Waimanalo farmer Dean Okimoto is looking to possibly double or triple the amount of acreage he farms for his popular Nalo Greens salad mix and other crops, in part because of rising crude oil prices around the globe.

He currently has 3.5 acres and is in talks to get about 12 more acres for his Nalo Farms. He wants to increase production of lettuce, herbs, sprouts and microgreens sold to Hawai'i grocers and chefs.

"We're trying to go after more of the local market and replace imports," said Okimoto, noting there is an opportunity rising as oil prices surge and translate into higher costs for shipping in farm goods from the Mainland.

Crude oil's rise, along with the accompanying increase in fuel prices for Matson Navigation Co. and other shipping lines, is at the heart of the discussion as costs go up to bring in refrigerated containers of produce, meat, poultry and dairy items. During the past year, Matson's fuel surcharge has risen to 33.75 percent, or 13 percentage points more than a year ago.

That, along with prospects of a continued climb in crude oil, has many implications about where Hawai'i gets its food and arguments about the state needing to be more self-sufficient. It plays into the state Department of Agriculture's attempt to boost consumption of locally grown and raised foods, and comes at a time when some people are advocating eating locally raised foods as the environmentally right thing to do.

Much of the current discussion can be traced to the near-meteoric rise in crude oil prices.

Where three years ago a barrel of domestic crude traded for under $50 on the New York Mercantile Exchange, crude prices are now more than twice that and closed trading Friday at a new record of $126.29.

RANGE OF INCREASES

The increase has many implications for farmers, ranging from the well-known increases in the cost of diesel and gasoline going into their trucks, to increases in electricity costs for their packing sheds and refrigerators and higher fertilizer costs.

But it also means higher costs of shipping Mainland produce, along with farm products sourced in Latin and South America and other parts of the globe. The possibility of much higher oil prices has sparked discussions within the Hawai'i Department of Agriculture on what that means for importing food and whether policy changes are needed to encourage more local production, said Matthew Loke, administrator of the department's Agricultural Development Division.

"If the price of oil were to go up further, say $150 to $200 a barrel, then I think we really need to look at self-sufficiency more closely," Loke said.

It is debatable how much of an opportunity the fuel surcharge is providing for locally produced goods, since it may just be adding pennies to the cost of individual items. But some see it as narrowing the pricing gap for some local farmers who compete against lower priced imports.

Because of the many shipping tariffs, it's difficult to bring down to a single number how the fuel surcharges are adding to shipping costs.

REFLECTIONS IN PRICE

For a head of lettuce, the cost amounts to pennies, according to Matson. Spokesman Jeff Hull said a 40-foot container can be packed with 24,000 heads of lettuce and that the 13 percentage point increase in fuel surcharge in the past year has amounted to 2.3 cents per head of lettuce.

While that doesn't seem like much, Loke and Okimoto believe the higher shipping costs are making some Hawai'i-grown produce — sometimes higher priced because of lower economies of scale and higher costs to do business here — more competitive with what's shipped in.

Moreover, they argue that local produce should command a higher price because it is fresher and thus tastes better and is more nutritious.

Hawai'i farmers are already dominating the markets for papaya, watermelons, green onions, sweet potatoes, tomatoes, watercress, cabbage, sweet corn, cucumbers and ginger.

But other market share remains surprisingly low compared to the products shipped in, such as those for avocados and citrus. Only 9 percent of the taro sold in Hawai'i in 2006 was grown locally.

Ken Love, a Kona avocado farmer, has seen wholesale pricing lists showing where some of the vegetables and fruits are priced lower than those shipped in, including romaine lettuce and avocados. State and U.S. Department of Agriculture statistics show local avocados only accounted for 27 percent of those sold here.

That's galling to Love, who notes a recent taste test among Hawai'i chefs found several local varieties superior to the well-known Hass avocado that's most often shipped in to the state. Love said growers need help in branding and educating consumers about the different types available here.

"You walk into our stores in the middle of our avocado season, and there's still piles of avocados from Ecuador," said Love, who also said local wholesalers need to do more in terms of promoting local produce.

The avocado issue helps illustrate that the local market operates on more than just price and that increasing the amount of food grown and raised locally is a complex issue.

'WE SUPPORT LOCAL'

No one at Love's taste test picked Sharwill avocados as among the best, but it is one of the most widely grown varieties here.

"We support local as much as we can — that has been a company mantra for decades," said Tish Uyehara, director of marketing for Armstrong Produce, one of the largest wholesalers in the state.

"But what they need to understand is you need to give the consumer what they want."

That includes making sure they provide uniform sizing, color and quality, said Uyehara, who was at the Hawai'i Department of Agriculture for a dozen years.

"Our preferences will come based on what our customers want or need."

She said large growers understand this, but that some of the state's many smaller farmers aren't always as savvy in the marketing side of their business as they are in raising crops.

"I think there is an opportunity, but it isn't going to happen overnight."

Moreover, there are questions about how shipping cost increases will affect Neighbor Island farmers sending produce to Honolulu and whether their expenses will rise at a slower pace than fuel surcharges for Mainland-Hawai'i containers. Fertilizer prices, for example, jumped 40 percent for Okimoto in a six-month period.

Okimoto said branding and education may be a viable route for smaller farmers to drive home the value of buying local produce, but noted the costs can be steep. Packaging and development of labels for his Dean's Greens product added 70 cents to his prices, he said, but has been worth it.

Then there are areas where Hawai'i needs to take a hard look, including water, better infrastructure help for small farmers and whether the government should help restart dairy farming on O'ahu. Policymakers also need to analyze what rising prices will do to Hawai'i's agricultural exports, which include flowers, pineapples, basil, papaya, coffee, ginger and Okinawan sweet potatoes.

But Okimoto said there should be some opportunities for local farmers with the rising shipping prices. At the Hawai'i State Farm Fair in July, the growers hope to make this point more apparent by holding taste tests comparing local versus imported vegetables and fruits.

"People will be really able to tell it's not only better to support local, but it tastes better, it's more nutritious," he said.

"If we don't start supporting agriculture, we won't have the farmers here when prices are really comparable. They're not going to be around to grow the stuff."