n sugar,
a c r e s . I 2 L i k e Waialua Sugar,
amount o f s u g a r p e r harvested acre:
used
a loss
Oahu Sugar produces a h i g h
14.20 tons i n 1986.
PROBLEMS AND OPPORTUNITIES
P A R T II.
THE PROBLEMS
F a c t o r y Smoke
The
environmental
rules
governing
factory
smoke
a r e contained
in
c h a p t e r 11-60, Hawaii A d m i n i s t r a t i v e Rules (Department o f Health), r e l a t i n g t o
a i r pollution control.
The
federal
Environmental
Protection
Agency
(EPA)
Department o f Health (DOH) have regulations a n d rules,
and
the
respectively,
state
which
a r e designed t o maintain a h e a l t h y environment f o r people i n Hawaii. T h e
environmental problems f a c i n g t h e sugar
industry
r e s u l t f r o m t h e age-old
search f o r how t o balance t h e interests o f t h e p u b l i c f o r clean a i r a n d water
a g a i n s t t h e d e s i r e o f t h e i n d u s t r y t o p r o d u c e s u g a r a t t h e lowest possible
cost.
A i r q u a l i t y r u l e s r e q u i r e , f o r example,
t h a t t h e smoke emitted f r o m
s u g a r mill b o i l e r smokestacks have an opacity o f f o r t y p e r cent i f t h e stack
was
b u i l t b e f o r e 1972 a n d a t w e n t y
p e r cent o p a c i t y if b u i l t a f t e r 1972.
( " O p a c i t y " means a s t a t e w h i c h r e n d e r s material p a r t i a l l y o r wholly impervious
t o r a y s o f l i g h t a n d causes o b s t r u c t i o n o f an o b s e r v e r ' s v i e w . )
Plasch:
According t o
" I n o r d e r t o meet t h e 20 p e r c e n t - o p a c i t y s t a n d a r d whenever a new
b o i l e r is installed, it w i l l b e necessary t o spend at least $750,000 f o r ' m u l t i cyclones'
and
possibly
up to
$1.2
million
if
'wet
scrubbers'
should
be
required. " I 3
Sugar mills affected b y these regulations have followed these guidelines
by
properly
outfitting
smokestacks
to
meet these
requirements,
q u e s t i o n remains w h e t h e r t h e benefits j u s t i f y t h e costs.
"...most
o f t h e time t h e occasional g r a y
smoke is
but the
I n Plasch's words,
quickly
dissipated b y
t r a d e w i n d s (and) most s u g a r mills are located i n r u r a l areas f a r removed f r o m
densely populated areas. " "
Field B u r n i n g
T h e environmental r u l e s g o v e r n i n g f i e l d b u r n i n g a r e also contained i n
c h a p t e r 11-60, Hawaii A d m i n i s t r a t i v e Rules (Department o f Health).
SUGAR INDUSTRY I N H A W A I I
Sugarcane f i e l d s a r e b u r n e d t o remove leaves b e f o r e h a r v e s t .
also r i d s t h e f i e l d s o f
diseases.
After
rodents which
proper
application
is desirable t o c o n t r o l
b y a plantation,
rodent-borne
t h e DOH issues f i e l d
b u r n i n g p e r m i t s f o r up t o one y e a r f r o m date o f a p p r o v a l .
permit,
Burning
l5
Even w i t h a
t h e p l a n t a t i o n must t a k e i n t o consideration such f a c t o r s as t h e w i n d
direction,
rainfall i n t h e preceding twenty-four
hours,
size o f area t o be
b u r n e d , a n d time o f d a y ( n o n i g h t time b u r n i n g is p e r m i t t e d ) b e f o r e actually
f i r i n g a field.
I n addition, n o a g r i c u l t u r a l b u r n i n g is allowed o n c e r t a i n "no
b u r n " d a y s when meteorological conditions " r e s u l t f s )
I n 1981, Plasch r e p o r t e d t h a t t h e p o s s i b i l i t y o f b a n n i n g f i e l d
t h e island".16
b u r n i n g was
i n widespread haze on
still f a r o f f .
As o f
1987,
t h e DOH c o n t i n u e d t o issue f i e l d
b u r n i n g permits o n e v e r y i s l a n d .
T h e p o l l u t i o n f r o m smoke a n d ash has o f t e n caused c i t i z e n complaints
f r o m residents d o w n w i n d .
pollution,
year
Open f i e l d b u r n i n g o f sugarcane does cause a i r
b u t a c c o r d i n g t o t h e i n d u s t r y , o n l y f o r a f e w d a y s o u t of t h e t w o -
growing
cycle.
The
Health
Department acknowledged
nuisance a n d aesthetica!ly undesirable.
that
it
is
a
F o r citizens w i t h c h r o n i c r e s p i r a t o r y
diseases l i k e emphysema, t h e e x p o s u r e t o f i e l d b u r n i n g p a r t i c u l a t e s and smoke
can a d v e r s e l y a f f e c t health.
However, t h e s u g a r companies have n o t f o u n d
an economical a l t e r n a t i v e t o f i e l d b u r n i n g .
Instead, t h e s u g a r companies have
t a k e n p o s i t i v e steps b y c a l l i n g residents w i t h r e s p i r a t o r y illnesses t o w a r n
them o f upcoming b u r n i n g so t h a t those i n d i v i d u a l s can leave t h e area d u r i n g
the burning.
A c c o r d i n g t o Plasch t h e b a n o n f i e l d b u r n i n g would r e q u i r e companies t o
haul a n d dispose o f
trash
at
the
mill,
although
burning
the trash
for
electrical power may b e a way t o p a r t i a l l y o f f s e t t h e s e added costs."
In
August
1987,
the
EPA
and
DOH
announced
the
results
of
a
p r e l i m i n a r y s t u d y on t h e b u r n i n g o f p r e - h a r v e s t sugarcane o n Maui in A p r i l
1986.
T h e announcement r e p o r t e d t h a t t h e limited s t u d y d i d " . . . n o t suggest
a s i g n i f i c a n t health h a z a r d e x i s t s , " b u t t h e s t u d y also "...did n o t i n c l u d e t h e
assessment o f a n y r i s k t o n e a r b y p o p u l a t e d areas.""
PROBLEMS A N D OPPORTUNITIES
T h e p r e s s release also reported:
DOH
is
currently
reviewing
''
existing
data
collected
by
the
department's Health Surveillance Program t o determine whether there
a r e any unusual p a t t e r n s of
sugar cane c u l t i v a t i o n .
i l l n e s s in populated areas close t o
The h e a l t h s t a t u s of r e s i d e n t s i n areas
where cane has been grown w i l l be compared t o t h a t of r e s i d e n t s i n
o t h e r areas of the S t a t e over a 10-year r e t r o s p e c t i v e period.
It is
a n t i c i p a t e d t h a t t h i s review w i l l be completed in October 1 9 8 7 .
In a d d i t i o n , t h e DOH is working with t h e EPA in developing another
study t o determine t h e e x t e n t t o which those l i v i n g downwind of a
burning canefield may be exposed t o the compound i d e n t i f i e d in the
preliminary
EPA
study.
This
air
sampling
study
would
provide
q u a n t i t a t i v e data t h a t may be useful i n determining possible health
r i s k s t o residents i n a f f e c t e d a r e a s .
In contrast t o s u g a r mill smoke emissions, t h e balance is tipped in favor
of field burning and t h e s u g a r industry over t h e public's concern for ash and
smoke f r e e conditions.
However,
residential, t h e public p r e s s u r e to
a s more areas near s u g a r fields become
ban field burning will probably increase.
Field Chemicals
Any ban of agricultural chemicals by E P A can hamper s u g a r production,
because some amount of field chemical use is inevitable in t h e agricultural
business t o control insects and plant diseases.
The goals in t h i s problem
area a r e t o reduce chemical usage t o a s little a s necessary and t o a s short a
time a s possible.
Ninety-six
p e r cent of all field chemicals used by Hawaii
s u g a r plantations a r e herbicides.
ametryn,
T h e top four herbicides being used a r e :
atrazine, diuron, and dalapon (see Exhibit 10).
a r e of relatively low toxicity ( s e e Exhibit 10-A).
These chemicals
However, atrazine has been
found in ground water and if not eventually banned, may a t least be required
t o c a r r y a precautionary
label.
These four herbicides
a r e used
plantations only in t h e f i r s t six months of t h e two-year crop cycle.
by
all
Exhibit 10
CPCs USED BY HAWAII'S SUGAR I N D U S T R Y IN 1984
Active ingredient'
Herhicides-weed control
ameon:
alrazine:
diuront
dalapont
2. 4-D
glyphosate
hemzinone
asulm
terbacil
picloram
silvex
metribuzin
Cmwth regulators
glyphosate
ethephon (experimental)
Fungicides-disease control
benomyl
methyl thiophanate
Insecticides-insect contml
heptachlor
chlorpyrifos
Rodenticides-rat contml
zinc phosphide
pindone
Brand name
96.4
Evik 90
Aatrex 80 or 90
Karmex
Dowpon
DM.4-6
Roundup. Rodeo
Velpar
Asulox
Sinbar
Tordon
Kuron
Sencor
2.2
Poiado
Ethrel
0.8
Benlate
Topsin M
0.2
Heptachlor 2EC
Durshan
0.4
Zinc Phos~hideOat
Bait
Pival Oat Bait
-
'CPCs are sold by brand name as diluted formulations of the
active ingredient.
tThese four compounds represent 84% ofthe total chemicals
used.
Th2 tup four h e r b d s s represent thc jumr induriqi m 3 1 ~
CPC use anJ arc applwd .n ths first 6 m8mrIrr o i ~ k ? - ? e a crop
r
cvcle. The rest ofthe CPCsare for selective ~mblemsreauirini!
.
.
lesser quantities: e.g., grou.th regulators are applied in small
amounts to increase sugar yields: fungicides are used in seed
treatment t a n k insecticides are rarely needed because of
biological controls (heptachlor is being phasedout and replaced
by a phpical method to contml ants; c h l o ~ r i f o sis used to
conbol mosquitoes in waste water areas): mdentrcides ar? used
only %,herethere are lots of rats
Source:
Sugar Kews (Brochure) HSPA.
Exhibit 10-A
lmialw3 ACUI?E TOXICITY
SUGAR CPCI AND OTHER FAMILIAR CHEMICALS
Moderately Horordo
Active ingredients
.
.*:pbn
kimrinora
.atrefin.
0A.tr.x
I0
.,"g;yo
wearing Toxicity By Ingestion-
Source:
Sugar Kews (Brochure) HSPA
SUGAR INDUSTRY IN HAWAII
G r o w t h r e g u l a t o r s make up a n o t h e r t w o p e r c e n t o f all f i e l d chemicals
used, a n d t h e remaining t w o p e r c e n t a r e d i s t r i b u t e d among fungicides (used
o n l y o n seeds), insecticides, a n d r o d e n t i c i d e s .
E x h i b i t 10-A shows t h e k i n d s of herbicides, fungicides,
insecticides, and
rodenticides used i n t h e s u g a r i n d u s t r y a n d t h e i r r e l a t i v e t o x i c i t y b y s k i n
c o n t a c t o r by i n g e s t i o n .
T h e s u g a r i n d u s t r y is keenly aware o f t h e potential
r i s k s o f u s i n g f i e l d chemicals a n d t h r o u g h t h e HSPA conducts research t o
f i n d non-chemical a l t e r n a t i v e s s u c h as biological c o n t r o l against insect pests
o r special designs f o r drip t u b e s s u c h as a parallel r i d g e b a r r i e r t o p r e v e n t
a n t s f r o m damaging i r r i g a t i o n drip holes.
Water Pollution
T h e environmental r u l e s g o v e r n i n g w a t e r q u a l i t y standards a r e contained
i n c h a p t e r 11-54, Hawaii A d m i n i s t r a t i v e Rules (Department o f H e a l t h ) .
H i l o Coast
Processing Company
(HCPC)
a n d Hamakua Sugar Company
process cane w h i c h contains a l a r g e amount o f dirt.
T h e EPA has set limits
on t h e amount o f soil t h a t can b e d i s c h a r g e d i n t o t h e ocean.
