TABLE OF CONTENTS
A. EXECUTIVE SUMMARY ................................................................................................................ 2
B. BUSINESS DESCRIPTION – AN ORGANIC OPPORUNITY ....................................................... 4
I NTRODUCTION ........................................................................................................................... 4
P RODUCT .................................................................................................................................... 4
G
ROUNDWORK FORTHE
V
ENTURE
............................................................................................. 4
C ROPS TO BE GROWN ................................................................................................................. 5
T HE O PPORTUNITY ..................................................................................................................... 6
O UR COMMUNITY ....................................................................................................................... 7
L AND U SE , ( RE ) CONNECTING TO ` AINA ( LAND ) .......................................................................... 7
C. INDUSTRY AND MARKET ANALYSIS ........................................................................................ 9
G ROWTH IN THE ORGANIC INDUSTRY ........................................................................................ 9
T HE H AWAI ` I MARKET ............................................................................................................... 9
LOCAL COMPETITION ................................................................................................................ 11
O FFSHORE ORGANIC COMPETITION .......................................................................................... 12
F ARMING IN H AWAI ` I ............................................................................................................... 12
C USTOMER PROFILE ................................................................................................................. 13
D ISTRIBUTION MECHANISMS .................................................................................................... 15
D. MARKETING PLAN ...................................................................................................................... 16
P ROMOTIONS AND OUTREACH .................................................................................................. 16
S PECIFIC SEGMENT STRATIGIES ............................................................................................... 17
MA`O CUSTOMER SERVICE PHILOSOPHY ................................................................................. 17
P ROMOTIONAL MATERIALS AND LABELING ............................................................................. 18
P
RICING
.................................................................................................................................... 18
D ISTRIBUTION .......................................................................................................................... 19
S ALES MANAGEMENT ............................................................................................................... 19
C OMPETITIVE ADVANTAGE ...................................................................................................... 19
E. MANAGEMENT PLAN .................................................................................................................. 20
O RGANIZATION AND BOARD ................................................................................................... 20
G OVERNANCE .......................................................................................................................... 20
MA`O’
S POSITION IN WCRC ................................................................................................... 21
E XECUTIVE MANAGEMENT & S TAFFING PLAN ........................................................................ 22
C
OOPERATING EXPERTS
........................................................................................................... 22
F. OPERATIONS PLAN ...................................................................................................................... 23
F ARM PLAN .............................................................................................................................. 23
R ESEARCH AND DEVELOPMENT ............................................................................................... 23
C ROP GROWTH ......................................................................................................................... 23
H ARVEST AND QUALITY CONTROL ........................................................................................... 24
I NVENTORY MANAGEMENT ...................................................................................................... 24
O RGANIC CERTIFICATION ......................................................................................................... 24
F ARMER
’
S MARKETS ................................................................................................................ 24
L
AND
, E
QUIPMENT
, O
FFICE
S
PACE
, T
OOLS
, R
ESOURCES
........................................................ 25
I NCREASING YOUTH CAPACITY ................................................................................................ 25
G. FINANCIAL PLAN ......................................................................................................................... 26
S TART UP ................................................................................................................................. 26
A CCOUNTING SYSTEM & B USINESS CONTROLS ....................................................................... 26
L ONG TERM SUSTINABILITY ..................................................................................................... 26
P ROFORMA STATEMENTS ......................................................................................................... 26
H. RISK ASSESSMENT & CONTINGENCY PLAN ......................................................................... 35
I. ENDNOTES ..................................................................................................................................... 36

A.
Leaders must deal with apathy along the Leeward Coast (Wai`anae), perhaps it comes from poverty and repeated disappointment, or from people too busy trying to survive and eke out a living. We hope that those that care can reach out to those who don’t and sow the seeds of positive change for the future of beautiful Wai`anae.
- Editorial, The Honolulu Advertiser , March 25, 2004
In September 2003, youth from a leadership training program began selling organically grown products at farmer’s markets located at health clinics in Wai`anae, Hawai`i. Their goal was to make affordable and healthy fruits and vegetables available to residents of their low-income community. The youth exceeded all expectations – products sold quickly, customers returned each week wanting more, and now these young people are poised to build on the test markets to become the largest producer of USDA certified organic fruits and vegetables on the island of
O`ahu.
The Wai`anae Community Re-Development Corporation (WCRC), a Hawai`i non-profit 501(c)3 corporation, proposes the development of the MA`O Youth Organic Farm (MA`O). MA`O will train and employ out-of-school youth from the Wai`anae community. These youth will grow a diversity of field crops (e.g., salad greens, herbs, eggplant) and fruits trees (e.g., mango, limes) using organic methods certified by the U.S. Department of Agriculture’s National Organic
Program rules, on five acres of land leased by WCRC.
The objectives of MA`O will be to:

Increase productive land from 2.5 to 5-acres by the end of 2007, and expand to ten acres by 2010;

Distribute 50% of produce to the Wai`anae community at affordable prices;

Provide employment, as well as business and sales training to Wai`anae youth;

Conduct research and provide advanced training in organic agriculture and community food systems;
 Work collaboratively with WCRC’s other programs to support the development of young people; and

Restore idle land to productive use.
MA`O’s evolution dates back to 2001, when WCRC established the Mala `Ai `Opio Community
Food Security Initiative, a project to create a community food system to fight hunger, improve nutrition, strengthen local agriculture and empower local families to move towards selfsufficiency. In the Hawaiian language mala `ai `opio means the youth food garden, and ma`o is also the Hawaiian name of the endemic cotton plant that makes its home in the Wai`anae area.
With youth leadership development as a core objective, WCRC established a series of interconnected activities with the MA`O farm site as the primary training venue.
Life is a daily struggle for many young people in Wai`anae. Local public schools are failing to meet the standards of the federally mandated No Child Left Behind Act . They experience high
MA`O YOUTH ORGANIC FARM 2

drop-out rates and illiteracy compared to the rest of the state. There are few opportunities for post-secondary employment and training. Wai`anae has the state’s highest unemployment rate.
Teenage pregnancy rates are high. Add to this a rapid growth in the distribution and use of crystal methamphetamine, and a formula for community deterioration and juvenile delinquency is created.
This venture is being planned and implemented to provide an employment, training and life-style opportunity for young people, while they work to improve the community. MA`O is founded with an entrepreneurial philosophy that is guided by our Hawaiian cultural traditions, with business activities developed to revive and expand upon Hawaiians’ traditional love and respect for the land. There are many local projects that have attempted to integrate social enterprise with
Hawaiian culture; however, MA`O stands out from its competition however, through combining the explosive growth predicted for the organic agriculture industry with methods that are deeply respectful of Hawaiian culture and sustainability. This market opportunity provides fertile ground for youth to make a radical contribution to the social and economic life of the Wai`anae community, our home.
The national organic food industry has experienced rapid growth over the past 20-years. By
2001, sales of organic foods reached $8 billion i and there has been 20% growth annually in national organic sales over the past 10-years, ii
The Organic Trade Association projects that the
U.S. organic market will reach $30.7 billion by 2007. While this is small compared to the conventional foods industry, OTA reports that conventional food growth is only 2-3% per year versus organic foods, which is growing 17-20% annually.
iii
According to the Hawai`i Organic Farmer’s Association (HOFA), Hawai`i imports over 90% of organic produce.
iv At the same time, there are only nine organic farms located on O`ahu where
870,000 consumers reside,).
v
Demand for fresh, local and organic foods is best illustrated by the recent establishment of three Hawai`i Farm Bureau Federation markets on O`ahu. The Kapiolani
Community College (KCC) Farmers Market, which opened in late 2003, attracts over 2,500 visitors each Saturday, and specializes in 100% Hawai`i grown products. The Hawai`i organic agriculture industry still lags behind the national growth figures, due to inflated land prices, the pressure of urban development, and the difficult shift from the plantation agriculture system.
The scarcity of local organic fruits and vegetables has made MA`O’s certified organic product highly attractive to consumers.
MA`O’s competitive advantage has been well established. WCRC recently secured substantial funding from the U.S. Department of Housing and Urban Development, as well as the U.S.
Department of Health’s Administration for Native Americans (ANA) to support this program. In its pilot year, MA`O established thriving farmer’s markets and strong relationships with retailers and restaurants, in which demonstrated demand far outstripped supply. MA`O has also developed partnerships with Leeward Community College to train youth and with Maui Land and
Pine CEO, David Cole, to collaborate in the development of a local organic industry. Most importantly, MA`O has a cadre of strong and determined youth – many already trained and eager to instruct others – with ambitions beyond their years, and a drive to become the largest producer of certified organic fruits and vegetables on the island of O`ahu.
MA`O YOUTH ORGANIC FARM 3

MA`O YOUTH ORGANIC FARM 4

B.
1.
Introduction
In September 2003, youth from a leadership training program commenced selling organically grown products at farmer’s markets located at the Wai`anae Comprehensive Health Center and
Kaiser Permanente Health Clinic, in Nanakuli, both located on the Westside of the island of
O`ahu, Hawai`i. The goal: to get healthy organic fruits and vegetables, sold at a fair price, into the regular food purchases of the low-income community. The youth exceeded all expectations – products sold quickly, customers returned each week for more, and now a group of young people are poised to build on these test markets to become the largest producer of USDA certified organic fruits and vegetables on the island of O`ahu.
2.
Product
The Wai`anae Community Re-Development Corporation (WCRC), a Hawai`i non-profit 501(c)3 corporation, proposes the development of the MA`O Youth Organic Farm (MA`O), a venture managed by out-of-school youth from the Wai`anae community. MA`O will cultivate a diversity of field crops and fruit trees, using organic methods certified by the U.S. Department of
Agriculture National Organic
Program’s rules, on 5-acres of land currently leased by WCRC.
The objectives of MA`O will be to:

Increase production of organic fruits and vegetables to a total of 5-acres, with each acre
ISLAND OF O`AHU
STATE OF HAWAI`I developed to gross at least
WAI`ANAE
$ $
$50,000 by the end of 2007;

Distribute at least 50% of
$
$
Area Map
Water Area
$ City product into the Wai`anae &
?
Census Tract
MA`O YOUTH ORGANIC FARM
Highway community through 0 2 4
Miles community farmer’s markets;

Provide employment with profit-incentives to three youth at start-up with two youth
6 added by Year 2;
 Work collaboratively with University of Hawai`i’s College of Tropical Agriculture and
Human Resources (CTAHR) and Leeward Community College (LCC) to increase research and advanced training in organic agriculture production;
 Work collaboratively with WCRC’s other programs to cultivate new organic farmers; and

