It’s an amazing fact that coffee is second only to petroleum in terms of dollar turnover on the world’s commodity markets!
In the newly prosperous export sector of Papua New Guinea, coffee follows closely behind petroleum, minerals and timber in terms of export earnings and is the most valuable of PNG’s agricultural crops. 70,000 tonnes of fine quality coffee are produced annually, the bulk of the crop being fine quality arabica coffees from the Highlands region.
In one respect, however, coffee can be said to be the most important commodity produced in this country. This is because so many people have a direct cash benefit from it. It is estimated that there are about 240,000 small coffee farms in the country. The sale of the crop from these farms directly benefits well over one third of PNG’s population. Between 70 and 80 per cent of the coffee exported from PNG comes from these small farms.
The benefit from the smallholder sector is not only widely spread, but also, because of the fierce competition for high-quality coffee, highly lucrative. It is not uncommon for a well-organised smallholder to sell his crop for up to 70% of the export price ruling at the time. It’s unlikely that any other tropical tree crop in any other country in the world can demonstrate such a high rate of return to the individual primary producer.
Papua New Guinea’s coffee industry is a free enterprise industry. This fits well with the independent outlook of the typical small coffee grower who owns his own land, owes nothing to the banks, and whose only input costs are a few simple hand tools and his own and his family’s labour.
Nevertheless, as in any successful industry, there are rules and standards to be observed, some set nationally and some deriving from international conventions as to terms and conditions of sale.
The organisation which administers these, together with other provisions of the relevant Act of Parliament, is the Coffee Industry Corporation. This is a democratically elected industry organisation controlled by a 12 member board, six of whom are elected by the smallholder and one each by the export sector, the large plantation sector and the small plantation sector.
The remaining three seats are held by the Government Ministers of Agriculture, Trade and Industry, and Finance.
The Corporation’s largest operating division is Extension Services, which provides education, handson training and leadership to smallholders. The Research Division, which operates the Coffee Research Institute at A iyura, has been paying Iattention to the problems of Coffee Rust, a disease which made its appearance in PNG a few years ago. The Industry Affairs Division looks after compliance with rules and standards, being particularly interested in quality control and licensing within the industry. It is also responsible for the promotion of PNG coffee overseas.
On a graph showing the annual output of the coffee-producing countries of the world, Papua New Guinea would show as one of a large group of minor producers gathered below the four giants: Brazil, Colombia, Indonesia and Mexico. Shipping around 1.5% of the world’s requirements, PNG is placed between Kenya and Tanzania in terms of exported tonnage. One might imagine that means a low position in terms of bargaining power in the market. Fortunately for PNG, however, the ambient conditions in the major growing areas are such that we produce an intrinsically high-quality arabica, equivalent to the best from any other producer. No matter what happens to the market, we can always sell our crop – so long as we pay attention at all times to quality in preparing the coffee for export.
In this complex and occasionally unruly industry lies the source of great wealth and one which is not a finite resource. Coffee farms can be expanded or reduced according to the needs, desires and capabilities of each individual grower. In PNG coffee is truly the peoples’ crop, which even in today’s constantly changing, technology-driven world, provides stability and real independence for many tens of thousands of Papua New Guineans.