T h e state
health department issues p e r m i t s w h i c h allow d i s c h a r g e o f t h e mill's waste
w a t e r if it meets national s t a n d a r d s .
T h e r e has been disagreement between
t h e State a n d EPA on w h e t h e r HCPC's d i s c h a r g e waters meet these standards,
but
the
State
has c o n t i n u e d t o issue p e r m i t s .
a l t e r n a t i v e would be a s h u t d o w n o f operations.
A c c o r d i n g t o HCPC,
the
Perhaps it is possible t o
change h a r v e s t i n g methods t o r e d u c e t h e amount o f soil collected w i t h t h e
cane.
However,
u n t i l it becomes economical t o m o d i f y h a r v e s t i n g methods i t
is u n l i k e l y t h a t any change i s f o r t h c o m i n g .
Water S u p p l y
G r o w i n g s u g a r r e q u i r e s a g r e a t deal o f w a t e r .
Department o f A g r i c u l t u r e :
g r e a t e s t amount of w a t e r
(MGD)
statewide,
or
A c c o r d i n g t o t h e state
" S u g a r cane i r r i g a t i o n accounts f o r b y f a r t h e
used:
about
approximately 820 million gallons
half
of
the
state's
total
daily
p e r day
water
PROBLEMS AND OPPORTUNITIES
consurnpti~n."~~
(See E x h i b i t s 11 a n d 12 f r o m A g r i c u l t u r e TRD, pp. 11-113,
11-114.)
It goes on:
Economic Development
"According to figures
Program,
i n t h e 1980 A n n u a l
s u g a r generates
5.30 f o r each 1,000 gallons of water consumed.
Overall
an annual r e t u r n of o n l y
"2'
Plasch r e p o r t e d t h a t n e a r l y 1-1/2 tons o f water a r e r e q u i r e d f o r each
p o u n d of
raw s u g a r p r o d u c e d . 2 2
S u g a r companies
r e l y on
rain in
some
areas, s u r f a c e w a t e r c a r r i e d t h r o u g h a series of d i t c h systems i n o t h e r areas,
o r drill t h e i r own wells.
inches,
"Where average y e a r l y r a i n f a l l exceeds s e v e n t y - f i v e
t h e c r o p u s u a l l y is n o t i r r i g a t e d .
I r r i g a t i o n b y t h e f u r r o w method
normally r e q u i r e s an application r a t e o f about 10,000 gallons p e r d a y ( g p d )
p e r acre.
gpd
I n contrast,
per
acre.
irrigated.""
Some
t h e drip method o f i r r i g a t i o n r e q u i r e s about 6,000
70,000
acres
of
sugarcane
are
presently
drip-
T h e i n d u s t r y uses drip i r r i g a t i o n as much as possible t o use
w a t e r more e f f i c i e n t l y b u t t h e f a c t t h a t s u g a r plantations r e q u i r e a g r e a t deal
o f w a t e r f o r t h e i r c r o p w o u l d put t h i s i n d u s t r y i n d i r e c t competition w i t h
residents a n d v i s i t o r s as more l a n d is p u t i n t o housing,
hotels,
and other
commercial activities w h i c h increase t h e demand f o r w a t e r .
The
state
Agriculture
Functional
a g r i c u l t u r a l water resource management.
Plan
includes
g i v e p r i o r i t y consideration,
Hawaii's people,
policy
to
improve
T h e a g r i c u l t u r e Technical Reference
Document states i n Implementing Action C ( l ) ( d f :
regulation,
a
"In implementing w a t e r use
where j u s t i f i e d f o r t h e
benefit of
t o t h e maintenance o f adequate water sources, supplies, a n d
facilities f o r continued e x i s t i n g a n d planned beneficial a g r i c u l t u r a l uses."
Comment states:
Hawaii
Its
'*
State
Plan
priority
guideline,
(section)
226-103(hj(3),
(Hawaii Revised S t a t u t e s ) encourages t h e r e s t r i c t i o n of new urban
development where water i s i n s u f f i c i e n t f o r b o t h a g r i c u l t u r a l and
domestic uses.. . . ( p a r e n t h e t i c a l m a t e r i a l and emphasis added)
It would t h e r e f o r e appear t h a t w h e r e water s u p p l y i s inadequate, s u g a r
plantations would b e f a v o r e d by t h e State o v e r u r b a n development in t h e same
area.
E x h i b i t 12
AGRlCULlURAL AND OTHER WATER USES
I n M i l l i o n Gal I o n s P e r Day
State
--
0
-4
Hawa i i
--
County
Ma 11i
Maui
.-
Molokai
-
--
Lana i
-.-
.
T o ~ a lS u s t a i n a b l e Y i e l d l a )
6,030
2,940
T o t a l Water Use 1980 ( h )
1,710
173
Ag Water Use T o t a l 1980
1,117
15
Ground w a t e r
Surface water
Recycled w a t e r
Ag Water Use l o t a l 1978 ( c )
1.264
1,144
5
115
Oa h u
Kaua i
.- .
.
783
1,043
-
5
375
652
90
10
981
109
-
Sugar
Pineapple
Vegetables
Orchards
r i e l d Crops
f o r a g e Crops
Other
( a 1 DLNR,
( b ) U.S.
wt?te_r.REs.or!rc&%~De.~~luem.ent
.....Fu.
nc&'OnaI_LL!an,
G e o l o g i c a l Survey,
198&.W&&er
Technica I R e f e r e n c e Document,
October,
1982, page I I I -24.
Use SllrVeX, DLNR R e p o r t R71, June 1984.
( c ) USDA S o i l C o n s e r v a t i o n S e r v i c e , u n p u b l i s h e d d a t a , March 1978.
S t a t e t o t a I s o n l y , i s l a n d data c a l c r l l a t e d from i r r i g a t e d
a c r e a g e s ( T a b l e 1 7 ) and f o l l o w i n g assttmed w a t e r use r a t e s i n g a l l o n s / a c r e / d a y :
sugar (6,700), p i n e a p p l e (1,350),
v e g e t a b l e s ( 6 , 7 0 0 ) , o r c h a r d s ( 3 , 7 0 0 ) , f i e l d c r o p s (6.7001, f o r a g e c r o p s ( 7 , 4 0 0 ) , o t h e r ( 7 , 4 5 0 ) .
Source:
H a w a i i S t a t e A g r i c u l t u r e F u n c t i o n a l P l a n : T e c h n i c a l R e f e r e n c e Document,
June 1985 p . 11-114.
Dept. o f A g r i c u l t u r e ,
Honolulu:
SUGAR INDUSTRY IN HAWAII
In 1987, t h e s t a t e l e g i s l a t u r e e n a c t e d a w a t e r c o d e t o manage a n d p r o t e c t
t h e S t a t e ' s w a t e r , f o r example, b y r e q u i r i n g w a t e r u s e r s t o o b t a i n permits in
areas where water supplies a r e threatened.2s
In r e s p o n s e t o t h e B u r e a u ' s q u e s t i o n n a i r e s a n d i n t e r v i e w s , some s u g a r
companies e x p r e s s e d c o n c e r n t h a t t h e w a t e r c o d e might r e s u l t in regulations
which will i n c r e a s e t h e c o s t of w a t e r o r s e v e r e l y r e s t r i c t u s a g e .
It is too
e a r l y t o know w h a t e f f e c t t h e w a t e r c o d e will h a v e on s u g a r o p e r a t i o n s , b u t
t h e implementation of t h e w a t e r code will b e c a r e f u l l y monitored b y t h e s u g a r
i n d u s t r y t o see w h a t e f f e c t s new r e g u l a t i o n s would h a v e o n s u p p l y of w a t e r
and costs.
Liability I n s u r a n c e a n d Workers' c o m p e n s a t i o n
T h e s u g a r i n d u s t r y is like o t h e r b u s i n e s s e s in i t s condemnation of t h e
c o s t s of d o i n g
business
in
Hawaii.
This
includes
t h e c o s t s of
liability
i n s u r a n c e , w o r k e r s compensation, a n d t a x e s .
Urbanization
Plasch r e p o r t e d in 1981 t h a t a t l e a s t two s u g a r p l a n t a t i o n s w e r e b e i n g
seriously t h r e a t e n e d b y urbanization:
Pioneer M i l l a n d Oahu S ~ g a r . ~ " n
1984, t h e DPED p o i n t e d o u t : Z 7
The ( s u g a r ) i n d u s t r y u s e s r e s o u r c e s i n t h e form of land and w a t e r
t h a t would o t h e r w i s e be
available
for
other
purposes,
although
c o m p e t i t i o n f o r land between s u g a r and o t h e r u s e s has become less
keen a s more o f t h e marginal cane l a n d s have been removed from
production.
While u r b a n i z a t i o n has pur: p r e s s u r e on s u g a r lands
a d j a c e n t t o e x i s t i n g r e s i d e n t i a l and commercial a c t i v i t i e s , t h e r e
a r e thousands of a c r e s o f m a r g i n a l l y p r o d u c r i v e l a n d s , c l a s s i f i e d a s
a g r i c u l t u r e , t h a t could be tapped f o r urban expansion b e f o r e prime
s u g a r l a n d s need be c o n s i d e r e d .
Sugar l a n d s most a f f e c t e d by t h e
p r e s s u r e o f u r b a n i z a t i o n a r e t h o s e of t h e 14,000-acre Oahu Sugar
C o . , i n t h e Ewa District o f Oahu, and t h e 8 , 0 0 0 - a c r e Pioneer Mill
PROBLEMS A N D OPPORTUNITIES
i n West
Co.,
Kaanapali.
Maui adjacent t o
the
Since 1980, about 4,000
major
resort
destination o f
acres have been taken o u t of
p r o d u c t i o n a t Oahu Sugar as an economy move and i n a n t i c i p a t i o n o f
future
urban development
threat
to
these
two
(West Beach f o r
operations
i s
not
example).
that
completely devour them i n t h e near f u t u r e ,
urbanization w i l l
rather that
but
amount o f cane a v a i l a b l e c o u l d drop below t h e
economically
sustain
the
processing m i l l s
The p r i m a r y
the
l e v e l needed t o
on b o t h p l a n t a t i o n s .
(emphasis added)
Summary of Problems
E x h i b i t 13 describes t h e s u g a r i n d u s t r y ' s analysis o f problem areas a n d
t h e p r i o r i t y o f each problem, some o f which h a v e been d e s c r i b e d a b o v e . 2 8
(1) f e d e r a l a n d state s u g a r
T h e t o p t e n p r i o r i t y problem areas a r e :
(2) b r e e d i n g a n d selection, (3) disease control,
support,
plant nutrition,
seed c u t t i n g ,
( 6 ) drip a n d s u b s u r f a c e i r r i g a t i o n ,
planting,
ratooning,
(10) f a c t o r y p r o c e s s i n g .
( 4 ) r a t c o n t r o l , (5)
(7) weed c o n t r o l ,
a n d f i e l d preparation,
(8)
(9) water use, a n d
Except f o r p r i o r i t y number one, t h a t o f f e d e r a l a n d
s t a t e s u g a r s u p p o r t , all o f t h e remaining t o p t e n p r i o r i t y issues depend o n
research
by
HSPA.
These
problems
have
been
i d e n t i f i e d by t h e s u g a r
i n d u s t r y a n d r e p o r t e d i n t h e State A g r i c u l t u r e Functional Plan,
Reference
energy,
Document
since
1985.
Other
state f u n c t i o n a l
Technical
p l a n s f o r water,
a n d t h e economy have also examined t h e r o l e o f t h e s u g a r i n d u s t r y
v i s a v i s r e l e v a n t State f u n c t i o n s .
F o r example, t h e State Water Resources
Development Plan examined t h e issue o f a s s u r i n g adequate w a t e r supplies f o r
c r o p s , i n c l u d i n g sugarcanez9 a n d examined t h e i s s u e o f w a t e r - r e l a t e d e n e r g y
p r o d u c t i o n (i.e.
h y d r o e l e c t r i c p o w e r generation)''
dealing w i t h water supply and energy).
