IPP205 Public Disclosure Authorized
Social Assessment Report for the Smallholder Agriculture Development Project
Public Disclosure Authorized (SADP) Papua New Guinea
January 2007 Public Disclosure Authorized
Curry, G.N., Koczberski, G., Omuru, E., Duigu, J., Yala, C. and Imbun, B. Public Disclosure Authorized SOCIAL ASSESSMENT REPORT
List of Tables iv List of Figures vi List of Appendices vi Executive Summary viii
1. Introduction 1 1.1 Project Description 1 1.2 Purpose of the Social Assessment 2 1.2.1 Conceptual Approach and Methodological Framework 3 1.3 Background to Oil Palm in Papua New Guinea 5 1.4 Notes 6
2. Land Access and Tenure Security among Oil Palm Smallholder 7 2.1 Introduction 7 2.2 Land Settlement Schemes (State Agricultural Leasehold Land) 8 2.2.1 Transmission of Land Titles 9 2.2.2 Customary Landowner Demands for the Return of Leasehold Blocks to Customary Ownership 10 2.2.3 Disputes Between Long-term Caretakers and Leaseholders 12 2.2.4 Arrears in Land Rentals 12 2.2.5 Rising Population Pressure on Leasehold Blocks 13 2.3 Village Oil Palm (VOP) Holdings on Customary Land 13 2.3.1 Land Tenure Conflicts between Customary Landowners and other VOP Growers 16 2.4 Land Tenure Conversion (LTC) Blocks (Popondetta) 18 2.5 Customary Purchase Blocks (CPBs) 19 2.5.1 Undocumented Land Transactions 20 2.6 Strategies to Achieve Social Development Outcomes: Recommendations to Address Land Issues. 22 2.6.1 Agricultural State Leasehold land on Land Settlement Schemes 22 2.6.2 Village Oil Palm (VOP) Holdings on Customary Land 25 2.6.3 Land Tenure Conversion blocks 26 2.6.4 Customary Purchase Blocks 26 2.7 Notes 32
ii Context 34 3. Key Social Issues: Socio-economic and Political 34 3.1 Introduction Population Growth 34 3.2 Changing Demographic Environment: Smallholders 37 3.3 Changing Harvesting Strategies Among Under-harvesting and Household Labour Constraints: 3.4 39 Gender and Youth Issues 42 Food Security and Access to Gardening Land 3.5 44 A Diversifying Rural Economy 3.6 45 Roads and Transport 3.7 46 Material Welfare 3.8 51 Savings and Loan Repayments 3.9 53 HIV/AIDS 3.10 54 3.11 Law and Order Development Outcomes: 3.12 Strategies For Achieving Social Recommendations to Address Socio-economic and 54 Political Context and Infill Blocks 54 3.12.1 Loan Repayments for Replant Blocks Improving Living Standards through New Savings 3.12.2 57 Mechanisms Improving Living Standards Through Broadening 3.12.3 62 Research and Extension Programs Improving Income Security by Diversifying the Rural 3.12.4 63 Economy 65 3.13 Notes
66 Assessment 4. Institutional 66 Introduction 4.1. 67 Local-Level Government 4.2 67 Organisational Structure and Responsibilities 4.2.1 68 Administrative and budgetary management practices 4.2.2 70 LLG Relationships with their Communities 4.2.3 71 Summary 4.2.4 72 Local Community Organisations 4.3 73 Church Groups 4.3.1 75 Non-Government Organisations 4.3.2 75 Community and Village-based Groups 4.3.3 76 Oil Palm Grower Associations 4.4 76 Organisational Structure and Responsibilities 4.4.1 77 Administrative and budgetary management practices 4.4.2 78 Relationship with the Smallholder Community 4.4.3 79 Summary 4.4.4 79 Palm Industry Corporation (OPIC) 4.5 Oil 79 4.5.1 Organisational Structure and Responsibilities Practices 81 4.5.2 Administrative and Budgetary Management with Smallholder Community 83 4.5.3 Relationship 84 4.5.4 Summary Papua New Guinea Oil Palm Research Association 4.6 85 (OPRA)
iii 4.6.1 Organisational Structure and Responsibilities 85 4.6.2 Administrative and Budgetary Management Practices 85 4.6.3 Relationship with Smallholder Community 87 4.6.4 Summary 4.7 87 Strategies to Achieve Social Development Outcomes: Recommendations to Address Community Driven Development 88 4.8 Strategies to Achieve Social Development Outcomes: Recommendations to Strengthen the Capacity of Oil Palm Institutions in meeting the needs of smallholders. 91 4.9 Notes 96
5. Monitoring and Evaluation 97 5.1 Household-level Baseline Survey 97 5.1.1 Household Questionnaire Survey 98 5.1.2 Participatory Focus Group Discussions 99 5.1.3 Action Plan 100 5.1.4 Estimated Costing 101 5.2 Key Socio-economic Indicators 101 5.2.1 Socio-Economic Indicators for Component 1 101 5.2.2 Socio-Economic Indicators for Component 2 104 5.2.3 Socio-Economic Indicators for Component 3 106 Annex 1: Template for SADP household baseline and monitoring survey for replant blocks. 108 Annex 2: Template for SADP household baseline and monitoring survey for infill blocks. 117 Annex 3: Template for SADP household baseline and monitoring survey (general survey). 124
6. Bibliography 131
List of Tables Table 1.1 Areas planted to oil palm in each scheme and potential for infill. I Table 1.2. Estate and smaliholder production details for Hoskins, Bialla and Popondetta. 6 Table 2.1. The numbers and areas of LSS blocks at Bialla, Hoskins and Popondetta. 8 Table 2.2. The numbers and area of VOP blocks at Bialla, Hoskins and Popondetta. 14 Table 2.3. Potential risks and risk mitigation strategies on
iv 31 Customary Purchase Blocks. the early l 990s Table 3.1. Numbers of persons per block from projected through to 2011 for LSS blocks at Bialla, 35 Hoskins and Popondetta. harvesting practices. 38 Table 3.2. Population growth and changing blockholders with export Table 3.3. Percentages of LSS and VOP 44 cash crops other than oil palm. and Oro Province: Mandated minimum and actual LLG Table 4.1. 69 Village Services Grants (8 rural LLGs). LLG West New Britain: Mandated minimum and actual Table 4.2: 69 and Village Services Grants (10 rural LLGs).
Organisational strengths and weaknesses and capacity Table 4.3. of building needs of LLGs in the oil palm growing regions 71 WNB and Oro provinces.
The main NGO, CBO and church-related groups present Table 4.4: 72 in the three project areas. and capacity Table 4.5. Organisational strengths and weaknesses building needs of the various Church groups in WNB 74 and Oro provinces. and capacity 4.5. Organisational strengths and weaknesses Table and building needs of the grower associations in WNB 79 Oro provinces. at Smallholder initiatives and extension programmes Table 4.6. 81 Bialla, Hoskins and Popondetta.
Organisational strengths and weaknesses and capacity Table 4.7. 84 building needs of the OPIC in WNB and Oro Province. 86 Table 4.8. 2005 PNGOPRA research projects.
Organisational strengths and weaknesses and capacity Table 4.9. 87 building needs of PNGOPRA.
Matrix of data collection sites by type of smaliholder Table 5.1. 99 grower in each project area.
Action plan for household surveys and focus group Table 5.2. 100 from survey design to report writing. 1: Table 5.3: Socio-economic indicators for Component
v Smallholder Productivity Enhancement. 103 Table 5.4. Socio-economic indicators for Component 2: Local Governance and Community Participation. 105 Table 5.5. Socio-economic indicators for Component 3: Project Management and Institutional Support. 107
List of Figures Figure 1.1. Schematic representation of the relationships among the major tasks of the Social Assessment. 3 Figure 3.1. Housing type among VOP and LSS smallholders at Bialla. 47 Figure 3.2. Housing type among LSS smaliholders at Hoskins. 48 Figure 3.3. Housing type among VOP and LSS smallholders at Popondetta. 48 Figure 3.4. Main types of water supply among VOP and LSS smallholders at Bialla. 49 Figure 3.5. Main types of water supply among LSS smallholders at Hoskins. 49 Figure 3.6. Main types of water supply among VOP and LSS smallholders at Popondetta. 50
List of Appendices 1. Terms of Reference (TOR) for the Social Assessment of the "Smallholder Agriculture Development Project". 134 2. List of people and groups consulted at Hoskins. 141 3. List of people and groups consulted at Bialla. 143 4. List of people and groups consulted at Popondetta. 145 5. Institutional Capacity Assessment of Bialla Rural LLG. 146 6. Institutional Capacity Assessment of Ward Development Committee, Bialla Rural LLG. 148 7. Institutional Capacity Assessment of Hoskins LLG. 150 8. Institutional Capacity Assessment of Mosa LLG. 152 9. Institutional Capacity Assessment of Kokoda Rural LLG. 153 10. Institutional Capacity Assessment of Oro Bay Rural LLG. 155
vi EXECUTIVE SUMMARY
is to improve the living The development objective of the proposed SADP of oil palm growing provinces. standards of rural communities in selected areas oil palm sector is to be achieved through: (a) increasing smallholder This and (b) promoting productivity through capitalising on existing infrastructure, mechanisms. Three oil sustainable local governance and community participation located at Hoskins, Bialla and palm schemes are included in the Project; these are project components: Oro. These objectives are to be achieved through three planting additional oil palm Component 1: This component will support: (a) existing provincial access roads blocks, each 2 ha in extent (up to 9,000 ha) along areas covered by oil palm through in-filling on land still available within the demand; (b) the upgrading infrastructure in response to smallholder smallholder oil palm blocks (reconstruction) of provincial access roads to existing roads used for Fresh (about 600 km), and maintaining all existing and upgraded of sustainable financing Fruit Bunch (FFB) collection, with the establishment enhancement of smallholder mechanisms for road maintenance; and (c) productivity through improved extension services. and demonstrate sustainable Component 2: This component will develop development, through the mechanisms for community participation into local project areas and promoting provision of grants to community groups in the at local government and participatory planning and local accountability self-reliant local development community level. This component will promote by local facilitators; (b) through: (a) community mobilisation, facilitated provide suitable solutions identification and prioritisation of activities that would processes at ward or to local development constraints, through transparent budgeting at LLG level; (d) community level; (c) participatory planning and conditions to ensure provision of small grant funding, with transparent communities; (e) design and accountability and effective use of funds by recipient themselves, with support implementation of planned activities by the communities service providers; and (f) from district and LLGs, local CBOs, NGOs and committees, LLGs and capacity-development of CBOs, ward development province/district administration. OPIC capacity in improving Component 3: This component will strengthen technical assistance and the smallholder productivity through the provision of system; strengthen OPIC establishment of a Monitoring and Evaluation (M&E) to define their priority and the institutions involved in assisting rural communities to these needs; and through needs, and the capacity of service providers to respond with existing HIV/AIDS OPIC provide support to and coordinate awareness/prevention campaigns in the project area. and overall responsibility for project management, coordination OPIC will take will be of the project components. Component 1 implementation performance of the milling through OPIC and its field offices with the support undertaken will be managed by a companies and PNGOPRA. Component 2 implementation i) set up Local Coordination management agency contracted out by OPIC to consultants and service Teams (LCT) at provincial level; ii) select and contract
vii providers to carry out all capacity building activities; iii) carry out M&E activities; iv) assist OPIC in management and transfer of the grants themselves, and manage the grant accounts at the LLG levels.
