Business and Development

Hopeful side to the slump in copra prices

From a Honiara correspondent With plunging world copra prices it looks as if the main prop sup porting the current Solomon Islands Development Plan has been all but undermined. The three-year plan goes into its second year this month. It was born at the March, 1971, meeting of the Governing Council—a time, incidentally, when first grade copra was fetching SAI4O a ton here.

Exactly a year later, at the begin ning of March, a fretting BSI Copra Board, with a wary eye on its rapidly diminishing reserves, dropped the price by another $l5 for all grades of copra. The new price, at $BO a ton for first grade, was still one of the highest prices being offered to the producer in the whole western Pacific area. But at this rate the Copra Board was still losing $l4 for every ton of copra it bought. Exactly ten days later the board succumbed and prices for all grades tumbled a further $l5 to a grand total of $65 for Ist grade.

It has got to the stage where, with the government bending over back wards with financial aid for the pro ducer, one could be forgiven thinking it may perhaps have barked up the wrong tree.

However, the day after announcing the March 1 reductions government officials and politicians— not least the Chairman of the Governing Council’s Natural Resources Com mittee David Kausimae—were quick on the rebound.

Grumbles and threats or either total closure or massive labour lay offs by plantation owners were reach ing the capital, but they could expect little sympathy from the administra tion. It is a more or less open secret that Agricultural Department director Hector Davidson, who also happens to be chairman of the Copra Board, has little time for moaners and grumblers. There was nothing the

government could do about it any way.

The government’s message to the people, although not exactly opti mistic, was far from pessimistic.

The Agricultural Department was able to get an oar in on its plans for diversification and block develop ment, using the current copra crisis to advantage. In pointed statements over the Solomon Islands Broad casting Service, aimed more at the Solomon Islands farmer rather than plantation owner, the department ex plained how cash crops such as chillis, ginger and turmeric could make up losses during the bad times.

Mr. Kausimae took the opportunity to point out that with efficient farming methods and use of superior varieties of trees available here, the little man—providing he was handy to a market or shipping point— could make two or even three bags of copra with much the same effort as he previously made one. So what was the problem? Government grants are available, not only for coconuts, but also for cattle, pastures and fencing—provided with the good wishes of the British taxpayer.

But there is one problem—as both Kausimae and Davidson are well aware—which cannot be handled by government or hired experts, for it is very much in the hands of the people. The problem is mainly sociological. It is how to get people

living in their traditional way on unproductive areas to come and live on proven productive areas more suitable for block development and commercial farming.

During the past five years the ODA’s land resources division, which has a registered team in the Solo mons, has been busily marking off thousands of acres of land deemed to be “opportunity” areas. This means that these areas are geophysically suitable for developing roads, wharves, storage, marketing facilities and even basic forms of processing.

There are now seven opportunity areas marked off on Guadalcanal and eleven on Malaita totalling some 300,000 acres. And there is promise of a lot more on the way.

The government now has to figure out a way to provide an incentive for people to move onto these areas, without their sniffing a plot. As Mr.

Davidson puts it, “they have to believe they thought of the idea in the first place”.

And in one or two cases it is actually working. At the beginning of March it was learned in the capital that the Parara people of Vona Vona island off New Georgia had taken it into their heads to build their own road. It was said that the road would open up several thousand acres of productive land. They now want help with this road, even though it was not listed on the Development Plan,

and it looks very much as if they will get it.

There are also at least two large chilli farms starting production on Malaita, and some thirty acres of turmeric will have been planted down in Santa Cruz by mid year.

The government’s chief research officer Derek Taysum points out that all these schemes require plenty of labour and with the Solomon Islander’s natural community minded ness this is no problem.

And what works for quick cash crops also works for communal coconut and cattle farming. The profit margin is greater and each member of the line gets his due share.

All in all, what on the surface

portended a major disaster for the Solomons could yet prove a turning point in agricultural thinking. The basic policy of government emphasis on copra production still stands, although emphasis has swung towards streamlined efficiency in all aspects of the industiy to absorb world market fluctuations.

As usual, two views

of price control

Complaints in Western Samoa about the high prices of goods late last year prompted parliament to pass the Price Control Act, 1971. Consumers said the prices were too high, they were

changed far too often, and they were not uniform.

