Table of Contents
- 1 National-level agencies
- 1.1 Department of Agriculture and Livestock
- 1.2 Department of National Planning and Monitoring
- 1.3 The Office of Rural Development
- 1.4 National Agricultural Council
- 1.5 Agriculture Subcommittee of the Consultative Implementation and Monitoring Council
- 1.6 The Rural Industries Council and the PNG Growers’ Association
- 1.7 National Agriculture Quarantine and Inspection Authority
- 1.8 Fresh Produce Development Agency
- 1.9 Livestock Development Corporation
- 1.10 Spice Industry Board
- 1.11 Rubber Board
- 1.12 National Fisheries Authority
- 1.13 PNG Forest Authority
- 2 Agricultural research organisations and commodity boards
Numerous national-level government agencies have roles in agricultural and rural industries. Key factors in determining their effectiveness is whether they have the resources and institutional linkages with other agencies and all levels of government to perform their specified functions and whether they have competent directors, managers and staff. This section examines the most important organisations related to agriculture.
Department of Agriculture and Livestock
The functions of the national Department of Agriculture and Livestock (DAL) include providing policy advice and sector coordination relating to agriculture and livestock (including advice on the application of agricultural legislation, administered by statutory bodies); promoting agricultural development; assisting provincial governments with the provision of extension; and preparing and implementing appropriate investment programs for major commodities and livestock.
In the 1970s DAL lost responsibility for extension services when they became a provincial function. Export tree crops research was transferred to specialised research institutions in the mid 1980s. During the 1990s, remaining research and quarantine functions held by DAL were moved into separate institutions, and commodity boards and corporations were given greater independence. DAL’s role was narrowed, however, the department struggled to adapt to its new role and wasted resources in trying to regain some of its lost functions. A 2004 review of DAL by the Asian Development Bank (ADB) found that DAL was without clear agricultural sector roles and did not have the capacity to plan or develop policy. The review argued that a National Agriculture Development Plan (NADP) ‘owned’ by all the stakeholders, including rural village people, was essential if agriculture was to bring about economic and social change in PNG. But the review stated that DAL was ‘uncoordinated, was unsure of budget allocations and was poorly served by national and provincial financial information systems’, and was unable to develop or implement such a plan. DAL produced an NADP (2002–2012) which was approved in principle by the National Executive Council.
Department of National Planning and Monitoring
The Department of National Planning and Monitoring (DNPM) is responsible for national strategic development policy, development planning and preparation of the development budget, aid coordination, and monitoring and evaluation. DNPM evolved from a pre-Independence National Planning Office (NPO). DNPM was disbanded in 1985 and its tasks split between the Department of the Prime Minister and the Department of
Finance. The central planning and coordination functions and dominance of development activities previously carried out by the NPO disappeared during the next ten years. In 1995 these functions were included in a new DNPM, but the department has been reorganised four times in 10 years, which has created instability and lack of continuity. Part of the reorganisations involved the provincial and district coordination branch moving from DNPM to the Office of Rural Development, which caused the DNPM to lose touch with the provinces and resulted in the poor integration of agricultural policies into national development strategies. The role of DNPM also overlaps with a number of other departments, which causes confusion and inefficiency.
The Office of Rural Development
The Office of Rural Development (ORD) has the role of supporting provinces and districts in planning, implementing, monitoring and evaluating rural improvement programs. The ORD draws on funds from the Provincial Support Grant, the District Support Grant, the Social and Rural Development Program and the Targeted Community Development Program. ORD’s role includes overseeing the allocation and spending of K1 million of provincial and district support grants per MP per year, K500 000 of which can be spent at the discretion of the MP. Although the ORD is closer to the provinces and districts than the DNPM, it has been criticised for not collaborating sufficiently, or at all, with other government departments, the research organisations, or the universities, in the development of high quality district projects that can be supported by the MP’s grants. The 2004 ADB review argued that ‘projects submitted for funding… are not well designed, due to lack of skills in the provinces to support national members to formulate their projects’.
