PM Marape Donates K1.5 Million To Menyamya's Coffee Development
by PNG Business News - October 13, 2021
PM Marape Gives K1.5 Million For Coffee Development in Menyamya . Photo, PNG Government media
Hon. James Marape, the Prime Minister of Papua New Guinea, has set aside K1.5 million for coffee development in rural Menyamya, Morobe, which produces some of the best coffee in the country.
During his one-day visit to Menyamya Station last week, he revealed this to hundreds of people.
PM Marape was accompanied by members of the ruling Pangu Pati, including Education Minister Hon. Jimmy Uguro, Morobe Governor Hon. Ginson Saonu, and Menyamya MP Hon. Benjamin Philip.
He stated that K1.5 million would go into a coffee depot and K500,000 would go toward coffee price support managed by local churches.
“I want the Menyamya District Administration to set up a good coffee-buying depot here for K1 million so farmers don’t need to carry heavy bags on their shoulders to find markets in Bulolo and Lae,” PM Marape said.
“I want coffee to be bought here at good prices, which farmers can collect, and then return to their gardens
“I want the churches to get the K500,000 and buy coffee at good prices.
“Our Government has put in place a price support programme to support coffee, cocoa, copra, vanilla and other agriculture produce.
“Coffee buyers who are buying here, and at Marawaka (Eastern Highlands) for K1.50 per kg, should now be paying K6 per kg.
“I want the Menyamya District Administration to partner with the churches in delivering this programme.
“I am engaging the churches so they can involve young people and get them back to their coffee gardens.
“The churches will then buy coffee at a good price.”
PM Marape recently stated at the United Nations General Assembly in New York City that PNG is "one huge garden."
“Our job as Government is to help you get your produce to markets,” he said.
“If five million Papua New Guineans go to agriculture, and produce one bag of coffee, cocoa or copra, you are contributing K1.5 billion extra on top of our current National Budget of K12 billion.”
PM Marape stated the Pangu Pati had envisioned a PNG where everyone had money when the country gained independence in 1975, but that this had fallen by the wayside.
“We are now picking up and putting PNG back on the right road to economic independence, where everyone will have money in their pockets,” he said.
“When my Government realised that the price of coffee, cocoa and copra was very low, and deterring farmers, we decided to introduce price support and buying points at the farm gate.”
Reference: Papua New Guinea Today (10 October 2021). “PM Marape Gives K1.5 Million For Coffee Development in Menyamya”.
PNG Business News - March 29, 2021
Coffee Demand Has Declined, According to a Survey
According to estimates from a survey, coffee production in the country has been decreasing for the past ten years. “From 1998 to 2018, the coffee harvest area and quantity of coffee produced in PNG decreased by 33 per cent and 28 per cent respectively,” a National Research Institute (NRI) report stated. The downturn was triggered by the problems that coffee growers face, such as a shortage of processing facilities, insufficient extension resources, and restricted access to finance. The problems could be resolved by the strategies suggested by NRI deputy director for research Prof Euegene Ezebilo and Prof Carolyn Afolami of the Federal University of Agriculture Abeokuta, based on the fact that “PNG has ideal environmental and climatic conditions for growing high-quality coffee.” They concluded in their paper, Strategies for improving coffee production and processing in PNG: Lessons from the top five coffee-producing countries, that the government's "political will" was critical in moving the coffee industry forward. “And this can be done by promoting effective extension services and training coffee growers on modern systems and innovations in producing coffee; provide funds for research and farm management practices; and, support farmers through loans facility at low-interest rates,” NRI said in a statement. “Policymakers, planners and agricultural managers are urged to take heed of the findings to make informed decisions on boosting the yield and quality of this commodity.”
