Increase in Coffee Export Levy is Reasonable, says Kapka
by PNG Business News - March 24, 2022
Photo: Intercontinental Coffee
According to Coffee Industry Corporation Ltd (CICL) board chairman Jerry Kapka, the increase in the levy on green bean coffee exports from 10t to 20t per kilogramme is reasonable.
“The increase is not same as 10t administrative levy. With the current scenario facing the coffee industry, the board has seen the need to have a reserved funding source assigned specifically for coffee development initiatives, including quality improvement and market accessibility,” Kapka said in a paid notice.
“The additional 10t levy will be used under strict guidelines to help exporters, processors, plantations, block holders and smallholders’ associations to develop the industry. The additional levy was approved by representatives of all sector associations on the board.
“The exporter, processor/plantation, block holder and smallholder, including Government representatives, have seen the merit of introducing the levy for coffee development to be deployed directly to impact the industry, unlike the administrative levies
“The coffee development levy will be directly fixed to projects or programmes to support exporters, processors, plantations, block holders and smallholders and not only to increase production but also provide incentives to direct interests on coffee farming activities,” he added.
CICL acting chief executive Charles Dambui said: “We cannot just expect all the time from Government/CICL to fix and address all our sector association’s issues.
“We must be seen implementing some of the policies we made on the board as representatives of the associations. We cannot talk and watch things to happen or expect the Government to fix all our problems.
“We want to know the standing of Highlands Farmers and Settlers Association who claimed to represent exporters, processors, smallholders and plantations.
“The decision undertaken to increase coffee levy was made by the legitimate representatives of exporters, plantations, processors, block holders and smallholders of the coffee industry, appointed by the Government through their associations,” he added.
Reference: The National (22 March 2022). “Increase in coffee export levy ‘reasonable’ to develop industry”.
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 - 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.”
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PNG Business News - June 24, 2022
Creating decent income-earning opportunities for rural communities in Papua New Guinea under road maintenance programme
EU Funded UN Joint STREIT PNG Programme, as part of its mission to support efforts towards reducing rural poverty, is engaging local communities with a focus on struggling single parents as a support workforcefor maintenance of 18 selected farm-to-market roads in the Sepik region. Led by the International Labour Organization (ILO), the creation of these employment opportunities in remote communities where there are limited income-generating activities because of lack of accessible roads to markets is a relief to many disadvantaged households. This month the ILO team visited some of these beneficiaries who are employed in the Road Maintenance Groups (RMGs) working on a 17.7km-long Walkasa Mai-Wanwan road and an 8km-long Yiminum-Wilbowe road in the Nuku District of Sandaun Province. For the beneficiaries, this is a lifetime opportunity for a regular and steady income to support their and their families' everyday needs, and one important concern for the struggling families is paying for their siblings' and kids' school fees and associate costs. Among the struggling families are some widows like Marathia, aged 59, from Yiminum Village, who works on the Yiminum-Wilbowe road. "My husband died, and we were really struggling because our families have their own problems to take care of. Now, I'm very happy with this job which I joined last year. It helps with school fees for my children," said Marathia. Marathia was left with five children to support, including one who is attending final year studies at a vocational training nearby. With the income as an RMG, she was able to pay PGK 500 school fee last year and early this year she paid PGK 250. She said the community is also happy to see her contribution in a job they usually see as for men only. For youths like Jena Suwa this employment opens a new window to their life. She was not able to complete her studies after year 10 in 2018. "I'm very happy today because I was doing nothing in the house. I will now save some money to prepare to go back to school to become a nurse," said Jena. Sony Apo is another youth who completed Grade 8 in 2015 and is looking forward to some