The Fresh Food Development Authority (FPDA) is the Government agency responsible for managing the fresh food and horticultural industry in PNG. The industry has new challenges in recent times given the increased consumer demand from the rapidly growing rural and urban populations, increased business activities due to the resource boom and competition from imports. Over the last few years, FPDA has been working closely with the PNG fresh food and horticultural farmers; many of whom are now gradually shifting from subsistence farming to commercial farming where they are now able to grow and sell produces in distant domestic markets.
FPDA now has contracted about 14,000 farmers from 32 districts in nine provinces. Collectively, these farmers have supplied over 12,000 tonnes of fresh produce in major PNG markets generating some K19 million for themselves and their families. Key challenges faced by the local farmers include poor road and transport conditions, high freight costs, absence of coordinated cool chain systems (post-harvest handling), poor flow of appropriate information leading to inconsistency in supply resulting in quality and supply issues to markets.
These challenges are further exasperated by inadequate policy and regulatory framework, and unnecessary bureaucratic red tape. Consequently, PNGs local fresh produce commodities are less competitive against the imports. This has resulted in many local vegetable producers missing out on domestic markets created by urbanization, mining, petroleum and other large economic projects. For example, the total estimate for fresh produce demand in Port Moresby is about 167,000 tonnes per year. It is estimated that peri-urban and rural farmers in local markets and street vending meet some 60% of this demand.
Current records show that there is about a 40% wastage when local farmers sell their produce through the formal system of retailers, wholesalers, caterers and formal markets because of perceptions of quality issues. According to data from the Customs Office, about 85% of fresh produce needs of resource projects are imported resulting in an opportunity cost of PGK500,000 per week for PNG translating to an import bill of K26 million annually.
In 2013, the domestic fresh food market in PNG was valued at K2.5 billion and this is expected to increase in future as our population increases. Recent studies have shown that while PNG’s food imports have declined from 9,200 tonnes to around 6,000 tonnes, we still import over 8,000 tonnes of food from overseas.
The recent ban on imports of some of the fresh food has shown that PNG local farmers are able to supply much of the domestic fresh food requirements. For example, currently around 4,900 tonnes of the estimated 6,600 tonnes of fresh food banned through the import restrictions is supplied by the local PNG farmers.
PNG village farmers face many challenges in the fresh produce industry and need more support from the government and other stakeholders. Some key constraints include access to credit, marketing, infrastructure, extension, training, pest and disease, delivery of agricultural services and others.
In 2015, DAL and FPDA in partnership with the Department of National Planning and Monitoring, the Department of Treasury and other Government agencies initiated discussions with the International Fund for Agriculture Development (IFAD) on the “Maket belong Villis Fama Project”. This Project aims to deliver three key objectives, and they are:
- Building and strengthening of ‘business partnerships’between farmers and their private sector partners;
- Building and strengthening of ‘networking’between markets, farmers and their private sector partners along the supply chain; and
- Strengthening of ‘Government institutions, systems and building of their capacity’in facilitating local and international trade of PNG’s fresh produce and horticultural products.
In December 2017, the IFAD Board in Rome approved the PNG “Maket bilong Villis Fama Project”for funding worth US$25 million. This Agreement, between the Government and IFAD was signed by the Treasurer in August 2018 which will be repaid over a period of 25 years including a grace period of five years, with interest at a fixed rate of 1.25 per cent plus a service charge of 0.75 percent per annum. Co-financing of up to US$25 million will be from the PNG Government mainly through in-kind contributions, and from other development partners.
The project will be implemented over a six-year period in six provinces. Activities related to the fresh produce value chain will be implemented in four provinces in the highlands region, namely, Western Highlands, Jiwaka, Simbu and Eastern Highlands and Morobe in the Mamose region. Galip nut related activities will be implemented in East New Britain.
Source: Extract from Ministerial Statement
