Facilitating Agricultural Commodity Trade

The European Union-funded Facilitating Agricultural Commodity Trade (FACT) pilot project aims to support commercial ventures and producer groups in becoming export-oriented, market-driven enterprises that will consistently supply overseas markets with competitive agricultural and forestry products. The project is implemented by the Land Resources Division of the Secretariat of the Pacific Community (SPC) in Suva, Fiji and started in May 2008.

PNG’s rural coffee growers count the beans
Tuesday, 05 April 2011 13:57

SPC helps farmers get more benefits

Coffee farmers from Buang Village in the Morobe Province learn about bean quality at an SPC FACT training workshop.Did you know your morning cup of coffee could be a driver of change?

Change is certainly afoot in Papua New Guinea (PNG), where a Secretariat of the Pacific Community (SPC) pilot project is working with three coffee companies to bring wide-ranging benefits to rural communities.

The Facilitating Agricultural Commodity Trade (FACT) project works with the private sector towards poverty alleviation. Funded by the European Union, the project is unique in the Pacific Islands region.

Launched in 2008, FACT provides technical assistance to 18 partner enterprises (in seven Pacific ACP countries) across their entire supply chain. It proposes a triple bottom line approach, focusing on people, planet and profit.

In PNG, FACT has assisted with the certification and training of rural farmer networks for three fledgling companies that abide by this ethos: Earth & Spirit Products, Monpi Coffee Exports Ltd and Niugini Tea, Coffee & Spices.

In the case of Earth & Spirit Products, FACT has financed the company’s Rainforest Alliance certification, a globally recognised stamp for environmentally sound business. This has helped the company earn a higher price for its coffee, in turn yielding a higher farm gate price for the farmers.

Earth & Spirit works with an extensive network of small coffee farmers in the Mangalas Plateau, a volcanic plateau about 1200 meters above sea level, to produce certified organic coffee bound for Australian and US markets.

Started in 2005 with about 65 permanent and casual employees, Earth & Spirit grows the Arabica species of coffee. Arabica is the bean of choice for connoisseurs and thrives in tropical highland climates. The company’s coffee has been certified organic by the National Association for Sustainable Agriculture Australia (NASAA) since 2006.

Compared to the Robusta species, which is used mainly for instant coffee, Arabica fetches a higher market price for growers and vendors alike.

Through FACT’s technical assistance, Earth & Spirit Products has grown the number of rural farmers in its production supply chain from 2235 in 2008 to 2345 in 2010.

The majority of these smallholders, who run farms between one and ten hectares, have no other means of earning much needed cash to procure basic necessities.

For the year ending 2010, Earth & Spirit exported a total of approximately 3000 bags of coffee, which resulted in a net increase in revenue to both farmers and the company of about 40 per cent from the previous year.

To take up the slack between coffee harvesting seasons and help its network of remote, rural farmers by providing them with a market for another cash crop, Earth & Spirit expanded into the production of perennials, specifically bird's eye chillies, in 2010 – and again FACT was there to provide assistance.

The project engaged a specialist to convert an existing warehouse space to a passive solar dryer, which helped the company meet the standard moisture content required for storage and sale of chillies.

With assistance from FACT, transport costs were reduced and quality was improved, allowing farmers to receive higher prices for their chillies.

By year end, Earth & Spirit had exported its first container of chillies to Australia (the first container of chillies to leave PNG in nearly 30 years), and the company plans to export more than 10 containers this year.

This will significantly impact the livelihoods of the farmers they work with, who will now have access to more dependable income year-round.

Earth & Spirit is also planning to diversify into ginger, a new crop, this year with technical assistance and training from FACT.

In the case of Goroka based Monpi Sustainability Services, which has a smallholder network of 1500 farmers, FACT has assisted with organic and food safety compliance, carrying out pre-certification training for four communities (nearly 1400 growers).

Through the training of trainers and working with staff at Monpi’s processing facilities, the project hopes to enable Monpi’s growers to access higher value, certified export niches.

Meanwhile, Lae based Niugini Tea, Coffee & Spices works with an extensive network of 1900 smallholder growers in the Morobi Province and highland areas of PNG.

Having worked hard to access higher value certified markets for its coffee by obtaining organic and Rainforest Alliance certification, the company is now moving towards developing single plantation and smallholder branded coffees.

However, the quality of coffee they receive from smallholders fluctuates dramatically as a result of the processing technologies employed by the growers.

Farmers also lack the capacity to carry out many of the bookkeeping tasks required by the auditors to maintain organic and Rainforest Alliance certification.

FACT is helping Niugini Tea, Coffee & Spices improve the quality and traceability of coffee it receives by training farmers in the use of hand pulpers and fermentation boxes as well as business and bookkeeping.

Gains made by the enterprises translate directly to gains for the farmers, which is good news all around.

For more information, contact Rajan Sami, SPC FACT Writer/Sub-Editor ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

 

 


The European Union-funded Facilitating Agricultural Commodity Trade (FACT) project is implemented by the Land Resources Division of SPC.