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Crashing crops see little revival hope

A depressed world market and internal problems are turning planters away

By Robin Bromby

THAILAND has ordered 100 million cocoa hybrid seeds developed by Papua New Guinea researchers, while Indonesia and Malaysia are bringing new plantations into production next year to which will mean even more cocoa dumped on a depressed world market. Two public sector superannuation funds have had to come up with more of their members’ money to rescue one of the country’s largest plantation companies.

Meanwhile, copra is being shipped from the Solomon Islands to keep the coconut oil mill at Rabaul in operation while coconut growers in the area are threatening to poison their trees.

Pacific Islands Monthly reported last issue that the crisis for Papua New Guinea’s agricultural sector continues to worsen. But nothing seems to be able to halt the decline.

Now the government has confirmed it will use money from the National Provi dent Fund and the Public Officers’

Superannuation Fund to keep New Guinea Plantations Pty Ltd from having to cease operations. The two funds own 56 per cent of the company, and have

already injected large amounts of money

(some reports speaking of several million kina since world prices collapsed) to meet revenue shortfalls . Now the government is to divert another K 700,000 (U 55648,000) into the company.

The decision brought a vociferous response from unions with members

covered by the two superannuation funds, including the Public Employees Union, PNG Teachers Association and unions from the telecommunications, transport and harbours sectors. Union leaders warned there would be industrial chaos if more superannuation money was lost in plantation ventures. He said the govern ment was using the funds as “mini

political banks”.

It is hard to see a solution. Both the key growing areas of the country have critical problems: in North Solomons province the central government has still been unable to restore its control and the plantations have been devastated. In East New Britain, the police have failed to suppress the gangs of criminals which daily terrorise plantation workers.

On top of that, neighbouring countries are about to significantly boost their

cocoa exports and so further depress world price levels. Indonesia will, dur ing 1991, see its new plan tations come into pro duction, Its labour costs are about a third that of Papua New Guinea. Ma

laysia, too, is lifting exports dramatically.

Even Papua New Guinea’s work in developing new hybrid varieties will injure its own industry: the country will see a massive increase in its cocoa crop next year as new plants produce between 2.5 and 3 tonnes of dry beans per hectare compared with current levels of about one

tonne. Experimental crops now being developed suggest production will eventually be lifted to 7 tonnes per hectare. Another ominous sign is that Thailand has ordered 100 million of these

hybrid seeds.

The Papua New Guinea army is attempting to re-establish central govern ment control on Bougainville Island, in North Solomons province, but reports from there as to the state of cocoa

plantations is uniformly depressing.

There is no question that it will take several million dollars to rehabilitate them, but there is considerable doubt whether the owners will be prepared ever to return to the island. The rebel forces and criminal elements have destroyed many of the buildings, cocoa plants have been burned and even those surviving have not been pruned or weeded for more than a year.

While the law and order problem in East New Britain is bad enough on its own, some of the larger plantation companies operating there also had businesses on Bougainville, a situation which has deprived them of 60 per cent of revenue and left them trying to survive in East New Britain at a time of low world prices and falling government price sup port.

It is unclear how many plantations on East New Britain have closed. News from

'The police have failed to suppress criminals which terrorise plantation workers’

some of the more remote areas is hard to come by, but many management agency firms have pulled out. These agents were appointed as a condition of PNG Development Bank loans to help

nationals taking over what were pre viously foreign owned plantations. Many of these management agencies have laid off expatriate staff and the farms they supervised are now in limbo the owners are still living there but unable to meet loan repayments.

Reports from the Gazelle Peninsula,

where many of the large plantations are located, indicate that anarchy now reigns, with managers and workers and their families subject to attack, rape, theft and assault. Many of the foreign owners are now prepared to walk away from their life’s work with nothing, just as many did last year on Bougainville.

The commercial banks have refused to allow a moratorium on loan repayments, while the government’s price support scheme is due to expire in April 1992. This three-year plan allows for the price support payments to fall each six months until it reaches zero at the end. At the moment, the guaranteed price is KlOB2 a tonne against a market price of K 920.

What will happen in the Papua New Guinea cocoa industry when price sup port runs out, no one can predict.

The planters’ association is concerned that many of the large plantation companies and even smallholder growers cannot survive even until 1992. The executive director of the Planters’ Associ ation of Papua New Guinea, David Loh, told Pacific Islands Monthly he was frus trated with the government’s attitude.

“It is difficult to convince bureaucrats, politicians and the government that without a plantation industry (which will not survive with such a bleak future ahead), the smallholder and village growers will suffer and possibly collapse,” he said. “The plantation sector has always been the leading edge in any innovations in rural industry,”

Copra’s future also looks grim. Plan tations are now losing money even with government price support, so low were world prices, said Loh many growers would poison their trees rather than meet the cost of maintenance. This in turn would lead to the closure of the country’s only coconut oil mill, owned by Carpenters (Coconut Products) Ltd. The mill is already operating at 20 per cent below full capacity even after importing copra from the Solomon Islands to meet overseas orders. □