PNG Business News - April 08, 2021
Chamber: Businesses are Hoping for Recovery in the Coffee Industry
According to the Goroka Chamber of Commerce and Industry (GCCI), business is sluggish in Goroka, Eastern Highlands, but there is hope that the situation will change when the coffee industry picks up. In a market update, GCCI president Chris Anders said that coffee has always had a significant influence on the local economy. “Business has been slow the last few weeks, the main coffee crop in the Eastern Highlands should start to come through in the next few weeks,” he said.“This will put some cash into the economy and business should pick up.” According to the Coffee Industry Corporation, the province is second only to the Western Highlands in terms of coffee production. The province's largest cash crop is coffee. Coffee remains PNG's second-biggest agricultural export earner, contributing K2.4 billion in export revenue between 2014 and 2018 and processing around 259,000 tonnes of coffee beans, according to figures from the Agriculture and Livestock Department. Meanwhile, Anders claimed that the majority of companies complied with the Covid-19 pandemic controls. “But the people are not social distancing and not all are wearing masks which is a concern,” he said. “The main market is still a concern as this is where a large number of people gather.” Goroka market is currently at Peace Park.
PNG Business News - April 12, 2021
Governments Struggle with Providing Facilities, Says Study
Governments in some coffee-producing countries have struggled to provide facilities that encourage the cultivation and processing of high-quality coffee. Strategies for improving coffee production and processing in Papua New Guinea: Lessons from the top five coffee-producing countries, a report by the PNG National Research Institute (NRI), highlighted the country's coffee production and processing and proposed development strategies based on lessons learned from the top five coffee-producing countries in the world. Brazil, Vietnam, Colombia, Indonesia, Ethiopia, and Papua New Guinea were among the six coffee-producing countries studied across four continents. The study's abstract can be found below. Introduction Coffee is the second most important agricultural crop in Papua New Guinea (PNG), after oil palm. Coffee processing produced jobs as well as foreign currency earnings. From 2012 to 2017, coffee accounted for 27% of total agricultural exports and 6% of the country's gross domestic product (GDP). It helped PNG's economy in a variety of ways, including transportation, construction, manufacturing, retail and wholesale, insurance, and banking. Arabica is a coffee species that is widely grown in PNG, mostly in the Highlands between 700 and 2,050 meters above sea level. Robusta is grown in coastal areas of PNG at elevations of up to 550 meters above sea level. PNG produces high-quality, fine-flavour Arabica coffee, which is highly sought after by coffee drinkers. Coffee production in PNG, on the other hand, seems to be decreasing. Between 1998 and 2018, according to a survey by AECOM (2018) on PNG coffee market research, exports fell to 934 60kg bags. In the foreign market, the price of coffee has also been falling over time. The implication is that, since the two components of coffee revenue (output and price) to producers are decreasing, the revenue would decline over time, resulting in significant consequences for the producers and the PNG economy. Results of study In Papua New Guinea, the annual area of coffee fields cultivated ranges from 41,000 hectares in 2002 to 87,000 hectares in 1999. In PNG, the area of coffee fields cultivated decreased by 33% from 81,000 hectares in 1998 to 54,000 hectares in 2018. When compared to the smallest area of coffee field harvest among the top five nations, PNG's largest harvested area (87,000 hectares) is 71% less than the smallest harvested area (220,000 hectares). The amount of coffee beans processed has decreased by 28% from 81,000 tonnes in 1998 to 58,000 tonnes in 2018. It's worth noting that there was no data available for 2008. Over the course of the research, PNG's annual coffee production was lower than that of the top five coffee-producing countries. Vietnam had the most coffee harvested per hectare of the top five coffee-producing countries. It jumped from 1,875 kg/ha in 1998 to 2,612 kg/ha in 2018, a 39 percent rise. Brazil harvested 816 kilograms per hectare in 1998 and 1,906 kilograms per hectare in 2018, a 134 per cent rise. Findings from a literature review on key challenges to coffee production and processing in Papua New Guinea The following are some of the obstacles to coffee production and processing in PNG: INADEQUATE access to basic infrastructure and facilities – Smallholder farmers, especially those in rural areas, struggle to find facilities for coffee milling and storage. There were no decent roads for transporting agricultural supplies and goods to and from their coffee fields. FARM management activities – Most coffee trees have reached the end of their economic sustainable life cycle, resulting in a decrease in crop yield. Producers postpone or fail to perform required coffee husbandry activities such as daily pruning and the planting of shade trees. REDUCED YIELD AND Uneven PRODUCT QUALITY – The quality of coffee produced in PNG is deteriorating. INADEQUATE extension services – Coffee farmers, especially smallholders, need education on modern coffee production methods. They, on the