TABLE OF CONTENTS A. EXECUTIVE SUMMARY 2 B.

BUSINESS DESCRIPTION AN ORGANIC OPPORUNITY 4 INTRODUCTION 4 PRODUCT 4 GROUNDWORK FORTHE VENTURE 4 CROPS TO BE GROWN 5 THE OPPORTUNITY 6 OUR COMMUNITY 7 LAND USE, (RE)CONNECTING TO `AINA (LAND) 7 C. INDUSTRY AND MARKET ANALYSIS 9 GROWTH IN THE ORGANIC INDUSTRY 9 THE HAWAI`I MARKET 9 LOCAL COMPETITION 11 OFFSHORE ORGANIC COMPETITION 12 FARMING IN HAWAI`I 12 CUSTOMER PROFILE 13 DISTRIBUTION MECHANISMS 15 D. MARKETING PLAN 16 PROMOTIONS AND OUTREACH 16 SPECIFIC SEGMENT STRATIGIES 17 MA`O CUSTOMER SERVICE PHILOSOPHY 17 PROMOTIONAL MATERIALS AND LABELING 18 PRICING 18 DISTRIBUTION 19 SALES MANAGEMENT 19 COMPETITIVE ADVANTAGE 19 E. MANAGEMENT PLAN 20 ORGANIZATION AND BOARD 20 GOVERNANCE 20 MA`OS POSITION IN WCRC 21 EXECUTIVE MANAGEMENT & STAFFING PLAN 22 COOPERATING EXPERTS 22 F. OPERATIONS PLAN 23 FARM PLAN 23 RESEARCH AND DEVELOPMENT 23 CROP GROWTH 23 HARVEST AND QUALITY CONTROL 24 INVENTORY MANAGEMENT 24 ORGANIC CERTIFICATION 24 FARMERS MARKETS 24 LAND, EQUIPMENT, OFFICE SPACE, TOOLS, RESOURCES 25 INCREASING YOUTH CAPACITY 25 G. FINANCIAL PLAN 26 START-UP 26 ACCOUNTING SYSTEM & BUSINESS CONTROLS 26 LONG-TERM SUSTINABILITY 26 PROFORMA STATEMENTS 26 H. RISK ASSESSMENT & CONTINGENCY PLAN 35 I. ENDNOTES 36 A. EXECUTIVE SUMMARY

Leaders must deal with apathy along the Leeward Coast (Wai`anae), perhaps it com es from poverty and repeated disappointment, or from people too busy trying to s urvive and eke out a living. We hope that those that care can reach out to thos e who dont and sow the seeds of positive change for the future of beautiful Wai`a nae. - Editorial, The Honolulu Advertiser, March 25, 2004

In September 2003, youth from a leadership training program began selling organi cally grown products at farmers markets located at health clinics in Wai`anae, Ha wai`i. Their goal was to make affordable and healthy fruits and vegetables avai lable to residents of their low-income community. The youth exceeded all expect ations products sold quickly, customers returned each week wanting more, and now these young people are poised to build on the test markets to become the larges t producer of USDA certified organic fruits and vegetables on the island of O`ah u. The Wai`anae Community Re-Development Corporation (WCRC), a Hawai`i non-profit 5 01(c)3 corporation, proposes the development of the MA`O Youth Organic Farm (MA` O). MA`O will train and employ out-of-school youth from the Wai`anae community. These youth will grow a diversity of field crops (e.g., salad greens, herbs, e ggplant) and fruits trees (e.g., mango, limes) using organic methods certified b y the U.S. Department of Agricultures National Organic Program rules, on five acr es of land leased by WCRC. The objectives of MA`O will be to: Increase productive land from 2.5 to 5-acres by the end of 2007, and expand to t en acres by 2010; Distribute 50% of produce to the Wai`anae community at affordable prices; Provide employment, as well as business and sales training to Wai`anae youth; Conduct research and provide advanced training in organic agriculture and commun ity food systems; Work collaboratively with WCRCs other programs to support the development of youn g people; and Restore idle land to productive use. MA`Os evolution dates back to 2001, when WCRC established the Mala `Ai `Opio Comm unity Food Security Initiative, a project to create a community food system to f ight hunger, improve nutrition, strengthen local agriculture and empower local f amilies to move towards self-sufficiency. In the Hawaiian language mala `ai `op io means the youth food garden, and ma`o is also the Hawaiian name of the endemi c cotton plant that makes its home in the Wai`anae area. With youth leadership development as a core objective, WCRC established a series of interconnected act ivities with the MA`O farm site as the primary training venue. Life is a daily struggle for many young people in Wai`anae. Local public school s are failing to meet the standards of the federally mandated No Child Left Behi nd Act. They experience high drop-out rates and illiteracy compared to the res t of the state. There are few opportunities for post-secondary employment and t raining. Wai`anae has the states highest unemployment rate. Teenage pregnancy r ates are high. Add to this a rapid growth in the distribution and use of crysta l methamphetamine, and a formula for community deterioration and juvenile delinq uency is created. This venture is being planned and implemented to provide an employment, training and life-style opportunity for young people, while they work to improve the com munity. MA`O is founded with an entrepreneurial philosophy that is guided by ou r Hawaiian cultural traditions, with business activities developed to revive and expand upon Hawaiians traditional love and respect for the land. There are many local projects that have attempted to integrate social enterprise with Hawaiian culture; however, MA`O stands out from its competition however, through combini ng the explosive growth predicted for the organic agriculture industry with meth ods that are deeply respectful of Hawaiian culture and sustainability. This mar ket opportunity provides fertile ground for youth to make a radical contribution to the social and economic life of the Wai`anae community, our home. The national organic food industry has experienced rapid growth over the past 20 -years. By 2001, sales of organic foods reached $8 billion and there has been

20% growth annually in national organic sales over the past 10-years, The Orga nic Trade Association projects that the U.S. organic market will reach $30.7 bil lion by 2007. While this is small compared to the conventional foods industry, O TA reports that conventional food growth is only 2-3% per year versus organic fo ods, which is growing 17-20% annually. According to the Hawai`i Organic Farmers Association (HOFA), Hawai`i imports over 90% of organic produce. At the same time, there are only nine organic farms l ocated on O`ahu where 870,000 consumers reside,). Demand for fresh, local and organic foods is best illustrated by the recent establishment of three Hawai`i F arm Bureau Federation markets on O`ahu. The Kapiolani Community College (KCC) F armers Market, which opened in late 2003, attracts over 2,500 visitors each Satu rday, and specializes in 100% Hawai`i grown products. The Hawai`i organic agric ulture industry still lags behind the national growth figures, due to inflated l and prices, the pressure of urban development, and the difficult shift from the plantation agriculture system. The scarcity of local organic fruits and vegetab les has made MA`Os certified organic product highly attractive to consumers. MA`Os competitive advantage has been well established. WCRC recently secured sub stantial funding from the U.S. Department of Housing and Urban Development, as w ell as the U.S. Department of Healths Administration for Native Americans (ANA) t o support this program. In its pilot year, MA`O established thriving farmers mar kets and strong relationships with retailers and restaurants, in which demonstra ted demand far outstripped supply. MA`O has also developed partnerships with Le eward Community College to train youth and with Maui Land and Pine CEO, David Co le, to collaborate in the development of a local organic industry. Most importa ntly, MA`O has a cadre of strong and determined youth many already trained and e ager to instruct others with ambitions beyond their years, and a drive to become the largest producer of certified organic fruits and vegetables on the island o f O`ahu. B. BUSINESS DESCRIPTION AN ORGANIC OPPORTUNITY 1. Introduction In September 2003, youth from a leadership training program commenced selling or ganically grown products at farmers markets located at the Wai`anae Comprehensive Health Center and Kaiser Permanente Health Clinic, in Nanakuli, both located on the Westside of the island of O`ahu, Hawai`i. The goal: to get healthy organic fruits and vegetables, sold at a fair price, into the regular food purchases of the low-income community. The youth exceeded all expectations products sold qu ickly, customers returned each week for more, and now a group of young people ar e poised to build on these test markets to become the largest producer of USDA c ertified organic fruits and vegetables on the island of O`ahu. 2. Product The Wai`anae Community Re-Development Corporation (WCRC), a Hawai`i non-profit 5 01(c)3 corporation, proposes the development of the MA`O Youth Organic Farm (MA` O), a venture managed by out-of-school youth from the Wai`anae community. MA`O will cultivate a diversity of field crops and fruit trees, using organic methods certified by the U.S. Department of Agriculture National Organic Programs rules, on 5-acres of land currently leased by WCRC. The objectives of MA`O will be to: Increase production of organic fruits and vegetables to a total of 5-acres, with each acre developed to gross at least $50,000 by the end of 2007; Distribute at least 50% of product into the Wai`anae community through community farmers markets; Provide employment with profit-incentives to three youth at start-up with two yo uth added by Year 2; Work collaboratively with University of Hawai`is College of Tropical Agriculture

and Human Resources (CTAHR) and Leeward Community College (LCC) to increase rese arch and advanced training in organic agriculture production; Work collaboratively with WCRCs other programs to cultivate new organic farmers; and Restore idle land to productive uses, and reawaken the Hawaiian connection to ag riculture. 3. Groundwork for the Venture In 2001, WCRC established the Mala `Ai `Opio (MAO) Community Food Security Initia tive. This initiative was developed in order to create a community food system, fight hunger, improve nutrition, strengthen local agriculture and empower local families to move towards self-sufficiency. In the Hawaiian language mala `ai ` opio means the youth food garden and ma`o is also the Hawaiian name of the endemic Wai`anae cotton plant. WCRC established a series of interconnected activities with youth leadership development as a core objective and the MA`O farm site was established as the primary training venue. These activities now support the lo ng-term competitive advantage of MA`O, and are described as follows: ACTIVITY HIGHLIGHTS 1. Youth Leadership Training (YLT). The YLT is a 10-month long, 18-hours p er week, leadership training for low-income, out-of-school, Wai`anae youth, prov iding them with a paid educational, entrepreneurial, and agricultural work exper ience. This is the recruitment and training mechanism for MA`O Farm, an d provides a regular labor source for farm operations. 2. Aloha `Aina Caf and Natural Foods was opened in April 2003, specializes i n healthy breakfasts and lunches using locally-grown products. The caf will be a customer, a farmers market site and a showcase for MA`O products. As a commercial kitchen, the caf provides for the possibility of value -added product development opportunities. 3. Local Community Farmers Markets. Four farmers markets have been establish ed at the Aloha `Aina Caf, Wai`anae Comprehensive Health Center, Kaiser Permanent e Health Clinic, and Leeward Community College (LCC). Farmers markets have test ed and proven demand. The local customer base has been introduced to the organic concept and the MA`O product. Clinic markets support the WCRC mission. 4. Ai Pohaku Workshop, hands-on, culturally-based learning activities at Wa i anae Intermediate School (WIS) and Wai anae High School (WHS), that mix tradit ional Hawaiian taro cultivation with edible, organic school gardens. The gard ens illustrate the skill-set and experience already developed in the youth that will lead MA O and provide fertile ground for youth training and recruitment. 5. The Wai anae Organic Agriculture Center, in partnership with Leeward Com munity College (LCC), expands research and training activities in Wai anae. The partnership was awarded a U.S. Department of Housing & Urban Development gra nt of $579,000 to purchase 2.5 acres of WCRCs leased land, and to build an improv ed post-harvest packing and chilling facility which will increase MA Os productio n handling capacity. 4. Crops to be Grown Over the past three years, WCRC has developed farm operations on 2.5-acres as an integral training component of the Youth Leadership Training. This commenced w ith the planting of fruits trees and bananas and the organic conditioning of soi ls for field crops. Thereafter, approximately 30 field crop varieties were grow n and sold, with information gathered on: (a) Best seed varieties; (b) Hardiness of crop to local conditions; (c) Reaction of crop to organic methods of product ion; and (d) Marketability. Product was sold to Kokua Natural Foods Cooperative , a cooperatively-owned grocery store specializing in organic foods located near the main campus of the University of Hawai i. Kokua has a customer base of edu cated professionals, vegetarians, and people generally adept at cooking. This e xperience gave WCRC product feedback, as well as information on the demand for, and lack of supply of, locally-grown, organic fruits and vegetables. Through th e development of this venture, MA O will assume overall responsibility for farm

operations of the already developed 2.5-acres, and in May 2005 will begin prepar ation and cultivation of an additional 2.5-acres. Hawai i has a 12-month growin g season and crops to be grown include:

Cilantro Daikon Pak choy (bok choi) Romaine lettuce Various lettuces, arugula, kale, chard, beets and Asian greens (tat soi, mustard greens, mizuna) combined to produce two different salad mixes This will be our regular rotation (short) planted every 14-days, ready to harvest from day-28 thro ugh to day-45, with crops completed in 50-days. Beets Carrots Fennel Green onion This will be our regular rotation (long) planted every 28-days, r ady to harvest from day-70 through to day-100, with crops completed in 105-days. Basil Collard greens Eggplant (Japanese and Italian) Kale (Red Russian, blue curly, lacinato) Parsley (curly and flat-leaf) Swiss chard Taro This will be our perennial rotation planted every 3-months, ready to harv st in 80-days, with crops completed in 5-6 months. Lemon (Meyer variety) Mango (Haden and Kiett varieties) Orange (various Washington naval varieties) Tangerine (Clementine and Fremont varieties) Trees will be planted as an inco me-generators with first harvest being in year 3, and as a wind break on the win dward areas of the farm. 5. The Opportunity MA O will utilize the organic production techniques and market research achieved through WCRCs start-up period to expand production and sales. The youth-managed venture will provide planned financial incentives based on business and persona l performance. MA O will sell fruits and vegetables at the already established farmers markets, at the recently established Kapiolani Community College (KCC) Fa rmers Market, held every Saturday morning in Honolulu (the market attracts over 2 ,500 visitors each week), and to restaurants. In October 2004, WCRC received a $456,000 two-year grant from the U.S. Department of Health and Human Services Adm inistration for Native Americans (ANA), for Native Hawaiian youth education and economic development activities. The ANA grant will provide salary support for 2-years for a total of five Native Hawaiian youth and project directors, and cov er costs of equipment needed to operate a farm. WCRC carries a 25-year lease fo r 5-acres, 2.5 of which will be purchased in early 2006 using the aforementioned U.S. HUD federal grant. 6. Our Community MA O is situated in a community of 45,000 residents, of which more than 40% are Native Hawaiian. The entire Wai anae Coast has levels of poverty near 20% with some census tracts exceeding 50%. On the Wai anae Coast 45% of the entire popu lation is under the age of 25 years, 34% is under the age of 18 years versus 24% across the State of Hawai i (Census 2000). The current unemployment rate for O ahu is 3.5% while the Wai anae Coast rate is approximately three times the isla nd average. A report on food security to the 2003 Hawai i State Legislature (A Report to the Legislature on SCR 75, SD1, HD1, 2002), submitted by the State Office of Planning , describes Wai anae is one of the worst of the at-risk, food insecure communities

, which translates to poorer self-reported physical and mental health, higher le vels of obesity, diabetes, and arthritis. According to the Wai anae Coast Comp rehensive Health Center, the largest local health provider, at least 50% of resi dents suffer from obesity. Over multiple generations Wai anae residents have be come dependent on the welfare system in which the percentage of people in Wai an ae receiving welfare support (Temporary Assistance to Needy Families and Food St amps) is four times that of the State of Hawai i. And yet, this is not our comm unitys history. Wai anae was once a self-sufficient community, easily growing fo od and managing land and water resources to provide for community needs. Wai anae youth, a majority of whom are of Native Hawaiian descent, attend local public schools that are failing to meet the federally mandated No Child Left Beh ind Act. Worse still, when you look beyond the school environment, there are fe w opportunities for post-secondary employment and training, strained parents and families, and high rates of school drop-out and illiteracy compared to the rest of the state. Add to this a rapid growth in the abuse of crystal methamphetami ne and you have a formula for perpetuation of difficult conditions in Wai anae. 7. Land Use, (Re)Connecting to Aina (land) and Community Values One of the core Hawaiian values is aloha aina or love of the land. In pre-cont act Hawai i, people lived within an agricultural system that sustained as many a s 500,000 people. Wai anae has a rich agrarian history, from the pre-contact We stern period when Hawaiians farmed the entire region, through to the late 1800s a nd early 1900s when Hawaiian, and Chinese, Filipino, Okinawan, and Japanese immig rants farmed the valley regions independent from the more dominant plantation ag riculture system. Fresh water, a precious resource in arid Wai anae, was carefu lly managed, with a portion diverted to taro patches in the upland and then retu rned to the stream with nutrients that would feed into the estuaries and coastal fisheries. Crops such as taro, banana, sweet potato and breadfruit were raised in abundance, but over time Hawaiian farmers have lost the use and ownership of the land.

Today, Wai anae residents still embrace the idea of an agricultural community, c haracterizing the area with terms like rural, open space and agrarian lifestyles. Ho ever, the economy and peoples lifestyles have moved away from agriculture. Two o f our most fertile valleys are used predominantly by the U.S. military: Makua Va lley is used exclusively for live fire training; and 75% of Lualualei Valley, wh ere MA O is located, is used for munitions storage and as a naval communications base. Makaha Valley, to the north of Lualualei, has an exclusive gated communi ty, with a resort and two golf courses. In addition, much of Lualualei Valleys p rime agricultural land is no longer in production because the past generation of farmers encouraged their children to move away from the hard life of farming, e ncouraging them to seek professional careers. The Wai anae area already has thr ee landfills, and more prospective sites have been identified. In order to revi ve and expand upon Hawaiians traditional love and respect for the land, MA O has been founded with an entrepreneurial philosophy that is rooted in our cultural t raditions. C. INDUSTRY AND MARKET ANALYSIS 1. Growth in the Organic Industry From the early 1960s to 1980 the organic agriculture industry grew steadily acros s the United States. In the 1960s the industry was jump-started when information on the dangers of pesticides came to public prominence, most notably with the p ublication of Rachel Carsons Silent Spring in 1962. Consumers grew to understan d the connection between personal and environmental health, and over the course of time a genuine shift in food consumption patterns occurred. After 1980, the organic foods sector grew rapidly. By 2001, sales of organic foods reached $8 b illion and there has been 20% growth annually in national organic sales over th e past 10-years. There are multiple factors that have contributed to this growi

ng demand, including: th; Increase in diet related illnesses, such as the rate of U.S. obesity amongst you Increased health care costs and adoption of preventative medicinal practices; Growth in the physical fitness industry, gourmet cooking, and fine dining; Public awareness of fast-foods detrimental impact on health; and Major public health crisis, such as Mad Cow disease.

What was once an industry propelled by farmers markets and natural foods cooperat ives has now become mainstream. The Organic Trade Association (OTA), the leadi ng industry advocate, lists some examples of growth trends; including: In 2002, more organic foods were purchased in regular retail supermarkets than a ny other location. Organic foods are now available in over 20,000 natural foods stores and are found in over 70% of conventional retail groceries; Huge food and beverage corporations, such as Kraft and Coca-Cola, have now joine d the organic market by purchasing leading organic brands. USA Today reported i n their December 2, 2004 edition that the San Diego Padres and the St. Louis Car dinals would be serving organic franks alongside conventional hot dogs; and A national survey done in 2002 of 1,000 consumers showed that 58% had purchased organic foods. OTA projects that the U.S. organic market will reach $30.7 billion by 2007. Thi s is still miniscule compared to the conventional foods industry but OTA reports that conventional food growth at 2-3% per year while organic foods has been cli mbing at the growth rate of 17-20% annually. 2. The Hawai i Market The Hawaiian demand for organics may not easily correspond with national market trends due to our unique location. Certainly there have been similar public hea lth and environmental scares. In 1993, the chemical pesticide heptachlor, recog nized by the EPA as carcinogenic, was banned because residues were found in a nu mber of agriculture products including cows milk and cucumbers. Heptachlor had b een used to eradicate ants from pineapple and to kill termites in homes. Desp ite this type of impetus, Hawai i has been slow to embrace organic foods. The National Agriculture Statistics Service (NASS) reported in 2003 that of Hawai is $553 million total farm revenue, only an estimated $4.8 million was organic (les s than 1% of total Hawai i farm revenue). Comparatively U.S. organic produce re presents over 2% of total farm revenue. There are seven small natural foods stores on the island of O ahu and like the c ontinental U.S., organic fruits and vegetables can now be found in Hawai is regul ar retail grocery stores. Of nine regular grocery outlets surveyed for this bus iness plan, six stocked organic fruits and vegetables. Of the three that did n ot stock organic produce one had been in recent contact with MA O to purchase pr oduct. Of the six stores that did stock organic fresh produce, a non-scientific visual survey of inventory showed that less than 10% was locally sourced. In t wo stores none of the organic produce was from Hawai i. Hawai i imports over 80% of all fruits and vegetables, and 90% of fresh organic produce. Organic foods already sell at a premium, where the additional cost o f shipping to Hawai i increases the retail price of organic foods out of the ran ge of most local residents. Recently, however, big-box retailers such as Costco have started importing large volumes of organic salad greens from California, s elling them at a third of the price of the same locally produced product. For the most part, the local trend in organic foods is closely aligned with the emer gence of Hawai i Regional Cuisine, a merging of Eastern and Western cooking infl uences that mirrors Hawai is cultural diversity. Chefs have connected with smal ler farms to source the freshest ingredients and have asked for organic fruits,

vegetables and meats. This market had been predominantly a tourist audience (hi gh-end, college-educated travelers staying at resorts), but over the past decade many restaurants have been established in local communities. This trend has st imulated the local market, and is best illustrated by the recent establishment o f three Hawai i Farm Bureau Federation (HFBF) farmers markets on O ahu. In Honol ulu, the Kapiolani Community College (KCC) Farmers Market, opened in late 2003, attracts over 2,500 visitors each Saturday. The markets development has been cri tical for local farmers because it is the first time a market has required all p roducts be grown in the Hawaiian Islands. At other farmers markets on O ahu, suc h as the City and County of Honolulu operated Peoples Open Markets, vendors may s ell imported fruits and vegetables. According to the Hawai i Organic Farmers Association (HOFA), the local trade asso ciation for organic growers, there are now approximately 132 certified organic f arms in the State of Hawai i with only nine located on O ahu where 870,000 cons umers reside. It is difficult to extrapolate exactly how large the organic fru its and vegetables market is on O ahu, partly because State agencies do not as y et collect organic-specific data. A measure of industry size can be understood by looking at growth trends related to a leading retail outlet on O ahu called Kokua Natural Foods Cooperative. Fo rmed over 25-years ago, Kokua has a membership of 2,400 and occupies a small gro cery outlet approximately 2,000 square feet, close to the campus of the Universi ty of Hawai i. The membership, staff and Board have collectively decided that a n expansion is imperative at this time because currently no national health food chains, such as Whole Foods or Trader Joes, have entered the Hawai i market, and there are industry rumors that Whole Foods is researching local store locations . Kokua hired industry consultants to survey the market potential and reported that Kane ohe, located on the Windward Side of Oahu, would be an ideal location f or expansion. Kane ohe has a population of 35,000 people, and the industry cons ultants deduced that the total natural foods market for Kane ohe is valued at ov er $4 million, with 18-20% of sales predicted to be organic fruits and vegetable s. Since Kane ohe represents 4% of O ahus population, the overall organic fruit and vegetable market size could be as large as $20 million. Local industry leaders believe that organic agriculture is poised to expand. In a Hawai i Business Magazine special report on agriculture, various experts, inc luding Mr. Alan Takemoto, Executive Director of the Hawai i Farm Bureau Federati on, identified organic agriculture as having great potential in Hawai i. In supp ort letters, Ms. Joan Namkoong of the Hawai i Farm Bureau Federation and Mr. Dav id Cole of Maui Land and Pine clearly state that the market is wide-open. Mr. C ole states that there is great economic potential especially given the growing cons ciousness of consumers. 3. Local Competition There are a number of small organic farms that operate on O ahu. These farms ge nerally sell products wholesale to local health food stores because this ensures a steady price and quantity demand, contrary to farmers market booths that pose increased risk and require investment in an increased labor force. There have b een two well-known local certified organic growers: Ko Farms sells fresh herbs, salads, and greens to all of Hawai is natural foods s tores, and to a number of supermarkets. They recently sold their Waimanalo farm , and the owner Daniel Ko now works for the State Department of Agriculture. Da niels wife still grows specialty herbs and sells to all the natural foods stores. The quality of their product is very high, but production capacity low; and Lone Palm Organic Farms on the Big Island of Hawai i. Lone Palm is one of only a few neighbor island organic growers that regularly ship to O ahu. They specia lize in high quality sprouts and lettuces and work with three other growers to m ake salad mixes sold to natural foods stores, restaurants and supermarkets. The

ir product is very high quality and strongly supported by local consumers in hea lth food outlets, and their production capacity is high. Two other certified growers occasionally attend KCC Farmers Markets they are: (1) Ono Organic Farms, a 30-acre Maui-based grower of exotic fruits, papaya and ban ana; and (2) Lotus Farms, a 1-acre O ahu based chicken farm. A scan of HOFAs cer tified growers list shows that the majority of local growers tend towards mono-c ropping products such as macadamia nuts, papaya, pineapple or coffee. Maui Land and Pine (MLP) is the largest grower in the State and specializes in organic pi neapples. They will certainly expand in the future, but as the support letter indicates they are exited about collaborating to expand the overall organic mark et in Hawai i. There are regularly thirty-five booths at the KCC Farmers Market, of which 15-20 are farmer-operated fruit and vegetable sales booths. There are a number of co nventional farmers that grow the same vegetable varieties as MA O, one of the mos t successful is Dean Okimoto. Mr. Okimoto owns Nalo Farms, a 5-acre farm recogn ized as one of the most successful farms in Hawai i today. Mr. Okimoto has been able to penetrate the high-end restaurant market and his signature Nalo Greens, a delicate combination of mixed baby lettuces, is featured at over 100 of Hawai is best restaurants. It is often difficult for consumers to distinguish between o rganic and conventional products, however, at MA Os sales booth our young Hawaiia n sales representatives are large in number and energetic, and their exuberance draws customers to our products. Signage at our booth features liberal referenc e to organic which quickly informs customers of our status as organically-certifie d. 4. Offshore Organic Competition MA O will directly compete with offshore farms at Kokua but our broader sales st rategy is to sell through farmers markets, where imported products are prohibited . The growth of local-only farmers markets will help to insulate MA O from offsh ore competition. Nevertheless, offshore farms capture 90% of our market, so it is critical to understand who they are. Two of the largest are: Earthbound Farms, is one of the largest certified organic producers in the U.S., comprising 24,000 acres in California and Mexico. Earthbound grows a wide rang e of field crops but currently only the salad mixes are sold in Hawai i through conventional supermarkets and large retailers (Costco, Safeway, Star Market, Foo dland) and at natural foods stores (Down to Earths three O ahu locations). Their products are excellent, but like other imported items, suffer from short shelf life. Cal-Organic Farms, is an organic division of Grimmway Enterprises, Inc., a growe r of conventional product. They distribute carrots, chard, green onion, kale an d many herbs to all of Hawai is natural food stores and conventional supermarkets . Their product quality is average to high. Kokua has complained that their sh elf life is less than MA O grown produce, and Kokua has preferred to purchase MA O produce over Cal-Organics, when available (this has included kale, chard, and green onions). 5. Farming in Hawai i If the market for organic fruits and vegetables has so much potential for growth , why arent more conventional farmers shifting to organic production, and why are there so few new farmers entering this sector? There are multiple factors, whi ch converge to make entering organic production very difficult. On O ahu inflat ed land valuations make it extremely costly to secure land for either organic or conventional farming. The average cost of an acre of undeveloped farmland in W ai anae is now over $80,000, while the median sales price of a home on O ahu is over $500,000. Concurrently, there is considerable pressure from urban develo pment for more land. The Kunia Plain, once O ahus largest sugar growing area, is being encroached by housing developments. Most new farmers enter the market vi a leased land, with the market rate being $125 per acre per month. Leasing, how

ever, can be problematic as landowners have preferred short-term leases because of the potential to rezone land from agriculture to urban for housing developmen t. Even O ahus largest growers, Jefts Farms and Aloun Farms, have large portions of their land in short-term leases, some less than 5-years. Best practice organic agriculture requires an investment in soil building/condit ioning, which means income-generation does not start until late in year one of a n operation, at the earliest. Also, there should be periods where fields are le ft fallow and cover crops are planted, as this improves soil quality. Again, th is increases the time out of production. Most growth in the local organic agric ulture sector has occurred on the neighbor islands, especially the Big Island of Hawai i, where land is cheaper. Other reasons why there are few local organic farms, as suggested in supporting letters from Ms. Joan Namkoong and Mr. David Cole, include limited local technic al expertise in organic agriculture and a lack of coordinated support amongst ag ricultural sectors and agriculture supporters. Hawai i is transitioning out of plantation agriculture and there is limited entrepreneurial capacity amongst new growers. David Cole, the current Maui Land and Pine CEO, and former CEO of Nav iSoft Inc., and former president of AOL s New Enterprises Group, states in his s upport letter that: The transition away from the plantation model has been difficult because the farm industry has been slow to adapt to the new environment, there have been few mar ket makers to match local producers with consumers and there is a lack of capita l available to pioneering entrepreneurs. In 1996, Mr. Cole acquired Sunnyside Farms, a 500-acre Virginia farm. He re-lau nched Sunnyside as a certified organic supplier of gourmet quality fresh produce and meats. What makes the MA O venture especially unique is that it is on the cusp of being a market maker and pioneering entrepreneur while being a non-profit so cial enterprise. 6. Customer Profile In the initial phase of market development, five sales locations with uniquely d ifferent core customers have been tested: (1) farmers markets at different busine ss locations where MA O was the exclusive vender (including health clinics); (2) a low-medium end Wai anae grocery store; (3) a high-end farmers market; (4) a hi gh-end health food cooperative grocery outlet; and (5) a high-end gourmet restau rant in Honolulu. An overview of how these locations have evolved into clear se gments can be seen in the following table:

Customer Segments Buyer Behavior Needs (perceived) Alternatives Competitive Advantages High End (tourist foodies) Looking for a native and local experience Want to try something new High quality Good looks and taste Exotic, unique choices Authentic, local, native Restaurants / cafs Conventional vendors Grocery / health food stores Fresh and locally grown Organic Youth and products (taro, mangos) native and local therefore authentic High End (local, foodies) Looking for fresh, local grown, organic Increasing social consciousness when buying Demands high quality produc eshness, appearance, and taste for repeat business Health food stores Other market vendors Restaurants, cafes Fresh and locally grown Organic

 Diversity of offerings compared to other market growers Youth and social mission of WCRC Low-Moderate (local/ Hawaiian) Makes necessary food purchases, need to spread t heir food dollars Bang for the buck Food that tastes/looks good Food they like Local grocery store Prepared foods Fast food and restaurants Conventionally grown foods Recognize youth growers Have been instructed to buy foods by health care providers MAO produce looks better, has different selection Pricing comparable to local conventional retail items but with a marketable edge Retailers Products in high demand and/or trendy Want to make a mark-up on re-sale Competitive price Top quality and appearance Organic fills new niche Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product Restaurants Products in high demand and/or trendy Freshness and reliable source Competitive price Top quality and appearance Fresh, local, organic Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product Social mission 7. Distribution Mechanisms MA O will connect with the five aforementioned segments by selling product at th e following locations: High-end (tourist) High-end (local) Low-moderate Retail Restaurant KCC Farmers Market, Honolulu Wai anae Health Center Kaiser Clinic, Nanakuli; Leeward Community College, Pearl City Aloha Aina Caf (farmers market booth) Aloha Aina Caf Town Restaurant, Honolulu Wai anae Store Kokua Natural Foods Cooperative, Honolulu We have gained invaluable experiences thus far in the diversity of markets penet rated. Some trends have developed which are worthwhile mentioning here: (1) At health clinics care-providers and dietitians have staged cooking demonstrations to teach patients new recipes using MA O products, and doctors have purchased un sold product to support the social mission (2) At Leeward Community College facu lty and administrators regularly call the farm to make large orders, this takes some of the guess work out of what to take to a farmers market; and (3) The KCC F armers Market has become an attraction, there are food demonstrations and musicians , and people use the market as a convenient place to meet. All segments are rep resented at KCC including small restaurants that shop for specialty items and to investigate new product suppliers. Also Kokua Natural Foods is in close proxim ity to KCC Farmers Market, unsold product, can be sold to Kokua if necessary.

