The future continues to shine
for 100% Kona coffee
Fear for Les Drent
Featuring the latest chapter written on the Kona coffee scam; a Hawaii State Coffee Association is gaining momentum and acreage in Kona continues to grow; 100% Kona coffee farmers, grinders, roasters and retailers have a lot to look forward to. Combine that with an aggressive coffee cultivation research program being conducted by the University of Hawaii and the growing popularity of Kona coffee, and it looks like there's a bright future ahead. But like any successful company, this nearly 175-year-old industry still has a lot to improve to strengthen its future.
Hoshidana (folding roof system for drying coffee) at Bay View Farm
Start a coffee schedule. An apartment of this size houses between 600 and 900 coffee seedlings, which is enough to plant an acre of coffee trees.
A coffee plant with ripe coffee cherries.
Perhaps the brightest news of the summer came as the case of Kona Kai Farms and its multi-million dollar Kona coffee fraud scheme in the Federal Building in Oakland, California, neared conclusion. After several years of negative national media attention that seriously tarnished the credibility and reputation of 100% Kona coffee, Michael Norton of Kona Kai Farms recently pleaded guilty to one count of wire fraud and one count of tax evasion.
The next page is an excerpt from the United States Department of Justice press release dated July 14, 2000.
In addition to protecting 100% Kona coffee, the industry continues to grow rapidly. However, this growth is also changing the face of local farms. Many of the new plantings are the result of large farmers planting on lots of 50 to 100 acres. For the past 100 years, coffee production in Kona has been the result of many small farms ranging in size from 1 to 10 acres. For much of the 19th century, several major coffee operations controlled most of Kona's coffee land, but with the decline of the coffee market in the early 1900s, much of the land was leased or sold to families who had previously immigrated to Hawaii from Japan. These early Japanese first worked in the sugar industry before settling in Kona to escape the harsh working and living conditions of the sugar plantations. Working for years with local mills to buy, process, and sell the precious crop has been a way of life for many in Kona. In most cases, growing coffee was just to supplement the family income and much of the work was done after normal work. Although opinions vary, some in Kona see the rise of large coffee plantations as a way to strengthen the relationship between small farmers and local mills as both recognize the importance each plays in their overall success. Some are also taking to the streets to retail their own coffee. In short, the Kona coffee industry is as diverse as ever.
A coffee garden.
The Hawaii Coffee Association also contributes to the success of all coffee production, not just in Kona but on the other coffee-producing islands as well. It may come as a surprise to some, but for many in Kona, a new coffee organization is nothing new. Various groups, including the Kona Coffee Council and the Kona Coffee Farmers Cooperative, have been formed over the years to address issues facing the industry. Yet few organizations have sustained positive growth and have been able to bring together all members of the Hawaiian coffee community. Many hope the new Hawaii Coffee Association will help further improve relationships between all factions of the Hawaiian coffee industry.
Greenwell Farms' Alex Hedger carefully watches the coffee as it passes through a gravity table. 100% Kona coffee is sorted by bean size and density.
A 100 pound bag of premium Extra Fancy coffee is bottled at the Captain Cook Coffee Company's dry mill in Kainaliu.
Greenwell Farms master roaster Kurt Penrose refines a batch of freshly roasted 100% Kona coffee.
The Hawaii Coffee Association just celebrated the fifth anniversary of its annual coffee conference in Kona last July. Once again the conference and exhibition served as a useful tool to improve many issues related to the local coffee industry. The daily fair showcased everything from coffee processing to roasting and packaging equipment, while hourly lectures covered topics related to coffee growing and marketing in Hawaii. Other activities included various gatherings bringing together farmers, millers, roasters and traders from all the islands. Many agree that in addition to applicable programs that directly address industry issues, the conference was simply a great time to exchange ideas and gain insights into coffee production in Hawaii.
A woman harvests coffee above the city of Kainaliu.
A serious topic discussed during a presentation by Mario Serracin of the University of Hawaii concerned the impact of microscopic pests known as nematodes on coffee production in Kona and across Hawaii. An ongoing study by Dr. Donald Schmitt and Mario Serracin of the University of Hawaii are attempting to offer solutions to combat these root knot nematodes, which if left unchecked, can wipe out entire coffee plantations. Studies have shown that the effects of these nematodes not only resulted in reduced yields, but also in wilting, chlorosis, delamination, root rot and eventual tree death. In severe cases, trees that can normally grow healthily for more than 75 years can die after only 5 years of planting.