The objectives of the Social and Institutional Assessment are to: * Increase opportunities for optimising social development outcomes through identifying the project beneficiaries and their needs, expectations; ideas, and verify the validity and outcomes of the consultation that process have given rise to the proposed SADP activities; possibilities and examine for effective community participation in interacting relevant with service providers to meet communities' needs. * Minimise adverse social impacts which might be caused * Mitigate by SADP. unavoidable adverse social impacts and social Project. costs of the * Propose guidelines for adopting a socially sustainable project design. * Prepare key socio-economic and social indicators for project monitoring and evaluation.
There are two additional reports which complement this report, the second of which contains an overview of the non-oil palm communities in the project areas: * Curry, G.N. and Koczberski, G. 2007. The Resettlement Framework Policy Report for the Smallholder Agriculture Development Papua New Project, Guinea. Report to the Oil Palm Industry Corporation. * Koczberski, G., & Curry, G.N. 2007. Beneficiaries Assessment Report for the Smallholder Agriculture Development Project, Papua New Guinea. Report to the Oil Palm Industry Corporation. The methodological framework for this study involved a mix of participatory rapid rural assessment and techniques. These techniques included interviews, workshops and focus group meetings with key beneficiaries and stakeholders, and analyses of existing studies and data on smallholder oil palm production in the two provinces of WNB and Oro.
Land Access and Tenure Security among Oil Palm Smallholders Land conflicts take many forms in the oil palm industry, compensation from the large claims of customary landowners for land alienated settlement schemes for land (LSS) and estate plantations to inter- and intra-household disputes over block ownership. Land disputes are critical production because they issues can reduce smallholder productivity by taking disputed stands out of production, oil palm reducing the capacity of smallholders to repay by lowering smallholder loans and incentives to invest in their long-term futures. principal land tenure The arrangements under which smallholder oil palm in PNG are: is cultivated
* Agricultural State leasehold land on LSSs;
viii land by major and minor • Village oil palm (VOP) holdings on customary clans; * Land Tenure Conversion blocks; land. * Customary Purchase Blocks (CPBs) on customary
State leasehold land Agricultural oil palm is planted on Approximately 49% of the total area of smallholder Hoskins and Popondetta. The agricultural State leasehold land in LSSs at Bialla, relate to: main concerns regarding land tenure for LSS growers over inheritance); * Transmission of leasehold titles (e.g., disputes of leasehold blocks to • Customary landowner demands for the return payments be made customary ownership (or that additional compensation to customary landowners for alienated land); leaseholders over block * Disputes between long-term caretakers and ownership; * Arrears in land rentals; * Rising population pressure on leasehold blocks. problems for LSS The transmission of leasehold titles poses land administration problem has arisen because the growers and other industry stakeholders. The follow informal mechanisms of large majority of LSS growers has tended to these are modelled on transferring tenure rights in LSS blocks. Typically, home communities. Also, traditional systems of land tenure from settlers' arrangements. leasehold titles are not updated to reflect current ownership tenure security. This Recommendation: Update leasehold titles to strengthen of Lands and Physical requires a coordinated approach by OPIC, the Department should be given to: Planning, and the provincial lands offices. Priority update and clarify the status * Conducting an audit of state leasehold titles to of each leasehold title. inheritance of leases by * Reducing the potential for disputes of the the three project areas. introducing a standardised Will for LSS farmers in that protect the rights of * OPIC should encourage title transfers in Wills the leaseholder. widows to remain on the block after the death of the collection of LSS leasehold Recommendation: Establish new approaches for rental fees. The National rentals and a more equitable method of setting be encouraged to outsource Department of Lands and Physical Planning should companies. the collection of land rental fees to OPIC or the milling greater tenure security to LSS Recommendation: Develop strategies to afford and LSS growers must growers at Popondetta. OPIC, customary landowners by encouraging constructive address the continuing insecurity of LSS growers to improve the lease tenure dialogue between the groups to formulate strategies rental fee paid to customary security of LSS growers. The question of a land a potential solution to these landowners by LSS growers should be discussed as disputes.
ix Recommendation: Address problematic caretaker arrangements. between Relationships long-term caretakers and leaseholder/VOP blockowners formalised should be by OPIC with the introduction of a contract agreement Arrangement (a Caretaker Agreement) between the caretaker and the leaseholder/blockowner. The contract should specify the contract period, the type of work caretaker, to be done by the the terms and conditions of the caretaker arrangements proportion and the of the value of the harvested fruit paid to the caretaker.
Village oil palm (VOP) holdings on customary land Approximately 46% of the total area of smallholder oil palm is classified as VOP plantings. Oil palm cultivated on village land is subject to the rules and regulations of customary law and land tenure principles. Clan agreements to the planting of individual oil palm holdings are either informal social contracts or are outlined in a Clan Land Usage Agreement (CLUA) which is a signed agreement between a clan and an individual acknowledging the latter's right under native law and custom to have access to the land to plant oil palm. The road access requirement for oil palm means that landowner groups without feeder road on their land a are dependent on the generosity of other landowner groups (clans or subclans) for access to land for oil palm. The road network important determinant is an of the income potential of different landowning within villages. groups
Recommendation: OPIC to adopt strategies during infill and replanting that i) strengthen the tenure rights of growers on non-clan land, and ii) promote more equitable access to oil palm across village landowning groups. Possible strategies to be discussed with landowner groups include: 1. Encourage a form of 'compensation' or 'gift' payment to landowners the replanting at stage for disputed blocks in line with existing practices. customary 2. Introduce a land rental fee which generates an income for the landowning group and thus provides some tenure security for the 'tenant'. 3. Site feeder and linking roads during infill to maximise the number of landowning groups within each village with access to a feeder road on their own land.
Land Tenure Conversion (LTC) blocks (Popondetta) Approximately 450 ha of VOP oil palm at Popondetta is classified as LTC blocks. In the early 1960s, the Australian administration introduced the Land (Tenure Conversion) Act 1963 to enable customary tenure to be converted to individual freehold title. The designated land was removed from customary control and registered in the name of an individual. Most of the land holdings did not proceed to full title registration in the name of an individual, and so technically are still subject to principles of customary land tenure.
x insecurity on LTC blocks in Recommendation: In addition to addressing tenure legal status of each LTC block same way as recommended for VOP blocks, the must be determined.
land Customary PurchaseBlocks (CPBs) on customary for oil palm development The 'purchase' of customary land by non-clan members 1980s and later, around the recent trend, first emerging at Hoskins in the mid is a 200 ha and 50 ha of 1990s to 2000, at Bialla and Popondetta. Approximately mid to 'outsiders' for oil land have been 'sold' at Bialla and Popondetta respectively land have been developed palm development. At Hoskins, 2,567 ha of customary area of land classified as VOP as CPBs, representing about 30% of the total plantings. and not conducted in accordance The majority of CPB transactions are informal rarely undertaken, and written with customary law. Detailed land surveys are of the land, the amount and agreements often do not specify the agreed sale price rights of the purchaser. timing of payment instalments, and the specific use system for oil palm Recommendation: OPIC to develop a new land administrative developments on CPBs. This should have three elements: Agreement (CLTA) in 1. The design of a Customary Land Tenancy consultation with legal experts and customary landowners. 2. Completion of a Land Investigation Report. specify the transfer of user- 3. The Design of a Statutory Declaration Form to rights in the event of the death of the blockholder.
Context Key Social Issues: Socio-economic and Political growth Changingdemographic environment: population from 5.9 persons per block in the Population density on the Hoskins LSS has risen block in 2000, and in 2002 the early 1970s (Ploeg, 1972) to 13.3 persons per 2011 (expected completion of Bialla LSS averaged 11.1 persons per block. By population of 15 at Bialla, 20 at the SADP), there will be an average block density on the LSS blocks is Hoskins and 10 at Popondetta. Rising population leading to:
• Increased economic pressures on blocks. * Diversification into non-oil palm income sources. and intra-household disputes * Social instability and conflict including inter over the allocation of oil palm work and income. residing on their parents' * Resistance to replanting by younger households block (because of short-term loss of income). seek additional land to plant * Increased pressure on co-resident families to oil palm, most often with insecure tenure. of blocks. Increased disputes over the inheritance and 'ownership' * systems by more * The displacement of cooperative household harvesting is rotated amongst individualised units of production where the harvesting
xi co-resident households. This change is reducing smallholder motivation invest in farm to inputs, carry out block maintenance and service loans. There are clear long-term income advantages for smaliholders to replant old and tall stands of oil palms. However, there is a sizable group of growers for whom replanting will result in short-term economic hardship. Smallholders that would be hardest hit financially during replanting are: * Smallholders with the majority of their palms over 15 years old. • VOP producers with a single, 2 ha stand of oil palm. * Elderly or widowed farmers who are part-time/semi-retired smallholders. * Families on populated multiple household blocks where oil palm income is already thinly spread across households.
Recommendation: Implement short-term strategies to lessen the financial of hardship loan repayments for smallholders undertaking replanting. rates should Loan repayment not normally exceed 30% of gross monthly oil recommendations palm income. Other to ease the financial pressure on growers include: during replanting
* Giving VOP producers with only 2 ha of oil palm the option of poisoning I ha at a time. a Arranging Mobile Card contracts as part of a replanting package for heavily populated blocks. * Encouraging income diversification on newly replanted LSS blocks such as the cultivation of profitable market crops on newly replanted blocks until young palms come into production. * Increasing block productivity by raising harvesting rates.
Recommendation: Implement long-term strategies to lessen the financial hardship of loan repayments for smallholders undertaking replanting. The industry should consider moving towards some form of replanting levy as suggested by Brophy (n.d., p3). Advantages of a replanting levy include:
* Relief from some of the short-term financial pressures of replanting by removing the 'double-disadvantage' during replanting of reduced income and increased loan repayments. * Reduced financial risks associated with replanting. * Elimination of the incentives to shift fruit because there would be a financial cost of doing so (levy deductions paid into the account of the block through which fruit is sold). * Enhanced success of other initiatives to raise productivity (e.g., Mama Loose Fruit Scheme and Mobile Card which are sometimes used to loan repayments). avoid
xii gender andyouth issues Under-harvestingand household labour constraints: among growers. Data from Under-harvesting is a major cause of low productivity 60% of plantation levels the Hoskins scheme revealed that LSS growers achieved only 38% of plantation of production (tonnes/ha) while VOP growers achieved levels. under-harvesting include: The main types of labour supply constraints explaining small family size, old age, * Absolute shortages of household labour (e.g., short and long-term illness and physical disability). or caretaker labour due to * Under-utilisation of available household labour of labour. contested tenure rights, or disputes over the remuneration to social commitments or * Reduced availability of household labour due competing economic activities. * The absence of a market in hired labour. separately for the collection The Mama Loose Fruit Scheme, which pays women on the supply of women's of loose fruit, has successfully overcome constraints all three schemes now have their labour. Around 85% of female smallholders in smallholder oil palm income paid own harvesting card and the proportions of total at Bialla to 30% at Popondetta. directly to women vary from approximately 20% budgeting, which could be Women expressed an interest in training in household Some female smallholders would usefully extended to small business training. deducted from their Loose like company credit for wheelbarrows with repayments Fruit Mama payments. where the labourer is paid an Other payment initiatives such as the Mobile Card on the Mobile Card, have agreed proportion of the FFB harvested and weighed and incomes. The success proven successful in raising smallholder productivity Fruit Scheme demonstrates the of the Mobile Card trial and the Mama Loose the payment of family or hired effectiveness of payment systems that guarantee intra-household conflicts over labour. Such payment mechanisms can also resolve of income among household labour and allow for a more equitable distribution members. pursue strategies to increase Recommendation: OPIC and PNGOPRA to employment opportunities for smallholder harvesting rates thereby creating more New payment initiatives like the youth and women and improving debt servicing. should be encouraged where Mama Loose Fruit Scheme and the Mobile Card smallholder productivity, create necessary on infill and replant blocks to maximise caretakers, and to improve debt employment opportunities for youth, women and servicing.