(see p a r t s of t h i s c h a p t e r
T h u s t h e issues faced b y t h e s u g a r
i n d u s t r y have been examined b y a number of state departments a n d data have
been g a t h e r e d f o r several y e a r s o n t h e e f f e c t of t h e s u g a r i n d u s t r y o n t h e
resources a n d f u t u r e of Hawaii.
i n d u s t r y a r e n o t new problems.
T h e problems b e i n g faced b y t h e sugar
Exhibit 13
SUGAR INDUSTRY ANALYSIS NO. 3
n.
. ..
T R ~ ~ ~ W * D ~ V E L ~ U.S. W
. T.
n,*EOrRIl BrrrrE REWLATlOHa . .
Source:
10. IBBZ
P R I O . ~17. ~ r n ~ t t i mfomation
~ ~ ~ n t on iroDprowtn and w e i o p m m t . 1.1 ~ e w g r a r t n
irju'afonl i e needed to nmnrorr p r o
avit,.ity. , b j peg,,t,,tion WQ",,d
",LO' .in
[i)
r,.l,C
intormation ix*in.an ".r,rtai n,rtiao ,a rif,l.n.nm* herbic,dn
,a, Fiore.8". in cans tl.ldl *=durn "iriot.
lei
,.,,
..
'd>, F E D l D U I X T A i E W G l l I U P I O R T -
wwcn
*
PRbOR1TI 1. F8d.m $n# SMr WPPO*. TOItxiltmp rumon i e v ~ l r theCai1 d Piodurilon in n* 1981 farm & i t for rvgmi S i x >
Mil p i a . d r adwmte pro<&ion for the H#wlicm ~ 9 . rin8uriw. F.roraBi.trlb~rt~tu~ tor tb*Carcbh.r luilw 9iow.n wit8 rilo
hl"< an ndrwx a'*(
on i(.r.i,.o
m*r*rtl.
rwowrr ( 5 . comiilitnrr wi4b F-darni and S ! m rwiaciom rsu,eronomir hardmio. Tmat.n=fl ban o r i . n buin~ns,odor ot
miic waste n i e r .nd OSHA rwC.lionl .r. tDntinuin9 Oro(llar.
S t a t e Agrrculture Functional Plan Technical Reference Doc.,
Dept. of A g r i c u l t u r e , Honolulu, June 1985.
PROBLEMS AND OPPORTUNITIES
I n t h e environmental area,
t h e s u g a r i n d u s t r y has managed t o r e t a i n i t s
advantage o v e r i t s problems because f i e l d b u r n i n g , f i e l d chemical use,
d u m p i n g o f some amount of dirt i n t o t h e coastal waters c o n t i n u e .
and
I n general,
t h e state Department o f Health has leaned towards h e l p i n g t h e s u g a r i n d u s t r y
instead o f f r u s t r a t i n g it.
T h e Department o f Health has c o n t i n u e d t o g r a n t
p e r m i t s f o r a g r i c u l t u r a l f i e l d b u r n i n g a n d d i s c h a r g e of m u d d y mill waste water
o f f t h e Hamakua coast a n d has w o r k e d w i t h t h e i n d u s t r y w i t h i n t h e rules
established b y EPA.
P A R T Ill.
T H E OPPORTUNITIES
O p p o r t u n i t i e s in t h e s u g a r i n d u s t r y have been limited t o f i n d i n g new
crops f o r s u g a r lands a n d new ways t o use sugarcane as biomass f o r e n e r g y ,
o r f o r o t h e r b y p r o d u c t s f r o m t h e cane p l a n t .
A l t e r n a t i v e Crops
Alternative
crops,
diversified
agriculture,
aquaculture,
and
similar
a c t i v i t i e s can b e vtewed as ways t o supplement s u g a r o r t o replace s u g a r .
Plasch
reviewed
sugar.31
Sugar
the
historical
lands
amount
difficulties
to
184,181
in
i d e n t i f y i n g c r o p s t o replace
acres
statewide
as
of
1986.32
A l t h o u g h t h i s r e p r e s e n t s a decline o f 34,600 sugarcane acres between 1980 t o
1986, it would b e d i f f i c u l t t o f i n d enough a l t e r n a t i v e c r o p s t o f i l l all o f these
acres
(see
Exhibit
14,
from
Agriculture
TRD
p.11-87).
In
some
areas
sugarcane lands can b e used b y no o t h e r c r o p because o f t h e n a t u r e o f t h e
l a n d such as t h e q u a n t i t y o f r a i n f a l l ,
soil,
terrain,
a n d o t h e r conditions.
B u t t h e more l i k e l y problem would b e w h e t h e r t h e r e would b e a m a r k e t f o r
the
p r o d u c t s i f all available s u g a r lands could b e f u l l y
utilized.
Plasch
concluded:
I n summary,
suitable
for
crops which have t h e p o t e n t i a l t o r e p l a c e sugar must be
export,
must
cost
reiatively
little
co
transport
overseas; must t h r i v e i n Hawaii under t h e same growing c o n d i t i o n s as
does sugar; m u s t be r e s i s t a n t t o diseases,
that
thrive
i n Hawaii
insects,
and p r e d a t o r s
and must have some unique c h a r a c t e r i s t i c s
E x h i b i t 14
ACREAGE OF AGRICULTURAL COMMODITIES
By County, 1984
COMMODITY
STATE
SUGAR
188,400
PINEAPPLE
LIVESTOCK'
HAWAII
-0,92c
35,000
091,800
814.65C
Swine
P o u l t r y L Eggs
Other I r v e r t o r k
086,390
L.370
210
150
960
81i1.650
1.5:0
10
20
90
ORCHARD CROPS
ZS .LOO
22,100
Macadamla N u t s
Papaya'
Coffee
Banana
Guava
Avocado
Other fruits
16,900
2,590
2,000
990
875
50s
1,540
15.500
2,165
2,000
320
320
FLOWERS L NURSERY
PRODUCTS
1,715
5,235
Lettuce
Tomato
O t h e r Vegetables L Melons
FIELD CROPS
Forage L G r a i n
130
280
4,225
9,833
8.993
Seed C o r n
840
WETLAND CROPS
435
Taro
Watercress
Lotus Root
370
35
30
AQUACULTURE PRODUCTS'
PLANTED FOREST (1983)'
T O T A L ACREAGE,
A L L COMMODITIES'
475
46,279
l,lOL,572
T28.530
323,iiY
6
T O T A L ACREAGF, DIVERSIFIED
1,181,172
COMMODITIES
857,630
253.019
3
T O T A L ACREAGE. DIVERSIFIED
42,600
COMMODITIES I N CROP'
25,100
11,000
5
3,irOC
80.965
3:,06S
1.700
1. Source: Table C-I.
2. Acres hsiverted.
3. Data combined under steie total to avoid disciosvre of individual ouera:innr
4 . Stdie tote1 excluder varercrerr and lorus roar.
5. Source: Aquaculruie Developmsni Program Miice, Depaiiinenr of Land
and Nature: Resauices, records.
6. Source: The Srnte of H e ~ a i rDaia Book 19SL. Table 589, page 598.
7. Total here does not equel the iota1 in Siaiisrics of ~ a v s i i e n
Azri~~ifvze
1984 due to the mclurzonof livesrock, a~uacultuie.and
.
planted foiali.
8 . Excludes sugar, p ~ n e a p p i e ,livesrock, squeculrure. and plsniec forest
Source: Stare Agiiculivie Functional Plan, Technical Reference Document,
Depaiimeni afAgriivliure (Honolulu: June 1985:. p. 11-87,
PROBLEMS AND OPPORTUNITIES
which g i v e Hawaii a c o m p e t i t i v e a d v a n t a g e
sufficient
t o overcome
Hawaii's high c o s t s .
A r e c e n t s t u d y b y K . K . S e o f o r H S P A s o u g h t t o d e t e r m i n e t h e economic
v i a b i l i t y of
p r o d u c i n g f o u r p r o d u c t s from b a g a s s e ,
from s u g a r ,
a n d growing two alternative c r o p s :
producing
sugar esters
alfalfa a n d p o t a t o e s .
The
o v e r a l l c o n c l u s i o n s of t h i s s t u d y w e r e n o t e n c o u r a g i n g : "
(1)
The m a n u f a c t u r e o f p u l p and p a p e r ,
p a r t i c l e board o r medium
a c t i v a t e d c a r b o n , o r s u c r o s e e s t e r s &-ill
density fiberboard,
n o t be e c o n o m i c a l l y v i a b l e i n Hawaii i n t h e f o r e s e e a b l e f u t u r e .
(2)
There is a
l i m i t e d market p o t e n t i a l
some p r o s p e c t of making a p r o f i t .
potatoes
is
possible,
but
f o r growing a l f a l f a w i t h
Profitable cultivation of
would
be
riskier
than
growing
alfalfa.
< 3 ) The c o n v e r s i o n of b a g a s s e i n t o c a t r l e f e e d h a s t h e p o t e n t i a l t o
be p r o f i t a b l e b u t i n a l i m i t e d m a r k e t .
T h e r e a r e f o u r major d i f f i c u l t i e s t h a t have l e d t o t h e s e f i n d i n g s .
F i r s t , v e r y s m a l l p l a n t s ( i n t e r m s of a c r e a g e ) can more t h a n s a t i s f y
the
local
demand,
economies o f s c a l e .
but
small
plants
a r e unable
t o benefit
from
C o n s e q u e n t l y , p r o d u c t i o n c o s r s i n Hawaii w i l l
be higher than elsewhere.
Second, most of t h e p r o d u c t s s t u d i e d would r e q u i r e a l a r g e c a p i r a l
o u t l a y i n t h e f a c e of an u n c e r t a i n r e t u r n on i n v e s t m e n t .
Third,
i n many c a s e s , a dominant t e c h n o l o g y a p p r o p r i a t e t o t h e u s e
o f s u g a r o r b a g a s s e a s raw m a t e r i a l s i s l a c k i n g .
Fourth,
except
for
the
growing
of
alfalfa
and
potatotes
on
a
r e l a t i v e l y s m a l l s c a l e , t h e l o c a l market c a n n o t a b s o r b more t h a n a
small
f r a c t i o n of
the
output
of
even t h e s m a l l e s t v i a b l e p l a n t ,
SUGAR INDUSTRY IN HAWAII
while our geographical isolation from the mainland and other export
markets guarantees freight rates that would make Hawaiian products
non-competitive. (Parenthetical material added)
Several s u g a r companies a r e already p l a n t i n g a l t e r n a t i v e c r o p s such as
macadamia n u t s , pineapple, orange,
Wailuku agribusinesses i n P a r t I ) .
and coffee (see d e s c r i p t i o n o f Ka'u and
Wailuku Agribusiness expects t o b e o u t of
s u g a r a n d i n t o pineapple, among o t h e r crops, b y t h e end o f 1988 and Ka'u
Agribusiness
w i t h a few
acres
i n macadamia,
orange,
and coffee may be
c o n s i d e r i n g a l t e r n a t i v e c r o p s t o supplement i t s sugar p r o d u c t i o n .
As t h i s
r e p o r t was
being prepared f o r
printing,
late b r e a k i n g news
indicated t h e publication o f a book, "A Profile o f Economic Plants",
by Transaction Books,
Jersey.
R u t g e r s - - t h e State U n i v e r s i t y ,
published
New B r u n s w i c k , New
T h i s book l i s t s more t h a n 1,160 p l a n t s which could b e g r o w n on
agricultural
lands
now
or
formerly
in
pineapple
and
sugar
production.
A c c o r d i n g t o t h i s news a r t i c l e : "
This book is an outgrowth of the so-called Sugar Lands Project,
a federally funded search for alternate crops that may some day be
grown on the thousands of acres of agricultural land now in sugar
and the thousands more that now lie fallow because of the decline of
the sugar and pineapple industries . . . .
Sugar Lands is a two-fold effort.
One part resulted in the
computerized Hawaii Natural Resources Information System ( H N R I S ) ,
which is an on-line information system that stores a vast amount of
information detailing Hawaii's land and its many characteristics.
The second is a huge library of information, also stored on
computer, of worldwide
crops
that
have
been
studied
from
an
agricultural and economic perspective for possible cultivation in
the Islands.
