Papua New Guinea: Coffee farmers face challenges, as demand for crop continues

Elimbari is one of Kongo Coffee's  special reserve coffees. Kongo is one of the country’s three largest exporters in Papua New Guinea.

Goroka is the provincial capital in the Eastern Highlands of Papua New Guinea, and home to extensive networks of smallholder coffee producers.  PNG’s fertile lands produce a broad range of tropical and temperate crops, and the 85 percent or more of the population who live in rural areas combine household food production with cash crops. Cash is needed to pay school fees for kids, pay for transport to health posts and then meet doctor and medicine charges. Cash also has become critical for many non-market exchanges such as bride prices, funeral and compensation payments, and other social obligations. While the performance of food crops has been good and has kept pace with population growth, PNG’s main cash crops, including coffee and cocoa, has been below potential.

Coffee production is the backbone of the rural economy in the Highlands; across the nation, approximately 2-2.5 million of PNG’s 6 million people depend on coffee production for cash needs. Almost all coffee produced in PNG is arabica, and exporters see a sustained demand for PNG coffee with markets able to absorb a doubling of high-quality premium smallholder product. The challenge for PNG coffee growers is to produce consistently the quantity and quality required by those markets.

About 85 percent is produced by smallholders and productivity is low, for two main reasons:

1. The lack of tailored extension packages including adequate replanting strategies (most of the trees are over 40 year old).
2. Constraints to market access reduce farm-gate prices and smallholders’ incentives to invest.

Links in the supply chain are defined primarily by exporter-processors, and lessons from research and past coffee programs show us that improving productivity and quality requires the close involvement of commercial operators.

Coffee production is the backbone of the rural economy in the Eastern Highlands mountain range of Papua New Guinea.

In my first trip outside of capital city Port Moresby after my arrival here in April, I visited Kongo Coffee, one of the country’s three largest exporters. Managed by a native Highlander and grown from a small effort gathering and selling coffee from his ancestral community-held land, Kongo works with small farmers to improve their techniques. Despite considerable attention to improved coffee quality in recent years there is little evidence that government attempts to improve smallholder processing have been effective, most importantly because individual households do not receive appropriate price signals for their efforts to improve their processing and post-harvest handling techniques. Kongo changed that, by publicly signaling the price differential for the better quality product and communicating clear information about what to do to get that price. This means that even on PNG’s aging tree stock, some of Kongo’s family suppliers deliver the premium quality arabica that earns the highest export prices to Japan, Europe, USA ... and approx 70 percent of the shipping cost comes back to the smallholder farming families.

A World Bank project under preparation, called Productive Partnerships in Agriculture, will target improved smallholder productivity, hoping to get an additional 25,000 households (30,000 in total) registered as producers of certified coffees by the end of the project’s sixth year, while pushing the proportion of  exported as certified from 4 percent now to 13 percent.

Not all exporters see a need to devote extensive resources to improve smallholder coffee quality. Kongo’s owner said it was easy for him to invest the time and ‘risk’ in offering extension advice and price premiums to smallholders because, “it only represents maybe 3 percent of my total business, so if it fails entirely it’s okay.” Some industry leaders argue that the emphasis should be on raising the volume of coffee produced, but it is clear that a large proportion of smallholder coffee is sorted and graded up by processors and exporters and achieves considerable premiums. Any improvement in quality that can improve quality, they say, will have a big impact on the value of PNG’s coffee production. 

Elimbari is named after the cliff-massif that dominates the Goroka Valley.