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TABLE OF CONTENTS

A. EXECUTIVE SUMMARY................................................................................................................ 2

B. BUSINESS DESCRIPTION – AN ORGANIC OPPORUNITY ....................................................... 4

INTRODUCTION ........................................................................................................................... 4

PRODUCT .................................................................................................................................... 4

GROUNDWORK FORTHE VENTURE ............................................................................................. 4

CROPS TO BE GROWN ................................................................................................................. 5

THE OPPORTUNITY..................................................................................................................... 6

OUR COMMUNITY ....................................................................................................................... 7

LAND USE, (RE)CONNECTING TO `AINA (LAND) .......................................................................... 7

C. INDUSTRY AND MARKET ANALYSIS........................................................................................ 9

GROWTH IN THE ORGANIC INDUSTRY ........................................................................................ 9

THE HAWAI`I MARKET ............................................................................................................... 9

LOCAL COMPETITION ................................................................................................................ 11

OFFSHORE ORGANIC COMPETITION .......................................................................................... 12

FARMING IN HAWAI`I ............................................................................................................... 12

CUSTOMER PROFILE ................................................................................................................. 13

DISTRIBUTION MECHANISMS.................................................................................................... 15

D. MARKETING PLAN ...................................................................................................................... 16

PROMOTIONS AND OUTREACH.................................................................................................. 16

SPECIFIC SEGMENT STRATIGIES ............................................................................................... 17

MA`O CUSTOMER SERVICE PHILOSOPHY................................................................................. 17

PROMOTIONAL MATERIALS AND LABELING ............................................................................. 18

PRICING .................................................................................................................................... 18

DISTRIBUTION .......................................................................................................................... 19

SALES MANAGEMENT ............................................................................................................... 19

COMPETITIVE ADVANTAGE ...................................................................................................... 19

E. MANAGEMENT PLAN .................................................................................................................. 20

ORGANIZATION AND BOARD ................................................................................................... 20

GOVERNANCE .......................................................................................................................... 20

MA`O‘S POSITION IN WCRC ................................................................................................... 21

EXECUTIVE MANAGEMENT & STAFFING PLAN ........................................................................ 22

COOPERATING EXPERTS ........................................................................................................... 22

F. OPERATIONS PLAN ...................................................................................................................... 23

FARM PLAN .............................................................................................................................. 23

RESEARCH AND DEVELOPMENT ............................................................................................... 23

CROP GROWTH ......................................................................................................................... 23

HARVEST AND QUALITY CONTROL ........................................................................................... 24

INVENTORY MANAGEMENT ...................................................................................................... 24

ORGANIC CERTIFICATION ......................................................................................................... 24

FARMER‘S MARKETS ................................................................................................................ 24

LAND, EQUIPMENT, OFFICE SPACE, TOOLS, RESOURCES ........................................................ 25

INCREASING YOUTH CAPACITY ................................................................................................ 25

G. FINANCIAL PLAN ......................................................................................................................... 26

START-UP ................................................................................................................................. 26

ACCOUNTING SYSTEM & BUSINESS CONTROLS ....................................................................... 26

LONG-TERM SUSTINABILITY..................................................................................................... 26

PROFORMA STATEMENTS ......................................................................................................... 26

H. RISK ASSESSMENT & CONTINGENCY PLAN ......................................................................... 35

I. ENDNOTES ..................................................................................................................................... 36

A. EXECUTIVE SUMMARY





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 self-

sufficiency. 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 billioni 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. BUSINESS DESCRIPTION – AN ORGANIC OPPORTUNITY

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

ISLAND OF O`AHU

currently leased by WCRC.

STATE OF HAWAI`I

The objectives of MA`O will be to:

 Increase production of organic

fruits and vegetables to a total

of 5-acres, with each acre

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 6

Miles

community farmer‘s markets;

 Provide employment with profit-incentives to three youth at start-up with two youth

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 self-

sufficiency. 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 long-

term competitive advantage of MA`O, and are described as follows:



ACTIVITY HIGHLIGHTS

1. Youth Leadership Training (YLT). This is the recruitment and training

The YLT is a 10-month long, 18-hours mechanism for MA`O Farm, and provides

per week, leadership training for low- a regular labor source for farm operations.

income, out-of-school, Wai`anae

youth, providing them with a paid

educational, entrepreneurial, and

agricultural work experience.

2. Aloha `Aina Café and Natural Foods The café will be a customer, a farmer‘s

was opened in April 2003, specializes market site and a showcase for MA`O

in healthy breakfasts and lunches using products. As a commercial kitchen, the

locally-grown products. café provides for the possibility of value-

added product development opportunities.