Restore idle land to productive uses, and reawaken the Hawaiian connection to agriculture.
3.
Groundwork for the Venture
In 2001, WCRC established the Mala `Ai `Opio (MA’O) Community Food Security Initiative.
This initiative was developed in order to create a community food system, fight hunger, improve nutrition, strengthen local agriculture and empower local families to move towards selfsufficiency. In the Hawaiian language mala `ai `opio means the “youth food garden” and ma`o is
MA`O YOUTH ORGANIC FARM 5

also the Hawaiian name of the endemic Wai`anae cotton plant. WCRC established a series of interconnected activities with youth leadership development as a core objective and the MA`O farm site was established as the primary training venue. These activities now support the longterm competitive advantage of MA`O, and are described as follows:
ACTIVITY
1.
Youth Leadership Training (YLT).
The YLT is a 10-month long, 18-hours per week, leadership training for lowincome, out-of-school, Wai`anae
HIGHLIGHTS
This is the recruitment and training mechanism for MA`O Farm, and provides a regular labor source for farm operations.
youth, providing them with a paid educational, entrepreneurial, and agricultural work experience.
2.
Aloha `Aina Café and Natural Foods was opened in April 2003, specializes in healthy breakfasts and lunches using locally-grown products.
3.
Local Community Farmer’s Markets.
Four farmer’s markets have been established at the Aloha `Aina Café,
Wai`anae Comprehensive Health
Center, Kaiser Permanente Health
Clinic, and Leeward Community
College (LCC).
4.
‘Ai Pohaku Workshop, hands-on, culturally-based learning activities at
Wai`anae Intermediate School (WIS) and Wai`anae High School (WHS), that mix traditional Hawaiian taro cultivation with edible, organic school gardens.
5.
The Wai`anae Organic Agriculture
Center, in partnership with Leeward
Community College (LCC), expands research and training activities in
Wai`anae.
The café will be a customer, a farmer’s market site and a showcase for MA`O products. As a commercial kitchen, the café provides for the possibility of valueadded product development opportunities.
Farmer’s markets have tested and proven demand. The local customer base has been introduced to the “organic” concept and the
“MA`O” product. Clinic markets support the WCRC mission.
The gardens illustrate the skill-set and experience already developed in the youth that will lead MA`O and provide “fertile ground” for youth training and recruitment.
The partnership was awarded a U.S.
Department of Housing & Urban
Development grant of $579,000 to purchase 2.5 acres of WCRC’s leased land, and to build an improved post-harvest packing and chilling facility which will increase MA`O’s production handling capacity.
4.
Crops to be Grown
Over the past three years, WCRC has developed farm operations on 2.5-acres as an integral training component of the Youth Leadership Training. This commenced with the planting of fruits trees and bananas and the organic conditioning of soils for field crops. Thereafter,
MA`O YOUTH ORGANIC FARM 6

approximately 30 field crop varieties were grown and sold, with information gathered on: (a)
Best seed varieties; (b) Hardiness of crop to local conditions; (c) Reaction of crop to organic methods of production; and (d) Marketability. Product was sold to Kokua Natural Foods
Cooperative, a cooperatively-owned grocery store specializing in organic foods located near the main campus of the University of Hawai`i. Kokua has a customer base of educated professionals, vegetarians, and people generally adept at cooking. This experience gave WCRC product feedback, as well as information on the demand for, and lack of supply of, locally-grown, organic fruits and vegetables. Through the development of this venture, MA`O will assume overall responsibility for farm operations of the already developed 2.5-acres, and in May 2005 will begin preparation and cultivation of an additional 2.5-acres. Hawai`i has a 12-month growing season and crops to be grown include:

Cilantro

Daikon

Pak choy (bok choi)

Romaine lettuce

Various lettuces, arugula, kale, chard, beets and
This will be our “regular rotation
(short)” planted every 14-days, ready to harvest from day-28 through to day-45, with crops completed in 50-days.
Asian greens (tat soi, mustard greens, mizuna) combined to produce two different salad mixes

Beets

Carrots

Fennel

Green onion
This will be our “regular rotation
(long)” planted every 28-days, ready to harvest from day-70 through to day-100, with crops completed in 105-days.
This will be our “perennial rotation” planted every 3-months,

Basil

Collard greens

Eggplant (Japanese and Italian)

Kale (Red Russian, blue curly, lacinato)

Parsley (curly and flat-leaf)

Swiss chard

Taro

Lemon (Meyer variety)

Mango (Haden and Kiett varieties)

Orange (various Washington naval varieties)

Tangerine (Clementine and Fremont varieties) ready to harvest in 80-days, with crops completed in 5-6 months.
Trees will be planted as an income-generators with first harvest being in year 3, and as a wind break on the windward areas of the farm.
5.
The Opportunity
MA`O will utilize the organic production techniques and market research achieved through
WCRC’s start-up period to expand production and sales. The youth-managed venture will provide planned financial incentives based on business and personal performance. MA`O will sell fruits and vegetables at the already established farmer’s markets, at the recently established
Kapiolani Community College (KCC) Farmer’s Market, held every Saturday morning in
Honolulu (the market attracts over 2,500 visitors each week), and to restaurants. In October
MA`O YOUTH ORGANIC FARM 7

2004, WCRC received a $456,000 two-year grant from the U.S. Department of Health and
Human Service’s Administration for Native Americans (ANA), for Native Hawaiian youth education and economic development activities. The ANA grant will provide salary support for
2-years for a total of five Native Hawaiian youth and project directors, and cover costs of equipment needed to operate a farm. WCRC carries a 25-year lease for 5-acres, 2.5 of which will be purchased in early 2006 using the aforementioned U.S. HUD federal grant.
6.
Our Community
MA`O is situated in a community of 45,000 residents, of which more than 40% are Native
Hawaiian. The entire Wai`anae Coast has levels of poverty near 20% with some census tracts exceeding 50%.
vi On the Wai`anae Coast 45% of the entire population is under the age of 25 years, 34% is under the age of 18 years versus 24% across the State of Hawai`i (Census 2000).
The current unemployment rate for O`ahu is 3.5% while the Wai`anae Coast rate is approximately three times the island average.
vii
A report on food security to the 2003 Hawai`i State Legislature (“A Report to the Legislature on
SCR 75, SD1, HD1, 2002”), submitted by the State Office of Planning, describes Wai`anae is one of the worst of the “at-risk,” food insecure communities, which translates to poorer selfreported physical and mental health, higher levels of obesity, diabetes, and arthritis.
viii
According to the Wai`anae Coast Comprehensive Health Center, the largest local health provider, at least
50% of residents suffer from obesity. Over multiple generations Wai`anae residents have become dependent on the welfare system in which the percentage of people in Wai`anae receiving welfare support (Temporary Assistance to Needy Families and Food Stamps) is four times that of the State of Hawai`i.
ix
And yet, this is not our community’s history. Wai`anae was once a self-sufficient community, easily growing food and managing land and water resources to provide for community needs.
Wai`anae youth, a majority of whom are of Native Hawaiian descent, attend local public schools that are failing to meet the federally mandated No Child Left Behind Act . Worse still, when you look beyond the school environment, there are few opportunities for post-secondary employment and training, strained parents and families, and high rates of school drop-out and illiteracy compared to the rest of the state. Add to this a rapid growth in the abuse of crystal methamphetamine and you have a formula for perpetuation of difficult conditions in Wai`anae.
7.
Land Use, (Re)Connecting to `Aina (land) and Community Values
One of the core Hawaiian values is aloha `aina or love of the land. In pre-contact Hawai`i, people lived within an agricultural system that sustained as many as 500,000 people. Wai`anae has a rich agrarian history, from the pre-contact Western period when Hawaiians farmed the entire region, through to the late 1800’s and early 1900’s when Hawaiian, and Chinese, Filipino,
Okinawan, and Japanese immigrants farmed the valley regions independent from the more dominant plantation agriculture system. Fresh water, a precious resource in arid Wai`anae, was carefully managed, with a portion diverted to taro patches in the upland and then returned to the stream with nutrients that would feed into the estuaries and coastal fisheries. Crops such as taro, banana, sweet potato and breadfruit were raised in abundance, but over time Hawaiian farmers have lost the use and ownership of the land.
MA`O YOUTH ORGANIC FARM 8

Today, Wai`anae residents still embrace the idea of an agricultural community, characterizing the area with terms like “rural”, “open space” and “agrarian lifestyles.” x However, the economy and people’s lifestyles have moved away from agriculture. Two of our most fertile valleys are used predominantly by the U.S. military: Makua Valley is used exclusively for live fire training; and
75% of Lualualei Valley, where MA`O is located, is used for munitions storage and as a naval communications base. Makaha Valley, to the north of Lualualei, has an exclusive gated community, with a resort and two golf courses. In addition, much of Lualualei Valley’s prime agricultural land is no longer in production because the past generation of farmers encouraged their children to move away from the hard life of farming, encouraging them to seek professional careers. The Wai`anae area already has three landfills, and more prospective sites have been identified. In order to revive and expand upon Hawaiian’s traditional love and respect for the land, MA`O has been founded with an entrepreneurial philosophy that is rooted in our cultural traditions.
MA`O YOUTH ORGANIC FARM 9

C.
1.
Growth in the Organic Industry
From the early 1960’s to 1980 the organic agriculture industry grew steadily across the United
States. In the 1960’s the industry was jump-started when information on the dangers of pesticides came to public prominence, most notably with the publication of Rachel Carson’s
Silent Spring in 1962.
xi Consumers grew to understand the connection between personal and environmental health, and over the course of time a genuine shift in food consumption patterns occurred. After 1980, the organic foods sector grew rapidly. By 2001, sales of organic foods reached $8 billion xii
and there has been 20% growth annually in national organic sales over the past 10-years.
xiii There are multiple factors that have contributed to this growing demand, including:

Increase in diet related illnesses, such as the rate of U.S. obesity amongst youth;

Increased health care costs and adoption of preventative medicinal practices;

Growth in the physical fitness industry, gourmet cooking, and fine dining;

Public awareness of fast-food’s detrimental impact on health; and

Major public health crisis, such as Mad Cow disease.
xiv
What was once an industry propelled by farmer’s markets and natural foods cooperatives has now become mainstream. The Organic Trade Association (OTA), xv the leading industry advocate, lists some examples of growth trends; including:

In 2002, more organic foods were purchased in regular retail supermarkets than any other location. Organic foods are now available in over 20,000 natural foods stores and are found in over 70% of conventional retail groceries;

Huge food and beverage corporations, such as Kraft and Coca-Cola, have now joined the organic market by purchasing leading organic brands. USA Today reported in their
December 2, 2004 edition that the San Diego Padres and the St. Louis Cardinals would be serving organic franks alongside conventional hot dogs; xvi
and

A national survey done in 2002 of 1,000 consumers showed that 58% had purchased organic foods.
xvii
OTA projects that the U.S. organic market will reach $30.7 billion by 2007. This is still miniscule compared to the conventional foods industry but OTA reports that conventional food growth at 2-3% per year while organic foods has been climbing at the growth rate of 17-20% annually.
xviii
2.
The Hawai`i Market
The Hawaiian demand for organics may not easily correspond with national market trends due to our unique location. Certainly there have been similar public health and environmental scares.
In 1993, the chemical pesticide heptachlor, recognized by the EPA as carcinogenic, was banned because residues were found in a number of agriculture products including cow’s milk and cucumbers. Heptachlor had been used to eradicate ants from pineapple and to kill termites in homes.
xix Despite this type of impetus, Hawai`i has been slow to embrace organic foods. The
MA`O YOUTH ORGANIC FARM 10

National Agriculture Statistics Service (NASS) reported in 2003 that of Hawai`i’s $553 million total farm revenue, only an estimated $4.8 million was organic (less than 1% of total Hawai`i farm revenue). Comparatively U.S. organic produce represents over 2% of total farm revenue.
xx
There are seven small natural foods stores on the island of O`ahu and like the continental U.S., organic fruits and vegetables can now be found in Hawai`i’s regular retail grocery stores. Of nine regular grocery outlets surveyed for this business plan, six stocked organic fruits and vegetables.
xxi
Of the three that did not stock organic produce one had been in recent contact with
MA`O to purchase product. Of the six stores that did stock organic fresh produce, a nonscientific visual survey of inventory showed that less than 10% was locally sourced. In two stores none of the organic produce was from Hawai`i.
Hawai`i imports over 80% of all fruits and vegetables, and 90% of fresh organic produce.
xxii
Organic foods already sell at a premium, where the additional cost of shipping to Hawai`i increases the retail price of organic foods out of the range of most local residents. Recently, however, big-box retailers such as Costco have started importing large volumes of organic salad greens from California, selling them at a third of the price of the same locally produced product.
xxiii
For the most part, the local trend in organic foods is closely aligned with the emergence of Hawai`i Regional Cuisine, a merging of Eastern and Western cooking influences that mirrors Hawai`i’s cultural diversity.
xxiv Chefs have connected with smaller farms to source the freshest ingredients and have asked for organic fruits, vegetables and meats. This market had been predominantly a tourist audience (high-end, college-educated travelers staying at resorts), but over the past decade many restaurants have been established in local communities. This trend has stimulated the local market, and is best illustrated by the recent establishment of three
Hawai`i Farm Bureau Federation (HFBF) farmer’s markets on O`ahu. In Honolulu, the
Kapiolani Community College (KCC) Farmers Market, opened in late 2003, attracts over 2,500 visitors each Saturday. The market’s development has been critical for local farmers because it is the first time a market has required all products be grown in the Hawaiian Islands. At other farmer’s markets on O`ahu, such as the City and County of Honolulu operated People’s Open
Markets, vendors may sell imported fruits and vegetables.
According to the Hawai`i Organic Farmer’s Association (HOFA), the local trade association for organic growers, there are now approximately 132 certified organic farms in the State of
Hawai`i xxv
with only nine located on O`ahu where 870,000 consumers reside.
xxvi
It is difficult to extrapolate exactly how large the organic fruits and vegetables market is on O`ahu, partly because State agencies do not as yet collect organic-specific data.
A measure of industry size can be understood by looking at growth trends related to a leading retail outlet on O`ahu called Kokua Natural Foods Cooperative. Formed over 25-years ago,
Kokua has a membership of 2,400 and occupies a small grocery outlet approximately 2,000 square feet, close to the campus of the University of Hawai`i. The membership, staff and Board have collectively decided that an expansion is imperative at this time because currently no national health food chains, such as Whole Foods or Trader Joe’s, have entered the Hawai`i market, and there are industry rumors that Whole Foods is researching local store locations.
Kokua hired industry consultants to survey the market potential and reported that Kane`ohe,
MA`O YOUTH ORGANIC FARM 11

