Can PNG climb back to world’s Top 10 in coffee production?
News that matters in Papua New Guinea
PORT MORESBY: Papua New Guinea (PNG) was one of the world’s Top 10 coffee producing countries in 2005.
Today, it is ranked 17th with annual exports worth some K500 million.
Why has PNG’s coffee industry taken a global dive from 2006 to 2016?
PNG Cyber Monitor reproduces below a series of news reports on the state of one of PNG’s major agricultural commodities:
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Can PNG climb back to world’s Top 10 in coffee production?
PORT MORESBY: Papua New Guinea (PNG) was one of the world’s Top 10 coffee producing countries in 2005.
Today, it is ranked 17th with annual exports worth some K500 million.
Why has PNG’s coffee industry taken a global dive from 2006 to 2016?
PNG Cyber Monitor reproduces below a series of news reports on the state of one of PNG’s major agricultural commodities:
Add value to PNG’s coffee beans to soar in the world market
THE global coffee industry is worth more than US$100 billion (K338 billion) and exports are valued at least US$20 billion (K68 billion).
According to Business Insider, coffee is the second most sought-after commodity in the world, after crude oil, and the industry’s annual growth rate is 5.5%.
Coffee is also one of PNG’s major agricultural commodities, with annual exports worth some K500 million.
And worldatlas ranks PNG as the 17th largest coffee producer in world out of 50 countries. More than 2.5 million Papua New Guineans cultivate coffee – the Robusta and Arabica varieties – on more than 64,000ha in PNG’s 16 coffee growing provinces.
According to PNG’s Coffee Industry Corporation (CIC), the growers, the majority being smallholders, produce about a million bags of green coffee beans a year (annual world production is about 125 million).
To date, there are 25 licensed coffee exporters in PNG supplying to more than 30 countries, including Germany, the United States, Japan and Australia.
The world’s top three coffee producers are Brazil, Vietnam and Columbia.
There are more than 100 types of coffee brew in the world but the top 10 favourites are Caffè Americano, Café Latte (or Café au lait), Cappuccino, Espresso, Flat White, Long Black, Macchiato (also known as a Piccolo Latte), Mochaccino, Irish Coffee, Vienna and Affogato.
PNG’s coffee production has been averaging a 3% growth rate per year, from 650,000 (39,000 tonnes) bags since independence in 1975 to about 1.12 million bags in 2005.
Production declined from 2006 to 2016 but soared to 1.13 million bags in 2016, 65% or more than half of 2015’s production.
According to Business Insider, coffee is the second most sought-after commodity in the world, after crude oil, and the industry’s annual growth rate is 5.5%.
Coffee is also one of PNG’s major agricultural commodities, with annual exports worth some K500 million.
And worldatlas ranks PNG as the 17th largest coffee producer in world out of 50 countries. More than 2.5 million Papua New Guineans cultivate coffee – the Robusta and Arabica varieties – on more than 64,000ha in PNG’s 16 coffee growing provinces.
According to PNG’s Coffee Industry Corporation (CIC), the growers, the majority being smallholders, produce about a million bags of green coffee beans a year (annual world production is about 125 million).
To date, there are 25 licensed coffee exporters in PNG supplying to more than 30 countries, including Germany, the United States, Japan and Australia.
The world’s top three coffee producers are Brazil, Vietnam and Columbia.
There are more than 100 types of coffee brew in the world but the top 10 favourites are Caffè Americano, Café Latte (or Café au lait), Cappuccino, Espresso, Flat White, Long Black, Macchiato (also known as a Piccolo Latte), Mochaccino, Irish Coffee, Vienna and Affogato.
PNG’s coffee production has been averaging a 3% growth rate per year, from 650,000 (39,000 tonnes) bags since independence in 1975 to about 1.12 million bags in 2005.
Production declined from 2006 to 2016 but soared to 1.13 million bags in 2016, 65% or more than half of 2015’s production.
Allan … connect farmers to markets, promote SMEs
Former Agriculture and Livestock Minister Benny Allan says the way to upgrade and forward PNG’s coffee industry is to connect farmers to markets, and promoting Small-Medium Enterprises (SMEs).
“That is the Government’s agenda for the coffee industry. We must start changing our way of subsistence farming to commercial farming to maximise revenue.
“We also need to tap the specialty markets while strengthening the connectivity between farmers and all stakeholders up in the value chain,” he added.
To achieve all that, Allan said PNG’s coffee farmers must learn to increase production and consistently maintain quality.