3. Local Community Farmer‘s Markets. Farmer‘s markets have tested and proven

Four farmer‘s markets have been demand. The local customer base has been

established at the Aloha `Aina Café, introduced to the ―organic‖ concept and the

Wai`anae Comprehensive Health ―MA`O‖ product. Clinic markets support

Center, Kaiser Permanente Health the WCRC mission.

Clinic, and Leeward Community

College (LCC).

4. ‗Ai Pohaku Workshop, hands-on, The gardens illustrate the skill-set and

culturally-based learning activities at experience already developed in the youth

Wai`anae Intermediate School (WIS) that will lead MA`O and provide ―fertile

and Wai`anae High School (WHS), ground‖ for youth training and recruitment.

that mix traditional Hawaiian taro

cultivation with edible, organic school

gardens.

5. The Wai`anae Organic Agriculture The partnership was awarded a U.S.

Center, in partnership with Leeward Department of Housing & Urban

Community College (LCC), expands Development grant of $579,000 to

research and training activities in purchase 2.5 acres of WCRC‘s leased land,

Wai`anae. 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 This will be our ―regular rotation

 Daikon (short)‖ planted every 14-days,

 Pak choy (bok choi) ready to harvest from day-28

 Romaine lettuce through to day-45, with crops

 Various lettuces, arugula, kale, chard, beets and completed in 50-days.

Asian greens (tat soi, mustard greens, mizuna)

combined to produce two different salad mixes

 Beets This will be our ―regular rotation

 Carrots (long)‖ planted every 28-days,

 Fennel ready to harvest from day-70

 Green onion through to day-100, with crops

completed in 105-days.

 Basil This will be our ―perennial

 Collard greens rotation‖ planted every 3-months,

 Eggplant (Japanese and Italian) ready to harvest in 80-days, with

 Kale (Red Russian, blue curly, lacinato) crops completed in 5-6 months.

 Parsley (curly and flat-leaf)

 Swiss chard

 Taro

 Lemon (Meyer variety) Trees will be planted as an

 Mango (Haden and Kiett varieties) income-generators with first

 Orange (various Washington naval varieties) harvest being in year 3, and as a

 Tangerine (Clementine and Fremont varieties) 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 self-

reported 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. INDUSTRY AND MARKET ANALYSIS

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 billionxii 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 non-

scientific 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`ixxv 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 farmer-

operated 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 organically-

certified.



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 Buyer Behavior Needs (perceived) Alternatives Competitive Advantages

Segments

High End  Looking for a  High quality  Restaurants / cafés  Fresh and locally grown

(tourist ―native‖ and ―local  Good looks and taste  Conventional  Organic

―foodies‖) experience‖  Exotic, unique choices vendors  Youth and products (taro, mangos)

 Want to try  Authentic, local, native  Grocery / health ―native‖ and ―local‖ therefore

something new food stores authentic

High End  Looking for fresh,  Demands high quality  Health food stores  Fresh and locally grown

(local, local grown, organic product, freshness,  Other market  Organic

―foodies‖)  Increasing social appearance, and taste vendors  Diversity of offerings compared to

consciousness when for repeat business  Restaurants, cafes other market growers

buying  Youth and social mission of WCRC

Low-  Makes necessary  Bang for the buck  Local grocery store  Recognize youth growers

Moderate food purchases, need  Food that tastes/looks  Prepared foods  Have been instructed to buy foods

(local/ to spread their food good  Fast food and by health care providers

Hawaiian) dollars  Food they like restaurants  MA‘O produce looks better, has

 Conventionally different selection

grown foods  Pricing comparable to local

conventional retail items but with a

marketable edge

Retailers  Products in high  Competitive price  Other local and  Local and organic often yields

demand and/or  Top quality and non-local organic superior quality

trendy appearance producers  Product availability and cost to

 Want to make a  Organic fills new niche  Conventional ship/store imported product

mark-up on re-sale producers

Restaurants  Products in high  Competitive price  Other local and  Local and organic often yields

demand and/or  Top quality and non-local organic superior quality

trendy appearance producers  Product availability and cost to

 Freshness and  Fresh, local, organic  Conventional ship/store imported product

reliable source producers  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:









Restaurant

moderate

High-end





High-end

(tourist)





(local)









Retail

Low-

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 care-

providers 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. MARKETING PLAN

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

CONNECTED TO:

 MA`O products were featured on a 30-minute cooking show  Both high-end

called “Sam Choy Presents.” Well-known local chef Sam (local), low-

Choy was hired by Kaiser Permanente to stage a live medium, and

cooking show at a local clinic to feature low calorie and restaurant

vegetarian recipes. segments.