Food security and access to gardening land for sale at local markets, production, whether for domestic consumption or Garden of the vast majority of is a fundamental component of the livelihood strategies Some families on multiple LSS and VOP smallholders, particularly women. income is rotated amongst household blocks where oil palm production and from sales of garden food to households each month depend primarily on income
xiii support the household during the months when they do not have access to oil palm income. The long-term viability of the smallholder sector depends to a considerable extent on the food and income security provided by access gardening land. to
A diversifying rural economy Most VOP and LSS smallholders develop supplementary income sources to augment oil palm income and to strengthen livelihood security. It is probable that as population and land pressures continue to rise on the LSSs, an increasing proportion of LSS settlers will be engaged in non-oil palm income activities, on and off-farm. both
Non-oil palm activities are sometimes viewed as distractions drawing smallholders' time and energy away from oil palm production. Rather ignoring income diversification, than the challenge for extension services and smallholder development policies is to consolidate and build on these income trends through policies that strengthen linkages between the smallholder sector and the broader regional economy. Income diversification should be encouraged and actively fostered as a way of improving the economic and social the LSSs. stability of
Recommendation: Develop strategies to support the diversification of the rural economy. Income diversification could be facilitated business- by providing small and employment-related skills training for under-employed LSSs, CPBs youth on the and VOPs. As part of the SADP, a small business/welfare should be employed officer by OPIC in each project area to coordinate external organisations training by and to provide advice and training to smallholders wider community. and the
Roads and transport The road systems in the smallholder oil palm areas of WNB and Popondetta been steadily deteriorating have over the years due to lack of road maintenance government agencies. by
Poor road conditions and unreliable harvest pickups undermine grower commitment to oil palm production, including replanting. Growers will shift their labour to activities where the retums to their labour are assured. Smallholders are risk averse for good reason, and are reluctant to risk labour and capital where returns cannot be assured.
Material welfare In all three project areas smallholders complained about how little material improvement there had been in their lives following the introduction of oil palm. Living conditions, particularly on the land settlement subdivisions, have deteriorated through time. Over the years there has been little or no maintenance of the original houses so that many are in very poor condition or uninhabitable. Water tanks have rusted out and not been replaced, and most aid posts are closed
xiv funding by the provincial or lack medical supplies because of inadequate governments. problem or a health The fall in living standards is more than simply a development issue for the industry issue for smallholders. It is an important productivity water supply, and other because it is well established in PNG that housing, are powerful forces for material improvements such as access to vehicles crop producers. motivating workers, both as employees and as cash oil palm smallholders for a This decline in living standards is paradoxical because above those of other long period have had levels of cash income significantly themselves offered two main smallholder cash crop producers. Smallholders population on the land explanations for the decline. First, an ever increasing to save; and, second, there settlement subdivisions undermines people's capacity is no effective savings mechanism for growers. to enhance improvements in Recommendation: Introduce a savings mechanism living standards.
HIVWAIDS oil palm industry and has the HIV/AIDS is expected to impact severely on the To date, 70% of all reported potential to undermine the objectives of the SADP. (2004) has predicted that over HIV infections in PNG are in rural areas. Sales be HIV positive by 2017. The 17% of the oil palm population in WNB could the problem. Thus, it is industry cannot rely fully on the public sector to address actions to address the necessary for the industry itself to take some preventative communities. rising incidences of HIV/AIDS among the oil palm the milling companies and an Recommendation: PNGOPRA in association with Research and/or Anglicare) external organisation (e.g., PNG Institute of Medical assessment for the industry. should undertake a comprehensive HIV/AIDS risk
Law and order LSSs, are exacerbated by the Many law and order problems, especially on the and the high level of male growth in the number of under-employed young men, drunkenness on oil palm paydays.
Institutional Assessment the capacity of the various The institutional assessment component was to assess affected by SADP activities. institutions representing the communities potentially community and village-based The Institutional Assessment examined the LLGs, associations, OPIC and groups, women's groups, church groups, grower PNGOPRA.
Local Level Government
xv The Organic Law on Provincial Governments and Local-level Governments, 1995, defined a new system of relationships amongst the national, provincial and local governments which provided the foundation and structure for Local Level Government (LLG). Under the law, LLGs were given new powers and responsibilities to be providers of local development and service delivery (e.g., water and power supply, social services, housing, aid posts and clinics, maintaining peace, and providing community sport, recreation, and cultural industrial shows), and and to enact laws, with the aim of improving the basic services. delivery of
The structure of the LLGs, with member representation from local wards, including female representatives from local women's organisations, provides a solid foundation for establishing strong links into their communities for the initiation of projects and the delivery of services. However, whilst the structures are in place, LLG activities are generally severely constrained by funding shortfalls to the extent that basic services for the community cannot be Typically, LLGs delivered. lack the resources to perform even basic functions. administrative
Another factor constraining the ability of the LLGs to deliver services is their lack of management skills, particularly in relation to administrative and budgetary functions. The skills identified most frequently in need of upgrading included: • project planning, design and management; * budget planning; * administrative and technical skills; * community needs analysis.
The under-resourcing of LLGs together with limited management and administrative skills, mean that there are few opportunities for the poor to access basic services and community development programs.
Recommendation: Provide capacity building activities for LLGs to improve success of the the community development component of the SADP. committing funds Before to LLGs, SADP should first give attention to: * Awareness programmes for LLG representatives on governance their issues and roles and responsibilities under the Organic Law. * Improving the capacity of LLG representatives to prepare project funding proposals and financial plans. • Developing the management and organisational capacity of LLGs to co- ordinate and manage community projects. * Training LLG representatives in community needs assessment and participatory approaches to community development. * Training LLG representatives in project monitoring and evaluation techniques. * Fostering community trust in and respect for the LLG system through improving awareness of how the LLG system operates and the and bureaucratic financial obstacles faced by LLGs in performing their duties.
xvi around CBOs' Initiating dialogue between LLGs and CBOs to turn negative perceptions of LLG operations and performance. organisations that Recommendation: LLGs should be partnered with community development. are well established with proven track records in community
Local community organisations as NGOs and CBOs do not As in other areas of PNG, civil society groups such The main providers of non- have a strong effective presence in WNB and Oro. most stable and effective state services in WNB and Popondetta, and the organisations, are those associated with the various churches.
Churches regions of PNG, have The churches in WNB and Oro provinces, like most other as education and health. long been primary providers of local services such through which the local Moreover, they are the most important vehicles society. In the Hoskins and population, particularly women, participate in civil are the main established Bialla regions, the Catholic Church and United Church while at Popondetta, the church organisations servicing the local population, health care, education and Anglican Church is the dominant church providing around 80%-90% of the community and pastoral services. It is estimated that Church, and in WNBP, the population of Oro Province belong to the Anglican Catholic Church runs approximately 90% of the schools. have a demonstrated The churches, especially the larger established churches, and health and education capacity to manage a range of community programmes management; quality services that display: sound administrative and financial business acumen; and leadership, in terms of experience, commitment and general For example, the Anglican very efficient and cost-effective service delivery. 12 health sub-centres, 12 Health Service in Popondetta runs three health centres, volunteers. Similarly, the aid posts and has trained numerous village health clinics in each of their 19 Kimbe Catholic Diocese manages schools and health of the churches and parishes. The effective network and management structures excellent local coordinators their culture of honesty and transparency make them and facilitators of community development.
Non-government organisations administrative capacity Some of the environmental NGOs have well developed (TNC) in WNB and and financial management skills. The Nature Conservancy links and strong Conservation Melanesia in Popondetta both have international on-the-ground presences.
Community and village-based groups and environmental In addition to the formal organisations of church organisations community and village- NGOs, there are numerous, usually ephemeral, informal wax and wane depending on based groups and committees. These groups tend to at a point in time. Sports, the perceived needs of the community or kinship group important social and civil music and youth groups are some of the more organisations available to young men in the villages.
xvii The two most important constraints/weaknesses affecting the performance and effectiveness of local community groups are:
1. Insufficient capacity, in terms of personnel and other resources to undertake project tasks. Most groups lack basic skills in budgeting, literacy, record keeping, and project management. They also lack the fiscal discipline to keep projects on track for timely completion. 2. The widespread practice of group leaders 'personalising' the assets group's such as outboard motors, drum ovens and other equipment.
Recommendation: Address the weak institutional capacity among local community and village based groups. The main areas of weakness are in skills and knowledge related to the following areas:
* book keeping and general budgeting; * literacy and record keeping skills; * project management; * understanding the project purposes; * distinguishing between personal and group objectives/purposes of projects; * absence of skilled support staff.
Recommendation: The community development component of the SADP investigate the potential for facilitating partnerships between local entrepreneurs and LLGs/community groups to develop sustainable livelihoods for villagers without access to oil palm income.
Oil palm grower associations Each project area is served by its own grower association: Bialla Oil Palm Growers' Association (BOPGA); Hoskins Oil Palm Growers' Association (HOPGA); and Popondetta Oil Palm Growers' Association (POPGA). Each association is governed by a constitution and is made up of voluntary members from the VOP and LSS smallholder community. The annual subscription fee of K36 is deducted from members' oil palm payments. Membership fees fund of the operating most costs of the associations. The role of the associations represent the is to interests of smallholders to industry bodies such as OPIC the companies, and PNGOPRA, and to national and provincial governments. The grower associations consist of an elected executive committee headed by a Chairman and Deputy Chairman and a representative from each smallholder division. Popondetta holds elections for executive positions every four years while BOPGA and H-OPGA hold their elections every two years. The Chair and Secretary of each association sits on the board of OPIC and represent smallholders at Local Planning Committee (LPC) meetings.