The funding of the districts (and provinces) is provided for under the Organic Law with decision making determined by the Joint District (and Provincial) Planning and Budgeting Priorities Committees, chaired by the MPs and comprising Local Level Government Area presidents and district managers. Spending is widely considered to be unduly controlled by the MPs. In 2006 a new District Services Improvement Program (DSIP) was set up to complement the establishment of District Treasuries and to improve service delivery at the district level. The DSIP includes funds for ‘agriculture’. However, confusion remains over which level of government is responsible for service provision. In addition, the amount of money provided does not cover the cost of even the most basic service provision (including agricultural extension) in most provinces.
National Agricultural Council
The National Agricultural Council (NAC) was established as a committee of national and provincial agriculture ministers, supported by an advisory council of national and provincial department and division heads. After the 1995 Organic Law reforms, its role changed to one of bringing together the chairs of the provincial agricultural committees (where they exist) and the provincial agricultural advisers and statutory body heads, with the national minister and the national secretary of DAL. The secretariat is provided by DAL. The mandate of the NAC is to review national research, training and skills building in agriculture and to report on this to the secretary of DAL. The full membership is large and unwieldy and lack of funds has meant the NAC rarely meets.
Agriculture Subcommittee of the Consultative Implementation and Monitoring Council
The Consultative Implementation and Monitoring Council (CIMC) was established by the National Executive Council and is chaired by the Minister for Planning and Implementation. The CIMC set up a number of sectoral committees, including the Agriculture Subcommittee, made up of representatives from the private sector commodity producers, civil society (including non-government organisations), DAL, DNPM and sectoral statutory bodies. The subcommittee operates independently of the government, under the direction of the CIMC. Its role is to ensure a dialogue between government, private enterprise and civil society. The subcommittee meets reasonably regularly. The ADB review suggested that, given the dormancy of the National Agricultural Council, the CIMC Agriculture Subcommittee should oversee the National Agriculture Development Plan and the agricultural sector program planning, budgeting and implementation, and monitoring and evaluation, for at present no body takes responsibility.
The Rural Industries Council and the PNG Growers’ Association
The Rural Industries Council (RIC) mainly represents larger organisations and agricultural industry companies, although it is endeavouring to extend its representation more effectively, especially to growers. The chair and deputy chair come from the largest agricultural industry companies in PNG. The RIC has 27 members, including a number of government departments and industry boards. It has an office in Port Moresby in association with the Institute of National Affairs.
A number of growers’ associations exist in PNG, representing villagers (and in some cases largeholders) involved mainly in cash cropping. The Smallholder Coffee Growers’ Association is the largest with around 14 000 members in 14 provinces. It is supported by the Coffee Industry Corporation (CIC) and has four members on CIC’s board. The Palm Oil Producers’ Association (POPA), on the other hand, is an association of large oil palm producers. Oil palm smallholders are represented by the Oil Palm Industry Corporation (OPIC). The PNG Growers’ Association was formed out of the Planters’ Association to bring together cocoa and copra growers. These organisations come together under the Rural Industries Council, which works to raise the profile of agriculture and give a stronger voice for policies to support the sector. Some branches of the growers’ associations conduct field days and training activities.
National Agriculture Quarantine and Inspection Authority
The National Agriculture Quarantine and Inspection Authority (NAQIA) was created out of DAL in 1997. Its mandate is to protect the animals, plants and fish in PNG from exotic pests, diseases and weeds. It is also responsible for facilitating trade through export and import risk analysis and quality assurance systems. The head office is in Port Moresby and NAQIA operates in 15 seaports, international airports and an international post office. It also maintains two animal and plant health laboratories to provide diagnostic and advisory services. Staff conduct meat inspections at five abattoirs.
The 2004 ADB report criticised NAQIA for charging high and unrealistic fees, overly restrictive rules imposed on the import of cultivars and seeds, and the slow issuing of import permits. However, the high risk that imported pests, diseases and exotic species could create severe economic damage to PNG’s agricultural production means an effective and efficient quarantine service is critical to the future of agriculture in PNG.