 The Hawaiian Electric Company has a 30-minute cooking  Crossed both high-

show called “The Electric Kitchen”, the Aloha `Aina Café end (local), low-

was a guest restaurant and prepared dishes using MA`O‘s medium, and

herbs and baby greens. restaurant

segments.

 University of Hawai`i (UH), working with KITV, a local  All segments

television station, featured MA`O as a program partner in a except perhaps

news segment called “Discover UH, You‟ll Be Amazed.” high end (tourist)

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  Both high-end

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  Both high-end

the farm in a 5-page center-spread with color photos, segments.

appeared in the December 2003 issue.xxxii

 The youth leadership training was featured as a center-  Low-moderate

spread in the Office of Hawaiian Affairs monthly newspaper segment.

called “Ka Wai Ola o OHA.”xxxiii

 Farm activities were featured in a two-page spread in the  High-end (local)

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  High-end (local)

Honolulu Weekly, a free alternative newspaper featuring

politics, entertainment and arts.xxxv



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



Customer Specific Outreach Strategies

Segments

High End (tourist  No specific strategy except when segment attends KCC farmer‘s

―foodies‖) market.

High End (local,  Connect to repeat customer at KCC and develop that customer to

―foodies‖) cross-market to Town Restaurant and Kokua

 Continue to build e-mail database

 Invite customers to attend monthly community work days.

Low-Moderate  Maintain high community profile through presence at markets,

(local/ Hawaiian) occasionally story in the local community newspaper, and by posting

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.

Retailers  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.

Restaurants  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. MANAGEMENT PLAN

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 non-

profits. 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 Description of Support

Peter Quigley,  Provides additional training for youth including higher

Vice Chancellor education courses, and is developing a degree program in

Randy Francisco, Tropical Organic Agriculture.

Program Director

Leeward Community

College (LCC)

David Cole, CEO,  Partners with MA`O to increase youth involvement in

Maui Land and Pine organic agriculture

(former VP of AOL) o Hosted MA`O youth in Maui to learn about MLP‘s

current research and development (composting, cover

crops, organic pineapple)

o Has reviewed MA`O‘s business plan and provided

commentary on business strategies

Joan Namkoong, Organizer  Provides connection to customers and information on local

KCC and Kailua farmer‘s food demand and availability

markets

Stephen Bradley, MD,  Operates a clinic farmer‘s market, produces nutrition

Wai`anae Comprehensive education literature, and promotes market to community.

Health Center

Lei Aken, Ag Program  Will establish an organic agriculture high school program ,

Teacher, Wai`anae High develop community garden and support trainings.

School (WHS)  Recruitment of future youth.

Hawaii Organic Farmers  Promote organic agriculture and provide organic

Association certification.

 Recruitment of future youth.









MA`O YOUTH ORGANIC FARM 25

F. OPERATIONS PLAN

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 6-

month 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 Wednesdays 11:45am to 1:00 pm

Kaiser Permanente, Nanakuli Wednesdays 11:45am to 1:00 pm



MA`O YOUTH ORGANIC FARM 27

Leeward Community College, Pearl City Wednesdays 11:45am to 1:00 pm

Aloha `Aina Café, Wai`anae Saturdays 9:00 am to 11:00 am

KCC Farmer‘s Market, Honolulu 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 MA`O Youth Organic Farm, Lualualei Valley, Wai`anae, HI

the Community of Christ ĞMap of Neighboring Land, Possible Sites for Expansion

Church and the 25-year

term began in 2001. The Former chicken farm (4-acres), 8-acre farm parcel owner

closed early 1990 ’s. willing to lease or sell to

land has excellent potential MA`O

for expansion with three of

the neighboring properties MA`O’s landlord.

vacant (see map at right).



MA`O will benefit from MA`O



equipment acquired with

WCRC grant funds. This

includes a 2001 model 55- Heliconia flower closed in Undeveloped land.

hp John Deer tractor and a mid-1990’s

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. FINANCIAL PLAN FOR MA`O VENTURE

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

PRO JECTIO N O F WEEKLY WHOLESALE









TOTAL WEEKLY

SALES BY CUSTO MER, 2005 CUSTO MER UNITS CUSTO MER SALES









Wholesale Needed

WEEKLY (lbs)









WHOLESALE

ALOHA `AINA









ALOHA `AINA

Price/Unit

KAMAKOU









KAMAKOU









SALES -

W-STORE









W-STORE

YIELD (lbs)

