Cooperatives can assist smallholder coffee growers boost coffee production
by PNG Business News - July 07, 2022
Photo credit: Coffee Affection
Coffee has been one of the most important agricultural commodities that contributes to Papua New Guinea (PNG) economy. It contributes to the livelihoods of almost three million people in the country. However, since the closure of several plantations in PNG, coffee production has continued to decline. Though coffee production in the country is currently driven much by smallholder coffee growers they face several challenges.
National Research Institute (NRI) Spotlight Volume 15, Issue 7: Cooperative is the way forward for smallholder coffee growers in Papua New Guinea by Research Intern Joecy Kabiu, highlights how coffee cooperatives can be used to address some challenges faced by smallholder coffee growers.
Ms. Kabiu reported that “through cooperatives, smallholder coffee growers can be assured of higher production, better-quality coffee, and better returns”
Coffee cooperatives in PNG also face challenges that hinder their growth, which resulted in the demise of some cooperatives. The challenges can be addressed using holistic approach that involves all key stakeholders in the coffee industry.
Government at all levels should consider doing more to encourage smallholder coffee growers to establish effective and efficient cooperatives to move coffee industry forward to the next level.
Article courtesy of National Research Institute
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.”
Place your Ad Here!
PNG Business News - August 12, 2022
Going Green: FAO-led EU-STREIT PNG Programme provides green-powered facility to local agricultural authorities to effectively service rural farmers
EU Funded UN Joint STREIT Programme in Papua New Guinea establishes a renewable energy-powered facility to support local government authorities in East Sepik Province, in delivering effective services to rural farmers and entrepreneurs. With generous support of the European Union, the FAO-led EU STREIT Programme officially opened a new 3 cluster office building on 10 August 2022, to host the Programme along with the East Sepik provincial divisions of Agriculture and Livestock, Cocoa Board and the National Agriculture Quarantine & Inspection Authority. The new-look office building is powered by 189 solar panels, which significantly reduce greenhouse gas emissions and reduces the collective dependence on fossil fuel. The solar panels supply the building with 90 KW of energy, relieving the resident agencies and authorities from relying on fossil-generated electricity for their needs, including lighting, ICT, water pumping, and temperature control. This zero-carbon-emission facility has the capacity to accommodate around 90 experts, technicians and extension service officers. Equipped with 120 batteries, the building can support staff’s operation for 36 hours in case of experiencing high cloud cover. The building, currently co-resided by the Programme and provincial agricultural bodies, will be transferred over to the East Sepik Provincial Administration at the end of the Programme and will continue to provide a sustainable base for sustainable support to agriculture-related services in the Province. Officiating the opening ceremony, His Excellency Ambassador Jernej Videtič, Head of the European Union Delegation to PNG, in his address, said: “I am happy to be here and to see that things are moving in the right direction to bring sustainable benefits to the people of East Sepik” Ambassador Videtič further highlighted that “with resources from the citizens of Europe to fund the EU-STREIT Programme in providing training, tools and support, the quantity and quality of cocoa, vanilla and fisheries products will increase. The objective is also to protect these quality products in international markets under the EU-STREIT introduced initiative of Geographical Indication.” The East Sepik Acting Deputy Provincial Administrator, Mr James Baloiloi, in his speech expressed his appreciation to the EU for funding the EU-STREIT Programme and the interventions that the Programme is doing in East Sepik and Sandaun provinces. “The STREIT Programme has gone ahead to introduce a culture of agribusiness that now enables the people of this Province and the people of Sandaun Province to have cash income that can sustain their livelihoods.” Mr Baloiloi added, “this infrastructure and building supports us and facilitates the service delivery to our people in this Province as well as Sandaun Province.” Thanking the EU for its generous funding support, Dr Xuebing Sun, the EU-STREIT Programme Coordinator, said: “the Programme has generated substantial impacts at beneficiary, local institutions and enabling business environment levels. This would not be possible with good partnership, increased ownerships and leaderships of the governments and implementing partners.” “This co-residing and close co-operation among UN agencies and their national partners in this integrated space reflect the partnership approach taken by the Programme to sustainably develop agri-enterprise activities in the region,” added Dr Xuebing Sun, adding “the new climate-friendly facility, which is fully powered by solar energy, also provides a space to welcome, advise and serve the farmers, including interested women and youth, who play very important roles along agri-food value chains”. “This kind of ‘green investment’ enables a shift to a more green economy for local institutions and infrastructure to meet cocoa, vanilla and fishery value chains stakeholders” advised Anthony Bennett, the FAO Lead Technical Officer of the EU-STREIT PNG Programme. United Nations’ implementing partners supporting the FAO-led EU-STREIT PNG present in the office include the International Labour Organization (ILO), International Telecommunication Union (ITU), United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP). The EU-STREIT PNG is being implemented as a UN Joint Programme (FAO as leading agency, and ILO, ITU, UNCDF and UNDP as implementing partners), is the largest grant-funded Programme of the European Union in the Country and the Pacific region. It focuses on increasing sustainable and inclusive economic development of rural areas through increasing the economic returns and opportunities from cocoa, vanilla and fishery value chains and strengthening and improving the efficiency of value chain enablers, including the business environment and supporting sustainable, climate-proof transport and energy infrastructure development.