located on the Windward Side of O’ahu, would be an ideal location for expansion. Kane`ohe has a population of 35,000 people, and the industry consultants deduced that the total natural foods market for Kane`ohe is valued at over $4 million, with 18-20% of sales predicted to be organic fruits and vegetables. Since Kane`ohe represents 4% of O`ahu’s population, the overall organic fruit and vegetable market size could be as large as $20 million.
Local industry leaders believe that organic agriculture is poised to expand. In a Hawai`i Business
Magazine special report on agriculture, various experts, including Mr. Alan Takemoto, Executive
Director of the Hawai`i Farm Bureau Federation, identified organic agriculture as having “great potential in Hawai`i.” xxvii In support letters, Ms. Joan Namkoong of the Hawai`i Farm Bureau
Federation and Mr. David Cole of Maui Land and Pine clearly state that the market is wide-open.
Mr. Cole states that there is “great economic potential” especially given the “growing consciousness of consumers.”
3.
Local Competition
There are a number of small organic farms that operate on O`ahu. These farms generally sell products wholesale to local health food stores because this ensures a steady price and quantity demand, contrary to farmer’s market booths that pose increased risk and require investment in an increased labor force. There have been two well-known local certified organic growers:
 Ko Farms sells fresh herbs, salads, and greens to all of Hawai`i’s natural foods stores, and to a number of supermarkets. They recently sold their Waimanalo farm, and the owner
Daniel Ko now works for the State Department of Agriculture. Daniel’s wife still grows specialty herbs and sells to all the natural foods stores. The quality of their product is very high, but production capacity low; and

Lone Palm Organic Farms on the Big Island of Hawai`i. Lone Palm is one of only a few neighbor island organic growers that regularly ship to O`ahu. They specialize in high quality sprouts and lettuces and work with three other growers to make salad mixes sold to natural foods stores, restaurants and supermarkets. Their product is very high quality and strongly supported by local consumers in health food outlets, and their production capacity is high.
Two other certified growers occasionally attend KCC Farmer’s Markets they are: (1) Ono
Organic Farms, a 30-acre Maui-based grower of exotic fruits, papaya and banana; and (2) Lotus
Farms, a 1-acre O`ahu based chicken farm. A scan of HOFA’s certified growers list shows that the majority of local growers tend towards mono-cropping products such as macadamia nuts, papaya, pineapple or coffee. Maui Land and Pine (MLP) is the largest grower in the State and specializes in organic pineapples. They will certainly expand in the future, but as the support letter indicates they are exited about collaborating to expand the overall organic market in
Hawai`i.
There are regularly thirty-five booths at the KCC Farmer’s Market, of which 15-20 are farmeroperated fruit and vegetable sales booths.
xxviii There are a number of conventional farmer’s that grow the same vegetable varieties as MA`O, one of the most successful is Dean Okimoto. Mr. Okimoto owns Nalo Farms, a 5-acre farm recognized as one of the most successful farms in Hawai`i today.
MA`O YOUTH ORGANIC FARM 12

Mr. Okimoto has been able to penetrate the high-end restaurant market and his signature “Nalo
Greens”, a delicate combination of mixed baby lettuces, is featured at over 100 of Hawai`i’s best restaurants. It is often difficult for consumers to distinguish between organic and conventional products, however, at MA`O’s sales booth our young Hawaiian sales representatives are large in number and energetic, and their exuberance draws customers to our products. Signage at our booth features liberal reference to “organic” which quickly informs customers of our status as organicallycertified.
4.
Offshore Organic Competition
MA`O will directly compete with offshore farms at Kokua but our broader sales strategy is to sell through farmer’s markets, where imported products are prohibited. The growth of local-only farmer’s markets will help to insulate MA`O from offshore competition. Nevertheless, offshore farms capture 90% of our market, so it is critical to understand who they are. Two of the largest are:

Earthbound Farms, is one of the largest certified organic producers in the U.S., comprising 24,000 acres in California and Mexico. Earthbound grows a wide range of field crops but currently only the salad mixes are sold in Hawai`i through conventional supermarkets and large retailers (Costco, Safeway, Star Market, Foodland) and at natural foods stores (Down to Earth’s three O`ahu locations). Their products are excellent, but like other imported items, suffer from short shelf life.

Cal-Organic Farms, is an organic division of Grimmway Enterprises, Inc., a grower of conventional product. They distribute carrots, chard, green onion, kale and many herbs to all of Hawai`i’s natural food stores and conventional supermarkets. Their product quality is average to high. Kokua has complained that their shelf life is less than MA`O grown produce, and Kokua has preferred to purchase MA`O produce over Cal-Organics, when available (this has included kale, chard, and green onions).
5.
Farming in Hawai`i
If the market for organic fruits and vegetables has so much potential for growth, why aren’t more conventional farmers shifting to organic production, and why are there so few new farmers entering this sector? There are multiple factors, which converge to make entering organic production very difficult. On O`ahu inflated land valuations make it extremely costly to secure land for either organic or conventional farming. The average cost of an acre of undeveloped farmland in Wai`anae is now over $80,000, xxix
while the median sales price of a home on O`ahu is over $500,000.
xxx Concurrently, there is considerable pressure from urban development for more land. The Kunia Plain, once O`ahu’s largest sugar growing area, is being encroached by housing developments. Most new farmers enter the market via leased land, with the market rate being
$125 per acre per month. Leasing, however, can be problematic as landowners have preferred short-term leases because of the potential to rezone land from agriculture to urban for housing development. Even O`ahu’s largest growers, Jefts Farms and Aloun Farms, have large portions of their land in short-term leases, some less than 5-years.
xxxi
Best practice organic agriculture requires an investment in soil building/conditioning, which means income-generation does not start until late in year one of an operation, at the earliest.
Also, there should be periods where fields are left fallow and cover crops are planted, as this
MA`O YOUTH ORGANIC FARM 13

improves soil quality. Again, this increases the time out of production. Most growth in the local organic agriculture sector has occurred on the neighbor islands, especially the Big Island of
Hawai`i, where land is cheaper.
Other reasons why there are few local organic farms, as suggested in supporting letters from Ms.
Joan Namkoong and Mr. David Cole, include limited local technical expertise in organic agriculture and a lack of coordinated support amongst agricultural sectors and agriculture supporters. Hawai`i is transitioning out of plantation agriculture and there is limited entrepreneurial capacity amongst new growers. David Cole, the current Maui Land and Pine
CEO, and former CEO of NaviSoft Inc., and former president of AOL's New Enterprises Group, states in his support letter that:
“The transition away from the plantation model has been difficult because the farm industry has been slow to adapt to the new environment, there have been few market makers to match local producers with consumers and there is a lack of capital available to pioneering entrepreneurs.”
In 1996, Mr. Cole acquired Sunnyside Farms, a 500-acre Virginia farm. He re-launched
Sunnyside as a certified organic supplier of gourmet quality fresh produce and meats. What makes the MA`O venture especially unique is that it is on the cusp of being a “market maker” and “pioneering entrepreneur” while being a non-profit social enterprise.
6.
Customer Profile
In the initial phase of market development, five sales locations with uniquely different core customers have been tested: (1) farmer’s markets at different business locations where MA`O was the exclusive vender (including health clinics); (2) a low-medium end Wai`anae grocery store; (3) a high-end farmer’s market; (4) a high-end health food cooperative grocery outlet; and
(5) a high-end gourmet restaurant in Honolulu. An overview of how these locations have evolved into clear segments can be seen in the following table:
MA`O YOUTH ORGANIC FARM 14

Customer
Segments
High End
(tourist
“foodies”)
High End
(local,
“foodies”)
Low-
Moderate
(local/
Hawaiian)
Buyer Behavior Needs (perceived) Alternatives

Looking for a
“native” and “local experience”

Want to try something new

Looking for fresh, local grown, organic

Increasing social consciousness when buying

Makes necessary food purchases, need to spread their food dollars

High quality

Good looks and taste

Exotic, unique choices

Authentic, local, native

Demands high quality product, freshness, appearance, and taste for repeat business

Bang for the buck

Food that tastes/looks good

Food they like
 Restaurants / cafés

Conventional vendors

Grocery / health food stores

Health food stores

Other market vendors

Restaurants, cafes

Local grocery store

Prepared foods

Fast food and restaurants

Conventionally grown foods
Retailers

Products in high demand and/or trendy

Want to make a mark-up on re-sale
Restaurants

Products in high demand and/or trendy

Freshness and reliable source

Competitive price

Top quality and appearance

Organic fills new niche


Competitive price
Top quality and appearance

Fresh, local, organic

Other local and non-local organic producers

Conventional producers

Other local and non-local organic producers

Conventional producers
Competitive Advantages

Fresh and locally grown

Organic

Youth and products (taro, mangos)
“native” and “local” therefore authentic

Fresh and locally grown

Organic

Diversity of offerings compared to other market growers

Youth and social mission of WCRC

Recognize youth growers

Have been instructed to buy foods by health care providers
 MA’O produce looks better, has different selection

Pricing comparable to local conventional retail items but with a marketable edge

Local and organic often yields superior quality

Product availability and cost to ship/store imported product

Local and organic often yields superior quality

Product availability and cost to ship/store imported product

Social mission
MA`O YOUTH ORGANIC FARM 15

MA`O YOUTH ORGANIC FARM 16

7.
Distribution Mechanisms
MA`O will connect with the five aforementioned segments by selling product at the following locations:
KCC Farmer’s Market, Honolulu  
Wai`anae Health Center
Kaiser Clinic, Nanakuli;


Leeward Community College, Pearl City
Aloha `Aina Café (farmer’s market booth)

 
Aloha `Aina Café  
Town Restaurant, Honolulu







Wai`anae Store
Kokua Natural Foods Cooperative, Honolulu

We have gained invaluable experiences thus far in the diversity of markets penetrated. Some trends have developed which are worthwhile mentioning here: (1) At health clinics careproviders and dietitians have staged cooking demonstrations to teach patients new recipes


 using MA`O products, and doctors have purchased unsold product to support the social mission (2) At Leeward Community College faculty and administrators regularly call the farm to make large orders, this takes some of the guess work out of what to take to a farmer’s market; and (3) The KCC Farmer’s Market has become an “attraction”, there are food demonstrations and musicians, and people use the market as a convenient place to meet. All segments are represented at KCC including small restaurants that shop for specialty items and to investigate new product suppliers. Also Kokua Natural Foods is in close proximity to KCC
Farmer’s Market, unsold product, can be sold to Kokua if necessary.
MA`O YOUTH ORGANIC FARM 17

D.
1.
Promotions and Outreach
The critical strategy for outreach involves customer education of the uniqueness and benefits of organic foods, and the social mission of MA`O. Through multiple branches of media, and with the assistance of WCRC’s partnerships, MA`O has enjoyed some high profile free advertising, which has set the stage for current positioning. This has included:
OUTREACH SEGMENT

MA`O products were featured on a 30-minute cooking show called
“Sam Choy Presents.”
Well-known local chef Sam
Choy was hired by Kaiser Permanente to stage a live cooking show at a local clinic to feature low calorie and vegetarian recipes.

