Papia New Guinea coffee urged to shift focus from production to marketing

Tiri Kuimbakul…shift from coffee production to marketing

Ripe red coffee cherries in the Highlands. – Picture by CIC

PNG made coffee products..among the best in the world but must be aggressively marketed.-Picture by CIC

Prominent economist and author Tiri Kuimbakul has called on the Papua New Guinea coffee industry to shift its focus from production to marketing.
Mr Kuimbakul, a former industry affairs general manager with the Coffee Industry Corporation and now a private consultant, said the industry had placed too much emphasis on research and extension over the last 20 years with no increase in production.
Figures show that production has stagnated over the past 20 years at one million bags, despite the fact that the industry has invested millions of kina into research and extension.
He made these comments after a presentation by PNG agriculture expert, Dr Mike Burke of the Australian National University, who said at last week’s National Development Forum that growers were getting better return for fresh vegetables such as kaukau.
“My view is that for the industry to move forward, there needs to be a shift in focus and emphasis from production to marketing, in particular, overseas promotion of PNG coffee,” Mr Kuimbakul said.
“What is important to the growers is the price.
“If they receive good prices for their coffee, they will continue to produce.
“If they feel that the prices that they’re getting for their coffee is not sufficient, they will simply neglect their coffee gardens, and even uproot their trees to plant food crops.
“From Dr Mike Bourke’s presentation, he showed that the returns to labour from coffee production are lower than fresh produce, in particular, kaukau.
“What the growers are faced with now is shortage of land due to population pressures, so they have to decide between coffee and other crops.
“Generally, food crops offer better prices than coffee.
“That’s why growers are responding by allocating more land and labour to producing these other crops and neglecting coffee.”
“So if we’re going to move the industry forward, coffee has to give better prices to growers.”
Mr Kuimbakul’s suggestion is that PNG coffee be aggressively marketed on the world stage.
“The only way that growers can receive better prices on a sustainable basis is for the industry to sell PNG coffee to international markets at better prices,” he said.
“We can get better prices only if we promote PNG coffee.
“PNG coffee is among the best in the world, but most consumers are not really aware of what PNG can offer.
“Other producing countries like Kenya, Columbia and Jamaica attract the best prices in the world because they have spent millions on promotion.
“This is why consumers perceive their coffee as of high quality, so they pay very high prices.
“I have tasted coffee from these countries, and PNG coffee is even better, but we get lousy prices because our coffee is no well-known.
“Basically, what I’m saying is that we shift from production to marketing.
“We’ve got to go out and tell the world what PNG has to offer, focusing on emerging markets like Japan, South Korea and China.
“Let’s create a demand for our coffee.
“When demand increases, prices will rise and growers will respond by increasing production.
“We want to increase production, but not by doing what we’ve been doing all this time.
“Let’s change the strategy, give growers better prices, and they will give us better coffee.

Papua New Guinea capable of producing world-class products

Micky Puritau of Paradise Spices shows some of the company’s products at the National Development Forum

