Sugar land, the sweet and sour

The U.S. Department of Agriculture this week issued its final report on 2007 sugarcane production. Hawaii production rose from 1,681,000 tons in 2006 to 1,778,000 tons in 2007. Sounds good, right? But Hawaii is only the fourth largest sugarcane producing state. Read this:

1. Florida: 14,612,000 tons.
2. Louisana: 12,180,000 tons.
3. Texas: 1,841,000 tons.
4. Hawaii: 1,778,000 tons.

Not only is Hawaii responsible for less than 1/15th of the nation's 30.4 million ton sugarcane production, but there is sugar beet production in many other states. Sugar, like pineapple, stopped being a major economic driver for Hawaii when production shifted to places with cheaper labor, chiefly Central America. What's left of sugar in Hawaii is the small Gay & Robinson operation on Kauai and Alexander & Baldwin's Hawaii Commercial & Sugar division on Maui.  HC&S is the exclusive source of the contents of "Sugar in the Raw." That's turbinado sugar, which is only lightly refined so you still get a faint taste of molasses. Sales rose after the packets were reprinted to say that the product was made in Maui. It's instructive and pleasing that HC&S was able to hit upon a way to maintain some sugar production and make an occasional profit. But don't think this means Hawaii specialty agriculture is secure. All agriculture in Hawaii is endangered -- not by cheap labor in Central America; premium branding has essentially solved that problem -- but by the high value of the land if it is developed instead of farmed. Mainland stock advisors have written favorable reports on Alexander & Baldwin Inc. (Nasdaq: ALEX) based not on its sugar and coffee divisions or even on its Matson shipping subsidiary but on the future development potential of its agriculture properties. Alexander & Baldwin management felt obliged recently to tell mainland investors on a conference call that they intended to accelerate their efforts to capture the value of some marginal farming lands by selling them to others who will want to build on them. The real news in the announcement, I've decided, was in how limited A&B's plans were. Its executives confined their comments to land which, while zoned for agriculture, isn't really very good for farming, and they said they wanted to position the land so that it was used by wealthy people who want to build estates in remote areas, which will have less impact on scenery and resources than 1,000 houses. But the long-term issue remains: with the population growing worldwide as well as here, and with the beauty and comfort of Hawaii widely known worldwide, there is and will continue to be enormous pressure to develop more land. We all need to watch this. The beauty of Hawaii, and for that matter the value of land that has already been developed, depends on leaving plenty of remaining land undeveloped altogether, or confined to farming, which is the next best thing. There is no way to keep farmland in farming except to require it by law -- zoning law is the closest any local government comes to having police powers -- or to create such powerful financial incentives to farm the land that no one in his right mind would consider putting houses on it.