The Hawaiian Electric Company has a 30-minute cooking show called
“The Electric Kitchen” , the Aloha `Aina Café was a guest restaurant and prepared dishes using MA`O’s herbs and baby greens.
CONNECTED TO:

Both high-end
(local), lowmedium, and restaurant segments.

Crossed both highend (local), lowmedium, and restaurant segments.

All segments except perhaps high end (tourist)

University of Hawai`i (UH), working with KITV, a local television station, featured MA`O as a program partner in a news segment called
“Discover UH, You’ll Be Amazed.”
Two segments appeared, including a 30-second commercial that ran for to-weeks between the local evening news.

KITV has developed additional footage of MA`O, and added to other activities unique to Hawai`i to develop an in-flight commercial for Hawai`i that runs on flights coming to
Hawai`i from Japan.

Hawaiian Airlines in-flight magazine, Hana Hou , featured the farm in a 5-page center-spread with color photos, appeared in the December 2003 issue.
xxxii

The youth leadership training was featured as a centerspread in the Office of Hawaiian Affairs monthly newspaper called
“Ka Wai Ola o OHA.” xxxiii

Farm activities were featured in a two-page spread in the
Honolulu Magazine , a monthly-published magazine. MA`O was included in the 2004 food edition.
xxxiv

Farm activities were featured in one-page spread in the
Honolulu Weekly , a free alternative newspaper featuring politics, entertainment and arts.
xxxv





Both high-end
Both high-end segments.
Low-moderate segment.
High-end (local)
High-end (local)
This publicity has occurred over 2-years and has increased MA`O recognition. In 2002, youth developed a MA`O farm tee-shirt which on the front read “no panic, go organic.” Over 2,000
MA`O YOUTH ORGANIC FARM 18

tee shirts have been sold and the playfulness of the message has become iconic of the grassroots social mission of MA`O.
2.
Specific Segment Strategies
Specific Outreach Strategies Customer
Segments
High End (tourist
“foodies”)
High End (local,
“foodies”)
Low-Moderate
(local/ Hawaiian)
 No specific strategy except when segment attends KCC farmer’s market.

Connect to repeat customer at KCC and develop that customer to cross-market to Town Restaurant and Kokua

Continue to build e-mail database

Invite customers to attend monthly community work days.

Maintain high community profile through presence at markets, occasionally story in the local community newspaper, and by posting
Retailers
Restaurants fliers and brochures at the Aloha `Aina Café
 Connect to, and nurture, repeat customers at farmer’s markets.

Continue to build e-mail database

Invite customers to attend monthly community work days.

Provide on-site marketing collateral such as laminated product nametags for vegetables, fliers, and brochures.

Invite retailer to bring staff to the farm to increase education on product and mission.

Encourage restaurant management to acknowledge MA`O on menus

Provide on-site marketing collateral such as fliers, and brochures.

Invite restaurant to bring staff to the farm to increase education on product and mission.
The farmer’s market booth is arranged to stimulate customer senses, by:

Fruits and vegetables are arranged to catch the eye through color and shape;

Youth wear bright green or blue tee-shirts with “MA`O” on the rear and “no panic, go organic” on the front;
 Product is stacked in wicker baskets which conjures a nostalgic sense of old Hawai’i, this is how Mom and Pop stores displayed their products;

Samples of product are always available, e.g. ripe bananas are given to all children that stop by the booth;
 Sales youth are lively and playful, chanting slogans such as “fresh organic greens” or simply “arugula”, and when time allows a youth might play ukulele;

Prices are posted on old-style school blackboards and written in chalk; and

Posters with photos of the farm and youth working are arranged where people cannot miss seeing them.
MA`O YOUTH ORGANIC FARM 19

3.
MA`O Customer Service Philosophy
Excellent customer service skills are vital in agriculture businesses, especially enterprises direct marketing to customers. Our goal is to attract and retain customers through high quality product and service experience, therefore; all youth are trained in sales and customer service, and they regularly debrief farmer’s market experiences to find ways to improve sales. We will periodically “audit” our sales techniques and make necessary adjustments. Of key importance is that youth are knowledgeable regarding products and convey our social mission. To reinforce the importance of customer service we developed a simple sales philosophy, which youth learn and apply, it is as follows:

Make eye contact, greet all people, smile, show maximum aloha;

Listen to customers, learn their names, learn how they cook our food, and ask how we can improve our products;

Communicate with customers, tell them the MA`O story, talk about our products, the farm, and upcoming events;

Show aloha to other venders, learn their names and something about their products, refer customers to them where possible; and

Strive for excellence in customer service and product quality.
4.
Promotional Materials and Labeling
To ensure customer education and information transfer, we developed the following promotional materials, this includes:

Brochures, fliers, posters which are distributed at all locations;
 MA`O information is added to stakeholder’s staff bulletins;

E-mail distribution lists, sent twice monthly to an in-house list, and the lists of our stakeholders. This reaches approximately 2,000 people;

Partner marketing, e.g. marketing is done by the Hawai`i Farm Bureau Federation via a web site and regular articles in local newspapers; and
 The café staff actively informs customers of the markets, and there is signage along a major town thoroughfare.
MA`O Youth Organic farm will sell produce simply under the
“MA`O” brand label. In mid-2003, a youth involved with the project developed a label that will be used (see right). All
“MA`O” brand products will be sold with labeling to educate the consumer that the product is certified organic, is grown by youth and that 100% of their purchase will go to support youth leadership development activities.
5.
Pricing
Overall prices have been set based on competitor’s prices. Wholesale prices are based on the equivalent wholesale price Kokua Market pays for the same imported product. Usually each quarter Kokua’s produce buyer gives us a printout of what he is paying California food brokers for product. If they are receiving a discounted price for an item we attempt to make an adjustment. Once per month we monitor retail prices at three retail outlets. We sometimes
MA`O YOUTH ORGANIC FARM 20

do this as a class field trip for youth in the leadership training. Selling product at KCC farmer’s market allows us to average our price upward to secure a higher margin. At KCC we can also move large volumes of product given the number of market shoppers. The bottom line is that if we are to compete against imported products then we need to offer prices attractive to the local public. Direct marketing, through such mechanisms as farmer’s markets, has become the best method to increase margin for smaller farmers.
6.
Distribution
Through a U.S. Housing and Urban Development grant, WCRC purchased a 2004-model Ford
E-350 extended cargo van. The cargo van will be used to deliver produce to farmer’s markets.
Two personal vehicles owned by staff are currently used for the smaller markets. In 2005, we will purchase two additional vehicles using ANA funds. We use reusable plastic vegetable container totes to package produce for wholesale deliver. These are more hygienic than cartons as they can be easily sanitized. Large coolers are used to transport vegetables to farmer’s markets; space in the van is equivalent to 24 large 120-quart coolers.
7.
Sales Management
Under the tutelage of Gary Maunakea-Forth, a youth co-manager, Ms. Kanoe Burgess, manages weekly sales. Kanoe has been with WCRC for 2-years and has already demonstrated sales acumen beyond her years. She is an excellent communicator, and is able to install a sense of confidence and trust in our wholesale and retail clientele. She supervises and motivates youth crews working at farmer’s markets. Development of the youth-to-customer relationship has increased return clientele, especially at farmer’s markets; therefore it is fitting to enlist a youth to manage the maturation of our sales strategies.
8.
Competitive Advantage
Five-months prior to opening Town Restaurant Lesa Griffith, a food critic for the Honolulu
Weekly , wrote that Chef/Owner Ed Kenney would “open what could be Honolulu’s hottest restaurant.” In the same article Kenney summarized MA`O’s relationship with Town, and in effect our competitive advantage, by stating that:
“MA`O takes it from the earth to the seed to growing the thing to picking kids out of the community who are in need of help, teaching them the Hawaiian culture, then
(they) take it to their café and markets. That whole thing fires me up.” xxxvi
Town opened in March 2005, and in her culinary review, Nadine Kam of the Honolulu Star-
Bulletin stated that:
Town raises the bar for Honolulu's restaurateurs. I hope that, like patrons who are flocking to the restaurant, other chefs eventually get it
.
She added that:
“Their philosophy is ‘local first, organic whenever possible, with aloha always,’ and it shows in MA'O Farms greens that do taste as if they were hand-picked from the field seconds before hitting the plate .” xxxvii
Over the past 2-years, WCRC’s activities, branded as MA`O, have received widespread media attention. The convergence of social mission (youth development) and market demand
MA`O YOUTH ORGANIC FARM 21

(organic foods) has positioned MA`O on the verge of an incredible opportunity. Planning, hard-work and skill development have built the foundation for a superior quality product emblemized by “freshness”, “local” and now “organic.” With strategic educational materials, a grassroots approach to promotions, and word-of-mouth support, our customer base will expand and mature in quick-time.
MA`O YOUTH ORGANIC FARM 22

E.
1.
Organization and Board
MA`O is a pilot program of the Wai`anae Community Re-Development Corporation
(WCRC), a non-profit 501(c)3 community development organization. WCRC’s mission is to plan and implement community-based economic development projects which create sustainable employment and business opportunities for Wai`anae residents, especially youth.
In 1999, our community came together to develop an application to the U.S. Department of
Housing and Urban Development for Empowerment Zone—Enterprise Community status.
While the application was unsuccessful, a group continued to meet to discuss five interest areas: out-of-school youth, sustainable economic development, agriculture, health and
Hawaiian culture. The group decided to establish an organization with social enterprise development as a key objective. WCRC was incorporated in 2001.
2.
Governance
WCRC has an active and committed Board of Directors, with extensive experience and a commitment to community service. The Board meets every month and they are responsible for policy making, financial oversight, adoption of annual budget, and support of grassroots fundraising efforts. All Board members are residents of the Wai`anae community and are of
Native Hawaiian ancestry. The Board includes:

Kaimana Pine -- WCRC Board President and a founding member of WCRC. Mr. Pine is only 25-years old and has for the past 5-years owned and managed one of O`ahu’s last remaining locally owned and operated surf shops. In 2003, he developed a graphic design and internet marketing business that specializes in promotion of Hawai`i manufactured products.

Malia Miles -- WCRC Board Vice President and current food manager at Pu`u Kahea
Christian retreat center. Ms. Miles has many years experience in culinary arts and food service and is highly active in community affairs.

Cris Akao -- WCRC Board Treasurer and Branch Manager of American Savings Bank,
Wai`anae. Ms. Akao was born and raised in Wai`anae, graduated from both Wai`anae
Intermediate and Wai`anae High School and has worked as Manager and Operations
Director for ASB for over 12-years. She brings extensive experiences in community banking, financial oversight, small business financing, and accounting to WCRC, and is responsible for review of monthly financial statements.

Kawika Naho`opi`i -- WCRC Board Secretary and the Center Manager for `Olelo
Community Television in Wai`anae. Mr. Naho`opi`i is a video production trainer and coordinates community outreach, volunteer and staff management at the Wai`anae studio, and provides technical assistance and artistic direction to Wai`anae High
School’s award winning Searider Productions multi-media program.

Austin Miles -- WCRC Board Member and caretaker of Pu`u Kahea Christian retreat center. Mr. Miles is active in community organizing and until recently owned and operated a popular local eatery where he was head chef.
MA`O YOUTH ORGANIC FARM 23

3.
MA`O’s Position in WCRC
MA`O will operate as a pilot project of WCRC. WCRC has secured initial funding to launch
MA`O. Starting in year 3, youth employees of MA`O will receive a bonus based on their performance and MA`O’s profits. This will provide incentives for the youth to be full partners in expanding production and sales.
4.
Executive Management & Staffing Plan
Gary Maunakea-Forth is currently WCRC’s Agriculture Director, responsible for overseeing agricultural production, expansion, and training of staff and volunteers. Mr. Maunakea-Forth will devote 100% of his time to MA`O (resume attached).
Other staff dedicated to the development of MA`O are:

J. Kukui Maunakea-Forth is currently WCRC Executive Director. Ms. Maunakea-
Forth holds a BA in Pacific Island & Hawaiian Studies, and a BSc in Cultural
Anthropology and has more than 10 years experience teaching and managing nonprofits. Twenty percent of her overall time will be devoted to administrative and fiscal management for MA`O (resume attached).

