PRIOR to the establishment of the Territorial market under the supervision of the Hawaiian Experiment Station, the tourists who visited Honolulu had for years complained of the impossibility of securing any adequate conception of the nature and variety of tropical fruits by an inspection of the local markets, and of the absence of these fruits on the menus of Honolulu hotels. The fruits to be obtained in the Honolulu markets included California oranges and grapefruit, a poor quality of Chinese banana, poor specimens of pineapple picked so green that they had neither sweetness nor flavor, papayas which might or might not be fit to eat, occasionally an avocado composed largely of an immense seed with a thin layer of pulp around it, a few turpentine mangoes, and in the Chinese markets a considerable variety of the less common tropical fruits. The reason for the lack of any adequate supply of tropical fruits in proper condition on the Honolulu markets was found in the total absence among farmers of organization or information regarding the demands of the Honolulu market or the methods of grading and shipping the various fruits and vegetables. To this reason should be added the traditional and well-grounded suspicion that in the event of making shipment of fruit or vegetables to Honolulu the farmer might not receive a remittance large enough to pay the freight. When one asked why Honolulu markets were not properly supplied with tropical products the farmer replied that the dealers apparently did not want such produce, or any rate would not pay enough for it to give the farmer a profit, while the dealer replied that either the produce in question could not be profitably grown in the Territory or the farmers were not sufficiently industrious to engage in any special line of agriculture. To understand how such a situation arose it is necessary to sketch briefly some of the early events on the island.

When Capt. Cook discovered the Hawaiian Islands, in 1778, he found there about 400,000 natives, largely engaged in agriculture and fishery and in self-supporting condition.  With the establishment of a sailing service between Hawaii and the mainland, after the advent of the white man, trade began to develop with the mainland in agricultural produce.  The forty-niners in search of gold in California received a large part of their supplies of potatoes, wheat, beans, etc., from Hawaii by means of sailing vessels. With the mainland and with oriental countries considerable trade was also developed in sandalwood, pulu fiber, candlenut oil (the export of which at one time reached a volume of 10,000 gallons a year), and cotton, especially after the Civil War.  Moreover, the whaling fleets, which for many years operated in Hawaiian waters, offered a large market to Hawaiian farmers for miscellaneous farm products.

The advent of the white man in Hawaii was not an unmixed blessing to the natives. It brought about important far-reaching changes in their habits of life and in their industries, but these changes were not all to their advantage, as is apparent from the diminution of the native population.  At present, notwithstanding the large influx of Chinese, Japanese, Porto Ricans, Portuguese, Spanish, Filipinos, Russians, and others, brought in as laborers, and the considerable numbers of Americans and Europeans who came to establish themselves in business, the total population is only 200,000, or one-half that present in Capt. Cook’s time, while more than half the foodstuffs are imported from the mainland and the Orient, and a large proportion of the natives have ceased to be farmers. These changes and the resulting present condition have been brought about largely by changes and disturbances in the marketing conditions for local products. The land was gradually taken in large areas by corporations for the production of sugar cane, and later for plantations of pineapples, sisal, rubber, etc. The transportation facilities furnished by sailing vessels, and later steamships, were quite fully absorbed in carrying sugar from the various islands of the group to Honolulu and om Honolulu to the mainland. There is a decided advantage to the transportation companies in having a large return freight from the mainland. The building up of this business in return freight from the United States greatly checked the development of local farming enterprises by reason of the extensive business connections which the transportation companies, had with local dealers. The great development of the sugar industry, therefore, operated to the discouragement of farming.

There have always been in Hawaii men interested in the maintenance and prosperity of a local farming population.  Their efforts have from time to time brought about the establishment of homestead communities in different localities on the various islands. The underlying idea which governed the establishment of these homestead communities was not always the development of independent farming but rather the attachment of the plantation laborer to the soil by giving him a small tract of land on which to raise garden vegetables, a few fruit trees, and possibly some poultry, a cow, and a few pigs. The area of homesteads, as parceled out in the early days, was about 6 acres and was obviously inadequate for the maintenance of the family in an independent condition. As a matter of fact, few even of these small homesteads were properly farmed. The laborers recognized the fact that under existing conditions a living could not be made from such a small area. The only cultivation, therefore, which was done on the homesteads was in the nature of small garden patches, and this work was done by women and children, while the men labored on neighboring sugar plantations. In a large percentage of cases the homesteads were simply planted to cane under contract with the sugar plantations and cane was harvested by the regular labor force of the plantation.

