Papua New Guinea offers huge agricultural opportunities with greater potential for return on investment given its strategic positioning in the region, the vast untapped agricultural potential and an enabling policy framework, according to the Minister for Agriculture Hon John Boito. Speaking at the Hand-in-Hand Investment Conference of the Food and Agriculture Organization of the United Nations (FAO) in Rome, Italy, during October 14-18 2024, Minister Boito called on potential investors to consider PNG as an investment designation given the country’s vast potentials and the Government’s medium-to-long term priorities in growing the sector and the economy through the agriculture sector. He presented three priority investment plans (cocoa, vanilla and coconuts). Read below the full statement presented at the global FAO forum:

It is my pleasure to present my country, Papua New Guinea’s Investment Plans, at this 3rd Hand-In-Hand Investment Forum.

Firstly, I wish to extend to FAO the gratitude and a word of thank you from the Government and people of PNG for the partnership between FAO and Papua New Guinea (PNG), spanning over five decades, and the establishment of the PNG Country Office in 2013.

I am also hoping to sign off the Host Country Agreement during this forum or in the coming months – whenever the agreement is ready for signing between parties. The Host Country Agreement would elevate FAO’s roles and partnership in PNG’s development aspirations in the years to come. I also thank you for inviting PNG to this forum of great nations.

PNG is the largest island country in the Pacific and lies north of Australia. It is situated in the middle of Asia Pacific, especially South East Asia and Western Pacific. Current global conversations on Indo – Pacific are conversations that PNG must capture for our people and economy. You cannot pass PNG in the Indo-Pacific dialogue whether you travel from South to North or East to West – PNG is in the heart of it. In the coming 10-20 years, the economic combustion in Asia is expected to fire up to full throttle. PNG with her massive land mass and vast sea stands ready to harness from the growth that is taking place in Asia.

With a total landmass of 462, 840 square kilometers and a population of over 10 million people, PNG has a sizeable market and its appetite for investment is growing. Although the country has a GDP of USD25 billion, based on its extractive industries, there is a 40 % poverty level, mostly across the rural population.

With rich and highly productive volcanic soils, the country has three main farming systems; from subsistence to semi-commercial and commercial enterprising. PNG’s major agriculture export crops include Crude Palm Oil, Coffee, Cocoa, Copra, Spices, Rubber and Tea.

Agriculture contributes 28% to the national GDP and a current forex earning of 1.2 billion US dollars per annum.

The PNG Government’s Strategic Development Plan is to Diversify the Economy, away from Extractive Industries. The Government is focused on Commercializing Agriculture in the next 10 years to deliver Prosperity to the 80% of the population who are mostly rural-based.

The Strategic Priority Areas are for Deliberate Investment Programs to expand Agricultural Production and downstream processing by four-fold. These are outlined in the Government’s Medium Term Development Plan (MTDP) IV 2023 – 2027 and the National Agricultural Sector Plan (NASP) 2024 – 2033. The Key Targets to be delivered by 2033 from Agriculture Commercialization are a ten-fold increase in GDP (to 10 billion US Dollar per annum); creation of two million direct jobs and the establishment of 450, 000 Micro, Small and Medium Enterprises (MSME). The NASP targets reduction in Poverty Levels from 40% to 20% and reducing malnutrition in childbearing aged women and stunting in children from 48% to 10%. To achieve these targets, the agriculture sector, overall, must achieve the very ambitious outcome of around 11% growth per annum from 2024 and 2025.

Foreign Direct Investment is facilitated by the Government through the Investment Promotion Authority (IPA) and Special Economic Zone Authority (SEZA). The Government of PNG provides direct and indirect tax incentives for investors willing to invest in large Agribusiness while SEZA provides corporate income tax holiday, and exemptions from customs duties and withholding taxes. There are 12 designated Special Economic Zones (SEZ) dedicated to developing the agriculture industry, and downstream processing and value addition. The SEZs also cover other renewable sectors including fisheries, and forestry.

PNG has the third Largest World Tropical Rainforest (28.2 million hectares) and the largest biodiversity in the Asia-Pacific Region. PNG’s Rainforest Biomass contains a massive 4,730 million tons of Carbon.

PNG has 40% high poverty prevalence rate and up to 32% of Arable Land with Medium to High Agricultural Potential. Across the country, there is 5% high efficiency and 40% medium efficiency for operating Agricultural enterprises and only 30% of the country is accessible to urban markets within five hours.