WEEKLY







KOKUA









KOKUA

TOTAL









TOWN









TOWN

CAFÉ









CAFÉ

1 Arugula 17.6 3 0 1 0 5 9 $ 5.00 $ 15 $ - $ 5 $ - $ 25 $45

2 Bananas - Apple 142.0 0 12 0 0 0 12 $ 1.00 $ - $ 12 $ - $ - $ - $12

3 Basil - green leaf 18.5 5 1 2 0 5 13 $ 1.00 $ 5 $ 1 $ 2 $ - $ 5 $13

4 Beets 31.5 10 0 0 0 10 20 $ 1.50 $ 15 $ - $ - $ - $ 15 $30

5 Chard 56.0 20 0 2 0 0 22 $ 2.00 $ 40 $ - $ 4 $ - $ - $44

6 Cilantro 47.5 20 3 2 0 10 35 $ 3.00 $ 60 $ 9 $ 6 $ - $ 30 $105

7 Citrus 46.6 15 10 0 0 15 40 $ 1.50 $ 23 $ 15 $ - $ - $ 23 $60

8 Collard Greens 35.0 15 0 2 0 0 17 $ 1.50 $ 23 $ - $ 3 $ - $ - $26

9 Daikon 36.0 20 0 4 0 0 24 $ 1.00 $ 20 $ - $ 4 $ - $ - $24

10 Eggplant 86.0 15 6 4 0 10 35 $ 1.50 $ 23 $ 9 $ 6 $ - $ 15 $53

11 Green Onions 41.8 15 3 2 0 10 30 $ 3.00 $ 45 $ 9 $ 6 $ - $ 30 $90

12 Kale - Blue Curled 25.0 10 0 2 0 0 12 $ 1.50 $ 15 $ - $ 3 $ - $ - $18

13 Kale - Lacinato 45.0 10 0 2 0 20 32 $ 1.50 $ 15 $ - $ 3 $ - $ 30 $48

14 Kale - Red Rus. 25.0 10 0 2 0 0 12 $ 1.50 $ 15 $ - $ 3 $ - $ - $18

15 Lettuce, Romaine 52.0 0 12 8 0 0 20 $ 1.75 $ - $ 21 $ 14 $ - $ - $35

16 Mesclun, regular 95.0 0 24 6 30 0 40 $ 5.00 $ - $ 120 $ 30 $ 150 $ - $300

17 Mesclun, Sassy ! 53.5 0 0 0 0 24 24 $ 5.00 $ - $ - $ - $ - $ 120 $120

18 Mizuno 1.6 0 0 0 0 0 0 $ 4.00 $ - $ - $ - $ - $ - $0

19 Mustard Greens 1.6 0 0 0 0 0 0 $ 4.00 $ - $ - $ - $ - $ - $0

20 Pak Choi - Baby 56.8 15 0 8 0 0 23 $ 1.10 $ 17 $ - $ 9 $ - $ - $25

21 Pak Choi - Large 56.8 15 0 8 0 0 23 $ 1.10 $ 17 $ - $ 9 $ - $ - $25

22 Parsley , Am. 19.3 10 1 0 0 5 16 $ 1.00 $ 10 $ 1 $ - $ - $ 5 $16

23 Taro - Leaf 38.5 0 4 0 0 0 4 $ 2.00 $ - $ 8 $ - $ - $ - $8

24 Tat Soi 1.6 0 0 0 0 0 0 $ 4.00 $ - $ - $ - $ - $ - $0

TO TAL 1030 208 76 55 30 114 463 $356 $205 $107 $150 $298 $1,115





MA`O YOUTH ORGANIC FARM 30

SUMMARIZATIO N OF PRO JECTED ANNUAL YIELD & SALES



YEAR O NE YEAR TWO YEAR THREE YEAR FO UR





Annual Total Annual Total Annual Total Annual Total

Production Annual Production Annual Production Annual Production Annual

(lbs) Sales (lbs) Sales (lbs) Sales (lbs) Sales

1 Arugula 917 $ 5,928 963 $ 6,224 1,926 $ 12,449 1,965 $ 12,698

2 Bananas - Apple 7,384 $ 8,944 7,753 $ 9,391 15,506 $ 18,782 15,817 $ 19,158

3 Basil 962 $ 2,964 1,010 $ 3,112 2,020 $ 6,224 2,061 $ 6,349

4 Beets 1,638 $ 3,276 1,720 $ 3,440 3,440 $ 6,880 3,509 $ 7,017

5 Chard 2,912 $ 5,096 3,058 $ 5,351 6,115 $ 10,702 6,238 $ 10,916

6 Cilantro 2,470 $ 8,060 2,594 $ 8,463 5,187 $ 16,926 5,291 $ 17,265

7 Citrus 2,421 $ 6,656 2,542 $ 6,989 5,083 $ 13,978 5,185 $ 14,257

8 Collard Greens 1,820 $ 2,782 1,911 $ 2,921 3,822 $ 5,842 3,898 $ 5,959

9 Daikon 1,872 $ 2,496 1,966 $ 2,621 3,931 $ 5,242 4,010 $ 5,346

10 Eggplant – Italian 4,472 $ 5,772 4,696 $ 6,061 9,391 $ 12,121 9,579 $ 12,364

11 Green Onions 2,171 $ 7,124 2,280 $ 7,480 4,559 $ 14,960 4,650 $ 15,260

12 Kale - Blue Curled 1,300 $ 1,872 1,365 $ 1,966 2,730 $ 3,931 2,785 $ 4,010