money to upgrade. He dreams of becoming a carpenter to continue the legacy of his late 'big daddy'. "Big daddy was the only skilled man we had in the family, and now I'm ready to become a carpenter as well," he said. The main works that encompass the road routine maintenance aspect to be undertaken by the RMGs include pothole patching, vegetation clearing, drainage and general cleaning along the road in preparation for engagement of a contractor to perform specific maintenance on these farm-to-market access and feeder roads. Safety gears and road maintenance tools like boots, gloves, vests, safety helmets, spades, hoes, wheelbarrows were also among the tools and equipment provided and distributed by the EU-STREIT PNG Programme among the RMGs' members. During the visits, the Programme's Community Facilitator, Rachel Bowie also shared with the RMGs to demonstrate commitment in their work to take ownership in the routine maintenance of these roads because it will serve them, their families and their fellow community members. The mission also conducted a drone survey of a 14km-long Nanaha-Tau LLG access road in the Ambunti-Drekikier District, East Sepik Province. In consultation with Ward Members, locals, including youths and women, were also recruited to form RMGs to conduct routine maintenance for this road that will also service Drekikier Secondary. Under the Programme selection criteria, one RMG comprises six members that must have at least two females. The group must also have representation from youths, single parents whose partners have died or have deserted them and traditional owners of land the road passes through. The Programme, in partnership with MiBank, a local financial institution, is implementing cashless transactions and banking for rural farmers by opening bank accounts for these RMGs, and their payment is deposited directly at the end of every month. This arrangement encourages rural farmers to save and grow their earnings, which can be used to access small loan benefits. Under this rural agriculture development programme, 18 rural roads in the Sepik region totalling close to 300 km in length are being maintained or upgraded with the help of RMGs to support the market access initiative implemented by the EU-STREIT PNG Programme for rural and farming communities to boost agriculture production and agribusiness activities pertaining to three targeted cocoa, vanilla and fisheries agri-food value chains for an improved income and cash flow for the rural communities. The roads will also support other agricultural, business, social and community activities and facilities like schools, aid posts and health centres that are in dire need of better accessible roads. The EU-STREIT PNG Programme, being implemented as a UN Joint Programme (FAO as the leading agency, and ILO, ITU, UNCDF and UNDP as partners), is the largest grant-funded Programme of the European Union in the country and the Pacific region. The Programme aims to help improve the lives of the people from East Sepik and Sandaun provinces, by focusing on increasing sustainable and inclusive economic development of rural areas through improved economic returns and opportunities from cocoa, vanilla and fishery value chains while strengthening and improving the efficiency of value chain enablers, including the business environment, and supporting sustainable, climate-proof transport and energy infrastructure development.
PNG Business News - June 24, 2022
Santos welcomes new apprentices in higher-level program
Photo: Leon Buskens, Santos Country Chair PNG meeting the 25 new apprentices in Port Moresby before their departure to the Institut Teknologi Petroleum Petronas (INSTEP) in Malaysia. Joining Mr Buskens and the apprentices are members of the Santos Training and People & Culture Teams. Santos is helping to equip Papua New Guinea’s next generation of oil and gas technicians with international qualifications. Ten females are among 25 novices who have joined the Santos 2022 Apprenticeship Program following a rigorous selection process which will see them train at the Institut Teknologi Petroleum Petronas (INSTEP) in Malaysia – 900 applications were received for the 2022 Program. Upon completion of the technician training at INSTEP, the apprentices will earn a Pearson Business Education Technology Council Level 2 and Level 3 UK qualification. Santos Country Chair for PNG, Leon Buskens when welcoming the apprentices, said: “You have joined at an exciting time following the merger between Oil Search and Santos. As the inaugural batch under the merged entity, there are greater opportunities for you to advance in all aspects of your career both in PNG and abroad. I encourage you to do your best and importantly, maintain a