Agriculture in Papua New Guinea: a sector profile


A profile of the agriculture sector in Papua New Guinea, including governance and legislation, key players, opportunities, challenges and incentives.

Tea and coffee growers in Papua New Guinea’s Highlands. Credit: Asian Development Bank/Flickr

Industry snapshot

Around 26 per cent of Papua New Guinea’s Gross Domestic Product (GDP) is derived from agriculture. According to the World Bank, agriculture is the second largest contributor (17 per cent) to total export earnings after minerals (77 per cent). Palm oil, which accounts for 51 per cent of total agriculture exports, is the largest contributor, followed by coffee (27 per cent), cocoa (15 per cent), and copra and copra oil (7 per cent). It is estimated that more than 80 per cent of the country’s population is engaged in semi-subsistence food production.

Except for palm oil and copra, there has been a steady overall decline in agriculture export volumes over the last decade. Over the period 2009–18, exports of coffee and cocoa fell by 6 per cent per annum on average while copra oil exports declined by around 20 per cent over the same period.

Exports of copra oil have continued an upward trend, however, rising by 8.2 per cent between 2017 and 2018, according to the World Bank. Exports of palm oil decreased by 3.3 per cent over the same period. In 2018, agricultural exports were worth K3.798 billion, according to the Bank of Papua New Guinea.

PNG’s climate and high seasonal rainfall, good quality soil and low-intensity farming methods, make for a favourable environment for agricultural activities. The PNG Government estimates that about 24 per cent (23,080 square kilometres) of the country is considered suitable for intensive agricultural production without major soil-quality limitations.

Despite this comparative advantage, the level of production from commercial plantations has declined in the last five years due to rising labour costs and overhead costs and management and land tenure issues that have led to the closure of some big estates. Rapid population growth, issues of food security, land shortages, and natural disasters also pose threats.

Diseases have also been a problem. The sector has been affected by the Bogia Coconut Syndrome (BCS), the Coffee Berry Borer (CBB) and the Cocoa Pod Borer (CPB). These have depressed production levels, especially between 2011 and 2016.

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Lae is the most important port in terms of PNG’s agricultural exports. While production is spread across many of the country’s provinces, the Highlands region is especially important for some of the most lucrative crops, particularly coffee. Cash crops are generally produced on plantations, although some local farmers operate on a small-scale level, and sell on to plantations.

The government’s policy is focused on improving the quality and quantity of traditional staple crops, marketing, rural credits, food processing and downstream processing, packaging and distribution.

According to the World Bank, coffee accounts for about a third of rural villagers’ annual cash income; 22 per cent comes from fresh foods, 10 per cent comes from betel nut and copra, and less than 3 per cent each comes from oil palm, firewood, fresh fish and shellfish, potato, tobacco and livestock. Ninety per cent of the rural population is engaged in earning cash income from agriculture.

Governance and legislation

PNG’s Department of Agriculture and Livestock is responsible for all agriculture and livestock industry matters. Its departments and programs include policy planning, food security, education and training, science and technology services, and provincial and industry support.

According to the Government’s Medium Term Development Plan 2018-2022, the Department’s focus is on rehabilitating run-down plantations, establishing strong governance with clear policy guidelines, developing a biosecurity strategy and addressing major impediments to growth. There is also an intention to establish partnerships with the private sector, provide legislative and policy frameworks, establish a central data centre to coordinate and track progress of the sector for future planning, and promote research and development for addressing food security issues and improving the quality and yield of food crops.

Other quasi-government agencies with responsibilities in the sector include: the Oil Palm Research Association, National Agricultural Quarantine and Inspection Authority and the National Agricultural Research Institute. PNG’s Conservation and Environment Protection Authority (CEPA) also holds responsibilities in the agricultural sphere. It administers the Environmental Planning Act, conservation acts, International Trade (Flora and Fauna) and Water Resources Act among other relevant legislation.

The ongoing Productive Partnerships in Agriculture Project (PPAP), funded by the World Bank, focuses on strengthening the agricultural sector through improved market access, improved performance in value chains, and the fostering of public-private partnerships.

The Australian Centre for International Agricultural Research also contributes to PNG’s agricultural development.


Cocoa tree in Papua New Guinea. Credit: RNZI

PNG is one of the few countries where cocoa can be grown organically and the country has developed a reputation for its high quality product. PNG is classified as a 90 per cent fine or flavour cocoa rating and supplies one per cent of cocoa of the world market, according to the Department for Agriculture and Livestock. Despite on-going challenges in the industry, including the impact of the cocoa pod borer, the value of PNG’s cocoa exports were K246.5 million in 2018, a jump of 22 per cent on the previous year according to the Bank of PNG.