“There are lucrative coffee markets but few offer best prices based on consistent supply and quality,” he said, adding that markets would look elsewhere if production was inconsistent. It is, therefore, the Government’s responsibility to link farmers to the markets and create business opportunities.
“And farmers must always strive to deliver what is demanded by markets. They must meet market requirements, quality and supply,” he added.
Former Agriculture and Livestock Minister Benny Allan says the way to upgrade and forward PNG’s coffee industry is to connect farmers to markets, and promoting Small-Medium Enterprises (SMEs).
“That is the Government’s agenda for the coffee industry. We must start changing our way of subsistence farming to commercial farming to maximise revenue.
“We also need to tap the specialty markets while strengthening the connectivity between farmers and all stakeholders up in the value chain,” he added.
To achieve all that, Allan said PNG’s coffee farmers must learn to increase production and consistently maintain quality.
“There are lucrative coffee markets but few offer best prices based on consistent supply and quality,” he said, adding that markets would look elsewhere if production was inconsistent. It is, therefore, the Government’s responsibility to link farmers to the markets and create business opportunities.
“And farmers must always strive to deliver what is demanded by markets. They must meet market requirements, quality and supply,” he added.
Kanua … poor price of coffee beans affecting interest of farmers
Former Agriculture and Livestock Secretary Mathew Kanua said the poor price of coffee beans was contributing to the growing lack of interest in coffee cultivation.
“The growers are not really getting the price that encourages them to remain in the coffee industry.
“All the information and feedback at this symposium should be collated for all stakeholders,” he added.
Kanua said there were talks of integration, increased mixed farming, coffee integrated with food crops and other matters.
“You should be having people from NARI (National Agriculture Research Institute) and FPDA (Fresh Produce Development Agency) here.
“You have to (regularly) provide updates to keep the Government, informed so that planning and strategy policies are adopted and implemented effectively.
“It’s really disappointing, as a former secretary of agriculture department, to see that senior public servants are not here to drive all issues and measures for all stakeholders in the coffee industry.”
Former Agriculture and Livestock Secretary Mathew Kanua said the poor price of coffee beans was contributing to the growing lack of interest in coffee cultivation.
“The growers are not really getting the price that encourages them to remain in the coffee industry.
“All the information and feedback at this symposium should be collated for all stakeholders,” he added.
Kanua said there were talks of integration, increased mixed farming, coffee integrated with food crops and other matters.
“You should be having people from NARI (National Agriculture Research Institute) and FPDA (Fresh Produce Development Agency) here.
“You have to (regularly) provide updates to keep the Government, informed so that planning and strategy policies are adopted and implemented effectively.
“It’s really disappointing, as a former secretary of agriculture department, to see that senior public servants are not here to drive all issues and measures for all stakeholders in the coffee industry.”
Attract, motivate the young to venture into coffee industry
Wheeler … the young must be encouraged and motivated to venture into the coffee industry
AGRICULTURE is recognised nationally as Papua New Guinea (PNG)’s economic backbone but the Government had not given it enough priority, says Coffee Industry Corporation London representative Mick Wheeler.
Wheeler, arguably PNG’s foremost coffee expert, said the coffee industry’s potential to be a significant revenue earner was also not given enough attention to transform it into a major export, including downstream production.
“Just review the Government’s agriculture policies the past 30 years and we have to say agriculture has really not been prioritised. I think this is a real problem (for Papua New Guineans and PNG),” he added.
Wheeler said agriculture and coffee production activities were seen as allied to subsistence living.
“You’re not seeing coffee as a business. You need to attract the young into the industry. There is nothing towards achieving this.
“Why would they want to go into an industry that their fathers slaved over for hours daily to earn very meagre returns or incomes?
“The issues are linked to land tenure, education, policies and priorities in the agriculture sector and the Government,” he added.
“We need a more holistic approach to agriculture, in particular coffee, because of the commodity’s business potential and greater economies of scale.
“We must aim to compete on the world stage, not with smallholders and subsistence agriculture. We are not going to get anywhere forward if we do not change or transform our policies and actions.
“We need to modernise coffee production and downstream activities to attract the educated young to return to rural areas and turn coffee production and related activities into a really rewarding business.
“We can do it and succeed. But the priorities are lacking not only in agriculture but also other sectors,” Wheeler said. How much agriculture education is there in schools now? Very little indeed.
“The only people left in coffee production are the elderly. If the young are not encouraged and motivated to venture into the industry, what will happen?” he asked.
