Hawaii sugar crop: how sweet it isn't
These are bitter times for Hawaii's sweetest crop -- sugar cane.
The industry that dominated Hawaii's economy from the 1860s through World War II is in the throes of some the worst times it ever has known, prompting predictions from some observers that sugar is ''on its way out.''
Last year's record industry loss of $83.5 million sent a shock wave through Hawaii's sugar economy. Already, one of the state's five big sugar growers has announced its intentions to close down an approximately 13,000-acre plantation on the big island of Hawaii by 1984. Another says it will convert 8,000 acres to macadamia nut production over the next decade. And six plants shut down March 15 for a two-week period to hold down costs.
Although sugar cane today runs a distant third in Hawaii's economy, behind tourism and US defense expenditures, it remains the largest crop in the state -- accounting for three-fourths of all farmlands, or about 217,000 acres, and employing 9,000 workers.
The causes for the economic woes now facing the industry are many: high labor costs (Hawaii's sugar plantation workers are among the highest-paid agricultural laborers in the world); transportation expenses; the rapid growth of a sugar substitute known as high fructose corn syrup, and cheap foreign sugar.
Although some industry observers also cite poor corporate management as part of the problem, it is the issue of foreign competition that appears to be most pressing.
Because of favorable soil, water, and weather conditions, as well as technological sophistication, Hawaii sugar-cane growers get the highest yields in the world from their crops. But because the United States does not have an aggressive domestic support program for sugar -- unlike virtually all of the 125 other nations that produce sugar -- growers are hard pressed to compete with low-cost foreign sugar.
''If Hawaii were competing head-on with other producers, it would do very well,'' explains Dr. Bruce Plasch, who prepared a report on Hawaii's sugar industry for the state last year. ''The problem basically is that every other government protects its own sugar industry. The US industry is not unprotected, but it's not protected to the same degree.''
Under last year's Agriculture and Food Act, the US Department of Agriculture promised a price support of approximately 17 cents a pound. But the cost of sugar production in Hawaii, which amounts to approximately 1 million tons of raw sugar yearly, averages 19.3 cents a pound, according to the Hawaiian Sugar Planters Association. Sugar on the world market has dropped to as low as 12 cents a pound.
Although state officials are trying to counter a public feeling that sugar has no future in Hawaii, it is clear that there are no easy answers. The sugar-cane acreage is so immense that to convert it to other uses requires substantial research and planning. And there is disagreement as to what the best long-term solutions are.
Already, industry officials have proposed that the state help sugar growers by providing tax and fee relief and some $3 million for research that would include developing new varieties of cane. They also urge setting aside $50 million loan fund to be repaid as, or if, the industry recovers. This loan plan has been given a lukewarm greeting by government officials.
''Given continued horrendous losses, corporations will have to close operations that are [losing money]. That's not a threat, it's just a fact,'' says Robert Hughes, president of the Hawaiian Sugar Planters' Association.