Licensed Operators Implement Government Coffee Price Support

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Thirty-five licensed coffee operators have so far received price incentive support under the Government’s Covid-19 stimulus package.

Coffee Industry Corporation Ltd (CICL) Acting Chief Executive Officer Charles Dambui said this during a recent disbursement of funds to the licensed operators.

He said the price incentive for coffee subsector targets the smallholders and block holders coffee growers who account for more than 85% of the national coffee production.

Dambui said the price incentive program is currently being implemented by licensed operators who have supply chain linkages with cooperatives and grower groups.

He added that CICL received K10 million from the government to roll out the price incentive program under the Government’s Covid-19 stimulus package, and hopes to bring it down to the growers’ reach through the licensed operators in the participating coffee growing provinces.

He explained that out of the K10m, K8m was put towards coffee price incentive whilst K2m was put towards intervention support.

“So far, we have disbursed over 50 percent of the funds to 35 licensed operators and 17 active cooperative groups under this government assistance program,” he said.

Licensed operators and cooperatives who have received assistance through this program are from Eastern Highlands, Western Highlands, Enga, Simbu, Jiwaka, Morobe, Madang, East New Britain, Central, and Robusta coffee farmers in East and West Sepik.

For the intervention support, active cooperative groups were selected with the help of CIC coffee coordinators in respective provinces to assist them with coffee rehabilitation, nurseries, coffee parchment buying and group enhancement initiatives.

Dambui added that the whole idea of the incentive program was to give the funding support to licensed operators for both wet and dry mills who will then ensure the price reach the farmers.

“We are using the industry regulatory policy guidelines and CIC Act to roll out this project. The idea behind this as initially announced by the Agriculture Minister is to have the threshold at K6 for parchment Class 1 coffee and K2 for Cherry coffee to the benefit of the growers at the farm gate.”

New Guinea Highlands Coffee Exports General Manager, Joelri Kalwij, said CIC is the coffee controlling body and knows who is licensed and who is not and should transparently run this program.

“As an exporter, we should be exempted; however, there is a cloud of influence by the exporters. We all have our agents and mills. Although, there is the broad spectrum of industry players, we have to thank CIC for this,” Kalwij said.

Mark Munnull of Kosem Coffee Ltd in Jiwaka said the coffee farmers in the remote areas appreciated the price increase, as the cost of moving their coffee out to the market is very expensive, and often they left with less returns after sales. “Now they are getting more back, and have more cash income to spend on their basic needs, after deduction of transport costs,” he said.

Munnull said the concern for the industry now is the sustainability of this program. “We are grateful for the support but want to see it being further boosted and on a timely basis into the future if we want our farmers to stay motivated and help us increase production.”

Managing Director of Kongo Coffee Ltd, Jerry Kapka said many coffee growers went direct to their depots in Kundiawa and Chuave to sell their coffee and receive the price support.

“We saw encouraging and improved quality coming into our depots and there was a feeling of excitement among our coffee growers and they started going back to their gardens,” Kapka said.

He expressed concerns with funding delays and sudden discontinuation of the support could have a bad implication on the farmers who have already been motivated through this support.


Charles Dambui
Acting Chief Executive Officer

New Guinea Highlands Coffee Exports General Manager, Joelri Kalwij receiving payment under the price support program from CIC’s Sam Menanga in Goroka recently.
Wanima Coffee Ltd Managing Director, James Pupune (left) signing the MoU before receiving payment for the coffee price support from CIC.
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