Agriculture is still the main source of employment for about 85% of Papua New Guineans. While the majority of this activity takes place in the informal sector, in recent times PNG’s farmers have developed significant capacity in cash crops.
Background
PNG has two distinct climates: the hot, humid lowland and coastal areas, and cooler highlands. Both deliver constant stable growing conditions. Vitally, rainfall can be relied upon and droughts are almost unknown. The quality of the soil is also a bonus. The rich loam and lack of intensive farming methods mean the soil maintains all the nutrients necessary to cultivate a broad range of crops and raise stock. Importantly, these low-tech farming practices and the lack of pesticides and artificial fertilizers mean PNG can position itself as a leading organic producer at a time when global demand for such products is growing very strongly.
Pure Agribusiness
Another interesting company is Trukai Industries, whose major shareholders are Rice Growers Australia and the PNG Government. It produces 1.2 million tons of sweet potatoes, 300,000 tons of taros, and 200,000 tons of bananas per year, while its Trukai Farms division keeps approximately 5000 head of Brahman cattle in the lush Markham Valley, northeast of Lae.
Trukai is very much an agribusiness, operating a large, modern rice processing mill in Lae. The mill was recently upgraded to conform to Australian standards and operates 24 hours a day. It supplies most of PNG’s substantial rice requirements and exports to the Solomon Islands and even neighboring Australia. PNG grows little of its own rice, so most of the raw material originates in Thailand.
Commodities
Palm oil: This has been the star if the PNG agribusiness sector of late, spearheaded by NBPOL, whose success in East New Britain has encouraged others to follow suit. Palm oil is cholesterol-free and can be used in foods, cosmetics, soaps, printing inks and a bio-fuel. Worldwide demand has almost doubled in the past decade, and it is now the second-largest source of vegetable oil after soya.
Coffee: PNG’s coffee industry is worth over US$150 million annually to the country’s economy. A lack of intensive farming distinguishes the PNG coffee industry – about 85% of the coffee comes from small-hold farms. With organic coffee increasingly in vogue, this is becoming a selling point. There is a focus on developing specialty markets, including under the Fair Trade organic brand. The main export markets are the USA and the European Union.
Sugar: While PNG’s sugar output is dwarfed by neighboring Australia, producer Ramu Agro-Industries nevertheless supplies all of the local market’s requirements and exports throughout the South Pacific. Sugar by-products, such as molasses and ethanol, are also produced.
Other exports: They include coconut products, beef, vanilla, cocoa, kava and bananas.
Areas with significant growth potential: These include beef cattle, cashew nuts, cocoa, coconut/copra, oil palms, root crops (cassava, sago, and sweet potatoes), and rubber as well as tropical fruit/vegetables.