The unsatisfactory conditions in markets for farm produce in Hawaii finally induced the Territorial legislature by joint resolution of the session of 1909 to appoint a commission on fruit growing and truck farming for the purpose of investigating the market conditions and for recommending to the legislature a method of overcoming these difficulties.  The commission was at once appointed with the writer as chairman and a report was submitted in February, 1910, recommending the establishment of a Territorial market. It had been originally intended that the Territorial market should be from the beginning under the supervision of the Hawaii experiment station, maintained by this department.  By a ruling of the Territorial attorney general, however, it was decided that the Territorial funds at the disposal of the station could not be used for that purpose. A temporary arrangement was therefore made whereby the Territorial department of immigration, labor, and statistics maintained a Territorial market for nearly two years. At the 1913 session of the Territorial legislature an act was passed placing funds at the disposal of the Hawaii experiment station to be used in furthering the production and marketing of miscellaneous farm products. As a result of this action of the legislature the experiment station established a Territorial marketing division under its supervision on July 1, 1913.

The astonishingly low ebb to which trade in local farm produce had fallen was evidenced by the fact that for the first four months of its existence the produce received by the Territorial market did not reach a total value of $700.  It required patience and careful managing to establish in the minds of local farmers any confidence in the possibility of marketing farm produce in Honolulu with a profit to the producer. Through conversation with many of the farmers it was found that they had all had practically the same experience. It was impossible for any one farmer to raise enough produce to secure the reduced rates granted by the steamship companies to 5-ton shipments. Moreover, his small farm area could not be allotted to different crops in such a manner as to bring about a steady supply. The worst feature of all from the standpoint of the small farmer was that no market information was available in any of the local newspapers. The farmer was, therefore, never able, except through sheer luck, to send a shipment to a market in which a good demand existed. In most instances the market was found to be occupied by large shipments just received from the mainland.

   The list of difficulties which confronted the farmer in Hawaii was not exhausted by the lack of information concerning the market, high freight rates, competition with produce shipped in from the United States and the Orient, and the indifference of Honolulu produce dealers. Another serious difficulty was furnished by the uneven nature of the land, the prevalence of insect pests and fungus diseases, the unusual heaviness of the soil, and poor roads leading from the somewhat isolated farms to boat landings. In fact the whole field of diversified agriculture in Hawaii was, until quite recently, neglected by reason of the intense interest in the production of sugar. It was therefore obviously necessary for the Hawaii experiment station to begin at the beginning and to help as rapidly as possible to bring about conditions which are recognized as fundamental to successful farming.

   The freight rates on the local inter-island steamships were high for small shipments, and the charges of commission men and other middle men amounted to so much in the aggregate that little or no profit was received by the producer, even when his produce reached Honolulu at a time of unglutted market. An investigation of the egg industry, for example, showed that with eggs retailing in Honolulu at 60 cents a dozen, the farmer located at a distance of 80 miles on the island of Maui netted only 13 to 15 cents a dozen for his eggs.  With the establishment of the Territorial market a decided change in betterment of marketing conditions took place. The farmers who first took advantage of the market were encouraged to increase their production, others learned of the opportunities offered by the marketing division, and within six months enough of certain kinds of produce was received at the market to maintain a steady supply for a slowly increasing number of customers who visited the market for their supplies.

   Visits to the various produce dealers in Honolulu brought out quite clearly their attitude and the difficulties which they had experienced in attempting to depend upon local supplies of farm produce. A number of them had had very unsatisfactory experiences. After making an arrangement with some dairyman for the purpose of handling his butter, they were unable to deal satisfactorily with him for the reason that he could not maintain a uniform supply and sometimes could not secure transportation for his produce on the local steamships. The dealers had, therefore, come to depend upon shipments from the mainland by regular steamers, and had, of course, made arrangements with mainland dealers whereby the shipments to Honolulu were regulated so as to maintain a constant and uniform supply.