Although nematodes were first documented in 1907 when they were discovered on tobacco farms in Hawaii, it wasn't until 1982 that a nematode problem in coffee was discovered. From 1994 to date, a scientific study has produced important information about the ecology-life cycle of root-knot nematodes. After the identification and studies of this species are complete, experts from the University of Hawaii are conducting several tests to learn more about how to control the nematode problem not only in Kona but in other Hawaiian islands as well.
Bay View Farm's Luis Cisneros transports fermented coffee to drying platforms.
It is now known that farmers can take several initiatives to control the spread of nematodes on farmland, one of which is to uproot trees from seed in sterile soil, rather than the "pulla pulla" method in which they remove the Tearing off stalks of young coffee plants. pulled out of the ground and replanted. This practice alone will greatly control the spread of nematodes in orchards. It is also believed that the timing and frequency of watering and fertilization play an important role in reducing nematode populations. Nematode production has been documented to increase in over-irrigated fields. To encourage this clean start to coffee tree growth, it is recommended that you use clean, sterile soil to start the coffee trees. This can be done in two ways. The first, more expensive but safer way would be to simply buy sterilized soil in bags. A second, cheaper but labor intensive way would be to sterilize the soil by boiling. This is commonly accomplished in South and Central America by cooking the soil in 50-gallon barrels over an open fire while turning it over a two-hour period.
Cuppers sample 100% Kona coffee at the annual Kona Coffee Festival.
Perhaps the most revolutionary solution to the nematode crisis may be to graft special Kona coffee seedlings onto the root systems of African coffee trees. The root systems of these African coffee trees have proven to be resistant to nematodes. While many are skeptical about the impact this might have on the flavor of Kona coffee, Skip Bittenbender and Kathy Cavaletto, horticulturists and senior coffee tasters at the University of Hawaii, say preliminary coffee cupping tests show no difference in flavor was found. In the full knowledge that Kona coffee farmers are the true judges and juries of Kona flavor, a full and comprehensive tasting by discerning members of the Kona coffee industry will be held later this year.
Romeo Ladore in the foreground and Justin Pitts in the background of freshly harvested Greenwell Farms coffee pulp.
All in all, the Hawaii Coffee Association is proving to be a useful and beneficial organization in assisting in all facets of the Hawaiian coffee industry. For more information about next year's conference or to become a member of the Association, interested individuals are encouraged to visit the Association's website at www.hawaiicoffeeassoc.org
A continuous effort continues to help protect 100% Kona coffee; the area under cultivation increases; and the alliance between small farmers and mills in Kona is strengthened. Everyone expects sustained coffee prices and a very successful 2000-2001 coffee season.
The United States Attorney's Office for the Northern District of California announced today that Michael L. Norton has pleaded guilty to one count of wire fraud and one count of tax evasion. Mister. Norton, 52, a Berkeley resident, was indicted by a federal grand jury on April 16, 1998 on multiple counts of fraud, money laundering and tax evasion.
The allegations stem from an elaborate scheme perpetrated by Norton between 1993 and 1995 to defraud businesses and consumers who bought coffee from his company believing it was 100% Kona coffee from Hawaii, even though coffee is made in America was actually significantly cheaper. During the period 1993-1996, Norton purchased approximately 3.6 million pounds of Central American coffee. By sorting, repackaging, and relabeling the Central American coffee as "pure Kona coffee," Mr. Norton was able to generate significantly higher profits than he could have had had he not misrepresented the product as Kona coffee. The government claims that this additional revenue exceeded $10 million.
In 1995 and 1996, Mr. Norton diverted approximately $1.3 million of his fraudulent coffee sales to a personal bank account in Switzerland. You did not state this income as income in your 1995 income tax return.
As part of the plea agreement entered into in this case, Norton agreed to pay the government approximately $2 million that the government had seized against Norton at the time the charges were first filed, as well as an additional $1.3 million that Norton had on his account had paid into the Swiss bank account. to avoid paying income tax.
Mr. Norton's sentencing is scheduled for October 20, 2000 at 10:00 am before Justice D. Lowell Jensen of Oakland Federal Court. The maximum statutory penalties for each wire fraud and tax violation to which Norton has pleaded guilty are; five years in prison; 3 years supervised release; a $250,000 fine and a $100 special assessment. In addition, the wire fraud charge also requires Norton to recover losses suffered by its customers.
The indictment is the result of a lengthy investigation into Mr. Norton by special agents from the US Customs Service, the Internal Revenue Service and the Contra Costa County Sheriff's Office. The prosecution was led by Assistant United States Attorneys Laura E. Gonzales and Ben Burch, with assistance from Letty Whitworth.
All media inquiries to the US Attorney's Office should be directed to Assistant US Attorney Matt Jacobs at (415) 436-7181.
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