13 Kale - Lacinato 2,340 $ 3,432 2,457 $ 3,604 4,914 $ 7,207 5,012 $ 7,351

14 Kale - Red Rus. 1,300 $ 1,872 1,365 $ 1,966 2,730 $ 3,931 2,785 $ 4,010

15 Lettuce, Romaine 2,704 $ 5,148 2,839 $ 5,405 5,678 $ 10,811 5,792 $ 11,027

16 Mesclun, regular 4,940 $ 34,060 5,187 $ 35,763 10,374 $ 71,526 10,581 $ 72,957

17 Mesclun, Sassy! 2,782 $ 16,744 2,921 $ 17,581 5,842 $ 35,162 5,959 $ 35,866

18 Mizuno 83 $ 520 87 $ 546 175 $ 1,092 178 $ 1,114

19 Mustard Greens 83 $ 520 87 $ 546 175 $ 1,092 178 $ 1,114

20 Pak Choi - Baby 2,951 $ 4,436 3,099 $ 4,657 6,197 $ 9,315 6,321 $ 9,501

21 Pak Choi - Large 2,951 $ 4,436 3,099 $ 4,657 6,197 $ 9,315 6,321 $ 9,501

22 Parsley, Am. 1,001 $ 1,508 1,051 $ 1,583 2,102 $ 3,167 2,144 $ 3,230

23 Taro - Leaf 2,002 $ 2,392 2,102 $ 2,512 4,204 $ 5,023 4,288 $ 5,124

24 Tat Soi 83 $ 520 87 $ 546 175 $ 1,092 178 $ 1,114

TO TAL 53,476 $ 136,557 56,150 $ 143,385 112,300 $ 286,770 114,546 $ 292,506



PRO DUCE MATURING IN YEAR 4

Mango 3,000 $ 5,250

Avocado 1,500 $ 2,625

4,500 $ 7,875



TO TAL 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 1 2 3 4 5 6 7 8 9 10 11 12 YEAR 1

Sales-v egetable operation $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 10,080 $ 120,957

Sales-orchard operation $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 1,300 $ 15,600

Total Cash In from Operations $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 11,380 $ 136,557



Cash Out From Operations



Costs of Production

Packing Supplies $ (393) $ - $ - $ (393) $ - $ - $ (393) $ - $ - $ (393) $ - $ - $ (1,572)

Seeds, Soil and Amendments $ (2,117) $ - $ - $ (2,117) $ - $ - $ (2,117) $ - $ - $ (2,117) $ - $ - $ (8,467)

Tools & Equipment $ (3,000) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (3,000)

Utilities $ (603) $ (603) $ (603) $ (603) $ (603) $ (603) $ (603) $ (603) $ (603) $ (603) $ (603) $ (603) $ (7,238)



Other Operating Expenses

Administrativ e, Legal & Acct. $ (284) $ (284) $ (284) $ (284) $ (284) $ (284) $ (284) $ (284) $ (284) $ (284) $ (284) $ (284) $ (3,414)

Adv ertising & Promotions $ (300) $ - $ - $ (300) $ - $ - $ (300) $ - $ - $ (300) $ - $ - $ (1,200)

Freight, Mileage $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (1,200)

Insurance $ (5,500) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (5,500)

Licenses & Fees $ (600) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (600)

Postage $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (600)

Professional Serv ices $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (13,200)

Profit Share - Youth Staff $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Rent $ (1,800) $ - $ - $ (1,800) $ - $ - $ (1,800) $ - $ - $ (1,800) $ - $ - $ (7,200)

Supplies $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (100) $ (1,200)

Tax es $ - $ - $ - $ (882) $ - $ - $ (882) $ - $ - $ (882) $ - $ - $ (2,646)

Training and Dev elopment $ - $ (300) $ - $ - $ (300) $ - $ - $ (300) $ - $ - $ (300) $ - $ (1,200)

