Coffee growers
By WILSON THOMPSON ORLEGGE
COFFEE is a major industry in Papua New Guinea, providing livelihood to about 80% of the population in the Highlands and about 30% of the country.
From the 1970s to the 1990s, it was a major export earner from the agriculture sector until it was overtaken by the oil palm industry.
While palm oil prices have hit new highs, the coffee industry has been plagued by law and order problems, land compensation issues, poor infrastructure, poor management and fluctuating prices.
This article looks into locally-owned and managed coffee plantations in Eastern Highlands because it is the home of coffee.
The Coffee Industry Corporation Ltd (CIC) is also based in the province.
Let us ask three questions:
* Are the Government and its agencies taking active interest in serving the plantations in terms of extension, advisory and training services?
* Are the plantations being managed by competent and skilled personnel?
* Are the plantations helping themselves?
Before answering them, we should also look at the history of the plantations and the responsible government agency to give us a clear picture of the situation.
Coffee was grown on a large scale by colonial administrators who became planters in the early 1950s in Eastern Highlands.
To represent their interests which also include peanut and tobacco cultivation, cattle rearing and trading, the Highlands Farmers & Settlers Association (HFSA) was established in 1953.
A formal charter followed three years later.
As coffee production increased, the planters realised that they were restricted to the world market, being a colony of Australia, hence they called for tariff review.
In 1964, the Coffee Marketing Board was set up for the purpose.
In the 1980s, it was renamed Coffee Industry Board (CIB) and it was tasked with regulating, monitoring and developing the industry.
Amongst other things, it would carry out research, training, provide advisory support as well as collect levy.
In 1986, there was an outbreak of coffee leaf rust disease that saw the government injecting substantial funds to establish a Coffee Development Agency to fight the menace and to undertake smallholder farmer extension and training.
In 1991, CIC was established to carry out and manage research (through the Coffee Research Institute), industry affairs (CIB) and extension services (Coffee Development Agency).
Funding for the CIC is obtained from levy imposed on green beans exported, supplemented by government grants and other income.
CIC was incorporated as a company but is actually a commodity board vested with powers and functions under the Coffee Industry Corporation (Statutory Powers and Functions) Act to control, regulate and provide essential services to the industry.
The Department of Agriculture and Livestock provides policy support and directives including coordination with all other commodity boards.
After independence, the government began looking at the role of Papua New Guineans in business and economic development and land utilisation.
New laws were enacted to exempt companies owned by locals from statutory reporting requirements.
Under the National Plantation Redistribution Scheme, cocoa, copra and coffee plantations were sold to locals within vicinity of plantations (former customary land owners) with government assistance and finance.
Two problems arose from this.
Leaders grew enormously (financially and socially) and acquired private interests and lavish lifestyles.
Second, due to lack of business knowledge, ordinary shareholders expected assistance with school fees and customary obligations.
When the assistance was not given, they resorted to forcing management changes, resulting in conflicts, sometimes violent, and other problems to the detriment of the plantations.
Many were also oblivious to world market factors, government economic policies and the impact of the Bougainville crisis.
Workers were also hard to come by due to poor wages.
On top of all these were the loans that had to be serviced.
As early as 1980, most of the coffee plantations had majority PNG shareholding or were owned and managed by locals.
Ricky Mitio, then chief executive officer of the Coffee Industry Board, noted that although most plantations were managed by nationals, the managing directors lacked education, experience or training.
He said that plantation owners required professionals and persons who were committed and keen to develop the industry.
In 1987, a joint survey in Eastern Highlands and Western Highlands by the government and Australia found that out of 20 managers, only two went to university and two attended agricultural colleges.
The rest had qualifications lower than Grade 12.
This indicated that the poor level of management found in 1980 had not improved.
In 1995, I surveyed 23 plantations in Eastern Highlands and reviewed them in 2006.
These plantations were restricted to those that were locally owned with diverse business forms such as individuals, business groups, proprietary company and development corporations.
Most of them were located along the Okuk Highway and various provincial roads in all eight districts.
Only four of the owners had gone beyond primary school education.
Likewise, only a few of the managers studied beyond high school or had some background in agriculture and plantation management.
In summary, I would say that most of the problems faced by plantations are basically due to a lack of expertise and qualified management and support personnel.
Eventually, though many plantations are still operating, they are doing so under receivership, some form of dispute and inadequate working capital.
Many are indebted to the banks.
Few expatriate or foreign-owned plantations are operating, no thanks to law and order problems, poor infrastructure and other issues.
On the third question of whether plantations are doing anything to understand the industry, nine were asked about the availability of extension, advisory services and training provided by government agencies and their knowledge on training opportunities available.
It was obvious that none of the plantations were subscribing to industry magazines and journals and do not approach government agencies and organisations voluntarily for assistance.
All said that adequate training suited to the industry was vital but have little or no knowledge of opportunities available.
Further, there appears to be little or no communication by relevant government agencies tasked with technical and policy matters.
The problems facing the coffee industry are also prevalent in the copra, cocoa, rubber and livestock industries.
As such,. the government needs to intervene now before the situation gets worse.

Note: The author is the secretary of the Highlands Farmers and Settlers Association Inc.
 
Globalisation and the beautiful game
By DANI RODRIK
HOW does globalisation reshape wealth and opportunity around the world?
Is it mainly a force for good, enabling poor nations to lift themselves up from poverty by taking part in global markets?
Or does it create vast opportunities only for a small minority?
To answer these questions, look no farther than soccer.
Ever since European clubs loosened restrictions on the number of foreign players, the game has become truly global.
African players, in particular, have become ubiquitous, supplementing the usual retinue of Brazilians and Argentines.
Indeed, the foreign presence in soccer surpasses anything that we see in other areas of international commerce.
English Premier League club Arsenal, fields 11 starters who typically do not include a single British player.
Indeed, all the English players for the four English clubs that recently advanced to the final eight of the UEFA Champions’ League would hardly be enough to field a single team.
There is little doubt that foreign players enhance the quality of play in the European club championships.
Europe’s soccer scene would not be half as exciting without strikers such as Cote d’Ivoire’s Didier Drogba (Chelsea) or Cameroon’s Samuel Eto’o (Barcelona).
The benefits to African talent are easy to see, too.
African players are able to earn much more money by marketing their skills in Europe – not just the top clubs in the Premiership or the Spanish Primera Liga, but the countless nouveau-riche clubs in Russia, Ukraine, or Turkey.
To be sure, soccer players’ international mobility has increased the earnings gap between stars such as Drogba and Eto’o and their compatriots back home.
This is part and parcel of globalisation: enhanced global economic opportunities lead to wider disparities between those who have the skill or luck to take advantage of them and those who do not.
This kind of inequality is not necessarily a bad thing. It makes some people better off without making others worse off.
But soccer enthusiasts care about country as well as club, and here the consequences of the global mobility of talent are not as straightforward.
Many fear that the quality of national teams is harmed by the availability of foreign players. Why invest in developing local talent if you can hire it from abroad?
England once again provides an apt illustration.
Many blame the country’s failure to qualify for this summer’s European championship on the preponderance of foreign players in English club teams.
The real lesson is that taking full advantage of globalisation requires developing domestic capabilities along with international links.
The benefits of globalisation come to those who do their homework. – Project Syndicate

Note: Dani Rodrik, Professor of Political Economy at Harvard University’s John F. Kennedy School of Government, is the first recipient of the Social Science Research Council’s Albert O. Hirschman Prize. His latest book is One Economics, Many Recipes: Globalisation, Institutions, and Economic Growth.
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