   The Hawaiian farmers were therefore confronted with the fact that peanuts were imported in large quantities from China and Japan, beans from the mainland, corn from Seattle and Manchuria, oranges, grapefruit, carrots, beets, asparagus, potatoes, and various vegetables, as well as cold-storage chickens and turkeys, from California, and onions from Texas and Australia. Without any information as to the actual condition of the Honolulu market, it was practically impossible for the farmer to prevent glutting the market by making a shipment to Honolulu.

In the management of the Territorial marketing division it was apparent at once that the fundamental difficulty to be overcome was that of the total lack of organization. Rather unusual difficulties had to be overcome in starting any system of organization among the farming population. There are a few communities composed almost exclusively of one race, for example, Hawaiian, Portuguese, and, in one or two instances, American. Most communities, however, are of mixed races, involving Japanese, Chinese, Hawaiian, Korean, Filipino, and Portuguese, as well as American. Few other races understand the Chinese or Japanese language.  Nearly all races in Hawaii speak and understand Hawaiian, many of them having better knowledge of Hawaiian than of English. The diversity of language and ideas, and, in many cases, the sheer impossibility of understanding one another readily, made the establishment of cooperative associations among these groups of farmers a slow and difficult procedure. Through the medium of pidgin English, however, the universal business language of the Orient, and by enlisting the interest of representatives of various races, quite satisfactory cooperative associations have at last been formed in the various farming communities. The simplest form is a mere voluntary organization of farmers who pool their produce and ship it in common in the name of the organization to the Territorial marketing division. Some of the more advanced associations have monthly or bimonthly meetings and have affiliated women’s organizations.  In some instances they sell all their produce cooperatively and buy a large part of their supplies, building materials, fertilizers, household utensils, and standard groceries cooperatively. The prevailing idea in nearly all of these cooperative associations of farmers in Hawaii has been to make a study of their immediate local markets their first problem and then to organize their farm operations in such a manner as to ship to Honolulu cooperatively and at opportune times all produce not demanded by their immediate local market. The chief reason for this arrangement is that prices on local markets in the various islands are almost invariably higher than in Honolulu.

One association on the island of Maui is composed exclusively of American farmers. Their main crop is pineapples.  They were induced to take up land in this locality by contract with the local cannery, which agreed to take their pineapples on a sliding-scale system regulated by the sale price of canned pineapples. Up to that time no trouble had been experienced with such contracts. Before the first crop of pineapples in this community matured the price for fresh fruit was reduced one-half or more, and the farmers were brought face to face with a new emergency.  This is merely an illustration of the fate which may befall farming communities who depend upon the sale of one product under contract to a neighboring mill or cannery. A movement was at once started to establish a cooperative cannery for handling the fruit of the community, but, in the meantime, it was necessary to attempt to save the first crop by selling the pineapples fresh to the Territorial marketing division. In another neighboring community on Maui, composed largely of Portuguese and Japanese, corn, beans, cabbage, and poultry are the main products for sale. This community buys its supplies through a business manager elected by popular vote and sells its produce cooperatively through the same manager. The association has succeeded in placing its products advantageously upon the small local markets on the island of Maui and is now making large shipments to the Territorial marketing division for sale in Honolulu or for reshipment to San Francisco.

Both of these associations are making a thorough study of the methods of sorting, grading, holding, packing, and shipping their products. The unsatisfactory condition in which much of the produce was received by the Territorial market in Honolulu showed at once that a special effort must be made to give instruction and advice in the matter of packing and shipping. Through the extension work of the experiment station, a great amount of good has been done along this line. The extension men of the experiment station have visited the various farming communities with sample packing cases and have demonstrated methods of wrapping, packing, and kinds of shipping cases which have proved to be satisfactory for Hawaiian conditions. These were matters to which, for the most part, the Hawaiian farmer had given no thought. Extension work on methods of packing and shipping is yielding large results among these farmers. Considerable experience had already been had in shipping fresh pineapples to San Francisco and farther inland, and one of the most expert packers in the Territory was employed in demonstrating the best methods of sorting and packing this fruit for long shipments.  (Pl. IX.)  The methods of packing and shipping butter were also carefully studied and instruction given in this matter to the butter producers in the neighborhood of Hilo. In a number of instances in which the farmers could not be made to believe through correspondence that their produce was not arriving in good condition they were induced to come to Honolulu in order to see the condition in which the produce arrived at the Territorial market.