D. MARKETING PLAN 1. Promotions and Outreach The critical strategy for outreach involves customer education of the uniqueness and benefits of organic foods, and the social mission of MA O. Through multipl e branches of media, and with the assistance of WCRCs partnerships, MA O has enjo yed some high profile free advertising, which has set the stage for current posi tioning. This has included:

OUTREACH SEGMENT CONNECTED TO: MA O products were featured on a 30-minute cooking show called Sam Choy Presents. Well-known local chef Sam Choy was hired by Kaiser Permanente to stage a live c ooking show at a local clinic to feature low calorie and vegetarian recipes. Both high-end (local), low-medium, and restaurant segments. The Hawaiian Electric Company has a 30-minute cooking show called The Electric Ki tchen, the Aloha Aina Caf was a guest restaurant and prepared dishes using MA Os h erbs and baby greens. Crossed both high-end (local), low-medium, and restauran t segments. University of Hawai i (UH), working with KITV, a local television station, featu red MA O as a program partner in a news segment called Discover UH, Youll Be Amaze d. Two segments appeared, including a 30-second commercial that ran for to-weeks between the local evening news. All segments except perhaps high end (to urist) KITV has developed additional footage of MA O, and added to other activities uni que to Hawai i to develop an in-flight commercial for Hawai i that runs on fligh ts coming to Hawai i from Japan. Both high-end Hawaiian Airlines in-flight magazine, Hana Hou, featured the farm in a 5-page ce nter-spread with color photos, appeared in the December 2003 issue. Both hig h-end segments. The youth leadership training was featured as a center-spread in the Office of H awaiian Affairs monthly newspaper called Ka Wai Ola o OHA. Low-moderate seg ment. Farm activities were featured in a two-page spread in the Honolulu Magazine, a m onthly-published magazine. MA O was included in the 2004 food edition. High-end (local) Farm activities were featured in one-page spread in the Honolulu Weekly, a free alternative newspaper featuring politics, entertainment and arts. High-end (local) This publicity has occurred over 2-years and has increased MA O recognition. In 2002, youth developed a MA O farm tee-shirt which on the front read no panic, go organic. Over 2,000 tee shirts have been sold and the playfulness of the messag e has become iconic of the grassroots social mission of MA O. 2. Specific Segment Strategies

Customer Segments Specific Outreach Strategies High End (tourist foodies) No specific strategy except when segment attends KCC farmers market. High End (local, foodies) Connect to repeat customer at KCC and develop that mer to cross-market to Town Restaurant and Kokua Continue to build e-mail database Invite customers to attend monthly community work days. Low-Moderate (local/ Hawaiian) Maintain high community profile through presence at markets, occasionally story in the local community newspaper, and by posting fliers and brochures at the Aloha Aina Caf Connect to, and nurture, repeat customers at farmers markets. Continue to build e-mail database Invite customers to attend monthly community work days. Retailers Provide on-site marketing collateral such as laminated product n ametags for vegetables, fliers, and brochures.

 Invite retailer to bring staff to the farm to increase education on product and mission. Restaurants Encourage restaurant management to acknowledge MA O on menus Provide on-site marketing collateral such as fliers, and brochures. Invite restaurant to bring staff to the farm to increase education on product an d mission.

The farmers market booth is arranged to stimulate customer senses, by: Fruits and vegetables are arranged to catch the eye through color and shape; Youth wear bright green or blue tee-shirts with MA O on the rear and no panic, g rganic on the front; Product is stacked in wicker baskets which conjures a nostalgic sense of old Haw aii, this is how Mom and Pop stores displayed their products; Samples of product are always available, e.g. ripe bananas are given to all chil dren that stop by the booth; Sales youth are lively and playful, chanting slogans such as fresh organic greens or simply arugula, and when time allows a youth might play ukulele; Prices are posted on old-style school blackboards and written in chalk; and Posters with photos of the farm and youth working are arranged where people cann ot miss seeing them. 3. MA O Customer Service Philosophy Excellent customer service skills are vital in agriculture businesses, especiall y enterprises direct marketing to customers. Our goal is to attract and retain customers through high quality product and service experience, therefore; all yo uth are trained in sales and customer service, and they regularly debrief farmers market experiences to find ways to improve sales. We will periodically audit our sales techniques and make necessary adjustments. Of key importance is that you th are knowledgeable regarding products and convey our social mission. To reinf orce the importance of customer service we developed a simple sales philosophy, which youth learn and apply, it is as follows: Make eye contact, greet all people, smile, show maximum aloha; Listen to customers, learn their names, learn how they cook our food, and ask ho w we can improve our products; Communicate with customers, tell them the MA O story, talk about our products, t he farm, and upcoming events; Show aloha to other venders, learn their names and something about their product s, refer customers to them where possible; and Strive for excellence in customer service and product quality. 4. Promotional Materials and Labeling To ensure customer education and information transfer, we developed the followin g promotional materials, this includes: Brochures, fliers, posters which are distributed at all locations; MA O information is added to stakeholders staff bulletins; E-mail distribution lists, sent twice monthly to an in-house list, and the lists of our stakeholders. This reaches approximately 2,000 people; Partner marketing, e.g. marketing is done by the Hawai i Farm Bureau Federation via a web site and regular articles in local newspapers; and The caf staff actively informs customers of the markets, and there is signage alo ng a major town thoroughfare. MA O Youth Organic farm will sell produce simply under the MA O brand label. In m id-2003, a youth involved with the project developed a label that will be used ( see right). All MA O brand products will be sold with labeling to educate the con sumer that the product is certified organic, is grown by youth and that 100% of their purchase will go to support youth leadership development activities. 5. Pricing Overall prices have been set based on competitors prices. Wholesale prices are b

ased on the equivalent wholesale price Kokua Market pays for the same imported p roduct. Usually each quarter Kokuas produce buyer gives us a printout of what he is paying California food brokers for product. If they are receiving a discoun ted price for an item we attempt to make an adjustment. Once per month we monit or retail prices at three retail outlets. We sometimes do this as a class field trip for youth in the leadership training. Selling product at KCC farmers marke t allows us to average our price upward to secure a higher margin. At KCC we ca n also move large volumes of product given the number of market shoppers. The b ottom line is that if we are to compete against imported products then we need t o offer prices attractive to the local public. Direct marketing, through such m echanisms as farmers markets, has become the best method to increase margin for s maller farmers. 6. Distribution Through a U.S. Housing and Urban Development grant, WCRC purchased a 2004-model Ford E-350 extended cargo van. The cargo van will be used to deliver produce to farmers markets. Two personal vehicles owned by staff are currently used for th e smaller markets. In 2005, we will purchase two additional vehicles using ANA funds. We use reusable plastic vegetable container totes to package produce for wholesale deliver. These are more hygienic than cartons as they can be easily sanitized. Large coolers are used to transport vegetables to farmers markets; sp ace in the van is equivalent to 24 large 120-quart coolers. 7. Sales Management Under the tutelage of Gary Maunakea-Forth, a youth co-manager, Ms. Kanoe Burgess , manages weekly sales. Kanoe has been with WCRC for 2-years and has already de monstrated sales acumen beyond her years. She is an excellent communicator, and is able to install a sense of confidence and trust in our wholesale and retail clientele. She supervises and motivates youth crews working at farmers markets. Development of the youth-to-customer relationship has increased return clientel e, especially at farmers markets; therefore it is fitting to enlist a youth to ma nage the maturation of our sales strategies. 8. Competitive Advantage Five-months prior to opening Town Restaurant Lesa Griffith, a food critic for th e Honolulu Weekly, wrote that Chef/Owner Ed Kenney would open what could be Honol ulus hottest restaurant. In the same article Kenney summarized MA Os relationship with Town, and in effect our competitive advantage, by stating that: MA O takes it from the earth to the seed to growing the thing to picking kids out of the community who are in need of help, teaching them the Hawaiian culture, t hen (they) take it to their caf and markets. That whole thing fires me up. Town opened in March 2005, and in her culinary review, Nadine Kam of the Honolul u Star-Bulletin stated that: Town raises the bar for Honolulu s restaurateurs. I hope that, like patrons who are flocking to the restaurant, other chefs eventually get it. She added that: Their philosophy is local first, organic whenever possible, with aloha always, and it shows in MA O Farms greens that do taste as if they were hand-picked from the field seconds before hitting the plate. Over the past 2-years, WCRCs activities, branded as MA O, have received widesprea d media attention. The convergence of social mission (youth development) and ma rket demand (organic foods) has positioned MA O on the verge of an incredible op portunity. Planning, hard-work and skill development have built the foundation for a superior quality product emblemized by freshness, local and now organic. With trategic educational materials, a grassroots approach to promotions, and word-of -mouth support, our customer base will expand and mature in quick-time.

E. MANAGEMENT PLAN 1. Organization and Board MA O is a pilot program of the Wai anae Community Re-Development Corporation (WC RC), a non-profit 501(c)3 community development organization. WCRCs mission is t o plan and implement community-based economic development projects which create sustainable employment and business opportunities for Wai anae residents, especi ally youth. In 1999, our community came together to develop an application to t he U.S. Department of Housing and Urban Development for Empowerment ZoneEnterpris e Community status. While the application was unsuccessful, a group continued t o meet to discuss five interest areas: out-of-school youth, sustainable economic development, agriculture, health and Hawaiian culture. The group decided to es tablish an organization with social enterprise development as a key objective. WCRC was incorporated in 2001. 2. Governance WCRC has an active and committed Board of Directors, with extensive experience a nd a commitment to community service. The Board meets every month and they are responsible for policy making, financial oversight, adoption of annual budget, a nd support of grassroots fundraising efforts. All Board members are residents o f the Wai anae community and are of Native Hawaiian ancestry. The Board include s: Kaimana Pine -- WCRC Board President and a founding member of WCRC. Mr. Pine is only 25-years old and has for the past 5-years owned and managed one of O ahus l ast remaining locally owned and operated surf shops. In 2003, he developed a gr aphic design and internet marketing business that specializes in promotion of Ha wai i manufactured products. Malia Miles -- WCRC Board Vice President and current food manager at Pu u Kahea Christian retreat center. Ms. Miles has many years experience in culinary arts and food service and is highly active in community affairs. Cris Akao -- WCRC Board Treasurer and Branch Manager of American Savings Bank, W ai anae. Ms. Akao was born and raised in Wai anae, graduated from both Wai anae Intermediate and Wai anae High School and has worked as Manager and Operations Director for ASB for over 12-years. She brings extensive experiences in communi ty banking, financial oversight, small business financing, and accounting to WCR C, and is responsible for review of monthly financial statements. Kawika Naho opi i -- WCRC Board Secretary and the Center Manager for Olelo Comm unity Television in Wai anae. Mr. Naho opi i is a video production trainer and coordinates community outreach, volunteer and staff management at the Wai anae s tudio, and provides technical assistance and artistic direction to Wai anae High Schools award winning Searider Productions multi-media program. Austin Miles -- WCRC Board Member and caretaker of Pu u Kahea Christian retreat center. Mr. Miles is active in community organizing and until recently owned a nd operated a popular local eatery where he was head chef. 3. MA Os Position in WCRC MA O will operate as a pilot project of WCRC. WCRC has secured initial funding to launch MA O. Starting in year 3, youth employees of MA O will receive a bonu s based on their performance and MA Os profits. This will provide incentives for the youth to be full partners in expanding production and sales. 4. Executive Management & Staffing Plan Gary Maunakea-Forth is currently WCRCs Agriculture Director, responsible for over seeing agricultural production, expansion, and training of staff and volunteers. Mr. Maunakea-Forth will devote 100% of his time to MA O (resume attached). Ot her staff dedicated to the development of MA O are: J. Kukui Maunakea-Forth is currently WCRC Executive Director. Ms. Maunakea-Fort h holds a BA in Pacific Island & Hawaiian Studies, and a BSc in Cultural Anthrop ology and has more than 10 years experience teaching and managing non-profits.

Twenty percent of her overall time will be devoted to administrative and fiscal management for MA O (resume attached). William Aila, Sr., is currently Farm Manager for WCRC and kupuna (elder and ment or) to youth in all of WCRCs activities. He has over 35-years experience in ranc hing, farming, and composting as a business owner, and an extensive background i n heavy equipment operations. Currently he is a part-time contract employee wit h WCRC and half of that time will be devoted to MA O to provide land clearing an d irrigation system development (resume attached). Youth are central to MA O. Three Native Hawaiian youth, recent graduates of WCR C leadership training programs, have been employed. The youth are: Kanoe Burgess. Ms. Burgess, 21-years old, has already gained national attention , through her speech at the Kellogg Foundations Food and Society national conferenc e, on indigenous youth perspectives of agriculture. She coordinates sales and m arketing at MA O. Ikaika Burgo. Mr. Burgo, 20-years old, is perhaps the most natural and gifted armer among our youth. He has a genuine love for being outside and working on t he land, and spends numerous hours fine-tuning nursery and orchard operations. Manny Miles. Mr. Miles, 20-years old, coordinates field crop production at MA O . He has attended conferences and has become active in the BLAST Initiative of Bostons The Food Project, an effort to network young people working in sustainabl e agriculture. Youth from the youth leadership team provide an able labor force of 6 to 12 youn g people, working 18-hours each week. They are paid as interns under the leader ship-training program. MA O will hire two additional full-time youth coordinato rs in year 2. 5. Cooperating Experts This enterprise is strongly supported by Jonathan Deenik, PhD. Dr. Deenik, has a doctoral degree in Soil Science from the University of Hawai i at Manoa, where he is currently employed as an extension specialist and lecturer. Dr. Deenik i s able to provide regular tutelage on technical issues and access to other unive rsity faculty experts. Other stakeholders include: Partner Description of Support Peter Quigley, Vice Chancellor Randy Francisco, Program Director Leeward Community College (LCC) Provides additional training for youth including higher education courses, and is developing a degree program in Tropical Organi c Agriculture. David Cole, CEO, Maui Land and Pine (former VP of AOL) Partners with MA O to increase youth involvement in orga nic agriculture o Hosted MA O youth in Maui to learn about MLPs current research and develo pment (composting, cover crops, organic pineapple) o Has reviewed MA Os business plan and provided commentary on business stra tegies Joan Namkoong, Organizer KCC and Kailua farmers markets Provides connection to customers and information on local food demand and availability Stephen Bradley, MD, Wai anae Comprehensive Health Center Operates a clinic farmers market, produce s nutrition education literature, and promotes market to community. Lei Aken, Ag Program Teacher, Wai anae High School (WHS) Will establish a n organic agriculture high school program , develop community garden and support trainings.

 Recruitment of future youth. Hawaii Organic Farmers Association organic certification. Recruitment of future youth.

Promote organic agriculture and provide

F. OPERATIONS PLAN 1. Farm Plan MA O has a total of 5-acres of land in Lualualei Valley: 2.5 acres currently in production and another 2.5-acres of cleared land available starting January 2005 . The new land will be developed similar to the current 2.5 acres in 50 wide by 80 long sections, providing 8 beds per section for field crops. We will plant a row of citrus trees between each section. . Mangos and avocados will be plante d along the north fence line. Field crops are planted every one to two weeks, p erennials every three months and orchard trees at start-up. 2. Research & Development The most technically challenging facet of this venture is the organic production . Farming commenced in early 2002, and we have now completed three full years o f soil building, crop testing and experimentation with different organic methods . This has provided invaluable information on organic fertilization; timing of crop planting cycles, and organic seed varieties. The result is a system that h as produced high yields with excellent product quality (taste, shelf-life, appea rance, weight), and minimal insect damage. We augmented on-farm experimentation by visiting many other farms to research new and best practices. Similarly loc al farmers and university extension agents have visited MA O and provided more t echnical information. There are numerous variables that must converge to produc e a healthy crop. Over the past three years we have kept daily input and yield records so that we can better plan for future seasons. We have a strong working relationship with Jonathan Deenik, a PhD soil scientist at the University of Ha wai i, who has assisted with our organic production plan since the inception of farm activities. 3. Crop Growth Given Wai anaes climate and optimal growing conditions, mixed salad greens (lettu ces, arugula, chard, beet tops, tat soi, mizuna, mustard cabbage, kale) take 2528 days from seed to first cutting. This is our biggest seller and we are able to harvest it 2-3 times per planting, with re-growth occurring every 8-10 days. We also plant a longer rotation every two weeks of fennel, green onion, beets, and carrots, which last approximately 100-days. In our perennial rotation, whic h lasts 4-6 months, we plant basil, eggplant, parsley, kale, chard, and collards . We plant this rotation every four months. 4. Harvest and Quality Control Market demand requires fresh, clean and attractively presented fruits and vegeta bles. For organically grown fruits and vegetables consumers have even higher ex pectations for appearance and cleanliness. Our crops are harvested three times each week. Youth managers and workers are trained to cultivate, harvest and han dle (wash, package, chill) in keeping with these quality standards. Washing vegetables tends to be the most labor-intensive facet of the operation, especially as salad greens are delicate and are double washed. While our curren t packing facility is basic, we have customized faucets so that each sink cleani ng area has overhead washing faucets with shower-flow heads. This frees hands t o concentrate on cleaning the product. After each product has been washed, it i s placed in small quantities (about five pounds) on drying trays and a youth man ager or coordinator inspects the product. The inspector has the option to retur n the tray to the cleaner for additional washing. If the tray is excellent qual ity then a packaging crew handles the boxing or bagging of the product. This pr

ovides three points of inspection. Before a product leaves the farm a final che ck is done by choosing a random item from each product. One item from each harv ested crop is also kept to monitor shelf life. 5. Inventory Management Every Monday, we estimate yield quantities for the week. Staff log anticipated yield numbers in a spreadsheet to manage distribution. This system helps us acc ommodate fluctuations in weekly yield to ensure customer satisfaction. To maxim ize freshness, we harvest three times per week and maintain little inventory. F or all points of sale, except KCC farmers market, we harvest and distribute the s ame day. For KCC we harvest, chill over night, and sell in the morning. Our pr esent cold storage is limited to a 108 cubic foot chiller, but in June 2005 we w ill install a 760 cubic foot reefer, which will have an alarm system to monitor possible power outages. 6. Organic Certification In September 2004, MA O Youth Organic Farm received organic certification from t he Hawai i Organic Farmers Association (HOFA), under the auspices of the USDA. H OFA is the only certifying body in the State of Hawai i and the application proc ess involved a 6-month review and final inspection. MA O will be inspected each year and is required to show proof of organic methods. We are obliged to keep accurate records for soil inputs, seed sources, and crop yields. We track the f ollowing data on a customized excel spreadsheet: (1) type of product sold; (2) a mount of product sold: (3) customer that received product; (4) location on farm where product was grown; and (4) history of inputs and events for the area where product was grown. 7. Farmers Markets As aforementioned MA O will sell primarily at markets already tested including: Wai anae Comprehensive Health Center Wednesdays 11:45am Kaiser Permanente, Nanakuli Wednesdays 11:45am to 1:00 Leeward Community College, Pearl City Wednesdays 11:45am Aloha Aina Caf, Wai anae Saturdays 9:00 am to 11:00 KCC Farmers Market, Honolulu Two Saturdays per month, 7:30 am to 11:00

MA O uses the markets as training grounds for youth in our leadership developmen t programs. Our full-time staff provide supervision for each market while the p art-time youth ensure adequate staffing to cover multiple markets simultaneously . 8. Land, Equipment, Office Space, Tools, Resources WCRC leases 5-acres of land located at 86-210 Puhawai Road in Lualualei Valley, which will be used for the MA O venture. The landowner is the Community of Chri st Church and the 25-year term began in 2001. The land has excellent potential for expansion with three of the neighboring properties vacant (see map at right) . MA O will benefit from equipment acquired with WCRC grant funds. This includes a 2001 model 55-hp John Deer tractor and a cargo van. ANA funds will be used to purchase and additional delivery van and a one-ton dump truck. As mentioned col d storage is limited at present but through the aforementioned HUD grant MA O wi ll be constructing a new Organic Agriculture Center to include a 40 x 40 concrete floor processing facility, additional cold storage, and offices. 9. Increasing Youth Capacity In early 2004, WCRC started educational programs at two local schools, using edi ble organic school gardens as an alternative teaching tool. Teachers have been trained to use organic farming techniques as a vehicle to teach social studies a

to 1:00 pm pm to 1:00 pm am

nd science classes. Fruits and vegetables are harvested on a weekly basis, and sold by youth on campus. Youth participants are prime candidates for future emp loyment at MA O, critical to our growth plans. G. FINANCIAL PLAN FOR MA O VENTURE 1. Start-up A grant of $456,000 has been secured from the DHHS-Administration for Native Ame ricans with $317,837 dedicated to this venture to be used in 2005 and 2006, to c omplete development of MA O. This money is listed as restricted grants on the b alance sheet and as ANA grant on the cash flow and income statements. 2. Accounting System & Business Controls. We use Quickbooks as our primary accounting system. We track sales weekly throu gh spreadsheets and review them monthly so that we understand trends related to product and point of sale. This will allow us to analyze the profitability of s ales by specific crop. WCRCs Board of Directors will regularly monitor all these statements for accountability. We have scheduled our first external audit (bas ed on increased budget size) for 2005. 3. Long-term Sustainability WCRC has maintained financial stability while growing rapidly in the past four y ears. Significant steps have been taken to lay a foundation for long-term susta inability, including: Securing a total of $1,354,000 of federal funds the past 4-years to support MA O , for our new caf, and a variety of educational and community projects; Arranging for the purchase of 2.5 acres of land that we currently lease for farm ing, providing leverage to acquire more land in the future; Forging partnerships with industry and business (Maui Land and Pine, Hawai i Org anic Farmers Association, Kokua Natural Foods Cooperative), education (Leeward Co mmunity College, University of Hawai i College of Tropical Agriculture & Human R esources, Kamehameha Schools), to ensure access to markets and technical assista nce; Initiating contractual relationships with Kamehameha Schools/Bishop Estate and A lu Like, a $16 million Hawaiian job training program, to improve job training pr ograms for youth. 4. Proforma Statements We have included the following financial statements: Projection of weekly customer product orders. These estimates rely on data from the last three years of operations and are the basis for our sales figures for t he next three years. Note that year 3 is a critical point for expansion as prod uctive land and sales double. Annual income statements for years 1, 2, and 3. Monthly cash flow statements for years 1, 2 and 3. Annual balance sheets for years 1,2, and 3. Social Return on Investment (SROI).

Analysis of Social Return on Investment SROI Narrative and Assumptions Community Wealth: Benefits Amount income returned to the community in taxes based on Hawaiian state income tax rate of 6.4% for 16,000-24,000 income bracket. Assumed youth salary: $18,0 00/year. Public assistance not collected based on 20% welfare assistance dependence in th e target community multiplied by average annual payments of $6,168 (Honolulu Sta r Bulletin 1999). Costs Additional staff time for farmer training programs based on the estimate that th e youth dedicate about 20% of their time to leading educational programs. Discounted sales figures were calculated based on establishing an average discou nt taken off the price of produce sold at markets that cater specifically to the low-income, local community. The average discount calculated was 33%, and with this discount taken off, weekly revenue averaged $854. Environment: A conventional farm receives subsidies at a rate of $72.93 per acre. (www.bette rfarming.com) The cost of farming inputs in conventional agriculture is $340/acre (University of Florida, IFAS Extension). By farming organically, MA O is using 50% less ene rgy and resources to farm their land (Lori Drinkwater, Nature Magazine, Nov. 98). The value of training organic farmers is based on average per person, per hour e ducational rates of HOFA (Hawaiian Organic Farmers Association.) We assumed th at for each youth education hour, two individuals receive training, and that thi s hour is valued at $10 per trainee.

