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The Honolulu Advertiser
Posted on: Friday, January 29, 2010

Ulupono leases Maui farm

BY Greg Wiles
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Pierre and Pam Omidyar's Ulupono Initiative will assume operation of Kapalua Farms and plans to expand the current eight acres of vegetables, herbs and free-range eggs on the remainder of the 158-acre parcel.

Bob Bangerter photo

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An organic farm operated by Maui Land & Pineapple is being taken over by Pierre and Pam Omidyar's Ulupono Initiative, which is vowing to expand it and show that vegetables grown on the island can be priced competitively with conventionally grown produce that's imported.

The Ulupono Initiative said it has signed a long-term lease for Kapalua Farms, an operation near the Kapalua Resort in West Maui, and will expand the current eight acres of vegetables, herbs and free-range eggs on the remainder of the 158-acre parcel. It already has increased staffing from three to six people and plans to hire as many as 20 more employees.

"We believe it's an important opportunity to demonstrate that organic, sustainable agriculture can be scaled up from very effective small farming today to a more mechanized, commercial level of farming," said Kyle Datta, a general partner of the Ulupono Initiative.

"Our goal is to be able to be cost-competitive with the least-expensive segment of the markets," he said.

The venture marks yet another investment by the Omidyars in the Islands and follows Maui Land's announcement in November that it would be finding another operator for the farm that supplied resort restaurants and neighboring communities with organic pineapple and produce.

Pierre Omidyar, the founder and chairman of online emporium eBay Inc., is thought to be Hawai'i's wealthiest resident.

Since moving here in 2006, the Omidyars have been stepping up their philanthropic and investment activities, recently giving $50 million to the Hawai'i Community Foundation and starting Peer News, a news organization that is gearing up operations.

The couple, who have committed more than $900 million to philanthropic efforts here and on the Mainland, formed the Ulupono Initiative, which aims to improve the quality of life here by investing in for-profit and nonprofit ventures focused on reducing waste, renewable energy and local food production.

To help run the venture, the Omidyars have hired Datta, an energy expert who previously served as chief executive of a biodiesel company, and Robin Campaniano, a Hawai'i executive who most recently headed Farmers Insurance Hawaii.

The Ulupono Initiative has been mum about how much the Omidyars are pledging toward the effort and declined to say the amount of investment going into leasing Kapalua Farm lands and buildings along with purchasing its equipment. But Campaniano said Ulupono's efforts, in some instances, will be limited to playing a catalytic role, providing expertise or introductions.

"The last thing we want to do is throw money at it," Campaniano said. Some investments will be ones it expects to earn returns on, such as its investment in solar technology firm Sopogy.

Other investments are made in organizations that should provide returns for society, such as one for Ma'o Organic Farms in Wai'anae, which engages students in farming.

The effort also dovetails with the Omidyars' belief that more of the food that Hawai'i consumes should be locally produced.

The state Department of Agriculture said only 34 percent of the vegetables consumed in the state in 2008 were grown here, while only 32 percent of fruits were from Hawai'i soil. A number of organizations and people have sought to boost Hawai'i's food self-sufficiency.

Datta said Kapalua Farms at present produces organic tomatoes, eggplant, herbs, limes and guavas in addition to organic pineapple that's going out of production.

He said Ulupono wants to keep the land in agricultural use while boosting local production and serving as an educational and community resource on Maui. Long-term plans also envision eliminating use of fossil fuels on the farm through bioenergy and other technologies.

Datta said it will take time to recondition soils to bring them back to full productivity, but that the operation should be cost-competitive with Mainland-grown non-organic produce within three to five years.

Lillian Boerner, who runs the 70-acre Ono Organic Farms with her husband Charles on Maui, said she believes Ulupono should be able to make a go of it.

"It's beautiful farm land," Boerner said, adding that Ulupono should be able to achieve economies of scale: "There's lots of things that will grow out there in the hot sun if you have the water."

Matthew Loke, the administrator of the state's Agricultural Development Division, said that in general, Hawai'i's farming production costs are about 20 percent higher than those in California.

Some of that is negated by the cost of shipping to the Islands, while organic farmers here avoid importing fertilizer and pesticides for their operations, he said.

Because of those factors, it may be possible for an organic farmer with low land costs to be competitive with Mainland producers, he said, though the operations can have a tough time because of pests.

"I would like to see them succeed," said Loke, who has authored papers about how increasing local food production would be good for the local economy, while reducing potential for importing invasive pests that can hitchhike on fresh produce.