Another Year Like Last Might Mean The

The Product is First Class, But It Needs Buyers Another Year Like Last Might Mean The End of the New Guinea Coffee Industry

From Judy Tudor, in Goroka. NG Coffee producers in New Guinea who have always had doubts about Australian buyers’ criticism of NG coffee on a quality basis, are more sure than ever since the recent Goroka coffee conference that this criticism has been merely diver sionary. What the majority of Australian buyers require is a low grade product for blending in soluble and syrup forms of coffee or in ready-ground proprietary lines. NG coffee is, if anything, too good.

It LTHOUGH the conference (from \. January 20-22) was hampered by the fact that only two of the we merchants invited from Aus -alia attended, it was generally re garded as a success in that it aired ne problems of the industry and /aved the way for a second meeting if interested parties at a date and llace yet to be fixed.

The problems of New Guinea :Dffee producers are not academic, [hey are acute, real and now.

If the marketing conditions of 058 are permitted to continue nrough 1959, when NG coffee pro .uction is expected to be double nat of last year, the infant in .ustry could receive a mortal blow.

There have been too many new nd promising industries that have :een allowed to die of inanition in ;apua and New Guinea.

In the case of coffee, natives have large share in the growing in ustry, and this makes the Adminis •ation vitally interested in whether ue crop can be disposed of in Aus •alia at an economic price.

It is impossible to explain to so icently primitive natives as the ighlanders, the economic laws of ipply and demand. They cannot see ay reason why when a few years go they were getting 7/- a lb for 11 the coffee they could produce, ney now cannot get much more nan half that amount for more ad better quality.

Australia's Poor Effort

In 1&58, New Guinea produced bout 400 tons of coffee; 50 tons iere sold abroad and at the end T the year over 160 tons remained tisold. The remainder was bought i Australia, whose yearly require tents are somewhere around 6,000 >ns.

This year it is calculated that reduction in New Guinea will be )0 tons; and in 1960, 1,350 tons.

If ter that the situation, based on fisting plantings, will remain liatic.

' The growers claim that Australian

buyers could very easily absorb this amount of New Guinea coffee and that the only reason that they have not been willing to do so is long standing buying arrangements made by established importers with over seas suppliers.

The growers claim that buyers in Australia have, in fact, bought inferior East African coffee at a higher price than they have been willing to pay for better grade New Guinea coffee.

Some agents who attended the conference said that they did not know that something close to 200 tons of NG coffee remained unsold

at the end of last year; and some offered to place it immediately, at a price of 3/8 to 3/9, which growers

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Haim is less than the cost of pro motion.

Saving Overseas Funds

The Highland Farmers’ and j.ettlers’ Association, which stated ::s case in a very well-prepared irochure distributed at the confer ence. claims that the Common wealth Government could save 1800,000 per annum in overseas timds by 1962 if buyers in Australia sad to absorb all the New Guinea iroduction of coffee before being lermitted to import from other ources.

The present state of affairs is iirectly attributable to the fact nat the Federal Government lifted icensing controls on coffee in the ;jcond half of 1957 and as a result irices of New Guinea coffee were repressed. Until July, 1957, claims [ie HF and S Association, Aus ralian buyers themselves forced the irice of NG coffee to over 7/- per 0.

Because of the present low price ;t coffee, small farmers who have .ut everything they own or can j,ise into planting, have been forced 0 sell their coffee at any price uey can get, to meet urgent cash equipments. “Some of them,” says ae HF & S, “have been forced to lace their coffee in the hands of • erchants to whom they owe money ad there is little incentive for a lerchant to obtain more for the offee than will cover the extent of is client’s indebtedness.”

It's Not Too Mild, or Inferior

The Association refutes the sug lestion made last year by icrchants in Australia—that New luinea coffee was too “mild” for the ulates of New Australians to whom ne great increase in coffee drinking 1 Australia has been attributed, landom samples (not specially ;e lect e d) have been sent to icrchants in the United Kingdom, iblland and Germany, and all have sen pronounced fully acceptable id equal to the best that Kenya [Ters.

They don’t believe, either, the old •y that, grade for grade, New luinea coffee is inferior to imported offees; they are convinced, how ver, that Australian buyers are ;ot as interested in high grade offees as they once stated they sere (except for the limited con oisseur trade) and that if any iiing, growers have been aiming for md high a standard when the bulk :irchasers really want cheap, low irade coffee including Robusta urieties.

This was borne out when a party : pressmen visited Mr. Jim Leahy’s ilantation outside Goroka at the nd of January and found his saborate and fully mechanised fac »ry at work winnowing bags of ;hat he had regarded as reject uans.

