Improving productivity of the smallholder oil palm sector in Papua New Guinea: a study of biophysical and socioeconomic interactions

Papua New Guinea

Katherine Gibson
Phone: 02 6125 3154
Fax: 02 6249 4896
Email: katherine.gibson@anu.edu.au

• Oil Palm Research Association, Papua New Guinea
• Curtin University of Technology, Australia

$299,784

01/07/2000 - 30/06/2001

01/01/2002 - 31/12/2002

Dr Ken Menz

Oil palm is one of PNG's most successful rural industries. While the plantation sector has a strong presence, the smallholder sector is important, covering almost half the total production area. Yields are lower in the smallholder sector, and productivity levels vary considerably within the sector. Much of this variability is attributed to sociological and economic factors, and this project will examine how these factors interact with biophysical factors. Recently one of the companies operating in the industry has instituted a program of payments for women smallholders who gather 'lus frut' - oil palm kernels that fall from the bunch during harvest - and there was a need to evaluate this initiative.

The project's primary objective was to gain a more comprehensive picture of biophysical and socioeconomic interactions in the PNG smallholder sector. A secondary objective was to evaluate the Lus Frut Mama Scheme to gain insight into its effect on oil palm production and how it had reshaped women's relationship to the oil palm production process. A third objective was to develop strategies for more effective interventions within the smallholder sector.

The research project focused on two of the oil palm growing regions of PNG, namely the Hoskins project and the Popondetta/Oro project. The program consisted of site visits and grower surveys to assess the production capability of smallholders. In-depth interviews were given to a selection of growers and households. Upon completion of the site visits and sample surveys in each project area a workshop held with Oil Palm Industry Corporation (OPIC) field extension officers reviewed initial findings, and officers were invited to participate in the research process. The research team considered a plan of action research involving smallholders, women and OPIC extension officers, to draw into the process their knowledge and ideas of how to improve productivity in the smallholder sector.

The study found that under-harvesting was a major contributor to lower productivity in the smallholder sector and traced this practice to a number of key issues that also contributed to the failure to administer fertiliser and maintain blocks. Increased population pressure meant that many blocks were now supporting multiple households. Where multiple families resided on the blocks a variety of production systems had evolved. Highest productivity was achieved where family members worked together in a shared wok bung production system. Many families, however, resorted to a rotation system, makim mun, whereby different households took turns to harvest the crop and receive the oil palm cheque. This could lower the labour input and often resulted in poorer productivity. Remuneration for labour performed on the blocks was a contested issue that was not governed by clear agreement and as a result labour was withheld from the oil palm production system.

A second major finding of the research was the extent of reliance upon food gardens. This was one of a diversity of economic activities that placed other key constraints on oil palm productivity. Traditional pursuits at certain times of the year, e.g. fishing, were more lucrative than oil palm. Although such alternative demands upon labour time could have a negative effect on oil palm productivity, the researchers noted that in the context of rapid population growth they could have a positive impact on productivity, through reducing conflict and providing additional sources of capital for farm investment.

Land insecurity was a further constraint, in that it provided a disincentive to invest in long term-block improvements such as fertiliser uptake or replanting.

In the face of these factors that contributed to lower production levels, the study found that key industry and OPIC interventions were having a major positive impact on smallholder productivity. The 'Lus Frut Mama' scheme was providing substantial benefits for approximately 3000 local women. Each received a 'Mama card' to record her own collection output, and from this it was found 'lus frut' collection represented approximately 25% of total production. These results were an encouragement to widen the scheme to other oil palm or cash crop areas.

Managers of the Oil Palm Industry Corporation believe that this project has already contributed to a change in industry attitudes. Benefits include increased yields from smallholder blocks, an increase in income for women and new spinoff schemes they established - for instance many formed groups to market used clothing, and they also wanted to market their garden produce.

In August 2003 the Centre for International Economics completed an Impact Assessment of the Mama Lus Frut scheme for ACIAR. The Assessment focused on the poverty reduction impacts of the project, concluding that the scheme had increased the incomes of oil-palm producers, many of who were barely above the poverty line. This has had a corresponding effect on improving welfare among oil-palm producers beyond that attributable to the income increase. Channeling a greater percentage of household income to women increased total expenditure on items such as food, clothing and education, empowered the women by granting them a greater degree of economic independence, and empowered children because the households now could find money for school fees.