Export crops drives commercial agriculture

Farming

The driving force behind commercial agriculture in Papua New Guinea has always been the export crops. This trend will no doubt continue to dominate the development of the sector in the future.
At present, more than 90 percent of the value of agriculture export comes from four crops – coffee,cocoa, oil palm and kernels, and coconuts(copra). Other export commodities include tea, cardamom,rubber, chillies and pyrethrum.There is considerable potential for the expansion and development of many more crops for export, including the export of fresh fruit and vegetables and processed products.
The Government is keen to see innovation in agricultural and livestock projects. It is committed to improving the country’s infrastructure.
Major reforms in fiscal and trade policies are expected to induce an upsurge in investor interest in the agricultural sector.
At present, most of Papua New Guinea’s small scale agricultural production is consumed by the domestic market. The main goods produced include a wide variety of fruit and vegetables, meats and small goods, eggs, tobacco, grains and sugar. The value of fruits and vegetable sales is about K100 million a year. Other marketed products total about the same amount.
Export commodities Coffee
Arabica coffee is Papua New Guinea’s most important crop,both in terms of foreign exchange and its contribution to income and employment. Pioneered by estates,coffee is now primarily a smallholder crop (nearly 70 per cent of production comes from more than250,000 villages households), and is concentrated in the Highlands region,where coffee is the predominant source of cash income. Nearly half of all the village households grow coffee. Among small holders there is a greater potential for increasing yields and raising farm incomes.
There is considerable scope for expansion.
Cocoa
After coffee, cocoa is Papua New Guinea’s second most important agricultural export crop. Existing plantings are highly concentrated geographically in the islands region.
But many other areas in the country are highly suitable for cocoa production.Smallholder production has been increasing by about 5 percent a year over the last 10 years,and the 70,000 producers now account for 70 per cent of total output.
The prospects for cocoa look good. In the longer term, the potential for further expansion is excellent,particularly through a further increase in smallholder productivity and a major expansion in upstream processing.
Coconut
The coconut tree has a long history in Papua New Guinea and was an important source of food and other products long before other tree crops were introduced into the country. In recent years, estate production has declined, but coconut continues to be a staple crop for over 100,000 smallholders, who now produce about 60 per cent of national output. About 20 per cent of production is consumed domestically.Coconuts (whether hybrids or tall) provide the necessary shade for cocoa needs, share costs of cultivation,and provide useful supplemented in come. Thus, by inter cropping the cost of production of both crops are reduced, and a good return can be earned.
Oil Palm
Although it was introduced only 20 years ago, oil palm is now the third most important agricultural export and is growing rapidly. It is expected that in the not too distant future, oil palm will rival coffee in importance. There are now several major nucleus estate and small holder (NES) schemes in production in Papua New Guinea. Production is almost equally divided between estates and small holders.The potential for further development is impressive.Papua New Guinea is estimated to have a strong competitive advantage over most major producers.
Estate yields are among the highest in the world, and as a late starter,Papua New Guinea has the advantage of modern mills and marketing facilities and high-quality planting materials.
Rubber
In terms of soil and climate rubber has as good a potential as oil palm in Papua New Guinea. A large expansion program could be very attractive, particularly in helping to diversify production and offering an important source of income and employment to areas not suitable for other major export crops. Papua New Guinea has recently witnessed renewed level of investment activity in rubber projects and the trend is expected to continue in the medium term.There are some rubber projects currently in Papua New Guinea which operate efficiently and profitably.Some are seeking joint venture partners to realise their expansion plans.Interested investors should make further enquiries with the Government to obtain more details.
Other export crops
Compared with the four major export commodities and rubber,the potential for other agricultural developments is equally as exciting.
The major prospects lie in the expansion of production of tea,cardamom, chillies and pyrethrum,among others, as well as the great number of varieties of tropical fruit sand vegetables to cater for the rapidly growing Asian market.Potential investment opportunities in the agriculture sector can be obtained through the Agricultural Sector Manual and the project profiles being promoted by the Investment Promotion Authority. – newag.
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