One of the merchant’s represent

atives at the conference had in formed him otherwise; That this coffee was quite suitable for blend ing with better grades to produce one of Australia’s most popular coffees.

Mr. Leahy was offered a 1/- a lb under first grade price and accepted.

He was Goroka’s first coffee planter, got some advantage of the high prices of a few years back and now is more fortunately placed than some of his new neighbours to withstand the current slump.

Some Help for Growers

Two unexpected offers that came during the conference were: • A promised reduction of 40/per ton on the freight rate on coffee between New Guinea ports and Australia by Burns Philp and the agents for New Guinea Australia line. (This brings the rate down to 240/- per ton, which still is high. For a far longer journey, on a much less profitable route, Royal Interocean Lines quote freight rates on coffee, East African ports- Sydney, at 250 - stg. per ton, or about £l5/12/6 in Australian currency). • From the agents’ represent atives a suggestion that they should form an accredited association of buying agents to handle the whole of the New Guinea production in Aust-F^ilici Growers were, naturally, pleased with both suggestions.

Growers do not think that Aus tralia owes them a living by the mere fact that they exist. But they believe that if they can produce a comparable coffee, at a price that will be economic to the planter and reasonable to the consumer, Aus tralia owes them more of a living than it does East Africans who buy little from the Commonwealth.

They feel that Australia should afford them the sort of support that it already gives Papua’s rubber pro ducers and Queensland tobacco growers.

A Marketing Board Proposed

For the short term, it is felt that the Australian Government will be forced to invoke a stricter system of licensing coffee imports. For the long term, the growers are solidly behind the idea of a Coffee Market ing Board. , .

For some reason that is not clear, the P-NG Administration does not favour a Board: neither do Aus tralian buyers. But the reasons why the growers want it are set out logically and fully in the following, taken from the HF & S brochure.

After carefu! consideration of all the factors involved, the Highland Farmer and Settlers’ Association is firmly of th opinion that the future marketing of all coffee should be in the hands of a Coitee Marketing Board. . . . „ The Coffee Marketing Board to be a separate corporate body Government and growers representatives

i and having the sole authority to export • coffee and/or permit the export of coffee I by other persons.

That in order to secure a market for the > Coffee Board and place it in a position lto finance the crop, including, of course, I the native crop, the Federal Government i must regulate so that it be obligatory upon •- Australian importers and buyers of coffee ito first purchase the Australian New > Guinea coffee crop before obtaining coffee Ifrom any other overseas source. Alterna tively, that all coffee blended, processed or 8 sold in Australia must contain a certain ipercentage of New Guinea coffee. The ibroad precedent and outline for either of ithese proposals exists in the current system jof marketing Papua-New Guinea rubber in and Australian tobacco in IQueensland. Both systems can be adopted sand modified to suit coffee sales.

"Rural Credits"

That in practice, the Board would, in ■[recognition of the ready market created cby Government action (in securing pre iference on the Australian market for New IGuinea coffee) be able to obtain Rural from the Commonwealth Bank cand so be able to make appropriate ad vances to growers against the final sale of their coffee.

The Board would ultimately be financed fby a levy upon coffee sold and New .Guinea growers are prepared for this levy lin exchange for a reasonable margin over ;costs to the grower.

In order to achieve some stability in the [marketing of coffee and thus avoid the (menace of Import Restrictions and/or Higher tariffs on African coffee being ap plied to protect New Guinea growers, and 0 lessen the results of world instability in .(his commodity upon the consumer in Australia, there should be a price agree ment between the Board and Australian uuyers to provide reasonable limits of prices to be paid within different grades.

The creation of a Board would ensure Ihe establishment of high export standards, consistent packing and availability and storage pending sale. The continued existence of coffee importers and agents n Australia acting on Commission would lot be threatened. The Board could ap »oint agents for storage and handling, tuthonse internal trading, raise standards md permit overseas exports which would lot depress the price available to the Hoard at any particular time.

Whether the Australian govern ment takes the long term or the short term view, it is obvious that 'something has to be done quickly *’o save the NG coffee industry from

monomic disaster.

Another year hke 1958 and there .vould be few men left in the in

dustry by 1960. We repeat—too many

promising industries have been

tllowed to fold up in the Territory n the past. In most of these only Europeans have been involved. But Ihis time too much Administration prestige is at stake to let coffee sollow in the path of kenaf, cutch, jugar, paper, fibres, minerals and ither potential bonanzas that fizzled mt like damp squibs in the last

)0 years.

Ratu Edward Cakobau, QBE, MC.

[>ne of Fiji’s leading personalities,

ailed from Sydney in January by

‘ & O Iberia, en route to Europe.

He expected to be abroad for some months.