RISK ASSESSMENT & CONTINGENCY PLAN While farming has many inherent risks, in just three years of operations MA O, h as created an innovative and successful model that others in Hawai i wish to rep licate. Moreover, the model and systems have been developed with the co-managem ent of youth. Risk assessments have been mentioned throughout this business pla n and the following table summarizes the important challenges and our mitigation approaches. RISK MITIGATING FACTORS Organic production fails through pests, natural causes, and or other unforeseen circumstances. Thoroughly tested organic methods and systems Expert technical assistance available To anticipate losses, yield assumptions are conservative Ongoing research experiments to ensure new learning Problems with youth, such as lack of motivation. Consensus-building, open communication approach Accountability built within profit-sharing model Expert technical assistance available for youth, and diverse opportunities for i mproving skills. Low Sales Regular customer feedback Diversified product mix Proven demand for products Diversity of markets Options to reduce expenses, if necessary High operating costs, low margins Diversity of markets increase direct sal es and improve margins

 Source lower cost local supplies, e.g., animal manure Difficulty in attracting suitable staff Grow youth from within the MA O system a nd expose early to other benefits trips to conferences, site visits Seen at the moment as doing cutting edge work so we are in high demand Educational programs with local schools provide pipeline for new staff Operational problems, poor food quality, delivery time Thoroughly tested system Access to high-end chef who will help to assess product quality Technical assistance available to investigate unforeseen crop failures MA O system reinforces importance of product quality, assessment and feedback gi ven to youth three days per week. Marketing problems, regulatory barriers and costs Diversity of end markets Certified organic status already achieved Classes to teach safe food handling strategies Caf is a certified kitchen and their staff provide guidance Departure of key project employees Inherent to WCRC is the training, empowe rment and employment of youth, new leaders constantly being developed WCRC Board will create a succession plan H. ENDNOTES

TABLE OF CONTENTS A. EXECUTIVE SUMMARY 2 B. BUSINESS DESCRIPTION AN ORGANIC OPPORUNITY 4 INTRODUCTION 4 PRODUCT 4 GROUNDWORK FORTHE VENTURE 4 CROPS TO BE GROWN 5 THE OPPORTUNITY 6 OUR COMMUNITY 7 7 LAND USE, (RE)CONNECTING TO AINA (LAND) C. INDUSTRY AND MARKET ANALYSIS 9 GROWTH IN THE ORGANIC INDUSTRY 9 THE HAWAI I MARKET 9 LOCAL COMPETITION 11 OFFSHORE ORGANIC COMPETITION 12 FARMING IN HAWAI I 12 CUSTOMER PROFILE 13 DISTRIBUTION MECHANISMS 15 D. MARKETING PLAN 16 PROMOTIONS AND OUTREACH 16 SPECIFIC SEGMENT STRATIGIES 17 MA O CUSTOMER SERVICE PHILOSOPHY 17 PROMOTIONAL MATERIALS AND LABELING 18 PRICING 18 DISTRIBUTION 19 SALES MANAGEMENT 19 COMPETITIVE ADVANTAGE 19 E. MANAGEMENT PLAN 20 ORGANIZATION AND BOARD 20 GOVERNANCE 20 MA OS POSITION IN WCRC 21 EXECUTIVE MANAGEMENT & STAFFING PLAN 22 COOPERATING EXPERTS 22 F. OPERATIONS PLAN 23 FARM PLAN 23 RESEARCH AND DEVELOPMENT 23 CROP GROWTH 23 HARVEST AND QUALITY CONTROL 24 INVENTORY MANAGEMENT 24

ORGANIC CERTIFICATION 24 FARMERS MARKETS 24 LAND, EQUIPMENT, OFFICE SPACE, TOOLS, RESOURCES 25 INCREASING YOUTH CAPACITY 25 G. FINANCIAL PLAN 26 START-UP 26 ACCOUNTING SYSTEM & BUSINESS CONTROLS 26 LONG-TERM SUSTINABILITY 26 PROFORMA STATEMENTS 26 H. RISK ASSESSMENT & CONTINGENCY PLAN 35 I. ENDNOTES 36 A. EXECUTIVE SUMMARY

Leaders must deal with apathy along the Leeward Coast (Wai anae), perhaps it com es from poverty and repeated disappointment, or from people too busy trying to s urvive and eke out a living. We hope that those that care can reach out to thos e who dont and sow the seeds of positive change for the future of beautiful Wai a nae. - Editorial, The Honolulu Advertiser, March 25, 2004 In September 2003, youth from a leadership training program began selling organi cally grown products at farmers markets located at health clinics in Wai anae, Ha wai i. Their goal was to make affordable and healthy fruits and vegetables avai lable to residents of their low-income community. The youth exceeded all expect ations products sold quickly, customers returned each week wanting more, and now these young people are poised to build on the test markets to become the larges t producer of USDA certified organic fruits and vegetables on the island of O ah u. The Wai anae Community Re-Development Corporation (WCRC), a Hawai i non-profit 5 01(c)3 corporation, proposes the development of the MA O Youth Organic Farm (MA O). MA O will train and employ out-of-school youth from the Wai anae community. These youth will grow a diversity of field crops (e.g., salad greens, herbs, e ggplant) and fruits trees (e.g., mango, limes) using organic methods certified b y the U.S. Department of Agricultures National Organic Program rules, on five acr es of land leased by WCRC. The objectives of MA O will be to: Increase productive land from 2.5 to 5-acres by the end of 2007, and expand to t en acres by 2010; Distribute 50% of produce to the Wai anae community at affordable prices; Provide employment, as well as business and sales training to Wai anae youth; Conduct research and provide advanced training in organic agriculture and commun ity food systems; Work collaboratively with WCRCs other programs to support the development of youn g people; and Restore idle land to productive use. MA Os evolution dates back to 2001, when WCRC established the Mala Ai Opio Comm unity Food Security Initiative, a project to create a community food system to f ight hunger, improve nutrition, strengthen local agriculture and empower local f amilies to move towards self-sufficiency. In the Hawaiian language mala ai op io means the youth food garden, and ma o is also the Hawaiian name of the endemi c cotton plant that makes its home in the Wai anae area. With youth leadership development as a core objective, WCRC established a series of interconnected act ivities with the MA O farm site as the primary training venue. Life is a daily struggle for many young people in Wai anae. Local public school s are failing to meet the standards of the federally mandated No Child Left Behi

nd Act. They experience high drop-out rates and illiteracy compared to the res t of the state. There are few opportunities for post-secondary employment and t raining. Wai anae has the states highest unemployment rate. Teenage pregnancy r ates are high. Add to this a rapid growth in the distribution and use of crysta l methamphetamine, and a formula for community deterioration and juvenile delinq uency is created. This venture is being planned and implemented to provide an employment, training and life-style opportunity for young people, while they work to improve the com munity. MA O is founded with an entrepreneurial philosophy that is guided by ou r Hawaiian cultural traditions, with business activities developed to revive and expand upon Hawaiians traditional love and respect for the land. There are many local projects that have attempted to integrate social enterprise with Hawaiian culture; however, MA O stands out from its competition however, through combini ng the explosive growth predicted for the organic agriculture industry with meth ods that are deeply respectful of Hawaiian culture and sustainability. This mar ket opportunity provides fertile ground for youth to make a radical contribution to the social and economic life of the Wai anae community, our home. The national organic food industry has experienced rapid growth over the past 20 -years. By 2001, sales of organic foods reached $8 billion and there has been 20% growth annually in national organic sales over the past 10-years, The Orga nic Trade Association projects that the U.S. organic market will reach $30.7 bil lion by 2007. While this is small compared to the conventional foods industry, O TA reports that conventional food growth is only 2-3% per year versus organic fo ods, which is growing 17-20% annually. According to the Hawai i Organic Farmers Association (HOFA), Hawai i imports over 90% of organic produce. At the same time, there are only nine organic farms l ocated on O ahu where 870,000 consumers reside,). Demand for fresh, local and organic foods is best illustrated by the recent establishment of three Hawai i F arm Bureau Federation markets on O ahu. The Kapiolani Community College (KCC) F armers Market, which opened in late 2003, attracts over 2,500 visitors each Satu rday, and specializes in 100% Hawai i grown products. The Hawai i organic agric ulture industry still lags behind the national growth figures, due to inflated l and prices, the pressure of urban development, and the difficult shift from the plantation agriculture system. The scarcity of local organic fruits and vegetab les has made MA Os certified organic product highly attractive to consumers. MA Os competitive advantage has been well established. WCRC recently secured sub stantial funding from the U.S. Department of Housing and Urban Development, as w ell as the U.S. Department of Healths Administration for Native Americans (ANA) t o support this program. In its pilot year, MA O established thriving farmers mar kets and strong relationships with retailers and restaurants, in which demonstra ted demand far outstripped supply. MA O has also developed partnerships with Le eward Community College to train youth and with Maui Land and Pine CEO, David Co le, to collaborate in the development of a local organic industry. Most importa ntly, MA O has a cadre of strong and determined youth many already trained and e ager to instruct others with ambitions beyond their years, and a drive to become the largest producer of certified organic fruits and vegetables on the island o f O ahu. B. BUSINESS DESCRIPTION AN ORGANIC OPPORTUNITY 1. Introduction In September 2003, youth from a leadership training program commenced selling or ganically grown products at farmers markets located at the Wai anae Comprehensive Health Center and Kaiser Permanente Health Clinic, in Nanakuli, both located on the Westside of the island of O ahu, Hawai i. The goal: to get healthy organic fruits and vegetables, sold at a fair price, into the regular food purchases of

the low-income community. The youth exceeded all expectations products sold qu ickly, customers returned each week for more, and now a group of young people ar e poised to build on these test markets to become the largest producer of USDA c ertified organic fruits and vegetables on the island of O ahu. 2. Product The Wai anae Community Re-Development Corporation (WCRC), a Hawai i non-profit 5 01(c)3 corporation, proposes the development of the MA O Youth Organic Farm (MA O), a venture managed by out-of-school youth from the Wai anae community. MA O will cultivate a diversity of field crops and fruit trees, using organic methods certified by the U.S. Department of Agriculture National Organic Programs rules, on 5-acres of land currently leased by WCRC. The objectives of MA O will be to: Increase production of organic fruits and vegetables to a total of 5-acres, with each acre developed to gross at least $50,000 by the end of 2007; Distribute at least 50% of product into the Wai anae community through community farmers markets; Provide employment with profit-incentives to three youth at start-up with two yo uth added by Year 2; Work collaboratively with University of Hawai is College of Tropical Agriculture and Human Resources (CTAHR) and Leeward Community College (LCC) to increase rese arch and advanced training in organic agriculture production; Work collaboratively with WCRCs other programs to cultivate new organic farmers; and Restore idle land to productive uses, and reawaken the Hawaiian connection to ag riculture. 3. Groundwork for the Venture In 2001, WCRC established the Mala Ai Opio (MAO) Community Food Security Initia tive. This initiative was developed in order to create a community food system, fight hunger, improve nutrition, strengthen local agriculture and empower local families to move towards self-sufficiency. In the Hawaiian language mala ai opio means the youth food garden and ma o is also the Hawaiian name of the endemic Wai anae cotton plant. WCRC established a series of interconnected activities with youth leadership development as a core objective and the MA O farm site was established as the primary training venue. These activities now support the lo ng-term competitive advantage of MA O, and are described as follows: ACTIVITY HIGHLIGHTS 1. Youth Leadership Training (YLT). The YLT is a 10-month long, 18-hours p er week, leadership training for low-income, out-of-school, Wai anae youth, prov iding them with a paid educational, entrepreneurial, and agricultural work exper ience. This is the recruitment and training mechanism for MA O Farm, an d provides a regular labor source for farm operations. 2. Aloha Aina Caf and Natural Foods was opened in April 2003, specializes i n healthy breakfasts and lunches using locally-grown products. The caf will be a customer, a farmers market site and a showcase for MA O products. As a commercial kitchen, the caf provides for the possibility of value -added product development opportunities. 3. Local Community Farmers Markets. Four farmers markets have been establish ed at the Aloha Aina Caf, Wai anae Comprehensive Health Center, Kaiser Permanent e Health Clinic, and Leeward Community College (LCC). Farmers markets have test ed and proven demand. The local customer base has been introduced to the organic concept and the MA O product. Clinic markets support the WCRC mission. 4. Ai Pohaku Workshop, hands-on, culturally-based learning activities at Wa i anae Intermediate School (WIS) and Wai anae High School (WHS), that mix tradit ional Hawaiian taro cultivation with edible, organic school gardens. The gard ens illustrate the skill-set and experience already developed in the youth that will lead MA O and provide fertile ground for youth training and recruitment.

5. The Wai anae Organic Agriculture Center, in partnership with Leeward Com munity College (LCC), expands research and training activities in Wai anae. The partnership was awarded a U.S. Department of Housing & Urban Development gra nt of $579,000 to purchase 2.5 acres of WCRCs leased land, and to build an improv ed post-harvest packing and chilling facility which will increase MA Os productio n handling capacity. 4. Crops to be Grown Over the past three years, WCRC has developed farm operations on 2.5-acres as an integral training component of the Youth Leadership Training. This commenced w ith the planting of fruits trees and bananas and the organic conditioning of soi ls for field crops. Thereafter, approximately 30 field crop varieties were grow n and sold, with information gathered on: (a) Best seed varieties; (b) Hardiness of crop to local conditions; (c) Reaction of crop to organic methods of product ion; and (d) Marketability. Product was sold to Kokua Natural Foods Cooperative , a cooperatively-owned grocery store specializing in organic foods located near the main campus of the University of Hawai i. Kokua has a customer base of edu cated professionals, vegetarians, and people generally adept at cooking. This e xperience gave WCRC product feedback, as well as information on the demand for, and lack of supply of, locally-grown, organic fruits and vegetables. Through th e development of this venture, MA O will assume overall responsibility for farm operations of the already developed 2.5-acres, and in May 2005 will begin prepar ation and cultivation of an additional 2.5-acres. Hawai i has a 12-month growin g season and crops to be grown include:

Cilantro Daikon Pak choy (bok choi) Romaine lettuce Various lettuces, arugula, kale, chard, beets and Asian greens (tat soi, mustard greens, mizuna) combined to produce two different salad mixes This will be our regular rotation (short) planted every 14-days, ready to harvest from day-28 thro ugh to day-45, with crops completed in 50-days. Beets Carrots Fennel Green onion This will be our regular rotation (long) planted every 28-days, r ady to harvest from day-70 through to day-100, with crops completed in 105-days. Basil Collard greens Eggplant (Japanese and Italian) Kale (Red Russian, blue curly, lacinato) Parsley (curly and flat-leaf) Swiss chard Taro This will be our perennial rotation planted every 3-months, ready to harv st in 80-days, with crops completed in 5-6 months. Lemon (Meyer variety) Mango (Haden and Kiett varieties) Orange (various Washington naval varieties) Tangerine (Clementine and Fremont varieties) Trees will be planted as an inco me-generators with first harvest being in year 3, and as a wind break on the win dward areas of the farm. 5. The Opportunity MA O will utilize the organic production techniques and market research achieved through WCRCs start-up period to expand production and sales. The youth-managed venture will provide planned financial incentives based on business and persona l performance. MA O will sell fruits and vegetables at the already established farmers markets, at the recently established Kapiolani Community College (KCC) Fa rmers Market, held every Saturday morning in Honolulu (the market attracts over 2

,500 visitors each week), and to restaurants. In October 2004, WCRC received a $456,000 two-year grant from the U.S. Department of Health and Human Services Adm inistration for Native Americans (ANA), for Native Hawaiian youth education and economic development activities. The ANA grant will provide salary support for 2-years for a total of five Native Hawaiian youth and project directors, and cov er costs of equipment needed to operate a farm. WCRC carries a 25-year lease fo r 5-acres, 2.5 of which will be purchased in early 2006 using the aforementioned U.S. HUD federal grant. 6. Our Community MA O is situated in a community of 45,000 residents, of which more than 40% are Native Hawaiian. The entire Wai anae Coast has levels of poverty near 20% with some census tracts exceeding 50%. On the Wai anae Coast 45% of the entire popu lation is under the age of 25 years, 34% is under the age of 18 years versus 24% across the State of Hawai i (Census 2000). The current unemployment rate for O ahu is 3.5% while the Wai anae Coast rate is approximately three times the isla nd average. A report on food security to the 2003 Hawai i State Legislature (A Report to the Legislature on SCR 75, SD1, HD1, 2002), submitted by the State Office of Planning , describes Wai anae is one of the worst of the at-risk, food insecure communities , which translates to poorer self-reported physical and mental health, higher le vels of obesity, diabetes, and arthritis. According to the Wai anae Coast Comp rehensive Health Center, the largest local health provider, at least 50% of resi dents suffer from obesity. Over multiple generations Wai anae residents have be come dependent on the welfare system in which the percentage of people in Wai an ae receiving welfare support (Temporary Assistance to Needy Families and Food St amps) is four times that of the State of Hawai i. And yet, this is not our comm unitys history. Wai anae was once a self-sufficient community, easily growing fo od and managing land and water resources to provide for community needs. Wai anae youth, a majority of whom are of Native Hawaiian descent, attend local public schools that are failing to meet the federally mandated No Child Left Beh ind Act. Worse still, when you look beyond the school environment, there are fe w opportunities for post-secondary employment and training, strained parents and families, and high rates of school drop-out and illiteracy compared to the rest of the state. Add to this a rapid growth in the abuse of crystal methamphetami ne and you have a formula for perpetuation of difficult conditions in Wai anae. 7. Land Use, (Re)Connecting to Aina (land) and Community Values One of the core Hawaiian values is aloha aina or love of the land. In pre-cont act Hawai i, people lived within an agricultural system that sustained as many a s 500,000 people. Wai anae has a rich agrarian history, from the pre-contact We stern period when Hawaiians farmed the entire region, through to the late 1800s a nd early 1900s when Hawaiian, and Chinese, Filipino, Okinawan, and Japanese immig rants farmed the valley regions independent from the more dominant plantation ag riculture system. Fresh water, a precious resource in arid Wai anae, was carefu lly managed, with a portion diverted to taro patches in the upland and then retu rned to the stream with nutrients that would feed into the estuaries and coastal fisheries. Crops such as taro, banana, sweet potato and breadfruit were raised in abundance, but over time Hawaiian farmers have lost the use and ownership of the land.

Today, Wai anae residents still embrace the idea of an agricultural community, c haracterizing the area with terms like rural, open space and agrarian lifestyles. Ho ever, the economy and peoples lifestyles have moved away from agriculture. Two o f our most fertile valleys are used predominantly by the U.S. military: Makua Va lley is used exclusively for live fire training; and 75% of Lualualei Valley, wh ere MA O is located, is used for munitions storage and as a naval communications

base. Makaha Valley, to the north of Lualualei, has an exclusive gated communi ty, with a resort and two golf courses. In addition, much of Lualualei Valleys p rime agricultural land is no longer in production because the past generation of farmers encouraged their children to move away from the hard life of farming, e ncouraging them to seek professional careers. The Wai anae area already has thr ee landfills, and more prospective sites have been identified. In order to revi ve and expand upon Hawaiians traditional love and respect for the land, MA O has been founded with an entrepreneurial philosophy that is rooted in our cultural t raditions. C. INDUSTRY AND MARKET ANALYSIS 1. Growth in the Organic Industry From the early 1960s to 1980 the organic agriculture industry grew steadily acros s the United States. In the 1960s the industry was jump-started when information on the dangers of pesticides came to public prominence, most notably with the p ublication of Rachel Carsons Silent Spring in 1962. Consumers grew to understan d the connection between personal and environmental health, and over the course of time a genuine shift in food consumption patterns occurred. After 1980, the organic foods sector grew rapidly. By 2001, sales of organic foods reached $8 b illion and there has been 20% growth annually in national organic sales over th e past 10-years. There are multiple factors that have contributed to this growi ng demand, including: th; Increase in diet related illnesses, such as the rate of U.S. obesity amongst you Increased health care costs and adoption of preventative medicinal practices; Growth in the physical fitness industry, gourmet cooking, and fine dining; Public awareness of fast-foods detrimental impact on health; and Major public health crisis, such as Mad Cow disease.

What was once an industry propelled by farmers markets and natural foods cooperat ives has now become mainstream. The Organic Trade Association (OTA), the leadi ng industry advocate, lists some examples of growth trends; including: In 2002, more organic foods were purchased in regular retail supermarkets than a ny other location. Organic foods are now available in over 20,000 natural foods stores and are found in over 70% of conventional retail groceries; Huge food and beverage corporations, such as Kraft and Coca-Cola, have now joine d the organic market by purchasing leading organic brands. USA Today reported i n their December 2, 2004 edition that the San Diego Padres and the St. Louis Car dinals would be serving organic franks alongside conventional hot dogs; and A national survey done in 2002 of 1,000 consumers showed that 58% had purchased organic foods. OTA projects that the U.S. organic market will reach $30.7 billion by 2007. Thi s is still miniscule compared to the conventional foods industry but OTA reports that conventional food growth at 2-3% per year while organic foods has been cli mbing at the growth rate of 17-20% annually. 2. The Hawai i Market The Hawaiian demand for organics may not easily correspond with national market trends due to our unique location. Certainly there have been similar public hea lth and environmental scares. In 1993, the chemical pesticide heptachlor, recog nized by the EPA as carcinogenic, was banned because residues were found in a nu mber of agriculture products including cows milk and cucumbers. Heptachlor had b een used to eradicate ants from pineapple and to kill termites in homes. Desp ite this type of impetus, Hawai i has been slow to embrace organic foods. The National Agriculture Statistics Service (NASS) reported in 2003 that of Hawai is $553 million total farm revenue, only an estimated $4.8 million was organic (les s than 1% of total Hawai i farm revenue). Comparatively U.S. organic produce re

presents over 2% of total farm revenue. There are seven small natural foods stores on the island of O ahu and like the c ontinental U.S., organic fruits and vegetables can now be found in Hawai is regul ar retail grocery stores. Of nine regular grocery outlets surveyed for this bus iness plan, six stocked organic fruits and vegetables. Of the three that did n ot stock organic produce one had been in recent contact with MA O to purchase pr oduct. Of the six stores that did stock organic fresh produce, a non-scientific visual survey of inventory showed that less than 10% was locally sourced. In t wo stores none of the organic produce was from Hawai i. Hawai i imports over 80% of all fruits and vegetables, and 90% of fresh organic produce. Organic foods already sell at a premium, where the additional cost o f shipping to Hawai i increases the retail price of organic foods out of the ran ge of most local residents. Recently, however, big-box retailers such as Costco have started importing large volumes of organic salad greens from California, s elling them at a third of the price of the same locally produced product. For the most part, the local trend in organic foods is closely aligned with the emer gence of Hawai i Regional Cuisine, a merging of Eastern and Western cooking infl uences that mirrors Hawai is cultural diversity. Chefs have connected with smal ler farms to source the freshest ingredients and have asked for organic fruits, vegetables and meats. This market had been predominantly a tourist audience (hi gh-end, college-educated travelers staying at resorts), but over the past decade many restaurants have been established in local communities. This trend has st imulated the local market, and is best illustrated by the recent establishment o f three Hawai i Farm Bureau Federation (HFBF) farmers markets on O ahu. In Honol ulu, the Kapiolani Community College (KCC) Farmers Market, opened in late 2003, attracts over 2,500 visitors each Saturday. The markets development has been cri tical for local farmers because it is the first time a market has required all p roducts be grown in the Hawaiian Islands. At other farmers markets on O ahu, suc h as the City and County of Honolulu operated Peoples Open Markets, vendors may s ell imported fruits and vegetables. According to the Hawai i Organic Farmers Association (HOFA), the local trade asso ciation for organic growers, there are now approximately 132 certified organic f arms in the State of Hawai i with only nine located on O ahu where 870,000 cons umers reside. It is difficult to extrapolate exactly how large the organic fru its and vegetables market is on O ahu, partly because State agencies do not as y et collect organic-specific data. A measure of industry size can be understood by looking at growth trends related to a leading retail outlet on O ahu called Kokua Natural Foods Cooperative. Fo rmed over 25-years ago, Kokua has a membership of 2,400 and occupies a small gro cery outlet approximately 2,000 square feet, close to the campus of the Universi ty of Hawai i. The membership, staff and Board have collectively decided that a n expansion is imperative at this time because currently no national health food chains, such as Whole Foods or Trader Joes, have entered the Hawai i market, and there are industry rumors that Whole Foods is researching local store locations . Kokua hired industry consultants to survey the market potential and reported that Kane ohe, located on the Windward Side of Oahu, would be an ideal location f or expansion. Kane ohe has a population of 35,000 people, and the industry cons ultants deduced that the total natural foods market for Kane ohe is valued at ov er $4 million, with 18-20% of sales predicted to be organic fruits and vegetable s. Since Kane ohe represents 4% of O ahus population, the overall organic fruit and vegetable market size could be as large as $20 million. Local industry leaders believe that organic agriculture is poised to expand. In a Hawai i Business Magazine special report on agriculture, various experts, inc luding Mr. Alan Takemoto, Executive Director of the Hawai i Farm Bureau Federati on, identified organic agriculture as having great potential in Hawai i. In supp

ort letters, Ms. Joan Namkoong of the Hawai i Farm Bureau Federation and Mr. Dav id Cole of Maui Land and Pine clearly state that the market is wide-open. Mr. C ole states that there is great economic potential especially given the growing cons ciousness of consumers. 3. Local Competition There are a number of small organic farms that operate on O ahu. These farms ge nerally sell products wholesale to local health food stores because this ensures a steady price and quantity demand, contrary to farmers market booths that pose increased risk and require investment in an increased labor force. There have b een two well-known local certified organic growers: Ko Farms sells fresh herbs, salads, and greens to all of Hawai is natural foods s tores, and to a number of supermarkets. They recently sold their Waimanalo farm , and the owner Daniel Ko now works for the State Department of Agriculture. Da niels wife still grows specialty herbs and sells to all the natural foods stores. The quality of their product is very high, but production capacity low; and Lone Palm Organic Farms on the Big Island of Hawai i. Lone Palm is one of only a few neighbor island organic growers that regularly ship to O ahu. They specia lize in high quality sprouts and lettuces and work with three other growers to m ake salad mixes sold to natural foods stores, restaurants and supermarkets. The ir product is very high quality and strongly supported by local consumers in hea lth food outlets, and their production capacity is high. Two other certified growers occasionally attend KCC Farmers Markets they are: (1) Ono Organic Farms, a 30-acre Maui-based grower of exotic fruits, papaya and ban ana; and (2) Lotus Farms, a 1-acre O ahu based chicken farm. A scan of HOFAs cer tified growers list shows that the majority of local growers tend towards mono-c ropping products such as macadamia nuts, papaya, pineapple or coffee. Maui Land and Pine (MLP) is the largest grower in the State and specializes in organic pi neapples. They will certainly expand in the future, but as the support letter indicates they are exited about collaborating to expand the overall organic mark et in Hawai i. There are regularly thirty-five booths at the KCC Farmers Market, of which 15-20 are farmer-operated fruit and vegetable sales booths. There are a number of co nventional farmers that grow the same vegetable varieties as MA O, one of the mos t successful is Dean Okimoto. Mr. Okimoto owns Nalo Farms, a 5-acre farm recogn ized as one of the most successful farms in Hawai i today. Mr. Okimoto has been able to penetrate the high-end restaurant market and his signature Nalo Greens, a delicate combination of mixed baby lettuces, is featured at over 100 of Hawai is best restaurants. It is often difficult for consumers to distinguish between o rganic and conventional products, however, at MA Os sales booth our young Hawaiia n sales representatives are large in number and energetic, and their exuberance draws customers to our products. Signage at our booth features liberal referenc e to organic which quickly informs customers of our status as organically-certifie d. 4. Offshore Organic Competition MA O will directly compete with offshore farms at Kokua but our broader sales st rategy is to sell through farmers markets, where imported products are prohibited . The growth of local-only farmers markets will help to insulate MA O from offsh ore competition. Nevertheless, offshore farms capture 90% of our market, so it is critical to understand who they are. Two of the largest are: Earthbound Farms, is one of the largest certified organic producers in the U.S., comprising 24,000 acres in California and Mexico. Earthbound grows a wide rang e of field crops but currently only the salad mixes are sold in Hawai i through conventional supermarkets and large retailers (Costco, Safeway, Star Market, Foo dland) and at natural foods stores (Down to Earths three O ahu locations). Their products are excellent, but like other imported items, suffer from short shelf

life. Cal-Organic Farms, is an organic division of Grimmway Enterprises, Inc., a growe r of conventional product. They distribute carrots, chard, green onion, kale an d many herbs to all of Hawai is natural food stores and conventional supermarkets . Their product quality is average to high. Kokua has complained that their sh elf life is less than MA O grown produce, and Kokua has preferred to purchase MA O produce over Cal-Organics, when available (this has included kale, chard, and green onions). 5. Farming in Hawai i If the market for organic fruits and vegetables has so much potential for growth , why arent more conventional farmers shifting to organic production, and why are there so few new farmers entering this sector? There are multiple factors, whi ch converge to make entering organic production very difficult. On O ahu inflat ed land valuations make it extremely costly to secure land for either organic or conventional farming. The average cost of an acre of undeveloped farmland in W ai anae is now over $80,000, while the median sales price of a home on O ahu is over $500,000. Concurrently, there is considerable pressure from urban develo pment for more land. The Kunia Plain, once O ahus largest sugar growing area, is being encroached by housing developments. Most new farmers enter the market vi a leased land, with the market rate being $125 per acre per month. Leasing, how ever, can be problematic as landowners have preferred short-term leases because of the potential to rezone land from agriculture to urban for housing developmen t. Even O ahus largest growers, Jefts Farms and Aloun Farms, have large portions of their land in short-term leases, some less than 5-years. Best practice organic agriculture requires an investment in soil building/condit ioning, which means income-generation does not start until late in year one of a n operation, at the earliest. Also, there should be periods where fields are le ft fallow and cover crops are planted, as this improves soil quality. Again, th is increases the time out of production. Most growth in the local organic agric ulture sector has occurred on the neighbor islands, especially the Big Island of Hawai i, where land is cheaper. Other reasons why there are few local organic farms, as suggested in supporting letters from Ms. Joan Namkoong and Mr. David Cole, include limited local technic al expertise in organic agriculture and a lack of coordinated support amongst ag ricultural sectors and agriculture supporters. Hawai i is transitioning out of plantation agriculture and there is limited entrepreneurial capacity amongst new growers. David Cole, the current Maui Land and Pine CEO, and former CEO of Nav iSoft Inc., and former president of AOL s New Enterprises Group, states in his s upport letter that: The transition away from the plantation model has been difficult because the farm industry has been slow to adapt to the new environment, there have been few mar ket makers to match local producers with consumers and there is a lack of capita l available to pioneering entrepreneurs. In 1996, Mr. Cole acquired Sunnyside Farms, a 500-acre Virginia farm. He re-lau nched Sunnyside as a certified organic supplier of gourmet quality fresh produce and meats. What makes the MA O venture especially unique is that it is on the cusp of being a market maker and pioneering entrepreneur while being a non-profit so cial enterprise. 6. Customer Profile In the initial phase of market development, five sales locations with uniquely d ifferent core customers have been tested: (1) farmers markets at different busine ss locations where MA O was the exclusive vender (including health clinics); (2) a low-medium end Wai anae grocery store; (3) a high-end farmers market; (4) a hi gh-end health food cooperative grocery outlet; and (5) a high-end gourmet restau rant in Honolulu. An overview of how these locations have evolved into clear se

gments can be seen in the following table:

Customer Segments Buyer Behavior Needs (perceived) Alternatives Competitive Advantages High End (tourist foodies) Looking for a native and local experience Want to try something new High quality Good looks and taste Exotic, unique choices Authentic, local, native Restaurants / cafs Conventional vendors Grocery / health food stores Fresh and locally grown Organic Youth and products (taro, mangos) native and local therefore authentic High End (local, foodies) Looking for fresh, local grown, organic Increasing social consciousness when buying Demands high quality produc eshness, appearance, and taste for repeat business Health food stores Other market vendors Restaurants, cafes Fresh and locally grown Organic Diversity of offerings compared to other market growers Youth and social mission of WCRC Low-Moderate (local/ Hawaiian) Makes necessary food purchases, need to spread t heir food dollars Bang for the buck Food that tastes/looks good Food they like Local grocery store Prepared foods Fast food and restaurants Conventionally grown foods Recognize youth growers Have been instructed to buy foods by health care providers MAO produce looks better, has different selection Pricing comparable to local conventional retail items but with a marketable edge Retailers Products in high demand and/or trendy Want to make a mark-up on re-sale Competitive price Top quality and appearance Organic fills new niche Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product Restaurants Products in high demand and/or trendy Freshness and reliable source Competitive price Top quality and appearance Fresh, local, organic Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product Social mission 7. Distribution Mechanisms MA O will connect with the five aforementioned segments by selling product at th e following locations: High-end (tourist) High-end (local) Low-moderate Retail Restaurant KCC Farmers Market, Honolulu Wai anae Health Center

Kaiser Clinic, Nanakuli; Leeward Community College, Pearl City Aloha Aina Caf (farmers market booth) Aloha Aina Caf Town Restaurant, Honolulu Wai anae Store Kokua Natural Foods Cooperative, Honolulu We have gained invaluable experiences thus far in the diversity of markets penet rated. Some trends have developed which are worthwhile mentioning here: (1) At health clinics care-providers and dietitians have staged cooking demonstrations to teach patients new recipes using MA O products, and doctors have purchased un sold product to support the social mission (2) At Leeward Community College facu lty and administrators regularly call the farm to make large orders, this takes some of the guess work out of what to take to a farmers market; and (3) The KCC F armers Market has become an attraction, there are food demonstrations and musicians , and people use the market as a convenient place to meet. All segments are rep resented at KCC including small restaurants that shop for specialty items and to investigate new product suppliers. Also Kokua Natural Foods is in close proxim ity to KCC Farmers Market, unsold product, can be sold to Kokua if necessary. D. MARKETING PLAN 1. Promotions and Outreach The critical strategy for outreach involves customer education of the uniqueness and benefits of organic foods, and the social mission of MA O. Through multipl e branches of media, and with the assistance of WCRCs partnerships, MA O has enjo yed some high profile free advertising, which has set the stage for current posi tioning. This has included:

OUTREACH SEGMENT CONNECTED TO: MA O products were featured on a 30-minute cooking show called Sam Choy Presents. Well-known local chef Sam Choy was hired by Kaiser Permanente to stage a live c ooking show at a local clinic to feature low calorie and vegetarian recipes. Both high-end (local), low-medium, and restaurant segments. The Hawaiian Electric Company has a 30-minute cooking show called The Electric Ki tchen, the Aloha Aina Caf was a guest restaurant and prepared dishes using MA Os h erbs and baby greens. Crossed both high-end (local), low-medium, and restauran t segments. University of Hawai i (UH), working with KITV, a local television station, featu red MA O as a program partner in a news segment called Discover UH, Youll Be Amaze d. Two segments appeared, including a 30-second commercial that ran for to-weeks between the local evening news. All segments except perhaps high end (to urist) KITV has developed additional footage of MA O, and added to other activities uni que to Hawai i to develop an in-flight commercial for Hawai i that runs on fligh ts coming to Hawai i from Japan. Both high-end Hawaiian Airlines in-flight magazine, Hana Hou, featured the farm in a 5-page ce nter-spread with color photos, appeared in the December 2003 issue. Both hig h-end segments. The youth leadership training was featured as a center-spread in the Office of H awaiian Affairs monthly newspaper called Ka Wai Ola o OHA. Low-moderate seg ment. Farm activities were featured in a two-page spread in the Honolulu Magazine, a m onthly-published magazine. MA O was included in the 2004 food edition. High-end (local) Farm activities were featured in one-page spread in the Honolulu Weekly, a free alternative newspaper featuring politics, entertainment and arts. High-end (local) This publicity has occurred over 2-years and has increased MA O recognition. In

2002, youth developed a MA O farm tee-shirt which on the front read no panic, go organic. Over 2,000 tee shirts have been sold and the playfulness of the messag e has become iconic of the grassroots social mission of MA O. 2. Specific Segment Strategies

Customer Segments Specific Outreach Strategies High End (tourist foodies) No specific strategy except when segment attends KCC farmers market. High End (local, foodies) Connect to repeat customer at KCC and develop that mer to cross-market to Town Restaurant and Kokua Continue to build e-mail database Invite customers to attend monthly community work days. Low-Moderate (local/ Hawaiian) Maintain high community profile through presence at markets, occasionally story in the local community newspaper, and by posting fliers and brochures at the Aloha Aina Caf Connect to, and nurture, repeat customers at farmers markets. Continue to build e-mail database Invite customers to attend monthly community work days. Retailers Provide on-site marketing collateral such as laminated product n ametags for vegetables, fliers, and brochures. Invite retailer to bring staff to the farm to increase education on product and mission. Restaurants Encourage restaurant management to acknowledge MA O on menus Provide on-site marketing collateral such as fliers, and brochures. Invite restaurant to bring staff to the farm to increase education on product an d mission.

The farmers market booth is arranged to stimulate customer senses, by: Fruits and vegetables are arranged to catch the eye through color and shape; Youth wear bright green or blue tee-shirts with MA O on the rear and no panic, g rganic on the front; Product is stacked in wicker baskets which conjures a nostalgic sense of old Haw aii, this is how Mom and Pop stores displayed their products; Samples of product are always available, e.g. ripe bananas are given to all chil dren that stop by the booth; Sales youth are lively and playful, chanting slogans such as fresh organic greens or simply arugula, and when time allows a youth might play ukulele; Prices are posted on old-style school blackboards and written in chalk; and Posters with photos of the farm and youth working are arranged where people cann ot miss seeing them. 3. MA O Customer Service Philosophy Excellent customer service skills are vital in agriculture businesses, especiall y enterprises direct marketing to customers. Our goal is to attract and retain customers through high quality product and service experience, therefore; all yo uth are trained in sales and customer service, and they regularly debrief farmers market experiences to find ways to improve sales. We will periodically audit our sales techniques and make necessary adjustments. Of key importance is that you th are knowledgeable regarding products and convey our social mission. To reinf orce the importance of customer service we developed a simple sales philosophy, which youth learn and apply, it is as follows: Make eye contact, greet all people, smile, show maximum aloha; Listen to customers, learn their names, learn how they cook our food, and ask ho w we can improve our products; Communicate with customers, tell them the MA O story, talk about our products, t he farm, and upcoming events; Show aloha to other venders, learn their names and something about their product s, refer customers to them where possible; and Strive for excellence in customer service and product quality.

4. Promotional Materials and Labeling To ensure customer education and information transfer, we developed the followin g promotional materials, this includes: Brochures, fliers, posters which are distributed at all locations; MA O information is added to stakeholders staff bulletins; E-mail distribution lists, sent twice monthly to an in-house list, and the lists of our stakeholders. This reaches approximately 2,000 people; Partner marketing, e.g. marketing is done by the Hawai i Farm Bureau Federation via a web site and regular articles in local newspapers; and The caf staff actively informs customers of the markets, and there is signage alo ng a major town thoroughfare. MA O Youth Organic farm will sell produce simply under the MA O brand label. In m id-2003, a youth involved with the project developed a label that will be used ( see right). All MA O brand products will be sold with labeling to educate the con sumer that the product is certified organic, is grown by youth and that 100% of their purchase will go to support youth leadership development activities. 5. Pricing Overall prices have been set based on competitors prices. Wholesale prices are b ased on the equivalent wholesale price Kokua Market pays for the same imported p roduct. Usually each quarter Kokuas produce buyer gives us a printout of what he is paying California food brokers for product. If they are receiving a discoun ted price for an item we attempt to make an adjustment. Once per month we monit or retail prices at three retail outlets. We sometimes do this as a class field trip for youth in the leadership training. Selling product at KCC farmers marke t allows us to average our price upward to secure a higher margin. At KCC we ca n also move large volumes of product given the number of market shoppers. The b ottom line is that if we are to compete against imported products then we need t o offer prices attractive to the local public. Direct marketing, through such m echanisms as farmers markets, has become the best method to increase margin for s maller farmers. 6. Distribution Through a U.S. Housing and Urban Development grant, WCRC purchased a 2004-model Ford E-350 extended cargo van. The cargo van will be used to deliver produce to farmers markets. Two personal vehicles owned by staff are currently used for th e smaller markets. In 2005, we will purchase two additional vehicles using ANA funds. We use reusable plastic vegetable container totes to package produce for wholesale deliver. These are more hygienic than cartons as they can be easily sanitized. Large coolers are used to transport vegetables to farmers markets; sp ace in the van is equivalent to 24 large 120-quart coolers. 7. Sales Management Under the tutelage of Gary Maunakea-Forth, a youth co-manager, Ms. Kanoe Burgess , manages weekly sales. Kanoe has been with WCRC for 2-years and has already de monstrated sales acumen beyond her years. She is an excellent communicator, and is able to install a sense of confidence and trust in our wholesale and retail clientele. She supervises and motivates youth crews working at farmers markets. Development of the youth-to-customer relationship has increased return clientel e, especially at farmers markets; therefore it is fitting to enlist a youth to ma nage the maturation of our sales strategies. 8. Competitive Advantage Five-months prior to opening Town Restaurant Lesa Griffith, a food critic for th e Honolulu Weekly, wrote that Chef/Owner Ed Kenney would open what could be Honol ulus hottest restaurant. In the same article Kenney summarized MA Os relationship with Town, and in effect our competitive advantage, by stating that: MA O takes it from the earth to the seed to growing the thing to picking kids out

of the community who are in need of help, teaching them the Hawaiian culture, t hen (they) take it to their caf and markets. That whole thing fires me up. Town opened in March 2005, and in her culinary review, Nadine Kam of the Honolul u Star-Bulletin stated that: Town raises the bar for Honolulu s restaurateurs. I hope that, like patrons who are flocking to the restaurant, other chefs eventually get it. She added that: Their philosophy is local first, organic whenever possible, with aloha always, and it shows in MA O Farms greens that do taste as if they were hand-picked from the field seconds before hitting the plate. Over the past 2-years, WCRCs activities, branded as MA O, have received widesprea d media attention. The convergence of social mission (youth development) and ma rket demand (organic foods) has positioned MA O on the verge of an incredible op portunity. Planning, hard-work and skill development have built the foundation for a superior quality product emblemized by freshness, local and now organic. With trategic educational materials, a grassroots approach to promotions, and word-of -mouth support, our customer base will expand and mature in quick-time. E. MANAGEMENT PLAN 1. Organization and Board MA O is a pilot program of the Wai anae Community Re-Development Corporation (WC RC), a non-profit 501(c)3 community development organization. WCRCs mission is t o plan and implement community-based economic development projects which create sustainable employment and business opportunities for Wai anae residents, especi ally youth. In 1999, our community came together to develop an application to t he U.S. Department of Housing and Urban Development for Empowerment ZoneEnterpris e Community status. While the application was unsuccessful, a group continued t o meet to discuss five interest areas: out-of-school youth, sustainable economic development, agriculture, health and Hawaiian culture. The group decided to es tablish an organization with social enterprise development as a key objective. WCRC was incorporated in 2001. 2. Governance WCRC has an active and committed Board of Directors, with extensive experience a nd a commitment to community service. The Board meets every month and they are responsible for policy making, financial oversight, adoption of annual budget, a nd support of grassroots fundraising efforts. All Board members are residents o f the Wai anae community and are of Native Hawaiian ancestry. The Board include s: Kaimana Pine -- WCRC Board President and a founding member of WCRC. Mr. Pine is only 25-years old and has for the past 5-years owned and managed one of O ahus l ast remaining locally owned and operated surf shops. In 2003, he developed a gr aphic design and internet marketing business that specializes in promotion of Ha wai i manufactured products. Malia Miles -- WCRC Board Vice President and current food manager at Pu u Kahea Christian retreat center. Ms. Miles has many years experience in culinary arts and food service and is highly active in community affairs. Cris Akao -- WCRC Board Treasurer and Branch Manager of American Savings Bank, W ai anae. Ms. Akao was born and raised in Wai anae, graduated from both Wai anae Intermediate and Wai anae High School and has worked as Manager and Operations Director for ASB for over 12-years. She brings extensive experiences in communi ty banking, financial oversight, small business financing, and accounting to WCR C, and is responsible for review of monthly financial statements. Kawika Naho opi i -- WCRC Board Secretary and the Center Manager for Olelo Comm unity Television in Wai anae. Mr. Naho opi i is a video production trainer and coordinates community outreach, volunteer and staff management at the Wai anae s

tudio, and provides technical assistance and artistic direction to Wai anae High Schools award winning Searider Productions multi-media program. Austin Miles -- WCRC Board Member and caretaker of Pu u Kahea Christian retreat center. Mr. Miles is active in community organizing and until recently owned a nd operated a popular local eatery where he was head chef. 3. MA Os Position in WCRC MA O will operate as a pilot project of WCRC. WCRC has secured initial funding to launch MA O. Starting in year 3, youth employees of MA O will receive a bonu s based on their performance and MA Os profits. This will provide incentives for the youth to be full partners in expanding production and sales. 4. Executive Management & Staffing Plan Gary Maunakea-Forth is currently WCRCs Agriculture Director, responsible for over seeing agricultural production, expansion, and training of staff and volunteers. Mr. Maunakea-Forth will devote 100% of his time to MA O (resume attached). Ot her staff dedicated to the development of MA O are: J. Kukui Maunakea-Forth is currently WCRC Executive Director. Ms. Maunakea-Fort h holds a BA in Pacific Island & Hawaiian Studies, and a BSc in Cultural Anthrop ology and has more than 10 years experience teaching and managing non-profits. Twenty percent of her overall time will be devoted to administrative and fiscal management for MA O (resume attached). William Aila, Sr., is currently Farm Manager for WCRC and kupuna (elder and ment or) to youth in all of WCRCs activities. He has over 35-years experience in ranc hing, farming, and composting as a business owner, and an extensive background i n heavy equipment operations. Currently he is a part-time contract employee wit h WCRC and half of that time will be devoted to MA O to provide land clearing an d irrigation system development (resume attached). Youth are central to MA O. Three Native Hawaiian youth, recent graduates of WCR C leadership training programs, have been employed. The youth are: Kanoe Burgess. Ms. Burgess, 21-years old, has already gained national attention , through her speech at the Kellogg Foundations Food and Society national conferenc e, on indigenous youth perspectives of agriculture. She coordinates sales and m arketing at MA O. Ikaika Burgo. Mr. Burgo, 20-years old, is perhaps the most natural and gifted armer among our youth. He has a genuine love for being outside and working on t he land, and spends numerous hours fine-tuning nursery and orchard operations. Manny Miles. Mr. Miles, 20-years old, coordinates field crop production at MA O . He has attended conferences and has become active in the BLAST Initiative of Bostons The Food Project, an effort to network young people working in sustainabl e agriculture. Youth from the youth leadership team provide an able labor force of 6 to 12 youn g people, working 18-hours each week. They are paid as interns under the leader ship-training program. MA O will hire two additional full-time youth coordinato rs in year 2. 5. Cooperating Experts This enterprise is strongly supported by Jonathan Deenik, PhD. Dr. Deenik, has a doctoral degree in Soil Science from the University of Hawai i at Manoa, where he is currently employed as an extension specialist and lecturer. Dr. Deenik i s able to provide regular tutelage on technical issues and access to other unive rsity faculty experts. Other stakeholders include: Partner Description of Support Peter Quigley, Vice Chancellor Randy Francisco,

Program Director Leeward Community College (LCC) Provides additional training for youth including higher education courses, and is developing a degree program in Tropical Organi c Agriculture. David Cole, CEO, Maui Land and Pine (former VP of AOL) Partners with MA O to increase youth involvement in orga nic agriculture o Hosted MA O youth in Maui to learn about MLPs current research and develo pment (composting, cover crops, organic pineapple) o Has reviewed MA Os business plan and provided commentary on business stra tegies Joan Namkoong, Organizer KCC and Kailua farmers markets Provides connection to customers and information on local food demand and availability Stephen Bradley, MD, Wai anae Comprehensive Health Center Operates a clinic farmers market, produce s nutrition education literature, and promotes market to community. Lei Aken, Ag Program Teacher, Wai anae High School (WHS) Will establish a n organic agriculture high school program , develop community garden and support trainings. Recruitment of future youth. Hawaii Organic Farmers Association Promote organic agriculture and provide organic certification. Recruitment of future youth.

F. OPERATIONS PLAN 1. Farm Plan MA O has a total of 5-acres of land in Lualualei Valley: 2.5 acres currently in production and another 2.5-acres of cleared land available starting January 2005 . The new land will be developed similar to the current 2.5 acres in 50 wide by 80 long sections, providing 8 beds per section for field crops. We will plant a row of citrus trees between each section. . Mangos and avocados will be plante d along the north fence line. Field crops are planted every one to two weeks, p erennials every three months and orchard trees at start-up. 2. Research & Development The most technically challenging facet of this venture is the organic production . Farming commenced in early 2002, and we have now completed three full years o f soil building, crop testing and experimentation with different organic methods . This has provided invaluable information on organic fertilization; timing of crop planting cycles, and organic seed varieties. The result is a system that h as produced high yields with excellent product quality (taste, shelf-life, appea rance, weight), and minimal insect damage. We augmented on-farm experimentation by visiting many other farms to research new and best practices. Similarly loc al farmers and university extension agents have visited MA O and provided more t echnical information. There are numerous variables that must converge to produc e a healthy crop. Over the past three years we have kept daily input and yield records so that we can better plan for future seasons. We have a strong working relationship with Jonathan Deenik, a PhD soil scientist at the University of Ha wai i, who has assisted with our organic production plan since the inception of farm activities. 3. Crop Growth Given Wai anaes climate and optimal growing conditions, mixed salad greens (lettu ces, arugula, chard, beet tops, tat soi, mizuna, mustard cabbage, kale) take 2528 days from seed to first cutting. This is our biggest seller and we are able to harvest it 2-3 times per planting, with re-growth occurring every 8-10 days.

We also plant a longer rotation every two weeks of fennel, green onion, beets, and carrots, which last approximately 100-days. In our perennial rotation, whic h lasts 4-6 months, we plant basil, eggplant, parsley, kale, chard, and collards . We plant this rotation every four months. 4. Harvest and Quality Control Market demand requires fresh, clean and attractively presented fruits and vegeta bles. For organically grown fruits and vegetables consumers have even higher ex pectations for appearance and cleanliness. Our crops are harvested three times each week. Youth managers and workers are trained to cultivate, harvest and han dle (wash, package, chill) in keeping with these quality standards. Washing vegetables tends to be the most labor-intensive facet of the operation, especially as salad greens are delicate and are double washed. While our curren t packing facility is basic, we have customized faucets so that each sink cleani ng area has overhead washing faucets with shower-flow heads. This frees hands t o concentrate on cleaning the product. After each product has been washed, it i s placed in small quantities (about five pounds) on drying trays and a youth man ager or coordinator inspects the product. The inspector has the option to retur n the tray to the cleaner for additional washing. If the tray is excellent qual ity then a packaging crew handles the boxing or bagging of the product. This pr ovides three points of inspection. Before a product leaves the farm a final che ck is done by choosing a random item from each product. One item from each harv ested crop is also kept to monitor shelf life. 5. Inventory Management Every Monday, we estimate yield quantities for the week. Staff log anticipated yield numbers in a spreadsheet to manage distribution. This system helps us acc ommodate fluctuations in weekly yield to ensure customer satisfaction. To maxim ize freshness, we harvest three times per week and maintain little inventory. F or all points of sale, except KCC farmers market, we harvest and distribute the s ame day. For KCC we harvest, chill over night, and sell in the morning. Our pr esent cold storage is limited to a 108 cubic foot chiller, but in June 2005 we w ill install a 760 cubic foot reefer, which will have an alarm system to monitor possible power outages. 6. Organic Certification In September 2004, MA O Youth Organic Farm received organic certification from t he Hawai i Organic Farmers Association (HOFA), under the auspices of the USDA. H OFA is the only certifying body in the State of Hawai i and the application proc ess involved a 6-month review and final inspection. MA O will be inspected each year and is required to show proof of organic methods. We are obliged to keep accurate records for soil inputs, seed sources, and crop yields. We track the f ollowing data on a customized excel spreadsheet: (1) type of product sold; (2) a mount of product sold: (3) customer that received product; (4) location on farm where product was grown; and (4) history of inputs and events for the area where product was grown. 7. Farmers Markets As aforementioned MA O will sell primarily at markets already tested including: Wai anae Comprehensive Health Center Wednesdays 11:45am Kaiser Permanente, Nanakuli Wednesdays 11:45am to 1:00 Leeward Community College, Pearl City Wednesdays 11:45am Aloha Aina Caf, Wai anae Saturdays 9:00 am to 11:00 KCC Farmers Market, Honolulu Two Saturdays per month, 7:30 am to 11:00

MA O uses the markets as training grounds for youth in our leadership developmen t programs. Our full-time staff provide supervision for each market while the p

to 1:00 pm pm to 1:00 pm am

art-time youth ensure adequate staffing to cover multiple markets simultaneously . 8. Land, Equipment, Office Space, Tools, Resources WCRC leases 5-acres of land located at 86-210 Puhawai Road in Lualualei Valley, which will be used for the MA O venture. The landowner is the Community of Chri st Church and the 25-year term began in 2001. The land has excellent potential for expansion with three of the neighboring properties vacant (see map at right) . MA O will benefit from equipment acquired with WCRC grant funds. This includes a 2001 model 55-hp John Deer tractor and a cargo van. ANA funds will be used to purchase and additional delivery van and a one-ton dump truck. As mentioned col d storage is limited at present but through the aforementioned HUD grant MA O wi ll be constructing a new Organic Agriculture Center to include a 40 x 40 concrete floor processing facility, additional cold storage, and offices. 9. Increasing Youth Capacity In early 2004, WCRC started educational programs at two local schools, using edi ble organic school gardens as an alternative teaching tool. Teachers have been trained to use organic farming techniques as a vehicle to teach social studies a nd science classes. Fruits and vegetables are harvested on a weekly basis, and sold by youth on campus. Youth participants are prime candidates for future emp loyment at MA O, critical to our growth plans. G. FINANCIAL PLAN FOR MA O VENTURE 1. Start-up A grant of $456,000 has been secured from the DHHS-Administration for Native Ame ricans with $317,837 dedicated to this venture to be used in 2005 and 2006, to c omplete development of MA O. This money is listed as restricted grants on the b alance sheet and as ANA grant on the cash flow and income statements. 2. Accounting System & Business Controls. We use Quickbooks as our primary accounting system. We track sales weekly throu gh spreadsheets and review them monthly so that we understand trends related to product and point of sale. This will allow us to analyze the profitability of s ales by specific crop. WCRCs Board of Directors will regularly monitor all these statements for accountability. We have scheduled our first external audit (bas ed on increased budget size) for 2005. 3. Long-term Sustainability WCRC has maintained financial stability while growing rapidly in the past four y ears. Significant steps have been taken to lay a foundation for long-term susta inability, including: Securing a total of $1,354,000 of federal funds the past 4-years to support MA O , for our new caf, and a variety of educational and community projects; Arranging for the purchase of 2.5 acres of land that we currently lease for farm ing, providing leverage to acquire more land in the future; Forging partnerships with industry and business (Maui Land and Pine, Hawai i Org anic Farmers Association, Kokua Natural Foods Cooperative), education (Leeward Co mmunity College, University of Hawai i College of Tropical Agriculture & Human R esources, Kamehameha Schools), to ensure access to markets and technical assista nce; Initiating contractual relationships with Kamehameha Schools/Bishop Estate and A lu Like, a $16 million Hawaiian job training program, to improve job training pr ograms for youth. 4. Proforma Statements

We have included the following financial statements: Projection of weekly customer product orders. These estimates rely on data from the last three years of operations and are the basis for our sales figures for t he next three years. Note that year 3 is a critical point for expansion as prod uctive land and sales double. Annual income statements for years 1, 2, and 3. Monthly cash flow statements for years 1, 2 and 3. Annual balance sheets for years 1,2, and 3. Social Return on Investment (SROI).

Analysis of Social Return on Investment SROI Narrative and Assumptions Community Wealth: Benefits Amount income returned to the community in taxes based on Hawaiian state income tax rate of 6.4% for 16,000-24,000 income bracket. Assumed youth salary: $18,0 00/year. Public assistance not collected based on 20% welfare assistance dependence in th e target community multiplied by average annual payments of $6,168 (Honolulu Sta r Bulletin 1999). Costs Additional staff time for farmer training programs based on the estimate that th e youth dedicate about 20% of their time to leading educational programs. Discounted sales figures were calculated based on establishing an average discou nt taken off the price of produce sold at markets that cater specifically to the low-income, local community. The average discount calculated was 33%, and with this discount taken off, weekly revenue averaged $854. Environment: A conventional farm receives subsidies at a rate of $72.93 per acre. (www.bette rfarming.com) The cost of farming inputs in conventional agriculture is $340/acre (University of Florida, IFAS Extension). By farming organically, MA O is using 50% less ene rgy and resources to farm their land (Lori Drinkwater, Nature Magazine, Nov. 98). The value of training organic farmers is based on average per person, per hour e ducational rates of HOFA (Hawaiian Organic Farmers Association.) We assumed th at for each youth education hour, two individuals receive training, and that thi s hour is valued at $10 per trainee.

