Patterns of energy use, energy cost increases and their impacts on crop production on the Big Island of Hawaii : a linear programming approach

Typescript.Thesis (Ph. D.)--University of Hawaii.Bibliography: leaves 168-173.Photocopy.xiv, 173 leaves, bound ill., map 28 cmIn recent years, drastic changes have occurred in input prices, output prices and in the institutional structure within which agricultural producers operate. These changes are largely the upshot of sharp increases in energy prices that are directly or indirectly translated into higher production costs for the farmers. The main objective of this study is to examine the interrelationship between the energy sector and the production of three agricultural crops (sugar, macadamia nut and coffee) by small growers on the Big Island of Hawaii. Specifically, it attempts: (a) to explore the patterns of energy use in agriculture; (b) to determine the relative efficiency of fuel use by farm size among the three agricultural crops; and (c) to investigate the impacts of higher energy costs on farmers' net revenues under three output price and three energy cost scenarios. To meet these objectives, a linear programming model was developed. The objective function was to maximize net revenues subject to resource availability, production, marketing and non negativity constraints. The application of the model to sugar, macadamia nuts and coffee yielded the following results. With respect; to sugar, indirect energy (fertilizer and herbicide) use appears to be an increasing function of farm size. Direct energy (gasoline, diesel and electricity) does not lead to a specific conclusion. In the case of macadamia nuts, both direct and indirect energy use, with the exception of gasoline and electricity, appears to be a decreasing function of farm size. With respect to coffee, the results indicate that direct energy use is a decreasing function of farm size. However, the relationship between fertilizer use and farm size is not conclusive. Findings also reveal that sugar, with only 10% of energy cost, appears to be more vulnerable to higher energy costs than macadamia nuts and coffee with 16% and 18% of energy cost, respectively. In addition, higher energy costs tend to have differential impacts depending upon the output price. Some of the major conclusions emerging from this study are: (a) higher energy costs have not significantly impacted on farmers' net revenues, but do have a differential impact depending on the resource endowments of each crop grower; (b) low output prices tend to reinforce the impacts of higher energy costs, whereas high prices tend to negate them; (c) farmers are faced with many constraints that do not permit factor substitution. In terms of policy formulation, it was observed that policy makers seem to be overly concerned with the problems facing growers at the macro level, without taking into account the constraints that growers face at the micro level. These micro factors play a dominant role in the context of resource allocation. They must, therefore, be incorporated into a comprehensive energy and agricultural policy at the county and state level