Coffee – a great industry fallen on hard times

DON TAPIO

PAPUA NEW GUINEA’S FIRST national coffee barons were from the Asaro and Gahuku valleys of the Eastern Highlands Province.

In the years immediately leading up to independence coffee was contributing up to 80% of PNG revenue before the Bougainville copper mine came into full operation.

Names like Enoch Mole, Sinake Giregire, Apele Goso and Sir Akapite Wamiri were the prominent coffee farmers who became PNG’s first national millionaires.

Their white brothers, Sir Danny Leahy, Sir Mike Bromley, Sir Dennis Buchanan and later Malcolm Smith Kela all made their fortunes in the Eastern Highlands from this platform of coffee.

The industry in the highlands was started by novices who were introduced to the concept by the kiaps and didimen (agriculture and livestock officers).

The pioneers built large estates with little technical knowledge, generously cheap labour, loads of sheer hard work and a huge determination to succeed.

Such is the history of the people and the life crop that built the Eastern Highlands to what it is today, with PNG the biggest supplier of quality organic coffee supplying the Australasian market.

These days, however, the plantations are in a sad state mainly because of a booming population and the domino-effect pressure on available land, law and order issues and the resultant tribal wars fought over land.

The once flourishing estates are increasingly being divided into smallholder blocks. Only a small number of plantations have managed to escape the scourge.

There is consensus that there is a serious need for all stakeholders to find solutions on how they can work together to rehabilitate the plantations and the coffee industry.

Most people agree that the issues are many, complex and interrelated. An inclusive view taking in the wider community needs to be embraced if workable solutions are to be realised.

The main issues directly affecting coffee production and quality include:

Law and order

Stealing from plantations by workers, thieves and community members

Land disputes leading to tribal wars

Lack of cooperation and the failure of negotiation and mediation among land owners in community owned estates

Abuse of funds by ‘paper’ farmers in concert with farmers

Lack of basic coffee farming skills and knowledge

No access to the latest information on coffee research

No awareness of quality control by responsible government agencies

Chronic lack of implementation of proposals and technical reports by private or government officers

Lack of a good work ethic

No vocational skills training in the curriculums of rural schools

Increasing costs of labour and agricultural farming equipment and consumables. No tax incentives or government subsidies

Lack of starting capital. Stringent bank requirements chase away farmers

Lack of business management skills and knowledge leading to fiscal mismanagement and abuse of funds eventually resulting in defaulting loan repayments

Poor rehabilitation of existing coffee trees

Lack of supporting infrastructure like roads and bridges, transport and communication technology

Abolition of the national cooperative regulating body - greatly disadvantaging smallholder grower

Smallholder farmers not getting value for their effort and production

Coffee is the lifeline of the Eastern Highlands Province.

As we may never see the return of the big estate coffee plantations, the focus must now shift from bulk exports to high quality organic coffee with better land utilisation and improving existing smallholder blocks.

The local politicians and other relevant officials need to take this matter seriously as there is a very strong link between coffee production and price which impacts directly on crime and associated law and order issues.

Agriculture, and especially coffee, is vital to survival for many rural Eastern Highlanders, as they do not have extractive natural resources. Coffee is seen by many as their green organic gold. The livelihood of a province depends on this cash crop.

Right now middleman (coffee buyers and exporters) are ripping off the smallholder growers, who are not being rewarded for their efforts and production-quality. The conditions for granting export licenses need to be reviewed so that new licences are at least 50% owned by the growers.

Countries like the USA and Australia protect their growers. As farmers have more money to reinvest in their coffee blocks, so production will increase and quality will improve.

The way forward for coffee is by way of harnessing smallholder farmers and growers, whether through cooperatives, associations or small companies. The government should be more aggressive in promoting local brands and developing strategies to target international markets.

That said, there are successful models of local communities organising themselves with assistance from government agencies for quality assurance and certification to secure international markets. This option needs more emphasis and analysis on best models applicable to the industry.

Consumers in the developed world increasingly selective of products they buy; hence the introduction of certification processes. Coffee smallholders can add value and premium to their products through Fair Trade Certification and Organic Certification.

There exist unique hotel, restaurant and other markets for gourmet coffee based on customer preferences for organically grown and grower exported coffee beans - a demand which can be matched by local farmers.

The PNG government is not fully exploiting international markets and more focus needs to be directed to China and India, both emerging powerhouse markets for coffee.

To enable smallholders to participate fully in this export market, the government needs to empower growers with the technical skills, funding assistance and expert advice on certification processes and compliance standards.

The current qualification requirement discriminates against smallholder growers because they cannot consistently meet the quotas required to qualify for export licences.

Incentives such as a merit based reward systems can be used to identify and promote best practice quality control of coffee in line with regulatory standards.

The government could also arrange for small growers to access funds either through the National Development Bank or the commercial banks to raise equity to enable joint ventures with established exporters.

A worrying concern is the abolishment of the National Cooperatives Authority.

This will hugely disadvantage smallholder growers who are already missing out big time on value for their produce.

The coffee cooperatives started off well but have not really realised their full potential. Many were hijacked by businessman or middlemen who abused the system to evade taxes and fees.