   

DISTRIBUTION OF MARKET INFORMATION.

In order to keep the farmers on the different islands informed as to the prices and demands for various kinds of produce in Honolulu, a weekly market letter is prepared, a copy being sent to every farmer who ships produce to the Territorial market, copies also being furnished to all the newspapers of the Territory. This market letter is therefore printed in all languages which are spoken in the Territory and reaches practically every farmer who has miscellaneous produce for sale.

Soon after the establishment of the marketing division an active campaign was started to secure advance notification and estimates from farmers throughout the Territory as to the kinds and amounts of produce which they were likely to have in the near future for shipment to Honolulu. A card system was devised for the use of all farmers who wish to patronize the marketing division. On these cards the farmers indicated the number of acres planted to various crops, the varieties which they had used, the expected time of maturity of the crops, and the expected amount of produce as estimated from average yields in their neighborhood. By means of other cards the marketing division is furnished, about two weeks in advance of shipment, the closest possible estimates of the amount of produce and the approximate date of shipment. Usually the exact date can be given, for the reason that from many ports there is boat connection only once a week. This system of mutual exchange of information between the marketing division and the contributing farmers makes it possible to regulate the supply of produce so as to hold the trade which is already established in Honolulu and tends to prevent the flooding of the market.

The beneficial results of the establishment of the Territorial market are obvious on every hand. The demand for local produce in Honolulu has greatly increased as a result of the fact that dealers found that through the Territorial market they could secure a uniform and constant supply for their trade. Many local products which were rarely found upon the Honolulu market are now supplied in reasonable quantities. In the place of cold-storage chickens and turkeys the market is supplied with home-grown poultry in good condition. The local supply of eggs has not yet equaled the demand. The duck industry, which had previously been almost exclusively in the hands of the Chinese, has taken on an entirely different character. The Chinese raised only an inferior breed, which was maintained on ponds and which tasted fishy and unsavory. The great demand at present is for muscovies, while a large demand has arisen for duck eggs, especially those from the Indian Runner breed.

Until the establishment of the Territorial market, the small farmer had almost no market for the few cattle, sheep, and pigs which he might be able to raise. All this meat is now handled readily and at a profit to the farmer through the Territorial market. The market has also made it possible to secure in Honolulu a regular supply of limes and Hawaiian seedling oranges. These products had formerly gone to waste for the most part. The seedling oranges are a delicious fruit, more juicy and of better flavor than the oranges imported from California. A promising market has also been opened for Hawaiian grapefruit, breadfruit, avocados, mangoes, papayas, poha, jams, jellies, watermelons, mountain apple, and various other fruits and fruit products.

Before the establishment of the marketing division a large part of the corn consumed in the Territory was imported from Seattle and Manchuria. The market demand is now satisfied largely from growers on the various islands, and on account, of the regular supply of fresh local corn the use of corn for feeding purposes is extending. It is a curious fact that corn had been used in Honolulu only for feeding chickens, and not as a horse and mule feed.

During the first year of the existence of the Territorial market the monthly receipt and sale of farmers’ produce increased from $85 to $6,000. The total value of the produce received and handled during the year was $26,500, at a cost of $2,000. The funds originally provided by the Territory for conducting the market were so limited that a charge had to be made against the produce for the actual expense of handling, the Territorial funds being sufficient only for the salaries of the men directly engaged in developing and maintaining the market. Arrangements were made by which cold storage was provided for berries, butter, meat, and other articles on board the island steamships. By an understanding with the company which operates the steamships all produce consigned to the Territorial market is accepted without prepaying the freight and monthly bills for freight are rendered to the superintendent of the market. The freight charges against each consignor are deducted from the proceeds of his consignment before remittance is made.  In this way a great saving is effected in the matter of book-keeping on the part of the steamship company and the company has been willing to grant more favorable rates. A large increase in their local business between the different islands has awakened sufficient interest on the part of the officers of the steamship companies to induce them to provide better facilities for the transportation of perishable produce. Before the establishment of the market the ships’ crews had little experience in handling any perishable products, the freight being mostly sugar, fertilizers, and live stock on the hoof. As a result of the cooperation of the officers of the interisland steamships, farm produce has received more attention and more careful handling, with the result that it reaches the market in better condition than heretofore.