Fresh Produce Development Agency
The Fresh Produce Development Agency (FPDA) was established in 1989, with assistance from New Zealand Aid, to develop a competitive and sustainable fruit and vegetable industry. FPDA compiles information on prices and quantities of fruit and vegetables in the main markets, provides extension and training on production, marketing and post-harvest handling, establishes contacts between sellers and buyers, supplies certified seed potato, assists in village commercial food processing initiatives, and assists women to engage in fresh food marketing. FPDA has had an important role in the re-establishment of the potato industry following an outbreak of blight.
The 2004 ADB report suggested that FPDA needs to make greater attempts to sell its services to the industry in order to become independent of government funding. The report also recommended that FPDA make greater efforts to collaborate with the National Agricultural Research Institute and to work more with small and medium producers.
Livestock Development Corporation
The Livestock Development Corporation (LDC) is a self-financing organisation that is responsible for the control of the slaughter and processing of livestock for retail sale, for the encouragement of
the smallholder sector to increase the supply of poultry and breeding-age cattle, and the production of stockfeed. LDC has abattoirs in Central, Morobe and Eastern Highlands provinces. A fruit production project and a cashew nut nucleus estate project, both in Central Province, have been established using revenue from the abattoirs and from aid money.
However, the LDC board has recently been subject to numerous political appointments and its revenue depleted by excessive board and management spending. The Goroka piggery and the cashew nut projects are in financial difficulty and the abattoirs are said to be underfunded, poorly maintained and so far below public hygiene standards that they are in danger of closing. If these facilities close, all animals for slaughter will have to be transported to Ramu Agri-Industries’ modern abattoir at Gusap in the Markham Valley. A chronic shortage of breeding-age poultry, day-old chicks and cattle for commercial smallholders exists in PNG, but LDC has seemingly been unable to respond to this need. The future of the LDC is in doubt.
Spice Industry Board
The Spice Industry Board (SIB) is responsible for regulating and collecting data on spice production and marketing, including vanilla, cardamom, pepper and turmeric. The board maintains a small office within DAL in Port Moresby. It has seven members, six of whom, including the chairman, are appointed by the Minister of DAL. SIB is poorly resourced and staff struggle to maintain basic information about production and trade. Licences to export spices are issued by the board on DAL’s advice. Poor control over quality has recently damaged PNG’s reputation as a vanilla producer.
A Rubber Board was established in the mid 1950s to regulate the export of rubber from PNG. The board is supposed to oversee inspections and hear appeals. It has five members, all appointed by the Minister of DAL. Considerable state investment has gone into rubber growing since the 1970s, but the schemes have been poorly managed by DAL and the Department of Lands. The privately run Doa Plantations Ltd owned by Galley Reach Holdings and the Fly River Rubber Cooperative in Western Province produce most of PNG’s rubber exports. An attempt to sell the government-owned Cape Rodney rubber factory in Central Province to private interests has been accompanied by alleged financial irregularity and a lack of transparency.
In late 2006, in an attempt to revitalise the rubber sector, an interim rubber board was formed to review the Rubber Act and to guide formation of a PNG Rubber Industry Corporation.
National Fisheries Authority
The National Fisheries Authority (NFA), established in 1998, is a non-commercial statutory authority owned by the government. The role of the NFA is to promote long-term sustainable development of PNG’s marine resources. This includes ensuring that catch levels are such that maximum sustainable yield is achieved. Other roles include protection of entire marine ecosystems, preservation of biodiversity, minimising pollution and supporting village fishers. Major fisheries are managed under a national fisheries plan and local fisheries are also controlled nationally. The NFA trains staff in the National Fisheries College at Kavieng, New Ireland Province. A major review and restructure in 2000 and 2001 created an efficient and effective body, but recent political appointments to the board and management have been quickly followed by allegations of excessive licensing and other forms of malpractice.
PNG Forest Authority
The Papua New Guinea Forest Authority (PNGFA) was formed in 1993 as a statutory corporation to manage the national forest sector. Because forestry has been declared an area of national interest, control over forests has not been decentralised to the provinces under the 1995 Organic Law reforms. PNGFA comprises the National Forestry Board (NFB) and the National Forest Service (NFS). The NFB is made up of representatives of a number of government departments, provincial governments, women, forest owners, the forest industry and NGOs. The NFS works in all provinces.
