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Fostering Sustainability and Innovation in Agriculture

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Impact Investment Firm Takes on Local Food Production to Increase Food Security in Hawaiian Islands

October 11, 2016 |

The Hawaiian Islands possess ideal climatic conditions to support year-round agriculture from consistently temperate weather to ample rainfall and abundant sunlight. Despite these favorable conditions, the islands rely on imports from the mainland and elsewhere for nearly 90 percent of the food that residents consume.

Last month, at the ICUN World Conservation Conference in Honolulu, Governor David Ige announced his pledge to double local food production by the year 2030. To help insure the success of this pledge, the Ulupono Initiative, a Hawaii-focused impact investing firm, has stepped into the fray to provide financial and advisory support to for-profit, non-profit and social ventures seeking to increase food security and production on the islands.

“We are pleased to hear about the governor’s announcement, and want to make it happen through investment means,” says Murray Clay, Managing Partner at Ulupono Initiative. “We are an impact investing firm, with one of the key areas of focus being local food production.”

Established in 2009 by the Omidyar Group, the Ulupono Initiative believes that sustainability is essential to future prosperity in Hawaii. “Pam and Pierre (Omidyar) live in Hawaii, so they found it important to invest locally,” says Clay. “Hawaii is the world’s most isolated populated land mass [and] we are literally thousands of miles away from help in any direction; that’s a very long supply line. It’s just a better to have your food produced locally than to be completely dependent on the outside world for that.”

Thus, the majority of the firm’s investments, which are between one and three million dollars, seek to address challenges to food production there, including an aging farmer population, the high cost of transporting food, land availability and arability, and urban development pressures.

Among its investments in local agriculture capacity building is a $17.5 million investment in Hawaii Dairy Farms, a pasture-based dairy farm in Mahaulepu Valley on the north shore of Kauai. As the first pasture-raised rotational grazing dairy in the state, the farm is a 557-acre operation that takes advantage of the opportunity provided by the abundant grass in Hawaii, which negates the need to import expensive seed for feed. Due to the increased cost of importing seed to finish off cattle, current milk and beef production has dwindled. “In the mid-80’s, Hawaii was largely, if not entirely self-sufficient in terms of beef and dairy production,” says Clay.

“We wanted to bring (dairy) back, and one thing that Hawaii does really well is grow grass,” he says. “It might sound really obvious, but we grow grass really well, and it grows even better if very carefully and sort of scientifically managed.” The rotational grazing strategy that the farm utilizes helps it to conserve water, incorporate wastes, and increase dairy quality resulting in the production 1.2 million gallons of milk annually.

Another one of the firms for profit impact investments in Anoano Farms focuses on growing breadfruit on the Big Island of Hawaii. Breadfruit is a culturally significant tree crop, grown in the Pacific, which promises to provide a sustainable source of low-cost, vitamin-rich starch. Through a partnership with Ulupono Initiative, Anoano Farms provides research to support the development of this promising industry. Production of local starch fills a large gap in local food development, and the success of a farm growing breadfruit would demonstrate the viability of commercially producing this versatile starch in the Islands.

Ulupono’s investments in strengthening local food production also extend to the non-profit sector. An investment made in Hawaii Green Growth (HGG), an NGO and governmental partnership, aims to support a sustainable and resilient economy for Hawaii by tackling food production challenges on the islands. One of HGG’s goals includes doubling local food production, which is in line with the governor’s announcement earlier this month. Ulupono invested in HGG’s Sustainability Measures project to identify benchmark indicators for a food security metrics database.

Another non-profit venture, Grow Hawaii is a three-year project of the Hawaii Association of Independent Schools. This project seeks to impact food behavior as well as increase capacity building for school chefs and garden coordinators. The gardens that resulted from this program not only provided the children access to fresh and healthy food, but also incorporated an educational component to increase understanding of where food comes from, recycling, and composting.

If successful, the heavy investment in local food production capacity that Ulupono is making could increase Hawaii’s food security, generate new jobs, and improve health outcomes.

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