There is a need for industry-wide consultation, facilitated by the government, for all stakeholders to identify successful models for land sharing agreements between landowners in plantations or estates.

Utilising village land mediators, Land Courts and defining the District and Provincial governments roles in the model design may provide some solutions to meeting the challenge of a ‘bankable’ model which can be replicated in similar settings-circumstances and at an acceptable risk level.

There is also a need for the Coffee Industry Corporation, as the government regulatory agency, to be more proactive in its extension programs and to take a bottom-up approach (go to the villages and train farmers in the basics of coffee cultivation). The top-down approach has not been fully successful.

There has been an important article published by Wilson Thomson Orlege in the Melanesian Institute journal Catalyst and in the Divine Word University journal Contemporary Studies entitled The demise of the plantation sector in the coffee industry: An overview and alternative.

Mr Orlege states that, “while all stakeholders need to accept responsibility for the state of the plantation sector, the coffee government agencies [should] take a leading role to revitalise the industry, particularly in the areas of extension, management training and advisory services”.

Commitment from the government is needed if the market is to become more robust and competitive to give more options to smallholders and plantations.

So in concluding, let’s rephrase the famous CIC slogan and direct this to national and provincial leaders and to key people in the industry: “Helpim mipla lon lukautim kopi na kopi bai lukautim mipla” (help us look after the coffee and the coffee will look after us).

Don Tapio is the pen name of a health industry professional who works in the Eastern Highlands. His real name is known to PNG Attitude. The article is a condensation of discussions by members of Nokondi Talk, a forum for Eastern Highlanders on the Facebook social media site. It aims to present a community viewpoint to supplement the archives of scientific and related socio-economic collations about the coffee industry with a focus on Eastern Highlands Province

Comments

[Apaso Tato]

I agree that the Coffee Industry Corporation did some good groundwork in the early years, 1980-90, with the cooperative movement, and contributed to the National Purse while many mining projects were yet to contribute.

But the agencies responsible for coffee to some extent have been politicised and lost track of tangible strategies to continue the interest required at the village level to maintain farmers' interest in the coffee movement.

The CIC has become a sleeping giant and an overhead. We know where coffee is now - it is sliding unless some major efforts are put into identifying key impediments to the industry.

Don Tapi has a point, and Nokondi Talk contributors know what they are referring to. Any defence of CIC would not hold water here, I'm sorry.

[DonTapio]

Thank you for the critique and insight, Mr Fowke.

The recent agreement signed by oil palm companies and growers for a price determination agreement with ICCC goes to prove that growers, if better organised, can force an agreement for better value for them (grassroots smallholders), which is the whole point of the article.

It is the small time rural coffee growers who feed the buyer-exporters companies (some of which are foreign owned) to make up the bulk of PNG's coffee export quota.

We believe the time is right for stakeholders to review and undertake decisive legislative action to ensure the grassroots growers earn a maximum yield for their land and labour.

We value your input and welcome your initiative to educate us on how the cooperatives and the Grower's Association in existence since have contributed to the plight of the small holder grower as stated in the article.

[John Fowke]

Whilst temperate and well-written, the article by Don Tapio shows a level of naivety and lack of factual knowledge which pervades, and has always been present, in the grower community, both the educated and those without the benefit of a broader-than-normal view of business and the industry.

Ten years ago Coffee Industry Corporation produced a good illustrated colour booklet entitled 'Stori bilong Kopi'.

This contained a complete overview of the facts surrounding the industry and its function. It included graphs and examples in comparison with other similar, small coffee-producing nations elsewhere in the world.

Whilst it is now out of date, and whilst CIC will have long run out of copies, I still have the proofs and could with some help from people in Goroka, recreate the booklet in an updated version.

However, do note that this expensive and well-put-together initiative, produced in Tok Pisin (20,000 copies) nd in English (20,000 copies) was distributed thorough the Growers Associations, and through all registered factories and their road-buyers.

Quantities were mailed to all PNG's universities, to all high schools in coffee-producing provinces, to agricultural and teachers colleges, and to the 109 MPs at the Big House.

CIC received not one acknowledgement, let alone any expression of appreciation or comment.

These booklets addressed and answered all the points raised in this article. I still have a copy of the original and could easily arrange, with the help of friends such as Tiri Kuimbakul and the staff at the Coffee Research Station at Aiyura, to produce a new, updated version.

But would it be read and discussed and thus inform and encourage growers? On past experience I rather think not.

If it would be of interest I will be happy to write about the coffee industry and about the history of cooperatives in PNG, here on Attitude, as I worked in both areas for some years.
____________

PNG Attitude can put Don Fabio and his team in touch with John Fowke, and also accepts John's offer to write regularly on these important agricultural issues - KJ

[Don Tapio]

Thank you for publishing this article.

Nokondi Talk will be the main 'soup kitchen' for brainstorming ideas into proposals for submissions to relevant authorities to address.

However we also realise from our own experience the futile enthusiasm our suggestions are recieved with therefore we are also exploring avenues to 'actionize' our submissions through a provincial networking group that will be launched soon.

[Jeff Febi]

Thank you sincerely for publishing this article! At Nokondi Talk (NT) we discuss real issues in the province and propose practical solutions - solutions that are potentially workable. More from NT coming soon!