other hand, often find it impossible to obtain services from extension agents. TECHNOLOGY – Modern technology can help coffee farmers increase productivity and increase the appeal of their commodity. Coffee farmers in PNG, on the other hand, often lack modern technologies, which limits their ability to reach their full potential in the coffee industry. CHANGE IN CROPPING Trend – Due to a drop in coffee market prices or problems with access to coffee processing facilities, some coffee farmers turn all or part of their coffee fields to other more cost-effective crops. The turn to other crops may also be due to labour shortages for essential farm tasks including pruning coffee trees and picking coffee beans. PESTS and diseases – Other threats threatening coffee production include the coffee berry borer, coffee leaf rust, coffee green scale, and pink disease (DAL, 2020). UNFAVORABLE MARKET PRICES – The price paid to smallholder coffee farmers is often less than the rate paid to exporters. Smallholders are also discouraged from paying attention to required farm activities, which has an effect on coffee productivity. FINANCIAL ACCESS – Certain coffee farmers choose to grow their farm or buy coffee processing equipment. They, on the other hand, frequently have difficulty obtaining loans from commercial banks. ACCESS TO LAND FOR COMMERCIAL COFFEE PRODUCTION – A wide area of land is required for commercial coffee production to be productive, particularly in terms of economies of scale. Broad tracts of land with proper names, on the other hand, are often difficult to navigate. This is due to the fact that the state-owned property with proper titles is almost depleted. Communal-owned property, which accounts for nearly 97 per cent of total land in PNG, lacks proper titles; and SECURITY issues – Theft of coffee goods, particularly in rural areas, is a major concern for farmers and raises production costs and losses. Discussion The results of this study revealed that PNG has the potential to become one of the world's leading coffee producers. The country's climatic and environmental conditions are ideal for growing a variety of coffee varieties, giving it an advantage over some of the world's top coffee producers. This may explain why, according to the study, PNG had a higher average coffee yield per hectare than all of the top five coffee-producing countries except Vietnam. However, the region of cultivated coffee fields and the quantity of coffee produced by PNG have remained lower than those of the other top five coffee-producing countries studied in this report. The PPAP, which is being implemented by the government with the support of the World Bank, has the ability to increase PNG's coffee production and make the country more competitive in the coffee industry. However, the PPAP benefits only certain coffee farmers, making it impossible to achieve the desired rise in coffee demand. More robust and reliable monitoring and evaluation processes are needed for the PPAP to contribute more meaningfully to the coffee market. The project should place a greater emphasis on coffee tree replanting and plantation regeneration. To increase overall coffee production in PNG, all coffee growers should have access to the PPAP (for example, through an all inclusion program).
PNG Business News - October 26, 2021
Australia buys Digicel, PNG’s mobile monopoly
Photo credit: Devpolicy by Stephen Howes Yesterday, Telstra announced that it was buying Digicel Pacific. Telstra itself is only paying $270 million, and the Australian government $1.33 billion. Yet, Telstra is obtaining 100% ownership. The deal is certainly an attractive one for Telstra. But does it make sense for Australia, and for the Pacific? Digicel has had a transformational impact in the Pacific, but now has too much market power. As the Telstra release explains, it holds the dominant position in all the Pacific countries in which it operates, except for Fiji, where it is in second place. In Papua New Guinea, which I know best, and which is by far Digicel's biggest market, the company has a 92% share of the mobile phone market. That makes Digicel effectively a monopoly in PNG. And that is why it is so profitable: like any monopolist, it exploits its market power. Australian and PNG researchers have been tracking mobile internet prices in PNG since Australia gifted it a new underwater cable . Their conclusion is that since the completion of that cable in December 2019 to today there has been no decrease in mobile internet prices. The reason is simple: the lack of retail competition. Michelle Nayahamui Rooney, Martin Davies and I last year exposed Digicel PNG’s predatory loan scheme. Digicel lends phone credit to its customers. They pay it back when they next top up. Our estimate is that Digicel made a 17% return from such loans every week, which is equivalent to an unbelievable 351200% a year. Is this really the way in which Australia want to engages in the Pacific – owning an enterprise that keeps prices high for consumers, and rips them off when they are desperate to make a call? Any monopolist is necessarily engaged in a battle between the consumer and their profits. At some point, Telstra will end up going toe-to-toe with the PNG telecom regulator, NICTA, as Digicel has done several times. It’s going to be awkward for both Telstra and the Australian government. Many will welcome the investment as a sign of Australian commitment to the Pacific. However, if we want to invest in the telecom sector