RISK ASSESSMENT & CONTINGENCY PLAN While farming has many inherent risks, in just three years of operations MA O, h as created an innovative and successful model that others in Hawai i wish to rep licate. Moreover, the model and systems have been developed with the co-managem ent of youth. Risk assessments have been mentioned throughout this business pla

n and the following table summarizes the important challenges and our mitigation approaches. RISK MITIGATING FACTORS Organic production fails through pests, natural causes, and or other unforeseen circumstances. Thoroughly tested organic methods and systems Expert technical assistance available To anticipate losses, yield assumptions are conservative Ongoing research experiments to ensure new learning Problems with youth, such as lack of motivation. Consensus-building, open communication approach Accountability built within profit-sharing model Expert technical assistance available for youth, and diverse opportunities for i mproving skills. Low Sales Regular customer feedback Diversified product mix Proven demand for products Diversity of markets Options to reduce expenses, if necessary High operating costs, low margins Diversity of markets increase direct sal es and improve margins Source lower cost local supplies, e.g., animal manure Difficulty in attracting suitable staff Grow youth from within the MA O system a nd expose early to other benefits trips to conferences, site visits Seen at the moment as doing cutting edge work so we are in high demand Educational programs with local schools provide pipeline for new staff Operational problems, poor food quality, delivery time Thoroughly tested system Access to high-end chef who will help to assess product quality Technical assistance available to investigate unforeseen crop failures MA O system reinforces importance of product quality, assessment and feedback gi ven to youth three days per week. Marketing problems, regulatory barriers and costs Diversity of end markets Certified organic status already achieved Classes to teach safe food handling strategies Caf is a certified kitchen and their staff provide guidance Departure of key project employees Inherent to WCRC is the training, empowe rment and employment of youth, new leaders constantly being developed WCRC Board will create a succession plan H. ENDNOTES

TABLE OF CONTENTS A. EXECUTIVE SUMMARY 2 B. BUSINESS DESCRIPTION AN ORGANIC OPPORUNITY 4 INTRODUCTION 4 PRODUCT 4 GROUNDWORK FORTHE VENTURE 4 CROPS TO BE GROWN 5 THE OPPORTUNITY 6 OUR COMMUNITY 7 LAND USE, (RE)CONNECTING TO AINA (LAND) 7 C. INDUSTRY AND MARKET ANALYSIS 9 GROWTH IN THE ORGANIC INDUSTRY 9 THE HAWAI I MARKET 9 LOCAL COMPETITION 11 OFFSHORE ORGANIC COMPETITION 12 FARMING IN HAWAI I 12 CUSTOMER PROFILE 13 DISTRIBUTION MECHANISMS 15

D. MARKETING PLAN 16 PROMOTIONS AND OUTREACH 16 SPECIFIC SEGMENT STRATIGIES 17 MA O CUSTOMER SERVICE PHILOSOPHY 17 PROMOTIONAL MATERIALS AND LABELING 18 PRICING 18 DISTRIBUTION 19 SALES MANAGEMENT 19 COMPETITIVE ADVANTAGE 19 E. MANAGEMENT PLAN 20 ORGANIZATION AND BOARD 20 GOVERNANCE 20 MA OS POSITION IN WCRC 21 EXECUTIVE MANAGEMENT & STAFFING PLAN 22 COOPERATING EXPERTS 22 F. OPERATIONS PLAN 23 FARM PLAN 23 RESEARCH AND DEVELOPMENT 23 CROP GROWTH 23 HARVEST AND QUALITY CONTROL 24 INVENTORY MANAGEMENT 24 ORGANIC CERTIFICATION 24 FARMERS MARKETS 24 LAND, EQUIPMENT, OFFICE SPACE, TOOLS, RESOURCES 25 INCREASING YOUTH CAPACITY 25 G. FINANCIAL PLAN 26 START-UP 26 ACCOUNTING SYSTEM & BUSINESS CONTROLS 26 LONG-TERM SUSTINABILITY 26 PROFORMA STATEMENTS 26 H. RISK ASSESSMENT & CONTINGENCY PLAN 35 I. ENDNOTES 36 A.

Leaders must deal with apathy along the Leeward Coast (Wai anae), perhaps it com es from poverty and repeated disappointment, or from people too busy trying to s urvive and eke out a living. We hope that those that care can reach out to thos e who dont and sow the seeds of positive change for the future of beautiful Wai a nae. - Editorial, The Honolulu Advertiser, March 25, 2004 In September 2003, youth from a leadership training program began selling organi cally grown products at farmers markets located at health clinics in Wai anae, Ha wai i. Their goal was to make affordable and healthy fruits and vegetables avai lable to residents of their low-income community. The youth exceeded all expect ations products sold quickly, customers returned each week wanting more, and now these young people are poised to build on the test markets to become the larges t producer of USDA certified organic fruits and vegetables on the island of O ah u. The Wai anae Community Re-Development Corporation (WCRC), a Hawai i non-profit 5 01(c)3 corporation, proposes the development of the MA O Youth Organic Farm (MA O). MA O will train and employ out-of-school youth from the Wai anae community. These youth will grow a diversity of field crops (e.g., salad greens, herbs, e ggplant) and fruits trees (e.g., mango, limes) using organic methods certified b y the U.S. Department of Agricultures National Organic Program rules, on five acr es of land leased by WCRC. The objectives of MA O will be to:

EXECUTIVE SUMMARY

 Increase productive land from 2.5 to 5-acres by the end of 2007, and expand to t en acres by 2010; Distribute 50% of produce to the Wai anae community at affordable prices; Provide employment, as well as business and sales training to Wai anae youth; Conduct research and provide advanced training in organic agriculture and commun ity food systems; Work collaboratively with WCRCs other programs to support the development of youn g people; and Restore idle land to productive use. MA Os evolution dates back to 2001, when WCRC established the Mala Ai Opio Comm unity Food Security Initiative, a project to create a community food system to f ight hunger, improve nutrition, strengthen local agriculture and empower local f amilies to move towards self-sufficiency. In the Hawaiian language mala ai op io means the youth food garden, and ma o is also the Hawaiian name of the endemi c cotton plant that makes its home in the Wai anae area. With youth leadership development as a core objective, WCRC established a series of interconnected act ivities with the MA O farm site as the primary training venue. Life is a daily struggle for many young people in Wai anae. Local public school s are failing to meet the standards of the federally mandated No Child Left Behi nd Act. They experience high drop-out rates and illiteracy compared to the res t of the state. There are few opportunities for post-secondary employment and t raining. Wai anae has the states highest unemployment rate. Teenage pregnancy r ates are high. Add to this a rapid growth in the distribution and use of crysta l methamphetamine, and a formula for community deterioration and juvenile delinq uency is created. This venture is being planned and implemented to provide an employment, training and life-style opportunity for young people, while they work to improve the com munity. MA O is founded with an entrepreneurial philosophy that is guided by ou r Hawaiian cultural traditions, with business activities developed to revive and expand upon Hawaiians traditional love and respect for the land. There are many local projects that have attempted to integrate social enterprise with Hawaiian culture; however, MA O stands out from its competition however, through combini ng the explosive growth predicted for the organic agriculture industry with meth ods that are deeply respectful of Hawaiian culture and sustainability. This mar ket opportunity provides fertile ground for youth to make a radical contribution to the social and economic life of the Wai anae community, our home. The national organic food industry has experienced rapid growth over the past 20 -years. By 2001, sales of organic foods reached $8 billion and there has been 20% growth annually in national organic sales over the past 10-years, The Orga nic Trade Association projects that the U.S. organic market will reach $30.7 bil lion by 2007. While this is small compared to the conventional foods industry, O TA reports that conventional food growth is only 2-3% per year versus organic fo ods, which is growing 17-20% annually. According to the Hawai i Organic Farmers Association (HOFA), Hawai i imports over 90% of organic produce. At the same time, there are only nine organic farms l ocated on O ahu where 870,000 consumers reside,). Demand for fresh, local and organic foods is best illustrated by the recent establishment of three Hawai i F arm Bureau Federation markets on O ahu. The Kapiolani Community College (KCC) F armers Market, which opened in late 2003, attracts over 2,500 visitors each Satu rday, and specializes in 100% Hawai i grown products. The Hawai i organic agric ulture industry still lags behind the national growth figures, due to inflated l and prices, the pressure of urban development, and the difficult shift from the plantation agriculture system. The scarcity of local organic fruits and vegetab les has made MA Os certified organic product highly attractive to consumers.

MA Os competitive advantage has been well established. WCRC recently secured sub stantial funding from the U.S. Department of Housing and Urban Development, as w ell as the U.S. Department of Healths Administration for Native Americans (ANA) t o support this program. In its pilot year, MA O established thriving farmers mar kets and strong relationships with retailers and restaurants, in which demonstra ted demand far outstripped supply. MA O has also developed partnerships with Le eward Community College to train youth and with Maui Land and Pine CEO, David Co le, to collaborate in the development of a local organic industry. Most importa ntly, MA O has a cadre of strong and determined youth many already trained and e ager to instruct others with ambitions beyond their years, and a drive to become the largest producer of certified organic fruits and vegetables on the island o f O ahu. B. BUSINESS DESCRIPTION AN ORGANIC OPPORTUNITY 1. Introduction In September 2003, youth from a leadership training program commenced selling or ganically grown products at farmers markets located at the Wai anae Comprehensive Health Center and Kaiser Permanente Health Clinic, in Nanakuli, both located on the Westside of the island of O ahu, Hawai i. The goal: to get healthy organic fruits and vegetables, sold at a fair price, into the regular food purchases of the low-income community. The youth exceeded all expectations products sold qu ickly, customers returned each week for more, and now a group of young people ar e poised to build on these test markets to become the largest producer of USDA c ertified organic fruits and vegetables on the island of O ahu. 2. Product The Wai anae Community Re-Development Corporation (WCRC), a Hawai i non-profit 5 01(c)3 corporation, proposes the development of the MA O Youth Organic Farm (MA O), a venture managed by out-of-school youth from the Wai anae community. MA O will cultivate a diversity of field crops and fruit trees, using organic methods certified by the U.S. Department of Agriculture National Organic Programs rules, on 5-acres of land currently leased by WCRC. The objectives of MA O will be to: Increase production of organic fruits and vegetables to a total of 5-acres, with each acre developed to gross at least $50,000 by the end of 2007; Distribute at least 50% of product into the Wai anae community through community farmers markets; Provide employment with profit-incentives to three youth at start-up with two yo uth added by Year 2; Work collaboratively with University of Hawai is College of Tropical Agriculture and Human Resources (CTAHR) and Leeward Community College (LCC) to increase rese arch and advanced training in organic agriculture production; Work collaboratively with WCRCs other programs to cultivate new organic farmers; and Restore idle land to productive uses, and reawaken the Hawaiian connection to ag riculture. 3. Groundwork for the Venture In 2001, WCRC established the Mala Ai Opio (MAO) Community Food Security Initia tive. This initiative was developed in order to create a community food system, fight hunger, improve nutrition, strengthen local agriculture and empower local families to move towards self-sufficiency. In the Hawaiian language mala ai opio means the youth food garden and ma o is also the Hawaiian name of the endemic Wai anae cotton plant. WCRC established a series of interconnected activities with youth leadership development as a core objective and the MA O farm site was established as the primary training venue. These activities now support the lo ng-term competitive advantage of MA O, and are described as follows:

ACTIVITY HIGHLIGHTS 1. Youth Leadership Training (YLT). The YLT is a 10-month long, 18-hours p er week, leadership training for low-income, out-of-school, Wai anae youth, prov iding them with a paid educational, entrepreneurial, and agricultural work exper ience. This is the recruitment and training mechanism for MA O Farm, an d provides a regular labor source for farm operations. 2. Aloha Aina Caf and Natural Foods was opened in April 2003, specializes i n healthy breakfasts and lunches using locally-grown products. The caf will be a customer, a farmers market site and a showcase for MA O products. As a commercial kitchen, the caf provides for the possibility of value -added product development opportunities. 3. Local Community Farmers Markets. Four farmers markets have been establish ed at the Aloha Aina Caf, Wai anae Comprehensive Health Center, Kaiser Permanent e Health Clinic, and Leeward Community College (LCC). Farmers markets have test ed and proven demand. The local customer base has been introduced to the organic concept and the MA O product. Clinic markets support the WCRC mission. 4. Ai Pohaku Workshop, hands-on, culturally-based learning activities at Wa i anae Intermediate School (WIS) and Wai anae High School (WHS), that mix tradit ional Hawaiian taro cultivation with edible, organic school gardens. The gard ens illustrate the skill-set and experience already developed in the youth that will lead MA O and provide fertile ground for youth training and recruitment. 5. The Wai anae Organic Agriculture Center, in partnership with Leeward Com munity College (LCC), expands research and training activities in Wai anae. The partnership was awarded a U.S. Department of Housing & Urban Development gra nt of $579,000 to purchase 2.5 acres of WCRCs leased land, and to build an improv ed post-harvest packing and chilling facility which will increase MA Os productio n handling capacity. 4. Crops to be Grown Over the past three years, WCRC has developed farm operations on 2.5-acres as an integral training component of the Youth Leadership Training. This commenced w ith the planting of fruits trees and bananas and the organic conditioning of soi ls for field crops. Thereafter, approximately 30 field crop varieties were grow n and sold, with information gathered on: (a) Best seed varieties; (b) Hardiness of crop to local conditions; (c) Reaction of crop to organic methods of product ion; and (d) Marketability. Product was sold to Kokua Natural Foods Cooperative , a cooperatively-owned grocery store specializing in organic foods located near the main campus of the University of Hawai i. Kokua has a customer base of edu cated professionals, vegetarians, and people generally adept at cooking. This e xperience gave WCRC product feedback, as well as information on the demand for, and lack of supply of, locally-grown, organic fruits and vegetables. Through th e development of this venture, MA O will assume overall responsibility for farm operations of the already developed 2.5-acres, and in May 2005 will begin prepar ation and cultivation of an additional 2.5-acres. Hawai i has a 12-month growin g season and crops to be grown include:

Cilantro Daikon Pak choy (bok choi) Romaine lettuce Various lettuces, arugula, kale, chard, beets and Asian greens (tat soi, mustard greens, mizuna) combined to produce two different salad mixes This will be our regular rotation (short) planted every 14-days, ready to harvest from day-28 thro ugh to day-45, with crops completed in 50-days. Beets Carrots Fennel Green onion This will be our regular rotation (long) planted every 28-days, r ady to harvest from day-70 through to day-100, with crops completed in 105-days. Basil

 Collard greens Eggplant (Japanese and Italian) Kale (Red Russian, blue curly, lacinato) Parsley (curly and flat-leaf) Swiss chard Taro This will be our perennial rotation planted every 3-months, ready to harv st in 80-days, with crops completed in 5-6 months. Lemon (Meyer variety) Mango (Haden and Kiett varieties) Orange (various Washington naval varieties) Tangerine (Clementine and Fremont varieties) Trees will be planted as an inco me-generators with first harvest being in year 3, and as a wind break on the win dward areas of the farm. 5. The Opportunity MA O will utilize the organic production techniques and market research achieved through WCRCs start-up period to expand production and sales. The youth-managed venture will provide planned financial incentives based on business and persona l performance. MA O will sell fruits and vegetables at the already established farmers markets, at the recently established Kapiolani Community College (KCC) Fa rmers Market, held every Saturday morning in Honolulu (the market attracts over 2 ,500 visitors each week), and to restaurants. In October 2004, WCRC received a $456,000 two-year grant from the U.S. Department of Health and Human Services Adm inistration for Native Americans (ANA), for Native Hawaiian youth education and economic development activities. The ANA grant will provide salary support for 2-years for a total of five Native Hawaiian youth and project directors, and cov er costs of equipment needed to operate a farm. WCRC carries a 25-year lease fo r 5-acres, 2.5 of which will be purchased in early 2006 using the aforementioned U.S. HUD federal grant. 6. Our Community MA O is situated in a community of 45,000 residents, of which more than 40% are Native Hawaiian. The entire Wai anae Coast has levels of poverty near 20% with some census tracts exceeding 50%. On the Wai anae Coast 45% of the entire popu lation is under the age of 25 years, 34% is under the age of 18 years versus 24% across the State of Hawai i (Census 2000). The current unemployment rate for O ahu is 3.5% while the Wai anae Coast rate is approximately three times the isla nd average. A report on food security to the 2003 Hawai i State Legislature (A Report to the Legislature on SCR 75, SD1, HD1, 2002), submitted by the State Office of Planning , describes Wai anae is one of the worst of the at-risk, food insecure communities , which translates to poorer self-reported physical and mental health, higher le vels of obesity, diabetes, and arthritis. According to the Wai anae Coast Comp rehensive Health Center, the largest local health provider, at least 50% of resi dents suffer from obesity. Over multiple generations Wai anae residents have be come dependent on the welfare system in which the percentage of people in Wai an ae receiving welfare support (Temporary Assistance to Needy Families and Food St amps) is four times that of the State of Hawai i. And yet, this is not our comm unitys history. Wai anae was once a self-sufficient community, easily growing fo od and managing land and water resources to provide for community needs. Wai anae youth, a majority of whom are of Native Hawaiian descent, attend local public schools that are failing to meet the federally mandated No Child Left Beh ind Act. Worse still, when you look beyond the school environment, there are fe w opportunities for post-secondary employment and training, strained parents and families, and high rates of school drop-out and illiteracy compared to the rest of the state. Add to this a rapid growth in the abuse of crystal methamphetami ne and you have a formula for perpetuation of difficult conditions in Wai anae.

7. Land Use, (Re)Connecting to Aina (land) and Community Values One of the core Hawaiian values is aloha aina or love of the land. In pre-cont act Hawai i, people lived within an agricultural system that sustained as many a s 500,000 people. Wai anae has a rich agrarian history, from the pre-contact We stern period when Hawaiians farmed the entire region, through to the late 1800s a nd early 1900s when Hawaiian, and Chinese, Filipino, Okinawan, and Japanese immig rants farmed the valley regions independent from the more dominant plantation ag riculture system. Fresh water, a precious resource in arid Wai anae, was carefu lly managed, with a portion diverted to taro patches in the upland and then retu rned to the stream with nutrients that would feed into the estuaries and coastal fisheries. Crops such as taro, banana, sweet potato and breadfruit were raised in abundance, but over time Hawaiian farmers have lost the use and ownership of the land.

Today, Wai anae residents still embrace the idea of an agricultural community, c haracterizing the area with terms like rural, open space and agrarian lifestyles. Ho ever, the economy and peoples lifestyles have moved away from agriculture. Two o f our most fertile valleys are used predominantly by the U.S. military: Makua Va lley is used exclusively for live fire training; and 75% of Lualualei Valley, wh ere MA O is located, is used for munitions storage and as a naval communications base. Makaha Valley, to the north of Lualualei, has an exclusive gated communi ty, with a resort and two golf courses. In addition, much of Lualualei Valleys p rime agricultural land is no longer in production because the past generation of farmers encouraged their children to move away from the hard life of farming, e ncouraging them to seek professional careers. The Wai anae area already has thr ee landfills, and more prospective sites have been identified. In order to revi ve and expand upon Hawaiians traditional love and respect for the land, MA O has been founded with an entrepreneurial philosophy that is rooted in our cultural t raditions. C. INDUSTRY AND MARKET ANALYSIS 1. Growth in the Organic Industry From the early 1960s to 1980 the organic agriculture industry grew steadily acros s the United States. In the 1960s the industry was jump-started when information on the dangers of pesticides came to public prominence, most notably with the p ublication of Rachel Carsons Silent Spring in 1962. Consumers grew to understan d the connection between personal and environmental health, and over the course of time a genuine shift in food consumption patterns occurred. After 1980, the organic foods sector grew rapidly. By 2001, sales of organic foods reached $8 b illion and there has been 20% growth annually in national organic sales over th e past 10-years. There are multiple factors that have contributed to this growi ng demand, including: th; Increase in diet related illnesses, such as the rate of U.S. obesity amongst you Increased health care costs and adoption of preventative medicinal practices; Growth in the physical fitness industry, gourmet cooking, and fine dining; Public awareness of fast-foods detrimental impact on health; and Major public health crisis, such as Mad Cow disease.

What was once an industry propelled by farmers markets and natural foods cooperat ives has now become mainstream. The Organic Trade Association (OTA), the leadi ng industry advocate, lists some examples of growth trends; including: In 2002, more organic foods were purchased in regular retail supermarkets than a ny other location. Organic foods are now available in over 20,000 natural foods stores and are found in over 70% of conventional retail groceries; Huge food and beverage corporations, such as Kraft and Coca-Cola, have now joine d the organic market by purchasing leading organic brands. USA Today reported i

n their December 2, 2004 edition that the San Diego Padres and the St. Louis Car dinals would be serving organic franks alongside conventional hot dogs; and A national survey done in 2002 of 1,000 consumers showed that 58% had purchased organic foods. OTA projects that the U.S. organic market will reach $30.7 billion by 2007. Thi s is still miniscule compared to the conventional foods industry but OTA reports that conventional food growth at 2-3% per year while organic foods has been cli mbing at the growth rate of 17-20% annually. 2. The Hawai i Market The Hawaiian demand for organics may not easily correspond with national market trends due to our unique location. Certainly there have been similar public hea lth and environmental scares. In 1993, the chemical pesticide heptachlor, recog nized by the EPA as carcinogenic, was banned because residues were found in a nu mber of agriculture products including cows milk and cucumbers. Heptachlor had b een used to eradicate ants from pineapple and to kill termites in homes. Desp ite this type of impetus, Hawai i has been slow to embrace organic foods. The National Agriculture Statistics Service (NASS) reported in 2003 that of Hawai is $553 million total farm revenue, only an estimated $4.8 million was organic (les s than 1% of total Hawai i farm revenue). Comparatively U.S. organic produce re presents over 2% of total farm revenue. There are seven small natural foods stores on the island of O ahu and like the c ontinental U.S., organic fruits and vegetables can now be found in Hawai is regul ar retail grocery stores. Of nine regular grocery outlets surveyed for this bus iness plan, six stocked organic fruits and vegetables. Of the three that did n ot stock organic produce one had been in recent contact with MA O to purchase pr oduct. Of the six stores that did stock organic fresh produce, a non-scientific visual survey of inventory showed that less than 10% was locally sourced. In t wo stores none of the organic produce was from Hawai i. Hawai i imports over 80% of all fruits and vegetables, and 90% of fresh organic produce. Organic foods already sell at a premium, where the additional cost o f shipping to Hawai i increases the retail price of organic foods out of the ran ge of most local residents. Recently, however, big-box retailers such as Costco have started importing large volumes of organic salad greens from California, s elling them at a third of the price of the same locally produced product. For the most part, the local trend in organic foods is closely aligned with the emer gence of Hawai i Regional Cuisine, a merging of Eastern and Western cooking infl uences that mirrors Hawai is cultural diversity. Chefs have connected with smal ler farms to source the freshest ingredients and have asked for organic fruits, vegetables and meats. This market had been predominantly a tourist audience (hi gh-end, college-educated travelers staying at resorts), but over the past decade many restaurants have been established in local communities. This trend has st imulated the local market, and is best illustrated by the recent establishment o f three Hawai i Farm Bureau Federation (HFBF) farmers markets on O ahu. In Honol ulu, the Kapiolani Community College (KCC) Farmers Market, opened in late 2003, attracts over 2,500 visitors each Saturday. The markets development has been cri tical for local farmers because it is the first time a market has required all p roducts be grown in the Hawaiian Islands. At other farmers markets on O ahu, suc h as the City and County of Honolulu operated Peoples Open Markets, vendors may s ell imported fruits and vegetables. According to the Hawai i Organic Farmers Association (HOFA), the local trade asso ciation for organic growers, there are now approximately 132 certified organic f arms in the State of Hawai i with only nine located on O ahu where 870,000 cons umers reside. It is difficult to extrapolate exactly how large the organic fru its and vegetables market is on O ahu, partly because State agencies do not as y et collect organic-specific data.

A measure of industry size can be understood by looking at growth trends related to a leading retail outlet on O ahu called Kokua Natural Foods Cooperative. Fo rmed over 25-years ago, Kokua has a membership of 2,400 and occupies a small gro cery outlet approximately 2,000 square feet, close to the campus of the Universi ty of Hawai i. The membership, staff and Board have collectively decided that a n expansion is imperative at this time because currently no national health food chains, such as Whole Foods or Trader Joes, have entered the Hawai i market, and there are industry rumors that Whole Foods is researching local store locations . Kokua hired industry consultants to survey the market potential and reported that Kane ohe, located on the Windward Side of Oahu, would be an ideal location f or expansion. Kane ohe has a population of 35,000 people, and the industry cons ultants deduced that the total natural foods market for Kane ohe is valued at ov er $4 million, with 18-20% of sales predicted to be organic fruits and vegetable s. Since Kane ohe represents 4% of O ahus population, the overall organic fruit and vegetable market size could be as large as $20 million. Local industry leaders believe that organic agriculture is poised to expand. In a Hawai i Business Magazine special report on agriculture, various experts, inc luding Mr. Alan Takemoto, Executive Director of the Hawai i Farm Bureau Federati on, identified organic agriculture as having great potential in Hawai i. In supp ort letters, Ms. Joan Namkoong of the Hawai i Farm Bureau Federation and Mr. Dav id Cole of Maui Land and Pine clearly state that the market is wide-open. Mr. C ole states that there is great economic potential especially given the growing cons ciousness of consumers. 3. Local Competition There are a number of small organic farms that operate on O ahu. These farms ge nerally sell products wholesale to local health food stores because this ensures a steady price and quantity demand, contrary to farmers market booths that pose increased risk and require investment in an increased labor force. There have b een two well-known local certified organic growers: Ko Farms sells fresh herbs, salads, and greens to all of Hawai is natural foods s tores, and to a number of supermarkets. They recently sold their Waimanalo farm , and the owner Daniel Ko now works for the State Department of Agriculture. Da niels wife still grows specialty herbs and sells to all the natural foods stores. The quality of their product is very high, but production capacity low; and Lone Palm Organic Farms on the Big Island of Hawai i. Lone Palm is one of only a few neighbor island organic growers that regularly ship to O ahu. They specia lize in high quality sprouts and lettuces and work with three other growers to m ake salad mixes sold to natural foods stores, restaurants and supermarkets. The ir product is very high quality and strongly supported by local consumers in hea lth food outlets, and their production capacity is high. Two other certified growers occasionally attend KCC Farmers Markets they are: (1) Ono Organic Farms, a 30-acre Maui-based grower of exotic fruits, papaya and ban ana; and (2) Lotus Farms, a 1-acre O ahu based chicken farm. A scan of HOFAs cer tified growers list shows that the majority of local growers tend towards mono-c ropping products such as macadamia nuts, papaya, pineapple or coffee. Maui Land and Pine (MLP) is the largest grower in the State and specializes in organic pi neapples. They will certainly expand in the future, but as the support letter indicates they are exited about collaborating to expand the overall organic mark et in Hawai i. There are regularly thirty-five booths at the KCC Farmers Market, of which 15-20 are farmer-operated fruit and vegetable sales booths. There are a number of co nventional farmers that grow the same vegetable varieties as MA O, one of the mos t successful is Dean Okimoto. Mr. Okimoto owns Nalo Farms, a 5-acre farm recogn ized as one of the most successful farms in Hawai i today. Mr. Okimoto has been

able to penetrate the high-end restaurant market and his signature Nalo Greens, a delicate combination of mixed baby lettuces, is featured at over 100 of Hawai is best restaurants. It is often difficult for consumers to distinguish between o rganic and conventional products, however, at MA Os sales booth our young Hawaiia n sales representatives are large in number and energetic, and their exuberance draws customers to our products. Signage at our booth features liberal referenc e to organic which quickly informs customers of our status as organically-certifie d. 4. Offshore Organic Competition MA O will directly compete with offshore farms at Kokua but our broader sales st rategy is to sell through farmers markets, where imported products are prohibited . The growth of local-only farmers markets will help to insulate MA O from offsh ore competition. Nevertheless, offshore farms capture 90% of our market, so it is critical to understand who they are. Two of the largest are: Earthbound Farms, is one of the largest certified organic producers in the U.S., comprising 24,000 acres in California and Mexico. Earthbound grows a wide rang e of field crops but currently only the salad mixes are sold in Hawai i through conventional supermarkets and large retailers (Costco, Safeway, Star Market, Foo dland) and at natural foods stores (Down to Earths three O ahu locations). Their products are excellent, but like other imported items, suffer from short shelf life. Cal-Organic Farms, is an organic division of Grimmway Enterprises, Inc., a growe r of conventional product. They distribute carrots, chard, green onion, kale an d many herbs to all of Hawai is natural food stores and conventional supermarkets . Their product quality is average to high. Kokua has complained that their sh elf life is less than MA O grown produce, and Kokua has preferred to purchase MA O produce over Cal-Organics, when available (this has included kale, chard, and green onions). 5. Farming in Hawai i If the market for organic fruits and vegetables has so much potential for growth , why arent more conventional farmers shifting to organic production, and why are there so few new farmers entering this sector? There are multiple factors, whi ch converge to make entering organic production very difficult. On O ahu inflat ed land valuations make it extremely costly to secure land for either organic or conventional farming. The average cost of an acre of undeveloped farmland in W ai anae is now over $80,000, while the median sales price of a home on O ahu is over $500,000. Concurrently, there is considerable pressure from urban develo pment for more land. The Kunia Plain, once O ahus largest sugar growing area, is being encroached by housing developments. Most new farmers enter the market vi a leased land, with the market rate being $125 per acre per month. Leasing, how ever, can be problematic as landowners have preferred short-term leases because of the potential to rezone land from agriculture to urban for housing developmen t. Even O ahus largest growers, Jefts Farms and Aloun Farms, have large portions of their land in short-term leases, some less than 5-years. Best practice organic agriculture requires an investment in soil building/condit ioning, which means income-generation does not start until late in year one of a n operation, at the earliest. Also, there should be periods where fields are le ft fallow and cover crops are planted, as this improves soil quality. Again, th is increases the time out of production. Most growth in the local organic agric ulture sector has occurred on the neighbor islands, especially the Big Island of Hawai i, where land is cheaper. Other reasons why there are few local organic farms, as suggested in supporting letters from Ms. Joan Namkoong and Mr. David Cole, include limited local technic al expertise in organic agriculture and a lack of coordinated support amongst ag ricultural sectors and agriculture supporters. Hawai i is transitioning out of plantation agriculture and there is limited entrepreneurial capacity amongst new

growers. David Cole, the current Maui Land and Pine CEO, and former CEO of Nav iSoft Inc., and former president of AOL s New Enterprises Group, states in his s upport letter that: The transition away from the plantation model has been difficult because the farm industry has been slow to adapt to the new environment, there have been few mar ket makers to match local producers with consumers and there is a lack of capita l available to pioneering entrepreneurs. In 1996, Mr. Cole acquired Sunnyside Farms, a 500-acre Virginia farm. He re-lau nched Sunnyside as a certified organic supplier of gourmet quality fresh produce and meats. What makes the MA O venture especially unique is that it is on the cusp of being a market maker and pioneering entrepreneur while being a non-profit so cial enterprise. 6. Customer Profile In the initial phase of market development, five sales locations with uniquely d ifferent core customers have been tested: (1) farmers markets at different busine ss locations where MA O was the exclusive vender (including health clinics); (2) a low-medium end Wai anae grocery store; (3) a high-end farmers market; (4) a hi gh-end health food cooperative grocery outlet; and (5) a high-end gourmet restau rant in Honolulu. An overview of how these locations have evolved into clear se gments can be seen in the following table:

