After years of uncertainty, dozens of Ka‘u coffee farmers are now buying the land they’ve worked for more than two decades.

About 300 acres near Pahala on the Big Island have been utilized by coffee farmers since sugarcane plantation C. Brewer & Co. left the area in the late 1990s.

But the land in the Pear Tree-Moa‘ula Cloud Rest Area has changed hands several times over the farmers’ tenure through a series of purchases, sales and a foreclosure, having been caught up in the global financial crisis. Now the coffee farmers themselves have an opportunity to buy the land from Ka‘u Mahi, a subsidiary of Colorado equity firm Resource Land Holdings, which bought it as part of a $10 million, 6,000-acre purchase in 2016.

RLH bought the land from Lehman Brothers, which had loaned $105 million to WWK Holdings to invest in the area, before the former became embroiled in 2008’s financial crisis and was forced to sell.

Navarro Coffee Farm was one of the first Ka‘u operations established in the 1990s, by a former sugarcane plantation worker. Courtesy: Navarro Coffee Farm/2020

But in December the parcels came onto the market. The prices were “jaw-dropping” at the time, according to Delvin Navarro.

Navarro and his wife inherited Navarro Coffee Farm from her grandfather, who was one of the first sugarcane workers to farm coffee in the region. He took out a loan with USDA to pay for his 15 acres, which are valued at $295,000.

“It’s not just your sentimental value. We do make a living,” Navarro said.

Parcels in the Pear Tree-Moa‘ula Cloud Rest Area were valued from $12,000 to $21,000 per acre, depending on location, land quality and infrastructure improvements by Ka‘u Mahi, according to one of its board members, Jim McCully.

“The farmers were not expecting that,” said coffee farmer John Ah San.

Many of the farmers inquired with the real estate agents about the price, and found out-of-state demand was a major driver.

“When we went to Realtors complaining to them about the prices, they said, ‘If I were you, I’d just go ahead and grab it,’” he said.

Farmers also approached the Edmund C. Olson Trust, a major landowner in the area, to inquire about the availability of leases, in lieu of buying the land. The trust, which runs Ka‘u Coffee Mill and Ka‘u Farms Management, owns about 10,000 acres in the district and runs a 350-acre agricultural park.

Kona coffee, pictured here, is often the first coffee to come to mind when it comes to Hawaii. But Ka‘u coffee has consistently been scoring highly in international competitions. Courtesy: Christopher Prentiss Michel/2010

Over the past six months, as the sale drew closer, Ka‘u Coffee Mill manager Louis Daniele said he had spoken to most of the farmers about leasing Olson land, but the trust did not have enough land to readily allocate to everyone.

Other farmers have opted to buy, or already have, smaller parcels to pair with Olson trust parcel leases, he added.

“It was always slated, from the very beginning, to be chopped and sold off,” Daniele said of the first acquisition. “That was always very clear.”

‘A Rock And A Hard Place’

There were 40 active coffee farms on about 270 acres of land when the Pear Tree-Cloud Rest area was purchased, according to Ka‘u Mahi board member McCully.

But it was still zoned in such a way it would have been classified as a “luxury ag subdivision” which would have priced the farmers out entirely. Rather, McCully says he worked with the Hawaii County’s planning department to lower the prices and reclassify the lands as purely agricultural.

Curb Latte coffee closeup. 3 oct 2016
With coffee culture as strong as ever, Ka‘u’s coffee has become a darling in Hawaii’s export industry. Cory Lum/Civil Beat

McCully says a handful of farmers are not buying their land and opting to see out the end of their leases.

“People talk about promoting agriculture. There’s always a rock and a hard place,” said McCully. “And the rock is land and the hard place is people. And you know, there’s just not enough people who really want to farm.”

Given the average age of the farmers, which is about 65, many do not see a future for themselves or their families on the land either, so moving to complete the lease term and attempting to strike a farming agreement with the new landowners — in which the farmers continue their work on a contracted basis — seems to be an option.

Back To The Future

Farmers fought hard for their land and had to deal with a number of hurdles, but having now secured financing they are able to look to the future, according to Chris Manfredi, organizer of the Ka‘u Coffee Festival and president of the Hawaii Coffee Association.

big island locator badge“Their security at this point has been kind of secured,” Manfredi said.

Their focus can now go back to their work, which is threatened by coffee berry borer and the prospect of coffee leaf rust.

Until now, Ka‘u is relatively unscathed compared to Kona’s crop. But Manfredi and the wider industry is not taking any chances, and is seeking to import leaf-rust resistant plants, predominantly from Puerto Rico and Costa Rica.

Hawaii’s coffee production is forecasted at 26.7 million pounds – at $2.25 per pound – for the 2021-2022 season, up 17% from the previous season, but leaf rust is one of the most significant pathogens in the global industry.

Fortunately, however, Hawaii is among the last of the growing regions to have been hit by the disease. In the short term, the association is seeking to import special fungicides to deal with the pathogen. HCA was also seeking to thicken the wallet for current relief for coffee berry borer and leaf rust at the current legislative session, Manfredi said.

Dealing with such issues will require money, but Navarro is confident that if he keeps working hard and staying vigilant he can continue producing more and more coffee from his 15 acres.

And despite the hardships of the pandemic on his business, coffee prices have been increasing for Hawaii’s farmers: It has jumped $0.23 per pound since the 2019-2020 season. And if that’s not enough to close the gap for the farmers, Navarro says they are now empowered to grow whatever they like because the land is theirs.

“Once you have your land,” Navarro said, “you can do anything you want with it, right?”

“Hawaii Grown” is funded in part by grants from the Ulupono Fund at the Hawaii Community Foundation, the Marisla Fund at the Hawaii Community Foundation, and the Frost Family Foundation.

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