Brief History of Oil Palm Development in Papua New Guinea

Germans were the first to plant oil palm in 1894-95 on the Rai Coast of Papua New Guinea (Sack and Clark 1979, quoted in Grieve 1986). The Germans also established additional experimental plantings in the early 1920s near Popondetta in Northern (Oro) Province (Landell Mills 1991). Commercial plantings were established in 1967 following a World Bank recommendation that oil palm on a  nucleus estate-smallholder system be introduced to New Britain or Bougainville  to diversify the agricultural economy and increase the export income of Papua  New Guinea (IBRD 1965; Grieve 1986).

Smallholder Schemes - Hoskins, LSS

The smallholder land settlement scheme developed by the administration at Hoskins was based on land holdings of approximately 6-6.5 hectares. It was expected that 4 hectares would be planted to oil palm, and the remaining area reserved for food gardens. Groupings of approximately 130-320 blocks became  subdivisions, each with a central community centre containing a primary school, health centre, agricultural extension office, designated market area, stores and recreational facilities. Blockholders acquired 99 year agricultural leases over their blocks and were provided with loans from the Papua New Guinea Development Bank (PNGDB) for house building, oil palm seedlings, tools, land rent and to cover living expenses while waiting for the first harvest (Jonas 1972; Hulme 1984). By independence in 1975, 1,536 LSS blocks had been planted to oil palm and the project’s target of 1,560 blocks was achieved in 1975/76 (Hulme 1984, 241).

Hoskins, VOP

Following the initial development and establishment of the LSS scheme, attention was turned to indigenous landowners in the Hoskins area. The VOP project initially encouraged local villagers to plant 2 or 4 hectare blocks of oil palm on customary land, but most have planted only 2 hectares. Villagers were provided with PNGDB loans to develop their blocks and between 1970 and 1975, 182 VOP blocks were established (Leach and Benjamin 1984, 17). By the end of 1980 there were 418 blocks. VOP blocks were slow to develop at Hoskins, although further expansion was stimulated in 1986 followingassistance from the Asian Development Bank (Christensen 1986).

Bialla

The government and company viewed the Hoskins scheme as a success because it surpassed many of its early production and earning goals (Hulme 1984, 253) and provided an impetus to regional growth and development in the province. Its perceived success led the government to set up similar oil palm nucleus estate-smallholder schemes at Bialla and Popondetta. The Bialla scheme was established in 1972 following a joint agreement between the government and a Japanese company. However, a dispute between the government and the company delayed the commencement of the project and in 1977 a new agreement was signed with SIPEF (Belgium) and Warrens (United Kingdom) (Christensen 1986). A joint government and SIPEF-Warrens venture company, Hargy Oil Palms was formed. The basic operation and structure of the Bialla scheme mirrored that of the Hoskins scheme whereby the company partners agreed to develop a nucleus estate of oil palm and a processing mill and the government opened alienated land adjacent to the estate for smallholder leasehold settlement.

Popondetta

The Popondetta Oil Palm scheme was initiated in 1976 following arecommendation that the failed Popondetta cocoa scheme be redeveloped as a nucleus estate-smallholder oil palm project (Harrison Fleming Advisory Services 1973 quoted in Hulme 1984, 216). In 1976 the government entered into a joint venture agreement with the British Commonwealth Development Corporation (CDC) to redevelop the 16,000 hectare cocoa scheme into an oil palm nucleus estate-smallholder project (Grieve 1986). The two parties formed Higaturu Oil Palm Plantation Ltd (HOPPL2). In 1976 work began on developing a 4,500 hectare estate and processing facilities.

Milne Bay

Milne Bay started in 1985 following government approval for the development of a K60 million oil palm and cocoa scheme (Grieve 1986). The government in a joint venture with Commonwealth Development Corporation planned to establish 4,000 hectares of oil palm and 750 hectares of cocoa (Christensen 1986, 139), and Milne Bay Estates Ltd was formed (now a subsidiary of Pacific Rim Plantations Ltd). The project, with World Bank funding, was seen as a major vehicle for bringing sustainable economic development to the province.

New Ireland

New Ireland is the most recent and smallest oil palm scheme in Papua New Guinea. The company, Poliamba Pty Limited (subsidiary of Pacific Rim Plantations Ltd), operates the estate and mill process and was formed in 1998 following the restructuring of a group of cocoa and copra plantations in that province (Papua New Guinea Oil Palm Association 1998). The company completed most of its planting in 1992 and plantings total around 5,200 hectares (ADS (PNG) 2001).

Current State of Oil Palm Industry in Papua New Guinea

Most of the development of the oil palm industry occurred in the decade 1975-1985. Since the first commercial plantings in 1968 at Nahavio, West New Britain over 50,000 hectares are now under estate cultivation and over 43,000 hectares have been planted by smallholders. Since 1997 approximately, 11,463 hectares have been planted to mini-estates. Growth of the industry has benefited enormously by the introduction in the early eighties of a pollinating weevil3 (Elaeidobius kamerunicus) and more recently by higher yielding and disease resistant strains of oil palm. In terms of total exports the oil palm industry is emerging as the most important agricultural export industry in Papua New Guinea. Over the last few years oil palm has been one of the fastest growing agricultural exports in the country and  has performed remarkably well, especially compared to other tree crop exports (Tables 1.2 and 1.3). Last year the value of oil palm exports exceeded coffee for the first time (DAL data, 2001). In 2000 oil palm exports accounted for 32% of the total value of Papua New Guinea’s agricultural exports, and 5% of  total Papua New Guinea exports (data held by DAL, 2001). The total value of palm oil exports for 2000 was K302.5 million, a substantial increase from K142.2 million in 1995.

AGRICULTURAL  DEVELOPMENT  PLAN

Palm Oil Development Project

Green – Hub Development Corporation Limited

Landowner Company

And

Alpha 79 Plantations Limited

Developer

CATEEL, DAVAO ORIENTAL, PHILIPPINES

Prepared by:

Lindo J. Canon, MSc, MPA, PRA

Dean, College of Agriculture

Chief, Plant Quarantine Service, Region XI, Philippines

Director, Quality Assurance-Fresh Produce (Tropical Fruits)

Specialist, Probiotics for Soil Amendments and Livestock Production

Specialist, Post-Harvest Pests Management and Control (Tropical Fruits)

Columnist, Philippine Regional News

Project Writer, PNG-Large Scale Agricultural Dev’t. Projects  

Bewani Oil Palm Plantations Limited

Section 32, Lot 11 – 14 (P.O Box 167) Vanimo, Sandaun Province, Papua New Guinea

Tel +675 457 1328  Fax +675 457 1875  

JUNE 2014