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Papua New Guinea's Coffee Context

August 05, 2016
Category: in PNG Travel and Program Updates

I wrote a brief blog before travelling to Papua New Guinea for the first time. Now I am back after a short trip to the Highlands, and thought that my armchair article (here) could benefit from a recap. There are a few points I made which deserve different emphasis. Not so much misstatements as understatements, lacking in context. And so, those of you interested in smallholder specialty coffees from PNG, read on for context. --  Jake Elster, Crop to Cup Coffee Importers. August 5th 2016.


 on airstrip coffee and geography

Unlike other coffee-growing areas I’ve been too, once you get there, PNG is incredible accessible. Ninety percent of the country’s coffee comes from the Highlands region, which stretches between the Southern Highlands, Western Highlands, Simbu (or Chimbu) Province, the Eastern Highlands and Morobe Province. Between Simbu and the Western Highlands there is a new Province as of 2016 called Jiwaka Province; this is still not show on many (any?) maps. The town of Hagen in Western Highlands, and moreso Goroka, in the Eastern Highlands, serve as points of collection for smallholder or ‘airstrip’ coffee.      

political-map-of-papguinea

Further East, in Morobe, you’ll find the port town of Lae as another collection center for what is known as ‘coastal coffee’. Whereas airstrip coffee comes into Hagen or (more often) Goroka by truck (or plane), coastal coffee comes into Lae by boat. This could be lower altitude farms around Lae, or from farms which find it easier to go north, to the ocean, as opposed to South and East across a mountains and valleys. Since coffee is not tracked as it crosses provinces there is no reliable count as to what coffee comes from where, however most Y-grade coffee (read: smallholder parchment, read: 90% of the country’s export volume) comes through Goroka.

You would know this immediately upon landing in Goroka, a shining town clearly cut out of the wild landscape. If you are sitting on the right during landing, and look out the window, you will see every PNG exporter’s office lined up along the airstrip. Goroka is a coffee town – it’s why you come here. And it’s well located; 3 hours in either direction will take you through a vast majority of the Highlands growing region.

airstrip-min

But what variety you can find this relatively short stretch! Loamy grasslands, volcanic foothills, limestone river basins – you probably toss an aerobe from one micro-climate to the next. And this is where the future PNG’s specialty coffee becomes interesting.

Unlike other coffee growing regions of the world, villages in PNG are organized along house-lines. This means that each village is one extended family, making lot separation by nano-region more possible.

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REGIONAL CUP CHARACTERISTICS. Over time the world can look forward to exploring this rich variety, one village at a time. But before getting to the village level we first need to get lots separated by District. There are multiple Districts in each Province, and anecdotally at least, we have an idea of what flavors to expect out of coffees from each province.

Now what follows is far from fact, but moving from West to East there seems to be a clear drift in cup characteristics. Mount Hagen in the Western Highland has cold wind over sandy, loamy soils, which may contribute to the heavy body and intense character of coffees from this region.  Simbu Province is high atop limestone; local buyers said they could recognize beans from this area from their darker green appearance. The Eastern Highlands are known for producing more neutral, tea-like profiles except for coffee collected from around the town of Kainantu, which is heavier and more full in character (like coffee from around Hagen). Like Hagen, this could be because the cool breeze from the coast makes it’s way through a valley and all the way to Kainantu, making it colder than other parts of the Eastern Highlands.  Furthest east is the Province of Morobe which, generally at lower altitudes, produces coffee with heavier body and lower acidity.

IMG 20160716 165757-min


 on grading and smallholders

My last article spent a lot of time talking about the grading system in PNG, only to find that it’s soon to change yet again. More, for now at least, terminology is likely to differ supplier to supplier.

The good news is that these changes are being driven in the interest of quality, and towards the potential, eventual benefit of smallholders. To review, grades were initially assigned according to where coffee was purchased – all smallholders fit into one category, ‘Y-Grade’. Later this was expanded with the Premium Smallholder Coffee (PSC) Grade, a premium grade given to any smallholder coffee coming from a controlled point of purchase (i.e., consistency from cherry through drying).

 

PREMIUM SMALLHOLDER COFFEE. The PSC grade is a benefit buyers, like us, who will pay exporters a premium to juice up our ‘Y’ grades. Next, this premium benefits those blockholders who can sell in cherry to wetmills and estates and receive a portion of that premium. Note that Estates get ~60% of their coffees from neighboring blockholders. And, lastly, the PSC premium benefits those few smallholders wo are members of a cooperative and who are lucky enough to live close enough to a Centralized Processing Unit (CPU).