A full three months later, the Chamber of Commerce came out fighting, calling the act “unfair” and “impractical”. It said the act did not make allowance for changing overseas costs and that if the act were allowed to stand, merchants might have to sell below cost or else flout the law.

But a member of the Bills Com mittee countered by saying that prices of goods could be changed after six months on application to and ap proval of the Price Control Board.

“Merchants are free to reduce their prices but they cannot charge above the ceilings established by the board,” he said.

What the act stipulated was that any price could not be increased within a six month period. When such a change was needed, an ap plication would have to be made to the board and sufficient evidence must be given to the board to show why the increase was needed, said Vincent Brebner, Price Control Officer.

The Chamber of Commerce has come back with a protest on the specific issue of the price of sugar.

The arbitrary period of six months in which no change can be made has meant that with overseas increases the landed cost of sugar in Western Samoa exceeded the selling price limits established by the most recent price control order. A spokesman claimed that a merchant had to sell at a loss or stop ordering sugar, in which case the public would suffer.

Copra dips to

lowest for years

Copra prices for April shipment fell to a 15-year low at SUSI2B a ton, Philippines, and they are likely to fall even lower before picking up at the end of this year.

The latest fall is part of a steady decline since 1970, when, with oil seeds generally in short supply, copra was fetching nearly $3OO a ton.

A drop in prices for competitive oils and a big upsurge in crops from the Philippines, by far the world’s biggest producer, are the two major causes for the current bad times.

The Philippines expect a record crop of 1.76 million tons this year, well above the previous peak of 1.58 million tons in 1966.

However, respite for growers is in sight. Coconut oil demand is now building up under the stimulus of extremely low prices, and copra is coming back into favour with refiners who crush it for copra cake, used for animal feedstuffs, and coconut oil.

No funds for hopeful

home builders

A bitter blow to would-be home builders in Fiji in March was the announcement that the main source of loans for middle and upper-income homes had virtually dried up. Reply ing to complaints that loan applica tions had been frozen for more than a year, manager of the Home Finance Company, Mr. John Sands declared that the company itself was having trouble obtaining funds.

“We cannot obtain money on suitable terms for new loans, but are still carrying clients to whom advances were committed before we ran into difficulties,” he explained.

Mr. Sands said that part of the company’s finance came from the Commonwealth Development Cor poration and part was floated in Fiji.

The company was trying to obtain funds on suitable terms from both these sources—and was “just as con cerned with the situation as were its clients.”

Meanwhile, there is speculation in Fiji over whether the newly-estab lished Savings Bank of Fiji, formerly the Post Office Savings Bank, will make funds available at reasonable interest rates for home buildings.

The savings bank is to be divorced from the government and will be come a statutory body in full com petition with commercial savings banks.

The government proposes to employ an advisor for two years to help in setting up the bank—possibly with the assistance of Australia’s technical aid overseas scheme.

It is to be hoped that the money deposited in savings accounts by Fiji people will be recirculated in the form of loans for building houses and similar projects. For the average person in Fiji, it is virtually impos sible to obtain bank finance for housing, on terms that are practical.

Even bank employees themselves say, that something like 60 per cent, of Fiji citizens’ savings is being invested outside Fiji.

At the same time, savings bank interest rates are pegged by govern ment at a level lower than that of Australia, where much of the money is being invested. In an editorial about home financing, The Fiji Times re marked: “There is something radically wrong with the present situation when soaring rents are causing increasing hardship, while the agency created especially to help new houses to be built can get no money to do its job, although the savings of the com munity are being accumulated in large sums to give the lenders, by govern ment direction, only a 2J per cent, return on their money.”

Bank gets moving

A nine-man board of directors, consisting of the Trust Territory Deputy High Commissioner and members appointed by the Congress of Micronesia and the six district legislatures, is now being set up in Micronesia to do the ground work for the establishment of the Bank of Micronesia. The bank, to be owned and operated by Micronesians (shares at S5O each are to be sold to Micro

nesian citizens), is to be in operation by April 1, 1973. The Micronesian bill to establish the bank was signed into law in February.