The capacity of the grower associations to carry out their functions varies greatly through time. The effectiveness of an association depends largely on the managerial abilities of the executive committee, membership numbers (income),
xviii and OPIC and the and the quality of the relationship between the executive milling company. varies amongst The extent of smaliholder involvement in the grower associations confidence in project areas and through time, reflecting the level of smallholder the associations to deliver benefits to members. associations. Although Women are seriously under-represented in the grower production, there is not they now account for over one-quarter of total smallholder one female representative in any of the associations. associations to represent Recommendation: Strengthen the capacity of the grower that: the needs and interest of their members. It is recommended each of the grower * Executive and long-term administration staff of keeping, and in associations receives training in book keeping, record governance and transparency issues. standards and * Grower associations should aim to enhance accountability transparency regarding the disbursement of membership fees. * An additional place reserved for women on the executive. responsibility for * Grower associations be encouraged to take on more problems services that address some of the social and economic workshops on confronting growers. Potential activities include funding STDs, household budgeting and savings, health issues (e.g., HIV/AIDs, and drug abuse), family planning and nutrition), youth issues (e.g., alcohol law and order and alternative income opportunities.
Oil Palm Industry Corporation(OPIC) and agricultural reform In 1992, as part of the government's corporatisation Under the OPIC policies, OPIC was established as a semi-government agency. increases in smallholder Act, the central role of OPIC is to promote and encourage services to smallholders. productivity by the more efficient provision of extension problems exist at Whilst the overall management of OPIC is sound, governance obtaining government the national level due largely to the ongoing problem of Secretary and the OPIC gazettal of formal appointments such as the General of seven directors (three Board. Under the OPIC Act, an OPIC Board consisting each from POPA smallholders, two state representatives, and one representative of the Corporation. and PNGOPRA) should be directing the management several years. However, the Board has not been functioning officially for programs in the OPIC Secretariat, based in Port Moresby, co-ordinates the The planning, five project areas. It is also responsible for policy development, the oil palm industry. training, sourcing funds, and liaising with all stakeholders in managed by a Project An OPIC field office is established at each project site and (LPC) have been Manager. To facilitate OPIC's role, Local Planning Committees consists of the OPIC established in each of the five project areas. The LPC growers' association, project manager and representatives from the local
xix provincial government, milling company and PNGOPRA. The Committee meets regularly to discuss, plan and monitor the work of OPIC and to act as a forum for stakeholders to raise various issues of interest or concern. The LPCs were functioning well in each project site visited as part of the institutional assessment. OPIC is financed by a smaliholder crop levy of K4.00/tonne matched by a voluntary company contribution. Together they account for approximately 93% of OPIC's income. The balance of funds is provided by annual grants from the national government. OPIC has difficulty covering its operating expenses, particularly at Bialla and Popondetta, because of the declining funding contribution from the national government. To address these budget pressures, the organisation is cutting costs by lowering the ratio of extension officers to smallholder blocks (now approximately one extension officer to 300 blocks). OPIC usually performs well in meeting its annual smallholder production replanting targets, and and has worked well with the companies in coordinating smallholder harvesting schedules. It has been active in introducing a range successful initiatives of to raise smallholder productivity such as the Mama Fruit Scheme. Loose
Fertiliser application has long been the central plank of OPIC's extension program to increase smallholder production, but sometimes the promotion of fertiliser amongst growers has been in isolation from other important factors influencing productivity such as harvesting rates and other broader social and demographic factors which, for example, affect the supply of smallholder labour. Whilst the Mama Loose Fruit Scheme, Mobile Card trials, Growers' Fund, HIV/AIDS awareness, and the recent attention to land tenure issues, indicate a broadening of OPIC's approach to smallholder productivity, the promotion of fertiliser remains the most dominant extension strategy.
Given that a significant proportion of smallholders (both LSS under-harvest, and VOP) regularly then strategies to promote fertiliser application rates, undertaken must be in conjunction with strategies to raise harvesting rates. Generally, OPIC extension officers have a good relationship with smallholders, but relationships can become strained when deteriorating road conditions lead to late, irregular or cancelled pickups of smallholder fruit (a problem in the past at Bialla and Popondetta).
Given the limited channels for female representation in the industry, efforts further to increase the number of female extension officers representation and female at LPC meetings should be a priority for OPIC. Recommendation: Strengthen the capacity of OPIC to better perform its roles and responsibilities effectively. It is recommended that: * The government be encouraged to proceed with the gazettal of the OPIC Board and the General Secretary position. * A training needs analysis be conducted to identify the training requirements of OPIC extension staff.
xx • A small business/welfare officer should be recruited to establish and coordinate collaborative programs with external organisations to address some of the emerging needs of smaliholders which are now affecting smallholder productivity (e.g., budgeting, HIV/AIDS, small business training, etc.). * Each scheme should have a female smallholder representative attend LPC meetings. * Female extension officers should be recruited at Bialla and Popondetta. * The capacity of the Land Sections of OPIC be strengthened to deal with the range of land issues affecting smallholder production fertiliser Recommendation: OPIC to combine its extension efforts to promote with broader strategies to raise smallholder harvesting rates (e.g., Mobile Card).
PNG Oil Palm Research Association (OPRA) the oil OPRA is a not-for-profit organisation that constitutes the research arm of milling palm industry. It conducts agricultural research and development for the services companies and smallholder growers, and provides technical support and crop to the industry. The five principal areas of research include: agronomy, nutrition, entomology, plant pathology and smallholder livelihood studies. on member OPRA is financed by a research levy of Kl.77/tonne of FFB 64% of companies and smallholders. Levies account for approximately and PNGOPRA's income, with external funding from the PNG government finance overseas donors accounting for the remainder. Oil palm levies specific PNGOPRA's recurrent costs and external funds are used to support research projects. to Two areas of research that require further strengthening are studies on strategies focus minimise the environmental impacts of oil palm activities and an increased rapidly on smallholder research. The latter is becoming more important with the changing socio-demographic context of smallholder production (population of growth, generational change, land tenure issues, food security, growing threat HIV/AIDS), and the high rates of under-harvesting amongst smallholders. of Recommendation: Expand the smallholder livelihood studies section PNGOPRA to support further research that will enhance smallholder productivity and and incomes with an emphasis on achieving a more economically, socially environmentally sustainable smallholder sector.
A smallholder research officer with a diploma/degree in agriculture and with be training in social science research methods, preferably to Masters level should recruited. PNGOPRA should also develop priority areas for smallholder research which aim to:
* Improve smallholder productivity through research that promotes a greater understanding of intra-household relations of production and constraints on the supply of family and hired labour.
xxi * Seek a better understanding of the many socio-economic and demographic factors affecting smallholder productivity (e.g., population growth, land tenure issues, HIV/AIDS, etc.). * Focus on developing economic and environmental cost-benefit analysis of research innovations/production strategies tailored to accommodate the broad typology of household types and production strategies pursued by smallholders. * Understand the influence of quality of life issues (e.g., housing, water supply, social stability, family relationships, etc.) on smallholder productivity. * Examine the role of food gardens in food/livelihood security, especially given the trend amongst LSS growers to plant all their blocks to oil palm.
Recommendation: Strengthen links between PNGOPRA and the smallholder sector. Possible directions include:
* Establishing a network of part-time, "barefoot research assistants" in each project area. * Greater smallholder attendance at research presentations at PNGOPRA's annual SAC meetings. * Encouraging OPIC project managers from each project area to attend research presentations at PNGOPRA SAC meetings. * Enhance the dissemination of research findings presented at PNGOPRA's annual SAC meeting in a form suitable for the growing educated population of smallholders. * Expand PNGOPRA's involvement in OPIC field days at Hoskins and Bialla.
Recommendation: PNGOPRA to initiate collaborative work with OPIC to target under-harvesting in extension activities, especially during field days.
Monitoring and Evaluation
The household-level baseline survey has been designed to assist with:
* Monitoring of the socio-economic impacts of the SADP, including the degree of inclusiveness in SADP activities. * Measuring project performance during and after SADP's implementation phase.
The proposed baseline survey is comprised of two main data collection instruments: a household questionnaire survey to be conducted among smallholder households and a series of focus group discussions with identified communities in each project area.
Three household surveys have been designed, each of which is designed specifically for smallholders undertaking infill and replanting while being affected by road maintenance and upgrading. The broad topic areas covered in the household surveys include:
xxii * holdings of oil palm and other cash crops including betel nut palms; * population and demographic characteristics; * subsistence resources; * range of livelihood strategies which capture the gender, generational/age, ethnic and land access differences; * access to services; * main expenses; * other physical assets influencing wellbeing (e.g., water supply, housing, access to transport, etc.).
A matrix for the proposed household surveys and collation of production data in each project area is presented. In the matrix, VOP smallholders have been differentiated into three subgroups according to the type of land tenure under which smallholder blocks are managed: customary landowner VOP, Customary Purchase Block and Land Tenure Conversion block.
Complementing the household surveys, five focus group meetings in each of the survey sites should be conducted following analysis of the household survey data. These focus groups should explore the community's expectations (baseline phase) and actual experiences (implementation phase) of SADP activities in relation to the following:
* The changing socio-cultural context of the village/community, especially as it relates to oil palm production (e.g., adjustments to land tenure to accommodate infill). * General living standards and people's aspirations in relation to SADP activities. * Impacts of poor roads, old and tall palms, or limited access to commodity crop income. * The areas of their lives people feel will be improved as a result of infilling, replanting, road upgrading and improved delivery of services through LLGs, CBOs, NGOs and churches. * Any other concerns that participants bring to the focus group discussions.
The socio-economic indicators have been formulated for project monitoring and evaluation of the three main components of the SADP as outlined in the TOR. These indicators include a mix of quantitative and qualitative measures to assess SADP progress and impacts on the livelihoods of beneficiaries. To ensure a high degree of community participation in the process, beneficiaries should have the opportunity to identify indicators that they perceive to be an important measure of their own wellbeing.
xxiii AIXX 1 Introduction
1.1 Project Description the living The development objective of the proposed SADP is to improve provinces. standards of rural communities in selected areas of oil palm growing palm sector This is to be achieved through: (a) increasing smallholder oil (b) promoting productivity through capitalising on existing infrastructure, and Three oil sustainable local governance and community participation mechanisms. Bialla and palm schemes are included in the Project; these are located at Hoskins, Oro. These objectives are to be achieved through three project components: will Component 1: Smallholder Productivity Enhancement. This component (up to 9,000 support: (a) planting additional oil palm blocks, each 2 ha in extent still available ha) along existing provincial access roads through in-filling on land smallholder within the areas covered by oil palm infrastructure in response to to existing demand; (b) the upgrading (reconstruction) of provincial access roads existing and smallholder oil palm blocks (about 600 km), and maintaining all with the upgraded roads used for Fresh Fruit Bunch (FFB) collection, and (c) establishment of sustainable financing mechanisms for road maintenance; services. enhancement of smallholder productivity through improved extension area for The total area of established oil palm in each scheme and the potential 1 Village Oil Palm (VOP) infill are shown in Table 1.1.