Customer Segments Buyer Behavior Needs (perceived) Alternatives Competitive Advantages High End (tourist foodies) Looking for a native and local experience Want to try something new High quality Good looks and taste Exotic, unique choices Authentic, local, native Restaurants / cafs Conventional vendors Grocery / health food stores Fresh and locally grown Organic Youth and products (taro, mangos) native and local therefore authentic High End (local, foodies) Looking for fresh, local grown, organic Increasing social consciousness when buying Demands high quality produc eshness, appearance, and taste for repeat business Health food stores Other market vendors Restaurants, cafes Fresh and locally grown Organic Diversity of offerings compared to other market growers Youth and social mission of WCRC Low-Moderate (local/ Hawaiian) Makes necessary food purchases, need to spread t heir food dollars Bang for the buck Food that tastes/looks good Food they like Local grocery store Prepared foods Fast food and restaurants Conventionally grown foods Recognize youth growers Have been instructed to buy foods by health care providers MAO produce looks better, has different selection Pricing comparable to local conventional retail items but with a marketable edge Retailers Products in high demand and/or trendy Want to make a mark-up on re-sale Competitive price Top quality and appearance Organic fills new niche Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product

Restaurants Products in high demand and/or trendy Freshness and reliable source Competitive price Top quality and appearance Fresh, local, organic Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product Social mission 7. Distribution Mechanisms MA O will connect with the five aforementioned segments by selling product at th e following locations: High-end (tourist) High-end (local) Low-moderate Retail Restaurant KCC Farmers Market, Honolulu Wai anae Health Center Kaiser Clinic, Nanakuli; Leeward Community College, Pearl City Aloha Aina Caf (farmers market booth) Aloha Aina Caf Town Restaurant, Honolulu Wai anae Store Kokua Natural Foods Cooperative, Honolulu We have gained invaluable experiences thus far in the diversity of markets penet rated. Some trends have developed which are worthwhile mentioning here: (1) At health clinics care-providers and dietitians have staged cooking demonstrations to teach patients new recipes using MA O products, and doctors have purchased un sold product to support the social mission (2) At Leeward Community College facu lty and administrators regularly call the farm to make large orders, this takes some of the guess work out of what to take to a farmers market; and (3) The KCC F armers Market has become an attraction, there are food demonstrations and musicians , and people use the market as a convenient place to meet. All segments are rep resented at KCC including small restaurants that shop for specialty items and to investigate new product suppliers. Also Kokua Natural Foods is in close proxim ity to KCC Farmers Market, unsold product, can be sold to Kokua if necessary. D. MARKETING PLAN 1. Promotions and Outreach The critical strategy for outreach involves customer education of the uniqueness and benefits of organic foods, and the social mission of MA O. Through multipl e branches of media, and with the assistance of WCRCs partnerships, MA O has enjo yed some high profile free advertising, which has set the stage for current posi tioning. This has included:

OUTREACH SEGMENT CONNECTED TO: MA O products were featured on a 30-minute cooking show called Sam Choy Presents. Well-known local chef Sam Choy was hired by Kaiser Permanente to stage a live c ooking show at a local clinic to feature low calorie and vegetarian recipes. Both high-end (local), low-medium, and restaurant segments. The Hawaiian Electric Company has a 30-minute cooking show called The Electric Ki tchen, the Aloha Aina Caf was a guest restaurant and prepared dishes using MA Os h erbs and baby greens. Crossed both high-end (local), low-medium, and restauran t segments. University of Hawai i (UH), working with KITV, a local television station, featu

red MA O as a program partner in a news segment called Discover UH, Youll Be Amaze d. Two segments appeared, including a 30-second commercial that ran for to-weeks between the local evening news. All segments except perhaps high end (to urist) KITV has developed additional footage of MA O, and added to other activities uni que to Hawai i to develop an in-flight commercial for Hawai i that runs on fligh ts coming to Hawai i from Japan. Both high-end Hawaiian Airlines in-flight magazine, Hana Hou, featured the farm in a 5-page ce nter-spread with color photos, appeared in the December 2003 issue. Both hig h-end segments. The youth leadership training was featured as a center-spread in the Office of H awaiian Affairs monthly newspaper called Ka Wai Ola o OHA. Low-moderate seg ment. Farm activities were featured in a two-page spread in the Honolulu Magazine, a m onthly-published magazine. MA O was included in the 2004 food edition. High-end (local) Farm activities were featured in one-page spread in the Honolulu Weekly, a free alternative newspaper featuring politics, entertainment and arts. High-end (local) This publicity has occurred over 2-years and has increased MA O recognition. In 2002, youth developed a MA O farm tee-shirt which on the front read no panic, go organic. Over 2,000 tee shirts have been sold and the playfulness of the messag e has become iconic of the grassroots social mission of MA O. 2. Specific Segment Strategies

Customer Segments Specific Outreach Strategies High End (tourist foodies) No specific strategy except when segment attends KCC farmers market. High End (local, foodies) Connect to repeat customer at KCC and develop that mer to cross-market to Town Restaurant and Kokua Continue to build e-mail database Invite customers to attend monthly community work days. Low-Moderate (local/ Hawaiian) Maintain high community profile through presence at markets, occasionally story in the local community newspaper, and by posting fliers and brochures at the Aloha Aina Caf Connect to, and nurture, repeat customers at farmers markets. Continue to build e-mail database Invite customers to attend monthly community work days. Retailers Provide on-site marketing collateral such as laminated product n ametags for vegetables, fliers, and brochures. Invite retailer to bring staff to the farm to increase education on product and mission. Restaurants Encourage restaurant management to acknowledge MA O on menus Provide on-site marketing collateral such as fliers, and brochures. Invite restaurant to bring staff to the farm to increase education on product an d mission.

The farmers market booth is arranged to stimulate customer senses, by: Fruits and vegetables are arranged to catch the eye through color and shape; Youth wear bright green or blue tee-shirts with MA O on the rear and no panic, g rganic on the front; Product is stacked in wicker baskets which conjures a nostalgic sense of old Haw aii, this is how Mom and Pop stores displayed their products; Samples of product are always available, e.g. ripe bananas are given to all chil dren that stop by the booth; Sales youth are lively and playful, chanting slogans such as fresh organic greens or simply arugula, and when time allows a youth might play ukulele; Prices are posted on old-style school blackboards and written in chalk; and

 Posters with photos of the farm and youth working are arranged where people cann ot miss seeing them. 3. MA O Customer Service Philosophy Excellent customer service skills are vital in agriculture businesses, especiall y enterprises direct marketing to customers. Our goal is to attract and retain customers through high quality product and service experience, therefore; all yo uth are trained in sales and customer service, and they regularly debrief farmers market experiences to find ways to improve sales. We will periodically audit our sales techniques and make necessary adjustments. Of key importance is that you th are knowledgeable regarding products and convey our social mission. To reinf orce the importance of customer service we developed a simple sales philosophy, which youth learn and apply, it is as follows: Make eye contact, greet all people, smile, show maximum aloha; Listen to customers, learn their names, learn how they cook our food, and ask ho w we can improve our products; Communicate with customers, tell them the MA O story, talk about our products, t he farm, and upcoming events; Show aloha to other venders, learn their names and something about their product s, refer customers to them where possible; and Strive for excellence in customer service and product quality. 4. Promotional Materials and Labeling To ensure customer education and information transfer, we developed the followin g promotional materials, this includes: Brochures, fliers, posters which are distributed at all locations; MA O information is added to stakeholders staff bulletins; E-mail distribution lists, sent twice monthly to an in-house list, and the lists of our stakeholders. This reaches approximately 2,000 people; Partner marketing, e.g. marketing is done by the Hawai i Farm Bureau Federation via a web site and regular articles in local newspapers; and The caf staff actively informs customers of the markets, and there is signage alo ng a major town thoroughfare. MA O Youth Organic farm will sell produce simply under the MA O brand label. In m id-2003, a youth involved with the project developed a label that will be used ( see right). All MA O brand products will be sold with labeling to educate the con sumer that the product is certified organic, is grown by youth and that 100% of their purchase will go to support youth leadership development activities. 5. Pricing Overall prices have been set based on competitors prices. Wholesale prices are b ased on the equivalent wholesale price Kokua Market pays for the same imported p roduct. Usually each quarter Kokuas produce buyer gives us a printout of what he is paying California food brokers for product. If they are receiving a discoun ted price for an item we attempt to make an adjustment. Once per month we monit or retail prices at three retail outlets. We sometimes do this as a class field trip for youth in the leadership training. Selling product at KCC farmers marke t allows us to average our price upward to secure a higher margin. At KCC we ca n also move large volumes of product given the number of market shoppers. The b ottom line is that if we are to compete against imported products then we need t o offer prices attractive to the local public. Direct marketing, through such m echanisms as farmers markets, has become the best method to increase margin for s maller farmers. 6. Distribution Through a U.S. Housing and Urban Development grant, WCRC purchased a 2004-model Ford E-350 extended cargo van. The cargo van will be used to deliver produce to farmers markets. Two personal vehicles owned by staff are currently used for th e smaller markets. In 2005, we will purchase two additional vehicles using ANA

funds. We wholesale sanitized. ace in the

use reusable plastic vegetable container totes to package produce for deliver. These are more hygienic than cartons as they can be easily Large coolers are used to transport vegetables to farmers markets; sp van is equivalent to 24 large 120-quart coolers.

7. Sales Management Under the tutelage of Gary Maunakea-Forth, a youth co-manager, Ms. Kanoe Burgess , manages weekly sales. Kanoe has been with WCRC for 2-years and has already de monstrated sales acumen beyond her years. She is an excellent communicator, and is able to install a sense of confidence and trust in our wholesale and retail clientele. She supervises and motivates youth crews working at farmers markets. Development of the youth-to-customer relationship has increased return clientel e, especially at farmers markets; therefore it is fitting to enlist a youth to ma nage the maturation of our sales strategies. 8. Competitive Advantage Five-months prior to opening Town Restaurant Lesa Griffith, a food critic for th e Honolulu Weekly, wrote that Chef/Owner Ed Kenney would open what could be Honol ulus hottest restaurant. In the same article Kenney summarized MA Os relationship with Town, and in effect our competitive advantage, by stating that: MA O takes it from the earth to the seed to growing the thing to picking kids out of the community who are in need of help, teaching them the Hawaiian culture, t hen (they) take it to their caf and markets. That whole thing fires me up. Town opened in March 2005, and in her culinary review, Nadine Kam of the Honolul u Star-Bulletin stated that: Town raises the bar for Honolulu s restaurateurs. I hope that, like patrons who are flocking to the restaurant, other chefs eventually get it. She added that: Their philosophy is local first, organic whenever possible, with aloha always, and it shows in MA O Farms greens that do taste as if they were hand-picked from the field seconds before hitting the plate. Over the past 2-years, WCRCs activities, branded as MA O, have received widesprea d media attention. The convergence of social mission (youth development) and ma rket demand (organic foods) has positioned MA O on the verge of an incredible op portunity. Planning, hard-work and skill development have built the foundation for a superior quality product emblemized by freshness, local and now organic. With trategic educational materials, a grassroots approach to promotions, and word-of -mouth support, our customer base will expand and mature in quick-time. E. MANAGEMENT PLAN 1. Organization and Board MA O is a pilot program of the Wai anae Community Re-Development Corporation (WC RC), a non-profit 501(c)3 community development organization. WCRCs mission is t o plan and implement community-based economic development projects which create sustainable employment and business opportunities for Wai anae residents, especi ally youth. In 1999, our community came together to develop an application to t he U.S. Department of Housing and Urban Development for Empowerment ZoneEnterpris e Community status. While the application was unsuccessful, a group continued t o meet to discuss five interest areas: out-of-school youth, sustainable economic development, agriculture, health and Hawaiian culture. The group decided to es tablish an organization with social enterprise development as a key objective. WCRC was incorporated in 2001. 2. Governance WCRC has an active and committed Board of Directors, with extensive experience a nd a commitment to community service. The Board meets every month and they are

responsible for policy making, financial oversight, adoption of annual budget, a nd support of grassroots fundraising efforts. All Board members are residents o f the Wai anae community and are of Native Hawaiian ancestry. The Board include s: Kaimana Pine -- WCRC Board President and a founding member of WCRC. Mr. Pine is only 25-years old and has for the past 5-years owned and managed one of O ahus l ast remaining locally owned and operated surf shops. In 2003, he developed a gr aphic design and internet marketing business that specializes in promotion of Ha wai i manufactured products. Malia Miles -- WCRC Board Vice President and current food manager at Pu u Kahea Christian retreat center. Ms. Miles has many years experience in culinary arts and food service and is highly active in community affairs. Cris Akao -- WCRC Board Treasurer and Branch Manager of American Savings Bank, W ai anae. Ms. Akao was born and raised in Wai anae, graduated from both Wai anae Intermediate and Wai anae High School and has worked as Manager and Operations Director for ASB for over 12-years. She brings extensive experiences in communi ty banking, financial oversight, small business financing, and accounting to WCR C, and is responsible for review of monthly financial statements. Kawika Naho opi i -- WCRC Board Secretary and the Center Manager for Olelo Comm unity Television in Wai anae. Mr. Naho opi i is a video production trainer and coordinates community outreach, volunteer and staff management at the Wai anae s tudio, and provides technical assistance and artistic direction to Wai anae High Schools award winning Searider Productions multi-media program. Austin Miles -- WCRC Board Member and caretaker of Pu u Kahea Christian retreat center. Mr. Miles is active in community organizing and until recently owned a nd operated a popular local eatery where he was head chef. 3. MA Os Position in WCRC MA O will operate as a pilot project of WCRC. WCRC has secured initial funding to launch MA O. Starting in year 3, youth employees of MA O will receive a bonu s based on their performance and MA Os profits. This will provide incentives for the youth to be full partners in expanding production and sales. 4. Executive Management & Staffing Plan Gary Maunakea-Forth is currently WCRCs Agriculture Director, responsible for over seeing agricultural production, expansion, and training of staff and volunteers. Mr. Maunakea-Forth will devote 100% of his time to MA O (resume attached). Ot her staff dedicated to the development of MA O are: J. Kukui Maunakea-Forth is currently WCRC Executive Director. Ms. Maunakea-Fort h holds a BA in Pacific Island & Hawaiian Studies, and a BSc in Cultural Anthrop ology and has more than 10 years experience teaching and managing non-profits. Twenty percent of her overall time will be devoted to administrative and fiscal management for MA O (resume attached). William Aila, Sr., is currently Farm Manager for WCRC and kupuna (elder and ment or) to youth in all of WCRCs activities. He has over 35-years experience in ranc hing, farming, and composting as a business owner, and an extensive background i n heavy equipment operations. Currently he is a part-time contract employee wit h WCRC and half of that time will be devoted to MA O to provide land clearing an d irrigation system development (resume attached). Youth are central to MA O. Three Native Hawaiian youth, recent graduates of WCR C leadership training programs, have been employed. The youth are: Kanoe Burgess. Ms. Burgess, 21-years old, has already gained national attention , through her speech at the Kellogg Foundations Food and Society national conferenc e, on indigenous youth perspectives of agriculture. She coordinates sales and m arketing at MA O. Ikaika Burgo. Mr. Burgo, 20-years old, is perhaps the most natural and gifted armer among our youth. He has a genuine love for being outside and working on t he land, and spends numerous hours fine-tuning nursery and orchard operations.

 Manny Miles. Mr. Miles, 20-years old, coordinates field crop production at MA O . He has attended conferences and has become active in the BLAST Initiative of Bostons The Food Project, an effort to network young people working in sustainabl e agriculture. Youth from the youth leadership team provide an able labor force of 6 to 12 youn g people, working 18-hours each week. They are paid as interns under the leader ship-training program. MA O will hire two additional full-time youth coordinato rs in year 2. 5. Cooperating Experts This enterprise is strongly supported by Jonathan Deenik, PhD. Dr. Deenik, has a doctoral degree in Soil Science from the University of Hawai i at Manoa, where he is currently employed as an extension specialist and lecturer. Dr. Deenik i s able to provide regular tutelage on technical issues and access to other unive rsity faculty experts. Other stakeholders include: Partner Description of Support Peter Quigley, Vice Chancellor Randy Francisco, Program Director Leeward Community College (LCC) Provides additional training for youth including higher education courses, and is developing a degree program in Tropical Organi c Agriculture. David Cole, CEO, Maui Land and Pine (former VP of AOL) Partners with MA O to increase youth involvement in orga nic agriculture o Hosted MA O youth in Maui to learn about MLPs current research and develo pment (composting, cover crops, organic pineapple) o Has reviewed MA Os business plan and provided commentary on business stra tegies Joan Namkoong, Organizer KCC and Kailua farmers markets Provides connection to customers and information on local food demand and availability Stephen Bradley, MD, Wai anae Comprehensive Health Center Operates a clinic farmers market, produce s nutrition education literature, and promotes market to community. Lei Aken, Ag Program Teacher, Wai anae High School (WHS) Will establish a n organic agriculture high school program , develop community garden and support trainings. Recruitment of future youth. Hawaii Organic Farmers Association Promote organic agriculture and provide organic certification. Recruitment of future youth.

F. OPERATIONS PLAN 1. Farm Plan MA O has a total of 5-acres of land in Lualualei Valley: 2.5 acres currently in production and another 2.5-acres of cleared land available starting January 2005 . The new land will be developed similar to the current 2.5 acres in 50 wide by 80 long sections, providing 8 beds per section for field crops. We will plant a row of citrus trees between each section. . Mangos and avocados will be plante d along the north fence line. Field crops are planted every one to two weeks, p erennials every three months and orchard trees at start-up. 2.

Research & Development

The most technically challenging facet of this venture is the organic production . Farming commenced in early 2002, and we have now completed three full years o f soil building, crop testing and experimentation with different organic methods . This has provided invaluable information on organic fertilization; timing of crop planting cycles, and organic seed varieties. The result is a system that h as produced high yields with excellent product quality (taste, shelf-life, appea rance, weight), and minimal insect damage. We augmented on-farm experimentation by visiting many other farms to research new and best practices. Similarly loc al farmers and university extension agents have visited MA O and provided more t echnical information. There are numerous variables that must converge to produc e a healthy crop. Over the past three years we have kept daily input and yield records so that we can better plan for future seasons. We have a strong working relationship with Jonathan Deenik, a PhD soil scientist at the University of Ha wai i, who has assisted with our organic production plan since the inception of farm activities. 3. Crop Growth Given Wai anaes climate and optimal growing conditions, mixed salad greens (lettu ces, arugula, chard, beet tops, tat soi, mizuna, mustard cabbage, kale) take 2528 days from seed to first cutting. This is our biggest seller and we are able to harvest it 2-3 times per planting, with re-growth occurring every 8-10 days. We also plant a longer rotation every two weeks of fennel, green onion, beets, and carrots, which last approximately 100-days. In our perennial rotation, whic h lasts 4-6 months, we plant basil, eggplant, parsley, kale, chard, and collards . We plant this rotation every four months. 4. Harvest and Quality Control Market demand requires fresh, clean and attractively presented fruits and vegeta bles. For organically grown fruits and vegetables consumers have even higher ex pectations for appearance and cleanliness. Our crops are harvested three times each week. Youth managers and workers are trained to cultivate, harvest and han dle (wash, package, chill) in keeping with these quality standards. Washing vegetables tends to be the most labor-intensive facet of the operation, especially as salad greens are delicate and are double washed. While our curren t packing facility is basic, we have customized faucets so that each sink cleani ng area has overhead washing faucets with shower-flow heads. This frees hands t o concentrate on cleaning the product. After each product has been washed, it i s placed in small quantities (about five pounds) on drying trays and a youth man ager or coordinator inspects the product. The inspector has the option to retur n the tray to the cleaner for additional washing. If the tray is excellent qual ity then a packaging crew handles the boxing or bagging of the product. This pr ovides three points of inspection. Before a product leaves the farm a final che ck is done by choosing a random item from each product. One item from each harv ested crop is also kept to monitor shelf life. 5. Inventory Management Every Monday, we estimate yield quantities for the week. Staff log anticipated yield numbers in a spreadsheet to manage distribution. This system helps us acc ommodate fluctuations in weekly yield to ensure customer satisfaction. To maxim ize freshness, we harvest three times per week and maintain little inventory. F or all points of sale, except KCC farmers market, we harvest and distribute the s ame day. For KCC we harvest, chill over night, and sell in the morning. Our pr esent cold storage is limited to a 108 cubic foot chiller, but in June 2005 we w ill install a 760 cubic foot reefer, which will have an alarm system to monitor possible power outages. 6. Organic Certification In September 2004, MA O Youth Organic Farm received organic certification from t he Hawai i Organic Farmers Association (HOFA), under the auspices of the USDA. H

OFA is the only certifying body in the State of Hawai i and the application proc ess involved a 6-month review and final inspection. MA O will be inspected each year and is required to show proof of organic methods. We are obliged to keep accurate records for soil inputs, seed sources, and crop yields. We track the f ollowing data on a customized excel spreadsheet: (1) type of product sold; (2) a mount of product sold: (3) customer that received product; (4) location on farm where product was grown; and (4) history of inputs and events for the area where product was grown. 7. Farmers Markets As aforementioned MA O will sell primarily at markets already tested including: Wai anae Comprehensive Health Center Wednesdays 11:45am Kaiser Permanente, Nanakuli Wednesdays 11:45am to 1:00 Leeward Community College, Pearl City Wednesdays 11:45am Aloha Aina Caf, Wai anae Saturdays 9:00 am to 11:00 KCC Farmers Market, Honolulu Two Saturdays per month, 7:30 am to 11:00

MA O uses the markets as training grounds for youth in our leadership developmen t programs. Our full-time staff provide supervision for each market while the p art-time youth ensure adequate staffing to cover multiple markets simultaneously . 8. Land, Equipment, Office Space, Tools, Resources WCRC leases 5-acres of land located at 86-210 Puhawai Road in Lualualei Valley, which will be used for the MA O venture. The landowner is the Community of Chri st Church and the 25-year term began in 2001. The land has excellent potential for expansion with three of the neighboring properties vacant (see map at right) . MA O will benefit from equipment acquired with WCRC grant funds. This includes a 2001 model 55-hp John Deer tractor and a cargo van. ANA funds will be used to purchase and additional delivery van and a one-ton dump truck. As mentioned col d storage is limited at present but through the aforementioned HUD grant MA O wi ll be constructing a new Organic Agriculture Center to include a 40 x 40 concrete floor processing facility, additional cold storage, and offices. 9. Increasing Youth Capacity In early 2004, WCRC started educational programs at two local schools, using edi ble organic school gardens as an alternative teaching tool. Teachers have been trained to use organic farming techniques as a vehicle to teach social studies a nd science classes. Fruits and vegetables are harvested on a weekly basis, and sold by youth on campus. Youth participants are prime candidates for future emp loyment at MA O, critical to our growth plans. G. FINANCIAL PLAN FOR MA O VENTURE 1. Start-up A grant of $456,000 has been secured from the DHHS-Administration for Native Ame ricans with $317,837 dedicated to this venture to be used in 2005 and 2006, to c omplete development of MA O. This money is listed as restricted grants on the b alance sheet and as ANA grant on the cash flow and income statements. 2. Accounting System & Business Controls. We use Quickbooks as our primary accounting system. We track sales weekly throu gh spreadsheets and review them monthly so that we understand trends related to product and point of sale. This will allow us to analyze the profitability of s ales by specific crop. WCRCs Board of Directors will regularly monitor all these statements for accountability. We have scheduled our first external audit (bas

to 1:00 pm pm to 1:00 pm am

ed on increased budget size) for 2005. 3. Long-term Sustainability WCRC has maintained financial stability while growing rapidly in the past four y ears. Significant steps have been taken to lay a foundation for long-term susta inability, including: Securing a total of $1,354,000 of federal funds the past 4-years to support MA O , for our new caf, and a variety of educational and community projects; Arranging for the purchase of 2.5 acres of land that we currently lease for farm ing, providing leverage to acquire more land in the future; Forging partnerships with industry and business (Maui Land and Pine, Hawai i Org anic Farmers Association, Kokua Natural Foods Cooperative), education (Leeward Co mmunity College, University of Hawai i College of Tropical Agriculture & Human R esources, Kamehameha Schools), to ensure access to markets and technical assista nce; Initiating contractual relationships with Kamehameha Schools/Bishop Estate and A lu Like, a $16 million Hawaiian job training program, to improve job training pr ograms for youth. 4. Proforma Statements We have included the following financial statements: Projection of weekly customer product orders. These estimates rely on data from the last three years of operations and are the basis for our sales figures for t he next three years. Note that year 3 is a critical point for expansion as prod uctive land and sales double. Annual income statements for years 1, 2, and 3. Monthly cash flow statements for years 1, 2 and 3. Annual balance sheets for years 1,2, and 3. Social Return on Investment (SROI).

Analysis of Social Return on Investment SROI Narrative and Assumptions Community Wealth: Benefits Amount income returned to the community in taxes based on Hawaiian state income tax rate of 6.4% for 16,000-24,000 income bracket. Assumed youth salary: $18,0 00/year. Public assistance not collected based on 20% welfare assistance dependence in th e target community multiplied by average annual payments of $6,168 (Honolulu Sta r Bulletin 1999). Costs Additional staff time for farmer training programs based on the estimate that th e youth dedicate about 20% of their time to leading educational programs. Discounted sales figures were calculated based on establishing an average discou nt taken off the price of produce sold at markets that cater specifically to the

low-income, local community. The average discount calculated was 33%, and with this discount taken off, weekly revenue averaged $854. Environment: A conventional farm receives subsidies at a rate of $72.93 per acre. (www.bette rfarming.com) The cost of farming inputs in conventional agriculture is $340/acre (University of Florida, IFAS Extension). By farming organically, MA O is using 50% less ene rgy and resources to farm their land (Lori Drinkwater, Nature Magazine, Nov. 98). The value of training organic farmers is based on average per person, per hour e ducational rates of HOFA (Hawaiian Organic Farmers Association.) We assumed th at for each youth education hour, two individuals receive training, and that thi s hour is valued at $10 per trainee.

RISK ASSESSMENT & CONTINGENCY PLAN While farming has many inherent risks, in just three years of operations MA O, h as created an innovative and successful model that others in Hawai i wish to rep licate. Moreover, the model and systems have been developed with the co-managem ent of youth. Risk assessments have been mentioned throughout this business pla n and the following table summarizes the important challenges and our mitigation approaches. RISK MITIGATING FACTORS Organic production fails through pests, natural causes, and or other unforeseen circumstances. Thoroughly tested organic methods and systems Expert technical assistance available To anticipate losses, yield assumptions are conservative Ongoing research experiments to ensure new learning Problems with youth, such as lack of motivation. Consensus-building, open communication approach Accountability built within profit-sharing model Expert technical assistance available for youth, and diverse opportunities for i mproving skills. Low Sales Regular customer feedback Diversified product mix Proven demand for products Diversity of markets Options to reduce expenses, if necessary High operating costs, low margins Diversity of markets increase direct sal es and improve margins Source lower cost local supplies, e.g., animal manure Difficulty in attracting suitable staff Grow youth from within the MA O system a nd expose early to other benefits trips to conferences, site visits Seen at the moment as doing cutting edge work so we are in high demand Educational programs with local schools provide pipeline for new staff Operational problems, poor food quality, delivery time Thoroughly tested system Access to high-end chef who will help to assess product quality Technical assistance available to investigate unforeseen crop failures MA O system reinforces importance of product quality, assessment and feedback gi ven to youth three days per week. Marketing problems, regulatory barriers and costs Diversity of end markets Certified organic status already achieved Classes to teach safe food handling strategies Caf is a certified kitchen and their staff provide guidance Departure of key project employees Inherent to WCRC is the training, empowe rment and employment of youth, new leaders constantly being developed WCRC Board will create a succession plan

H.