Pacific Harbour's

Singapore deal

Pacific Harbour, Fiji’s biggest development project, got extensive coverage in the UK Press in March on the news of the international dealings of the 41J per cent, project shareholder, Slater Walker.

“Haw Par Joins in the Fung”, “Trader Jim—One and Two” and “Slater property build-up in the Far East”, ran the headlines.

Mr. Lindsay Vincent, a finance writer with the national daily Guardian, estimated in print that South Pacific Properties, the Nassau based holding company for the Fiji project, would make £890,000 profit (over 5F2.2 million) this year from sales of Fiji land.

But what interested the London Press was the purchase by a Slater Walker Singapore associate company called Haw Par of a majority stake in a Hong Kong “front” group called King Fung.

This sale was worth £1.3 million (about SF3 million).

It was subsequently announced that for an outlay of £13.7 million, or about SF3O million, King Fung was to buy SPP, of Nassau.

The deals are subject to not less than 75 per cent, of the SPP equity being offered to King Fung and the directors of Slater Walker are to accept for their own holding.

SW recommended the offer to other SPP shareholders, who include two astute Canadian businessmen, Messrs.

Peter Munk and D. W. Samuel, Jardine Matheson and P&O.

Said one paper: “ITEM: a Chinese puzzle. Players: Jim Slater, Lord Geddes (P&O), some Canadian entre preneurs, gentlemen from the honour able company of King Fung, and

directors of the equally honourable Haw Par.”

“Locations: downtown steamy Nassau, Hong Kong, Suva and London. Fung and profitable games for all.”

As one observer told a PIM man in London; “It’s great international financing, and profits for Slater Walker. But I’m not sure what Fiji gets out of it all.”

Solomons tourist

authority gets teeth

The Solomon Island Tourist Authority has at last been given some teeth in the form of legislation to

“promote the orderly growth of tourism in these islands.” Although this power was conferred on the authority as from February 1, for some strange reason the general public did not get to hear about it until mid-month.

The new ordinance was designed to protect both tourists and islanders, not only from each other, but also from local entrepreneurs and outside speculators. The aim of the bill is; . . to afford requisite protection to tourists and to control the operations and development of such organisations as cater for tourists . . .” In doing this the authority will also “have due regard to the customs, culture,

tradition, beliefs and welfare of the indigenous inhabitants of the (Solo mons), and so ensure that in pre sentations to tourists tradition will be rigidly adhered to . .

The authority will now proceed almost two years after its formation with its duty of inspecting and licensing hotels, shops, entertainers, taxis and any other undertaking which has dealings with tourists. Reason for the delay in ordinance was bluntly enough given in the authority’s February bulletin. It blamed it squarely on a “tangle of red tape.”

However there was more to it than that, as there are many different shades of opinion on how a tourist industry should be run in the Solo mons. This varied from extensive tourist development to those who did not want tourists at all. Somewhere between this the government chose a controlled policy with maximum indigenous participation.

Fiji tourism

Work on Fiji’s first national tourism development plan has at last begun.

A $300,000 survey on the future of Fiji tourism has been launched. The aim is not to promote tourism, but to plan all aspects of its growth, says resident manager of the project, Mr.

Edward Inskeep. He says about three quarters of the work will be done in Fiji, with about 20 people working in the dominion at one time or another during the next six months.

The major concern in planning the project, is the preservation of the local countryside while making maximum use of roads, water and power supplies and related infrastruc ture. One situation to be avoided is the pre-emption of major recreational sites, such as good beaches, by tourism developments so that the local population can’t get to them.

$1 million land sale

US publisher Mr. Malcolm S.

Forbes in March bought Laucala Island in Fiji for SUSI million, cash, from Morris Hedstrom Ltd.

It’s understood Mr. Forbes, 53, wants to develop the 3,017-acre island, north-east of Taveuni, as a meeting centre for executives, com plete with home sites.

The transaction also brought real estate broker Robert Hunter’s name back in the news. Mr. Hunter, who is married to a former Fiji Miss Hibiscus, negotiated the sale between Mr. Forbes and Morris Hedstrom Ltd., which bought the island in 1949. Mr. Hunter is back in Fiji, and again running South Sea Lands Ltd. $1 million is the largest sum yet paid in Fiji by a private land buyer.