The Government of PNG, which I represent here as the Minister for Agriculture, has medium and long term strategic and deliberate investment plans to support the 2030 Agenda by accelerating the transformation of our agrifood systems to be more efficient, inclusive, resilient and sustainable through better production; better nutrition; a better environment; and a better life, leaving no one behind.
More so to address SDG 1 (No Poverty), SDG 2 (Zero Hunger) and SDG 10 (Reduced Inequalities), as well as for furthering the broader 2030 Agenda.
The DIPs are in Specific Priority areas (SPAs) for greater investments in the agriculture sector. The opportunities are in our lower-hanging commodities for downstream processing and value addition.
I am here to invite you on behalf of the people of PNG to come and invest in these low hanging investment opportunities.
PNG has three priority investment Plans to present at this Hand-in-Hand Investment Forum.

1. Cocoa

Production is low-input smallholder-based production system,
150,000 households are engaged in cocoa production,
Producing 43,000 tons per year,
100 % export of dry cocoa beans,
Our cocoa is 75 % fine flavored, and
Cocoa production is profitable for all value chain actors.
Key investments Required:
- Modern processing facilities and equipment,
- Transport infrastructure for market access,
- Larger capacity nurseries to supply farmers with high yielding Cocoa Pod Borer tolerant cocoa clones for expansion,
- Capacity building of farmers on good agriculture practice (GAP) and management, and
- Credit and financial facilities and underwriters.

Investments in these areas will remove bottlenecks, mitigate risks and capitalize on the opportunities for geographical branding for niche and fine flavored markets,
Proposed investment plan requires an investment of USD 42.2 million for downstream processing and value addition of dry beans to cocoa butter and cocoa powder, and
Profitability indicators show Net Present Value of USD 535.1 million over 10 years with an Internal Rate of Return of 32%.

2. Vanilla

High value cash crop – supporting 130,012 households,
The Production is 100 % by subsistence-oriented smallholder household units,
PNG is 3^rd largest world producer with 300 tons per year from 1,918 ha of vanilla,
100 % export of dried cured vanilla beans,
Primary Processing (Green bean to dry cured bean) is the main value addition,
There is no domestic processing and value addition of lower grade beans (non-export quality), and
Increasing demand for natural flavors in food and beverage industries worldwide is driving the market growth.
Key investments Required:
- Supply solar-powered vanilla dryers,
- Invest in 1 x medium-scale vanilla processing factory,
- Invest in pathogen free nursery,
- Investment in Geographical Indications for branding and labelling to maintain consistency in quality,
- Invest in capacity building of farmers, and
- Provide underwriting services guaranteeing producers and processors and value chain actors to have access to credits and finances from financial institutions.

Investments in these areas will remove bottlenecks, mitigate risks and capitalize on the opportunities for geographical branding for niche and organic vanilla markets,
The proposed investment plan requires an investment of USD 24.3 million for downstream processing and value addition of vanilla, and
Profitability indicators show Net Present Value of USD 282.4 over 10 years with an Internal Rate of Return of 33.7%.

3. Coconuts

An important primary cash crop, supporting 440,328 households,
The total area planted is 560,000 ha with 14 million coconut palms,
The Production is 96,665 metric tons per year, with an Export Revenue of 37 USD per year,
PNG has a 1.1% share of global coconut products,
Current value-added products are Virgin coconut oil (VCO), copra (dried kernel), coconut oil extracted from copra (dried kernel) and copra meal (by-product of oil extraction),
Secondary Processing is mostly by local MSME are producing value added coconut oil-based products at cottage level,
Diversified utilisation of various coconut products are profitable ventures,
381 million coconuts nuts are locally consumed annually as food,
PNG produces high-quality white copra and virgin coconut oil products are exported, and
Market Opportunities exist for certified organic Virgin Coconut Oil command high premium price.
Key Investments
- Invest in modern processing facilities,
- Invest in road access,
- Invest in coconut nurseries,
- Invest in capacity building, and
- Investment in Credit provision.

Investments in these areas will remove bottlenecks, mitigate risks and capitalize on the opportunities for value added coconut products,
The proposed investment plan requires an investment of USD 61.4 million for downstream processing and value addition of coconut, and
Profitability indicators show Net Present Value of USD 349.4 million over 10 years with an Internal Rate of Return of 26 %.

In Summary

PNG is seeking a total Investment of 127.9 million USD for Cocoa, Vanilla and Coconut.

The Government of PNG has invested USD 18.0 million,
The balance needed is USD 109.9 million,
Up to 1.14 million people of PNG will directly benefit from these investments,
The average per capita income will increase by USD 1,463 per year, and
And a positive net carbon balance of 149,147 kilo tons carbon dioxide equivalent.

To conclude and as presented above, PNG plays a pivotal role as regional hub for business, trade and investment given the geo-strategic location and proximity to major regional markets in the Asia Pacific region.

If you invest in PNG, your Return of Investment would be in 10-12 years as compared to other countries within the region.

God bless you all.