Data from the Department of Agriculture and Livestock indicates that cocoa is grown in 14 of PNG’s 22 provinces with East Sepik, Bougainville, Madang, East New Britain, Morobe, West New Britain and New Ireland being the major producers. Ninety eight per cent of the crop is produced by rural households, according to the World Bank.

The Cocoa Industry Board regulates quality control, export licensing and registration. The Cocoa Industry Strategic Plan 2016–2025 maps out a strategy to plant 13 million new cocoa trees and increase PNG’s current export yield of 40,000 metric tonnes to 160,000 metric tonnes by 2022. It proposes a nursery program,a freight subsidy program anda cocoa Quality and Market Promotion Program. According to the Cocoa Board, this will earn K800 million in revenue per year upon maturity of the nurseries.

As well as cocoa for export, PNG is now using its cocoa in locally-manufactured chocolate.


Coffee  generated about 487.5 million kina (US$142.5 million) in exports in 2018, an increase of 8.3 per cent from 2017, according to the Bank of PNG.

Coffee is the second most important agriculture cash crop after palm oil to PNG and it is cultivated by over half a million households around the country. Almost 3 million Papua New Guineans rely on coffee for their livelihood.

The peak body for the industry is the Coffee Industry Corporation. After a year of research the CIC has identified six key areas that need to improve:

– Strengthen regulatory functions in the industry for licensed operators;

– Realign functional areas in the CIC to cater to emerging needs, resources, human talents and
organisational capacity development;

– Foster and actively promote partnerships and marketing;

– Revise and develop a standardised approach to extension inputs to improve market access, National Coffee Development production and productivity;

– Adopt an approach of intervention through organised farmer groups or at aggregate level;

– Develop technology-driven systems and processes for market information collection, analysis
and dissemination.

PNG primarily produces Arabica coffee beans, as well as a small portion of green Robusta beans.

The National Coffee Development Roadmap 2020-2030 (NCDR) has the bold aim to lift annual production to 3 million bags by 2030 (from under 1 million) and arrest the industry’s slow decline.

There are now numerous coffee exporters in PNG, including Monpi Coffee Exports, PNG Coffee Exports, Coffee Connections, New Guinea Highlands Exports and Kongo Coffee. The main buyers are Germany, United States, the Netherlands, Australia and Japan.


PNG copra exports were worth 120 million kina in 2018, up 3.6 per cent on the previous year according to the Bank of PNG. PNG exports copra, copra oil and copra meal. The main buyers are Australia, Germany, Philippines and Singapore. According to census figures, 35 per cent of total households in PNG, or an estimated 2.6 million people, are engaged in coconut activities in PNG to either generate income or to produce coconut as food to supplement their livelihoods.


Livestock contributes 15 per cent of total domestic food production (source: Department fo Agriculture and Livestock). PNG’s livestock industry has been in decline because of lack of proper management and support for the industry. PNG produces around 1,400 tonnes of meat annually which is all domestically consumed. Despite the country being well suited for livestock, production has not improved.

In March 2020, the Department of Agriculture and Livestock confirmed that African swine fever had been detected in PNG.

There are several poultry and egg producers in PNG, most of which are smallholders. The sector employs an estimated 3000 people. Major producers include Mainland Holdings and Zenag Chicken. PNG’s poultry sector has been under pressure because of the difficulties getting foreign exchange to buy feed. The industry is overseen by the Livestock Development Corporation.

Palm oil

Palm oil has become PNG’s most valuable agricultural export, accounting for K1.146 billion in 2018, according to the Bank of PNG. The World Bank says palm oil exports fell by 1.2 per cent in 2018. Much of PNG palm oil, which has a reputation for being produced according to the Roundtable on Sustainable Palm Oil (RSP0) standards, is exported to the European Union.

The industry covers an area of 144,183 hectares and is grown by smallholders (41 per cent) and large plantations (59 per cent). Over 200,000 people are dependent on the crop for their livelihoods.

According to the Medium Term Development Plan 2018-2022, major impediments to the growth of the industry include deteriorating public infrastructure and the absence of a regulator. The hope is to boost the industry by moving into milling and other downstream processing ventures.

Other agricultural exports

PNG’s other agricultural exports include rubber, tea, cardamom, vanilla, chillies, spices and many varieties of tropical fruits and vegetables. These crops are delivering opportunities for expansion, and in many cases, processed and downstream products.

The rubber industry provides employment opportunities to over 200,000 smallholder farmers. At present, there are three major estates in Western, East Sepik and Central provinces, managed by smallholder rubber farmers and private sector investors. The industry is aiming to increase rubber production by promoting downstream processing and encouraging more farmers to venture into the industry.

