Now the two groups of farmers are moving toward head-to-head competition following a recent decision by the U.S. Department of Agriculture to allow Taiwan to import potted orchids into the United States. It's a fight Hawai'i farmers fear they may not be able to win.

In an attempt to protect the state's $24 million orchid industry the Hawaii Orchid Growers Association sued the USDA over Taiwan imports in federal court last summer. Arguments in the case are scheduled for later this year, and for now the imports are on hold. However, second-generation orchid farmer Richard Takafuji, owner of Orchid Center, fears for the future of his more than four-decade-old business.

"It doesn't look too good at the moment with all that's going on," said Takafuji, 64. "Right now, seems we're on the losing end. For us to compete is not feasible because the costs are too high."

Currently orchid growers in Taiwan can export only young, bare-root plants to the United States, where they're potted and grown before they are sold as older, more expensive plants. The USDA's decision would allow Taiwan farmers to export the more mature, pricier potted orchids directly into the United States.

Tiny orchid plants grow at the Wai'anae Orchid Center, where they are nurtured to maturity. Orchid growers fear their plants may not survive a competitive market if more Taiwan imports are allowed. Deborah Booker • The Honolulu Advertiser

"Hawai'i really does face a major change because in a lot of the tropical fruits and flowers where Hawai'i faces a competitive advantage accessing the U.S. Mainland market, other countries can do it more competitively."

In addition to providing a local food source, farming provides economic opportunities in Hawai'i's rural areas and keeps land free of urban development. However, agriculture has been on a general decline with sugar and pineapple today representing less than 1 percent of gross state product compared with 15 percent and 12 percent respectively in 1950.

Apart from typical concerns such as high land, labor and shipping costs, Hawai'i orchid farmers complain about government subsidies provided to Taiwan growers. Though greater than those offered by the U.S. government such subsidies still comply with free trade rules.

"We don't mind competing against private industry," said Walter Moe, president of the Hawaii Orchid Growers Association. "We have to compete against a foreign government. That's not a fair playing field. This is a typical case of David and Goliath."

Driving the rise in agricultural imports are efforts by the U.S. and foreign governments to open each other's borders to trade. Ideally, such actions reward the most efficient producers, provide economic opportunities in poor countries and result in lower consumer prices, said the East-West Center's McNally. However, it also means lost U.S. jobs as markets respond to new competitive pressures.

For farmers with labor-intensive crops, "it means that they have to stay on edge all the time," McNally said. "That's what business is all about. Competition increases innovation and creativity. That helps our economic well-being in the long-term."

Hawai'i's diversified agriculture sector has been a bright spot in an industry that has grappled with significant declines in pineapple and sugarcane. Farm sales of diversified goods, which is everything except sugar and pineapple rose to $370.9 million in 2002, up slightly from from $370.2 million in 2001.

Going forward, the future success of diversified agriculture in Hawai'i depends on farmers' ability to develop innovative plant varieties and increase awareness and demand for Hawai'i-grown products, said Matthew Loke, administrator for the state agricultural development division.

"Hawai'i has to compete on quality," he said. "For us to compete, technology and research has to be the cornerstone.

"Basically we produce something that nobody else has and, if there's that advantage, then we have a higher quality product. If we have a higher quality product then we can charge a higher price."

Loke pointed to the success of Kona-brand gourmet coffee, which remains a popular choice among consumers, even though it sells for six times the price of commodity coffee brands from South America.

However, orchid grower Takafuji said he doesn't have the resources to develop new plants or build a brand-name for his plants.

"You can't (compete on quality) because they're going to be able to produce the same plant," said Takafuji, who provided $500 of the $30,000 that farmers raised to pursue the lawsuit. "You're on a little pebble in the middle of the ocean and you have all the transportation costs to deal with."

Takafuji said other Hawai'i farmers may find themselves in a similar situation in the future.

"All the plants will be the same way," he said.

Lyle Wong, administrator of the state's Plant Industry Division, acknowledged that state agriculture officials aren't sure how things will shake out for Hawai'i farmers as world markets converge.

"It could be (just) the beginning and we're concerned about that," he said. But, "I would say (diversified agriculture) has a great future. We just have to be diligent and work at it.

"We're in a fight and we won't run away from the competition," Wong said.