To recap, the PSC premium is an additional designation for Y-grade coffees which have been treated consistently from collection in the cherry, through pulping, processing and drying. This means that if they can deliver in the cherry the farmer gets a better price (about 20 Toyah / Kilo cherry, equal to 1 Kina per kilo parchment, or ~$.20 USD / lb in green eqv).

To get this price, however, farmers need to deliver cherry.  Cherry, which is five times as heavy as parchment. Long distances. In all this means that the PSC premium is open only to those who live close to a CPU, estate or wet mill, or who hire transport whose cost is nearly equivalent to the PSC premium. Where you live, more than anything, is what decides how your coffee gets categorized through the system as it is today.

 

COFFEE INDUSTRY CORPORATION. The ‘system’ I’m referring to is the grading system and other standards maintained by the Papua New Guinea’s Coffee Industry Corporation Ltd (CIC). Despite the corporate name, the CIC is a governmental body responsible for ‘providing leadership and support’ to the country’s coffee sector

And they have new leadership themselves; although acting since 2015 Mr. Charles Dambui was recently elected the acting CEO of the CIC. A few of Mr. Dambui’s new programs point towards progress – at least in the eyes of those looking for sustainable and sensational smallholder coffees.

For example, they are a few years into a regional quality competition which, to-date, has yet to pull off anything open to outside buyers. Each district has winners roll up to a province-wide competition which, in turn, feeds into a national competition.

Interested I contacted the CIC and, within a week, arranged to have Crop to Cup host the first international cupping of these competition coffees. This is not only very exciting for us, but a positive endorsement of the CIC’s attitude towards working with others.

We will have to wait and see what comes out of this event – to be hosted in NYC at a TBD date. But for now we know that this coffee competition is raising awareness of quality amongst some farmers, and has the potential to help us all learn about what micro-lots are available from the different micro-climates.

Auction coffees area always the exception, but when combined with the CIC’s new quality-based grading system the impact could be more micro-lots coming available at export. It appears as if the new system, not yet in effect, would provide a quality-based grade of ‘A’ or ‘B’ to Y grade coffees. These would have higher standards for liquoring and green bean defects.

Though not regardless of where it was grown, or how it was purchased, such a system would allow for coffee collected in parchment some upward mobility. It might put incentives in place for more micro-lots to make their way up to the export level, even as ‘airstrip’ coffee (in parchment). It might also be an indication that top-lots are going to get a bit more expensive now that exporters can classify coffees in a way that’s more calibrated with specialty markets. It is not, however, a sure thing that these premiums will trickle down to the farm-gate level anytime soon, especially in the absence of well-led cooperatives. And so, as far as farmer benefit goes, this is another ‘wait-and-see’ program to me. But it is a better system for specialty coffee buyers, and does pave the way for farmers to receive quality-based incentives at some undetermined point down PNG’s road ahead. 


on cooperatives, blockholders and estates

CHALLENGES FOR SMALLHOLDER COOPERATIVES. My previous article mentioned, off-hand, that smallholders were the future of coffee in PNG. But it did not address why there are so few smallholder cooperatives in PNG. While I reserve the right to change my mind as I learn more, our most recent conversations point to a few reasons for this.

Coffee is not a big deal to farmers in PNG. Family is. Coffee pays for the exchanges and social obligations one had to every marriage, birth and death in their house-line or clan. It paid the school fees for children. It pays for metal roofs, a practical and visible sign that you are providing for your family, and progressing as a household.

But getting there means getting your coffee to market. This is not an easy task for any subsistence smallholder, especially one in a terrain such as PNG. In other parts of the world this is where the smallholder cooperative comes in to help get their member’s coffee to market. But, as their name implies, cooperatives require cooperation.

Cooperation is made more challenging by a complex web of family and tribal relationships, which leads to small circles of trust. Outside the family, or certain negotiated relationships, there is not enough social capital for easy trust. While most everyone speaks the national language of Tok Pisam, this pidgin described to me as incapable of narrating a boxing match. The language is lacking in nuance, leading to the heavy use of metaphor and a real chance of miscommunication.

When it comes to cooperation these cultural challenges by a real lack of infrastructure, but human and physical. Since reforms in the ‘80s forbid any foreigner from owning farms there has been a marked decline in the financial and human capital required to get coffee to market.