Trav el/Entertainment $ - $ (2,405) $ - $ - $ (2,405) $ - $ - $ (2,405) $ - $ - $ (2,405) $ - $ (9,620)

Vehicles: Maintenance & Repair $ (300) $ - $ - $ (300) $ - $ - $ (300) $ - $ - $ (300) $ - $ - $ (1,200)

Wages and Benefits $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (11,150) $ (7,434) $ (130,087)

Total Cash Out from Operations $ (27,398) $ (16,093) $ (13,388) $ (19,180) $ (16,093) $ (13,388) $ (19,180) $ (16,093) $ (13,388) $ (19,180) $ (16,093) $ (9,671) $ (199,144)



Cash Out from Investing

Capital Purchases $ (33,413) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (33,413)

Total Cash Out from Investing $ (33,413) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -



Cash In from Financing

ANA grant disbursements $ 44,563 $ 13,555 $ 11,150 $ 11,150 $ 13,555 $ 11,150 $ 11,150 $ 13,555 $ 11,150 $ 11,150 $ 13,555 $ 7,735 $ 173,421

Total Cash In from Financing $ 44,563 $ 13,555 $ 11,150 $ 11,150 $ 13,555 $ 11,150 $ 11,150 $ 13,555 $ 11,150 $ 11,150 $ 13,555 $ 7,735 $ 173,421



Net Increase in Cash $ (4,868) $ 8,842 $ 9,142 $ 3,350 $ 8,842 $ 9,142 $ 3,350 $ 8,842 $ 9,142 $ 3,350 $ 8,842 $ 9,443

Cash at Beginning of Month $ 15,000 $ 10,132 $ 18,974 $ 28,116 $ 31,467 $ 40,309 $ 49,451 $ 52,801 $ 61,643 $ 70,785 $ 74,135 $ 82,977



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 1 2 3 4 5 6 7 8 9 10 11 12 YEAR 2

Sales-v egetable operation $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 10,584 $ 127,005

Sales-orchard operation $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 1,365 $ 16,380

Total Cash In from Operations $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 11,949 $ 143,385



Cash Out From Operations



Costs of Production

Packing Supplies $ (413) $ - $ - $ (413) $ - $ - $ (413) $ - $ - $ (413) $ - $ - $ (1,651)

Seeds, Soil and Amendments $ (2,223) $ - $ - $ (2,223) $ - $ - $ (2,223) $ - $ - $ (2,223) $ - $ - $ (8,890)

Tools & Equipment $ (1,200) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (1,200)

Utilities $ (673) $ (673) $ (673) $ (673) $ (673) $ (673) $ (673) $ (673) $ (673) $ (673) $ (673) $ (673) $ (8,080)



Other Operating Expenses

Administrativ e, Legal & Acct. $ (299) $ (299) $ (299) $ (299) $ (299) $ (299) $ (299) $ (299) $ (299) $ (299) $ (299) $ (299) $ (3,585)

Adv ertising & Promotions $ (450) $ - $ - $ (450) $ - $ - $ (450) $ - $ - $ (450) $ - $ - $ (1,800)

Freight, Mileage $ (167) $ (167) $ (167) $ (167) $ (167) $ (167) $ (167) $ (167) $ (167) $ (167) $ (167) $ (167) $ (2,000)

Insurance $ (5,638) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (5,638)

Licenses & Fees $ (600) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (600)

Postage $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (600)

Professional Serv ices $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (13,200)

Profit Share - Youth Staff $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Rent $ (1,800) $ - $ - $ (1,800) $ - $ - $ (1,800) $ - $ - $ (1,800) $ - $ - $ (7,200)

Supplies $ (117) $ (117) $ (117) $ (117) $ (117) $ (117) $ (117) $ (117) $ (117) $ (117) $ (117) $ (117) $ (1,400)

Tax es $ (882) $ - $ - $ (1,203) $ - $ - $ (1,203) $ - $ - $ (1,203) $ - $ - $ (3,609)

Training and Dev elopment $ - $ (400) $ - $ - $ (400) $ - $ - $ (400) $ - $ - $ (400) $ - $ (1,600)

Trav el/Entertainment $ - $ (600) $ - $ - $ (600) $ - $ - $ (600) $ - $ - $ (600) $ - $ (2,400)

Vehicles: Maintenance & Repair $ (375) $ - $ - $ (375) $ - $ - $ (375) $ - $ - $ (375) $ - $ - $ (1,500)

Wages and Benefits $ (19,091) $ (15,374) $ (15,374) $ (15,374) $ (15,374) $ (15,374) $ (15,374) $ (15,374) $ (15,374) $ (15,374) $ (15,374) $ (10,250) $ (183,085)

