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Sweat success
By REUBEN SENGERE
Within the local community of
Komunive in Eastern Highlands exists a valuable asset known as the
Obihaka Coffee Plantation. It was abandoned for some years due to
poor management and conflicts amongst shareholders.
The estate was originally established by a former goldminer named
Joe Searson in the 1950s as a potato farm and later planted with
coffee. Jim Leahy, one of the pioneer Leahy brothers of PNG fame,
purchased the estate in 1963 and handed it over to his nephew,
Paddy Leahy, to manage.
James Sinclair in his book "The Money Tree", described Obihaka as
'one of the finest coffee plantations in the highlands'. As
manager, Paddy claimed that the "estate used to export green beans
to Finland in Europe for premium prices offered at that time in
PNG."
The plantation changed ownership several times and eventually was
sold, in 1993, to a national coffee entrepreneur, Apele Goso,
owner of the now defunct Alenumpa Coffee Estates.
In 1997, the local landowners from Komunive and Kenetisaro
villages organised themselves and purchased 60 per cent of the
shares in the plantation from Alenumpa.
Management agencies and local managers were appointed to manage
Obihaka. However, they were not able to control costs, they abused
company assets and that led to cash-flow problems and eventually
the plantation was abandoned in 1999.
Several attempts were then made to rehabilitate the plantation but
those initiatives failed to produce the desired results for the
shareholders.
Overall, coffee production from the plantation and block
sub-sector of the coffee industry in PNG has been declining in the
last two decades. A plantation is 30-hectare or more of land
planted with coffee whilst a block has 5 to 29-hectares. Several
interventions have been made by the government with the support of
the Rural Development Bank but little progress has been made since
to revitalise this important sub-sector.
In April 2005, the Coffee Industry Corporation approached the
directors of Obihaka with the intention of rehabilitating the
estate using resources the landowners had.
The landowners or shareholders would contribute labour, cash,
tools, equipment and food for workers as 'sweat equity'
investment. 'Sweat equity' can be defined as labour input, cash
and in-kind contributions made by the landowners towards the
company.
The landowners mobilised their resources and worked on the
plantation on Tuesdays and Thursdays each week. One landowner, Mek
Hatuso said "coffee trees that were on the verge of dying have now
recovered through our own 'sweat' (labour) therefore we will not
abandon this work as was the case in past attempts".
"Sweat equity" was a central concept behind the establishment of
the 20-hectare coffee blocks in the 1980s. The labour of the
family, or the landowning group, were to be used as investments in
the projects but many projects fell apart due to lack of proper
control of cash income.
Moreover, there was widespread abuse and misuse of assets that
belonged to the landowner groups and financial reports were not
made known to group members.
The same principles used in the original 20-hectare block
developments can still be used to revive the current run-down
plantations and blocks. Llandowner groups must be encouraged to
make investments through "sweat equity" and in cash and kind
contributions.
The shareholders must then be rewarded properly through dividends
when the enterprise makes profits. Thus good management and proper
record keeping are critical to maintaining harmony within the
community.
The Obihaka landowners successfully used the above principles to
rehabilitate the once run-down estate. They literally used
whatever resources they had to bring back into production the
65-hectare coffee plantation. The desire of the landowners to see
positive benefits coming from the plantation provided the drive
for them to work as a team.
In addition, the landowners have registered a company as Keko
Investment Limited with two shareholding business groups, namely
Keko and Mukimuki.
The group has so far earned some money from coffee cherries picked
from rehabilitated trees. The income was used to purchase more
chemicals and recruited additional casual workers. The once idle
asset is now able to create income-earning opportunities and is
putting cash back into the community.
The directors approached the local bank where the company
initially had outstanding debts and the bank assisted them to open
an account.
The bank and Obihaka directors are now negotiating the repayment
schedule for old debts. The plantation has made a positive move to
establish good relations with the bank. At present, banks have
negative opinions about making investment in the coffee industry
because of past experience in which there was no return from
previous loans.
Obihaka plantation is creating a milestone by being rehabilitated
with the use of local resources without any external assistance
and is willing to repay its debts. It is setting the pace for
other problem plantations to follow.
The attitude of the community has changed and the reputation of
Obihaka has improved considerably since they started working on
their own. The plantation has also brought many positive benefits
to the community. It has employed landowners, assisted
shareholders with money to solve social problems and old debts
have been repaid.
The precedent set by Obihaka has been a stark contrast to the
"free handout" mentality that is prevalent in PNG societies where
people expect the government, local members of parliament or donor
agencies to provide monetary assistance. People need to learn to
earn an honest living by working the land.
The Obihaka group's experience proved that communities do not
necessarily need external help but can use available resources to
initiate change in rural areas.
 
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