The blend of agriculture and tourism into a niche known as "ag-tourism" is becoming an increasingly lucrative business for the state's visitor industry, a new report shows.

The value of ag-tourism rose to $38.8 million in 2006, a 14 percent increase from 2003, according to a study by the state Department of Agriculture.

However, the report, released every three years, also showed a decline in both the number of farms that conduct ag-tourism activities and the number of farms that plan to get involved in ag-tourism. There were 112 farms conducting ag-tourism in 2006, down from 187 in 2003. And the number of farms that said they intend to get into the business fell to 84 in 2006 from 145 in 2003.

Nonetheless, state tourism liaison Marsha Wienert said ag-tourism shows great promise for the state.

"We know anecdotally and by some of our statistics that people are looking for more authentic Hawaiian experiences," she said.

Wienert said worldwide there are examples of bolstering lagging sales for agriculture by tapping into an appetite for tours by people who want to know more about where their food comes from.

On O'ahu, the larger farms have been more successful with conducting tours, while smaller farms are exploring their options.

Susan Matsushima, chief executive of Alluvion farm near Hale'iwa, said she sees a lot of potential on O'ahu, especially on the North Shore. The company specializes in a wide variety of plants — grown in the nursery and out, a florist operation and even gift basket production.

Alluvion supplies lei, potted flowers, and landscape plants to begonias to a wide range of retailers. Color splashes are all over their operation — the anthuriums deftly arranged, the rows of potted plants headed for market all grown at the former dairy farm.

Matsushima — with the focused enthusiasm of a former schoolteacher — sees that the potential reaches beyond their operation at the farm on the site of the old Meadow Gold dairy. She proudly refers to the North Shore triangle fertile agricultural area that includes 50 agricultural businesses in a two-mile radius.

She points out many of the agricultural businesses: hydroponic lettuce grown at May's Wonder Garden, taro at HPC Foods, Kahuku Brand watermelon, Twin Bridges asparagus and A&K Nursery raising amazingly big and fragrant tuberose blossoms.

Matsushima envisions the possibilities for ag-tourism in the area. But she's aware of the hurdles.

While she's helped set up school tours and done special arrangements of 60 to 80 people, she realizes not all farmers can spare the time or manpower.

"You have to have someone that is available all the time to take people around," she said. While people want to visit farms, not everyone has farmers ready willing and able to show and tell."

GOT BATHROOMS?

Often entrepreneurs have a core staff of 4 to 6 people, so committing one or two people takes a huge chunk of employee power, she said. Many operations start planning tours only to realize that they'll need bathrooms for visitors that comply with federal requirements to make them accessible to the disabled.

Over at Oils of Aloha in the old Koga Theatre, Barbara Gray is ready to expand her ag-tourism business.

The North Shore company is turning kukui and macadamia nuts into a wide variety of products. The kukui oil is featured in a chic line of moisturizers, creams and after-sun lotions.

And the macadamia oils are used in gourmet cooking. Gray's company mixes the oil with infusions of garlic, herbs and chili pepper and is constantly experimenting with the flavors.

Gray said the operation used to include pressing the oil out of the nuts in Hale'iwa but expansion forced them to move the pressing to another building in Whitmore Village.

Still, the original Hale'iwa location features photos of the pressing process and then follows the bottling, mixing, labeling and packaging of the rest of the line.

The distribution of ag-tourism throughout Hawai'i has become more concentrated during the past three years as Hawai'i County now accounts for half of the farms with ag-tourism and 34 percent of the total value, said Mark Hudson, state statistician for the Agriculture Department.

Honolulu County has 12 percent of the farms and 37 percent of the total value. Kaua'i County accounts for 13 percent of the farms and its value was 16 percent of the total. Maui County accounts for 25 percent of the farms and was the only county showing a decline from 2003 with 13 percent of the total value.

A PARTNER IN EDUCATION

At Kapi'olani Community College's Culinary Arts Department, educational specialist Daniel Leung has been working with a federal grant over the past several years to work with farmers to create educational programs for both residents and visitors.

The goal is to promote Hawai'i produce through education.

And ag-tourism tours include some where a culinary instructor accompanies the group to a farm such as Aloun Farms — famous for its pumpkin patch tours and O'ahu grown melons — and then a cooking demonstration, which can be done at the farm.

Sometimes visitors get to pick pumpkins or cantaloupe as part of the tour. "Japanese visitors are so happy to be able to pick out their own melons," Leung said, because the fruits are so expensive in their home country.

He said the easiest tours to set up are for medium-to-large groups that can be scheduled in advance. But he said the college now offers farm tours through a continuing education program and by request for custom groups of 10 or more. He said such tours run from $60 to $120 a person.

"It's hard for them to deal with visitors a few here and a few there," he said.

"We have schools, visiting colleges and we market to conventions and work with tour companies," Leung said. "We also need to be sensitive to the farm's operation."

Ernest Tottori serves as chairman of HPC Foods Inc., a family business his grandfather founded as Honolulu Poi Co. Now, it's a fourth-generation business that has diversified into fresh vegetable processing — those Taro brand chop-suey mixes, bean sprouts and other vegetables plus a bakery division that puts poi in pancakes, bread and a wide variety of popular products.

His four children manage the operations in town, and he spends his time in Hale'iwa in the taro lo'i under the bypass highway. He's looking for better ways to grow taro even though his production tends to run 40,000 pounds per acre, more than five times the yield of more typical farms.

He's brought tours through, from school kids to Japanese tourists, and knows there's a market for doing more of them. "They wanted to do it every month," he said with a shake of his head. But in between battling pocket rot and the telltale pink eggs of the apple snail, Tottori said he's not likely to branch out into large-scale ag-tourism anytime soon.

Large operations — $250,000 or more in total annual farm sales — account for most of the dollar value of ag-tourism. The top 20 percent of all farms with ag-tourism generated 90 percent of the total revenue, he said.

Only approximately 2 percent of Hawai'i's 5,500 farms engaged in ag-tourism during 2006. The 40 percent decline in the number of ag-tourism operations between 2003 and 2006 is evidence that many previously involved in ag-tourism decided this venue did not fit into their business plans.

But KCC's Leung wants to help nurture that growth. "We're learning as we go," he said.

Hudson, the state statistician, agrees that the tours provide an important link to the history of the Islands. "Agriculture has always been a part of our state's culture and our sense of place."

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com.