PROBLEMS AND OPPORTUNITIES
A q u a c u l t u r e , t h e g r o w i n g o f animals o r p l a n t s i n f r e s h , salt, o r b r a c k i s h
water,
i s r e p o r t e d t o p r o v i d e 400 jobs in b o t h commercial p r o d u c t i o n and i n
technology t r a n s f e r ,
400
acres
in
research a n d t r a i n i n g i n 1983.
commercial
production.
Like
As o f 1983, t h e r e were
other
alternatives
being
considered as replacement o r a l t e r n a t i v e crops, i t is u n l i k e l y t h a t a q u a c u l t u r e
can u t i l i z e all of t h e thousands of acres of l a n d p r e s e n t l y i n s u g a r .
it
can
be
a
valuable
addition
to
the
State's
economic
However
ventures
into
diversification.
Sugar and Energy
I n i t s search f o r c o n t i n u e d v i a b i l i t y ,
t h e s u g a r i n d u s t r y has t u r n e d t o
d e v e l o p i n g ways t o use i t s b y p r o d u c t s in a l t e r n a t i v e e n e r g y p r o d u c t s .
For
example, ethanol can b e p r o d u c e d f r o m s u g a r a n d molasses3' a n d bagasse has
been b u r n e d t o generate steam f o r e l e c t r i c i t y f o r many y e a r s .
using sugar t o produce alternate energy,
c r o p s t o g r o w on s u g a r lands.
I n addition t o
t h e i n d u s t r y has looked t o new
Some o f these crops may b e food sources (see
section on a l t e r n a t i v e c r o p s ) o r p l a n t s f o r biomass.
S u g a r mills generate e l e c t r i c i t y b y b u r n i n g bagasse,
u s i n g h y d r o e l e c t r i c power where available.
and b y
T h e e l e c t r i c i t y is used t o power
t h e s u g a r m i l l ' s f a c t o r y a n d i r r i g a t i o n p u m p i n g needs.
t o t h e island's electric company.
f u e l oil,
I f mills close,
Excess power is sold
t h e loss o f e l e c t r i c power
p r o v i d e d b y these mills c o u l d have a s i g n i f i c a n t e f f e c t on t h e local power
company, p a r t i c u l a r l y on Kauai where t h e combined c o n t r i b u t i o n f r o m all Kauai
s u g a r plantations amount t o 38 p e r c e n t o f t h e island's t o t a l electrical p o w e r 3 '
(see E x h i b i t 15,
Summary o f Electrical Generation a n d E l e c t r i c i t y used b y
S u g a r Plantations, 1981 a n d Table 2, c h a p t e r 4 ) .
T h e use o f s u g a r f o r ethanol p r o d u c t i o n , as biomass f o r e n e r g y , a n d as
f e e d f o r cattle, a r e o n l y a few ways t o use s u g a r a n d i t s b y p r o d u c t s in a
fashion p r o b a b l y unimagined b y t h e earliest s u g a r g r o w e r s o f t h e 1800s.
HSPA,
some s u g a r companies,
a n d DBED a r e i n v o l v e d in v a r i o u s
The
k i n d s of
research w h i c h c o u l d lead t o t h e g r o w i n g o f sugarcane n o t f o r sugar, b u t f o r
its byproducts.
In a 1987 information release,
DBED r e p o r t e d :
"Although
Exhibit 15
SUMMARY OF ELECTRICAL GENERATION AND ELECTRICITY USED BY SUGAR PLANTATIONS:
WW(
PLM~
ISIANU-MATIUI
Gen. capacity, nameplate
Stem
Sug,*r CO.
l h i n a Factory
ODkala Factory
i l i l o Coast Prwess. Co.
Ka'u %gar Co., Inc.
12u1a Sugar Co., Ltd.
ISIANI) M A L
8
Fld 6
I
15,000
9.U00
23.800
2,500
12.500
62,800
8OMl
80MVlUOU
KAIIAI
Kekslre Sugdr Co., Ltd.
6,500
l . t l i ~ mPlantatn. Co., Ltd. 20,000
HBryde Sugar Co.. Ltd.
15,000
Olokele Sugar Co., Ltd.
2,800
ISiANO M A L
44.300
1.50011
1,30011
4,70011
50011/900U
8,000lV9000
7UUU
2,500
3 , 800
5,100
2, 500
3,700
4,200
4,000
1,m
2.200
UtilityC
+3.000
t500
+16,000
0
4,700
+1,000
t12.000
*3,600
+ZOO
SJW
RIKOWHJ
G~N~X!YI"I.J
Typical power d i s t r i b .
6
.lklQix&
S t e a ~ ~ d ~ o l O i e s e l b& a n t i c y
20.96
10.49
141.27
14.97
68.74
256.43
0.3911
0.391110.2lU
0.06
1.48
0 . d
0.31
0.99
3.37
22.21
99.76
27.19
7.58
156.76
6.6111
5.73H
32.8511
3.4atl10. 3611
48.671110. 360
1.31
0.39
0.49
1.07
3.26
0.2111
Fin
Co.. LtJ.
Wdtalua Sugar Co., Inc.
1 5 1 M M&
Iitiit*fes transmls,lon
2.34
59.65
11.40
8,000
24,000
14,000
46,000
17,500
10,000
21,500
losses and e l e c t r i c i t y used t o operate power p l a n t a u x i l i a r i e s .
d
*
f
B
I) dcctotes d i e s e l engine generator.
tiwlicates plantation delivery t o u t i l i t y .
-indicates u t i l i t y delivery to plnntation.
l s c l d r s 0.30 x 106 KW11 ptrcfmsed by lilwna Kea Sugar C o . , Inc.
I s ~ l r r l r sC . ? i n 106 K W l l used by Cay and Hubinsos.
lncltrles 1.55 x lo6 KM1 purchased by Wailuku Stlgar 6.
less t l w i 0.Oi r 1 1 ) ~KMl.
Source:
s t a - t e E n e r g y m a n T e c h n i c a l R e f e r e n c e Oocumeqt,
DPED ( H o n o l u l u :
Oct.
19821, p .
1 1 1-21.
Total
(&uu!&
(luantity
8.96
0.92
8.96
0.92
106.64
0
40.34
156.86
12.45
11.05
35.16
15.49
29.39
103.54
5.91
5.91
71.05
16.40
0.63
93.99
24.24
34.83
44.13
11.86e
115.06
16.40
0.63
11 d a w t e s hydroelectric generator.
c
(&~;m~11t16)
Standby Unsch'd
38.00
ON kt
Oahu Sugar
IJSIW
106.64
-Sugar CO.
Paia Factory
lhmcne Factory
Pioneer M i i l Co.. Ltd.
ISlANU Tcrml
1981
PROBLEMS AND OPPORTUNITIES
the
Hawaiian
generate
sugar
process
industry
steam
and
burns
nearly 3
electricity,
million
the
tons
of
industry
bagasse t o
still
consumes
approximately 350,000 b a r r e l s o f f u e l annually i n f a c t o r y b o i l e r s when bagasse
is u n a ~ a i l a b l e . " ' ~
I n a d d i t i o n t o bagasse f r o m sugarcane,
plants b e i n g t e s t e d f o r economic
f e a s i b i l i t y as d i f f e r e n t k i n d s o f biomass t o p r o d u c e e l e c t r i c i t y a n d l i q u i d o r
gaseous f u e l s i n c l u d e leucaena, eucalyptus, napier grass, a n d sweet sorghum.
T h e State o f Hawaii ( t h r o u g h DBED) p r o v i d e d f u n d s f o r 1986 ($150,000)
1987 ($120,000)
to
HSPA t o establish t h e biomass-to-energy
T e s t p l o t s o f 9 t o 12 acres a r e located o n f i v e islands:
and
t e s t facilities.
Hawaii,
Kauai, Maui,
Molokai, a n d Oahu."'
Hawaii's dependence o n petroleum f u e l m i g h t b e decreased and t h e s u g a r
i n d u s t r y r e v i t a l i z e d if new sources o f e n e r g y can b e competitively produced
f r o m biomass c r o p s .
Because o f t h e lag time between i n i t i a t i o n o f research
and t h e d i s c o v e r y o f a l t e r n a t i v e e n e r g y sources,
it is i n t h e State's i n t e r e s t
t o h e l p f u n d a l t e r n a t e e n e r g y research even d u r i n g a p e r i o d o f low oil prices,
i n o r d e r t o b e p r e p a r e d i f and when o i l p r i c e hikes d o o c c u r .
O t h e r Experimentation
T h e r e a r e o t h e r t y p e s of experimentation b e i n g conducted b y Hamakua
Sugar,
HSPA,
and DBED
to
produce
useful
byproducts
from
sugarcane.
Much o f t h e w o r k is h i g h l y technical and i n some cases confidential.
cases t h e bottom l i n e must b e whether such p r o d u c t s w i l l
I n all
b e profitable--a
b r e a k t h r o u g h t h a t has n o t y e t happened f o r t h e sugar i n d u s t r y .
Chapter 4
IMPACTS OF CLOSING SUGAR COMPANIES
Although t h r e e s u g a r companies closed d u r i n g t h e 1970s (Kilauea Sugar
Company on Kauai i n 1971, K a h u k u Plantation Company o n Oahu i n 1971, and
Kohala Sugar Company on Hawaii i n 1975) and one closed i n 1982 (Puna Sugar
Company
on
Hawaii),
the
Bureau's
research
indicated
that
most
of
the
remaining s u g a r companies a r e committed t o s t a y i n g i n business f o r a t least
another t e n years.
urbanization,
I n d u s t r y personnel a r e realistic about t h e p r e s s u r e s o f
increased
costs
of
production,
and
environmental requirements which can reduce p r o f i t s .
is
also
hopeful
that
with
continued
research,
the
cost
of
meeting
However, t h e i n d u s t r y
government
lobbying,
and
i n n o v a t i v e management, s u g a r can s u r v i v e i n Hawaii f o r many more years.
Economic Impacts
T h e r e a r e about 6,500 employees d i r e c t l y i n v o l v e d i n t h e sugar i n d u s t r y
(see Table 1 ) .
'
A c c o r d i n g t o HSPA: "Hawaiian sugar p r o v i d e s about 25,000
d i r e c t and i n d i r e c t jobs i n t h e state (and) d i r e c t s u g a r p a y r o l l i n c l u d i n g t h e
cost o f employee benefits, totaled $129 million i n 1986."2
Employment M u l t i p l i e r a n d Income M u l t i p l i e r
A t least one local economist has s t u d i e d t h e impact o f t h e loss o f sugar
t o t h e economy of Hawaii.'
H i t c h r e p o r t e d t h e employment m u l t i p l i e r i n sugar
is t h a t f o r e v e r y person d i r e c t l y i n v o l v e d in sugar, t h e r e a r e 2.29 n o n - s u g a r
jobs
indirectly
created
by
the
sugar
industry.
Therefore,
6,500
sugar
employees m u l t i p l i e d b y 2.29 totals 14,885 non-sugar jobs created i n d i r e c t l y
by t h e sugar i n d u s t r y .
Accordingly,
closing t h e sugar i n d u s t r y would affect
n o t o n l y t h e 6,500 s u g a r employees b u t about 14,800 o t h e r w o r k e r s as well.
T h e total f i g u r e o f about 21,300
w o r k e r s compares closely w i t h t h e 25,000
d i r e c t and i n d i r e c t jobs affected r e p o r t e d b y HSPA.
454,000
people employed i n t h e c i v i l i a n
labor force.'
I n 1985, t h e r e were
T h e 21,000
sugar-
IMPACTS O F C L O S I N G S U G A R C O M P A N I E S
related workers
(direct and indirect)
represent n e a r l y f i v e p e r c e n t o f t h e
t o t a l c i v i l i a n employment i n Hawaii.
Table 1
Approximate Employment by Occupation a t
S u g a r Companies, 1985
Factory
Field
Clerical
Miscellaneous
Supervisors
TOTAL
Source:
Hawaiian Sugar P l a n t e r s ' Association, Hawaiian Sugar Nanual,
1987
-
(Honolulu:
1986), p . 7.
