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Coffee is an important cash crop in Papua New Guinea, involving about one third of the population in its production. For many of the Highlands districts it is the major income earner of the local economy. However a 2009 World Bank supported report states that in PNG “coffee production and marketing are inefficient and not as remunerative as they could be. ... Despite its socio-economic importance, coffee has undergone an overall deterioration in quality and now both incomes and exports are at modest levels”[1].

Making changes to this situation is problematic. The majority of coffee in PNG is grown by small producers, often in remote areas, with few facilities to ensure quality processing, and great difficulty in getting their beans to the market. Giovannucci and Hunt discuss in detail the issues of motivating smallholder growers, and of setting up producer organisations in the PNG context. Producers are often primarily focussed on subsistence food production, with coffee as something that is very much a sideline. The average smallholder is not motivated to produce more, or better, coffee if that will require a significant increase in labour or investment. The establishment of producer organisations has been problematic in PNG, where community organisation is primarily based on clan or tribal affiliation.

Giovannucci and Hunt’s report covers all aspects of the market chain, from the smallholder grower to the international export market. Their conclusion is that “to improve livelihoods from coffee the most likely avenue of success is to refocus on better coffee rather than more coffee.”[2] Their four recommendations are:

Institution building in ways that strengthen associations and groups, supports sustainability and ensures the availability of market information

• The provision of extension and training services primarily for smallholder growers

Availability of finance particularly for those outside the scope of formal banking facilities

Infrastructure to improve the quality and efficient marketing of coffee[3]

The Baiyer Valley site of the Banzaid/Baptist Union of PNG project is an example of all the issues raised in the report. The returns to coffee growers are lower than average. A period of clan fighting disrupted production for a number of years, destroying an existing cooperative venture and existing processing facilities; cultivation methods, harvesting and initial processing are erratic; the remoteness of the area and difficulties of transport all contribute to low prices paid by commercial buyers.

New Zealand Baptists have an historic connection with PNG and in particular with the Baiyer Valley. NZ Baptist missionaries worked in the area until the 1990s. This project came out of discussions with the BUPNG leaders around areas where New Zealand could offer help. The BUPNG has an extensive education, health and community development programme in the area, working with Australian Baptists and funded through AusAid. This project’s focus on economic needs will complement the existing education and health activities, and is in line with wider PNG Government objectives.

The Baptist Union of PNG has been instrumental in bringing an end to clan fighting. This project was designed to consolidate the peace settlement by building up the economy of the district. The project targets grower needs through a plant nursery and demonstration of current cultivation and harvesting techniques. The project also targets the market chain through the provision of market information to growers, upgraded processing facilities and a locally based buying centre.

The project commenced in April 2013, and has received support from the Sustainable Development Fund of the New Zealand Aid Programme, and from the Government of Papua New Guinea.

PROJECT OBJECTIVES

• BU Kofi is established as a commercial agricultural business
• BU Kofi will include a demonstration farm, providing a nursery for new coffee varieties, and researching alternative and supplementary cash crops to encourage communities to diversify their income sources.
• Provide a purchasing and processing centre for local coffee and other cash crops that will ensure a better return to local farmers than they currently receive
• Return any profits to the existing community development (health and education) projects of the Baptist Union of Papua New Guinea (BUPNG) in the project areas

[1] Papua New Guinea Strategic Assessment of the Coffee Sector, Giovannucci and Hunt 2009. Executive summary page iii (http://siteresources.worldbank.org/INTPAPUANEWGUINEA/Resources/PNGCoffeeStrategyGiovannucci-Hunt.Final.pdf)
[2] Op.cit. page 12 (emphasis in original)
[3] Op.cit Executive Summary page iv

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