AGRICULTURE is recognised nationally as Papua New Guinea (PNG)’s economic backbone but the Government had not given it enough priority, says Coffee Industry Corporation London representative Mick Wheeler.
Wheeler, arguably PNG’s foremost coffee expert, said the coffee industry’s potential to be a significant revenue earner was also not given enough attention to transform it into a major export, including downstream production.
“Just review the Government’s agriculture policies the past 30 years and we have to say agriculture has really not been prioritised. I think this is a real problem (for Papua New Guineans and PNG),” he added.
Wheeler said agriculture and coffee production activities were seen as allied to subsistence living.
“You’re not seeing coffee as a business. You need to attract the young into the industry. There is nothing towards achieving this.
“Why would they want to go into an industry that their fathers slaved over for hours daily to earn very meagre returns or incomes?
“The issues are linked to land tenure, education, policies and priorities in the agriculture sector and the Government,” he added.
“We need a more holistic approach to agriculture, in particular coffee, because of the commodity’s business potential and greater economies of scale.
“We must aim to compete on the world stage, not with smallholders and subsistence agriculture. We are not going to get anywhere forward if we do not change or transform our policies and actions.
“We need to modernise coffee production and downstream activities to attract the educated young to return to rural areas and turn coffee production and related activities into a really rewarding business.
“We can do it and succeed. But the priorities are lacking not only in agriculture but also other sectors,” Wheeler said. How much agriculture education is there in schools now? Very little indeed.
“The only people left in coffee production are the elderly. If the young are not encouraged and motivated to venture into the industry, what will happen?” he asked.
Ganarafo … why did PNG’s coffee production slow down?
Former Coffee Industry Corporation (CIC) chief executive officer and Daulo MP Ron Ganarafo said it was very disappointing that PNG’s coffee production had dropped for several years.
“Production in 1977 was 700,000 bags. World production was then 70 million bags.
“World coffee production has now gone up to 170 million, and our production dropped from 1.4 million bags in the mid-1990s to below one million bags.
“What’s happened? We are not talking about fixing the production now. World production is expected to increase to 186 million bags over the next 10 years.
“What are we going to do about it now? Are we (just) going to keep talking about the value chain, specialty coffee and organic coffee?
“Don’t we want to increase production, so that Papua New Guineans who work hard on their land benefit financially?
“My concern now is about potential rise in coffee prices (and we lose out in revenue benefits),” the economist said.
Former Coffee Industry Corporation (CIC) chief executive officer and Daulo MP Ron Ganarafo said it was very disappointing that PNG’s coffee production had dropped for several years.
“Production in 1977 was 700,000 bags. World production was then 70 million bags.
“World coffee production has now gone up to 170 million, and our production dropped from 1.4 million bags in the mid-1990s to below one million bags.
“What’s happened? We are not talking about fixing the production now. World production is expected to increase to 186 million bags over the next 10 years.
“What are we going to do about it now? Are we (just) going to keep talking about the value chain, specialty coffee and organic coffee?
“Don’t we want to increase production, so that Papua New Guineans who work hard on their land benefit financially?
“My concern now is about potential rise in coffee prices (and we lose out in revenue benefits),” the economist said.
Mitio … need to get our farmers organised, mobilised
Former CIC chief executive officer Ricky Mitio said more attention should be given to farmers for the coffee industry to grow.
“We need to go back to the source of the coffee. Look at the farmers. Our country is topographically diverse, culturally as well.
“As the foreigners say, they want coffee with a story. We have got that,” he added.
Mitio said: “We need to get our farmers organised, mobilise them into cooperative groups, and link them to the value chain to boost new markets for PNG. That is the challenge.
“I think PNG’s coffee industry has good potential for growth. Government policy makers and regulators must get that correct by addressing the key needs of the farmers, back them up with financial support and incentives.”
Mitio, a veteran in the industry since the 1970s, added: “Coffee became a cash crop that brought income to rural farmers. “In the early mid-70s, after Independence leading onto the 80s, coffee became the cash crop that had vital links to rural development.
“However, the industry structure has failed to spur supply chain providers to bring coffee out of the rural enclaves. An increase in the informal business sector, farmers turning to growing fresh vegetables and others, stunted the growth of coffee growers. In short, the people have alternatives.”
Mitio said urban migration and social disorder in rural areas, featuring constant tribal fights, had forced coffee growers to flee from villages.
“Women are the main harvesters and coffee estate workers but druggies (drug addicts) and troublemakers make it impossible for them to stay on.