Paradise Spices products on display at the National Development Forum

Papua New Guinea is more than capable of producing world-class finished products that meet international requirements, according to leading 100% nationally-owned vanilla and spice producer Micky Puritau.
Mr Puritau, managing director of Paradise Spices, said this in a heartening and widely-applauded presentation to the National Development Forum in Parliament last Friday.
Paradise Spices is a family run company that has been involved in the agriculture
sector in PNG since 1987 and exporting vanilla beans for 10 years.
The company this year received $170,000 funding from AusAID which will enable Paradise Spices to establish a solvent extraction facility at its Port Moresby site to produce pure vanilla extract, vanilla oleoresin (a naturally occurring mixture of resin
and essential oil) and other spices.
The facility would be the first of its kind in PNG and it would create a larger and more-reliable market for the farmers.
Part of the plan for the project is to gain international quality standard certification.
Once achieved, it is expected that this will lead to greater export opportunities.
“As a producer and exporter of finished products, Paradise Spices is constantly faced with new challenges and decisions each year after participating in trade shows around the world,” Mr Puritau told an appreciative audience.
“When we see products that can easily be made in PNG, we are challenged with questions like ‘why can’t we do this in our own country?’, ‘is it too difficult for Papua New Guineas to make these products?’; ‘do we grow the raw materials in PNG and is the supply consistent?’
“Quite often, the answer is quite simple and resulting from these challenges, Paradise Spices is now producing gold award products which are now being used as food ingredients to make gourmet products in Australia and Japan.
“From our experience, we believe many other Papua New Guineans can replicate what we are doing.
“The challenge for this nation is that we cannot continue to export raw materials which are susceptible to the oscillations of world market prices, generation after generation.
“We must change our mentality into one of growing, producing and exporting of finished products into countries like India and China.”
Mr Puritau said immense opportunities abounded in the global markets for PNG-made products.
“Many consumers from countries around the world such as Australia, Japan, New Zealand, Taiwan, USA and Europe are seeking to buy organically-grown products and PNG is one country in the world than can supply these products,” he said.
“However, PNG producers must work towards obtaining quality standards certification from recognised certifying bodies already existing in order to satisfy the demand for quality products from these countries.
“We can no longer take these things for granted as we move into global trading and competition.
“Initially, the national government through its medium term development strategy (MTDS) 2005-2010, will need to provide support to existing producers and traders and improving their capacity to obtain quality standards certification.
“A database of local manufacturers needs to be established in order to provide direct and focused assistance.
“By increasing the number of certified producers over a 10-20 year period, this will result in increased volume pf trade and exports, thus, creating jobs locally and drawing in foreign currency which would contribute to a positive balance of payments never before seen in PNG.”

National Agriculture Development Plan doomed to failure, says former agriculture boss

Former Department of Agriculture and Livestock Secretary Mathew’Wela Kanua (pictured) says the massive National Agriculture Development Plan (NADP) is doomed to failure because its initial recommendations are not being adhered to and will also have a drastic effect on the agriculture sector in Papua New Guinea.
He said this as this year’s NADP allocation of K100 million has been just about finished with no proper accountability and much of it going to dubious projects and individuals.
The government plans to inject a massive K1 billion, K100m a year for the next 10 years, to prop up agriculture in the country but this has backfired with many questions now being asked about the NADP.
Mr Kanua, one of the architects of the NADP during his tenure as DAL Secretary from 2002-2006, said after last week’s National Development Forum that the NADP was never intended to replace government public investment programme (PIP) funding.
He said this was a “recipe for disaster” and the biggest loser would be the agriculture sector.
“The NADP was not intended to replace the development budget of agriculture,” Mr Kanua said.
“NADP was created to be an investment fund for agriculture.
“What has actually happened is that NADP has replaced the PIP for agriculture and made the sector worse off than it was.
“For instance, the agriculture development budget used to average about K75-K85m annually.
“NADP has subsumed all the K85m with no extra funding for investment, so the sector is worse off than it was.
“The NADP was supposed to mobilise customary land and identify potential for large projects, using the model of New Britain Palm Oil Ltd, with the government partnering with the private sector to develop one to two large projects in less-developed provinces every year.
“Over the tenure of the NADP, with private sector investment as well, the benefits would be tenfold.
“To do this, you need to set the NADP as appropriate legislation and corporatise the DAL, build up its capacity to deliver the NADP.
“It’s sad none of this is happening.
“And it’s also sad that all recommendations to improve it are mere recipes for disaster.
“It’s very heartening that the Chief Secretary Manasupe Zurenuoc has noted this.”
Mr Kanua said the only solution to making the NADP work was to go back to its original design.
He said various recommendations including streamlining of various layers of bureaucracy to improve the management and disbursement of NADAP funds would not
“I took care of the NADP planning process for six years under (former DAL Secretary) Utula Samana,” Mr Kanua said.
“When I left (as Secretary in 2006), I left a draft NADP, which was not the NADP that was intended.
“I left my hard notes to the incoming Secretary Anton Benjamin.
“I also wrote a letter to (then DAL) Minister Sasa Zibe, giving him a copy of the way forward.
“When John Hickey came in, I wrote another letter.
“I still have a copy.
“What everybody has to realise is that the NADP has been through three years of rigorous consultation provided by the economic sector ministers, headed by Bart Philemon.
“The plan is very simple: provide economic solutions to the myriad of social and cultural problems including mobilisation of land to grow the agricultural economy.

