New Era of Ag on Maui: A&B Sells 41,000 Acres to Mahi Pono

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Alexander & Baldwin today announced an agreement that will launch a new era of agriculture on Maui.  According to company executives, the agreement provides for the sale of the former Hawaiian Commercial & Sugar Company lands to Mahi Pono LLC for purposes of cultivating a variety of food and energy crops, ensuring the continued agricultural use of these lands, the preservation of green, open space in Central Maui, and a consistent and long-term source of revenue for the local economy.

HC&S lands aerial. PC: Alexander & Baldwin

Mahi Pono is a farming venture between Pomona Farming, LLC, a California-based agricultural group, and the Public Sector Pension Investment Board (PSP Investments), a long-term investor and one of Canada’s largest pension investment managers.

Mahi Pono (which means “to farm or cultivate morally and properly”) is planning a full range of agricultural operations and related uses. There are no plans to convert any of the lands to non-agricultural purposes.

“With our purchase of this fertile land, we want to help ensure that Maui’s residents can produce agricultural products for future generations,” said Ann Chin, President, Mahi Pono. “We want to expand Maui’s thriving and diversified agriculture industry. As we develop our plans, we will work closely with local stakeholders, including the agricultural community, our neighbors, government officials, civic leaders and the local community. Mahi Pono is committed to sustainable agriculture. We will be stewards of the land, and responsible users and protectors of Hawaiʻi’s natural resources and environment.”

According to the joint announcement, the Mahi Pono team has significant experience cultivating diverse agricultural crops and managing cattle operations on more than 100,000 acres, with a focus purely on agriculture and a track record of making long-term investments in farming projects.

All of A&B’s existing agricultural personnel will be offered positions with Mahi Pono, to put their experience and knowledge to use to help further Mahi Pono’s farm plan.

Mahi Pono’s farm plan currently envisions cultivating a broad range of food crops for local consumption and export, including coffee, various fruit and vegetable crops and an expansion of A&B’s grass-fed cattle project at Kulolio Ranch, which Mahi Pono purchased as part of this transaction. Mahi Pono also purchased Central Maui Feedstocks, A&B’s energy crop project, and assumed all diversified agriculture leases previously entered into by A&B.

Under the terms of the agreement, Mahi Pono purchased approximately 41,000 acres of agricultural farm land from A&B, along with the above mentioned companies. The $262 million transaction closed today. A&B and Mahi Pono also will partner in the ownership and management of East Maui Irrigation Company.

HC&S field work, final sugar harvest. Photo credit: Chris Archer.

A&B started growing sugar on these lands nearly 150 years ago and ceased sugar operations in 2016.

“A&B’s commitment, when we made the difficult decision to close our sugar operations, was to team up with qualified farmers and transition these lands to a diversified agriculture model. We acknowledged that this transition would take time, but could support the important goals of food and energy self-sufficiency for Hawaiʻi, preserve productive agricultural lands, and stimulate new economic activity on Maui and in the state,” said Chris Benjamin, A&B President and CEO.

Over the past two years, A&B has held discussions with hundreds of parties interested in farming, with most aiming to cultivate a single crop on portions of the former plantation.

“In Mahi Pono, we have found a unique partner with proven farming expertise, established marketing channels, strong financial resources, and a long-term perspective. Most importantly, they share our vision of seeing farming flourish across Central Maui for generations to come,” added Benjamin. “This could be one of the most important advances for agriculture in Hawaiʻi in many decades.”

HC&S final haul. Photo 12.12.16 by Wendy Osher.

“While it is difficult to part with our legacy lands, we believe the most important thing is that they remain in active agriculture—to help feed our local communities, support our local farmers, and provide new economic activity and jobs for Maui and the state,” Benjamin said. “Mahi Pono’s team has the expertise and capital necessary to make diversified agriculture a reality in Central Maui, but can justify the significant investment in infrastructure, equipment and staffing only if it owns the underlying lands. We considered many alternatives and believe this is the best path forward toward keeping these lands in agriculture and sustaining farming on Maui once again.”

“Maui will always be A&B’s home, our roots, and we still have a considerable amount of land and assets on this island. A&B remains committed to Maui and will continue to be an active part of this community,” concluded Benjamin.

“This transition represents a unique opportunity to advance diversified agriculture and increase local food production in Hawaiʻi,” said Hawaiʻi Governor David Ige. “With Alexander & Baldwin’s long tradition of stewardship and Mahi Pono’s investment, which is needed to cultivate new crops and preserve the environment, this partnership will ensure Central Maui stays green for the long term.”

“While many things have changed on Maui over the course of the past century, the majority of our residents want to retain the open space and rural character of Maui, and wish to see agriculture re-established on the former sugar lands in Central Maui,” said Maui Mayor Alan Arakawa. “It is important that we increase food security on Maui and in Hawaiʻi, and having a farmer with a proven track record pursue diversified food crops here on Maui is definitely a step in the right direction.”

Arakawa continued, “As a farmer myself, I understand the challenges of the business. Alexander & Baldwin has found the right partner in Mahi Pono to continue our island’s long legacy of farming, while providing new jobs and economic activity for our Maui residents.”

“This agreement significantly increases the potential for a meaningful advancement in food security and a renewed pledge to growing agriculture on Maui, topics that continue to resonate with me since I initiated the ʻĀina Pono Hawaiʻi State Farm-to-School Program in 2015,” said Shan Tsutsui, former Lt. Governor of the State of Hawaiʻi, former State Senator from Maui and Mahi Pono advisor. “It’s my hope that the fruits of this agreement will have a lasting impact on our keiki (children), the agriculture industry, and the state’s ability to become truly sustainable for many years to come.”

Key elements of Mahi Pono’s plans include the following:

• Production of high-quality, non-GMO foodstuffs for local consumption, with export potential.
• Creation of jobs for local residents, with job training and educational programs for employees.
• Providing land and water in an agricultural park for use by small, local farmers.
• Providing local partners with resources such as farming expertise, farming resources and equipment, and development and farming capital.
• Mahi Pono took over diversified agricultural leases, and purchased Kūlōlio Ranch and Central Maui Feedstocks, from A&B as part of this agreement.
• A&B and Mahi Pono will form a joint venture to own and operate East Maui Irrigation Company.
• All of A&B’s active agricultural personnel will be offered positions with Mahi Pono.

Central Maui farmland. PC: Alexander & Baldwin.

Former sugarcane lands in Central Maui. PC: Alexander & Baldwin.

Former sugarcane lands in Central Maui. PC: Alexander & Baldwin.

Maui cattle. PC: Alexander & Baldwin.

Maui cattle. PC: Alexander & Baldwin.