Trees are old; 30-40 years old on average. They are of good stock and properly spaced, and even stumped in some cases. But they are not pruned and have incredibly low yield. Looking at a coffee garden next to someone’s vegetable garden and you see where their passion is. Coffee isn’t taken seriously – it’s certainly not a business. Even if you don’t take much care of your coffee tree you get some money from it. But if you don’t tend to your vegetables everyday you get nothing. And so when you go to bend your back you do so to create beautiful raised vegetable gardens instead of repopulating aging fields of coffee.

Farmers are choosing vegetables over coffee, and that is a big deal for those of us who enjoy PNG-style deliciousness. Over recent years exporters have seen a decrease not only in the quantity, but in the quality of coffee that gets to them in Goroka.

 


 on blending and lot separation 

Maybe I can make this more interesting by reminding you that 85-90% of the country’s exports are Y-grade smallholder coffees. Smallholders from literally hundreds upon hundreds of micro-climates. More than micro-climates, each village has a slightly different way of growing and processing coffees. This variety is what gives even the most conventional Y-grade it’s flavor and complexity. But, as of now, this coffee is blended before it gets up to export. 

Blending starts at the farm level; farmers will use coffee to pay off social obligations first, then sell whatever is left to the market. There is no tracking coffee as it travels across borders, nor as it changes hands between truckers, middle-men or the other agents who aggregate ‘airstrip coffee’. Even Estate coffees, perhaps your safest bet for traceability, purchase over half of the coffees they sell as parchment from neighboring blockholders.

For farmers to care about their coffee they need a few things to happen. Namely they need to know that their coffee is not being blended. Right now coffee is out of sight and out of mind at upon delivery. But it is different when you know that your brand reaches coffee lovers. When you know that one buyer keeps your coffee separate while others blend, you give that collector your very best beans.

What farmers really need is to take care of their coffee gardens – they could double their yield, and income, through standard Good Agricultural Practices. While they are caught in a cycle of neglect and indifference, perhaps the PSC premium – because it multiples the value of every Kilo delivered - would be the incentive that leads to better care of trees.

PSC premiums would help farmers to sustain momentum, and pay up for labor or transport if needed. Getting there requires that cooperatives expand collection centers, and/or providing transport through donkeys or zip lines.

 


 apo, angra, anga and kange cooperative

AAAK Cooperative, for example, operates three collection centers to service about a quarter of their 64 cluster groups. They intend on building three more to cover up to extend the PSC premium to about half of their members. And the CIC’s new grading system makes the room for premiums for parchment collected from the other half, at some point, if the coop is strong.  

For a coop to be strong it needs to involve younger generations. This is true across the world where students and young adults leave the security of the farm for the excitement of the city.  Involvement in coffee gives young people more connections in their community, provides the labor needed during harvest and keeps continuous the knowledge passed down from parent to child.

And for this reason I was impressed to see AAAK Cooperative hire a youth programs coordinator, for this very purpose. This is the biased account of a specialty coffee buyer who was recently blown away by the hospitality, vitality and possibility of PNG. A promise, really, which in my mind is embodied by the AAAK Cooperative.

And so if you are interested in the future of smallholder specialty coffees from PNG then I recommend you keep an eye on AAAK; as leaders they will be the first to encounter – and overcome – the many challenges ahead. Also keep an ear out for that CIC regional coffee auction mentioned earlier; it could point you where to look for younger AAAK-type cooperatives.

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 on identity, diversity and possibility 

All in all PNG one of the most enjoyable, personable and engaging coffee growing origins I have been lucky enough to visit. The hospitality and vitality was overwhelming, as was the coffee, the context in which it’s grown and it’s potential.  This blog was built on notes taken between dinner and breakfast at 30,000 feet, but despite the thoughts being fresh, there was no real way to capture the experience.

Zooming out, my central theme here is an exploration of diversity in the context of possibility to describe a coffee context that I found to be wholly unique. In fact each moment, each village and cluster group, was itself entirely unique and different.

Before my visit I wrote about modern-day PNG as made of more than bright headdresses and exotic chants. Yet, while there, I didn’t take many pictures of coffee trees.  Compared to the vibrant personalities of each village, the aging coffee trees seemed particularly boring. It made me realize that coffee from PNG is interesting because it is from PNG, which is unique, diverse and full of possibility.

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