The Papua New Guinea (PNG) Cocoa Board was established by an act of Parliament to be responsible for the regulation and development of the cocoa industry in PNG. The PNG Cocoa Board also provides budgetary support to it’s two subsidiary institutes, the CCRI and CCEA to conduct research, and extension services required for the improvement and development of the industry.
Cocoa is the next most important crop with 22% of the value of major agricultural exports. About 16% (93,000) of all rural households produce 65% of the crop and the balance comes from plantations annually. It has an area of 116,000 hectares with 49,000 ha under estates and 66,000 ha under smallholder. Private exporting companies market all cocoa beans to overseas destinations. The Cocoa Industry board performs a regulatory function in terms of quality control, export licensing and fermentaries registration.
Annual cocoa earnings for the country averaged around K60 million up to 1984 when it declined more than 49% to around K33 million in 1993. A steady increase in cocoa earnings for the country was realised after 1994 thereon from K39 million to K85 million in 1998 as a result of improved prices and the evaluation and the subsequent flotation of the local currency, the Kina.
Cocoa’s contribution to agriculture exports accounted for an average of 18% between 1984 and 1991 reaching a peak of 21% in 1987. Since 1992 cocoa production has been on a decline coupled with relative prices, which are the major causes of decline in cocoa’s contribution to the total agriculture exports earnings, which dropped by 15% in 1994 to 8 percent. Thereafter in 1995 it has increased modestly by 10% to it’s current 18 percent.
Gross Domestic product of cocoa continued to decline from 2.9 percent in 1984 to 0.5 percent in 1993 and slight increase of 0.8 percent in 1994. This declining trend is attributed to an increase in the proportion of the mining and petroleum sector’s increased share of the GDP.
The cocoa industry in PNG is fully liberalised from growing through to pricing and exporting. The private exporters solely conduct marketing of cocoa. The cocoa Board’s roles and responsibilities under the Cocoa Act is limited to regulate, monitor, and promote the growing, processing, and marketing of cocoa, and to provide market intelligence for the benefit of those involved in the industry.
By 1999 there are about fifteen licensed cocoa exporters in the country who either sell their own cocoa or buy cocoa from smallholders as well as from the plantations for exports.
Until recently cocoa production in most provinces and been on a decline due to various reasons apart from the unrest on Bougainville and the natural disasters. The chief constraints faced by the cocoa farmers and the industry in general are considered to be as follows; poor infrastructure in road and marketing outlets, low world prices, lack of transport accessibility, lack of finance and no better options or alternatives from enterprises.
The sustainability and the future of the cocoa industry in PNG depend on three most important factor’s .These are (1) rehabilitation on Bougainville and other potential areas of the country, (2) various assistances by the Government and the industry, and (3) farmers response to international price movements.
The two main factors, expansion and rehabilitation and the forms of assistances provided by the Government if are accomplished, production is expected to increase by as much as 20-30 percent in the next five years. Rehabilitation programme presently undertaken on Bougainville may result in production increase by 7,000 to 8,000 tonnes by the turn of the century. It is anticipated that the impact of all forms of assistance provide under various schemes may result in total production increase to over 40,000tonnes in 1999 – 2000 cocoa years.
In lines with the Government policy to go into downstream processing of all its agriculture exports. the cocoa Board considering to go downstream, producing cocoa liquor and cocoa butter depending on the outcome of a feasibility study.
The Board expects that increase in production resulting from all the new initiatives undertaken so far will be used in the local plant, while at the same time sustaining and increasing the volume of bean exports.