“The industry, regulators and the Government have to come up with effective measures to forge peace and harmony in rural environments for commodities to flourish,” he added.
Former CIC chief executive officer Ricky Mitio said more attention should be given to farmers for the coffee industry to grow.
“We need to go back to the source of the coffee. Look at the farmers. Our country is topographically diverse, culturally as well.
“As the foreigners say, they want coffee with a story. We have got that,” he added.
Mitio said: “We need to get our farmers organised, mobilise them into cooperative groups, and link them to the value chain to boost new markets for PNG. That is the challenge.
“I think PNG’s coffee industry has good potential for growth. Government policy makers and regulators must get that correct by addressing the key needs of the farmers, back them up with financial support and incentives.”
Mitio, a veteran in the industry since the 1970s, added: “Coffee became a cash crop that brought income to rural farmers. “In the early mid-70s, after Independence leading onto the 80s, coffee became the cash crop that had vital links to rural development.
“However, the industry structure has failed to spur supply chain providers to bring coffee out of the rural enclaves. An increase in the informal business sector, farmers turning to growing fresh vegetables and others, stunted the growth of coffee growers. In short, the people have alternatives.”
Mitio said urban migration and social disorder in rural areas, featuring constant tribal fights, had forced coffee growers to flee from villages.
“Women are the main harvesters and coffee estate workers but druggies (drug addicts) and troublemakers make it impossible for them to stay on.
“The industry, regulators and the Government have to come up with effective measures to forge peace and harmony in rural environments for commodities to flourish,” he added.
Yogiyo… rampant theft of coffee cherries affecting growth of industry
Veteran coffee industry personality Jon Yogiyo claimed the rampant theft of coffee cherries was affecting the growth of the industry.
Yogiyo, who has spent a lifetime growing coffee as well as being general-manager of extension services with the CIC, said: “I had about 20ha of coffee trees.
“But coffee production is not increasing because of theft. That frustrated me so much that I turned my back on my plantation and now it’s all under bush.
“If we are going to get this industry back on its feet, I would ask those involved to ban the sale of coffee cherries. A complete and total ban should eliminate security woes, increase profits for farmers.
“Now, coffee is unsustainable. Coffee business in PNG is unethical. Why put in so much costs into production if you can’t make money?
“People are turning their backs on coffee and that’s why production is going down. This is compounded by transport costs, (poor) road infrastructure and law-and-order. If we don’t do anything now to intervene, we may as well say goodbye to the coffee industry. Nevertheless, I still think the future is bright for the coffee industry.
“We only produce one million bags. The specialty coffee market is at our fingertips. What we need is to get organise, get our house in order,” he added.
Yogiyo said the farmer must remain as the “king” in the coffee industry.
“He works on his land, his labour and pays for all costs. But he doesn’t decide on the price.
“We have to create a demand for our coffee, because at least we will have some leverage on our coffee prices,” he added.
Veteran coffee industry personality Jon Yogiyo claimed the rampant theft of coffee cherries was affecting the growth of the industry.
Yogiyo, who has spent a lifetime growing coffee as well as being general-manager of extension services with the CIC, said: “I had about 20ha of coffee trees.
“But coffee production is not increasing because of theft. That frustrated me so much that I turned my back on my plantation and now it’s all under bush.
“If we are going to get this industry back on its feet, I would ask those involved to ban the sale of coffee cherries. A complete and total ban should eliminate security woes, increase profits for farmers.
“Now, coffee is unsustainable. Coffee business in PNG is unethical. Why put in so much costs into production if you can’t make money?
“People are turning their backs on coffee and that’s why production is going down. This is compounded by transport costs, (poor) road infrastructure and law-and-order. If we don’t do anything now to intervene, we may as well say goodbye to the coffee industry. Nevertheless, I still think the future is bright for the coffee industry.
“We only produce one million bags. The specialty coffee market is at our fingertips. What we need is to get organise, get our house in order,” he added.
Yogiyo said the farmer must remain as the “king” in the coffee industry.
“He works on his land, his labour and pays for all costs. But he doesn’t decide on the price.
“We have to create a demand for our coffee, because at least we will have some leverage on our coffee prices,” he added.
Hombunaka … Government’s plan to increase coffee production to two million bags by 2022 is overly ambitious
CIC Productive Partnerships in Agriculture (PPAP) project manager Potaisa Hombunaka said the Government’s plan to increase coffee production to two million bags by 2022 “is overly ambitious”.
The target was set in its Medium Term Development Plan (MTDP) III 2018-2022.