ENDNOTES

TABLE OF CONTENTS A. EXECUTIVE SUMMARY 2 B. BUSINESS DESCRIPTION AN ORGANIC OPPORUNITY 4 INTRODUCTION 4 PRODUCT 4 GROUNDWORK FORTHE VENTURE 4 CROPS TO BE GROWN 5 THE OPPORTUNITY 6 OUR COMMUNITY 7 LAND USE, (RE)CONNECTING TO AINA (LAND) 7 C. INDUSTRY AND MARKET ANALYSIS 9 GROWTH IN THE ORGANIC INDUSTRY 9 THE HAWAI I MARKET 9 LOCAL COMPETITION 11 OFFSHORE ORGANIC COMPETITION 12 FARMING IN HAWAI I 12 CUSTOMER PROFILE 13 DISTRIBUTION MECHANISMS 15 D. MARKETING PLAN 16 PROMOTIONS AND OUTREACH 16 SPECIFIC SEGMENT STRATIGIES 17 MA O CUSTOMER SERVICE PHILOSOPHY 17 PROMOTIONAL MATERIALS AND LABELING 18 PRICING 18 DISTRIBUTION 19 SALES MANAGEMENT 19 COMPETITIVE ADVANTAGE 19 E. MANAGEMENT PLAN 20 ORGANIZATION AND BOARD 20 GOVERNANCE 20 MA OS POSITION IN WCRC 21 EXECUTIVE MANAGEMENT & STAFFING PLAN 22 COOPERATING EXPERTS 22 F. OPERATIONS PLAN 23 FARM PLAN 23 RESEARCH AND DEVELOPMENT 23 CROP GROWTH 23 HARVEST AND QUALITY CONTROL 24 INVENTORY MANAGEMENT 24 ORGANIC CERTIFICATION 24 FARMERS MARKETS 24 LAND, EQUIPMENT, OFFICE SPACE, TOOLS, RESOURCES 25 INCREASING YOUTH CAPACITY 25 G. FINANCIAL PLAN 26 START-UP 26 ACCOUNTING SYSTEM & BUSINESS CONTROLS 26 LONG-TERM SUSTINABILITY 26 PROFORMA STATEMENTS 26 H. RISK ASSESSMENT & CONTINGENCY PLAN 35 I. ENDNOTES 36 A. EXECUTIVE SUMMARY

Leaders must deal with apathy along the Leeward Coast (Wai anae), perhaps it com es from poverty and repeated disappointment, or from people too busy trying to s urvive and eke out a living. We hope that those that care can reach out to thos e who dont and sow the seeds of positive change for the future of beautiful Wai a

nae. - Editorial, The Honolulu Advertiser, March 25, 2004 In September 2003, youth from a leadership training program began selling organi cally grown products at farmers markets located at health clinics in Wai anae, Ha wai i. Their goal was to make affordable and healthy fruits and vegetables avai lable to residents of their low-income community. The youth exceeded all expect ations products sold quickly, customers returned each week wanting more, and now these young people are poised to build on the test markets to become the larges t producer of USDA certified organic fruits and vegetables on the island of O ah u. The Wai anae Community Re-Development Corporation (WCRC), a Hawai i non-profit 5 01(c)3 corporation, proposes the development of the MA O Youth Organic Farm (MA O). MA O will train and employ out-of-school youth from the Wai anae community. These youth will grow a diversity of field crops (e.g., salad greens, herbs, e ggplant) and fruits trees (e.g., mango, limes) using organic methods certified b y the U.S. Department of Agricultures National Organic Program rules, on five acr es of land leased by WCRC. The objectives of MA O will be to: Increase productive land from 2.5 to 5-acres by the end of 2007, and expand to t en acres by 2010; Distribute 50% of produce to the Wai anae community at affordable prices; Provide employment, as well as business and sales training to Wai anae youth; Conduct research and provide advanced training in organic agriculture and commun ity food systems; Work collaboratively with WCRCs other programs to support the development of youn g people; and Restore idle land to productive use. MA Os evolution dates back to 2001, when WCRC established the Mala Ai Opio Comm unity Food Security Initiative, a project to create a community food system to f ight hunger, improve nutrition, strengthen local agriculture and empower local f amilies to move towards self-sufficiency. In the Hawaiian language mala ai op io means the youth food garden, and ma o is also the Hawaiian name of the endemi c cotton plant that makes its home in the Wai anae area. With youth leadership development as a core objective, WCRC established a series of interconnected act ivities with the MA O farm site as the primary training venue. Life is a daily struggle for many young people in Wai anae. Local public school s are failing to meet the standards of the federally mandated No Child Left Behi nd Act. They experience high drop-out rates and illiteracy compared to the res t of the state. There are few opportunities for post-secondary employment and t raining. Wai anae has the states highest unemployment rate. Teenage pregnancy r ates are high. Add to this a rapid growth in the distribution and use of crysta l methamphetamine, and a formula for community deterioration and juvenile delinq uency is created. This venture is being planned and implemented to provide an employment, training and life-style opportunity for young people, while they work to improve the com munity. MA O is founded with an entrepreneurial philosophy that is guided by ou r Hawaiian cultural traditions, with business activities developed to revive and expand upon Hawaiians traditional love and respect for the land. There are many local projects that have attempted to integrate social enterprise with Hawaiian culture; however, MA O stands out from its competition however, through combini ng the explosive growth predicted for the organic agriculture industry with meth ods that are deeply respectful of Hawaiian culture and sustainability. This mar ket opportunity provides fertile ground for youth to make a radical contribution to the social and economic life of the Wai anae community, our home.

The national organic food industry has experienced rapid growth over the past 20 -years. By 2001, sales of organic foods reached $8 billion and there has been 20% growth annually in national organic sales over the past 10-years, The Orga nic Trade Association projects that the U.S. organic market will reach $30.7 bil lion by 2007. While this is small compared to the conventional foods industry, O TA reports that conventional food growth is only 2-3% per year versus organic fo ods, which is growing 17-20% annually. According to the Hawai i Organic Farmers Association (HOFA), Hawai i imports over 90% of organic produce. At the same time, there are only nine organic farms l ocated on O ahu where 870,000 consumers reside,). Demand for fresh, local and organic foods is best illustrated by the recent establishment of three Hawai i F arm Bureau Federation markets on O ahu. The Kapiolani Community College (KCC) F armers Market, which opened in late 2003, attracts over 2,500 visitors each Satu rday, and specializes in 100% Hawai i grown products. The Hawai i organic agric ulture industry still lags behind the national growth figures, due to inflated l and prices, the pressure of urban development, and the difficult shift from the plantation agriculture system. The scarcity of local organic fruits and vegetab les has made MA Os certified organic product highly attractive to consumers. MA Os competitive advantage has been well established. WCRC recently secured sub stantial funding from the U.S. Department of Housing and Urban Development, as w ell as the U.S. Department of Healths Administration for Native Americans (ANA) t o support this program. In its pilot year, MA O established thriving farmers mar kets and strong relationships with retailers and restaurants, in which demonstra ted demand far outstripped supply. MA O has also developed partnerships with Le eward Community College to train youth and with Maui Land and Pine CEO, David Co le, to collaborate in the development of a local organic industry. Most importa ntly, MA O has a cadre of strong and determined youth many already trained and e ager to instruct others with ambitions beyond their years, and a drive to become the largest producer of certified organic fruits and vegetables on the island o f O ahu. B. BUSINESS DESCRIPTION AN ORGANIC OPPORTUNITY 1. Introduction In September 2003, youth from a leadership training program commenced selling or ganically grown products at farmers markets located at the Wai anae Comprehensive Health Center and Kaiser Permanente Health Clinic, in Nanakuli, both located on the Westside of the island of O ahu, Hawai i. The goal: to get healthy organic fruits and vegetables, sold at a fair price, into the regular food purchases of the low-income community. The youth exceeded all expectations products sold qu ickly, customers returned each week for more, and now a group of young people ar e poised to build on these test markets to become the largest producer of USDA c ertified organic fruits and vegetables on the island of O ahu. 2. Product The Wai anae Community Re-Development Corporation (WCRC), a Hawai i non-profit 5 01(c)3 corporation, proposes the development of the MA O Youth Organic Farm (MA O), a venture managed by out-of-school youth from the Wai anae community. MA O will cultivate a diversity of field crops and fruit trees, using organic methods certified by the U.S. Department of Agriculture National Organic Programs rules, on 5-acres of land currently leased by WCRC. The objectives of MA O will be to: Increase production of organic fruits and vegetables to a total of 5-acres, with each acre developed to gross at least $50,000 by the end of 2007; Distribute at least 50% of product into the Wai anae community through community farmers markets;

 Provide employment with profit-incentives to three youth at start-up with two yo uth added by Year 2; Work collaboratively with University of Hawai is College of Tropical Agriculture and Human Resources (CTAHR) and Leeward Community College (LCC) to increase rese arch and advanced training in organic agriculture production; Work collaboratively with WCRCs other programs to cultivate new organic farmers; and Restore idle land to productive uses, and reawaken the Hawaiian connection to ag riculture. 3. Groundwork for the Venture In 2001, WCRC established the Mala Ai Opio (MAO) Community Food Security Initia tive. This initiative was developed in order to create a community food system, fight hunger, improve nutrition, strengthen local agriculture and empower local families to move towards self-sufficiency. In the Hawaiian language mala ai opio means the youth food garden and ma o is also the Hawaiian name of the endemic Wai anae cotton plant. WCRC established a series of interconnected activities with youth leadership development as a core objective and the MA O farm site was established as the primary training venue. These activities now support the lo ng-term competitive advantage of MA O, and are described as follows: ACTIVITY HIGHLIGHTS 1. Youth Leadership Training (YLT). The YLT is a 10-month long, 18-hours p er week, leadership training for low-income, out-of-school, Wai anae youth, prov iding them with a paid educational, entrepreneurial, and agricultural work exper ience. This is the recruitment and training mechanism for MA O Farm, an d provides a regular labor source for farm operations. 2. Aloha Aina Caf and Natural Foods was opened in April 2003, specializes i n healthy breakfasts and lunches using locally-grown products. The caf will be a customer, a farmers market site and a showcase for MA O products. As a commercial kitchen, the caf provides for the possibility of value -added product development opportunities. 3. Local Community Farmers Markets. Four farmers markets have been establish ed at the Aloha Aina Caf, Wai anae Comprehensive Health Center, Kaiser Permanent e Health Clinic, and Leeward Community College (LCC). Farmers markets have test ed and proven demand. The local customer base has been introduced to the organic concept and the MA O product. Clinic markets support the WCRC mission. 4. Ai Pohaku Workshop, hands-on, culturally-based learning activities at Wa i anae Intermediate School (WIS) and Wai anae High School (WHS), that mix tradit ional Hawaiian taro cultivation with edible, organic school gardens. The gard ens illustrate the skill-set and experience already developed in the youth that will lead MA O and provide fertile ground for youth training and recruitment. 5. The Wai anae Organic Agriculture Center, in partnership with Leeward Com munity College (LCC), expands research and training activities in Wai anae. The partnership was awarded a U.S. Department of Housing & Urban Development gra nt of $579,000 to purchase 2.5 acres of WCRCs leased land, and to build an improv ed post-harvest packing and chilling facility which will increase MA Os productio n handling capacity. 4. Crops to be Grown Over the past three years, WCRC has developed farm operations on 2.5-acres as an integral training component of the Youth Leadership Training. This commenced w ith the planting of fruits trees and bananas and the organic conditioning of soi ls for field crops. Thereafter, approximately 30 field crop varieties were grow n and sold, with information gathered on: (a) Best seed varieties; (b) Hardiness of crop to local conditions; (c) Reaction of crop to organic methods of product ion; and (d) Marketability. Product was sold to Kokua Natural Foods Cooperative , a cooperatively-owned grocery store specializing in organic foods located near the main campus of the University of Hawai i. Kokua has a customer base of edu cated professionals, vegetarians, and people generally adept at cooking. This e

xperience gave WCRC product feedback, as well as information on the demand for, and lack of supply of, locally-grown, organic fruits and vegetables. Through th e development of this venture, MA O will assume overall responsibility for farm operations of the already developed 2.5-acres, and in May 2005 will begin prepar ation and cultivation of an additional 2.5-acres. Hawai i has a 12-month growin g season and crops to be grown include:

Cilantro Daikon Pak choy (bok choi) Romaine lettuce Various lettuces, arugula, kale, chard, beets and Asian greens (tat soi, mustard greens, mizuna) combined to produce two different salad mixes This will be our regular rotation (short) planted every 14-days, ready to harvest from day-28 thro ugh to day-45, with crops completed in 50-days. Beets Carrots Fennel Green onion This will be our regular rotation (long) planted every 28-days, r ady to harvest from day-70 through to day-100, with crops completed in 105-days. Basil Collard greens Eggplant (Japanese and Italian) Kale (Red Russian, blue curly, lacinato) Parsley (curly and flat-leaf) Swiss chard Taro This will be our perennial rotation planted every 3-months, ready to harv st in 80-days, with crops completed in 5-6 months. Lemon (Meyer variety) Mango (Haden and Kiett varieties) Orange (various Washington naval varieties) Tangerine (Clementine and Fremont varieties) Trees will be planted as an inco me-generators with first harvest being in year 3, and as a wind break on the win dward areas of the farm. 5. The Opportunity MA O will utilize the organic production techniques and market research achieved through WCRCs start-up period to expand production and sales. The youth-managed venture will provide planned financial incentives based on business and persona l performance. MA O will sell fruits and vegetables at the already established farmers markets, at the recently established Kapiolani Community College (KCC) Fa rmers Market, held every Saturday morning in Honolulu (the market attracts over 2 ,500 visitors each week), and to restaurants. In October 2004, WCRC received a $456,000 two-year grant from the U.S. Department of Health and Human Services Adm inistration for Native Americans (ANA), for Native Hawaiian youth education and economic development activities. The ANA grant will provide salary support for 2-years for a total of five Native Hawaiian youth and project directors, and cov er costs of equipment needed to operate a farm. WCRC carries a 25-year lease fo r 5-acres, 2.5 of which will be purchased in early 2006 using the aforementioned U.S. HUD federal grant. 6. Our Community MA O is situated in a community of 45,000 residents, of which more than 40% are Native Hawaiian. The entire Wai anae Coast has levels of poverty near 20% with some census tracts exceeding 50%. On the Wai anae Coast 45% of the entire popu lation is under the age of 25 years, 34% is under the age of 18 years versus 24% across the State of Hawai i (Census 2000). The current unemployment rate for O ahu is 3.5% while the Wai anae Coast rate is approximately three times the isla nd average.

A report on food security to the 2003 Hawai i State Legislature (A Report to the Legislature on SCR 75, SD1, HD1, 2002), submitted by the State Office of Planning , describes Wai anae is one of the worst of the at-risk, food insecure communities , which translates to poorer self-reported physical and mental health, higher le vels of obesity, diabetes, and arthritis. According to the Wai anae Coast Comp rehensive Health Center, the largest local health provider, at least 50% of resi dents suffer from obesity. Over multiple generations Wai anae residents have be come dependent on the welfare system in which the percentage of people in Wai an ae receiving welfare support (Temporary Assistance to Needy Families and Food St amps) is four times that of the State of Hawai i. And yet, this is not our comm unitys history. Wai anae was once a self-sufficient community, easily growing fo od and managing land and water resources to provide for community needs. Wai anae youth, a majority of whom are of Native Hawaiian descent, attend local public schools that are failing to meet the federally mandated No Child Left Beh ind Act. Worse still, when you look beyond the school environment, there are fe w opportunities for post-secondary employment and training, strained parents and families, and high rates of school drop-out and illiteracy compared to the rest of the state. Add to this a rapid growth in the abuse of crystal methamphetami ne and you have a formula for perpetuation of difficult conditions in Wai anae. 7. Land Use, (Re)Connecting to Aina (land) and Community Values One of the core Hawaiian values is aloha aina or love of the land. In pre-cont act Hawai i, people lived within an agricultural system that sustained as many a s 500,000 people. Wai anae has a rich agrarian history, from the pre-contact We stern period when Hawaiians farmed the entire region, through to the late 1800s a nd early 1900s when Hawaiian, and Chinese, Filipino, Okinawan, and Japanese immig rants farmed the valley regions independent from the more dominant plantation ag riculture system. Fresh water, a precious resource in arid Wai anae, was carefu lly managed, with a portion diverted to taro patches in the upland and then retu rned to the stream with nutrients that would feed into the estuaries and coastal fisheries. Crops such as taro, banana, sweet potato and breadfruit were raised in abundance, but over time Hawaiian farmers have lost the use and ownership of the land.

Today, Wai anae residents still embrace the idea of an agricultural community, c haracterizing the area with terms like rural, open space and agrarian lifestyles. Ho ever, the economy and peoples lifestyles have moved away from agriculture. Two o f our most fertile valleys are used predominantly by the U.S. military: Makua Va lley is used exclusively for live fire training; and 75% of Lualualei Valley, wh ere MA O is located, is used for munitions storage and as a naval communications base. Makaha Valley, to the north of Lualualei, has an exclusive gated communi ty, with a resort and two golf courses. In addition, much of Lualualei Valleys p rime agricultural land is no longer in production because the past generation of farmers encouraged their children to move away from the hard life of farming, e ncouraging them to seek professional careers. The Wai anae area already has thr ee landfills, and more prospective sites have been identified. In order to revi ve and expand upon Hawaiians traditional love and respect for the land, MA O has been founded with an entrepreneurial philosophy that is rooted in our cultural t raditions. C. INDUSTRY AND MARKET ANALYSIS 1. Growth in the Organic Industry From the early 1960s to 1980 the organic agriculture industry grew steadily acros s the United States. In the 1960s the industry was jump-started when information on the dangers of pesticides came to public prominence, most notably with the p ublication of Rachel Carsons Silent Spring in 1962. Consumers grew to understan d the connection between personal and environmental health, and over the course of time a genuine shift in food consumption patterns occurred. After 1980, the

organic foods sector grew rapidly. By 2001, sales of organic foods reached $8 b illion and there has been 20% growth annually in national organic sales over th e past 10-years. There are multiple factors that have contributed to this growi ng demand, including: th; Increase in diet related illnesses, such as the rate of U.S. obesity amongst you Increased health care costs and adoption of preventative medicinal practices; Growth in the physical fitness industry, gourmet cooking, and fine dining; Public awareness of fast-foods detrimental impact on health; and Major public health crisis, such as Mad Cow disease.

What was once an industry propelled by farmers markets and natural foods cooperat ives has now become mainstream. The Organic Trade Association (OTA), the leadi ng industry advocate, lists some examples of growth trends; including: In 2002, more organic foods were purchased in regular retail supermarkets than a ny other location. Organic foods are now available in over 20,000 natural foods stores and are found in over 70% of conventional retail groceries; Huge food and beverage corporations, such as Kraft and Coca-Cola, have now joine d the organic market by purchasing leading organic brands. USA Today reported i n their December 2, 2004 edition that the San Diego Padres and the St. Louis Car dinals would be serving organic franks alongside conventional hot dogs; and A national survey done in 2002 of 1,000 consumers showed that 58% had purchased organic foods. OTA projects that the U.S. organic market will reach $30.7 billion by 2007. Thi s is still miniscule compared to the conventional foods industry but OTA reports that conventional food growth at 2-3% per year while organic foods has been cli mbing at the growth rate of 17-20% annually. 2. The Hawai i Market The Hawaiian demand for organics may not easily correspond with national market trends due to our unique location. Certainly there have been similar public hea lth and environmental scares. In 1993, the chemical pesticide heptachlor, recog nized by the EPA as carcinogenic, was banned because residues were found in a nu mber of agriculture products including cows milk and cucumbers. Heptachlor had b een used to eradicate ants from pineapple and to kill termites in homes. Desp ite this type of impetus, Hawai i has been slow to embrace organic foods. The National Agriculture Statistics Service (NASS) reported in 2003 that of Hawai is $553 million total farm revenue, only an estimated $4.8 million was organic (les s than 1% of total Hawai i farm revenue). Comparatively U.S. organic produce re presents over 2% of total farm revenue. There are seven small natural foods stores on the island of O ahu and like the c ontinental U.S., organic fruits and vegetables can now be found in Hawai is regul ar retail grocery stores. Of nine regular grocery outlets surveyed for this bus iness plan, six stocked organic fruits and vegetables. Of the three that did n ot stock organic produce one had been in recent contact with MA O to purchase pr oduct. Of the six stores that did stock organic fresh produce, a non-scientific visual survey of inventory showed that less than 10% was locally sourced. In t wo stores none of the organic produce was from Hawai i. Hawai i imports over 80% of all fruits and vegetables, and 90% of fresh organic produce. Organic foods already sell at a premium, where the additional cost o f shipping to Hawai i increases the retail price of organic foods out of the ran ge of most local residents. Recently, however, big-box retailers such as Costco have started importing large volumes of organic salad greens from California, s elling them at a third of the price of the same locally produced product. For the most part, the local trend in organic foods is closely aligned with the emer

gence of Hawai i Regional Cuisine, a merging of Eastern and Western cooking infl uences that mirrors Hawai is cultural diversity. Chefs have connected with smal ler farms to source the freshest ingredients and have asked for organic fruits, vegetables and meats. This market had been predominantly a tourist audience (hi gh-end, college-educated travelers staying at resorts), but over the past decade many restaurants have been established in local communities. This trend has st imulated the local market, and is best illustrated by the recent establishment o f three Hawai i Farm Bureau Federation (HFBF) farmers markets on O ahu. In Honol ulu, the Kapiolani Community College (KCC) Farmers Market, opened in late 2003, attracts over 2,500 visitors each Saturday. The markets development has been cri tical for local farmers because it is the first time a market has required all p roducts be grown in the Hawaiian Islands. At other farmers markets on O ahu, suc h as the City and County of Honolulu operated Peoples Open Markets, vendors may s ell imported fruits and vegetables. According to the Hawai i Organic Farmers Association (HOFA), the local trade asso ciation for organic growers, there are now approximately 132 certified organic f arms in the State of Hawai i with only nine located on O ahu where 870,000 cons umers reside. It is difficult to extrapolate exactly how large the organic fru its and vegetables market is on O ahu, partly because State agencies do not as y et collect organic-specific data. A measure of industry size can be understood by looking at growth trends related to a leading retail outlet on O ahu called Kokua Natural Foods Cooperative. Fo rmed over 25-years ago, Kokua has a membership of 2,400 and occupies a small gro cery outlet approximately 2,000 square feet, close to the campus of the Universi ty of Hawai i. The membership, staff and Board have collectively decided that a n expansion is imperative at this time because currently no national health food chains, such as Whole Foods or Trader Joes, have entered the Hawai i market, and there are industry rumors that Whole Foods is researching local store locations . Kokua hired industry consultants to survey the market potential and reported that Kane ohe, located on the Windward Side of Oahu, would be an ideal location f or expansion. Kane ohe has a population of 35,000 people, and the industry cons ultants deduced that the total natural foods market for Kane ohe is valued at ov er $4 million, with 18-20% of sales predicted to be organic fruits and vegetable s. Since Kane ohe represents 4% of O ahus population, the overall organic fruit and vegetable market size could be as large as $20 million. Local industry leaders believe that organic agriculture is poised to expand. In a Hawai i Business Magazine special report on agriculture, various experts, inc luding Mr. Alan Takemoto, Executive Director of the Hawai i Farm Bureau Federati on, identified organic agriculture as having great potential in Hawai i. In supp ort letters, Ms. Joan Namkoong of the Hawai i Farm Bureau Federation and Mr. Dav id Cole of Maui Land and Pine clearly state that the market is wide-open. Mr. C ole states that there is great economic potential especially given the growing cons ciousness of consumers. 3. Local Competition There are a number of small organic farms that operate on O ahu. These farms ge nerally sell products wholesale to local health food stores because this ensures a steady price and quantity demand, contrary to farmers market booths that pose increased risk and require investment in an increased labor force. There have b een two well-known local certified organic growers: Ko Farms sells fresh herbs, salads, and greens to all of Hawai is natural foods s tores, and to a number of supermarkets. They recently sold their Waimanalo farm , and the owner Daniel Ko now works for the State Department of Agriculture. Da niels wife still grows specialty herbs and sells to all the natural foods stores. The quality of their product is very high, but production capacity low; and Lone Palm Organic Farms on the Big Island of Hawai i. Lone Palm is one of only

a few neighbor island organic growers that regularly ship to O ahu. They specia lize in high quality sprouts and lettuces and work with three other growers to m ake salad mixes sold to natural foods stores, restaurants and supermarkets. The ir product is very high quality and strongly supported by local consumers in hea lth food outlets, and their production capacity is high. Two other certified growers occasionally attend KCC Farmers Markets they are: (1) Ono Organic Farms, a 30-acre Maui-based grower of exotic fruits, papaya and ban ana; and (2) Lotus Farms, a 1-acre O ahu based chicken farm. A scan of HOFAs cer tified growers list shows that the majority of local growers tend towards mono-c ropping products such as macadamia nuts, papaya, pineapple or coffee. Maui Land and Pine (MLP) is the largest grower in the State and specializes in organic pi neapples. They will certainly expand in the future, but as the support letter indicates they are exited about collaborating to expand the overall organic mark et in Hawai i. There are regularly thirty-five booths at the KCC Farmers Market, of which 15-20 are farmer-operated fruit and vegetable sales booths. There are a number of co nventional farmers that grow the same vegetable varieties as MA O, one of the mos t successful is Dean Okimoto. Mr. Okimoto owns Nalo Farms, a 5-acre farm recogn ized as one of the most successful farms in Hawai i today. Mr. Okimoto has been able to penetrate the high-end restaurant market and his signature Nalo Greens, a delicate combination of mixed baby lettuces, is featured at over 100 of Hawai is best restaurants. It is often difficult for consumers to distinguish between o rganic and conventional products, however, at MA Os sales booth our young Hawaiia n sales representatives are large in number and energetic, and their exuberance draws customers to our products. Signage at our booth features liberal referenc e to organic which quickly informs customers of our status as organically-certifie d. 4. Offshore Organic Competition MA O will directly compete with offshore farms at Kokua but our broader sales st rategy is to sell through farmers markets, where imported products are prohibited . The growth of local-only farmers markets will help to insulate MA O from offsh ore competition. Nevertheless, offshore farms capture 90% of our market, so it is critical to understand who they are. Two of the largest are: Earthbound Farms, is one of the largest certified organic producers in the U.S., comprising 24,000 acres in California and Mexico. Earthbound grows a wide rang e of field crops but currently only the salad mixes are sold in Hawai i through conventional supermarkets and large retailers (Costco, Safeway, Star Market, Foo dland) and at natural foods stores (Down to Earths three O ahu locations). Their products are excellent, but like other imported items, suffer from short shelf life. Cal-Organic Farms, is an organic division of Grimmway Enterprises, Inc., a growe r of conventional product. They distribute carrots, chard, green onion, kale an d many herbs to all of Hawai is natural food stores and conventional supermarkets . Their product quality is average to high. Kokua has complained that their sh elf life is less than MA O grown produce, and Kokua has preferred to purchase MA O produce over Cal-Organics, when available (this has included kale, chard, and green onions). 5. Farming in Hawai i If the market for organic fruits and vegetables has so much potential for growth , why arent more conventional farmers shifting to organic production, and why are there so few new farmers entering this sector? There are multiple factors, whi ch converge to make entering organic production very difficult. On O ahu inflat ed land valuations make it extremely costly to secure land for either organic or conventional farming. The average cost of an acre of undeveloped farmland in W ai anae is now over $80,000, while the median sales price of a home on O ahu is over $500,000. Concurrently, there is considerable pressure from urban develo

pment for more land. The Kunia Plain, once O ahus largest sugar growing area, is being encroached by housing developments. Most new farmers enter the market vi a leased land, with the market rate being $125 per acre per month. Leasing, how ever, can be problematic as landowners have preferred short-term leases because of the potential to rezone land from agriculture to urban for housing developmen t. Even O ahus largest growers, Jefts Farms and Aloun Farms, have large portions of their land in short-term leases, some less than 5-years. Best practice organic agriculture requires an investment in soil building/condit ioning, which means income-generation does not start until late in year one of a n operation, at the earliest. Also, there should be periods where fields are le ft fallow and cover crops are planted, as this improves soil quality. Again, th is increases the time out of production. Most growth in the local organic agric ulture sector has occurred on the neighbor islands, especially the Big Island of Hawai i, where land is cheaper. Other reasons why there are few local organic farms, as suggested in supporting letters from Ms. Joan Namkoong and Mr. David Cole, include limited local technic al expertise in organic agriculture and a lack of coordinated support amongst ag ricultural sectors and agriculture supporters. Hawai i is transitioning out of plantation agriculture and there is limited entrepreneurial capacity amongst new growers. David Cole, the current Maui Land and Pine CEO, and former CEO of Nav iSoft Inc., and former president of AOL s New Enterprises Group, states in his s upport letter that: The transition away from the plantation model has been difficult because the farm industry has been slow to adapt to the new environment, there have been few mar ket makers to match local producers with consumers and there is a lack of capita l available to pioneering entrepreneurs. In 1996, Mr. Cole acquired Sunnyside Farms, a 500-acre Virginia farm. He re-lau nched Sunnyside as a certified organic supplier of gourmet quality fresh produce and meats. What makes the MA O venture especially unique is that it is on the cusp of being a market maker and pioneering entrepreneur while being a non-profit so cial enterprise. 6. Customer Profile In the initial phase of market development, five sales locations with uniquely d ifferent core customers have been tested: (1) farmers markets at different busine ss locations where MA O was the exclusive vender (including health clinics); (2) a low-medium end Wai anae grocery store; (3) a high-end farmers market; (4) a hi gh-end health food cooperative grocery outlet; and (5) a high-end gourmet restau rant in Honolulu. An overview of how these locations have evolved into clear se gments can be seen in the following table:

Customer Segments Buyer Behavior Needs (perceived) Alternatives Competitive Advantages High End (tourist foodies) Looking for a native and local experience Want to try something new High quality Good looks and taste Exotic, unique choices Authentic, local, native Restaurants / cafs Conventional vendors Grocery / health food stores Fresh and locally grown Organic Youth and products (taro, mangos) native and local therefore authentic High End (local, foodies) Looking for fresh, local grown, organic Increasing social consciousness when buying Demands high quality produc eshness, appearance, and taste for repeat business Health food stores

 Other market vendors Restaurants, cafes Fresh and locally grown Organic Diversity of offerings compared to other market growers Youth and social mission of WCRC Low-Moderate (local/ Hawaiian) Makes necessary food purchases, need to spread t heir food dollars Bang for the buck Food that tastes/looks good Food they like Local grocery store Prepared foods Fast food and restaurants Conventionally grown foods Recognize youth growers Have been instructed to buy foods by health care providers MAO produce looks better, has different selection Pricing comparable to local conventional retail items but with a marketable edge Retailers Products in high demand and/or trendy Want to make a mark-up on re-sale Competitive price Top quality and appearance Organic fills new niche Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product Restaurants Products in high demand and/or trendy Freshness and reliable source Competitive price Top quality and appearance Fresh, local, organic Other local and non-local organic producers Conventional producers Local and organic often yields superior quality Product availability and cost to ship/store imported product Social mission 7. Distribution Mechanisms MA O will connect with the five aforementioned segments by selling product at th e following locations: High-end (tourist) High-end (local) Low-moderate Retail Restaurant KCC Farmers Market, Honolulu Wai anae Health Center Kaiser Clinic, Nanakuli; Leeward Community College, Pearl City Aloha Aina Caf (farmers market booth) Aloha Aina Caf Town Restaurant, Honolulu Wai anae Store Kokua Natural Foods Cooperative, Honolulu We have gained invaluable experiences thus far in the diversity of markets penet rated. Some trends have developed which are worthwhile mentioning here: (1) At health clinics care-providers and dietitians have staged cooking demonstrations to teach patients new recipes using MA O products, and doctors have purchased un sold product to support the social mission (2) At Leeward Community College facu lty and administrators regularly call the farm to make large orders, this takes some of the guess work out of what to take to a farmers market; and (3) The KCC F armers Market has become an attraction, there are food demonstrations and musicians , and people use the market as a convenient place to meet. All segments are rep resented at KCC including small restaurants that shop for specialty items and to

investigate new product suppliers. Also Kokua Natural Foods is in close proxim ity to KCC Farmers Market, unsold product, can be sold to Kokua if necessary. D. MARKETING PLAN 1. Promotions and Outreach The critical strategy for outreach involves customer education of the uniqueness and benefits of organic foods, and the social mission of MA O. Through multipl e branches of media, and with the assistance of WCRCs partnerships, MA O has enjo yed some high profile free advertising, which has set the stage for current posi tioning. This has included:

OUTREACH SEGMENT CONNECTED TO: MA O products were featured on a 30-minute cooking show called Sam Choy Presents. Well-known local chef Sam Choy was hired by Kaiser Permanente to stage a live c ooking show at a local clinic to feature low calorie and vegetarian recipes. Both high-end (local), low-medium, and restaurant segments. The Hawaiian Electric Company has a 30-minute cooking show called The Electric Ki tchen, the Aloha Aina Caf was a guest restaurant and prepared dishes using MA Os h erbs and baby greens. Crossed both high-end (local), low-medium, and restauran t segments. University of Hawai i (UH), working with KITV, a local television station, featu red MA O as a program partner in a news segment called Discover UH, Youll Be Amaze d. Two segments appeared, including a 30-second commercial that ran for to-weeks between the local evening news. All segments except perhaps high end (to urist) KITV has developed additional footage of MA O, and added to other activities uni que to Hawai i to develop an in-flight commercial for Hawai i that runs on fligh ts coming to Hawai i from Japan. Both high-end Hawaiian Airlines in-flight magazine, Hana Hou, featured the farm in a 5-page ce nter-spread with color photos, appeared in the December 2003 issue. Both hig h-end segments. The youth leadership training was featured as a center-spread in the Office of H awaiian Affairs monthly newspaper called Ka Wai Ola o OHA. Low-moderate seg ment. Farm activities were featured in a two-page spread in the Honolulu Magazine, a m onthly-published magazine. MA O was included in the 2004 food edition. High-end (local) Farm activities were featured in one-page spread in the Honolulu Weekly, a free alternative newspaper featuring politics, entertainment and arts. High-end (local) This publicity has occurred over 2-years and has increased MA O recognition. In 2002, youth developed a MA O farm tee-shirt which on the front read no panic, go organic. Over 2,000 tee shirts have been sold and the playfulness of the messag e has become iconic of the grassroots social mission of MA O. 2. Specific Segment Strategies

Customer Segments Specific Outreach Strategies High End (tourist foodies) No specific strategy except when segment attends KCC farmers market. High End (local, foodies) Connect to repeat customer at KCC and develop that mer to cross-market to Town Restaurant and Kokua Continue to build e-mail database Invite customers to attend monthly community work days. Low-Moderate (local/ Hawaiian) Maintain high community profile through presence at markets, occasionally story in the local community newspaper, and by posting fliers and brochures at the Aloha Aina Caf Connect to, and nurture, repeat customers at farmers markets. Continue to build e-mail database

 Invite customers to attend monthly community work days. Retailers Provide on-site marketing collateral such as laminated product n ametags for vegetables, fliers, and brochures. Invite retailer to bring staff to the farm to increase education on product and mission. Restaurants Encourage restaurant management to acknowledge MA O on menus Provide on-site marketing collateral such as fliers, and brochures. Invite restaurant to bring staff to the farm to increase education on product an d mission.

The farmers market booth is arranged to stimulate customer senses, by: Fruits and vegetables are arranged to catch the eye through color and shape; Youth wear bright green or blue tee-shirts with MA O on the rear and no panic, g rganic on the front; Product is stacked in wicker baskets which conjures a nostalgic sense of old Haw aii, this is how Mom and Pop stores displayed their products; Samples of product are always available, e.g. ripe bananas are given to all chil dren that stop by the booth; Sales youth are lively and playful, chanting slogans such as fresh organic greens or simply arugula, and when time allows a youth might play ukulele; Prices are posted on old-style school blackboards and written in chalk; and Posters with photos of the farm and youth working are arranged where people cann ot miss seeing them. 3. MA O Customer Service Philosophy Excellent customer service skills are vital in agriculture businesses, especiall y enterprises direct marketing to customers. Our goal is to attract and retain customers through high quality product and service experience, therefore; all yo uth are trained in sales and customer service, and they regularly debrief farmers market experiences to find ways to improve sales. We will periodically audit our sales techniques and make necessary adjustments. Of key importance is that you th are knowledgeable regarding products and convey our social mission. To reinf orce the importance of customer service we developed a simple sales philosophy, which youth learn and apply, it is as follows: Make eye contact, greet all people, smile, show maximum aloha; Listen to customers, learn their names, learn how they cook our food, and ask ho w we can improve our products; Communicate with customers, tell them the MA O story, talk about our products, t he farm, and upcoming events; Show aloha to other venders, learn their names and something about their product s, refer customers to them where possible; and Strive for excellence in customer service and product quality. 4. Promotional Materials and Labeling To ensure customer education and information transfer, we developed the followin g promotional materials, this includes: Brochures, fliers, posters which are distributed at all locations; MA O information is added to stakeholders staff bulletins; E-mail distribution lists, sent twice monthly to an in-house list, and the lists of our stakeholders. This reaches approximately 2,000 people; Partner marketing, e.g. marketing is done by the Hawai i Farm Bureau Federation via a web site and regular articles in local newspapers; and The caf staff actively informs customers of the markets, and there is signage alo ng a major town thoroughfare. MA O Youth Organic farm will sell produce simply under the MA O brand label. In m id-2003, a youth involved with the project developed a label that will be used ( see right). All MA O brand products will be sold with labeling to educate the con sumer that the product is certified organic, is grown by youth and that 100% of their purchase will go to support youth leadership development activities.

5. Pricing Overall prices have been set based on competitors prices. Wholesale prices are b ased on the equivalent wholesale price Kokua Market pays for the same imported p roduct. Usually each quarter Kokuas produce buyer gives us a printout of what he is paying California food brokers for product. If they are receiving a discoun ted price for an item we attempt to make an adjustment. Once per month we monit or retail prices at three retail outlets. We sometimes do this as a class field trip for youth in the leadership training. Selling product at KCC farmers marke t allows us to average our price upward to secure a higher margin. At KCC we ca n also move large volumes of product given the number of market shoppers. The b ottom line is that if we are to compete against imported products then we need t o offer prices attractive to the local public. Direct marketing, through such m echanisms as farmers markets, has become the best method to increase margin for s maller farmers. 6. Distribution Through a U.S. Housing and Urban Development grant, WCRC purchased a 2004-model Ford E-350 extended cargo van. The cargo van will be used to deliver produce to farmers markets. Two personal vehicles owned by staff are currently used for th e smaller markets. In 2005, we will purchase two additional vehicles using ANA funds. We use reusable plastic vegetable container totes to package produce for wholesale deliver. These are more hygienic than cartons as they can be easily sanitized. Large coolers are used to transport vegetables to farmers markets; sp ace in the van is equivalent to 24 large 120-quart coolers. 7. Sales Management Under the tutelage of Gary Maunakea-Forth, a youth co-manager, Ms. Kanoe Burgess , manages weekly sales. Kanoe has been with WCRC for 2-years and has already de monstrated sales acumen beyond her years. She is an excellent communicator, and is able to install a sense of confidence and trust in our wholesale and retail clientele. She supervises and motivates youth crews working at farmers markets. Development of the youth-to-customer relationship has increased return clientel e, especially at farmers markets; therefore it is fitting to enlist a youth to ma nage the maturation of our sales strategies. 8. Competitive Advantage Five-months prior to opening Town Restaurant Lesa Griffith, a food critic for th e Honolulu Weekly, wrote that Chef/Owner Ed Kenney would open what could be Honol ulus hottest restaurant. In the same article Kenney summarized MA Os relationship with Town, and in effect our competitive advantage, by stating that: MA O takes it from the earth to the seed to growing the thing to picking kids out of the community who are in need of help, teaching them the Hawaiian culture, t hen (they) take it to their caf and markets. That whole thing fires me up. Town opened in March 2005, and in her culinary review, Nadine Kam of the Honolul u Star-Bulletin stated that: Town raises the bar for Honolulu s restaurateurs. I hope that, like patrons who are flocking to the restaurant, other chefs eventually get it. She added that: Their philosophy is local first, organic whenever possible, with aloha always, and it shows in MA O Farms greens that do taste as if they were hand-picked from the field seconds before hitting the plate. Over the past 2-years, WCRCs activities, branded as MA O, have received widesprea d media attention. The convergence of social mission (youth development) and ma rket demand (organic foods) has positioned MA O on the verge of an incredible op portunity. Planning, hard-work and skill development have built the foundation for a superior quality product emblemized by freshness, local and now organic. With

trategic educational materials, a grassroots approach to promotions, and word-of -mouth support, our customer base will expand and mature in quick-time. E. MANAGEMENT PLAN 1. Organization and Board MA O is a pilot program of the Wai anae Community Re-Development Corporation (WC RC), a non-profit 501(c)3 community development organization. WCRCs mission is t o plan and implement community-based economic development projects which create sustainable employment and business opportunities for Wai anae residents, especi ally youth. In 1999, our community came together to develop an application to t he U.S. Department of Housing and Urban Development for Empowerment ZoneEnterpris e Community status. While the application was unsuccessful, a group continued t o meet to discuss five interest areas: out-of-school youth, sustainable economic development, agriculture, health and Hawaiian culture. The group decided to es tablish an organization with social enterprise development as a key objective. WCRC was incorporated in 2001. 2. Governance WCRC has an active and committed Board of Directors, with extensive experience a nd a commitment to community service. The Board meets every month and they are responsible for policy making, financial oversight, adoption of annual budget, a nd support of grassroots fundraising efforts. All Board members are residents o f the Wai anae community and are of Native Hawaiian ancestry. The Board include s: Kaimana Pine -- WCRC Board President and a founding member of WCRC. Mr. Pine is only 25-years old and has for the past 5-years owned and managed one of O ahus l ast remaining locally owned and operated surf shops. In 2003, he developed a gr aphic design and internet marketing business that specializes in promotion of Ha wai i manufactured products. Malia Miles -- WCRC Board Vice President and current food manager at Pu u Kahea Christian retreat center. Ms. Miles has many years experience in culinary arts and food service and is highly active in community affairs. Cris Akao -- WCRC Board Treasurer and Branch Manager of American Savings Bank, W ai anae. Ms. Akao was born and raised in Wai anae, graduated from both Wai anae Intermediate and Wai anae High School and has worked as Manager and Operations Director for ASB for over 12-years. She brings extensive experiences in communi ty banking, financial oversight, small business financing, and accounting to WCR C, and is responsible for review of monthly financial statements. Kawika Naho opi i -- WCRC Board Secretary and the Center Manager for Olelo Comm unity Television in Wai anae. Mr. Naho opi i is a video production trainer and coordinates community outreach, volunteer and staff management at the Wai anae s tudio, and provides technical assistance and artistic direction to Wai anae High Schools award winning Searider Productions multi-media program. Austin Miles -- WCRC Board Member and caretaker of Pu u Kahea Christian retreat center. Mr. Miles is active in community organizing and until recently owned a nd operated a popular local eatery where he was head chef. 3. MA Os Position in WCRC MA O will operate as a pilot project of WCRC. WCRC has secured initial funding to launch MA O. Starting in year 3, youth employees of MA O will receive a bonu s based on their performance and MA Os profits. This will provide incentives for the youth to be full partners in expanding production and sales. 4. Executive Management & Staffing Plan Gary Maunakea-Forth is currently WCRCs Agriculture Director, responsible for over seeing agricultural production, expansion, and training of staff and volunteers. Mr. Maunakea-Forth will devote 100% of his time to MA O (resume attached). Ot her staff dedicated to the development of MA O are:

 J. Kukui Maunakea-Forth is currently WCRC Executive Director. Ms. Maunakea-Fort h holds a BA in Pacific Island & Hawaiian Studies, and a BSc in Cultural Anthrop ology and has more than 10 years experience teaching and managing non-profits. Twenty percent of her overall time will be devoted to administrative and fiscal management for MA O (resume attached). William Aila, Sr., is currently Farm Manager for WCRC and kupuna (elder and ment or) to youth in all of WCRCs activities. He has over 35-years experience in ranc hing, farming, and composting as a business owner, and an extensive background i n heavy equipment operations. Currently he is a part-time contract employee wit h WCRC and half of that time will be devoted to MA O to provide land clearing an d irrigation system development (resume attached). Youth are central to MA O. Three Native Hawaiian youth, recent graduates of WCR C leadership training programs, have been employed. The youth are: Kanoe Burgess. Ms. Burgess, 21-years old, has already gained national attention , through her speech at the Kellogg Foundations Food and Society national conferenc e, on indigenous youth perspectives of agriculture. She coordinates sales and m arketing at MA O. Ikaika Burgo. Mr. Burgo, 20-years old, is perhaps the most natural and gifted armer among our youth. He has a genuine love for being outside and working on t he land, and spends numerous hours fine-tuning nursery and orchard operations. Manny Miles. Mr. Miles, 20-years old, coordinates field crop production at MA O . He has attended conferences and has become active in the BLAST Initiative of Bostons The Food Project, an effort to network young people working in sustainabl e agriculture. Youth from the youth leadership team provide an able labor force of 6 to 12 youn g people, working 18-hours each week. They are paid as interns under the leader ship-training program. MA O will hire two additional full-time youth coordinato rs in year 2. 5. Cooperating Experts This enterprise is strongly supported by Jonathan Deenik, PhD. Dr. Deenik, has a doctoral degree in Soil Science from the University of Hawai i at Manoa, where he is currently employed as an extension specialist and lecturer. Dr. Deenik i s able to provide regular tutelage on technical issues and access to other unive rsity faculty experts. Other stakeholders include: Partner Description of Support Peter Quigley, Vice Chancellor Randy Francisco, Program Director Leeward Community College (LCC) Provides additional training for youth including higher education courses, and is developing a degree program in Tropical Organi c Agriculture. David Cole, CEO, Maui Land and Pine (former VP of AOL) Partners with MA O to increase youth involvement in orga nic agriculture o Hosted MA O youth in Maui to learn about MLPs current research and develo pment (composting, cover crops, organic pineapple) o Has reviewed MA Os business plan and provided commentary on business stra tegies Joan Namkoong, Organizer KCC and Kailua farmers markets Provides connection to customers and information on local food demand and availability Stephen Bradley, MD, Wai anae Comprehensive Health Center Operates a clinic farmers market, produce s nutrition education literature, and promotes market to community.

Lei Aken, Ag Program Teacher, Wai anae High School (WHS) Will establish a n organic agriculture high school program , develop community garden and support trainings. Recruitment of future youth. Hawaii Organic Farmers Association Promote organic agriculture and provide organic certification. Recruitment of future youth.

F. OPERATIONS PLAN 1. Farm Plan MA O has a total of 5-acres of land in Lualualei Valley: 2.5 acres currently in production and another 2.5-acres of cleared land available starting January 2005 . The new land will be developed similar to the current 2.5 acres in 50 wide by 80 long sections, providing 8 beds per section for field crops. We will plant a row of citrus trees between each section. . Mangos and avocados will be plante d along the north fence line. Field crops are planted every one to two weeks, p erennials every three months and orchard trees at start-up. 2. Research & Development The most technically challenging facet of this venture is the organic production . Farming commenced in early 2002, and we have now completed three full years o f soil building, crop testing and experimentation with different organic methods . This has provided invaluable information on organic fertilization; timing of crop planting cycles, and organic seed varieties. The result is a system that h as produced high yields with excellent product quality (taste, shelf-life, appea rance, weight), and minimal insect damage. We augmented on-farm experimentation by visiting many other farms to research new and best practices. Similarly loc al farmers and university extension agents have visited MA O and provided more t echnical information. There are numerous variables that must converge to produc e a healthy crop. Over the past three years we have kept daily input and yield records so that we can better plan for future seasons. We have a strong working relationship with Jonathan Deenik, a PhD soil scientist at the University of Ha wai i, who has assisted with our organic production plan since the inception of farm activities. 3. Crop Growth Given Wai anaes climate and optimal growing conditions, mixed salad greens (lettu ces, arugula, chard, beet tops, tat soi, mizuna, mustard cabbage, kale) take 2528 days from seed to first cutting. This is our biggest seller and we are able to harvest it 2-3 times per planting, with re-growth occurring every 8-10 days. We also plant a longer rotation every two weeks of fennel, green onion, beets, and carrots, which last approximately 100-days. In our perennial rotation, whic h lasts 4-6 months, we plant basil, eggplant, parsley, kale, chard, and collards . We plant this rotation every four months. 4. Harvest and Quality Control Market demand requires fresh, clean and attractively presented fruits and vegeta bles. For organically grown fruits and vegetables consumers have even higher ex pectations for appearance and cleanliness. Our crops are harvested three times each week. Youth managers and workers are trained to cultivate, harvest and han dle (wash, package, chill) in keeping with these quality standards. Washing vegetables tends to be the most labor-intensive facet of the operation, especially as salad greens are delicate and are double washed. While our curren t packing facility is basic, we have customized faucets so that each sink cleani ng area has overhead washing faucets with shower-flow heads. This frees hands t o concentrate on cleaning the product. After each product has been washed, it i s placed in small quantities (about five pounds) on drying trays and a youth man

ager or coordinator inspects the product. The inspector has the option to retur n the tray to the cleaner for additional washing. If the tray is excellent qual ity then a packaging crew handles the boxing or bagging of the product. This pr ovides three points of inspection. Before a product leaves the farm a final che ck is done by choosing a random item from each product. One item from each harv ested crop is also kept to monitor shelf life. 5. Inventory Management Every Monday, we estimate yield quantities for the week. Staff log anticipated yield numbers in a spreadsheet to manage distribution. This system helps us acc ommodate fluctuations in weekly yield to ensure customer satisfaction. To maxim ize freshness, we harvest three times per week and maintain little inventory. F or all points of sale, except KCC farmers market, we harvest and distribute the s ame day. For KCC we harvest, chill over night, and sell in the morning. Our pr esent cold storage is limited to a 108 cubic foot chiller, but in June 2005 we w ill install a 760 cubic foot reefer, which will have an alarm system to monitor possible power outages. 6. Organic Certification In September 2004, MA O Youth Organic Farm received organic certification from t he Hawai i Organic Farmers Association (HOFA), under the auspices of the USDA. H OFA is the only certifying body in the State of Hawai i and the application proc ess involved a 6-month review and final inspection. MA O will be inspected each year and is required to show proof of organic methods. We are obliged to keep accurate records for soil inputs, seed sources, and crop yields. We track the f ollowing data on a customized excel spreadsheet: (1) type of product sold; (2) a mount of product sold: (3) customer that received product; (4) location on farm where product was grown; and (4) history of inputs and events for the area where product was grown. 7. Farmers Markets As aforementioned MA O will sell primarily at markets already tested including: Wai anae Comprehensive Health Center Wednesdays 11:45am Kaiser Permanente, Nanakuli Wednesdays 11:45am to 1:00 Leeward Community College, Pearl City Wednesdays 11:45am Aloha Aina Caf, Wai anae Saturdays 9:00 am to 11:00 KCC Farmers Market, Honolulu Two Saturdays per month, 7:30 am to 11:00

MA O uses the markets as training grounds for youth in our leadership developmen t programs. Our full-time staff provide supervision for each market while the p art-time youth ensure adequate staffing to cover multiple markets simultaneously . 8. Land, Equipment, Office Space, Tools, Resources WCRC leases 5-acres of land located at 86-210 Puhawai Road in Lualualei Valley, which will be used for the MA O venture. The landowner is the Community of Chri st Church and the 25-year term began in 2001. The land has excellent potential for expansion with three of the neighboring properties vacant (see map at right) . MA O will benefit from equipment acquired with WCRC grant funds. This includes a 2001 model 55-hp John Deer tractor and a cargo van. ANA funds will be used to purchase and additional delivery van and a one-ton dump truck. As mentioned col d storage is limited at present but through the aforementioned HUD grant MA O wi ll be constructing a new Organic Agriculture Center to include a 40 x 40 concrete floor processing facility, additional cold storage, and offices. 9. Increasing Youth Capacity

to 1:00 pm pm to 1:00 pm am

In early 2004, WCRC started educational programs at two local schools, using edi ble organic school gardens as an alternative teaching tool. Teachers have been trained to use organic farming techniques as a vehicle to teach social studies a nd science classes. Fruits and vegetables are harvested on a weekly basis, and sold by youth on campus. Youth participants are prime candidates for future emp loyment at MA O, critical to our growth plans. G. FINANCIAL PLAN FOR MA O VENTURE 1. Start-up A grant of $456,000 has been secured from the DHHS-Administration for Native Ame ricans with $317,837 dedicated to this venture to be used in 2005 and 2006, to c omplete development of MA O. This money is listed as restricted grants on the b alance sheet and as ANA grant on the cash flow and income statements. 2. Accounting System & Business Controls. We use Quickbooks as our primary accounting system. We track sales weekly throu gh spreadsheets and review them monthly so that we understand trends related to product and point of sale. This will allow us to analyze the profitability of s ales by specific crop. WCRCs Board of Directors will regularly monitor all these statements for accountability. We have scheduled our first external audit (bas ed on increased budget size) for 2005. 3. Long-term Sustainability WCRC has maintained financial stability while growing rapidly in the past four y ears. Significant steps have been taken to lay a foundation for long-term susta inability, including: Securing a total of $1,354,000 of federal funds the past 4-years to support MA O , for our new caf, and a variety of educational and community projects; Arranging for the purchase of 2.5 acres of land that we currently lease for farm ing, providing leverage to acquire more land in the future; Forging partnerships with industry and business (Maui Land and Pine, Hawai i Org anic Farmers Association, Kokua Natural Foods Cooperative), education (Leeward Co mmunity College, University of Hawai i College of Tropical Agriculture & Human R esources, Kamehameha Schools), to ensure access to markets and technical assista nce; Initiating contractual relationships with Kamehameha Schools/Bishop Estate and A lu Like, a $16 million Hawaiian job training program, to improve job training pr ograms for youth. 4. Proforma Statements We have included the following financial statements: Projection of weekly customer product orders. These estimates rely on data from the last three years of operations and are the basis for our sales figures for t he next three years. Note that year 3 is a critical point for expansion as prod uctive land and sales double. Annual income statements for years 1, 2, and 3. Monthly cash flow statements for years 1, 2 and 3. Annual balance sheets for years 1,2, and 3. Social Return on Investment (SROI).

Analysis of Social Return on Investment SROI Narrative and Assumptions Community Wealth: Benefits Amount income returned to the community in taxes based on Hawaiian state income tax rate of 6.4% for 16,000-24,000 income bracket. Assumed youth salary: $18,0 00/year. Public assistance not collected based on 20% welfare assistance dependence in th e target community multiplied by average annual payments of $6,168 (Honolulu Sta r Bulletin 1999). Costs Additional staff time for farmer training programs based on the estimate that th e youth dedicate about 20% of their time to leading educational programs. Discounted sales figures were calculated based on establishing an average discou nt taken off the price of produce sold at markets that cater specifically to the low-income, local community. The average discount calculated was 33%, and with this discount taken off, weekly revenue averaged $854. Environment: A conventional farm receives subsidies at a rate of $72.93 per acre. (www.bette rfarming.com) The cost of farming inputs in conventional agriculture is $340/acre (University of Florida, IFAS Extension). By farming organically, MA O is using 50% less ene rgy and resources to farm their land (Lori Drinkwater, Nature Magazine, Nov. 98). The value of training organic farmers is based on average per person, per hour e ducational rates of HOFA (Hawaiian Organic Farmers Association.) We assumed th at for each youth education hour, two individuals receive training, and that thi s hour is valued at $10 per trainee.

RISK ASSESSMENT & CONTINGENCY PLAN While farming has many inherent risks, in just three years of operations MA O, h as created an innovative and successful model that others in Hawai i wish to rep licate. Moreover, the model and systems have been developed with the co-managem ent of youth. Risk assessments have been mentioned throughout this business pla n and the following table summarizes the important challenges and our mitigation approaches. RISK MITIGATING FACTORS Organic production fails through pests, natural causes, and or other unforeseen circumstances. Thoroughly tested organic methods and systems Expert technical assistance available To anticipate losses, yield assumptions are conservative Ongoing research experiments to ensure new learning Problems with youth, such as lack of motivation. Consensus-building, open communication approach Accountability built within profit-sharing model Expert technical assistance available for youth, and diverse opportunities for i mproving skills. Low Sales Regular customer feedback Diversified product mix Proven demand for products Diversity of markets

 Options to reduce expenses, if necessary High operating costs, low margins Diversity of markets increase direct sal es and improve margins Source lower cost local supplies, e.g., animal manure Difficulty in attracting suitable staff Grow youth from within the MA O system a nd expose early to other benefits trips to conferences, site visits Seen at the moment as doing cutting edge work so we are in high demand Educational programs with local schools provide pipeline for new staff Operational problems, poor food quality, delivery time Thoroughly tested system Access to high-end chef who will help to assess product quality Technical assistance available to investigate unforeseen crop failures MA O system reinforces importance of product quality, assessment and feedback gi ven to youth three days per week. Marketing problems, regulatory barriers and costs Diversity of end markets Certified organic status already achieved Classes to teach safe food handling strategies Caf is a certified kitchen and their staff provide guidance Departure of key project employees Inherent to WCRC is the training, empowe rment and employment of youth, new leaders constantly being developed WCRC Board will create a succession plan H. ENDNOTES