Problem in the Bougainville cocoa industry

Leonard Fong Roka

Cocoa famer Patrick Erengona from Kaino village in the hinterland of Arawa earned K680.00 for two bags of dry bean cocoa in the last week of May and considering the cost of goods and services on Bougainville such an amount is not enough to sustain the livelihood of families and all problems goes into the cocoa industry ownership issue.  

In a story, Bougainville soon to be a cocoa leader (Post Courier, 18 November 2004 in page 17) by Eric Tapakau, it was said that by the end of 2004 Bougainville should have 30 million cocoa trees and there was a feasibility study for a proposed cocoa factory on the island led by the Cocoa Board of Papua New Guinea and spearheaded by the European Union.

To this day there is no evidence of any tangible socio-economic progress for the people and the autonomous region as a whole as should be as indicated by this media release. And the problem as should be is the ownership of the cocoa industry of the island.

Bougainvillean farmers are not the owners of their cocoa but the real owners are the non-Bougainvillean buyers and dealers. And in the 2008 research work, Market chain development in peace building: Australia’s roads, wharves and agriculture projects in post-conflict Bougainville, Ian Scales and Raoul Graemer reported (page 24) that Bougainville cocoa since being purchased directly by Rabaul-based buyers has been misattributed as East New Britain cocoa.

This is of course a direct exploitation of the Bougainville economy and the poor Bougainvillean farmers like Patrick Erengona of their resources’ earnings.

Ian Scales and Raoul Graemer (page 25) noted the Rabaul-based buyers in the 2005-2006 window as the Agmark, Outspan and Garamut. These companies operate as direct buyers of dry bean cocoa and also operate their dealers of local buyers that purchase cocoa and sell back.

And their chronic problem has been the raise of ‘black-market’ and ‘grey-market’ cocoa that affects monitoring by the Cocoa board of PNG (Bougainville) and proper earning schemes for agents and the Bougainville economy.  This is to do with registered and unregistered fermentary sheds around Bougainville and their distant masters.

The distant between these Rabaul-based buyers and their agents on Bougainville; the distant between the Rabaul-based buyer’s office in Buka and its agent in Arawa or Buin complicates things.

‘Grey-market’ cocoa is when a local dealer buys cocoa from unregistered fermentary, brands it with the number of a registered fermentary and sells it on to a cocoa exporter whilst ‘Black-market’ cocoa is unbranded and unreceipted and eventually mixed with legitimate produce for export.

 

The Bougainville branch of the Cocoa Board thus finds it hard to monitor, control and protect Bougainvilleans in terms of their income and pricing. This weakness had over the years attracted dozens of non-Bougainvillean companies entering Bougainville further complicating things for the under staffed Cocoa Board of PNG.  

 

And the impact is on the little growers and farmers like Erengona. Mr. Erengona’s fermentary is unregistered but sells his cocoa to a clansman who he says is an agent to Outspan. Thus he cares less about registering for he says Cocoa Board of PNG does nothing good to help him.

 

Cocoa Board of PNG does nothing good for Patrick Erengona and thus here is now a window for political intervention by the Bougainville government for its citizen’s betterment and its own internal revenue sourcing.

 

According to Ian Scales and Raoul Graemer (page 26), in the 2004-2005 Bougainville produced 15 670 tons of exportable cocoa matching the pre-crisis average of 15 600 tons. This quantity with the world market pricing of that period which was about K3 900 per ton (2006 price) could have fetched the Bougainville economy some K59 million if Bougainville had its own company in charge of it cocoa industry.

 

When non-Bougainvillean companies control the cocoa industry of Bougainville, farmers like Erengona, are exploited and the government keeps wailing to re-open the Panguna mine with foreign consultants screaming into its ears, ‘Re-open Panguna and your GDP will rocket into the space and we give you more loans to keep you under control.’

 

Erengona harvests about 140-170 kilograms of wet bean cocoa to ferment that to one standard exportable bag of 63.5 kilograms of dry bean bag. And in such places like Kaino caring for cocoa plots; harvesting and fermenting and accessing the market is labour intensive and costly.

 

So his recent earnings of K340 per bag is a disadvantage for him and the Bougainville economy where the cocoa industry is not own by Bougainvilleans or their government.

 

Since cocoa is one major income earner for Bougainvilleans the Bougainville government must seriously take control of the industry.

 

‘Bougainville is taking all the powers and functions of government from PNG,’ Erengona says, ‘so it’s about time it forms his own cocoa board and also form a true Bougainvillean company to export the cocoa we produce.

 

‘With that I think the price of cocoa on Bougainville will triple and that the internal revenue of Bougainville will rise and there is no need to destroy our environment with the re-opening of the Panguna mine since Bougainville is a small island.’

 

To Erengona Bougainville is being exploited yet of it enormous economic power from this single cash crop to advance above with its political journey towards referendum to decide its political future by foreign companies and its own myopic politicians.