PNG forestry policies and practices have been the focus of controversy, argument and allegations of corruption for some time. The most important issues are resource acquisition, allocation of licences to logging operators who do not comply with key requirements (like sustainable harvesting), poor monitoring of harvests, exports and enforcement of requirements, and the identification of landowners and lack of concern for their best interests. Aid donors, especially the World Bank, have attempted to place conditions on programs to force the PNG Government to comply with logging laws and control the damage being done to PNG’s forest resources. Uncontrolled logging is leading to losses by forest-owning villagers and the national economy.
Agricultural research organisations and commodity boards
The International Food Policy Research Institute argues that every dollar invested in effective agricultural research results in a $6 increase in agricultural output and a $15 increase in economic growth. Effective agricultural research is vital to improve food security and cash income for rural Papua New Guineans. In the 1990s, the DAL research division was split into separate institutions and the commodity boards given greater powers. Almost all agricultural research in PNG is now conducted by several statutory research organisations. The most important are:
- National Agricultural Research Institute (NARI)
- Coffee Industry Corporation (CIC)
- Cocoa Coconut Institute of Papua New Guinea (CCI)
- Papua New Guinea Oil Palm Research Association (OPRA)
National Agricultural Research Institute
The National Agricultural Research Institute (NARI) was formed from the research division of DAL in 1997. It is a publicly funded, statutory research organisation that conducts applied and development-oriented research on food crops, emerging food crops, emerging cash crops, livestock, and resource management issues. The major targets are the smallholder, semi-subsistence, semi-commercial and commercial farmers. NARI manages six research stations: Keravat (East New Britain Province), Bubia and Labu (Morobe Province), Aiyura (Eastern Highlands Province), Laloki (Central Province) and Tambul (Western Highlands Province). Additionally, NARI owns the National Chemistry Laboratory and National Agricultural Insect Collection in Port Moresby, and has an office in Mount Hagen. NARI headquarters is at Bubia near Lae.
NARI has been well managed. It has had difficulty training and retaining high quality staff. Because NARI does not have access to funding from a levy on exports as do the export commodity-based research institutions, funding for capital equipment and maintenance are proportionately less than in other agencies. Aid projects, in particular the Australian Contribution to a National Agricultural Research System, have supported NARI for some years, but long-term sources need to be found to maintain an adequate income.
Coffee Industry Corporation
Before 1991, coffee growing and exporting was governed by the Coffee Industry Board based at Goroka. Research on coffee was conducted by the Coffee Research Institute (set up in 1986) at Aiyura and extension to growers was the responsibility of the Coffee Development Agency. This last body was created after coffee rust appeared in PNG in 1986. In August 1991, the three organisations merged into the largely self-financing Coffee Industry Corporation Ltd (CIC).
The CIC has a broad range of powers, including buying and selling coffee, setting prices, registering and controlling exports, setting quality standards and controlling credit worthiness and capacity of market participants. CIC is unusual in that it is established under the Companies Act, but has been granted specific regulatory functions and powers by parliament. In practice, the CIC only applies its regulatory functions to setting guidelines, implementing firm quality control, and approving export contracts (and contract prices). The marketing of coffee is left in the hands of private companies licensed by the corporation. There is a risk that the board could become involved in the international marketing of coffee, and it has the power to do so, but the only occasion when the former Coffee Industry Board used this power (in the early 1980s), it failed badly. That experience provides a strong deterrent to using the powers again. CIC now has two divisions: the Research & Grower Services Division (made up of the Coffee Research Institute and Extension Services Division) and the Industry Operations Division. The CIC is well resourced (from an 8 toea/kg levy on green coffee beans).
Problems facing the CIC are how to:
- Improve the quality o f village coffee and increase overall production.
- Ensure board members are competent, represent industry interests and have a good knowledge of the coffee industry.
- Handle increasing attempts at political interference in its powers and functions.
Cocoa and coconut institutions
The Cocoa Coconut Institute of Papua New Guinea (CCI) was formed in 2003 from the merger of the PNG Cocoa and Coconut Research Institute and PNG Cocoa and Coconut Extension Agency. CCI is owned jointly by two statutory bodies, the Cocoa Board of Papua New Guinea and Kokonas Indastri Koporesen (KIK), which fund the institute through levies on exports.