Based on a series o f assumptions and calculations,
H i t c h said t h a t " f o r
e v e r y d o l l a r in personal income i n t r o d u c e d i n t o t h e economy f r o m t h e sale o f
an e x p o r t commodity o r service, t h e s p e n d i n g a n d successive r e s p e n d i n g o f it
creates 72 cents o f income.
T h i s adds 72/100th o f a job t o t h e economy f o r
e v e r y job created d i r e c t l y ( t h r o u g h p a y r o l l s ) o r i n d i r e c t l y ( i n t h e purchase
o f goods a n d services) b y t h e s u g a r plantation ~ o m p a n i e s . " ~H i t c h also said,
"...for
e v e r y $1 d i s b u r s e d by t h e s u g a r i n d u s t r y i n Hawaii, 67 cents becomes
personal income i n t h e hands o f residents o f H a w a i i . V n o t h e r words,
67
cents o f t h e dollar p a i d a s u g a r w o r k e r stays i n Hawaii w h i l e 33 cents goes
o u t o f State.
U s i n g a m u l t i p l i e r o f $1.72 f o r each 67 cents o f e v e r y s u g a r
income d o l l a r added t o t h e income stream o f
income m u l t i p l i e r o f 81.15.
Hawaii,
H i t c h a r r i v e d a t an
T h a t is, according t o Hitch, each d o l l a r o f sugar
income generates $1.15 o f personal income i n Hawaii, based o n t h e m u l t i p l i e r
o f $1.72.
Thus,
u s i n g Hitch's calculations,
a d i r e c t s u g a r p a y r o l l o f $129
million i n 1986 generated $148 million t o t h e income stream o f Hawaii f r o m t h e
sugar i n d u s t r y .
H i t c h concluded t h a t u s i n g conservative assumptions,
"the
closing o f t h e s u g a r i n d u s t r y would b e devastating t o t h e state's economy and
SUGAR INDUSTRY IN
would
result
in
the
almost
complete
HAWAII
collapse
of
the
neighbor
island
economies. "'
H i t c h also speculated t h a t s u g a r lands o f f e r an a t t r a c t i v e n a t u r a l f e a t u r e
t o t h e tourists
who
visit
these
islands
and
I f t h e s u g a r i n d u s t r y collapsed,
satisfaction.
r e t u r n t o weeds a n d s c r u b ,
w h i c h would
this
contributes
to
visitor
these g r e e n canefields would
have a n e g a t i v e e f f e c t on
the
atmosphere o f r u r a l Oahu a n d t h e n e i g h b o r islands.
Impact on S u g a r Employees
S u g a r w o r k e r s (except f o r Gay G Robinson's employees) a r e members o f
t h e I n t e r n a t i o n a l Longshoremen's a n d Warehousemen's Union (ILWU).
event
of
a
sugar
industry
collapse,
most s u p e r v i s o r s ,
clerks,
In the
a n d some
s k i l l e d f a c t o r y w o r k e r s would b e able t o t r a n s f e r t o o t h e r employment sectors,
b u t t h e b u l k o f t h e s u g a r w o r k e r s w i t h l i t t l e education a n d limited s k i l l s may
b e r e s t r i c t e d t o o t h e r a g r i c u l t u r a l jobs.
likely
types
of
jobs
A c c o r d i n g t o union officials t h e most
t o w h i c h these w o r k e r s c o u l d t r a n s f e r would b e in
pineapple, a q u a c u l t u r e , o r o t h e r d i v e r s i f i e d a g r i c u l t u r e .
i n the visitor
industry,
If t h e y s o u g h t jobs
t h e k i n d s of w o r k most s u g a r laborers would b e
s u i t e d f o r w o u l d b e groundskeepers,
maintenance personnel, o r housekeeping
staff.
Tourism,
a service industry,
would p r o v i d e a d i f f e r e n t l i f e s t y l e f r o m
f a r m i n g a n d it is l i k e l y t h a t t h e social impacts on families may b e d i s r u p t i v e
d u r i n g a t r a n s i t i o n f r o m an a g r i c u l t u r a l t o t o u r i s m employment base.
Such
r e s u l t seemed t o b e t h e experience a f t e r t h e 1975 s h u t d o w n o f Kohala S u g a r
Company
when
industry.'
some
former
sugar
workers
found
jobs
in
the
visitor
Such f a c t o r s as age, marital status, sex, i n t e r e s t i n r e l o c a t i n g i n
o r d e r t o f i n d replacement jobs, all influence t h e ease o f t r a n s i t i o n .
How real is t h e specter o f a complete s h u t d o w n o f t h e s u g a r i n d u s t r y i n
Hawaii?
F o r t h e s h o r t term, about 5 years, it does n o t appear t o t h e B u r e a u
t o b e a major p o s s i b i l i t y .
F o r example, a l t h o u g h Wailuku A g r i b u s i n e s s does
n o t p l a n t o b e i n s u g a r a f t e r 1988, t h e t r a n s i t i o n t o pineapple is b e i n g done
IMPACTS O F CLOSING S U G A R C O M P A N I E S
smoothly a n d w i t h o u t obvious social a n d economic dislocations.
operations appear "safe"
u n t i l 1989.
Waialua S u g a r
S u g a r labor c o n t r a c t s now p r o v i d e t h a t
t h e r e shall b e n o l a y o f f s f o r t h e l i f e of a s u g a r c o n t r a c t ( g e n e r a l l y one year)
a n d g i v e n t h e average c r o p age o f t w o years, t h e r e would b e a t least a few
years b e f o r e a p l a n t a t i o n can s h u t down completely.
Closings, if t h e y occur,
would t a k e place g r a d u a l l y w i t h f i e l d w o r k e r s g e n e r a l l y b e i n g l a i d o f f b e f o r e
o t h e r workers,
as f i e l d s a r e h a r v e s t e d .
Furthermore,
a r e c e n t l y enacted
"dislocated w o r k e r s ' law" p r o v i d e s t h a t employees b e g i v e n a t least 45 d a y s '
notice p r i o r t o a c l o s i n g of a covered establishment.'
While it is u n l i k e l y t h a t t h e e n t i r e s u g a r i n d u s t r y w i l l close down a t one
time,
t h e r e is a serious p o s s i b i l i t y t h a t t h e g r a d u a l c l o s u r e o f
plantations
would mean t h a t t h e remaining companies cannot maintain t h e economies o f
scale needed t o s t a y i n business.
A b s o r b i n g t h e f i x e d costs o f such t h i n g s
as s h i p p i n g terminals, warehouses, a n d research becomes more d i f f i c u l t as t h e
number of companies s h a r i n g these costs d w i n d l e .
Therefore,
what may have
s t a r t e d in 1971 as a t r i c k l e o f shutdowns c o u l d mean eventual d i s a s t e r f o r t h e
e n t i r e i n d u s t r y if s u g a r companies b e g i n t o s h u t down one-by-one on each
island.
For
example,
if Waialua S u g a r Company ceased operations,
Oahu
S u g a r may follow soon a f t e r w a r d s because t h e r e would n o t b e enough s u g a r
p r o d u c e d t o maintain r e f i n i n g operations.
lo
Electricity
E a r l i e r sections o f t h i s
r e p o r t made r e f e r e n c e t o t h e electrical power
generated b y several s u g a r companies (see E x h i b i t 15 i n c h a p t e r 3 ) .
Table 2
shows t h e c o n t r i b u t i o n t o Hawaii's t o t a l electric generation by s u g a r companies
by island.
cent,
sugar
A l t h o u g h t h e t o t a l c o n t r i b u t i o n f o r all islands is o n l y about 10 p e r
t h e n e i g h b o r islands would b e most h e a v i l y impacted b y cessation of
operations
which
contribute
electrical
power
to
the
local
power
company.
If t h e e n e r g y c o n t r a c t e x t e n d s b e y o n d t h e closure of t h e s u g a r
company,
t h e p o w e r company o n t h e island would n o t have t o a b s o r b t h e
difference
u n t i l t h e end of t h e contract.
F o r example,
Puna S u g a r w h i c h
closed i n 1982 is s t i l l p r o v i d i n g electrical e n e r g y u n t i l 1992.
"
When a s u g a r
company ceases c o n t r i b u t i n g electric power, t h e island p o w e r company would
SUGAR INDUSTRY I N H A W A I I
probably have to install a new power plant of boilers and generators and
burn
more oil o r find
other energy sources.
companies sell only their excess power,
if
Furthermore,
since sugar
its replacement industry uses as
much electricity as t h e s u g a r industry but does not generate electricity for
its
own
needs,
difference.
In
the
local
power
company
would
have
to
generate
the
1984 s u g a r companies generated about 817 million kilowatt
hours statewide, used about 540 million kilowatt hours and sold about 319
million kilowatt hours (see Exhibit 1 6 ) .
Table 2
Contribution t o Hawaii's Total Electric
Generation by t h e Sugar Companies, 1986
Percentage
Island
Total
of Contribution;*
-
a l l islands
10.4
Oahu
Hawaii
Kauai
?laui
"Includes power derived from bagasse, o i l , hydro, and d i e s e l .
a.
Department of Business and Economic Development records.
b.
Hawaii E l e c t r i c L i g h t Company
c.
Kauai E l e c t r i c Company
d.
Maui E l e c t r i c Company
Summary of Impacts
If t h e economic assumptions hold t r u e , a sugar industry shutdown would
be
devastating
for
the
State
of
Hawaii.
Without
suitable
alternative
employment choices, unemployment rates and welfare costs would increase on
E x h i b i t 16
E n e r g y Generated, Purchased, Sold and Used by
Raw Sugar Plantations, by islands: 1984
State
Total
Hawaii
Kauai
Maui
Oahu
Generated*
816.99
265.45
191.35
249.39
110.80
Purchased
41.91
2.12
4.68
9.76
25.35
319.04
163.52
82.90
61.43
11.19
26,089
10,345
4,938
8,080
3,447
Bagasse
23,411
9,215
4,577
6,409
3,210
Fuel oil
2,443
503
258
1,530
152
955
627
102
141
84
Subject
E l e c t r i c i t y (millions of
kilowatt-hours)
Sold
Gross heat values of b o i l e r fuels
( b i l l i o n s of B t u ' s )
A l l fuels
O t h e r fuels
"Includes electricity generated by steam and by hydroelectric or diesel
engine generators.
""Includes transmission losses and electricity used to operate power plant
auxiliaries.
Source:
Hawaii Sugar Planters' Association, Energy Inventory of Hawaiian
Sugar Plantations - 1984 (Energy Report 2 2 , December 1 8 , 1 9 8 5 ) ,
pp. 8 - 1 0 . Published in: The State of Hawaii Data Book, 1 9 8 6 ,
Department of Planning and Economic Development, State of Hawaii
(Honolulu: 1 9 8 6 ) Table 4 8 3 , p. 4 5 6 .
SUGAR INDUSTRY I N H A W A I I
all islands, b u t more so on t h e n e i g h b o r islands where s u g a r plays a l a r g e r
r o l e in t h e economy.
One need o n l y look a t t h e effects i n K a h u k u on Oahu,
Kohala a n d Puna o n Hawaii,
and Kilauea o n Kauai t o realize what
s u g a r jobs can d o t o a community.
loss o f
I n 1981 Plasch r e p o r t e d t h a t " t o minimize
problems r e s u l t i n g f r o m closing a s u g a r operation,
h i g h r i s k v e n t u r e s may
have t o b e attempted ( a n d ) t h e community may also become w i l l i n g t o accept
activities
which
it
would
otherwise
oppose
because
of
their
negative
environmental a n d social impact. " l Z
I n t h e n e x t c h a p t e r o f t h i s r e p o r t t h e B u r e a u p r e s e n t s i t s f i n d i n g s and
recommendations
d e s c r i b i n g t h e specific actions w h i c h t h e State of
m i g h t t a k e t o help t h e s u g a r i n d u s t r y .
been made bv Plasch i n 1981.
Hawaii
Some o f these recommendations had
Chapter 5
FINDINGS A N D A C T I O N PLAN
Findings
1.
S u g a r is a h i g h l y t r a d e d commodity.
A b o u t s e v e n t y nations e x p o r t
s u g a r t o approximately one h u n d r e d a n d f i f t e e n c o u n t r i e s .