Total Cash Out from Operations $ (35,076) $ (18,780) $ (17,780) $ (24,243) $ (18,780) $ (17,780) $ (24,243) $ (18,780) $ (17,780) $ (24,243) $ (18,780) $ (12,655) $ (248,038)



Cash Out from Investing

Capital Purchases $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Total Cash Out from Investing $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -



Cash In from Financing

ANA grant disbursements $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 144,416

Total Cash In from Financing $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 12,035 $ 144,416



Net Increase in Cash $ (11,093) $ 5,204 $ 6,204 $ (260) $ 5,204 $ 6,204 $ (260) $ 5,204 $ 6,204 $ (260) $ 5,204 $ 11,328

Cash at Beginning of Month $ 92,421 $ 81,328 $ 86,531 $ 92,735 $ 92,475 $ 97,679 $ 103,882 $ 103,623 $ 108,826 $ 115,030 $ 114,770 $ 119,974



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 1 2 3 4 5 6 7 8 9 10 11 12 YEAR 3

Sales-v egetable operation $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 21,168 $ 254,010

Sales-orchard operation $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 2,730 $ 32,760

Total Cash In from Operations $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 23,898 $ 286,770



Cash Out From Operations



Costs of Production

Packing Supplies $ (826) $ - $ - $ (826) $ - $ - $ (826) $ - $ - $ (826) $ - $ - $ (3,302)

Seeds, Soil and Amendments $ (4,445) $ - $ - $ (4,445) $ - $ - $ (4,445) $ - $ - $ (4,445) $ - $ - $ (17,781)

Tools & Equipment $ (1,200) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (1,200)

Utilities $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (1,147) $ (13,760)



Other Operating Expenses

Administrativ e, Legal & Acct. $ (597) $ (597) $ (597) $ (597) $ (597) $ (597) $ (597) $ (597) $ (597) $ (597) $ (597) $ (597) $ (7,169)

Adv ertising & Promotions $ (450) $ - $ - $ (450) $ - $ - $ (450) $ - $ - $ (450) $ - $ - $ (1,800)

Freight, Mileage $ (200) $ (200) $ (200) $ (200) $ (200) $ (200) $ (200) $ (200) $ (200) $ (200) $ (200) $ (200) $ (2,400)

Insurance $ (5,778) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (5,778)

Licenses & Fees $ (600) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (600)

Postage $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (50) $ (600)

Professional Serv ices $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (1,100) $ (13,200)

Profit Share - Youth Staff $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (20,000) $ (20,000)

Rent $ (1,800) $ - $ - $ (1,800) $ - $ - $ (1,800) $ - $ - $ (1,800) $ - $ - $ (7,200)

Supplies $ (133) $ (133) $ (133) $ (133) $ (133) $ (133) $ (133) $ (133) $ (133) $ (133) $ (133) $ (133) $ (1,600)

Tax es $ (1,203) $ - $ - $ (2,400) $ - $ - $ (2,400) $ - $ - $ (2,400) $ - $ - $ (7,200)

Training and Dev elopment $ - $ (500) $ - $ - $ (500) $ - $ - $ (500) $ - $ - $ (500) $ - $ (2,000)

Trav el/Entertainment $ - $ (600) $ - $ - $ (600) $ - $ - $ (600) $ - $ - $ (600) $ - $ (2,400)

Vehicles: Maintenance & Repair $ (600) $ - $ - $ (600) $ - $ - $ (600) $ - $ - $ (600) $ - $ - $ (2,400)

Wages and Benefits $ (18,022) $ (12,897) $ (12,897) $ (12,897) $ (12,897) $ (12,897) $ (12,897) $ (12,897) $ (12,897) $ (12,897) $ (12,897) $ (8,598) $ (155,594)

Total Cash Out from Operations $ (38,152) $ (17,225) $ (16,125) $ (26,646) $ (17,225) $ (16,125) $ (26,646) $ (17,225) $ (16,125) $ (26,646) $ (17,225) $ (31,826) $ (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 $ (14,254) $ 6,673 $ 7,773 $ (2,748) $ 6,673 $ 7,773 $ (2,748) $ 6,673 $ 7,773 $ (2,748) $ 6,673 $ (7,928)