Table I .I Areas planted to oil palm in each scheme and potential for infill*: Hoskins Bialla Oro Total 93,958 Area planted to oil palm 49,955 20,722 23,281 51,466 Area of smallholder blocks 23,634 13,547 14,285 8,740 Potential for infill VOP 2ha 3,500 1,240 4,000 blocks in hectares. Average Potential % increase in area 13% 9% 28% 17% of VOP Blocks _ Source: OPIC 2005 data. *=Area figures are in hectares. objective of Component 2: Local Governance and Community Participation. The mechanisms for this component is to develop and demonstrate sustainable of grants community participation into local development, through the provision planning to community groups in the project areas and promoting participatory and local accountability at local government and community level. through: (a) This component will promote self-reliant local development and community mobilisation, facilitated by local facilitators; (b) identification to local prioritisation of activities that would provide suitable solutions development constraints, through transparent processes at ward or community of level; (c) participatory planning and budgeting at LLG level; (d) provision and small grant funding, with transparent conditions to ensure accountability of effective use of funds by recipient communities; (e) design and implementation and planned activities by the communities themselves, with support from district
I LLGs, local CBOs, NGOs and service providers; and (f) capacity-development of CBOs, ward development committees, LLGs and province/district administration. Component 2 activities will be carried out in two phases. Two LLGs will be selected for Phase One in the Talasea District (WNB) and three LLGs in the Oro Province. During Phase Two all LLGs in the Talasea District and all LLGs in the Oro province would be included.
Component 3: Project Management and Institutional Support. OPIC will take overall responsibility for project management, coordination and performance of the project components. Component I implementation will be undertaken through OPIC and its field offices with the support of the milling companies and PNGOPRA. Component 2 implementation will be managed by a management agency contracted out by OPIC to: i) set up Local Coordination Teams (LCT) at provincial level; ii) select and contract consultants and service providers to carry out all capacity building activities; iii) carry out M&E activities; and iv) assist OPIC in management and transfer of the grants themselves, and manage the grant accounts at the LLG levels.
Component 3 will strengthen OPIC capacity in improving smallholder productivity through the provision of technical assistance and the establishment of a Monitoring and Evaluation (M&E) system; strengthen OPIC and the institutions involved in assisting rural communities to define their priority needs, and the capacity of service providers to respond to these needs; and through OPIC provide support to and coordinate with existing HIV/AIDS awareness/prevention campaigns in the project area.
Environmental monitoring would also be supported in close coordination with the Department of Environment and Conservation (DEC). Finally, to ensure a strong community ownership and participation, special attention will be given to incorporate gender-balanced activities in the various project components as well as consultation mechanisms for various indigenous groups.
1.2 Purpose of the Social Assessment The overall aim of the Social Assessment is to provide guidelines for the design and implementation of a socially sustainable SADP and to formulate socio- economic performance indicators for project monitoring and evaluation (see Appendix 1 for the TOR). The objectives of the Social Assessment are to:
* Increase opportunities for optimising social development outcomes through identifying the project beneficiaries and their needs, ideas, and expectations; verify the validity and outcomes of the consultation process that have given rise to the proposed SADP activities; and examine possibilities for effective community participation in interacting with relevant service providers to meet communities' needs. * Minimise adverse social impacts which might be caused by SADP. * Mitigate unavoidable adverse social impacts and social costs of the Project. * Propose guidelines for adopting a socially sustainable project design.
2 Prepare key socio-economic and social indicators for project monitoring and evaluation.
1.2.1 Conceptual Approach and Methodological Framework The Social Assessment framework employed draws together widely used basic concepts of social assessment and concepts from the Sustainable Livelihoods Approach which places people at the centre of development. The approach is geared to:
* Providing a sound understanding of the socio-economic, cultural and political contexts in which project activities will take place. * Identifying the key stakeholders and beneficiaries of the project to ensure the Project meets their needs. of * Ensuring gender and other social differences are reflected in the design the Project. in * Providing mechanisms for stakeholders and beneficiaries to participate Project design, implementation and monitoring and evaluation. * Enhancing equitable access to SADP activities for all potential beneficiaries. * Identifying and mitigating any possible constraints and adverse social impacts of SADP activities.
Figure 1.I outlines the main stages of the Social Assessment. These include:
1. Desk Review (pre-assessment groundwork). 2. Initial Consultations with OPIC and fact-finding workshops. 3. Stakeholder Analysis. 4. Institutional Assessment. 5. Beneficiaries Assessment. 6. Report Writing.
Desk Review Social Assessment (pre-assessment) -- i Beneficiaries Assessment
Fact-finding Institutional workshops Assessment p
tasks Figure 1.1. Schematic representation of the relationships among the major of the Social Assessment.
3 There are two additional reports in addition to this report, the second of which contains an overview of the non-oil palm communities in the project areas:
• Curry, G.N. and Koczberski, G. 2007. The Resettlement Policy Framework Report for the Smallholder Agriculture Development Project, Papua New Guinea. Report to the Oil Palm Industry Corporation. * Koczberski, G., & Curry, G.N. 2007. Beneficiaries Assessment Report for the Smallholder Agriculture Development Project, Papua New Guinea. Report to the Oil Palm Industry Corporation.
The Social Assessment began with a fact-finding workshop conducted jointly with the environmental assessment team in Port Moresby on Tuesday, 18 July, 2006, with the aim of identifying key social and environmental issues relating to the project. The results of the workshops are presented in a brief summary paper, "Smaliholder Agricultural Development Project Social Assessment Fact-finding Workshop Paper".
Based on the Port Moresby fact-finding workshop and consultations with OPIC, a list of beneficiaries and stakeholders was developed to guide the fieldwork data collection for the Social Assessment. From the 19 July to 30 August, the Social Assessment was carried out at Hoskins and Bialla, WNB, and Popondetta, Oro Province 2 . The focus of the Social Assessment was on the following key stakeholders and stakeholder groups:
* Oil palm smallholder households. * Customary landowners. * Milling companies. * Local government institutions. * Oil Palm organisations (e.g., OPIC, PNGOPRA, oil palm grower associations). * Members of rural communities directly affected by the Project. * Provincial government departments. * Community based organisations (CBOs). * Non-government organisations (NGOs). * Church groups.
The Social Assessment methodological framework employed a mix of participatory and rapid rural assessment techniques. These techniques included interviews, workshops and focus group meetings with key beneficiaries and stakeholders, and analyses of existing studies and data on smallholder oil palm production in the two provinces of WNB and Oro. Participatory methods are widely recognised as highly suitable approaches for improving community members' participation in project activities, and for giving local people a 'voice' in development activities. They also generate a more informed and fuller understanding of the people and socio-cultural environment in which projects take place. A list of the people and groups consulted for the Social Assessment is presented in Appendices 2 to 4.
4 1.3 Back2round to Oil Palm in Papua New Guinea (Hoskins and Oil Palm is grown in five provinces in PNG: West New Britain Palm in Morobe Bialla), Oro, Milne Bay, New Ireland and Morobe (Ramu Oil operate on a Province will begin processing fruit in 2007). All project areas palm fruit to nucleus estate-smallholder model whereby smallholders supply oil In WNB and mills operated by a nucleus estate company in each project area. Schemes (LSS) Popondetta, smallholder production is located on Land Settlement (village-based (State leasehold land) and on Village Oil Palm schemes (VOPs) at Bialla and production on customary land). At Hoskins, and to a lesser extent as 'Customary Popondetta, smallholder oil palm has recently been planted outside the Purchase Blocks' (customary land 'purchased' by people from do not have customary landowning group). Milne Bay, New Ireland and Morobe LSSs, only VOPs. approximately In 2005, PNG produced about 1.9 million tonnes of oil palm from total. Hoskins 125,000 ha: smallholders produced just over one third of this smallholders earned approximately K54 million from oil palm in 2005. productivity. A priority of the industry is to increase smallholder production and achieve about Based on five years of production data at Hoskins, LSS growers VOP producers 60% of the production per ha of the company plantations, while smallholder achieve only 38% of plantation production. Efforts to increase fertiliser use, production have included a range of interventions such as increased cards for access to credit for seedlings, tools and fertiliser, harvesting payment among women and the promotion of better farm management techniques smallholders. in WNB and The key characteristics of the Hoskins and Bialla schemes smallholder Popondetta in Oro Province are summarised in Table 1.2. Previous involved research at these three schemes indicates that smallholders are typically crops, wage in a range of livelihood strategies including managing several cash consumption employment, small business enterprises, garden production for home and clan and local markets and organising and participating in communal and social activities. These livelihood strategies promote household economic security.
5 Table 1.2. Estate and smallholder production details for Hoskins, Bialla and Popondetta.
BIALLA* HOSKINS* POPONDETTA* Company Hargy Oil Palms Ltd New Britain Palm Oil Higaturu Oil Palms (a Limited Cargill company) Ownership SIPEF, Belgium Kulim (Malaysia) Berhad 80% CTP Holdings Pte (72%), WNB Provincial Ltd (Singapore), 20% government (15 %), others IPBC (PNG Gov.) (13%) Total estate area 6,315 30,447 8,997 (ha)* 2004 estate 144,948 616,135 130.272 production (tonnes FFB)* Number of LSS 1,851 2,350 929 blocks
Number ofVOP 1,593 3,614 (t 857 CPBs) 5,191 blocks
Total smallholder 13,547 23,634 14,285 area (ha) 2004 smallholder 134,700 286,145 142,291 production (tonnes FFB) % smallholder 48.1% 31.7% 52.2% production to total production (2004) Total 2004 279,648 902,280 272,563 production' (tonnes FFB) . * Sources: 2004/2005 PNGOPRA data; 2004/2005 OPIC data and data provided by Higaturu Oil Palms.
1.4 Notes 1. SADP development of an infill block would only be considered if it met all the OPIC, DEC and IDA environmental and social guidelines for development to smallholder oil palm. These include social and socio-economic issues, topographic considerations, measures related to proximity to watercourses, preservation of protected flora or fauna, and status of impacted forest at each site. Primary forest is excluded. Further, an impacted forest site could only be eligible for smallholder oil palm development if it is certain the existing human pressure would not allow regeneration of the vegetation into forest. Even though a parcel of land for infill meets environmental guidelines, participation in the program would not be permitted if utilization of this land would result in expansion of household garden areas into zones that would normally be excluded on the same environmental grounds. 2. The Social Assessment team comprised of George Curry (Curtin University), John Duigu (Duigu & Associates), Ben Imbun (University of Western Sydney), Gina Koczberski (Curtin University), Eric Omuru (Kokonus Indastri Koporesen), Charles Yala (National Research Institute), together with local research assistants.
6 2 Land Access and Tenure Security Among Oil Palm Smallholders
2.1 Introduction This section considers potential land tenure problems that may emerge during the SADP in relation to infill and replanting at each of the three project sites. Land conflicts take many forms in the oil palm industry, from the large compensation claims demanded by customary landowners for land alienated for land settlement schemes and estate plantations to inter- and intra-household disputes over block ownership. Land disputes are critical production issues because they can reduce smallholder productivity by taking disputed oil palm stands out of production, reducing the capacity for loan repayments and by lowering smallholder incentives to invest in their long-term futures (e.g., replanting, fertiliser inputs and other investments in their blocks). This section of the report addresses this issue by describing the main types of land disputes affecting the smallholder sector, and then suggests strategies to mitigate potential conflicts associated with different types of land tenure. As part of this suite of strategies, it also suggests ways to facilitate more equitable participation of village families in oil palm production. This includes the judicious planning of infill strategies to enhance the participation rates of marginal households and clan groupings in village communities.