However,
about
s e v e n t y - f i v e p e r c e n t o f w o r l d s u g a r consumption o c c u r s w h e r e t h e s u g a r
c r o p is p r o d u c e d .
2.
Most
variety
of
agreements,
governments
domestic
sugar
protect
sugar
their
programs.
country's
Under
sugar
industry
preferential
p r i c e s averaged t w e n t y - o n e cents a pound,
and
by a
trade
while s u g a r
t r a d e d on t h e "free" o r w o r l d m a r k e t averaged s i x cents a p o u n d i n 1986.
3.
S u g a r p r i c e s a r e said t o b e among t h e most unstable i n international
t r a d e because of t h e r e l a t i v e l y small shares o f t h e w o r l d ' s s u g a r p r o d u c t i o n
f r e e l y t r a d e d i n i n t e r n a t i o n a l markets.
T h e f r e e l y t r a d e d s u g a r is u s u a l l y
s u g a r w h i c h cannot b e absorbed b y p r e f e r e n t i a l systems,
o r consumed i n t h e
producing countries.
4.
Attempts t o establish an e f f e c t i v e I n t e r n a t i o n a l S u g a r Agreement t o
stabilize t h e p r i c e o f s u g a r h a v e failed.
5.
syrup
T h e i n t r o d u c t i o n o f a process f o r mass-producing h i g h - f r u c t o s e c o r n
has
transformed
consumption o f
the
United
refined sugar
States
sugar
market,
so
that
the
has declined while t h e consumption o f h i g h -
f r u c t o s e c o r n s y r u p has r i s e n dramatically.
6.
1981 was
T h e s u g a r p r i c e s u p p o r t p r o g r a m o f t h e A g r i c u l t u r e a n d Food A c t o f
extended
in the
Food S e c u r i t y
Act
of
1985,
technically
until
SUGAR INDUSTRY IN HAWAII
September 30,
1990, b u t w i l l c o n t i n u e t o c o v e r t h e s u g a r i n d u s t r y u n t i l 1991.
However. i t s renewal is u n c e r t a i n .
7.
C e r t a i n i n d i v i d u a l s associated w i t h Hawaii's sugar i n d u s t r y perceive
t h a t t h e survival o f t h e sugar
i n d u s t r y depends on
the
renewal
of
the
essential features of t h e f e d e r a l s u g a r program, as well as c o n t i n u i n g e f f o r t s
t o reduce costs related t o s u g a r operations.
8.
Problems o f t h e Hawaii sugar operations which were i d e n t i f i e d b y
B r u c e Plash's s t u d y i n 1981 remain problems i n 1987.
field
burning,
use
of
field
chemicals,
water
Environmental issues of
pollution,
pressures
of
u r b a n i z a t i o n a n d water use continue t o a f f e c t t h e sugar companies.
9.
Hawaii s u g a r companies h a v e t r i e d t o reduce costs of operations b y
seeking a l t e r n a t e crops f o r use o f s u g a r lands and alternate uses f o r sugar
b y p r o d u c t s such as bagasse a n d molasses.
Research has been conducted on
ways t o increase y i e l d f r o m sugarcane, f i n d suitable biomass crops f o r use i n
e n e r g y generation,
a n d so on.
T h e State o f Hawaii, HSPA, t h e U n i v e r s i t y o f
Hawaii's College o f T r o p i c a l A g r i c u l t u r e and Human Resources, and i n d i v i d u a l
s u g a r companies have been d i l i g e n t l y seeking ways t o b e more e f f i c i e n t and
imaginative i n t h e e f f o r t t o keep sugar i n Hawaii.
10.
T h e impact o f s u g a r company shutdowns would have g r a v e economic
impacts on Hawaii,
especially o n t h e
socio-economic problems w i l l increase.
n e i g h b o r islands.
Unemployment a n d
Electric companies which now depend
o n t h e a v a i l a b i l i t y o f excess electric generation p r o d u c e d a n d sold by sugar
companies would
have t o f i n d
new ways t o generate t h e d i f f e r e n c e if t h e
s u g a r i n d u s t r y collapses.
Action Plan
T h e following
recommendations a r e based on a s u r v e y o f t h e State's
s u g a r companies and i n t e r v i e w s w i t h a v a r i e t y of i n d i v i d u a l s and organizations
associated w i t h Hawaii's s u g a r i n d u s t r y .
Some o f these steps can b e taken
FINDIf4GS AND ACTION PLAN
immediately.
O t h e r steps a r e o n - g o i n g and can b e i n i t i a t e d when s t a r t - u p
f u n d s a r e made available f o r studies and t h e l i k e .
L o b b y i n g i n S u p p o r t o f U n i t e d States Sugar Legislation
T h e State can h e l p Hawaii's s u g a r i n d u s t r y by l o b b y i n g Congress f o r
renewal o f t h e domestic s u g a r p r o g r a m t h a t technically e x p i r e s i n 1990.
C e r t a i n i n d i v i d u a l s i n t e r v i e w e d stated t h a t t h e f a t e o f t h e s u g a r i n d u s t r y
i n Hawaii is l a r g e l y o u t o f t h e hands of Hawaii's s u g a r companies, a n d instead
i s h i g h l y dependent on f e d e r a l s u p p o r t of t h e domestic sugar i n d u s t r y .
They
perceived t h a t passage o f federal legislation t o p r o t e c t sugar is essential t o
enable t h e domestic market t o compete i n a h i g h l y controlled international
market, where most nations i n t e r v e n e o n behalf of t h e i r sugar producers,
and
where t h e w o r l d market p r i c e o f sugar is h i g h l y unstable.
Research
T h e s u p p o r t of t h e Hawaiian Sugar Planters' Association research and
development p r o g r a m is viewed as b e i n g o f
sugar i n d u s t r y .
high priority for
helping the
As one i n d i v i d u a l p u t it, "Research is t h e salvation o f o u r
future."
One o f t h e keys t o t h e s u r v i v a l o f Hawaii's s u g a r i n d u s t r y is t o keep
p r i c e s low,
and i n o r d e r t o achieve
e f f i c i e n t as possible.
low
prices,
production
must
b e as
Research b y t h e Hawaiian Sugar Planters' Association
has helped t h e s u g a r i n d u s t r y t o b e more e f f i c i e n t in many areas,
including,
b u t n o t limited t o :
(If
Developing
new
sugarcane
sugarcane yields;
(2)
Developing i r r i g a t i o n systems;
varieties,
which
produce
higher
SUGAR INDUSTRY IN HAWAII
(3)
C o n t r o l l i n g pests;
(4)
Disposing wastes;
(5)
H a r v e s t i n g and t r a n s p o r t i n g cane; and
(6)
O p e r a t i n g factories.
H i g h p r i o r i t y areas o f importance t o t h e s u g a r i n d u s t r y a r e l i s t e d i n t h e
technical reference document f o r t h e State's A g r i c u l t u r e Functional Plan (see
E x h i b i t 13, c h a p t e r 3 ) .
According
Many o f these areas i n v o l v e research.
to Mr.
Sam Caldweil,
Hawaiian Sugar Planters' Association,
states
in
the country
supplemented
by
is e n t i r e l y
United
States
conducted a t s t a t e u n i v e r s i t i e s .
Companies
manufacturing
managing,
Sugar
engaged
sugar
research i n all o t h e r s u g a r p r o d u c i n g
f u n d e d b y state government,
Department
of
business
of
Agriculture
sometimes
moneys,
and
sugarcane
and
'
in
from
t h e director o f public affairs of the
the
it,
and
individuals
growing
connected
with
directing,
o r o p e r a t i n g t h e s u g a r companies a r e members o f t h e Hawaiian
Planters'
Association's
Association.
research
benefits
Therefore,
all
the
sugarcane
Hawaiian
growers
Sugar
and
Planters'
processors
in
Hawaii.
During
Association
earmarked
the
last
obtained
for
legislative
$2 million
alternate
crop
session,
from
and
the
the
state
byproduct
Certain individuals interviewed perceived that
Planters'
Association
operating
budget
legislature, t h a t is, $3 million a y e a r .
should
Hawaiian
Sugar
Planters'
with
$250,000
legislature,
research
and
devel~pment.~
half o f t h e Hawaiian Sugar
be
funded
by
the
state
FINDINGS AND ACTION PLAN
S u p p o r t o f LESA
The
Land
Evaluation
and
Site
Assessment
(LESA)
Commission
was
established t o implement a 1978 C o n s t i t u t i o n a l amendment r e q u i r i n g t h e state
legislature
to
p r o v i d e standards
and criteria
"...to
a g r i c u l t u r a l lands, promote d i v e r s i f i e d a g r i c u l t u r e ,
s u f f i c i e n c y a n d assure t h e a v a i l a b i l i t y
T h e LESA commission was
lands"
that
the
of
charged w i t h
conserve and protect
increase a g r i c u l t u r a l self-
a g r i c u l t u r a l l y suitable l a n d s . . . ."
identifying "important
agricultural
L e g i s l a t u r e s h o u l d set aside a c c o r d i n g t o a classification
system developed b y t h e Commission.
The final
presents
report
standards,
o f t h e commission,
criteria,
and
published in
procedures
to
February of
identify
1986,
"important
a g r i c u l t u r a l lands" o f t h e State; s t a n d a r d s , c r i t e r i a , a n d a process t o review
requests f o r
t h e reclass~fication o r
c h a n g i n g community needs,
goals,
redesignation
a n d objects;
of
these
lands
t o meet
an i n i t i a l i n v e n t o r y o f these
lands; p r e l i m i n a r y maps i l l u s t r a t i n g t h e application o f t h e proposed system;
a n d an
implementation f r a m e w o r k d e f i n i n g t h e
respective roles o f i n v o l v e d
state a n d c o u n t y agencies.
C e r t a i n i n d i v i d u a l s i n t e r v i e w e d s t a t e d t h a t t h e LESA r e p o r t should b e
used b y t h e Legislature,
a n d a g r i c u l t u r a l lands s h o u l d b e p r o t e c t e d f r o m
redesignation t o o t h e r uses, s u c h as u r b a n .
lands a r e a s s u r e d t o s t a y
i n agriculture,
One i n d i v i d u a l said,
then
people w o n ' t
"If these
be a f r a i d t o
i n v e s t , a n d look t o t h e f u t u r e . "
Public Education
A c c o r d i n g t o some i n d u s t r y o b s e r v e r s , t h e s u g a r i n d u s t r y can b e helped
by a p u b l i c education p r o g r a m which describes w h y s u g a r should c o n t i n u e as
an
industry
in
Hawaii.
T h i s would
i n c l u d e explanations o f t h e economic
b e n e f i t s a n d aesthetic q u a l i t i e s p r o v i d e d b y t h e s u g a r i n d u s t r y .
A similar
parallel can b e f o u n d i n t h e p u b l i c relations programs p u t f o r t h b y t h e v i s i t o r
industry.
A cooperative e f f o r t between government a n d t h e s u g a r i n d u s t r y
SUGAR INDUSTRY I N H A W A I I
would
have t o
show
that
there
are
mutually
beneficial
reasons
for
the
c o n t i n u a t i o n of t h e s u g a r i n d u s t r y i n Hawaii.
T h e p u b l i c can also b e made aware i n layman's terms o f t h e consequences
o f a collapse of t h e i n d u s t r y .
Assuming no a l t e r n a t i v e can b e f o u n d t o open
f i e l d b u r n i n g a n d d u m p i n g o f m u d d y m i l l waste w a t e r s o f f t h e Hamakua coast,
educating
the
public
unavoidable w o u l d
about
mean
the
why
such
development
procedures
of
a
are
public
necessary
and
relations campaign.
T h e r e a r e t r a d e - o f f s f o r r e g u l a t i n g t h e i n d u s t r y w h i c h t h e p u b l i c may n o t b e
aware o f , w h i c h could a f f e c t t h e l o n g - t e r m economic health o f t h e State.
Lead agencies:
DBED, DOE, HSPA
Energy P r o d u c t i o n
Hawaii has been a t t h e mercy of o i l p r o d u c i n g c o u n t r i e s f o r many y e a r s .