Cash at Beginning of Month $ 131,302 $ 117,048 $ 123,720 $ 131,493 $ 128,745 $ 135,418 $ 143,190 $ 140,442 $ 147,115 $ 154,887 $ 152,139 $ 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 % of % of % of

total total total total

ASSETS STARTING assets YEAR 1 assets YEAR 2 assets YEAR 3 assets

Current Assets

Cash $ 15,000 33.8% $94,421 29.9% $135,302 43.7% $ 116,002 91.1%

Accounts Receivable $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0%

Other $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0%

Total Current Assets $ 15,000 $ 94,421 $ 135,302 $ 116,002

Fixed Assets

Restricted Grants $ 173,421 54.9% $ 144,416 46.7% $ - 0.0%

Equipment $ 45,400 102.3% $ 73,013 23.1% $ 63,872 20.6% $ 54,730 43.0%

Acc. Depreciation $ (16,000) -36.0% $ (25,141) -8.0% $ (34,283) -11.1% $ (43,424) -34.1%

Total Fixed Assets $ 29,400 66.2% $ 221,293 70.1% $ 174,005 56.3% $ 11,307 8.9%





TOTAL ASSETS $ 44,400 100.0% $ 315,713 100.0% $ 309,307 100.0% $ 127,309 100.0%



LIABILITIES

Current Liabilities

Accounts Payable $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0%

Taxes Payable $ 882 $ 1,203 0.4% $ 2,400 1.9%

Wages Payable $ - 0.0% $ 3,717 1.2% $ 5,125 1.7% $ 4,299 3.4%

Other $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0%

$ - $ 4,599 $ 6,328 $ 6,699



Long-Term Liabilties

Notes Payable $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0%





TOTAL LIABILITIES $ - 0.0% $ 4,599 1.5% $ 6,328 2.0% $ 6,699 5.3%



EQUITY $ 44,400 100.0% $ 311,114 98.5% $ 302,979 98.0% $ 120,610 94.7%





TOTAL LIABILITIES

& EQUITY $ 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 NPV Year 1 Year 2 Year 3 Year 4 Year 5

Number of youth employeed per year 3 3 6 6 6

Number of acres farmed per year 2.5 2.5 5 5 5



BENEFITS

COMMUNITY WEALTH

income returned to the community in taxes $ 3,456 $ 3,456 $ 6,912 $ 6,912 $ 6,912

public assistance not collected $ 3,701 $ 3,701 $ 7,402 $ 7,402 $ 7,402



ENVIRONMENT

Savings in absence of government subsidies $ 182 $ 182 $ 365 $ 365 $ 365

Reduced energy inputs $ 425 $ 425 $ 850 $ 850 $ 850

Training new organic farmers $ 24,000 $ 24,000 $ 32,000 $ 32,000 $ 32,000



Social Benefits $ 206,113 $ 31,764 $ 31,764 $ 47,528 $ 47,528 $ 47,528



COSTS

COMMUNITY WEALTH

additional staff time (farmer training programs) $ 10,800 $ 10,800 $ 21,600 $ 21,600 $ 21,600

discount on sales of organic produce at targeted markets $ 22,204 $ 22,204 $ 44,408 $ 44,408 $ 44,408



Social Costs $ 167,614 $ 33,004 $ 33,004 $ 66,008 $ 66,008 $ 66,008



PV of Social Benefits $ 206,113

PV of Social Costs $ 167,614

Net social gain $ 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

target community multiplied by average annual payments of $6,168 (Honolulu Star

Bulletin 1999).



Costs

 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

RISK ASSESSMENT & CONTINGENCY PLAN

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 MITIGATING FACTORS

Organic production  Thoroughly tested organic methods and systems

fails through pests,  Expert technical assistance available

natural causes, and  To anticipate losses, yield assumptions are conservative

or other unforeseen  Ongoing research experiments to ensure new learning

circumstances.

Problems with  Consensus-building, open communication approach

youth, such as lack  Accountability built within profit-sharing model

of motivation.  Expert technical assistance available for youth, and diverse

opportunities for improving skills.

Low Sales  Regular customer feedback

 Diversified product mix

 Proven demand for products

 Diversity of markets

 Options to reduce expenses, if necessary

High operating  Diversity of markets increase direct sales and improve margins

costs, low margins  Source lower cost local supplies, e.g., animal manure

Difficulty in  Grow youth from within the MA`O system and expose early to

attracting suitable other benefits – trips to conferences, site visits

staff  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

Operational  Thoroughly tested system

problems, poor  Access to high-end chef who will help to assess product quality

food quality,  Technical assistance available to investigate unforeseen crop

delivery time failures

 MA`O system reinforces importance of product quality, assessment

and feedback given to youth three days per week.

Marketing  Diversity of end markets

problems,  Certified organic status already achieved

regulatory barriers  Classes to teach safe food handling strategies

and costs  Café is a certified kitchen and their staff provide guidance

Departure of key  Inherent to WCRC is the training, empowerment and employment

project employees 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. ENDNOTES





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 10th, 2005.









MA`O YOUTH ORGANIC FARM 41