positive attitude and uphold your values - this is what will take you far on this journey. “This is the beginning, but you should be proud of yourselves as we are of you for making it this far. Congratulations and welcome to Santos.” Joining Mr Buskens to address the new cohort were pioneering trainees Cornelius Soagai, Senior Government Affairs Manager and Lydia Warubi, Deputy Occupational Health & Safety Manager. Mr Soagai went on to become the first national Production Manager in the Operations and Maintenance Department while Ms Warubi made waves as the first national female process technician to work at the Central Processing Facility. Both leaders encouraged the apprentices to maximize on the career development opportunities available to them at Santos. Among the cohort was Judy Sasa who completed the Company’s pre-apprentice program at the Kumul Petroleum Academy (KPA) in 2020. Judy finished at the top of her class and attained an honourable achievement award. A grateful Judy thanked Santos for a further opportunity to broaden her knowledge in oil and gas production. “My dream is coming true as I have always wanted to work in this industry,” Ms Sasa said. The 25 apprentices along with the Santos training team departed PNG for Malaysia last weekend. Two permanent employees were also part of the travelling party to INSTEP where they will train to become dual Electrical & Instrumentation tradesmen. Article courtesy of Santos
PNG Business News - June 23, 2022
PM Marape says East Sepik can become ‘economic powerhouse’ of PNG
Photo: PM Marape addressing the crowd in Maprik Prime Minister Hon. James Marape says East Sepik has the potential to become the “economic powerhouse” of Papua New Guinea. He said in Maprik recently (June 22 2022) that because of this potential, and in memory of founding Prime Minister the late Sir Michael Somare, the next Government would be formed in East Sepik. Present with the Prime Minister were East Sepik Governor Hon. Allan Bird (National Alliance), Angoram MP Hon. Salio Waipo (National Alliance), Maprik MP and Minister for Agriculture and Livestock Hon. John Simon (Pangu) and Pangu candidate for Wosera-Gawi Ronald Asik. Sir Michael was instrumental in the formation of both Pangu and National Alliance “East Sepik has the potential to become the ‘economic powerhouse’ province of our country,” PM Marape said. “This is why I will bring Government formation to here: Firstly, in memory of Sir Michael, and secondly, in memory of Sir Pita Lus. “This will be the 11th Parliament, and the first Parliament without Sir Michael and Sir Pita being alive. “This will be symbolic that the nation is now being passed on to the next generation.” PM Marape said formation of the new Government in East Sepik would also inspire the new generation of leaders to hold on to the lofty ideals of the founding fathers like Sir Michael and Sir Pita. He said his Government, over the last three years, had passed major laws to fight corruption and promised the people of Papua New Guinea that some prominent leaders would be prosecuted after the elections. These include the Independent Commission Against Corruption (ICAC), Whistle Blowers’ Act and Undisclosed Wealth Act. “What would be the point of Allan Bird and I growing the economy of the country when corruption is still prevalent?” PM Marape said. “We have managed to stifle corruption in the big way with passage of the three bills during the last term of Parliament. “Over the last three years, we have spent over K56 billion, which has grown the economy by K30 billion.” PM Marape said East Sepik’s economic powerhouse potential was in agriculture, through the vast Sepik Plains, and challenged the province to start growing rice on a large scale to reduce the huge K900 million rice import bill. “Over the next few years, and into the future, we want to grow our own rice for domestic consumption as well as export to Phillipines, Indonesia and the rest if the region,” he said. “Sir Michael, before his passing, said he had helped groom me up and asked me not to forget East Sepik into the future. “The way to achieve this is through economic independence. “I want every Papua New Guinean to have money in their pockets: Grow rice, grow cocoa, grow vanilla, look after cattle, bring in tourists, stop consumption of home brew, stop marijuana and other bad habits. “We are ready to take the country to the next level. “I want East Sepik to be an economic powerhouse no longer dependent on Waigani. “This is why I ask the people of East Sepik to send Allan Bird, John Simon, Salio Waipo and my Wosera-Gawi candidate Ronald Asik, Ambunti-Dreikikier candidate Richard Rafa and Wewak candidate Jim Simitab to Parliament. “ Article courtesy of PM JAMES MARAPE News Page