Soaring Cost Of Coffee Has Been A Boon For Papua New Guinea Farmers, But Challenges Remain – CoffeeTalk

Coffee has been the lifeblood of rural communities in Papua New Guinea for decades, providing livelihoods and connecting the nation to global markets. As international coffee prices surge to unprecedented levels, farmers face a windfall, but the challenge for many within government is to address systemic and long-standing issues that have prevented them from fully reaping the benefits of these high prices. According to Kina Bank, coffee prices jumped a staggering 70% in 2024, with an additional 18% increase in the first quarter of 2025. These elevated figures are largely attributed to adverse weather conditions in major coffee-producing nations like Brazil and Vietnam, creating a global supply deficit that PNG farmers are now helping to fill.

For the majority of rural highlands households reliant on coffee, this translates to tangible benefits, such as improved living standards, better access to education, and greater financial security. Robert Solala, a coffee farmer and community leader in Nivi village, Unggai-Bena District, Eastern Highlands, said that coffee is everything, paying for school fees and cultural obligations. The surge in income is driving a mini-boom in local economies, as farmers spend their newfound earnings on goods and services, stimulating wholesale and retail trade.

ANZ Research forecasts Papua New Guinea’s GDP to grow by 4.7% in 2025, largely powered by exports of coffee, cocoa, and palm oil. This economic uplift is also playing a crucial role in easing the country’s persistent foreign currency issues. However, the difficult realities for many coffee farmers continue largely unabated.

The PNG government, with international support from the World Bank, has been working to boost the coffee industry and ensure its benefits reach the grassroots. However, legacy problems like land disputes and bad roads present a tricky situation for those driving intervention programs. The PNG Agriculture Commercialization and Diversification (PACD) Project, managed by the Coffee Industry Corporation (CIC), is a multi-million dollar initiative designed to empower farmers and enhance productivity.

Potaisa Hombunaka, the project coordinator in the highlands, believes that bad roads remain the biggest obstacle to achieving high coffee export figures demanded by Prime Minister James Marape. He believes that experts who plan in air-conditioned offices in Port Moresby need to go to the villages and understand how people live. Under the PACD Project, the focus has shifted to enhancing the ability of farmers and PNG exporters to actively participate in global trade.

Through the PACD, coffee farmers are receiving direct assistance in various forms, such as the distribution of high-quality coffee seedlings, essential farming tools, and the construction of vital infrastructure such as coffee training centers, storage sheds, and wet mills. In Goroka, Las Malo, a family-owned coffee processor, has just begun using an electronic color sorter, which quadruples production and removes the need for manual labor.

However, there is still a tough nut for the PNG government to crack. The vast majority of coffee exported comes from smallholder farmers who cultivate coffee on their customary land. Since Papua New Guinea’s independence in 1975, much of that land has been taken over by its customary owners, many of whom are embroiled in long-running land disputes, some spanning 40 years.

The interventions are not just economic but also fostering social change. In areas previously affected by tribal conflict, coffee initiatives are becoming powerful tools for peace and community building. For instance, the Kualga Women’s Development Association in Nebiliyer has received significant funding through the CIC-PACD Project for a nursery, office, and wet bean factory, boosting coffee production and bridging relationships damaged by decades of unrest.

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