The seed research and development industry in Hawaii shriveled a bit over the last two years following a decade of robust growth, though the unique sector of farming remained the state’s biggest crop by value.
Recent estimates by the Hawaii field office of the National Agricultural Statistics Service put the value of seed company spending statewide at $213 million for the 2012-13 season ended in June, down 10 percent from $238 million in the 2011-12 season.
The drop was the second consecutive annual reduction after a less than 1 percent dip from the 2010-11 season record of $239 million. That was the industry’s first decline in more than two decades.
Seed industry spending had annual growth roughly between 20 percent and 40 percent for most of the prior decade. But over the last few years it had been clear that operating budgets were reaching a plateau.
The recent report showed that the industry — five companies with 10 farms on Oahu, Maui, Molokai and Kauai — have kept the number of acres they farm and the amount of seed they produce fairly consistent over the past few years.
Mark Phillipson, president of the industry trade group Hawaii Crop Improvement Association, said reduced spending could be from operational efficiencies or changes in product lines being pursued, and that it doesn’t necessarily reflect scaled-back operations.
"One year doesn’t make a trend,"said Phillipson, who is also head of corporate relations for seed firm Syngenta Hawaii LLC. "Next year could see (spending)go up 10 percent."
The Statistics Service report said the industry farmed 7,040 acres last season, up from 6,910 acres in the prior season, and that more acres were being used last season to produce seeds for mass reproduction on the mainland.
The five companies — BASF, Dow AgroSciences, Monsanto, Pioneer Hi-Bred International and Syngenta — shipped close to 12 million pounds of seed out of Hawaii last season, according to Mark Hudson, state statistician with the Hawaii field office of the Statistics Service.
Shipping 12 million pounds of seed last season compares with 10 million pounds in each of the prior two seasons and matches the record reached in the 2009-10 season.
Seed companies in Hawaii experiment with plant traits — mostly for corn — and select certain plants to produce seeds that are sent to the mainland for mass reproduction and sale to farmers.
The industry has attracted criticism because of its work genetically modifying plants. Such concerns have led to state and county initiatives to restrict work with genetically modified organisms.
On the other hand, seed research and production is supported by many in the agriculture industry for keeping farmland in farming, being a major agricultural employer and enhancing crop viability.
Seed companies primarily value Hawaii as a base for research because corn can be planted and raised to maturity three or four times in a year compared with only once on the mainland, thereby allowing faster advancement of research.
Because seed companies don’t sell the seeds they produce in Hawaii, the Statistics Service uses the cost of production to represent industry value.
Other crop values are represented by sales revenue, which usually is more than production cost.
Since 2006 the value of the seed industry has topped any other crop in Hawaii. However, food crops generate income for local farmers, have broader impacts on the state economy and contribute to the local food supply.
After seed crops, sugar cane typically has been the state’s No. 2 crop by value, generating around $70 million or $80 million in sales annually. Cattle ranching is a roughly $50 million-a-year industry locally. And Hawaii farmers sell about $40 million of macadamia nuts annually.
