PNG Agribusiness

i2i - Indigenous to Indigenous

PNG Agribusiness

December 19, 2016

i2i is currently contracted to Department of Foreign Affairs and Trade to deliver a private sector development agribusiness project in Papua New Guinea (PNG). Essentially the project seeks to facilitate  a fundamental change in the way cocoa farming is currently managed. Earlier scoping demonstrated a clear commitment from the Government of PNG, the PNG Cocoa Board and farmers to a more corporatised structure within the industry.   This necessitates a shift in farmers mindset from treating their land as a low priority cash when required resource to developing farm plans and working their business to meet its full potential.

Cocoa is an important industry for PNG. 

There are approximately 150,000 families involved in cocoa farming in PNG, employing 31% of national labour.  According to data from the Cocoa Board of PNG, export revenues averaged K227 million per annum based on production volumes of 30,000 – 40,000 metric tonnes (mt) per annum.  Production was severely effected by the onslaught of the Cocoa Pod Borer (CPB) in 2006.

One of the hardest hit regions in PNG was the Province of East New Britain (ENB). It is estimated that production of cocoa in ENB fell from an average of 20,000mt per annum to less than 4,000mt in 2012. A significant number of families lost their cocoa crops and with that, a significant contribution to their livelihoods from cocoa production.  Production of cocoa in ENB today is around 4,700mt per annum (March 2013 Cocoa Market Report) and represents around 12% of the total PNG production.  It is estimated there are about 12,000 households involved in cocoa production in ENB, a drop from about 23,000 households in 2000.  The industry has responded to the challenges of CPB with new clones that are more tolerant to CPB and are generating high yields of cocoa pods.  Despite this positive development, farmers need to be very aware that disease will reoccur if good agriculture practices are not maintained.

i2i is working with the PNG Cocoa Board to establish a new business approach.  The centrepiece of this strategy is the establishment of PNG Agriculture Company (East New Britain).  The company's business model shifts smallholder farming from a cooperative based and dependent structure to a corporate structure based on commercial principles.  There is an emphasis on increasing farmer’s participation, such that they become more aware of their role in the industry and encouraging them to improve productivity and generate increased incomes for themselves and families.