William Aila, Sr., is currently Farm Manager for WCRC and kupuna (elder and mentor) to youth in all of WCRC’s activities. He has over 35-years experience in ranching, farming, and composting as a business owner, and an extensive background in heavy equipment operations. Currently he is a part-time contract employee with
WCRC and half of that time will be devoted to MA`O to provide land clearing and irrigation system development (resume attached).
Youth are central to MA`O. Three Native Hawaiian youth, recent graduates of WCRC leadership training programs, have been employed. The youth are:

Kanoe Burgess. Ms. Burgess, 21-years old, has already gained national attention, through her speech at the Kellogg Foundation’s “Food and Society” national conference, on indigenous youth perspectives of agriculture. She coordinates sales and marketing at MA`O.

Ikaika Burgo. Mr. Burgo, 20-years old, is perhaps the most “natural” and gifted farmer among our youth. He has a genuine love for being outside and working on the land, and spends numerous hours fine-tuning nursery and orchard operations.

Manny Miles. Mr. Miles, 20-years old, coordinates field crop production at MA`O.
He has attended conferences and has become active in the BLAST Initiative of
Boston’s The Food Project, an effort to network young people working in sustainable agriculture.
Youth from the youth leadership team provide an able labor force of 6 to 12 young people, working 18-hours each week. They are paid as interns under the leadership-training program.
MA`O will hire two additional full-time youth coordinators in year 2.
5.
Cooperating Experts
This enterprise is strongly supported by Jonathan Deenik, PhD. Dr. Deenik, has a doctoral degree in Soil Science from the University of Hawai`i at Manoa, where he is currently
MA`O YOUTH ORGANIC FARM 24

employed as an extension specialist and lecturer. Dr. Deenik is able to provide regular tutelage on technical issues and access to other university faculty experts. Other stakeholders include:
Partner
Peter Quigley,
Vice Chancellor
Randy Francisco,

Description of Support
Provides additional training for youth including higher education courses, and is developing a degree program in
Tropical Organic Agriculture.
Program Director
Leeward Community
College (LCC)
David Cole, CEO,
Maui Land and Pine
(former VP of AOL)

Partners with MA`O to increase youth involvement in organic agriculture o Hosted MA`O youth in Maui to learn about MLP’s current research and development (composting, cover
Joan Namkoong, Organizer
KCC and Kailua farmer’s markets
Stephen Bradley, MD, crops, organic pineapple) o Has reviewed MA`O’s business plan and provided commentary on business strategies

Provides connection to customers and information on local food demand and availability

Operates a clinic farmer’s market, produces nutrition education literature, and promotes market to community.
Wai`anae Comprehensive
Health Center
Lei Aken, Ag Program
Teacher, Wai`anae High
School (WHS)
Hawaii Organic Farmers
Association

Will establish an organic agriculture high school program , develop community garden and support trainings.

Recruitment of future youth.

Promote organic agriculture and provide organic certification.

Recruitment of future youth.
MA`O YOUTH ORGANIC FARM 25

F.
1.
Farm Plan
MA`O has a total of 5-acres of land in Lualualei Valley: 2.5 acres currently in production and another 2.5-acres of cleared land available starting January 2005. The new land will be developed similar to the current 2.5 acres in 50’ wide by 80’ long sections, providing 8 beds per section for field crops. We will plant a row of citrus trees between each section. .
Mangos and avocados will be planted along the north fence line. Field crops are planted every one to two weeks, perennials every three months and orchard trees at start-up.
2.
Research &
Development
The most technically challenging facet of this venture is the organic production.
Farming commenced in early
2002, and we have now completed three full years of soil building, crop testing and experimentation with different organic methods. This has provided invaluable information on organic fertilization; timing of crop planting cycles, and organic seed varieties. The result is a system that has produced high yields with excellent product quality (taste, shelf-life, appearance, weight), and minimal insect damage. We augmented on-farm experimentation by visiting many other farms to research new and best practices. Similarly local farmers and university extension agents have visited MA`O and provided more technical information. There are numerous variables that must converge to produce a healthy crop. Over the past three years we have kept daily input and yield records so that we can better plan for future seasons. We have a strong working relationship with
Jonathan Deenik, a PhD soil scientist at the University of Hawai`i, who has assisted with our organic production plan since the inception of farm activities.
3.
Crop Growth
Given Wai`anae’s climate and optimal growing conditions, mixed salad greens (lettuces, arugula, chard, beet tops, tat soi, mizuna, mustard cabbage, kale) take 25-28 days from seed to first cutting. This is our biggest seller and we are able to harvest it 2-3 times per planting, with re-growth occurring every 8-10 days. We also plant a longer rotation every two weeks of fennel, green onion, beets, and carrots, which last approximately 100-days. In our perennial rotation, which lasts 4-6 months, we plant basil, eggplant, parsley, kale, chard, and collards.
We plant this rotation every four months.
MA`O YOUTH ORGANIC FARM 26

4.
Harvest and Quality Control
Market demand requires fresh, clean and attractively presented fruits and vegetables. For organically grown fruits and vegetables consumers have even higher expectations for appearance and cleanliness. Our crops are harvested three times each week. Youth managers and workers are trained to cultivate, harvest and handle (wash, package, chill) in keeping with these quality standards.
Washing vegetables tends to be the most labor-intensive facet of the operation, especially as salad greens are delicate and are double washed. While our current packing facility is basic, we have customized faucets so that each sink cleaning area has overhead washing faucets with shower-flow heads. This frees hands to concentrate on cleaning the product. After each product has been washed, it is placed in small quantities (about five pounds) on drying trays and a youth manager or coordinator inspects the product. The inspector has the option to return the tray to the cleaner for additional washing. If the tray is excellent quality then a packaging crew handles the boxing or bagging of the product. This provides three points of inspection. Before a product leaves the farm a final check is done by choosing a random item from each product. One item from each harvested crop is also kept to monitor shelf life.
5.
Inventory Management
Every Monday, we estimate yield quantities for the week. Staff log anticipated yield numbers in a spreadsheet to manage distribution. This system helps us accommodate fluctuations in weekly yield to ensure customer satisfaction. To maximize freshness, we harvest three times per week and maintain little inventory. For all points of sale, except KCC farmer’s market, we harvest and distribute the same day. For KCC we harvest, chill over night, and sell in the morning. Our present cold storage is limited to a 108 cubic foot chiller, but in June 2005 we will install a 760 cubic foot reefer, which will have an alarm system to monitor possible power outages.
6.
Organic Certification
In September 2004, MA`O Youth Organic Farm received organic certification from the
Hawai`i Organic Farmer’s Association (HOFA), under the auspices of the USDA. HOFA is the only certifying body in the State of Hawai`i and the application process involved a 6month review and final inspection. MA`O will be inspected each year and is required to show proof of organic methods. We are obliged to keep accurate records for soil inputs, seed sources, and crop yields. We track the following data on a customized excel spreadsheet: (1) type of product sold; (2) amount of product sold: (3) customer that received product; (4) location on farm where product was grown; and (4) history of inputs and events for the area where product was grown.
7.
Farmer’s Markets
As aforementioned MA`O will sell primarily at markets already tested including:
Wai`anae Comprehensive Health Center
Kaiser Permanente, Nanakuli
Wednesdays 11:45am to 1:00 pm
Wednesdays 11:45am to 1:00 pm
MA`O YOUTH ORGANIC FARM 27

Leeward Community College, Pearl City
Aloha `Aina Café, Wai`anae
KCC Farmer’s Market, Honolulu
Wednesdays 11:45am to 1:00 pm
Saturdays 9:00 am to 11:00 am
Two Saturdays per month,
7:30 am to 11:00
MA`O uses the markets as training grounds for youth in our leadership development programs. Our full-time staff provide supervision for each market while the part-time youth ensure adequate staffing to cover multiple markets simultaneously.
8.
Land, Equipment, Office Space, Tools, Resources
WCRC leases 5-acres of land located at 86-210 Puhawai Road in Lualualei Valley, which will be used for the MA`O venture. The landowner is the Community of Christ
Church and the 25-year
MA`O Youth Organic Farm, Lualualei Valley, Wai`anae, HI
Ğ Map of Neighboring Land, Possible Sites for Expansion term began in 2001. The land has excellent potential
Former chicken farm (4-acres), closed early 1990’s.
8-acre farm parcel owner willing to lease or sell to
MA`O for expansion with three of the neighboring properties
MA`O’s landlord.
vacant (see map at right).
MA`O will benefit from equipment acquired with
WCRC grant funds. This includes a 2001 model 55-
MA`O
Heliconia flower closed in mid-1990’s
Undeveloped land.
hp John Deer tractor and a cargo van. ANA funds will be used to purchase and additional delivery van and a one-ton dump truck. As mentioned cold storage is limited at present but through the aforementioned HUD grant MA`O will be constructing a new Organic Agriculture Center to include a 40’ x 40’ concrete floor processing facility, additional cold storage, and offices.
9.
Increasing Youth Capacity
In early 2004, WCRC started educational programs at two local schools, using edible organic school gardens as an alternative teaching tool. Teachers have been trained to use organic farming techniques as a vehicle to teach social studies and science classes. Fruits and vegetables are harvested on a weekly basis, and sold by youth on campus. Youth participants are prime candidates for future employment at MA`O, critical to our growth plans.
MA`O YOUTH ORGANIC FARM 28

G.
1.
Start-up
A grant of $456,000 has been secured from the DHHS-Administration for Native Americans with $317,837 dedicated to this venture to be used in 2005 and 2006, to complete development of MA`O. This money is listed as restricted grants on the balance sheet and as
ANA grant on the cash flow and income statements.
2.
Accounting System & Business Controls.
We use Quickbooks as our primary accounting system. We track sales weekly through spreadsheets and review them monthly so that we understand trends related to product and point of sale. This will allow us to analyze the profitability of sales by specific crop.
WCRC’s Board of Directors will regularly monitor all these statements for accountability.
We have scheduled our first external audit (based on increased budget size) for 2005.
3.
Long-term Sustainability
WCRC has maintained financial stability while growing rapidly in the past four years.
Significant steps have been taken to lay a foundation for long-term sustainability, including:

Securing a total of $1,354,000 of federal funds the past 4-years to support MA`O, for our new café, and a variety of educational and community projects;

Arranging for the purchase of 2.5 acres of land that we currently lease for farming, providing leverage to acquire more land in the future;

Forging partnerships with industry and business (Maui Land and Pine, Hawai`i
Organic Farmer’s Association, Kokua Natural Foods Cooperative), education
(Leeward Community College, University of Hawai`i College of Tropical Agriculture
& Human Resources, Kamehameha Schools), to ensure access to markets and technical assistance;

Initiating contractual relationships with Kamehameha Schools/Bishop Estate and Alu
Like, a $16 million Hawaiian job training program, to improve job training programs for youth.
4.
Proforma Statements
We have included the following financial statements:

Projection of weekly customer product orders. These estimates rely on data from the last three years of operations and are the basis for our sales figures for the next three years. Note that year 3 is a critical point for expansion as productive land and sales double.

Annual income statements for years 1, 2, and 3.

Monthly cash flow statements for years 1, 2 and 3.

Annual balance sheets for years 1,2, and 3.