Simultaneously with this awakening of interest in local products on the part of steamship companies there has been an increased effort among the farmers themselves to crate and pack their produce in a satisfactory manner. Before any efforts at practical instruction along this line were put forth, the farmers of various races were without any hint as to the demands of the market regarding size and character of packages. The produce was sent in bags, loose crates, and various unattractive and totally inadequate containers, suffering greatly from bruising and heating or fermentation en route. While these difficulties have not been entirely overcome, great improvement in this regard is noted.

The farm produce received at the Territorial market is sold chiefly at wholesale to Army posts, hotels, boarding houses, hospitals, schools, and other institutions. A number of neighborhood groups of householders have been formed in various parts of Honolulu and these groups buy cooperatively of the Territorial market through a representative appointed by each group. In addition to the wholesale trade, a retail business of considerable proportions is done at the market. It was hoped in the first place that it might be possible to avoid the trouble of carrying on a retail business at the market. It was found necessary, however, to yield to the insistent demand of numerous individuals who wish to buy fresh local produce on the day of its arrival in smaller quantities than are considered in wholesale trade.  The retail trade has involved particularly the purchase of live fowls, pohas, watermelons, and butter.

In addition to the weekly list of prevailing prices issued by the marketing division and furnished to all farmers and newspapers, a list of breeders of pure-bred stock has been compiled and kept up to date by a card system, so that inquiring purchasers may be referred directly to individuals who have pure-bred stock for sale. In this work, as well as in the general increase in the use of local products, the actual receipts and sales of the marketing division indicate only a portion of the effect of the market in increasing the utilization of home products. Through the agency of the market, many sales and standing orders have been arranged which of course do not appear on the books of the Territorial market. The actual increase in the handling of local farm products upon the markets of Honolulu as a result of the establishment of the Territorial market is therefore much greater than would appear by the sales account of the market. Moreover, as already indicated, most of the local cooperative associations of farmers devoted their first efforts to a study of their immediate local markets and to supplying the demands of these markets. In some cases it required the efforts of a year or more before the local farmers were able to supply the demands of their local town markets.

The demand for reliable farm and garden seeds of varieties preferred in the Honolulu market and known to be adapted to the Hawaiian climate became so great that the marketing division was forced to make an arrangement by means of competitive bids for purchasing quantities of such seed and selling it to the farmers at cost price. This branch of the business in the marketing division has increased rapidly and is generally welcomed as a much-needed relief from the unsatisfactory seed markets to which the Hawaiian farmer previously had access. A number of Hawaiian farmers have gone into the business of producing seed for sale, and in such instances individual sales of their seed and standing orders have been arranged through the marketing division. The opportunity for the local production of seed seems to be greatest in the case of corn, cowpeas, jack beans, pigeon peas, Sudan grass, etc.

During the first year much of the time of the working force of the marketing division was absorbed in bringing about better methods of packing and handling produce, in organizing local communities into associations so as to simplify the inevitably elaborate bookkeeping of cooperative business, in furnishing more detailed information to farmers as to the quantities of farm produce demanded in Honolulu, the varieties preferred and the seasons when best prices may be expected, and in making known to the citizens of Honolulu the merits of locally grown produce and of the need of supporting the Honolulu market in order to encourage the establishment of a solid farming population in the Territory. Incidentally in connection with this work it soon became apparent that certain products could be grown in Hawaii in larger quantities than could be consumed in the Hawaiian markets. The Bermuda onion crop, although consumed in large quantities by the permanent population and by the Army posts in the neighborhood of Honolulu, overran all limits of local consumption and had to be shipped to the mainland.  Satisfactory prices were obtained and no difficulty was experienced in shipping onions from Honolulu to San Francisco. Similarly with sweet potatoes, which mature at all months of the year in Hawaii, it was found that from May to July, during the off season in San Francisco, prices ranging from 4 to 8 cents a pound could be obtained in that city. Several shipments of sweet potatoes were made during this season with satisfactory results.  From time to time an active demand for beans was manifest on the west coast, and it was found possible for the Territorial market to arrange, through the various farmers’ cooperative associations, for large supplies of dry beans for shipment to San Francisco.