“Some 20 years ago, CIC said it will produce two millions bags. Today, the production is still well below one million bags. My take is that we will not achieve the production target by 2022,” he said.
Hombunaka said production had not increased because the current conventional marketing systems “are unfriendly to our hardworking coffee farmers”.
“Only and when our coffee farmers see increased income from their coffee, can we see them spending more time working their coffee gardens or plantations,” he added.
“The only way for the plan to succeed is to work with the farmers who have proven beyond reasonable doubt at the National Coffee Cupping Competition that they are producing specialty coffee.
“That is the only way for them to market and sell their coffee to earn more and help grow the country’s coffee industry. The conventional way of selling coffee beans is inefficient and not rewarding. It is all about making more money or profits from coffee beans,” he added.
CIC Productive Partnerships in Agriculture (PPAP) project manager Potaisa Hombunaka said the Government’s plan to increase coffee production to two million bags by 2022 “is overly ambitious”.
The target was set in its Medium Term Development Plan (MTDP) III 2018-2022.
“Some 20 years ago, CIC said it will produce two millions bags. Today, the production is still well below one million bags. My take is that we will not achieve the production target by 2022,” he said.
Hombunaka said production had not increased because the current conventional marketing systems “are unfriendly to our hardworking coffee farmers”.
“Only and when our coffee farmers see increased income from their coffee, can we see them spending more time working their coffee gardens or plantations,” he added.
“The only way for the plan to succeed is to work with the farmers who have proven beyond reasonable doubt at the National Coffee Cupping Competition that they are producing specialty coffee.
“That is the only way for them to market and sell their coffee to earn more and help grow the country’s coffee industry. The conventional way of selling coffee beans is inefficient and not rewarding. It is all about making more money or profits from coffee beans,” he added.
Kuimbakul … big doubts about two million bags of coffee beans by 2022
Former CIC general-manager corporate services and economist Tiri Kuimbakul is bewildered by the Government’s production target of two million bags of coffee beans by 2022.
“I am just wondering how the target was set, knowing that production had been falling by an average 2% annually for the last 10 years from 2006 to 2016.
“The plan is calling for an increase in production of 16% every year for the next five years. Given all the (industry) constraints, I really wonder how the target can be achieved. The industry constraints, since the 60s, are not new issues. I have big doubts about the two million bags of coffee beans target,” he added.
Former CIC general-manager corporate services and economist Tiri Kuimbakul is bewildered by the Government’s production target of two million bags of coffee beans by 2022.
“I am just wondering how the target was set, knowing that production had been falling by an average 2% annually for the last 10 years from 2006 to 2016.
“The plan is calling for an increase in production of 16% every year for the next five years. Given all the (industry) constraints, I really wonder how the target can be achieved. The industry constraints, since the 60s, are not new issues. I have big doubts about the two million bags of coffee beans target,” he added.
Kukhang … support for coffee research and development almost non-existent
CIC chief scientist Tom Kukhang said coffee production was falling in in PNG because the crop was no longer relevant to growers.
“Coffee is no longer relevant to coffee growers. They are not interested in the cultivation. Just look at the figures for the last 30 years.
“Coffee production had dropped from one million or something (bags) to 800,000 or below. It’s very unfortunate,” he added.
Despite that, Kukhang said there “are many opportunities” that PNG must capitalise on, such as certification and specialty coffee.
“The people must make the right choices. When they vote in leaders, they must vote good leaders who make good decisions that suit the coffee growers’ interest.
“Only then will state institutions become relevant to those in the coffee industry. Now, support for research and development almost non-existent.
“We’re trying to go into smart agriculture but we have rundown facilities. What knowledge can we then pass on to our farmers?” he asked.
CIC chief scientist Tom Kukhang said coffee production was falling in in PNG because the crop was no longer relevant to growers.
“Coffee is no longer relevant to coffee growers. They are not interested in the cultivation. Just look at the figures for the last 30 years.
“Coffee production had dropped from one million or something (bags) to 800,000 or below. It’s very unfortunate,” he added.
Despite that, Kukhang said there “are many opportunities” that PNG must capitalise on, such as certification and specialty coffee.
“The people must make the right choices. When they vote in leaders, they must vote good leaders who make good decisions that suit the coffee growers’ interest.
“Only then will state institutions become relevant to those in the coffee industry. Now, support for research and development almost non-existent.
“We’re trying to go into smart agriculture but we have rundown facilities. What knowledge can we then pass on to our farmers?” he asked.
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