Social Return on Investment (SROI) .
MA`O YOUTH ORGANIC FARM 29

PROJECTION OF WEEKLY
SALES BY CUSTOMER, 2005 CUSTOMER UNITS
WHOLESALE
CUSTOMER SALES
5
6
7
8
3
4
1
2
9
10
11
12
13
20
21
22
23
24
14
15
16
17
18
19
Arugula
17.6
Bananas - Apple 142.0
Basil - green leaf 18.5
Beets
31.5
Chard
56.0
Cilantro
47.5
Citrus
46.6
Collard Greens 35.0
Daikon
36.0
Eggplant
86.0
Green Onions
41.8
Kale - Blue Curled
25.0
Kale - Lacinato 45.0
Kale - Red Rus.
25.0
Lettuce, Romaine
52.0
Mesclun, regular
95.0
Mesclun, Sassy!
53.5
Mizuno
1.6
Mustard Greens 1.6
Pak Choi - Baby
56.8
Pak Choi - Large
56.8
Parsley, Am.
19.3
Taro - Leaf
38.5
Tat Soi
1.6
TOTAL 1030
20
20
15
15
5
10
3
0
20
15
15
10
10
15
15
10
0
0
208
10
0
0
0
0
0
MA`O YOUTH ORGANIC FARM
10
0
0
3
0
12
1
0
3
0
0
0
6
1
4
0
0
0
76
0
12
24
0
0
0
2
2
0
2
2
0
1
0
2
2
2
4
4
0
0
8
8
0
55
6
0
0
0
2
8
0
10
15
0
5
10
5
0
0
10
10
0
20
5
0
0
0
0
114
0
24
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
30
0
0
0
0
0
22
35
40
17
9
12
13
20
24
35
30
12
32
23
23
16
4
0
463
0
0
12
20
40
24
$ 5.00
$ 1.00
$ 1.00
$ 1.50
$ 2.00
$ 3.00
$ 1.50
$ 1.50
$ 1.00
$ 1.50
$ 3.00
$ 1.50
$ 1.50
$ 1.50
$ 1.75
$ 5.00
$ 5.00
$ 4.00
$ 4.00
$ 1.10
$ 1.10
$ 1.00
$ 2.00
$ 4.00
$ 15
$ -
$ 5
$ 15
$ 40
$ 60
$ 23
$ 23
$ 20
$ 23
$ 45
$ 15
$ 15
$ 15
$ -
$ -
$ -
$ -
$ -
$ 17
$ 17
$ 10
$ -
$ -
$356
$ -
$ 12
$ 1
$ -
$ -
$ 9
$ 15
$ -
$ -
$ 9
$ 9
$ -
$ -
$ -
$ 21
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ 1
$ 8
$
$
9
9
$
$
-
-
$ $
$205 $107
-
$ 5
$ -
$ 2
$ -
$ 4
$ 6
$ -
$ 3
$ 4
$ 6
$ 6
$ 3
$ 3
$ 3
$ 25
$ -
$ 5
$ 15
$ -
$ 30
$ 23
$ -
$ -
$ 15
$ 30
$ -
$ 30
$ -
$ -
$ -
$ 120
$ -
$ -
$ -
$ -
$ 5
$ -
$ -
$298
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ 150
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$150
30
$45
$12
$13
$30
$44
$105
$60
$26
$24
$53
$90
$18
$48
$25
$25
$16
$8
$0
$1,115
$18
$35
$300
$120
$0
$0

SUMMARIZATION OF PROJECTED ANNUAL YIELD & SALES
YEAR ONE YEAR TWO YEAR THREE YEAR FOUR
1 Arugula
2 Bananas - Apple
3 Basil
4 Beets
5 Chard
6 Cilantro
7 Citrus
8 Collard Greens
9 Daikon
10
Eggplant – Italian
11 Green Onions
12 Kale - Blue Curled
13 Kale - Lacinato
14 Kale - Red Rus.
15 Lettuce, Romaine
16 Mesclun, regular
17 Mesclun, Sassy!
18 Mizuno
19 Mustard Greens
20 Pak Choi - Baby
21 Pak Choi - Large
22 Parsley, Am.
23 Taro - Leaf
24 Tat Soi
TOTAL
$ 1,872
$ 5,148
$ 34,060
$ 16,744
$ 520
$ 520
$ 4,436
$ 4,436
$ 1,508
$ 2,392
$ 520
$ 136,557
Total
Annual
Sales
$ 5,928
$ 8,944
$ 2,964
$ 3,276
$ 5,096
$ 8,060
$ 6,656
$ 2,782
$ 2,496
$ 5,772
$ 7,124
$ 1,872
$ 3,432
1,300
2,704
4,940
2,782
83
83
2,951
2,951
1,001
2,002
83
53,476
Annual
Production
(lbs)
917
7,384
962
1,638
2,912
2,470
2,421
1,820
1,872
4,472
2,171
1,300
2,340
$ 1,966
$ 5,405
$ 35,763
$ 17,581
$ 546
$ 546
$ 4,657
$ 4,657
$ 1,583
$ 2,512
$ 546
$ 143,385
Total
Annual
Sales
$ 6,224
$ 9,391
$ 3,112
$ 3,440
$ 5,351
$ 8,463
$ 6,989
$ 2,921
$ 2,621
$ 6,061
$ 7,480
$ 1,966
$ 3,604
1,365
2,839
5,187
2,921
87
87
3,099
3,099
1,051
2,102
87
56,150
Annual
Production
(lbs)
963
7,753
1,010
1,720
3,058
2,594
2,542
1,911
1,966
4,696
2,280
1,365
2,457
$ 3,931
$ 10,811
$ 71,526
$ 35,162
$ 1,092
$ 1,092
$ 9,315
$ 9,315
$ 3,167
$ 5,023
$ 1,092
$ 286,770
Total
Annual
Sales
$ 12,449
$ 18,782
$ 6,224
$ 6,880
$ 10,702
$ 16,926
$ 13,978
$ 5,842
$ 5,242
$ 12,121
$ 14,960
$ 3,931
$ 7,207
2,730
5,678
10,374
5,842
175
175
6,197
6,197
2,102
4,204
175
112,300
Annual
Production
(lbs)
1,926
15,506
2,020
3,440
6,115
5,187
5,083
3,822
3,931
9,391
4,559
2,730
4,914
$ 4,010
$ 11,027
$ 72,957
$ 35,866
$ 1,114
$ 1,114
$ 9,501
$ 9,501
$ 3,230
$ 5,124
$ 1,114
$ 292,506
Total
Annual
Sales
$ 12,698
$ 19,158
$ 6,349
$ 7,017
$ 10,916
$ 17,265
$ 14,257
$ 5,959
$ 5,346
$ 12,364
$ 15,260
$ 4,010
$ 7,351
2,785
5,792
10,581
5,959
178
178
6,321
6,321
2,144
4,288
178
114,546
Annual
Production
(lbs)
1,965
15,817
2,061
3,509
6,238
5,291
5,185
3,898
4,010
9,579
4,650
2,785
5,012
PRODUCE MATURING IN YEAR 4
Mango
Avocado
3,000
1,500
4,500
$ 5,250
$ 2,625
$ 7,875
TOTAL 119,046 $ 300,381
NOTES ON PROJECTED GROWTH
In year 2 we project a very small increase in each market, resulting in 5% overall growth. This is partly because we will be devoting considerable time to organizational development and capacity building.
In year 3 there is substantial growth in selected items through completion of land development, increased sales at farmer's markets, and the maturation of banana and citrus trees. Specifically growth will occur as follows: mesclun salad, pak choi, taro, banana and basil will treble in yield and sales (for banana this translates in the need to harvest 12-16 bunches per week); chard, citrus, green onions, arugula, basil, cilantro, romaine, parsley will double in yield and sales.
Beyond year 3 there will also be maturation of fruit trees (mango, avocado) planted in year 1. This will result in additional sales summariezed in the table above
MA`O YOUTH ORGANIC FARM 31

STATEMENT OF CASH FLOWS YEAR 1
CASH IN FROM OPERATIONS
Sales-vegetable operation
Sales-orchard operation
Total Cash In from Operations
1
$ 10,080
$ 1,300
$ 11,380
2
$ 10,080
$ 1,300
$ 11,380
3
$ 10,080
$ 1,300
$ 11,380
4
$ 10,080
$ 1,300
$ 11,380
5
$ 10,080
$ 1,300
$ 11,380
6
$ 10,080
$ 1,300
$ 11,380
7
$ 10,080
$ 1,300
$ 11,380
8
$ 10,080
$ 1,300
$ 11,380
9
$ 10,080
$ 1,300
$ 11,380
10
$ 10,080
$ 1,300
$ 11,380
11
$ 10,080
$ 1,300
$ 11,380
12
$ 10,080
$ 1,300
$ 11,380
YEAR 1
$ 120,957
$ 15,600
$ 136,557
Cash Out From Operations
Costs of Production
Packing Supplies
Seeds, Soil and Amendments
Tools & Equipment
Utilities
Other Operating Expenses
Administrative, Legal & Acct.
Advertising & Promotions
Freight, Mileage
Insurance
Licenses & Fees
Postage
Professional Services
Profit Share - Youth Staff
Rent
Supplies
Taxes
Training and Development
Travel/Entertainment
Vehicles: Maintenance & Repair
Wages and Benefits
Total Cash Out from Operations
Cash Out from Investing
Capital Purchases
Total Cash Out from Investing
Cash In from Financing
ANA grant disbursements
Total Cash In from Financing
Net Increase in Cash
Cash at Beginning of Month
$
$
$
$
$
$ (300)
$ (100)
$ (5,500)
$ (600)
$
$ (1,100)
$ -
$ (1,800)
$ (100)
$ -
$ -
$ -
$ (300)
$
$
(11,150)
(27,398)
$ (33,413)
$ (33,413)
$
$
$
(393)
(2,117)
(3,000)
(603)
(284)
(50)
44,563
44,563
$ (4,868)
15,000
$
$
$
$
$
$ -
$ (100)
$ -
$ -
$
$ (1,100)
$ -
$ -
$ (100)
$ -
$ (300)
$ (2,405)
$ -
$
$
(11,150)
(16,093)
$ -
$ -
$
$
$
-
-
-
(603)
(284)
(50)
13,555
13,555
$ 8,842
10,132
$
$
$
$
$
$ -
$ -
$
$ -
$ -
$ -
$ -
$ -
$ -
$
$
$ -
$ -
-
-
-
(603)
(284)
$ -
$ (100)
(50)
$ (1,100)
$ (100)
(11,150)
(13,388)
$ 11,150
$ 11,150
$
$
9,142
18,974
$
$
$
$
(393)
(2,117)
$
$
$
(603)
(284)
$ (300)
$ (100)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ (1,800)
$ (100)
$ (882)
$ -
$ -
$ (300)
(11,150)
(19,180)
$ -
$ -
$ 11,150
$ 11,150
$
$
3,350
28,116
-
$
$
$
$
$
$ -
$ (100)
$ -
$ -
$
$ (1,100)
$ -
$ -
$ (100)
$ -
$ (300)
$ (2,405)
$ -
$
$
(11,150)
(16,093)
$ -
$ -
$
$
$
-
-
-
(603)
(284)
(50)
13,555
13,555
$ 8,842
31,467
$
$
$
$
$
$ -
$ (100)
$ -
$ -
$
$ (1,100)
$ -
$ -
$ (100)
$ -
$ -
$ -
$ -
$
$
(11,150)
(13,388)
$ -
$ -
$
$
$
-
-
-
(603)
(284)
(50)
11,150
11,150
$ 9,142
40,309
$
$
$
(393)
$ (2,117)
$ -
$
$
$ (300)
$ (100)
$ -
$ -
$
$ (1,100)
$ -
$ (1,800)
$ (100)
$ (882)
$ -
$ -
$ (300)
(11,150)
(19,180)
$ -
$ -
$
$
$
(603)
(284)
(50)
11,150
11,150
$ 3,350
49,451
$
$ -
$ -
$
$
$ -
$ (100)
$ -
$ -
$
$ (1,100)
$ -
$ -
$ (100)
$ -
$ (300)
$ (2,405)
$ -
$
$
(11,150)
(16,093)
$ -
$ -
$
$
$
-
(603)
(284)
(50)
13,555
13,555
$ 8,842
52,801
$
$
$
$
$
$
$
$
$
$
$ (1,100)
$
$
$
$
$
$
$
$
$
-
-
-
-
(11,150)
(13,388)
$
$
$
$
$
-
-
-
(603)
(284)
(100)
(50)
(100)
11,150
11,150
$ 9,142
61,643
-
-
-
-
-
-
-
$
$
$
$
$
(1,100)
(1,800)
$
$
$
$
$
$
$
(393)
$
$
$
$
$
$
$
$
-
-
(11,150)
(19,180)
$
$
$
$
$
(2,117)
-
(603)
(284)
(300)
(100)
(50)
(100)
(882)
(300)
11,150
11,150
$ 3,350
70,785
-
-
-
-
-
$
$
$
$
$
$
$
$
$
$
$ (1,100)
$
$
$
$
$
$
$
$
$
-
(11,150)
(16,093)
$
$
$
$
$
-
-
-
(603)
(284)
(100)
(50)
(100)
(300)
(2,405)
13,555
13,555
$ 8,842
74,135
-
-
-
-
-
-
-
-
$
$
$
$
$
$ -
$ (100)
$ -
$ -
$
$ (1,100)
$ -
$ -
$ (100)
$ -
$ -
$ -
$ -
$
$
(7,434)
(9,671)
$
$
$
$
$
$
-
-
-
(603)
(284)
(50)
7,735
7,735
9,443
82,977
-
-
$
$
$
$
(1,572)
(8,467)
(3,000)
(7,238)
$ (3,414)
$ (1,200)
$ (1,200)
$ (5,500)
$ (600)
$ (600)
$ (13,200)
$ -
$ (7,200)
$ (1,200)
$ (2,646)
$ (1,200)
$ (9,620)
$ (1,200)
$ (130,087)
$ (199,144)
$
$
$
(33,413)
173,421
173,421
Cash at End of Month $ 10,132 $ 18,974 $ 28,116 $ 31,467 $ 40,309 $ 49,451 $ 52,801 $ 61,643 $ 70,785 $ 74,135 $ 82,977 $ 92,421
MA`O YOUTH ORGANIC FARM 32