The first year’s work of the Territorial market showed clearly the necessity of maintaining a branch market in San Francisco for handling Hawaiian products. Thus far all shipments of produce to San Francisco have been made by consignment, but it became evident that the business could be much increased by having an agent of the Territorial market in San Francisco. Naturally, his interest in the development of the business would be greater than that of the commission men, to whom the receipt of shipments of Hawaiian produce was merely an incidental matter. A recommendation to this effect was made to the governor and the legislature, with the result that at the 1915 session of the legislature provision was made for maintaining a branch office of the Territorial market in San Francisco.  Thus the Hawaii marketing division began operations in San Francisco July 1, 1915.  Its main business thus far has been the handling of fresh pineapples. The Hawaiian pineapple canneries had reduced the price of pineapples and offered only $5 to $10 a ton for first-grade pineapples instead of $18 to $21, which had previously been the prevailing price.  Since in Hawaii it costs in different localities from $12 to $14 a ton to produce pineapples it was necessary that the small growers secure some other outlet for their fruit in order to avoid losses. It could not be foretold whether the old prices would be reestablished after a slump of one year’s duration, but an attempt was made to market fresh pineapples in San Francisco in order to relieve the local situation. There had been a persistent tradition in Honolulu that pineapples would not stand shipment well to San Francisco and that only a few cases a week would be demanded by the markets of the west coast. It was found almost immediately, however, after the establishment of the branch office in San Francisco that the difficulty of pineapple marketing lay not with losses suffered during shipment nor in securing a market for the fruit, but in securing space on the steamships plying between Honolulu and San Francisco. Thus far it has not been possible to meet satisfactorily more than a small fraction of the orders for Hawaiian pineapples, and this failure is due entirely to a lack of transportation facilities. It is believed, however, that these facilities will be improved in the near future. With the prevalence of the fruit fly in Hawaii, unfortunately, no fruit can be shipped to San Francisco except pineapples and bananas.  If, however, adequate transportation facilities for carrying these fruits were supplied, the trade in fresh pineapples and Chinese bananas and cooking bananas might be expected to increase rapidly.

The substantial recognition of the services of the marketing division to the Hawaiian farmers and to the Territory as a whole is shown by the action of the legislature at its session in 1915.  An appropriation of $14,400 was made for a building to be used as headquarters of the marketing division in Honolulu. This building is already nearly completed, is conveniently located, both with regard to the steamship wharves and the railroad station, as well as to the commercial produce houses of Honolulu. The Territorial appropriation also carried an item of $7,500 to be used as a revolving fund to enable a prompter remittance to the farmer. During the first two years of the existence of the Territorial market no fund of this sort was available. It was necessary, therefore, to conduct the business of the market absolutely without capital, a rather anomalous procedure. The only inconvenience in this system, however, was the occasional delay in making remittances to consignors.  It was obviously necessary to receive payment from sales before remittance could be made to consignors. Most of the business was carried on a monthly basis, and since even monthly credit was given only to responsible institutions no losses were suffered. The possession of a revolving fund, however, will make it possible to remit promptly to the producer and thus encourage the individual farmer.

In addition to the funds already mentioned, the appropriation carried an item of $24,000 for the biennial period, or $1,000 a month, for maintenance. This is considered sufficient for the maintenance of the main market in Honolulu and also the branch office in San Francisco.

The substantial results from the establishment of the Territorial market have been far greater than were even anticipated by its friends and promoters. Starting with unorganized and isolated farming communities of different races, it has brought these men together to the mutual benefit of all concerned. Beginning with a farming population which had been originally laborers and totally without information as to market requirements for farm products, it has brought about a striking improvement in the grading and packing of tropical fruits and products to the benefit of the farmer and of the consumer in Honolulu and on the mainland.  Initiating a practical market system among a set of farmers who were thoroughly discouraged as to the prospects of carrying on general agriculture in Hawaii, it has shown that reasonable profits can be derived from diversified agriculture in Hawaii.