'Unproductive' public servants under the spotlight

Acting Chief Secretary Manasupe Zurenuoc (left) with PNG Women in Agriculture Development Foundation president Maria Linibi, one of the staunchest critics of “unproductive” public servants


The ‘unproductive’ public servants of Waigani came under the spotlight again at the National Development Forum at Parliament last Friday.
This led to Acting Chief Secretary Manasupe Zurenuoc, who was visibly disappointed at the lack of attendance by senior and rank-and-file public servants, vowing to change the mindset of the huge and inefficient Waigani bureaucracy.
Mr Zurenuoc bluntly said when closing the forum that the entire public service needed a complete overhaul to make it click.
Ironically, that same day, the no-nonsense former Morobe Administrator had in the media likened Waigani public servants to “headless chooks” who wander aimlessly around Port Moresby without care or knowledge about what was happening in the provinces.
Concern was also raised at the Consultative Implementation and Monitoring Council forum about the lack of interest shown by politicians in this very important public meeting.
Speaker after speaker – some of whom had paid for their own travel from other parts of the country - raised the same concern at the lack of interest shown by public servants, particularly from the Department of Agriculture and Livestock, given that the forum focused on “Opening up opportunities for agriculture and rural development”.
Many wanted answers about the massive National Agriculture Development Plan (NADP), for which the government has injected K100 million into agriculture this year – money that has already been used up without proper accountability.
Like DAL, there was little if any attendance by the entire public service including key departments like National Planning and Monitoring, Treasury, Commerce and Industry and its line agencies, Lands and many more.
“I note with alarm your concern about people who are not here, not particularly politicians, but public servants,” Mr Zurenuoc said.
“This will continue to happen unless we change the mindset of public servants at Waigani.”
He admitted that the much talked about NADP was not working as indicated at the three-day forum.
“We know for a fact that the NADP is not working,” Mr Zurenuoc said.
“With the NADP, there is a serious problem,
“Let’s talk about NADP and making it work.”
Mr Zurenuoc said public –private partnership (PPP) was the only way to move the stagnant public service forward.
“That’s the direction that the government must go now,” he said.

Rubber freight subsidies an example for other agricultural commodities

Rubber buying at Kapikam Village, Lake Murray district.-Picture by NFRL

The final product from North Fly Rubber Ltd ready for export.-Picture by NFRL

Papua New Guinea Rubber Board chairman Warren Dutton last Thursday called for National Agriculture Development Plan (NADP) funds to be spent on freight subsidies to move rubber and other commodities forward.
Mr Dutton, who is also chairman of North Fly Rubber Ltd (NFRL) and a former politician, told the National Development Forum in Port Moresby that only then could more money be put into the pockets of rural people as well as prop up PNG’s agricultural exports.
He cited the example of NFRL, the only successful smallholder rubber project in the country, as one of what could be achieved through freight subsidies.
NFRL currently produces the highest quality PNGCR10 (rubber) in PNG and exports to markets throughout Europe and Australia.
Since 1995, NFR has exported over 9, 442 tonnes of smallholders’ processed rubber to overseas markets, earning foreign exchange of K28.6 million and providing income of over K13.1m to the smallholder shareholders of the company
Mr Dutton said other reasons for NFRL being a success story was because of hard working village rubber growers, and a public private partnership (PPP).
The PPP was originally between NFRL which the rubber growers own and Ok Tedi Mining Ltd, but this has since grown to take on PNG Sustainable Development Program and the Fly River provincial government.
In 1992, OTML agreed to provide K100, 000 in loan capital as well as provide subsidised (free) shipment of containers of PNGCR10 rubber to Port Moresby or an international port for on-shipment to international buyers.
“The shipment of three or four containers of PNGCR10 rubber among a backload of over 100 empty containers cost OTML virtually nothing,” Mr Dutton said,
“In 1992, it allowed the rubber growers to be paid an extra 25t per kg for their cup lump.
“In 2008, it allowed for an extra 43t per kg.
“Without freight subsidies, there could be no rubber industry in the Western province.
“Without subsidies, there could be so much less agricultural production by the farmers in the major countries of the G8 and G20.
“Without subsidies, the production of most of the smallholder crops in PNG has been in continual decline.
“Production has been in decline ever since PNG destroyed its plantation industry and the partnerships which the plantations have with their neighbouring smallholders.”
Mr Dutton emphasised that the government’s policy of encouraging PPPs was “correct” because it would help rebuild the relationship which used to exist between smallholders and expert agricultural; investors.
“These expert agricultural investors are then responsible for providing the training, the transport, and the marketing for their neighbouring smallholders,” he said.
“Most importantly, they must pay an acceptable price for the smallholders’ products.”

