Looking beyond PPAP with new K140mil initiative

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A NEW US$40 million (K140 million) World Bank funding project – PNG Agriculture Commercialisation Project (PACD) – is mooted to replace the PPAP that is ending on Dec 31.
According to a PPAP report, the Government has requested the World Bank for continued support in the agriculture sector in January 2016.
The World Bank has followed up the request with pre-identification missions in 2017 and early 2018.
During the technical missions and discussions, it was also agreed that the project should continue to support coffee and cocoa, with more emphasis on supporting farmers’ cooperatives, consolidating volumes aimed for direct export backed by consistent production and supply.
This will strengthen the sustainability of the service delivery model and the industry.
It was also agreed that the new project should consider additional value chains of small livestock (chicken and pigs), coconut and spices so as to integrate smallholder farmers into effective supply/value-chains and linking them to markets, a Government priority.
The development objective of this new project is to facilitate the development of competitive and diversified value chains in targeted provinces of PNG.
The interventions to strengthen value chains are as follows:

  • COFFEE and cocoa will continue to focus on productivity related activities for new partnership projects. The PPAP partnerships will be upgraded to focus on exporting to specialty markets, hence priority to be given to supply of processing equipment to enable consolidation of volumes and marketing;
  • SMALL livestock – the value chain study identified activities related to feed production, chicken hatcheries and slaughterhouses as areas of support;
  • SPICES – supply of agriculture materials to increase production;
  • COCONUT – 50% of the trees are too old and an extensive replanting programme is needed. Demand for high value coconut products (virgin coconut oil, soap and body lotions) has been identified; and
  • PACD to be implemented in 12 provinces: Eastern Highlands, Chimbu, Western Highlands, Jiwaka, Enga and Southern Highlands (where 90% of PNG coffee is produced and exported), East New Britain, West New Britain, New Ireland, Bougainville, Morobe and Madang (where cocoa is produced and exported). Spices, coconut and small livestock will be introduced as a diversification to coffee and cocoa as a farming system.

The key criteria for the selection of provinces include:

  • LINK to ‘economic corridors; as defined in the MTDP (Medium Term Development Plan) III;
  • SUCCESSFUL implementation of PPAP activities now need to be consolidated industry-wide to develop critical mass;
  • COFFEE Industry Corporation (CIC) and Cocoa Board (CB)’s as successful imlementing agencies under PPAP; and
  • STRONG interest by the private sector and smallholder farmers in the provinces.

Based on PPAP costing experience, it is envisaged that there will be a financing gap of between US$2 and US$5 million (K6.8 million and K16.9 million).
The current implementation structure of PPAP will be maintained.
A project coordination unit is to be set up for PNG Agriculture and Diversification Projects’ programme of activities, including cross-cutting issues, and two project management units, hosted by the CIC and CB, for implementation activities.
Department of Agriculture and Livestock will provide oversight while the regional DAL offices will be tasked to support the implementation of activities related to spices and small livestock.
Memorandums-of-agreement will be signed between commodity boards for implementation of certain activities, where required.

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