STATEMENT OF CASH FLOWS YEAR 2
CASH IN FROM OPERATIONS
Sales-vegetable operation
Sales-orchard operation
Total Cash In from Operations
1
$ 10,584
$ 1,365
$ 11,949
2
$ 10,584
$ 1,365
$ 11,949
3
$ 10,584
$ 1,365
$ 11,949
4
$ 10,584
$ 1,365
$ 11,949
5
$ 10,584
$ 1,365
$ 11,949
6
$ 10,584
$ 1,365
$ 11,949
7
$ 10,584
$ 1,365
$ 11,949
8
$ 10,584
$ 1,365
$ 11,949
9
$ 10,584
$ 1,365
$ 11,949
10
$ 10,584
$ 1,365
$ 11,949
11
$ 10,584
$ 1,365
$ 11,949
12
$ 10,584
$ 1,365
$ 11,949
YEAR 2
$ 127,005
$ 16,380
$ 143,385
Cash Out From Operations
Costs of Production
Packing Supplies
Seeds, Soil and Amendments
Tools & Equipment
Utilities
Other Operating Expenses
Administrative, Legal & Acct.
Advertising & Promotions
Freight, Mileage
Insurance
Licenses & Fees
Postage
Professional Services
Profit Share - Youth Staff
Rent
Supplies
Taxes
Training and Development
Travel/Entertainment
Vehicles: Maintenance & Repair
Wages and Benefits
Total Cash Out from Operations
$
$
$
$
$
$
$
$ (5,638)
$
$
$
$
$
(1,100)
(1,800)
$
$
(117)
(882)
$
$
$
$
$
(413)
(2,223)
(1,200)
(673)
(299)
(450)
(167)
(600)
(50)
-
-
-
(375)
(19,091)
(35,076)
$
$
$
$
$
$
$ (167)
$
$
$
$
(50)
(1,100)
$
$
$ (117)
$
$
$
(400)
(600)
$
$
$
-
-
-
(673)
(299)
-
-
-
-
-
-
-
(15,374)
(18,780)
$
$
$
$
$
$
$ (167)
$
$
$
$
(50)
(1,100)
$
$
$ (117)
$
$
$
$
$
$
-
-
-
(673)
(299)
-
-
-
-
-
-
-
-
-
(15,374)
(17,780)
$
$
$
$
$
$
$
$
$
$
(50)
(1,100)
$
$ (1,800)
$
$
(117)
(1,203)
$
$
$
$
$
(413)
(2,223)
$ -
(673)
(299)
(450)
(167)
-
-
-
-
-
(375)
(15,374)
(24,243)
$
$
$
$
$
$
$ (167)
$
$
$
$
(50)
(1,100)
$
$
$ (117)
$
$
$
(400)
(600)
$
$
$
-
-
-
(673)
(299)
-
-
-
-
-
-
-
(15,374)
(18,780)
$
$ -
$ -
$
$
$
$ (167)
$
$
$
$
(50)
(1,100)
$
$
$ (117)
$
$
$
$
$
$
-
(673)
(299)
-
-
-
-
-
-
-
-
-
(15,374)
(17,780)
$
$
$
$
$
$
$
$
$
(50)
(1,100)
$
$ (1,800)
$
$
(117)
(1,203)
$
$
$
$
$
(413)
$ (2,223)
$ -
(673)
(299)
(450)
(167)
-
-
-
-
-
(375)
(15,374)
(24,243)
$
$
$
$
$
$
$ (167)
$
$
$
$
(50)
(1,100)
$
$
$ (117)
$
$
$
(400)
(600)
$
$
$
-
-
-
(673)
(299)
-
-
-
-
-
-
-
(15,374)
(18,780)
$
$
$
$
$
$
$
$
$
$
$
$
$
-
-
-
(1,100)
$
$
$
$
$
$
$
-
-
-
(673)
(299)
(167)
(50)
-
-
(117)
-
-
-
-
(15,374)
(17,780)
$
$
$
$
$
$
$
$
$
$
(50)
(1,100)
$
$ (1,800)
$
$
(117)
(1,203)
$
$
$
$
$
(413)
(2,223)
$ -
(673)
(299)
(450)
(167)
-
-
-
-
-
(375)
(15,374)
(24,243)
$
$
$
$
$
$
$ (167)
$
$
$
$
(50)
(1,100)
$
$
$ (117)
$
$
$
(400)
(600)
$
$
$
-
-
-
(673)
(299)
-
-
-
-
-
-
-
(15,374)
(18,780)
$
$ -
$ -
$
$
$
$ (167)
$
$
$
$
(50)
(1,100)
$
$
$ (117)
$
$
$
$
$
$
-
(673)
(299)
-
-
-
-
-
-
-
-
-
(10,250)
(12,655)
$ (1,651)
$ (8,890)
$ (1,200)
$ (8,080)
$ (3,585)
$ (1,800)
$ (2,000)
$ (5,638)
$ (600)
$ (600)
$ (13,200)
$ -
$ (7,200)
$ (1,400)
$ (3,609)
$ (1,600)
$ (2,400)
$ (1,500)
$ (183,085)
$ (248,038)
Cash Out from Investing
Capital Purchases
Total Cash Out from Investing
Cash In from Financing
ANA grant disbursements
Total Cash In from Financing
Net Increase in Cash
Cash at Beginning of Month
$
$
$
$
$
12,035
12,035
-
-
(11,093)
$ 92,421
$
$
$
$
12,035
12,035
$
$
5,204
81,328
-
-
$
$
$
$
$
12,035
12,035
$ 6,204
86,531
-
-
$
$
$
$
$
12,035
12,035
$
-
-
(260)
92,735
$
$
$
$
$
12,035
12,035
$ 5,204
92,475
-
-
$
$
$
$
$
12,035
12,035
$ 6,204
97,679
-
-
$
$
$
$
$
12,035
12,035
$
-
-
(260)
103,882
$
$
$
$
$
12,035
12,035
$ 5,204
103,623
-
-
$
$
$
$
$
12,035
12,035
$ 6,204
108,826
-
-
$
$
$
$
$
12,035
12,035
$
-
-
(260)
115,030
$
$
$
$
$
12,035
12,035
$ 5,204
114,770
-
-
$
$
$
$
$
$
12,035
12,035
11,328
119,974
-
-
$
$
$
144,416
144,416
-
Cash at End of Month $ 81,328 $ 86,531 $ 92,735 $ 92,475 $ 97,679 $ 103,882 $ 103,623 $ 108,826 $ 115,030 $ 114,770 $ 119,974 $ 131,302
MA`O YOUTH ORGANIC FARM 33

STATEMENT OF CASH FLOWS YEAR 3
CASH IN FROM OPERATIONS
Sales-vegetable operation
Sales-orchard operation
Total Cash In from Operations
1
$ 21,168
$ 2,730
$ 23,898
2
$ 21,168
$ 2,730
$ 23,898
3
$ 21,168
$ 2,730
$ 23,898
4
$ 21,168
$ 2,730
$ 23,898
5
$ 21,168
$ 2,730
$ 23,898
6
$ 21,168
$ 2,730
$ 23,898
7
$ 21,168
$ 2,730
$ 23,898
8
$ 21,168
$ 2,730
$ 23,898
9
$ 21,168
$ 2,730
$ 23,898
10
$ 21,168
$ 2,730
$ 23,898
11
$ 21,168
$ 2,730
$ 23,898
12
$ 21,168
$ 2,730
$ 23,898
YEAR 3
$ 254,010
$ 32,760
$ 286,770
Cash Out From Operations
Costs of Production
Packing Supplies
Seeds, Soil and Amendments
Tools & Equipment
Utilities
$ (826)
$ (4,445)
$ (1,200)
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ (826)
$ (4,445)
$ -
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ (826)
$ (4,445)
$ -
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ (826)
$ (4,445)
$ -
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ -
$ -
$ -
$ (1,147)
$ (3,302)
$ (17,781)
$ (1,200)
$ (13,760)
Other Operating Expenses
Administrative, Legal & Acct.
Advertising & Promotions
Freight, Mileage
Insurance
Licenses & Fees
Postage
Professional Services
Profit Share - Youth Staff
Rent
Supplies
Taxes
Training and Development
Travel/Entertainment
Vehicles: Maintenance & Repair
Wages and Benefits
Total Cash Out from Operations
$ (597)
$ (450)
$ (200)
$ (5,778)
$ (600)
$ (50)
$ (1,100)
$ -
$ (1,800)
$ (133)
$ (1,203)
$ -
$ -
$ (600)
$ (18,022)
$ (38,152)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ -
$ (133)
$ -
$ (500)
$ (600)
$ -
$ (12,897)
$ (17,225)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ -
$ (133)
$ -
$ -
$ -
$ -
$ (12,897)
$ (16,125)
$ (597)
$ (450)
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ (1,800)
$ (133)
$ (2,400)
$ -
$ -
$ (600)
$ (12,897)
$ (26,646)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ -
$ (133)
$ -
$ (500)
$ (600)
$ -
$ (12,897)
$ (17,225)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ -
$ (133)
$ -
$ -
$ -
$ -
$ (12,897)
$ (16,125)
$ (597)
$ (450)
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ (1,800)
$ (133)
$ (2,400)
$ -
$ -
$ (600)
$ (12,897)
$ (26,646)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ -
$ (133)
$ -
$ (500)
$ (600)
$ -
$ (12,897)
$ (17,225)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ -
$ (133)
$ -
$ -
$ -
$ -
$ (12,897)
$ (16,125)
$ (597)
$ (450)
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ (1,800)
$ (133)
$ (2,400)
$ -
$ -
$ (600)
$ (12,897)
$ (26,646)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ -
$ -
$ (133)
$ -
$ (500)
$ (600)
$ -
$ (12,897)
$ (17,225)
$ (597)
$ -
$ (200)
$ -
$ -
$ (50)
$ (1,100)
$ (20,000)
$ -
$ (133)
$ -
$ -
$ -
$ -
$ (8,598)
$ (31,826)
$ (7,169)
$ (1,800)
$ (2,400)
$ (5,778)
$ (600)
$ (600)
$ (13,200)
$ (20,000)
$ (7,200)
$ (1,600)
$ (7,200)
$ (2,000)
$ (2,400)
$ (2,400)
$ (155,594)
$ (265,985)
Cash Out from Investing
Capital Purchases
Total Cash Out from Investing
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$ -
Cash In from Financing
ANA grant disbursements
Total Cash In from Financing
Net Increase in Cash
Cash at Beginning of Month
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ (14,254)
$ 131,302
$ 6,673
$ 117,048
$ 7,773
$ 123,720
$ (2,748)
$ 131,493
$ 6,673
$ 128,745
$ 7,773
$ 135,418
$ (2,748)
$ 143,190
$ 6,673
$ 140,442
$ 7,773
$ 147,115
$ (2,748)
$ 154,887
$ 6,673
$ 152,139
$ (7,928)
$ 158,812
Cash at End of Month $ 117,048 $ 123,720 $ 131,493 $ 128,745 $ 135,418 $ 143,190 $ 140,442 $ 147,115 $ 154,887 $ 152,139 $ 158,812 $ 150,884
MA`O YOUTH ORGANIC FARM 34