Bombshell! Department of Agriculture and Livestock 'incapable' of running agriculture in PNG

Vice Minister for Agriculture and Livestock Jimmy Simitab  admitted at the National Development Forum in Port Moresby last Thursday  that the Department of Agriculture and Livestock is no longer capable of running agriculture in Papua New Guinea.

Mr Simitab dropped the bombshell in his presentation to the forum, which focuses on ‘Opening up opportunities for agriculture and rural development’.

He made a frank admission that DAL was incapable of running the much talked about National Agriculture Development Plan (NADP) and all overriding functions should be taken over by the National Agriculture Council.

The minister recommended the establishment of the NAC as the apex body in agriculture be given high consideration by the forum and the Consultative Implementation Monitoring Council.

Mr Simitab said one of the most-important recommendations of the Public Sector Review and Monitoring Unit (PMRSU) in 2005 was an overhaul of the DAL; however, this had not been implemented over the last five years.

“The findings of this review remain unimplemented, hitherto, the sad state of affairs in DAL over the last five years,” he said.

Mr Simitab said it was perceived that the NAC, once legislated, would recognise existing commodity and statutory bodies, with overriding powers to maintain and sustain the NADP.

“In fact, the National government, in approving and adopting the NADP in March 2007, had directed that a further institutional and legislative reform be undertaken to improve the management of the sector with NADP,” he said.

“Given the state of reforms that have occurred in agriculture to this point, it is obvious that DAL is neither a capable nor an appropriate ‘lead agency’ without an entity such as NAC as its apex body.

“The suggestion that NAC be chaired by the Minister for Agriculture and Livestock, with membership of no more than 10 people appointed by the Head of State on advice, has great merits, on a number of fronts.

“First, it will act independently of all agencies of the sector, and has links to DAL only for policy and technical guidance.

“Secondly, it will establish its own sub-sectoral liaison mechanisms to capture development resource requirements of each sub-sector as well as from each district, for budget purposes and for monitoring and evaluation.

“Thirdly, the entity shall provide a one-stop-shop for investors, and coordination of donor support for agriculture.

“Finally, it shall provide an effective mechanism for the policy coordination of the sector, and the management of annual fiscal support for agriculture through NADP.”

Mr Simitab said the concept of an ‘agricultural council’ being an apex body for the sector was not a foreign concept as it had already been practiced in several emerging Asian economies, including Taiwan and South Korea.

 

 

 

 

 

Happy birthday to me!

It's my birthday today and my four children Keith (2), Moasing (4, the only girl), Gedi (7) and Jr Malum (8) threw a party for me at home last night (pictured).
Great fun for all of us, with lots to eat and drink,  albeit bittersweet, as their Mum, my dear wife Hula, wasn't around to celebrate with us.
We all love and miss her so much.
We have all, however, come to accept that she will no longer be with us,and we have to live for the future and not dwell in the past.
Thank you to all those wonderful people from around Papua New Guine and the world who have sent their birthday wishes to me.

Malum