The Cocoa Board is responsible for the inspection of all export cocoa. It is funded by a K40/tonne levy on exported cocoa, some of which goes to supporting CCI. The board licenses around 5500 cocoa fermentaries
and 14 cocoa exporters. Price competition at all stages of the marketing chain has kept marketing margins low, to the benefit of growers. However, the board has suffered from ‘irregularities’ in management in recent years.
The CCI is responsible for all cocoa and coconut research, development and extension in PNG. CCI has two active research stations, one at Tavilo in East New Britain Province and the other, the Stewart Research Station, in Madang Province. At a third research station, in Bougainville Province, operations are temporarily suspended. CCI owns 3234 ha of cocoa in eight plantations and two hybrid seed gardens. The plantations and seed gardens generate a significant proportion of CCI income.
The Kokonas Indastri Koporesen, based in Port Moresby, evolved out of the privatisation of the Copra Marketing Board trading functions in 2002. KIK’s role is to contribute to policy and regulate the copra and coconut industry. Marketing is undertaken by the private sector, where an increasing proportion of exports is in the form of coconut oil, particularly from the Toboi mill in Rabaul. KIK provides some financial support for coconut research as well as funds for seed gardens. Growers feel strongly that KIK provides few benefits, while imposing high costs in the form of levies on producers. 17 The 2004 ADB report stated that it is ‘difficult to justify the existence of KIK’ and recommended that it be abolished.
KIK’s former coconut mill in Madang, set up in the 1990s at exorbitant cost and managed by subsidiary company PNG Coconut Commodities (PNGCC), was sold to a New Zealand company exploring biofuels.
Oil palm organisations
The oil palm industry is governed by a number of organisations: the Oil Palm Industry Corporation (OPIC), Papua New Guinea Oil Palm Research Association (OPRA), the Oil Palm Growers’ Association (OPGA), and the Papua New Guinea Palm Oil Producers’ Association (POPA).
OPIC was established in 1992, as part of a reform of the oil palm industry in response to grower frustration over low prices, a then unsatisfactory pricing formula and declining government services. OPIC is funded by a levy on sales of fruit, matched by the oil palm companies. International aid funding has also provided significant financial support to the corporation. Funding is expected to continue under a proposed World Bank smallholder agriculture project. OPIC’s main role is to provide extension services to smallholders in order to increase productivity, promote improved management, and enhance the wellbeing of producers. OPIC also liaises with government, the oil palm companies and other organisations involved in the industry. OPIC has five local planning committees, comprising representatives of smallholders, companies and the government, in five project areas.
OPRA is a non-profit research organisation with its headquarters at Dami Oil Palm Research Station in West New Britain Province, and another facility at Popondetta in Oro Province. OPRA was established by pooling research facilities of three companies 18 to bring together government, plantation companies and smallholders under a single research organisation. OPRA’s main areas of research include agronomy, entomology, smallholder studies, and plant pathology. OPRA is funded by a levy on production (50 toea/tonne of fresh fruit bunch for smallholders and 80 toea/tonne of fresh fruit bunch for plantations), government funding and research grants. OPRA also provides technical support and training to smallholders, extension officers and plantation company officers. OPRA’s research is highly regarded internationally.
POPA represents the joint interests of the milling companies. Each project area also has a growers’ association which represents the interests of smallholders to the companies, OPIC, OPRA, and national and provincial governments. The chair of each oil palm growers’ association sits on the board of OPIC. The extent of smallholder involvement in the associations varies between project areas and over time. At various times the associations have experienced problems with financial mismanagement resulting in members losing confidence in their organisations. For example, in 2000 the Hoskins growers’ association suffered a significant loss of members after the association’s funds were misappropriated. In Popondetta the association membership has been limited because the settlers believe that the organisation is dominated by local landowner interests. The distribution of financial benefits between the milling companies and the smallholders has been significantly adjusted in favour of smallholders in successive reviews in the 1990s and in 2000. However, smallholder advocates argue that the mills (or ‘nucleus estates’) have economic advantages over smallholders and the pricing formula fails to properly value customary land as well as heavily discounting smallholder labour.