Paul Oeka - August 12, 2022
CPAPNG annual meet to discuss global changes
Certified Practicing Accountants of Papua New Guinea will be hosting their 23rd annual conference with about 400 participants nationwide expected to attend the two day conference organized by CPA PNG in Lae Morobe Province from August 18 to19, 2022 CPAPNG was established in 1974 and has come a long way with a lot of achievements along the way. Over the years its membership grew from mere numbers to just below 2000 which includes 40% locals and 60% non-citizens. . The CPA PNG conference is one of CPAs three significant annual events on their calendar with this year's conference theme; Is PNG prepared for the recession?" The conference will see certain key leaders in executive management roles from both the public and private sector delivering presentations in line with the conference theme. CPA PNG's Executive Director Mr. Yuwak Tau said the theme of the conference was selected because there was a decline in the global economy and the general so when that eventuates small economies tend to be affected. He added that they have basically selected the theme that was current and appropriate so that members would find relevance during the course of the conference. “The meeting is to create intellectual and interactive discussions with seasoned business leaders to present and share their ideas and experiences to find probable outcomes within their business environment and industries in times of economic uncertainty”. Some of the topics to be presented by consultants are current significant issues such as crypto currency, transport pricing, bit coin block chain technology and stress management. This were some topics that people have heard about but have not really ventured into. Mr. Tau added that it would be quite hard to measure the benefits immediately but the participants will be able to look at insights shared during the conference that would be appropriate in the areas of employment, accounting, finance, auditing and others. The conference will create an environment where participants can also share information so That they can take points to apply in their work place and industries. In relation the Kumul petroleum Holdings had also presented a cheque of K50, 000 to support the coming event at their head office. The cheque was presented by KPHL's executive General Manager Corporate Affairs, Luke Liria and was received by CPA PNG Chairman Richard Kuna. Mr. Liria said KPHL has appreciated the effort put in by CPA PNG to ensure that its members in State owned enterprises and the private sector were given appropriate level of training and as part of KPHL's corporate social responsibility and commitment they hope that their support will continue to help the organization facilitate and make sure the accounting practices is of international standards. CPA PNG's Chairman, Richard Kuna acknowledged KPHL for their support and stated that he was looking forward to seeing KPHL being a big part of the upcoming conference.
Paul Oeka - August 12, 2022
BSP: Small to Medium Enterprises Loans reaches 60% rate.
Bank South Pacific's Financial Group Ltd Chief executive officer Mr. Robin Fleming has recently announced that the bank has granted more than K200 million as loans to small to medium enterprises under its credit scheme facility that the then Marape government had released to the bank to support Small to Medium Enterprise (SME) and local businesses during the peak of the COVID-19 pandemic. Mr. Fleming said about 1523 customer loans have been approved, that is about 60% of loan approval rates since 2019. Prior to this announcement BSP and the Department of Commerce and Industry (DCI) had agreed to increase the maximum loan under the small-to-medium enterprise (SME) credit enhancement facility to K5 million. The previous limit was K3 million when the Government first released K100 million as security to the bank under its K200 million SME allocation for BSP to rollout the loan facility last year. Fleming stated that even though they have exhausted and rolled out the bulk of the governments relief funds for SME's they will still be running the SME loan program under its credit facility scheme “At this stage, BSP has not received the funding planned for this year but that is not preventing BSP from giving loans under the facility”. “There remains significant capacity for BSP to continue to assess, approve and funds loans under the facility”. “The agreement with the Government did provide for momentum in the SME facility to be maintained while allowing for the Government budget and funding process to be adhered to”. As part of the government SME relief funding, Commercial Banks were allocated K200 million with BSP Financial Group receiving K100 million, NDB K80 million and another K20 million was allocated to the department of Commerce and Industry BSP could not comment on how the National Development Bank (NDB) is dealing with the K80 million it received, but the intent, when discussions were initiated, was that BSP would be lending to more mature SMEs and NDB to startup ventures. In addition to enabling SMEs to access lower cost of funds through the facility with BSP, the bank has also made it a responsibility to ensure that Government funding is preserved by not approving loans that have a higher risk of default.