The 45-year-old general manager for Green Point Nurseries in Hilo makes that prediction following a record year for the state's $92 million flower and nursery industry. He's not alone in his optimism.

From pineapple to tomatoes, Hawai'i's agricultural industry overall saw year-over-year growth from 2001 to 2002, the latest years for which comparative numbers are available, and prospects for this year and next are similarly upbeat.

But despite his sales growth in the past year, Tanouye expects he'll continue to face obstacles that have long challenged many Hawai'i farmers. High land costs and competition from foreign countries employing cheaper labor rank among his top concerns.

"It's exciting because competition keeps you on your toes, but you've always got to look over your shoulders," Tanouye said.

Agriculture key to economy

Although Hawai'i's $535.9 million farm sector is relatively small compared to the $10 billion tourism trade, there is growing recognition of agriculture's role in diversifying the state economy, preserving greenbelt lands and reducing the Islands' dependence on imported food.

As an employer, the industry's impact is building as well. As of July, Hawai'i agriculture employed 7,400 people with average pay of $11.25 an hour. Employment was up slightly from the 7,300 people employed in the same time last year.

The modest growth has come during a decade when sales of diversified agricultural products helped stem losses in two of the state's oldest commercial crops — sugarcane and pineapple.

But last year both the sugar and pineapple industries saw sales rise, pushing agriculture sales in Hawai'i up 2 percent to an 11-year high. Sugar and pineapple are expected to remain stable this year partly by developing niche products such as food-grade sugar, which is packaged for consumers or used in beverages, jams and jellies. And in the pineapple industry, Maui Pineapple is looking to build profits by shifting sales from canned fruit to fresh fruit.

Meanwhile, certain diversified agricultural sectors, including floriculture, will likely see growth, although it may not come easily.

Farmer Wilbert Yee, owner of the 58-year-old Yee's Orchard in Wailuku, said his challenges in the next year include urban encroachment and generating sales from local resorts and other large buyers.

Fruit provides 'sweet spot'

During the last decade or so, Yee said, nearby plantation land has been turned into retail operations that include a Safeway and Foodland.

The developments create soil-eroding runoff that can affect agriculture. In addition, the farm's sales are under pressure from cheap imports from Central America.

"They pay wages of $1, $2 and $3 a day compared to what we pay," said Yee. "That's our competition."

Yee said the near-term outlook for his 20-acre tropical fruit farm where he grows mangos, grapefruit and pomello remains positive, but he is less optimistic that the business will last another 58 years.

"For the next year or so maybe, but it's not going to last very long," said Yee, 85.

Hawai'i's success will depend on building and maintaining a reputation for quality fruits, he said.

Richard Johnson, 59, owner of Onomea Orchards, an exotic-fruit grower in Pepe'ekeo on the Big Island, agrees maintaining products of top grade and effective marketing are key to agriculture's survival.

"We're going to have to battle it out with our quality and our Hawai'i brand," said Johnson, a retired Intel Corp. manager.

Johnson, who started the orchard in 2000, has added 34 acres in the last year or so, creating 42 acres of rambutan, mango, lychee and other tropical fruit. Onomea's growth comes at a time when produce prices are high and Mainland demand is strong, he said. In 2002, the farm value of tropical specialty fruits sales grew 35 percent to an estimated $1.8 million.

"We're kind of in the sweet spot of a growing and new industry," Johnson said.

Sugar-cane growers worried

Like other farmers, however, he anticipates business rivalry to heat up. "In the future we expect the both the quantity of local and foreign competition will increase," he said.

Overseas competition is worrying big agricultural operations as well. Hawai'i's two remaining sugar-cane growers are experiencing a bit of a renaissance, but they are concerned a new free-trade deal between the United States and Central American countries will significantly increase sugar imports. The U.S.-Central America Free Trade Agreement, which still needs congressional approval, would raise the quota of sugar imports from El Salvador, Guatemala, Honduras and Nicaragua without tariffs.

Hawai'i sugar farmers — Hawaiian Commercial & Sugar Co. and Gay & Robinson — say the agreement may set a precedent for other trade negotiations that could collectively depress prices and effectively kill sugar farming in the state.

Increasing global competition is confronting many of Hawai'i's agricultural sectors.

Tanouye believes innovation in techniques and promising plant varieties will help flower growers survive. Green Point, for one, expects to grow hybrid anthuriums that not only are more disease resistant, but feature interesting new colors and even scents.

"We're going to be growing plants that we only dreamt of 20 years go," Tanouye said. "That is going to keep it exciting for people like us to stay in this business."