It must be stressed at the outset that SADP activities proposed in all project areas do not involve planned involuntary resettlement, the involuntary acquisition of customary or State land, the eviction of squatters or disturbance or damage of personal assets and property. Thus, it is very unlikely that SADP activities will involve the involuntary resettlement of people. However, it is a requirement of the World Bank's Operational Policy 4.12: Involuntary Resettlement, 2001, that a Resettlement Plan and Resettlement Policy Framework be developed even if the probability of involuntary resettlement is very low. In accordance with the Bank's Operational Policy 4.12, a resettlement plan and policy framework has been prepared, titled The Resettlement Policy Framework Report for the Smallholder Agriculture Development Project. PapuaNew Guinea.
Potential conflicts over land tenure may arise in relation to proposed infill plantings on customary land and replanting on both customary and State land. The potential for conflict varies between project sites and between the types of land tenure arrangements governing oil palm smallholdings. The most commonly recognised division in smallholder land tenure arrangements is that between land settlement schemes (LSS) on State land and smallholdings on customary land (Village Oil Palm - VOP). However, three distinct types of tenure arrangements are present within the broad VOP category each of which poses different potential risks and opportunities for SADP. For this reason, each type of land tenure arrangement is analysed separately in the discussion below. The principal land tenure arrangements under which smallholder oil palm is cultivated in PNG are:
* Agricultural State leasehold land on Land Settlement Schemes (LSS); * Village oil palm (VOP) holdings on customary land by major and minor clans; * Land Tenure Conversion blocks;
7 * Customary Purchase Blocks (CPBs) on customary land. The differences in property rights amongst these primary types of land tenure arrangements sometimes influence smallholder productivity, attitudes to replanting and infill, investment levels in farm inputs and other assets, the oil palm production strategies of smallholders, the livelihood strategies pursued by smallholders and the welfare/quality of life of smallholder families. The following discussion identifies the main areas of risk to SADP infill and replanting associated with each of the main land tenure arrangements. Some of the risks discussed are common to two or more types of land tenure or may be more pronounced in one project area than another. Overall, the potential for conflict over land tenure and thus for disrupting SADP activities of infill and replanting is much greater in Popondetta than in the other project areas.
2.2 Land Settlement Schemes (State Aricultural Leasehold Land) State Agricultural Leasehold land is State land alienated from customary ownership and leased by the State. Almost all State land was alienated prior to PNG's political independence in 1975. Alienated land is removed from the regulation of custom and is 'owned' according to the Land Act and other land laws (Larmour, 1991).
The oil palm Land Settlement Schemes (LSS) at Bialla, Hoskins and Popondetta operate on State Agricultural leases that were initially allocated to settlers, the majority of whom were from other provinces, who acquired individual 99-year leases over blocks mostly in the range of 6 to 6.5 ha. The agricultural leases were publicly advertised and open to all PNG residents, with priority given to applicants from land-short areas such as the Maprik district of East Sepik Province, Chimbu and Wabag in the Highlands, and the Gazelle Peninsula of East New Britain (Hulme, 1984). Approximately 49% of the total area of smallholder oil palm is planted on agricultural State leasehold land in LSSs at Bialla, Hoskins and Popondetta (Table 2.1).
Table 2.1. The numbers and areas of LSS blocks at Bialla, Hoskins and Popondetta*.
BIALLA HOSKINS POPONDETTA
No. of LSS blocks 1.851 2,350 929 LSS area (ha) 8,357 12,523 3,765 LSS area as a percentage of total 69.5% 52% 26.3% smaliholder area Total smallholder 12,026 24,064 14,285 area (ha) *Data supplied by OPIC offices at Bialla, Hoskins and Popondetta (based on 2005/2006 OPIC data).
8 The main concerns regarding land tenure for LSS growers relate to:
* Transmission of leasehold titles (e.g., disputes over inheritance); * Customary landowner demands for the return of leasehold blocks to customary ownership (or that additional compensation payments be made to customary landowners for alienated land); * Disputes between long-term caretakers and leaseholders over ownership of blocks; * Arrears in land rentals; * Rising population pressure on leasehold blocks.
2.2.1 Transmission of Land Titles The transmission of leasehold titles poses land administration problems for LSS growers and other industry stakeholders at Bialla, Hoskins and Popondetta (see Yala, 2004 for a fuller discussion of this issue in relation to the Hoskins scheme) . The problem has arisen because the large majority of LSS growers has tended to follow informal mechanisms of transferring tenure rights in LSS blocks. Typically, these are modelled on traditional systems of land tenure from settlers' home communities. For example, Tolai settlers from the Gazelle Peninsula of East New Britain, recognise that the sisters' sons of the leaseholder have a claim to the LSS block based on principles of matrilineal tenure of Tolai society. To validate the inheritance rights of the leaseholder's own children, compensation is sometimes paid to the leaseholder's nephews, i.e., to his sisters' children.
Generally, for settlers from patrilineal societies (the majority of settlers), all the sons are thought to have some rights in the block after the death of the leaseholder, with overall responsibility for managing the block usually recognised as passing to the eldest son. Problems emerge, however, when the eldest brother attempts to assert absolute control over the block (especially in relation to 2 income), thereby alienating his younger brothers . These inheritance disputes sometimes result in blocks being locked out of production or under-harvested for extended periods.
While inheritance practices tend to follow traditional principles of land tenure, leasehold titles are not updated to reflect current ownership arrangements (many titles are lost or misplaced). Similarly, when LSS blocks are sold, the leasehold titles are rarely updated, so that the lease remains under the name of the original settler. There are numerous cases in all three project areas where lease titles that have not been updated are being used to challenge informal tenure arrangements that have been in place for many years. For example, when an original leaseholder who sold his block many years ago passes away, sometimes his sons will challenge the tenure rights of the current residents citing the evidence of the existing lease which is still in their father's name. Thus the current residents become classified as 'caretakers' without security of tenure despite having 'purchased' the block at some time in the past. While it is recognised that OPIC is now taking steps to address these problems, there are several factors contributing to the difficulty of implementing an effective system of maintaining up-to-date leasehold records. These include:
9 1. The process of transferring leasehold titles is cumbersome, expensive and usually beyond the financial reach of most smallholder growers. 2. There is little coordination amongst the National Department of Lands and Physical Planning, the Provincial Lands Offices and OPIC3 . Coordination is constrained by the lack of effective linkages across the three organisations. Further, the Provincial Lands Offices in the WNB and Oro Provinces are under-resourced and poorly organised. In recognition of these unresolved land issues, OPIC employs Lands Officers at the three project areas to address these issues. However, the link is weak between the formal system of land administration and the OPIC land administration process. 3. Given the problems identified in Points I and 2, it is hardly surprising, therefore, that most LSS settlers have relied on informal tenure systems for the transmission of tenure rights in LSS blocks. However, the potential for conflict to arise between the two tenure systems is very high as the leasehold registration records (the de jure system) diverge from the de facto 'ownership' situation of blocks. This mismatch between the official record of lessees and the reality of the tenure situation on LSS blocks is raising the probability of disputes over land tenure, especially in the context of rising population pressure. Such disputes are already disrupting oil palm production and causing social conflict amongst settlers. While the issue is recognised by OPIC, there is an urgent need for the formal leasehold system to be updated to reflect the actual tenure arrangements in place on the blocks.
Disputed LSS leases can lead to replanting being postponed indefinitely. Whilst most growers recognise that their blocks are on government leases there is still a general acceptance amongst growers that the planting of a crop confers ownership of it on the person planting the crop. This is a principle of most systems of customary tenure, but the principle means that in cases where block ownership is contested, replanting is unlikely to go ahead because it would strengthen the ownership claim of the person replanting at the expense of the other party to the dispute.
2.2.2 Customary Landowner Demands for the Retum of Leasehold Blocks to Customary Ownership As discussed above, land for the LSSs in the provinces of West New Britain and Oro was alienated from customary ownership to resettle people from other parts of PNG. Customary landowner grievances over the amounts of compensation originally paid for alienated land emerge periodically in both provinces in the form of demands for additional monetary compensation, the return of alienated lands to customary ownership and the forced repatriation of settlers (for a fuller discussion see Koczberski et al., 2001 and Koczberski & Curry, 2004).
A key factor in anti-migrant sentiments is the manipulation of customary landowners' anxieties about migrants by provincial leaders and aspiring politicians attempting to mobilise support during election campaigns. In the 1992 elections in Popondetta, for instance, some local candidates pursued an 'Oro-for- Oro' campaign, based on a rhetoric of 'invasion' by 'outsiders' and a local population being 'ripped off by migrants from other provinces. During the
10 election, several hundred settler families from several LSS subdivisions were evicted from their blocks by landowners, or abandoned their blocks in a climate of fear and intimidation. A year later, a 'West-for-West' campaign was employed in the West New Britain provincial elections. In 1993, 173 settler families making up the Kavugara LSS subdivision in Hoskins, WNBP, were evicted from their blocks by customary landowners during confrontations4 . The Oro-for-Oro and West-for-West campaigns were based on the premise that both provinces should be developed and controlled by the landowner population, not by 'outsiders'. At both project areas political campaigns sought to manipulate customary landowner fears about demographic and economic dominance by 'outsiders'.
Whilst some underlying tensions remain between customary landowners and LSS leaseholders at Bialla and Hoskins, with occasional disputes occurring largely between local and migrant youth, overall, the relationship between the two groups does not adversely impact on LSS production or the investment decisions of leaseholders. However, the situation at Popondetta is different and local landowners constantly remind LSS leaseholders that their presence is resented. The intimidation and harassment of LSS settlers documented in 2001 (Koczberski et al., 2001) was observed during fieldwork for this assignment.
Many of the LSS blocks in Popondetta that were vacated by the registered leaseholders in the early 1990s are now managed by 'caretakers' either from the traditional landowning group or from other parts of Oro Province. The takeover of LSS blocks by Oro people from outside the customary landowning group was tolerated by landowners (they assisted with the evictions). Now, however, some customary landowners are keen to remove these people and have the LSS blocks re-allocated to members of the customary landowning group. Thus, the conflict between customary landowners and settlers from other provinces has shifted to one between customary landowners and settlers from other parts of Oro Province.
The uncertain tenure of Popondetta settlers discourages them from making long- term investments in their blocks and some LSS growers expressed anxieties about replanting. They were worried that re-investment and development of their blocks would attract the attentions of local landowners and were fearful that they would become targets of landowner anger. As indicated above, in most areas of PNG, the planting of economic trees and plants gives the cultivator ownership rights to the resources as distinct from the land on which they are grown. As such, replanting by growers who are not customary landowners is sometimes viewed by landowners as attempts by blockholders to renew or reassert their claims of 'ownership' to blocks. For this reason, some settlers are concerned that replanting may trigger a new round of efforts to evict them.
In summary, Oro-for-Oro sentiments still run deep at Popondetta, and as a consequence many LSS growers are unsure about replanting, making other long- term investments in their blocks or establishing small businesses. In fact, several LSS growers claimed that they under-harvested FFB during high crop periods because they thought that customary landowners would demand money from them.