The
development
dependency.
of
alternative
products
would
relieve
this
Increased e n e r g y s e l f - s u f f i c i e n c y is one o f t h e major objectives
o f t h e Hawaii State Plan.
policies
energy
include
In o r d e r t o achieve these objectives t h e State Plan
promoting t h e
e n e r g y , geothermal,
use o f
new e n e r g y
sources such as w i n d
a n d ocean thermal e n e r g y c o n v e r s i o n (OTEC),
biomass,
h y d r o p o w e r , and d i r e c t solar p o w e r . '
1.
T h e L e g i s l a t u r e s h o u l d c o n t i n u e t o f u n d research i n t o t h e use o f
biomass t o p r o d u c e e l e c t r i c i t y , as it did i n 1986 a n d 1987 t o establish biomass
t o e n e r g y t e s t facilities.
Lead agencies: DBED, DOA, HSPA
2.
T h e State should c o n t i n u e research programs t o develop new e n e r g y
systems a n d sources w h i c h c o u l d replace petroleum fuels,
thereby lowering
t h e cost o f e n e r g y r e q u i r e d by s u g a r factories and f i e l d equipment.
Lead agency: DBED
F I N D I N G S A N D ACTION PLAN
3.
The
State
should f u n d
a l t e r n a t e e n e r g y source.
a
study
to
examine ethanol f u e l
as an
Among t h e issues which s h o u l d b e addressed i n t h e
s t u d y are:
(a)
Determine t h e f e a s i b i l i t y of r e q u i r i n g t h a t all b u l k f u e l purchases
for
state-owned
vehicles
consist
of
ethanol-blended
fuel
(either
gasoline o r diesel b l e n d s ) ;
(b)
Determine how much f i n a n c i a l s u p p o r t can b e g i v e n f o r statewide
m a r k e t i n g o f f u e l ethanol and/or ethanol b l e n d e d fuels;
(c)
Develop a p r o g r a m t o encourage i n v e s t o r s in t h e p r o d u c t i o n a n d / o r
sale o f ethanol a n d ethanol-related p r o d u c t s i n Hawaii; a n d
( d f Develop a m a r k e t i n g s t r a t e g y , i n c l u d i n g t a x a n d o t h e r incentives t o
s u p p o r t an ethanol f u e l i n d u s t r y i n Hawaii.
Lead agency:
DBED w i t h s u p p o r t f r o m : T a x , DAGS.
Environment
Hawaii has been subject t o f e d e r a l environmental laws w h i c h t e n d t o be
based o n mainland conditions.
O f t e n these conditions a r e n o t applicable t o
Hawaii's oceanic location, soil, water, a n d p e s t p a t t e r n s .
1.
T h e State can
use i t s i n f l u e n c e t o e n s u r e f e d e r a l environmental
regulations a r e a p p r o p r i a t e t o Hawaii a n d when
exemptions t h r o u g h congressional l o b b y i n g .
n o t appropriate,
to
seek
Since area residents' health m u s t
n o t b e compromised, t h e State can also help t h e s u g a r i n d u s t r y b y f u n d i n g
and
conducting
studies
similar
t o those
burning.
Lead agencies:
DOH, DOA, HSPA
being
conducted
on
open
field
SUGAR INDUSTRY I N H A W A I I
2.
T h e environmental issue o f w a t e r p o l l u t i o n is g r e a t e s t on t h e Hilo
Coast, f o r HCPC a n d Hamakua S u g a r .
economically v i a b l e a l t e r n a t i v e e x i s t s
some d i r t .
A t t h e p r e s e n t time a p p a r e n t l y
na
t o t h e h a r v e s t i n g o f cane along w i t h
T h e Hamakua area is too wet f o r open f i e l d b u r n i n g a n d even
w i t h s e t t l i n g ponds, a q u a n t i t y o f m u d is dumped i n t o t h e waters o f f HCPC's
mill.
T h e w a t e r s o f f t h e Hamakua coast a r e n o t a recreational area so limited
d e t e r i o r a t i o n of w a t e r q u a l i t y is u n l i k e l y t o pose health r i s k s .
Therefore, t h e
B u r e a u recommends t h e c o n t i n u e d issuance o f p e r m i t s t o HCPC t o allow m u d d y
mill waste w a t e r s t o b e released i n t o t h e ocean along t h e Hamakua Coast.
However,
it is also recommended t h a t t h e State assist t h e s u g a r i n d u s t r y t o
develop h a r v e s t i n g methods w h i c h
deliver
less m u d t o t h e m i l l .
A study
i n v e s t i g a t i n g t h e h a r v e s t i n g methods i n o t h e r c o u n t r i e s may b e u s e f u l .
Lead a g e n c y :
3.
DOH w i t h assistance f r o m HSPA
While t h e c o n t i n u e d issuance o f a g r i c u l t u r a l f i e l d b u r n i n g permits b y
t h e DOH r e f l e c t s
state p o l i c y t o
assist
the
sugar
industry,
the
Bureau
recommends t h e State o f Hawaii assist t h e s u g a r i n d u s t r y t o f i n d alternatives
t o field burning.
A t least one s u g a r company said t h a t " b u r n i n g bans should n o t a p p l y t o
s u g a r companies."*
alternative.
T h e B u r e a u f i n d s t h a t t h i s is n o t a realistic o r p r a c t i c a l
T h e s u g a r companies w h i c h h a v e conducted f i e l d b u r n i n g appear
t o b e good n e i g h b o r s i n t h a t t h e y have t r i e d t o w a r n affected residents p r i o r
t o burning.
Furthermore,
p r e l i m i n a r y s t u d y b y EPA seemed t o i n d i c a t e n o
health r i s k s f r o m these b u r n i n g programs, a l t h o u g h t h e DOH is c o n t i n u i n g t o
s t u d y t h e probiem.
T h e B u r e a u believes t h a t i n t h e l o n g r u n t h e c o n f l i c t w i l l
increase between opponents o f f i e l d b u r n i n g a n d s u g a r companies,
primarily
because o f t h e nuisance f a c t o r o f b u r n i n g , even assuming n o h e a l t h r i s k s a r e
found.
An
increase i n t h e number o f
residents,
tourists,
or
both,
will
u n d o u b t e d l y raise t h e issue w h e t h e r a suitable a l t e r n a t i v e t o b u r n i n g does n o t
exist.
It w o u l d b e f a r b e t t e r t o seek a solution b e f o r e volatile c o n f r o n t a t i o n
r e q u i r e s it.
Plasch r e p o r t e d t h a t leaves can b e b u r n e d f o r electrical power
(see environmental issues, c h a p t e r 3 ) .
As o f 1987, no serious e f f o r t seemed
F I N D I N G S AND ACTION PLAN
t o have been made t o seek a l t e r n a t i v e s t o f i e l d b u r n i n g because DOH f i e l d
b u r n i n g permits continued t o b e issued.
Lead agencies:
DOH, DBED, HSPA.
O t h e r Recommendations
1.
T h e State should w o r k w i t h each c o u n t y ' s t r a n sporta at ion departme
t o develop safer,
b e t t e r roads t o a n d f r o m s u g a r plantations t o
improve
t r a f f i c flow and reduce congestion.
T h e Bureau's i n t e r v i e w s a n d questionnaires revealed t h a t on Kauai and
t h e B i g Island,
a major problem i s safety o f t h e roads t o a n d f r o m s u g a r
plantations a n d t h e m i l l s . V h e n l a r g e t r u c k s laden w i t h h a r v e s t e d cane use
t h e main streets,
hauling
trucks
t r a f f i c is o f t e n
clutter
the
backed up.
roadways.
t r a n s p o r t a t i o n problem i s n o t known,
A t times d e b r i s f r o m cane
While
this
is
the
whole
extent
of
the
a problem d e s e r v i n g action
because it affects t h e safety o f all users o f t h e roadways.
Lead agencies:
2.
The
DOT, C o u n t y T r a n s p o r t a t i o n Departments
State
should
begin
developing
retraining
programs
for
employees.
Many
sugar
companies
responded t o t h e
Bureau's
questionnaire and
i n t e r v i e w s w i t h a p o s i t i v e desire a n d i n t e n t i o n t o stay i n s u g a r f o r a t least
ten
years
companies,
or
as
long
as
possible.
Realistically,
however,
some
sugar
such as HCPC a n d Waialua Sugar Company occupy more tenuous
positions t h a n o t h e r s .
Therefore the
B u r e a u recommends t h a t t h e State,
t h r o u g h t h e Departments o f Labor (DOL) a n d Education (DOE)
i d e n t i f y and
develop r e t r a i n i n g programs f o r s u g a r w o r k e r s who m i g h t lose t h e i r jobs o v e r
t h e n e x t decade.
w o r k e r s would
A n e a r l y assessment of t h e needs a n d i n t e r e s t s o f sugar
lessen t h e dislocations which o c c u r when a s u g a r company
announces t h a t it w i l l s h u t down operations w i t h i n t w o years.
I n t h e near
SUGAR INDUSTRY I N H A W A I I
term,
t h e DOL c o u l d b e g i n w i t h a s u r v e y o f s u g a r w o r k e r s t o determine t h e i r
demographic c h a r a c t e r i s t i c s such as age,
of existing skills.
marital status, etc.,
and t h e i r level
T h e DOE c o u l d determine w h a t k i n d o f r e t r a i n i n g programs
need t o b e developed f o r t h e s u g a r w o r k e r s f r o m t h e information d e r i v e d from
the survey.
G i v e n enough lead time, r e t r a i n i n g programs c o u l d b e conducted
in tandem (in t h e evenings, on weekends) on a c o n t i n u i n g education basis f o r
a smooth t r a n s i t i o n f r o m one t y p e of employment t o another,
t y p e o f job terminates,
the worker,
i.e.,
being sufficiently trained,
c o u l d move
d i r e c t l y i n t o t h e o t h e r job w i t h o u t losing time o r income f o r t r a i n i n g .
Lead agencies:
DOA a n d DOE
a f t e r one
FOOTNOTES
Chapter 2
1. The members of the European Economic Community
are Belgium, Denmark, France
(Metropolitan,
Guadeloupe, Martinique, Reunion, French Guiana),
the Federal Republic of Germany, Greece,
Ireland, Italy, ~uxembourg,Netherlands, and the
United Kingdom.
20. Honolulu Star-Bulletin,November 18, 1987, p. D4; The Honolulu Advertiser, November 18, 1987,
p. A-15.
21. Telephone conversation with Mr. Jennifer Coto,
lenislative
essistant, Office of Senator Daniel
K. Inouye, November 23, 1987
Honolulu Star-Bulletin and Advertiser. December
20, 1987, p. B-4.
Hawaiian Sugar Plantersr Association, Hawaiian
Sugar Manual. 1987 (Hawaii: 1986), p. 22.
"Waiting for the Vestin," Hevaii Business. July
1987, p. 42.
Ihid., pp. 25, 26.
Ibid., p. 22.
-
"Thirteenth +ual
Nedia Briefing" (Hawaiian
Sugar Planters Association, March 10, 1987, p .
3 ) . (Mimeographed) .
Ibid., p. 22.
U.S.. De~arrment of Apriculture, Economic
~esesrch&vice.
Suear: Backaround for 1985
Farm
Legislation, Agriculture Information
Bulletin No. 478, 1984, p . 23.
Telephone conversation with Ms. Jennifer Goto,
legislative assistant, Office af Senator Daniel
K. Inouye, November 23, 1987.
Hawaiian Sugar Manual, 1987, p. 7.
Ibid.
Ibid.
-
U.S.,
General Accounting Office, Report to the
Congress by the Comptroller General. US_
SweetenerlSugar Issues and Concerns (Washington:
19851, pp. 21-22.
"Report of the Chairman", by Francis S. Morgan
(Hawaiian Sugar Planters' Association Annual
Beeting,
November
23,
19871,
p. 3.
(Yimeogrephedj.
Hawaiian Sugar Yanual, 1987, p. 26.
Honolulu Star-Bulletin and Advertiser, December
20, 1987, p. 8 - 4 .
Sucrose, commonly known as sugar, 1s a sweet
crystallizable colorless suhsiance.