MA`O YOUTH ORGANIC FARM
Balance Sheet
% of total assets ASSETS
Current Assets
Cash
Accounts Receivable
Other
Total Current Assets
Fixed Assets
Restricted Grants
Equipment
Acc. Depreciation
Total Fixed Assets
STARTING
$ 15,000 33.8%
$ 0.0%
$ 0.0%
$ 15,000
$ 45,400
$ (16,000)
$ 29,400
102.3%
-36.0%
66.2%
YEAR 1
$ 173,421
$ 73,013
$ (25,141)
$ 221,293
% of total assets
$94,421 29.9%
$ 0.0%
$ 0.0%
$ 94,421
54.9%
23.1%
-8.0%
70.1%
YEAR 2
$135,302
$
$
$
$
$
$
135,302
144,416
$ 63,872
-
-
(34,283)
174,005
% of total assets
43.7%
0.0%
0.0%
46.7%
20.6%
-11.1%
56.3%
YEAR 3
% of total assets
$ 116,002 91.1%
$ 0.0%
$ 0.0%
$ 116,002
$ 0.0%
$
$
54,730
(43,424)
$ 11,307
43.0%
-34.1%
8.9%
TOTAL ASSETS
LIABILITIES
Current Liabilities
Accounts Payable
Taxes Payable
Wages Payable
Other
$ 44,400 100.0% $ 315,713 100.0% $ 309,307 100.0% $ 127,309 100.0%
$ 0.0%
$ 0.0%
$ 0.0%
$ -
$ 0.0%
$ 882
$ 3,717 1.2%
$ 0.0%
$ 4,599
$ 0.0%
$
$
1,203
5,125
0.4%
1.7%
$ 0.0%
$ 6,328
$ 0.0%
$
$
2,400
4,299
1.9%
3.4%
$ 0.0%
$ 6,699
Long-Term Liabilties
Notes Payable $ 0.0% $ 0.0% $ 0.0% $ 0.0%
TOTAL LIABILITIES
EQUITY
TOTAL LIABILITIES
& EQUITY
$ 0.0% $ 4,599 1.5% $ 6,328 2.0% $ 6,699 5.3%
$ 44,400 100.0% $ 311,114 98.5% $ 302,979 98.0% $ 120,610 94.7%
$ 44,400 100.0% $ 315,713 100.0% $ 309,307 100.0% $ 127,309 100.0%
MA`O YOUTH ORGANIC FARM 35

Analysis of Social Return on Investment
SOCIAL RETURN ON INVESTMENT
Number of youth employeed per year
Number of acres farmed per year
BENEFITS
COMMUNITY WEALTH income returned to the community in taxes public assistance not collected
ENVIRONMENT
Savings in absence of government subsidies
Reduced energy inputs
Training new organic farmers
NPV Year 1
2.5
$
$
3
3,456
3,701
Year 2
2.5
$
$
3
3,456
3,701
Year 3
$
$
6
5
6,912
7,402
Year 4
$
$
6
5
6,912
7,402
Year 5
$
$
6
5
6,912
7,402
$ 182
$ 425
$ 24,000
$ 182
$ 425
$ 24,000
$ 365
$ 850
$ 32,000
$ 365
$ 850
$ 32,000
$ 365
$ 850
$ 32,000
Social Benefits $ 206,113
COSTS
COMMUNITY WEALTH additional staff time (farmer training programs) discount on sales of organic produce at targeted markets
Social Costs $ 167,614
$ 31,764 $ 31,764 $ 47,528 $ 47,528 $ 47,528
$
$
10,800
22,204
$ 33,004
$
$
10,800
22,204
$ 33,004
$
$
21,600
44,408
$
$
21,600
44,408
$ 66,008 $ 66,008
$
$
21,600
44,408
$ 66,008
PV of Social Benefits
PV of Social Costs
Net social gain
$ 206,113
$ 167,614
$ 38,499
SROI Narrative and Assumptions
Community Wealth:
Benefits

Amount income returned to the community in taxes based on Hawaiian state income tax rate of 6.4% for 16,000-24,000 income bracket. Assumed youth salary:
$18,000/year.

Public assistance not collected based on 20% welfare assistance dependence in the
Costs target community multiplied by average annual payments of $6,168 (Honolulu Star
Bulletin 1999).

Additional staff time for farmer training programs based on the estimate that the youth dedicate about 20% of their time to leading educational programs.

Discounted sales figures were calculated based on establishing an average discount taken off the price of produce sold at markets that cater specifically to the low-income,
MA`O YOUTH ORGANIC FARM 36

local community. The average discount calculated was 33%, and with this discount taken off, weekly revenue averaged $854.
Environment:

A conventional farm receives subsidies at a rate of $72.93 per acre.
(www.betterfarming.com)

The cost of farming inputs in conventional agriculture is $340/acre (University of
Florida, IFAS Extension). By farming organically, MA`O is using 50% less energy and resources to farm their land (Lori Drinkwater, Nature Magazine, Nov. ’98).

The value of training organic farmers is based on average per person, per hour educational rates of HOFA (Hawaiian Organic Farmers Association.) We assumed that for each youth education hour, two individuals receive training, and that this hour is valued at $10 per trainee.
MA`O YOUTH ORGANIC FARM 37

While farming has many inherent risks, in just three years of operations MA`O, has created an innovative and successful model that others in Hawai`i wish to replicate. Moreover, the model and systems have been developed with the co-management of youth. Risk assessments have been mentioned throughout this business plan and the following table summarizes the important challenges and our mitigation approaches.
RISK
Organic production fails through pests, natural causes, and or other unforeseen circumstances.
MITIGATING FACTORS

Thoroughly tested organic methods and systems

Expert technical assistance available

To anticipate losses, yield assumptions are conservative

Ongoing research experiments to ensure new learning
Problems with youth, such as lack of motivation.
Low Sales
High operating costs, low margins
Difficulty in attracting suitable staff
Operational problems, poor food quality, delivery time
Marketing problems, regulatory barriers and costs
Departure of key project employees

Consensus-building, open communication approach

Accountability built within profit-sharing model

Expert technical assistance available for youth, and diverse opportunities for improving skills.

Regular customer feedback

Diversified product mix

Proven demand for products

Diversity of markets

Options to reduce expenses, if necessary

Diversity of markets increase direct sales and improve margins

Source lower cost local supplies, e.g., animal manure

Grow youth from within the MA`O system and expose early to other benefits – trips to conferences, site visits

Seen at the moment as doing cutting edge work so we are in high demand

Educational programs with local schools provide pipeline for new staff

Thoroughly tested system

Access to high-end chef who will help to assess product quality

Technical assistance available to investigate unforeseen crop failures

MA`O system reinforces importance of product quality, assessment and feedback given to youth three days per week.

Diversity of end markets

Certified organic status already achieved

Classes to teach safe food handling strategies
 Café is a certified kitchen and their staff provide guidance

Inherent to WCRC is the training, empowerment and employment of youth, new leaders constantly being developed

WCRC Board will create a succession plan
MA`O YOUTH ORGANIC FARM 38

MA`O YOUTH ORGANIC FARM 39

H.
i Dimitri, Carolyn and Green, Catherine. “Recent Growth Patterns in the U.S. Organic Food
Markets.”
ERS Agriculture Information Bulletin No. AIB777 . 42 pp, September 2002 ii Information supplied by Kokua Natural Foods Cooperative. iii See www.ota.com/organic/mt/business.html. “Industry Statistics and Projected Growth.” iv
See support letter from Mr. David Cole, CEO, Maui Land and Pine. v
Population statistics derived from www.census.gov vi Demographic information obtained from the US Census 2000 web site www.census2000.gov vii
Information obtained via telephone interview with the State of Hawai`i Department of
Labor viii Food Security Task Force, A Report to the State Legislature . Office of Planning, State of
Hawai’i, January 2003. See www.hawaii.gov/dbedt/op/html, pg. 5. ix From “Nanakuli Area Community Profile.” “Wai`anae Area Community Profile.”
Publications produced by the Center on the Family, College of Tropical Agriculture and
Human Resources. 2003. x Wai`anae Sustainable Communities Plan.
City and County of Honolulu Community Planning
Document. 1998. xi Carson, Rachel. Silent Spring . 1962. Houghton Press, Boston. From www.rachelcarson.org it states that: “Disturbed by the profligate use of synthetic chemical pesticides after World War II, Carson reluctantly changed her focus in order to warn the public about the long term effects of misusing pesticides...she challenged the practices of agricultural scientists and the government, and called for a change in the way humankind viewed the natural world.” xii Dimitri, Carolyn and Green, Catherine. “Recent Growth Patterns in the U.S. Organic
Food Markets,” ERS Agriculture Information Bulletin No. AIB777. 42 pp, September
2002 xiii Information supplied by Kokua Natural Foods Cooperative. xiv See www.usda.gov. xv See www.ota.com xvi
Horovitz, Bruce. “Get 'em while they're hot: Ballpark franks go organic; 2 stadiums respond to consumers' pleas.”
USA TODAY. Dec 2, 2004. pg. A.1 xvii See www.ota.com. xviii See www.ota.com/organic/mt/business.html. “Industry Statistics and Projected Growth.” xix See www.state.hi.us/doh/about/press/99-35hept.html. xx Statistics reported in Honolulu Weekly . December 8, 2004. pp 4.
MA`O YOUTH ORGANIC FARM 40

xxi The authors surveyed produce sections of 9 regular grocery outlets, across a 36-mile corridor of O`ahu from Wai`anae to Honolulu, on December 5, 2004. Three stores,
Tamura’s Wai`anae, Time Waipahu and Sam’s Club Pearl City did not stock organic produce. Seven stores did stock organic produce, they were: Safeway Kapolei, Sack and
Save Nanakuli, Foodland Waipio, Daiei Waipahu, Star Market Moiliiili, and Costco,
Honolulu. xxii See support letter from Mr. David Cole, CEO, Maui Land and Pine. xxiii Earthbound Farms 1# package of mixed salad greens sells for $3.80 at Costco, while
0.5# of a similar product retails for approximately $5.50 at local natural foods stores. xxiv Namkoong, Joan. Honolulu Advertiser . Food section, August 22, 2001 xxv Verbal communication with Bari Green from HOFA on December 14, 2004. xxvi Population statistics derived from www.census.gov xxvii Hawai`i Business Magazine.
March 2004. xxviii
A list of venders at the KCC market can be found at www.hfbf.org/farmersmarket.html). xxix Information derived from WCRC. WCRC is purchasing 2.5 acres from the current landlord at the cost of $195,000. xxx See www.hicentral.com xxxi Information derived from public hearings held in 2001 regarding the use of diverted
Waiahole Stream water for Leeward agriculture purposes conducted by the State’s Water
Commission. xxxii
See www.hanahou.com/westsidestories.htm xxxiii Ferrar, Derek. “
Ka Wai Ola o OHA”
, 2005 v.22 n.2 – February. Page 10.
xxxiv Nichols, Katherine. Honolulu Magazine . August 2004. Page 183. xxxv
Kiyabu, Sue. Honolulu Weekly . October 13-19, 2004. Volume 14, Number 41. Page 39. xxxvi Griffth, Lesa. Article entitled “Town and Country.” Honolulu Weekly . October 13-19,
2004. Volume 14, Number 41. Page 49. xxxvii
Kam, Nadine. “Food Lovers Find a Home in Town. Honolulu Star Bulletin.
Sunday
April 10 th
, 2005.
MA`O YOUTH ORGANIC FARM 41