Poor facilities affecting production

Business
A study by the National Research Institute shows that providing facilities and processing of quality coffee were challenges faced by coffee-producing countries. In addressing these, PNG can be a leading coffee producing country.
A coffee farmer at her coffee garden.

Providing facilities that promote the production and processing of high-quality coffee has been challenging for governments of some coffee-producing countries.
A study by the PNG National Research Institute (NRI), Strategies for improving coffee production and processing in Papua New Guinea: Lessons from the top five coffee producing countries, highlighted the production and processing of coffee in the country and suggested improvement strategies by drawing lessons from the top five coffee-producing countries in the world.
The study covered six coffee-producing countries in four continents: Brazil, Vietnam, Colombia, Indonesia, Ethiopia and Papua New Guinea.
Below is the abstract of the study.

Introduction
In Papua New Guinea (PNG), coffee has been the second leading agricultural commodity, after oil palm.
Coffee production provided opportunities for employment and foreign exchange earnings.
Coffee contributed 27 per cent of the total agricultural export from 2012 to 2017 and accounted for six per cent of the gross domestic product (GDP) within the same period.
It contributed to multiple sectors of PNG’s economy including transport; construction; manufacturing; retail and wholesale; insurance; and banking.
Arabica is a coffee species that is frequently cultivated in PNG, mainly in the altitude between 700 and 2,050 metres above sea level in the Highlands.
Robusta is cultivated in areas of up to 550m above sea level in the coastal areas of PNG.
PNG provides high quality fine flavour Arabica coffee that is cherished by coffee consumers.
However, coffee production in PNG appears to have been declining.
According to a report by AECOM (2018) on PNG coffee market study, the export has dropped to 934 60kg bags between 1998 and 2018.
The price of coffee had also been declining over time in the international market.
The implication is that, given that the two components of coffee revenue (output and price) to the producers is declining, the revenue would decline over time and have serious consequences for the producers and the PNG economy that is dependent on it.

Coffee beans produced ranges from 81,000 tonnes in 1998 to 58,000 tonnes in 2018, corresponding to a decrease of 28 per cent.

Results of study
In case of PNG, the area of coffee field harvested annually ranges from as low as 41,000 hectares in 2002 to a high of 87,000 hectares in 1999.
Area of coffee field harvested in PNG decreased from 81,000 hectares in 1998 to 54,000 hectares in 2018, a decrease of 33 per cent.
In comparison to the smallest area of coffee field harvest among the top five countries, PNG’s largest area harvested (87,000 hectares) is lower than the smallest harvested area (220,000 hectares) among these countries by 71 per cent.
Coffee beans produced ranges from 81,000 tonnes in 1998 to 58,000 tonnes in 2018, corresponding to a decrease of 28 per cent.
It is important to note that there was no data for 2008.
PNG’s annual coffee production is lower than that of all top five coffee-producing countries over the period of our study.
Of the top five coffee-producing countries, Vietnam had the highest quantity of coffee harvested per hectare.
It increased from 1,875 kg/ha in 1998 to 2,612 in 2018, an increase of 39 per cent.
Brazil harvested 816kg/ha in 1998 and 1,906kg/ha in 2018, corresponding to an increase of 134 per cent.
Findings from review of the literature on key challenges to coffee production and processing in PNG
Challenges to coffee production and processing in PNG include the following:

  • INADEQUATE access to basic infrastructure and facilities – Smallholder farmers, especially those who reside in remote areas, find it difficult to access facilities for milling and storage of coffee.
    There were no good road networks to transport farm inputs and products to and from their coffee farms;
  • FARM management practices – Most of the coffee trees tend to have passed their economic productive age, which has resulted in a reduction of crop yield.
    Necessary coffee husbandry practices, such as regular pruning and provision of shade trees, are either delayed or not done by producers;
  • DIMINISHING yield and inconsistent quality of product – The quality of coffee produced in PNG tends to be declining;
  • INADEQUATE extension services – Coffee farmers, especially smallholders, need information about modern coffee production techniques.
    However, they often find it difficult to access services from extension agents;
  • TECHNOLOGY – Modern technology can assist coffee farmers improve productivity and make coffee production more attractive.
    However, coffee farmers in PNG often lack modern technology and this restricts their ability to achieve their full potential in the coffee business;
  • CHANGE of cropping pattern – Some coffee growers convert whole or part of their coffee fields to other more economical crops because of a decline in coffee market price or issues associated with access to coffee processing facilities.
    The switch to other crops may also be because of shortages of labour for necessary farm operations such as pruning coffee trees and picking coffee beans;
  • PESTS and diseases – Pests and diseases such as coffee berry borer, coffee leaf rust, coffee green scale and pink disease (DAL, 2020) are other issues militating against coffee production;
  • UNFAVOURABLE market prices – The price that smallholder producers receive for their coffee is often less than the premium price that exporters receive.
    This often discourages smallholders from paying much attention to necessary farm practices, which impacts the productivity of coffee;
  • ACCESS to finance – Some coffee farmers wish to expand their coffee farm or purchase equipment for processing coffee. However, they often find it difficult to access loans from commercial banks;
  • ACCESS to land for commercial coffee production – For coffee production to be profitable, especially in terms of economies of scale, a large area of land is needed.
    However, it is often difficult to access large areas of land with proper titles.
    This is because the state-owned land associated with proper titles is almost exhausted.
    Communal-owned land, which accounts for almost 97 per cent of the total land in PNG, does not have proper titles; and,
  • SECURITY issues – Theft of coffee products, especially in rural areas, is often a major concern for farmers and increases production costs and losses.

Discussion
The findings from this study showed that PNG has the potential to become one of the leading coffee-producing countries in the world.
The country’s climatic and environmental conditions are suitable for growing various species of coffee, which gives it an edge over some top coffee-producing countries.
This could be the reason that PNG, on average, had a higher coffee yield per hectare compared to all top five coffee-producing countries except Vietnam, as revealed by our analysis.
However, size of the area of coffee fields harvested and quantity of coffee produced by PNG have continued to be lower than those of other top five coffee-producing countries that we examined in this study.
The PPAP, being implemented by the Government in collaboration with the World Bank, has the potential to raise the coffee production of PNG and make the country more competitive in the coffee market.
However, only some coffee growers benefit from the PPAP, which might makes it difficult to achieve the desired increase in coffee production.
For the PPAP to contribute more meaningfully to the coffee sector, there is a need for more effective and efficient mechanisms to monitor and evaluate the PPAP.
The project should focus more on the replanting of coffee trees and rehabilitation of coffee plantations.
All coffee growers should have access (for example – an all inclusion programme) to benefit from the PPAP so that total coffee production can improve in PNG.

One thought on “Poor facilities affecting production

  • One though on the above especially the discussion part on the PPAP program.The PPAP program does not even impact the farm especially in extension work, its a waste.It should be a boost to the industry by increasing number of coffee bags being exported.Looking at the statistics given regarding the exporting of coffee bags,it keep decreasing where has the funding go?

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