COM 0604.043 1996-1998 - Laserfiche WebLink

Home

TESTIMONY TO THE FINANCE COMMITTEE, HAWAII COUNTY COUNCIL R E-VIABILITY OF THE COFFEE INDUSTRY I N HAMAKUA The Honorable Chair and Members Finance Committee, Hawaii County Council: My name is Ben C. Mahilum. I am a farming consultant in Hawaii since 1982 and a full time farmer in Honokaa since 1986 when I quit teaching tropical soils and crops at the College of Agriculture, UH-Hilo. I am growing coffee in Honokaa between macadamia nuts to maximize production because initital cost of farmland in Hamakua is terribly expensive. My coffee has been in full production since 1988 and the macadamia nut is almost at the peak of its produc- tive life. Last year my net income from the farm was $5,000/acre/year for coffee and $3,000/acre/year for macnut grown together on the same area. Last year the wholesale price of my coffee was $9/Ib for green coffee and $12/Ib for roasted whole coffee beans. My macnut was sold last year at $0.70/Ib in husk. I have been processing my coffee in Kona since 1989. I found this not only a drag but terribly expensive. And so, when I applied for and obtained a coffee grant of $150,000 in 1986 to re- jeuvenate the coffee industry in Hamakua, RETA-H (Rural Economic Transition Assistance- Hawaii) allowed me to purchase a coffee huller and roaster. The huller has the capacity to hull 100 Ib. of dry parchment coffee in 10 minutes and the roaster roasts 25 Ib. of dry coffee beans in one batch. The Hamakua/N. Hilo Ag Coop to which my fellow coffee growers and I belong, hopes to establish the coffee processing plant in Honokaa to serve not only the Coop coffee gro- wers but also the other coffee farmers in Hamakua. This is the initial phase of the Coop's plan to vertically integrate diversified ag farming in Hamakua. The Dept. of Horticulture at the College of Tropical Agriculture and Human Resources at UH- Manoa conducted a cupping test of all coffees grown in the State of Hawaii. They found that the best tasting coffee came from Paauilo where the first commercial coffee farm in the State was established. The comments I get from our coffee customers (my wife and I sell our coffee under the registered brand of Hamakua Coffee) are: (1) It is smoother; (2) It is less acidic; (3) It is more filling. And so, our Hamakua Coffee has its own taste different from that of Kona Coffee. Two of our customers in the mainland (one has a liver ailment and the other has a stomach ulcer) who order our Hamakua Coffee regularly through the mail, say that they feel discomfort after drinking other coffee but are not bothered at all by our coffee. In the first International Coffee Symposium held at the Kona Surf Hotel in 1986 the CEO of the Roncoco Co. (the largest coffee distributor in Chicago) said that if all of the coffee grown in Kona in one year which at that time was 2,000,000 Ib. of dry coffee beans, would be served in all of the specialty coffee shops in the mainland they would be consumed in three hours. This indicates that Kona Coffee serves amicro-mini portion of the gourmet coffee market in the mainland. Japan has been buying Kona Coffee and now China is starting to buy coffee from Ha- waii. We have customers of our Hamakua Coffee from Japan since 1990 and now we are selling some of the Hamakua Coffee to customers from China. One coffee farmer in Wood Valley, Pahala, is selling some of his coffee direct to Switzerland. All these coffee outlets indicate that the potential for ahigh-quality specialty or gourmet coffee in Hawaii is enormous. But there is one factor to consider about marketing gourmet coffee--price. Although some would say that prices