Location:Western Province - PNG
Impact:10,000 by 2020
Crop:Rubber, rice and eaglewood
Stage:Build
Partners:Ok Tedi Development Foundation, Olam and Trukai

WHY


Being a remote area with limited infrastructure and access to markets, development of commercial agricultural systems that go beyond subsistence farming has been constrained. Over 20 years ago rubber trees were planted by farmers living in the North, Middle and South Fly Districts. The growth of the industry has been limited due to a lack of transport infrastructure to market. As a result, farmer incomes are well below their potential.

Along with natural rubber, rice and eaglewood have also been identified as crops suitable for the area that could provide the potential to deliver greater income opportunities for farmers.

HOW


The project looked firstly to redesign the rubber industry. To achieve this, Business for Development was commissioned by Ok Tedi Development Foundation (OTDF) to map the existing rubber value chain, identify new supply chain opportunities and introduce off-take partners. It was identified for growers to capture additional value, early stage processing should be undertaken by creating rubber sheets processed at a grower owned factory in Western Province. An agreement has been negotiated with Olam International and an MOU signed, introducing this global commodity trading company as a key commercial buyer and project partner.

Commercial rice production is a new venture for Western Province. Business for Development brokered an introduction to Trukai Industries, a PNG based subsidiary of SunRice, who have partnered with OTDF to provide technical assistance and develop local capacity to enable this. Trukai will also be the off-take partner for the rice produced.

WHAT


Business for Development is assisting OTDF to create the structure and governance model for the grower owned company, Western Agro Industries, which will be the trading company that markets the rice, rubber and eaglewood on behalf of all growers. Over time, it is anticipated that these initiatives will benefit thousands of Papua New Guineans in Western Province.

Rubber: with technical assistance supplied by Olam and equipment provided by OTDF to villages, communities will create rubber sheets. Through construction of a road, the sheets will be transported to Aiambak where a factory will be built to process the rubber which will be subsequently exported. This will provide immediate access to global markets for the  people of the remote Lake Murray, Middle and South Fly areas.

Rice: trials have been conducted in four villages in the North, Middle and South Fly regions to identify suitable varieties for the region. The harvested rice will be marketed by Trukai providing direct market access for growers and minimising the number of intermediaries.

Eaglewood trees: produce a resin that is highly sought after by the fragrance industry.  Growers are planting eaglewood saplings to harvest this resin when the trees mature which will further supplement their incomes.