Refined
cane and beet sugar are approximately one hundred per cent sucrose. Glucose refers to an alternare chemical name for dextrose, and corn
syrups obtained by the action of acids or
enzymes, or both, on cornstarch. It is less
sweet than sucrose. High fructose corn syrups
are produced by the enzymaric conversion of a
portion of the glucose in corn syrup to
fructose.
"Gasbington Perspective", by Eiler Ravnholr
(Hawaiian Sugar Planters' Association Amual
Meering,
November
23,
1987),
p. 3.
(Mimeographed).
Chapter 3
Hawaiian Sugar ?fsnual,1987, p. 12
Ibid.
Ibid., p. 16.
-
Ibid., p. 12.
Honolulu Advertiser, November 20, 1987, p. A-1.
U.5..
Department of Agriculrure,
Beckaround for 1985 Farm Legislation. p. 3 0 .
Hawaiian Sugar Yanual, 1987, p. 18.
Johnson, The sun&
5. Honolulu Advertiser, November 20. 1987. p. A - 1 ;
November 21. 1987, p. 8-5; and Honolulu ScarXovember 23, 1987, A-2.
-.
Program, p. 73.
6. Honolulu Adverriser, November 20, 1987 p. A - 1 .
Veil Street Journal, September 26. 1986, p. 1.
7. Teie~hone interview bv Jean ?lardfin with Xorean
18. Senate Bill No.
Stabilization Act".
1877, "The
Sugar Supply
19. "Report of the Chairman", by Francis S. Morgan
(Hswaiian Sunsr Planters' Associarion ANiual
Hcetmg.
iovember 23,
1987),
p.
3.
(Mrmeographed).
Lee, engineer, Public Ctilities
November 25, 1987.
Cornission,
8. Honolulu Advertiser, November 24, 1987, p. A-14.
9. Plascb, p. 220-223.
10
Honolulu Adverrzser, September 2 5 , 1987, p A-3
Hawaiian Sugar Manual,
1987), p. 5.
1987, HSPA, (Honalulo:
Plasch, p. 165.
DPED announcement, July 28, 1987
Ibid.
-
Ibid., p. 165.
$11-60-36(d), Hawaii Administrative Rules
511-60-34,Hawaii Administrative Rules
Plasch, p. 166.
Joint Press Release, EPA and Hawaii Department
of Health Services, August 20, 1987, p. 1.
Ibid., pp. 1-2
Hawaii, Department of Agriculture, State
Agriculture Functional Plan, Technical Reference
Document, (Honolulu: June 19851, p. 11-112
(hereinafter: Agriculture TRDf
Ibid., p. 11-118.
-
Chapter 4
State Data Book figures range from 5,751 hourly
rated employees in the sugar industry for 1985
and 7,550 field and mill workers for 1985.
Differences in definition apparently account for
the variation in numbers, therefore, the HSPA
total is being used in this report.
Haweiian Sugar Plantation Association, m
Sunar Manual 1987 (Honolulu: 1987). p. 5.
n
Thomas X . Hitch. How the Collapse of rhe Sugar
Industrv Would Impact on Hawaii's Economv,
(Honolulu: First Hawaiiar. Bank 1984).
The State of Hawaii Data Book, 1986, Department
of Planning and Economic Development, State of
Hawaii (Honolulu: 1986), p. 332.
Plasch, pp. 150-151.
Hawaii, Department of Land
and
Natural
Resources, State Later Resources Development
Plan, Technical Reference Document, (Honolulu:
1982). p. 111-62 (hereinafter: Water Resources
TRD).
Agriculture TRD, p. 11-191.
Act 45, Session Laws of Haweii 1987 codified as
Haw. Rev. Stat. Chapter 174C.
Ibid., p. 5
Ibid., p. 7
Interview with Shoji Okazaki, Office ?Imager and
Legislative Liason
and
Charlyne
Palaclo.
Administrative Assistant with Jean K. ?lardfin
and Joyce Xahane, September 30, 1987.
Act 37i, Session Laws of Hawaii 1987 and Haw.
Rev. Stat. secrions 394B-2, 5, and 8 to 13.
Plasch, pp. 169-226
Hawaii, Department of Planning and Economic
Development, The Hawaii State Plan, Technical
Study:
Economy, (December: 1984). p. 84
(hereinafter: State Plan, Energy).
Interview with Sam Caldwell. Direcror of Public
Affairs, HSPA, July 29, 1987.
Agriculture TRD, Appendix A, pp. A-28, A-29
Telephone conversation berueen Jean K. ?lardfin
and Charles Kinoshita, Head, Sugar Technology
and Engineering Department, HSPA, October 1.
1987.
Later Resources TRD, p. 111-62
Plasch, pp. 246-247.
Ibid., P. 111-75 to 111-79.
-
Chapter 5
Plesch, pp. 238-246.
Hawaii Sugar Plsntatlon Associarion, Xavaiian
Sugar Nanual 1987 (Honolulu: 1987), p. 3.
Telephone conversation berween Joyce Rahane and
Sam Caldwell, director of public affairs of the
Hawaiian
Sugsr
Planrers'
Associarion.
November 4, 1987.
Plesch, p. 240.
Session Laws of Hawaii 1987. Acr 346, $ 2 ,
K.K. Seo. A Srudv of the Economic Viability of
Hany
of the following suggestions were made by
DBED.
Honolulu Srar-Siiiietin and Advertiser, December
20, 1987, p. A-47.
Srare Plan, Energy, p. 176
Plasch, pp. 233-235
Telephone interview by Joyce Kahene with Kauai
Electric Company. December 15, 1987.
R.B. Cushr~ie, Presidect, K a ' u Agribusinesr, on
LRB Quesrionnaire, Seprember. 196;.
Inrerview by
Susan Jaworowski. Legislarive
Researcher. LRB, with Don Cetaluma. Presrder.:.
Olokele Sugar Company, August 18, 1987 and G I r h
Jack Poppe, Executive Vice Preridenr and Genezal
Manager, Hamakua Sugar Company, Augusr 27. 1987.
Appendix A
HOUSE OF REPRESENTATIVES
FOURTEENTH LEGISLATURE,1987
STATE OF HAWAII
REQUESTING AN ACTION PLAN FOR THE SUGAR INDUSTRY IN HAWAII.
WHEREAS, the sugar industry in Hawaii is over 150 years
old, having been a pillar of the economic development of the
islands during that time contributing to the diverse ethnic
population which gives Hawaii its unique cultural and social
mix; and
WHEREAS, in recent years the sugar industry has been hard
hit by a reduction in the amount of sugar consumed by
Americans, the growing use of alternative sweetners, the
reduction of federal price supports, and competition from
subsidized sugar producers in foreign countries; and
WHEREAS, though sugar production still plays a significant
role in Hawaii's economy, being the third largest source of
export income and providing high-paying jobs, its contribution
to Hawaii's economy has steadily declined since 1950, and it
now employs only a third as many workers and provides
one-twentieth the percentage of state general excise tax
revenues; and
WHEREAS, the sugar industry has contributed to what is now
Hawaii's leading industry, tourism, because every acre planted
in sugar cane (approximately 16 percent of the habitable land
area of Oahu, the most heavily populated and developed of the
islands) is an acre free of concrete, green and lush,
preserving the image of Hawaii which sustains residents and
draws millions of visitors every year; and
WHEREAS, the future of the sugar industry is uncertain,
with the federal government considering further cuts in price
supports, the State's largest sugar grower, Amfac, suggesting
it might cease sugar production within ten years, and other
sugar growers looking for alternative crops; now, therefore,
Page 2
BE IT RESOLVED by the House of Representatives of the
Fourteenth Legislature of the State of Hawaii, Regular Session
of 1987, that the Legislative Reference Bureau is requested to
develop an Action Plan for Hawaii's sugar industry, including
recommendations outlining the measures necessary and actions
required to continue the contribution of the industry to the
State's economic and social well being; and
BE IT FURTHER RESOLVED that the Action Plan be based upon
a study of all factors affecting the future of the sugar
industry including but not limited to:
(1)
the probable future of federal support of sugar;
(2)
the current status of efforts to find new markets for
sugar products;
(3)
the impact on sugar-related employment; and
(4)
the impact on land use of the shift away from sugar
production;
and
BE IT FURTHER RESOLVED that for each recommendation, the
Action Plan identify the lead agency or unit best able to
implement the recornmeadation and specify the resources required
to complete the recommendation; and
BE IT FURTHER RESOLVED that the Hawaii Sugar Planter's
Association, the State of Hawaii Department of Agriculture, the
United States Department of Agriculture, and the College of
Tropical Agriculture and Human Resources, University of Hawaii
at Manoa, cooperate with the Legislative Reference Bureau in
developing the Action Plan; and
BE IT FURTHER RESOLVED that the Action Plan be submitted
to the legislature at least twenty days prior to the convening
of the Regular Session of 1988; and
BE IT FURTHER RESOLVED that certified copies of this
Resolution be transmitted to Hawaii's Congressional Delegation,
to the Director of the Legislative Reference Bureau, the
President of the Hawaiian Sugar Planter's Association, the
Director of the State Department of Agriculture, and the Dean
Page 3
ti.I.NU.
.:
of the College of Tropical Agriculture and Human Resources,
University of Hawaii at Manoa.
PUBLISHED REPORTS
O F THE LEGISLATVE REFERENCE BUREAU
1974
I . Window t o the Sea: A Study of the Waikiki Aquarium. 239 p
1975
1.
2.
3.
4.
1976
1. Privileged Communication and Counseling in Hawaii. I43 p. (out of print)
1977
1. Towards a Definition of Death. 181 p. (out of print)
2. lolani Palace Complex: Some Directions for the Future. 186 p
1978
1 . The Feasibility of Integrating Human Sercices in Hawaii: Some Issues, Problems, and Opportunities
Sanctify the Scales-.& Study of Consumer Protection. 196 p.
Vocational Education in Hawaii--An Examination of Its Administration. 130 p
Feed for Hawaii's Livestock Industry-Some Problems and Prospects. 124 p.
Prepaid Legal Services and Hawaii. 87 p.
262 p.
1979
I. Generic Drug Substitution: Feasibility for Hawaii. 204 p.
2. Preserving the Quality of Life in Hawaii: A Strategy for Population Growth Control. 220 p
3. Equality of Rights-Statutory Compliance. 73 p. (out of print)
1980
I. Economic Security for Older Persons in Hawaii: Some Issues, Problems, and Opportunities. 192 p.
1982
I. Review of the Implementation of the Hawaii Correctional Master Plan. 76 p
2. Condominium Conversions in Hawaii. 95 p.
3. Marine Resources and Aquaculture Programs in the State of Hawaii. 43 p.
1983
1. A Department of Corrections for Hawaii: A Feasibility Study. 87 p
Hawaii Legislators' Handbook. Eighth Edition. 120 p. $1.00
1984
1. A Home Equity Conversion Program for Hawaii's Elderly Homeowners. 90 p
Guide to Government in Hawaii. Eighth Edition. 186 p. $3.00
Hawaii Legislative Drafting Manual. Seventh Edition. 112 p.
1985
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4.
1986
How to Research Constitutional, Legislative, and Statutory Historj in Hawaii. 91 p
1. The Residential Landlord-Tenant Code. 113 p.
1987
1 . Definition of "Independent Contractor" Under Hawaii's Labor Laws. I81 p.
2. Assuring Dignity in Long-Term Care for the Elderly. 92 p
Compendium of State Ocean and 51arine Related Policies. 208 p.
3. Convention Center Site Selection Study. 249 p.
4. Bus Transportation for Public School Students on Oahu. $5 p.
5. Sponsorship of State Commemorative .Medallicms: A Feasibility Study for Hawaii. 93 p.
6 . Ownership Patterns of Land Beneath Hawaii's Condominiums and Cooperative
Housing Projects. 92 p.
7 . T u o Land Recording Systems. 58 p.
8 , Health Care Bcnefit Cost> for Rctixd Puhiic Employees: Issues and Funding Options. 58 p
The Feasibility of Environmental Reorganization for Hawaii. 145 p.
Third-Party Reimbursement of Clinical Social Workers. 61 p.
Statewide Standardized Testing Program of the Department of Education. 71 p
The Flexible Working Hours Program for State Employees. 92 p.