How soaring prices are brewing prosperity for PNG's coffee farmers

RNZ News

3 days ago

Las Malo coffee mill
Photo:
Scott Waide
For decades, coffee has been the lifeblood of countless rural communities in Papua New Guinea, a crop that sustains families and connects this rugged nation to global markets.
As international coffee prices surge to unprecedented levels, and farmers experience a windfall, the challenge for many within government is to address the existing systemic and long-standing issues that have prevented farmers from fully reaping the benefits of these high prices.
The latest figures paint a remarkable picture. According to Kina Bank, coffee prices jumped a staggering 70 per cent in 2024, with an additional 18 per cent increase in the first quarter of 2025.
While there's been a slight dip in the current June quarter, prices remain historically high. These elevated figures are largely attributed to adverse weather conditions in major coffee-producing nations like Brazil and Vietnam, creating a global supply deficit that PNG farmers are now helping to fill.
For the vast majority of rural highlands households reliant on coffee, this translates to tangible benefits. More money in the pockets of smallholder farmers means improved living standards, better access to education, and greater financial security.
"Coffee is everything. We pay for school fees. We pay for our cultural obligations," said Robert Solala, a coffee farmer and community leader in Nivi village, Unggai-Bena District, Eastern Highlands - one of PNG's leading coffee-producing provinces. This sentiment is echoed across the coffee-growing regions.
Robert Solala, coffee farmer
Photo:
Scott Waide
The surge in income is driving a mini-boom in local economies, as farmers spend their newfound earnings on goods and services, stimulating wholesale and retail trade.
ANZ Research forecasts Papua New Guinea's GDP to grow by 4.7 per cent in 2025, largely powered by exports of coffee, cocoa, and palm oil. This economic uplift is also playing a crucial role in easing the country's persistent foreign currency issues.
While the figures look good, the difficult realities for many coffee farmers continue largely unabated.
Nivi village is located in a valley where getting a trusty Toyota Landcruiser to the community can take hours of pushing and pulling, especially after even a slight drizzle. The road leading to the village has deteriorated so much that farmers often walk for four hours, carrying 40-kilogram coffee bags, to reach the nearest truck stop. Even with these difficulties, the village still produces an average of 5,000 bags a year.
"This is something I am yet to understand. I don't know if the government understands the difficulties we face as farmers," Robert Solala said.
"We contribute to the economy of the country. We make the money. But we're not getting the help we need."
Solala is one of many smallholder farmers who continue to work the land despite the challenges. With the spike in coffee prices expected to be sustained for at least the next two to three years, he is hoping there will be long-term investments into transport infrastructure and farmer support.
The PNG government, with support from international partners like the World Bank, has been actively working to bolster the coffee industry and ensure these benefits reach the grassroots. However, it's the slow grind of legacy problems like land disputes and bad roads that present a tricky situation for those driving the intervention programs.
A cornerstone of these efforts is the PNG Agriculture Commercialization and Diversification (PACD) Project, managed by the Coffee Industry Corporation (CIC), PNG's administering body. Co-funded by the World Bank and the government, the project is a multi-million dollar initiative designed to empower farmers and enhance productivity.
For the PACD's project coordinator in the highlands, Potaisa Hombunaka, bad roads remain the biggest obstacle to achieving the high coffee export figures demanded by Prime Minister James Marape.
"If I had the financial ability, I would put all the money into roads," Hombunaka said. "So-called experts who plan in air-conditioned offices in Port Moresby need to go to the villages and understand how people live."
Potaisa Hombunaka
Photo:
Scott Waide
Potaisa Hombunaka has worked in the coffee-rich highlands for the last three decades. His intimate knowledge of landownership and the deadly disputes it can trigger make him a valuable government asset.
Under a similar project six years ago, Potaisa Hombunaka and his team oversaw the construction of what they called "coffee roads". These are short stretches of road leading into coffee-growing regions that drastically reduced the time it took for farmers to transport their coffee. Under the PACD Project, the focus has shifted to enhancing the ability of farmers and PNG exporters to actively participate in global trade.
"In 2023, coffee was the second biggest commodity traded on the world market. The first was oil. But our farmers get very little from the global trade. That has to change now."
The program has been careful with the partners it works with, avoiding any groups with unresolved land disputes.
Through the PACD, coffee farmers are receiving direct assistance in various forms. This includes the distribution of high-quality coffee seedlings, crucial for revitalizing aging coffee trees and increasing yields. In provinces like Chimbu and the Eastern Highlands, farmers have received thousands of seedlings, along with essential farming tools such as pruning shears and canvases.
The project also supports the construction of vital infrastructure, such as coffee training centres, storage sheds, and wet mills - facilities that improve the quality of coffee processing and help farmers fetch better prices for their beans.
In Goroka, Las Malo, a family-owned coffee processor, has just begun using an electronic colour sorter. The machine, which occupies two-thirds of a newly built warehouse, removes the need for manual labour and quadruples production.
"Since 2019, we've paid K13 million [kina] in taxes. We buy directly from farmers," said owner Ken Dumudi.
Ken Dumudi - owner, Las Malo
Photo:
Scott Waide
However, there is still a tough nut for the PNG government to crack. The vast majority of coffee exported comes from smallholder farmers who cultivate coffee on their customary land. While plantations with state land titles produced coffee from the 1960s through the 1980s, much of that land has, since Papua New Guinea's independence in 1975, been taken over by its customary owners, many of whom are embroiled in long-running land disputes, some spanning 40 years.
"All our coffee comes from smallholders," says Ken Dumudi of Las Malo. "Even us, we don't own plantations."
The interventions are not just economic; they are also fostering social change.
In areas previously affected by tribal conflict, coffee initiatives are becoming powerful tools for peace and community building. The Kualga Women's Development Association in Nebiliyer, for instance, has received significant funding through the CIC-PACD Project for a nursery, office, and wet bean factory. This project is not only boosting coffee production but also bridging relationships damaged by decades of unrest.
While the current climate is undoubtedly positive, challenges remain.
Issues such as pest management, declining production in some areas due to aging trees, and ongoing logistical hurdles in transporting coffee from remote farms to market still need addressing. However, with sustained high prices and continued support, the outlook for Papua New Guinea's coffee farmers is brighter than it has been in years, provided prices remain high and long-term investments are made into existing and new transport infrastructure.