11 2.2.3 Disputes Between Long-term Caretakers and Leaseholders Caretakers have claimed ownership over LSS blocks for a range of reasons. It was pointed out above that on the LSS scheme at Popondetta, many Oro people moved on to LSS blocks and were issued with harvesting cards by OPIC following the departure of evicted leaseholders in the early 1990s. These caretakers now see themselves as the rightful owners of the blocks, especially those from customary landowning groups. Other caretakers though, as also pointed out above, are from Oro Province but are not members of landowning clans and are now finding their tenure rights being challenged by customary landowners. Their insecure tenure means that, like the LSS leaseholders mentioned above, they are reluctant to undertake large investments like replanting.
A third and large group of caretakers common in the three project areas are those caretakers managing blocks who originally had the consent of the leaseholder to 5 do so . Often disputes arise when the caretaker has for many years had primary responsibility for managing the block while the lessee has resided elsewhere. In such cases it is not uncommon for the caretaker to have undertaken replanting, loan repayments and the planting of fruit trees, coconuts, betel nut palms and other economic trees/palms on the block. In these situations, the caretaker often views his investments (including labour) in the block as validating his ownership claim to the block and will strongly resist any attempts by the original leaseholder or his sons to reclaim or sell the block. This is in accordance with traditional principles of land tenure whereby the tenure rights of village absentees weaken through time while those of villagers cultivating land are strengthened the longer they use the land. Monetary compensation is often demanded by a caretaker if they cannot remain on the block.
When ownership disputes over LSS blocks arise between caretakers and leaseholders, or between caretakers and customary landowners, productivity can drop sharply. Importantly, major investments like replanting and fertiliser inputs can be put on hold. Also, the insecurity generated by these disputes often means that the current occupants of the block are less inclined to repay loans because there is a relatively high probability of the benefits of such investments accruing to others (see Section 3.9 on loan repayments). Such disputes can result in reduced smallholder productivity for extended periods.
2.2.4 Arrears in Land Rentals The State land rental fees on many LSS blocks have been in arrears for more than a decade, though determining the amount of arrears is difficult because of poor record keeping in land administration mentioned above. The Organic Law on Provincial and Local Level Government decentralised land functions to the provinces, but land rents on State leasehold land remain a source of revenue for the National Government and are paid directly into national consolidated revenue. Although the provincial lands officers are well placed to collect land rents they are grossly under-resourced and therefore unable to undertake this task on a regular basis. For growers, the irregular and what appears to be arbitrary collection of land rentals together with evidence of poor record keeping, undermines their confidence in the land rental system. The key problems that have emerged in recent years concerning land rentals on LSS blocks include the following:
12 1. Large differences in the land rental charges between LSS blocks. Land rentals are based on an assessment of the value of the land by a valuer from the Lands Department. Those blocks that have been valued or purchased recently have significantly higher land rentals than those that have not been re-valued recently (valuations of LSS blocks are supposed to be made every 10 years). The land rental on many blocks has not changed since before PNG's political independence in 1975. 2. Many leaseholders lack confidence or trust in the record-keeping capacity of the Lands Department (both provincial and National) which they use to justify non-payment of annual rentals. 3. Many growers claim to have paid land rentals without receiving official receipts. They claim that these payments were never recorded by the Lands Department, and therefore are considered by the Lands Department to be outstanding 6. 4. LSS growers have sometimes had difficulties obtaining loans when their land rentals were in arrears. For example, the progress of the replanting program under the Oro Expansion project was initially delayed by the refusal of the Lands Department to grant approval for replanting of blocks that were in arrears.
2.2.5 Rising Population Pressure on Leasehold Blocks Most LSS blocks are 6.0-6.5 ha, an area deemed adequate to support a nuclear family when the LSS schemes were first established. Today, however, as Section 3.2 describes in greater detail, the single household has been supplemented by co- resident households as sons marry and raise their own children on the block (sometimes too a married daughter and her family will remain on her parents' block). It is not uncommon for three or more families spanning three generations to be sharing the resources of a single, 6 ha block. Population pressures are greatest at Hoskins (the oldest LSS scheme), followed by Bialla and then Popondetta (Table 3. 1).
This high population density on LSS blocks is placing significant social and economic stresses on block residents. These pressures are reflected in the high rate of disputes over block 'ownership' (especially following the death of the leaseholder), contested management decisions amongst family members concerning the allocation of oil palm work and income, by regular attempts to avoid loan repayments and efforts to delay replanting (Section 3.2). For example, there were many incidences at Hoskins where the sons of elderly or deceased leaseholders were stalling replanting because one or more sons were reluctant to forego oil palm income during replanting. Their reluctance to replant and ability to delay replanting was aided by the fact that leadership and responsibility for the block was not clearly vested in one son. Thus, population pressures can exacerbate tenure disputes amongst male siblings in deceased estates or in cases where the father, the original leaseholder, is too old to exercise any effective authority over the block.
2.3 Village Oil Palm (VOP) Holdings on Customary Land Across the three project sites, approximately 46% of the total area of smallholder oil palm is classified as VOP plantings. Popondetta experienced a large expansion of VOP plantings in the late 1990s under the Oro Expansion Project,
13 and VOP planting in that province now accounts for 74% of the total area planted to smallholder oil palm (Table 2.2).
Table 2.2. The numbers and area of VOP blocks at Bialla, Hoskins and Popondetta*
BIALLA HOSKINS POPONDETTA No. of VOP blocks 1,593 3.614 plus 857 5,191 CPBs** VOP area (ha) 3,669 8.428 10,520 VOP area as a percentage of total 31% 35% 74% smaliholder area
Total smaliholder area 12,026 24,064 14,285 (ha)
*Data supplied by OPIC offices at Bialla, Hoskins and Popondetta (based on 2005/2006 information). **Customary Purchase Blocks
Oil palm cultivated on village land is subject to the rules and regulations of customary law and land tenure principles. The constitution of PNG and the Underlying Law Act 2000 recognise customary land tenure principles and 7 practices . Customary land in PNG generally refers to land that is under the communal ownership of traditional social and kinship groupings like tribes, clans, subclans and lineages. It is useful at this point to provide a brief summary of customary land tenure principles in relation to subsistence production because it is these principles that have been modified to accommodate cash cropping.
Traditionally, customary land tenure regimes in PNG were characterised by two general sets of principles. First, exclusive individual land ownership and inheritance were almost unknown as all land was vested in land-holding groups, usually kinship groupings such as clans and subclans. Typically, membership in landholding groups was loosely based on common descent, residence and participation in social and ceremonial activities (Crocombe, 1971), and, ideally, group members had usufruct rights to land for cultivation of food crops and access rights for hunting and gathering forest products (Ward, 1997). This meant that an individual's gardening rights in an area of land waned as his/her garden reverted to fallow and the fallow period lengthened - there was a gradual reversion of rights to the group (Ward & Kingdon, 1995). This system of communal tenure limited the extent to which land could be directly inherited and so prevented individuals from acquiring exclusive control over large areas of land (Ward & Kingdon, 1995).
The second set of principles related to the flexible and pragmatic nature of customary land tenure. Rights to land were often modified to accommodate changing socio-political, demographic and environmental situations (Crocombe & Hide, 1971; Ward, 1997). The relative importance in land rights of descent, residency and participation in social/ceremonial and political activities varied so
14 that no single criterion, such as descent, was sufficient in itself to provide unconditional tenure rights (Crocombe, 1971). As Crocombe and Hide (1971, 305) note for PNG, "cultural norms tended to be local and adaptable and this was reflected in the multiplicity of links through which an individual could acquire land rights, and the degree to which the exercise of land rights deviated from the ideal". Thus flexible tenure arrangements sustained a system whereby all households had access to land for their daily sustenance (Ward & Kingdon, 1995) as well as access to a range of ecological zones to meet different household subsistence needs (Ward & Kingdon, 1995). In summary, traditional principles of customary land tenure created a balance between group and individual rights and obligations, with ownership of land vested in the group and access and land use rights operating at the individual or household level (see Fingleton, 2005).
With rising demographic pressures, the emergence of new land uses such as cash cropping and increased dependence on cash, customary rules of land tenure are becoming more prescriptive. As more land is devoted to commercial agriculture and comes under semi-permanent commercial production, usufruct rights are now vested in the same family or individual for much longer periods. This long-term alienation of land for cash cropping is leading people to claim exclusive rights of access to, and inheritance of, these resources of their fathers. The outcome is that customary tenure is gradually coming to resemble more individualised forms of land tenure with a consequent reduction in the flexibility of customary land tenure practices (Hooper & Ward, 1995). These shifts have been accompanied by a change in peoples' views and attitudes to land such that land is increasingly being seen by some clan members as a commodity that can be sold to people outside the land-holding group.
VOP blocks on village land are governed by the principles of customary land tenure with clan leaders controlling the allocation of land for export cash crops. Clan agreements to the planting of individual oil palm holdings are either informal social contracts or are outlined in Clan Land Usage Agreements (CLUA). A CLUA is a signed agreement between a clan and an individual acknowledging the latter's right under native law and custom to have access to the land to plant oil palm and receive the produce and resultant income of the palms for the life of the individual.
As indicated above, the planting of cash crops like oil palm has required modifications to customary rules of land tenure because the land is under individual control for much longer than for subsistence food gardens in swidden systems where short cultivation periods are interspersed with much longer fallow periods. Typically, under a traditional tenure system when a food garden is abandoned to the fallow after several years of cultivation, land tenure reverts to the group. A different situation pertains with long-term productive assets such as oil palm that have a productive life of over twenty years. Usually, the individual or household managing the crop wishes their children to inherit it rather than letting it revert to communal ownership. Similarly, most oil palm growers prefer to replant their oil palms rather than let the land move back into the pool of common clan lands. The most significant modifications to customary tenure for cash cropping have therefore occurred in relation to the greatly extended period of
15 individual tenure and the increased emphasis on the inheritance of land used for cash cropping S
VOP growers are not all customary landowners. They are a diverse group made up of close and distant relatives of the core landowning clan or subclan, members of minor village clans or subclans without full customary rights to the land on which they are cultivating oil palm, members or friends of an extended family network or clan, and 'outsiders' who have purchased blocks of land from the customary landowners to plant oil palm (Customary Purchase Blocks - CPBs). Land tenure issues vary amongst these groups. Potential land tenure problems associated with each type of VOP grower are discussed below.
2.3.1 Land Tenure Conflicts Between Customary Landowners and Other VOP Growers There are often large variations in the size of landholdings between neighbouring customary landowning groups within the three project areas (and within most other areas of PNG). Landholdings are often geographically dispersed, reflecting past movements of people, intermarriages, adoptions and the history of past cultivation practices that conferred on groups tenure rights to dispersed parcels of land. Often within a village, for example, one clan or subclan will be the dominant landholding group while other clans/subclans may have inadequate or scattered landholdings. In the past, as pointed out above, customary tenure arrangements were adaptable and flexible so that individuals from land-short clans/subclans had access to land for subsistence production. This flexibility provided most households with adequate access to land for subsistence.
