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
At present, more than 90 per cent 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
Papua New Guinea has extremely fertile
soil and a climate which is ideal for agricultural ventures, particularly
in the Highlands, coastal and island regions.
Rural dwellers already form the largest
component in agricultural activity with subsistence farming. Food for
consumption is only part of the total production in subsistence
production. Rather more, it produces all the needs of the household such
as housing materials, ceremonial goods, fuel, containers and animal feed.
Investors will find rural communities
ready and willing to grow crops for supply to markets or processing
factories. Assistance in technology and management procedures for
commercial enterprises would however be necessary.
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 smallgoods, 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.
The continued development of small scale
commercial agriculture is crucial to any expansion of employment. Twenty
per cent of the wage-earning households are in the non-village rural
Quality control procedures for exports
are being addressed through the country’s National Institute of
Standards and Industrial Technology (NISIT). New ventures can rely upon
the assistance of the Institute for research and development and
technology transfer information and assistance.
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% of production comes from more
than 250,000 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 smallholders there is a
greater potential for increasing yields and raising farm incomes. There is
considerable scope for expansion.
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 per cent a year over the last 10
years, and the 70,000 producers now account for 70% of total output.
Estate production has fallen steadily since 1975, mainly because of
disease, but this trend has now been reversed and estates are rapidly
replanting with high yielding and more disease resistant hybrids.
The introduction of high-yielding
hybrids has greatly improved the projects in Papua New Guinea, and the
country remains a competitive producer, even at low prices. Early results
from their use are showing yields up to 2 tonnes per hectare while
research continues to develop new varieties with even greater yield
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.
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% of
national output. About 20% of production is consumed domestically. The
traditional tall coconut continues to be an important source of food and
cash income for smallholders, particularly in the coastal provinces.
Returns are low, but so are production costs, and the coconut is so
entrenched in the coastal farming system that it will still be produced
regardless of copra prices.
The production of coconuts, in pure
stands, as cash crops, is experiencing a period of adjustment. More than
two thirds of coconuts are now interplanted with cocoa, and this system
offers the best prospects for future growth. Coconuts (whether hybrids or
tall) provide the necessary shade for cocoa needs, share costs of
cultivation, and provide useful supplemented income. Thus, by
inter-cropping the cost of production of both crops are reduced, and a
good return can be earned.
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/smallholder (NES) schemes in production in Papua New Guinea.
Production is almost equally divided between estates and smallholders. 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. While smallholder yields are lower than
estates, oil palm offers a much higher income and a higher return to labor
than any other major crop. Apart from the benefit enjoyed by the producers
themselves, the NES have a market developmental impact in the regions in
which they are located, partially because of the services and utilities
that have been associated with them.
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 a 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 fruits and 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.