in the Pacific, we should be backing alternatives to Digicel, to push prices down and improve services, not buying out the dominant player. Amalgamated Telecom Holdings based in Fiji is the Pacific’s second biggest telecom provider. It is currently planning to enter the PNG mobile market with support from the Asian Development Bank. This is the sort of investment we should be financing. That Australia has bought Digicel shows the extent to which the Pacific is now viewed through a China lens. That’s unfortunate. China is a massive economic power. Its companies will have increasing stakes in economies around the world. That is a fact we have to accept. The Australian government also needs to decide if its only goal is to counter China or if it is still seeks to promote Pacific development. When I was AusAID's Chief Economist, Digicel was the new kid on the block in the Pacific, and it was successfully challenging state-owned telcos that until then had been dominant. In 2006, in Foreign Minister Alexander Downer's flagship Pacific 2020 report, we wrote glowingly about the competition that various Pacific countries had recently started allowing in the mobile phone sector. Our analysis was right then, and remains relevant today. Yet here we are, in 2021, doing the opposite: rather than supporting greater competition in the telecom sector, subsidising the purchase of the incumbent monopolist. The decision to buy Digicel Pacific should be reversed. If it is too late for that, the Australian government should at least – in return for all its cheap and risk-reducing finance – oblige Telstra to operate Digicel for the benefit of the people of the Pacific rather than solely for its shareholders through an agreement that makes it clear that the Australian company is not only expected to return the cheap loan it has been given, but also reduce prices, and end rip-offs. This article appeared first on Devpolicy Blog (devpolicy.org), from the Development Policy Centre at The Australian National University. Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School.
PNG Business News - October 26, 2021
Taureka Replaced As Managing Director
Isikeli Taureka's position as managing-director (MD) of Kumul Consolidated Holdings (KCH) was terminated by the National Executive Council (NEC) recently. Professor David Kavanamur has been appointed as interim MD until a permanent appointment is made, and Moses Maladina, the current chairman of PNG Power Ltd, has been named as acting chairman. Taureka was removed after 20 months, according to Prime Minister James Marape, due to poor performance by KCH and State-Owned Enterprises (SOEs) and missed national project deadlines. “The reforms of the SOEs were endorsed by the Government in October 2019,” he said “We see it as the most-significant reform programme to be undertaken by any Government since the corporatisation of the state utilities and the creation of the Independent Public Business Corporation (IPBC), now KCH. “Building governance and accountability must go hand in hand with successful project execution. These are viable projects that can fundamentally change the accessibility and affordability of services and benefit the welfare of our people. “Extensive unexplained delays to major projects by KCH and SOEs are not acceptable. The Government understands that SOE issues cannot be immediately resolved as they take time. “That is why the NEC provided well over a year for KCH to work with SOEs to support the development and execution of strategies. We had hoped more would have been achieved during Taureka’s tenure. We regret to take the difficult step of severing the MD’s appointment. However, the NEC felt it had to be done. “The Telikom merger and partial privatisation with majority ownership and board control to be passed onto the super funds, for example, is one major issue the Government has been pushing since 2019 when we took office. “The merger of Water PNG and Eda Ranu is another matter that has been outstanding and not yet resolved. This merger is to take on a subsidiary structure where 20 percent of Eda Ranu is to be owned by Koiari landowners and 10 per cent each by Central Province and the National Capital District. “This decision was taken in 2019 but has not been implemented to date. “As for PNG Power and its continuous performance issues, these have been ongoing and evident. “These are badly-needed reforms within the SOEs and responsive policies have been launched by the Government, yet, very little or no progress have been made. “Out of respect to Taureka as a leading Papua New Guinea son, I had reached out to him for a meeting but there was no response forthcoming. Hence, the announcement of this decision (termination),” he added. Those nominated to crucial positions, according to Marape, must grasp the larger picture and act quickly to fulfill the government's goals.“For others in key leadership roles, whether as chair, members of boards, departments or agency heads, you are not here to pass the time or warm seats. Everyone must step up. “The Prime Minister’s Department is working to take stock of work done. So, if you feel you have not met your key performance indicators, I suggest you start thinking about resigning before the NEC asks you to leave.” According to Marape, Kavanamur had previously served as the chairman of KCH and had a thorough awareness of the organization's issues as well as the government's goals. Reference: The National (22 October 2021). “Cabinet Axes Taureka”.
