A new generation takes on the challenges of farming
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Business Consultants For Farmers
Farming takes a lot of skill and knowledge about ecology and science, but the business side is often neglected. That’s where the Agribusiness Incubator Program at the University of Hawaii system comes in.
AIP helps farms across the state become agribusinesses. Funded by grants from the USDA National Institute for Food and Agriculture, the 8-year-old program has helped 244 clients with their businesses. AIP can help any business that is growing or processing Hawaii-grown products, which can include everyone from vegetable and pig farmers to people making salad dressings. There is also a preference for Native Hawaiians.
“As far as I know, we’re the only business consulting group or program that focuses on agriculture,” says Steven Chiang, AIP’s director.
It brings results. Average revenue for its clients has increased by 39 percent, and average profit has increased by 291 percent, according to data provided by AIP.
“We assist with startup, we assist with a lot of financial and marketing type of planning and analysis – basically just trying to get them from point A to point B with anything other than production type of issues,” Chiang says. “But, because of our relationship with CTAHR (the College of Tropical Agriculture and Human Resources), we do act as a sort of a conduit for a lot of our clients to access technical resources within the college.”
Chiang says AIP also helps clients create business plans, because if they seek financing, they need to know how much to ask for. “People say I need money and I want to do this and they never look at how much things are going to cost, not even back of the napkin (calculations),” Chiang says.
“We do a bunch of financial analysis like cost of production. … Basically, we’re trying to figure out what one unit of that thing you’re selling costs you to produce. And nobody gets it right. The vast majority of people have no idea what their number is, so we help with that.”
AIP can also help clients build a website, set up an accounting program and connect them with contractors.
Majority of agriculture workers aged 45 or older
Source: U.S. Census Bureau for third quarter, 2011 (latest numbers available). The number of workers is based on the North American Industry Classification System category 11: agriculture, forestry, fishing and hunting.
With 1.2 million acres zoned for agriculture, more than 50 percent of the state’s potential farmland, Hawaii Island is focus of the state’s ag future.
Though the University of Hawaii at Hilo has nearly 200 students in its College of Agriculture, many graduates do not go directly into farming, says interim dean Bruce Mathews. Instead, he says, many enter graduate school or take job in the agriculture sciences.
“We’ve tried some things by bringing landowners into class to let the students know about the leases that are available,” Mathews says. “Some landowners are willing to give recent graduates low rates on leases. We’ve looked at microloan financing potentials and other things. A lot of students, unfortunately, they’re really concerned about paying off their student loans. They see farming as really being risky. It’s really challenging to get the college graduates.”
Landowner W.H. Shipman Ltd. offers ag leases to UH graduates and farmers at below market rates.
“They have some people with great agricultural experience at W.H. Shipman and those people are willing to consult,” Mathews says. “Not telling the farmers what to grow, but if they have some advice, to give it to them as far as cultural practices and things.”
Richard Ha has also approached UH-Hilo with the suggestion that graduates could use his greenhouses and tap his marketing expertise. “That’s a big challenge for students, too, worrying about marketing a crop. If you have somebody who is willing to do a profit-sharing arrangement, where he’ll handle all the marketing or help you with the marketing, that could be really useful.”
A legislative appropriation will fund three engineering faculty positions at UH-Hilo, including one for bio-fuel research and another for food engineering and food safety. Mathews hopes there are some ancillary benefits from the program, like animal feeds from biofuel by-products and food-safety training and value added product development and consulting. The first position should be filled by September 2013.
Finding enough young people willing to become farmers is an issue on all islands. The state’s Department of Labor and Industrial Relations held a series of sessions in which farmers, officials, educators and others discussed the challenges facing agriculture in order to form recommendations for the 2013 Legislature. Nearly 600 people attended the sessions held on Hawaii Island, Kauai, Maui and Oahu.
“The commonality between all of the islands was that there was concern about what was going to happen to ag in the future because they don’t see a lot of younger people doing agriculture,” says James Hardway, executive director of the Labor Department’s Workforce Development Council.
But the Labor Department can’t be accused of painting an overly rosy portrait of farming. CareerKokua.org, the department’s own guide to local career planning and opportunities, offers this sober outlook at farming as a career: “As the population continues to grow, the demand for food will grow as well. However, new technology is allowing farmers to produce larger crops than in the past. In addition, large farming companies are buying smaller farms. Some farms are sold because the farmer’s children do not want to farm the land. Others are sold because the farm has too much debt. The end result is that there are fewer farms and farmers. Most job openings will result from the need to replace farmers who retire or leave the occupation for other reasons.”
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