PNG spends about K400 million to import rice and the PNG National Rice Policy 2015-2030 outlines a plan to reverse this situation and make PNG become a rice producer and exporter. According to the Department of Agriculture and Livestock, PNG currently produces around 4,500 tonnes of rice per year, but it is not being properly marketed and distributed.

Major players

Types of rice produced by Trukai Industries in PNG. Credit: Trukai Industries

Trukai Industries operates rice farms in West New Britain, Central, Morobe and Oro Provinces and has a rice-processing mill in Lae. The company is continuing to expand its operations. It supplies domestic customers and exports rice to the Solomon Islands and Australia.

Lae-based Mainland Holdings is one of PNG’s largest agriculture companies, with products including poultry, eggs and flour. The company is looking to grow its own feed crops in PNG because of difficulties in getting foreign exchange.

New Britain Palm Oil is, after the government, the largest employer in the country, with almost 25,500 permanent employees on the payroll. The company supports 17,500 smallholder farms, many of which have co-resident families with an estimated total population of about 150,000. Smallholders represent about a third of the company’s crop production. Ninety five per cent of the company’s crude palm oil is exported, mostly to Europe.

Carpenter Estates, is a major tea and coffee exporter which grows and manufactures the two crops the fertile Waghi Valley of the Western Highlands and Jiwaka provinces. The coffee and tea are grown at 5000 feet and there is no use of pesticides or fungicides.

NGIP Agmark is a PNGX-listed diversified agribusiness, operating plantations, coastal shipping, hardware, machinery, trucking, logistics, and stevedoring. Based in Kokopo, it is PNG’s largest grower and exporter of cocoa, and also markets and trades in other agricultural commodities.

Innovative Agro Industry is an Israeli-backed agribusiness launched in 2014 specialising in the production of fresh fruit and vegetables and using modern, direct irrigation techniques. The company launched its first dairy farm and the 9 Mile Highlands Produce Depot in 2018 and has four major expansion projects underway for 2019: a second dairy farm, a frozen potato fries processing plant, large-scale coffee, cocoa, grain, stock feed processing and poultry production projects.

Opportunities and challenges

The fertile Markham Valley near Lae is one of PNG’s most productive agricultural regions.

Expansion of the country’s agricultural sector has been hampered by the country’s difficult terrain, coupled with an inadequate and erratically maintained road, sea, air and transport infrastructure, marketing depots, and law and order issues. The challenge of opening up the country for commercial production of food needs to be balanced with ensuring environmental integrity and meeting the needs and expectations of landowners.

Constraints to efficient and effective land use have historically been related to mobilisation and transfer. The PNG Government has indicated it will continue to take steps to amend the complicated laws governing land use, at both national and provincial level. The authorities have also been committed to developing new initiatives in land and land tenure that will contribute to economic growth and employment creation through more productive use of land resources throughout the country, while promoting economic participation and social stability.

The International Finance Corporation (IFC), a sister organisation of the World Bank, intends to do a scoping study on the Markham and Ramu Valleys, including mapping the geography and land ownership, to assess commercialistion opportunities.

PNG has the potential to make use of its low-tech farming practices, and, because of the of lack of pesticide and artificial fertilisers, can position itself as a leading organic producer. The country also continues to develop its Fairtrade credentials.

The Investment Promotion Authority (IPA) has identified specific investment opportunities in coffee, palm oil, cocoa, coconut/copra and all spice crops. The IPA notes that the government is focusing on downstream processing of agricultural products and potential investors are advised to tap into this area and to take advantage of the investment incentives currently provided by the government. SP Brewery’s cassava project, which has encourages the planting of cassava for the production of starch for local brewing, is an example of what could be done to expand the sector.

Papua New Guinea has a national E-Agriculture Strategy (2017-2023) for the sector. Productivity can be substantially improved with the use of digital technology.


Primary Production Investment Scheme
This incentive allows a deduction by shareholders against their personal tax liabilities. A primary production company that has incurred primary production development expenditure (defined to include cost of assets used for agricultural production) may surrender its available deduction in favour of its shareholders.

Primary production development expenditure includes the cost of assets used for agricultural production.

Tax deductions

  • 150 per cent deduction for R&D expenditure.
  • 100 per cent deduction for certain agricultural development expenses.
  • Pass through tax deductions to shareholders.
  • 150 per cent deduction for agriculture extension services.
  • Losses incurred in carrying on a primary production business can be carried forward indefinitely – they are not restricted to the seven year limit that applies generally to company tax losses.
  • Accelerated appreciation 100 per cent for expenditure on new plans or articles either used directly for agricultural production


What else would you like to know?

This sector file is a living document created as a service to our subscribers. It is updated from time to time, as new information comes to hand.

Is there something else you’d like to know about this sector? Is there new information we haven’t included? Let us know in the Comment section below, or email and we’ll look into it.


  1. Appreciate this, so much info given.

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