PNG Business News - October 26, 2021
Digicel Pacific to be Acquired by Telstra
Telstra has announced that it will buy Digicel Pacific for $US1.6 billion, plus up to an additional US$250 million based on business performance over the next three years, subject to government and regulatory approvals. In its six South Pacific markets – Papua New Guinea, Fiji, Nauru, Samoa, Tonga, and Vanuatu – Telstra, Australia's leading telecommunications and technology company, will continue to invest in and operate the business under the Digicel brand name. Telstra International CEO Oliver Camplin-Warner said the agreement will allow Telstra to expand on Digicel Pacific's regional leadership and increase mobile connectivity in Papua New Guinea. “Denis O’Brien and the Digicel team have built a phenomenal business that’s centred on providing exceptional customer service, the best coverage and leading digital experiences. Telstra will add to these strengths and the team’s local knowledge with our more than one hundred years’ experience connecting the vast expanses of Australia to continue delivering great experiences for Digicel’s customers across the Pacific.” “We have 19.5 million retail mobile customers in Australia and our 4G network is the largest and most reliable in country. It covers some of the remotest parts of Australia – from the coast, to the outback and the Torres Strait Islands, just off the coast of Papua New Guinea. And we’re in the process of building Australia’s largest 5G network that now stretches to more than 240 towns and 75 per cent of the population,” Camplin-Warner said. There will be no employment losses in the region as a result of the transaction, and the present Digicel Pacific team will continue to manage the company on a day-to-day basis. Denis O'Brien, the current owner of Digicel, will continue on the Board of Directors. “We will invest our know-how and capital to further expand coverage and over time bring the benefits of 5G to Papua New Guinea. But we’ll retain the same Digicel brand the people of PNG know and love today with the same team and services they have come to rely on,” Mr Camplin-Warner said. The purchase, according to Camplin-Warner, is in line with Telstra International's expansion plan, which now comprises operations in 20 countries outside of Australia and thousands of clients, including businesses, governments, and some of the world's largest technology firms. “Beyond Australia Telstra also has the most extensive subsea telecommunications cable network in the Asia Pacific. And we’re one of the biggest providers of voice and data services connecting the South Pacific to the rest of the world through our Southern Cross cable.” “Network traffic is growing faster than at any other period of time and digital technology is changing our world. We are at the centre of this, and so is Digicel Pacific. We are committed to delivering the best technology on the best network for PNG,” Mr Camplin-Warner said. The people and businesses of PNG will benefit from Telstra's experience rolling out a world-class 5G network and connecting diverse geographies, according to Colin Stone, CEO of Digicel Papua New Guinea. “Telstra’s network innovation has played a critical part in Australia being ranked first in the global Mobile Connectivity Index which assesses networks based on performance, affordability and availability. We look forward to working with Oliver and the Telstra team,” Mr Stone said. The two firms' ideals, according to Camplin-Warner, were likewise matched. “Digicel Pacific and Telstra are both committed to building a connected future so everyone can thrive and this includes supporting some of the most vulnerable in our communities.” “Digicel Pacific has taken community development to the next level through the Digicel Foundation’s investment in health, education and community-based programs. We look forward to continuing this work, just as we do today with the Telstra Foundation and its commitment to using technology to support young people and help to reduce the digital divide.” “We will also bring a commitment to addressing climate change to help drive better environmental outcomes for the people of PNG,” Mr Camplin-Warner said. Despite the fact that the transaction is funded by the Australian government, Telstra will remain the only owner and operator of the company. Reference: Loop (October 25, 2021). “Australia’s biggest telecommunications company to acquire Digicel Pacific”.