Similarly, with the initial introduction of village oil palm, clans, subclans and lineages that were land-short or lacked land for oil palm cultivation near a harvest road, were usually allocated land belonging to the major landholding group to plant oil palm, in the same way they were granted access to land for subsistence gardens. This meant that in some villages there was, in effect, a substantial redistribution of landholdings from primary landholding groups to minor clan groups. This land redistribution reduced potential income inequalities amongst village families by allowing most households access to land for oil palm.
Now, twenty or more years on, the distribution of landholdings that occurred when oil palm was introduced is increasingly being questioned by the present generation of the primary landowning groups. Some members of primary landowner groups are strongly opposed to the efforts of non-landowning VOP blockholders to replant their ageing stands of oil palm, for the same reasons that customary landowners in Popondetta are resisting the attempts of LSS growers to replant their blocks (i.e., to forestall long-term claims on the block so that it can be returned to the customary landowning group). Also, members of many customary landowning groups are becoming more resistant to non-clan/subclan villagers developing new blocks on their customary land. The reasons for this shift in attitude are varied, but relate largely to increased demographic pressures, functional land shortages for oil palm production, increased reliance on cash, and a growing recognition of the potential of land to generate wealth for the individual.
16 Although VOP tenure disputes between landowning clans/subclans and land-short village clans/subclans are present in some VOP subdivisions in Bialla and Hoskins, these problems are more common in Popondetta and are a major cause of tension in some villages. Some individuals from minor clans who were granted access to land to plant oil palm are now seen by some members of the primary landowner group to be enjoying better lifestyles and living standards than the 'true' landowners (papa graun tru). These blockholders are envied by members of the primary landowning group, partly because the wealth generated from these VOP blocks is viewed by customary landowners as being derived from 'their' land and, as such, is wealth being siphoned from the clan. Typically, the landowning group tends to emphasise the role of the land in wealth generation over the role of labour in generating that wealth. The replanting stage is often the trigger for customary landowner demands for the return of their land, or can spark demands for the imposition of landowner 'rental fees' on 'tenants' for continued access to the land for oil palm. However, often underlying these feelings of discontent are broader issues of functional land shortages for oil palm production.
Over the past twenty years, village populations have grown significantly, especially at Bialla and Hoskins, and land suitable for oil palm is perceived by some members of the primary landholding group to be in short supply (e.g., Mai and Buluma villages in the Hoskins scheme), leading to an increased emphasis on descent in allocations of land for oil palm. Thus, previous agreements with now deceased clan leaders which allowed land-short members from other village lineages and subclans to establish VOP blocks are now considered to be nearing expiry as the time for replanting oil palm approaches. Members of primary landholding groups claim that the land allocated to non-clan members by their forebears is now required by the younger generation of landowners who wish to manage their own oil palm blocks.
Thus this growing functional land shortage for oil palm relates largely to the uneven distribution of village landholdings amongst village clans/subclans, and the requirement that oil palm blocks be located along existing feeder roads. The road requirement means that landowner groups without a feeder road on their land are dependent on the generosity of other landowner groups for access to land for oil palm9. OPIC, rightly, does not approve applications for new VOP blocks if the proposed site is not located on an existing road. The road network is therefore an important determinant of the income potential of different landowning groups within villages.
Whilst land shortages are typically the root cause of disputes over planting (and replanting) of VOP blocks, other social variables are at play too that may serve as triggers for these disputes. These include: 1) the death of the customary landowner who allocated a block to a non-clan/subclan member; and 2) the death of the blockholder who was granted the land to plant oil palm. These two events often initiate demands that VOP blocks be returned to the primary landowning group, or demands for the introduction of a 'rental fee' or compensation payment for the land. Thus the children of the blockholder who was the recipient of the land, may be confronted with an uncertain future with regard to oil palm production. For the customary landowning group the validity of their demands for the return of the land are reinforced if two important conditions are not met.
17 These conditions, which reveal the continuing influence of traditional socio- cultural values in relation to land access, include the perception amongst customary landowners that the:
1. blockholder did not contribute adequately to the mortuary payments (or participate sufficiently in mortuary-related activities) of the deceased clan leader who allocated the land; and/or
2. blockholder or deceased blockholder did not fulfil his customary obligations to his 'host' landowning group to an appropriate level, or he failed to share a sufficient amount of his oil palm wealth with his 'host' landowning clan members. Customary obligations include contributions to brideprices and mortuary payments of the host group and often, nowadays, contributions to the school fees of children of the landowning group. In the case of a deceased blockholder, moves by his sons or other male relatives to take control of the block of the deceased will be resisted vigorously and sometimes denied by the landowning group.
The failure to meet expected customary obligations demonstrates that customary land tenure is based not only on principles of descent, co-residence and use, but importantly on meeting social obligations to the host landowning group. As indicated earlier, these sorts of pressures to fulfil social obligations (e.g., demands for money) are also present on LSS subdivisions in Popondetta (and to a lesser extent at Hoskins), where blocks are occupied by people from outside the customary landowning group.
As already indicated, the land disputes described above have implications for both the replanting and infill components of the SADP. First, as mentioned above, replanting by village non-clan members is being challenged increasingly by primary landholding groups; and, secondly, it is likely that in some infill areas under the SADP that 'ownership' of blocks allocated to non-landowning villagers will be disputed at some future point in time (when replanting is due) unless tenure arrangements are clear and agreed upon by all parties. When such disputes occur, oil palm blocks can be locked out of production for prolonged periods with replanting postponed indefinitely.
2.4 Land Tenure Conversion (LTC) Blocks (Popondetta) Approximately 450 ha of VOP oil palm at Popondetta is classified as Land Tenure Conversion (LTC) blocks. In the early 1960s, in an attempt to individualise land tenure and encourage export cash crop production, the Australian administration introduced the Land (Tenure Conversion) Act 1963. This allowed for customary tenure to be transferred to individual freehold titlel0. The designated land was removed from customary control and registered in the name of an individual, with provisions to allow up to six co-owners to be registered. LTC was based on the assumption that the individualisation of land holdings through titling would encourage the emergence of family farms and thus promote commercial agricultural development in PNG
Following a recommendation from the Land Development Board in 1964, Northern (Oro) Province was chosen to 'test' the conversion under the new
18 legislation (Morawetz, 1967). The scheme proved popular and by the end of 1965, 33,566 acres were under consideration for conversion under the new legislation (Morawetz, 1967). The early LTC blocks in Popondetta were planted to coffee, cocoa, or rubber, and many were later replanted with oil palm. However, most of the land holdings did not proceed to full title registration in the name of an individual, including, it appears, the majority of the oil palm blocks in Popondetta presently referred to as 'LTC blocks'.
Several growers with LTC blocks at Waseta-Korobata in Saiho-Aeka Division believed they have freehold title to their blocks. However, in follow up discussions with them it was clear that their blocks had not progressed to registration with freehold title being issued; it appears they had misunderstood the registration process with LTC blocks. LTC land must meet two requirements to be classified as private freehold land. First, it must have an LTC declaration on the land, which identifies the person who owns that piece of land by customary law. The second requirement is that LTC declared land must be surveyed, registered and a freehold title issued. An area of land declared as LTC without a freehold title therefore remains customary land. Legally, customary law continues to apply to such land. Where freehold title is issued, customary law ceases to apply.
Like the VOP blocks on customary land described above, many LTC blocks were allocated by clan leaders to non-landowning members, such as individuals from land-short clans/subclans, in-marrying males, sisters' sons and to men from outside the clan with whom they had long standing friendships. However, like the challenges to the tenure of non-landowning VOP growers described above, the tenure rights of non-landowner LTC growers are also being challenged on the same grounds by customary landowning groups.
The experiences of non-landowning LTC growers (and other non-landowning VOP and LSS growers) indicate that tenure conversion has not been effective in extinguishing customary interests in the land. The expectation remains amongst the host landholding group that ongoing access to land by non-clan members is conditional on a certain level of cultural obligations being met, including obligatory gift giving and more informal redistributions of wealth from the blockholder to the host clan. Such acts strengthen social relations and hence land tenure security. At another level, landowner expectations of the obligations of non-clan blockholders reinforce the concept of landowners' inalienable rights to their customary land, and in particular their rights to a portion of the wealth generated on 'their' land. This view or traditional value is very difficult to change, and its enduring influence must be recognised and somehow accommodated by SADP. Like the VOP smallholders on non-clan land and those purchasing customary land (see below), the idea of land being lost in perpetuity is inconceivable to most customary landowners.
2.5 Customary Purchase Blocks (CPBs) The 'purchase' of customary land by non-clan members for oil palm development is occurring at Hoskins and, to a much lesser extent, at Bialla and Popondetta. These oil palm growers and their holdings are referred to respectively as 'Customary Purchase' (CP) growers and 'Customary Purchase Blocks' (CPBs)l 1.
19 The sale of land by customary landowners is a recent trend, first emerging at Hoskins in the mid 1980s and later, around the mid 1990s to 2000, at Bialla and Popondetta. It is estimated that approximately 200 ha and 50 ha of land have been 'sold' at Bialla and Popondetta respectively to 'outsiders' for oil palm development. At Hoskins, there has been a rapid expansion of CPBs over the past 10 years. Presently at Hoskins, 2,567 ha of customary land (857 oil palm blocks) has been developed as CPBs, representing about 30% of the total area of land classified as VOP plantings. Not all VOP areas are selling land and the amount of land sold varies greatly amongst villages (OPIC data). For instance, in Gaungo Village, one of the first villages to begin selling land to outsiders, the total area of CPBs is approaching 900 hectares, representing 84% of the total area of oil palm planted in the village. According to the 2000 National Population Census, 38.5% of Gaungo's population are migrants from other provinces.
At Hoskins and Bialla, there is enormous demand for land by migrants attempting to secure a future for themselves and their families in the relatively prosperous oil palm belt bordering Kimbe Bay. For LSS settlers, especially those from highly populated blocks, the acquisition of a CPB is viewed as a means of easing population pressure on their existing LSS blocks. The high cost of LSS blocks puts these blocks beyond the reach of most LSS growers (prices for a 6 ha LSS block at Bialla and Hoskins range from K30,000 to K60,000 compared with K2,000 to K3,000 per ha for a CPB). Also, the acquisition of a CPB is even more critical for second generation LSS settlers who have lost access to land in their home villages. Similarly, company employees who have spent much of their working lives in WNB and who identify more closely with WNB than 'home' (their children raised in WNB), see an opportunity to secure a livelihood in retirement by purchasing CPBs 12 . Thus for the majority of second generation settlers and migrant workers, the purchase of a CPB is their only option, apart from illegally occupying rural State land or moving into an informal settlement in town.
The property rights of CPB growers differ significantly from those of LSS and other types of VOP growers. Land tenure over CPBs is the least secure of the three types of tenure held by smallholders. The main difficulties relating to land tenure for CPB growers are undocumented land transactions and insecure land tenure rights, both of which increase a CPB growers' vulnerability.
2.5.1 Undocumented Land Transactions The majority of CPB land transactions are informal and not conducted in 13 accordance with customary law . Detailed land surveys are rarely undertaken, and written agreements often do not specify the agreed sale price of the land, the amount and timing of payment instalments, and the specific use rights of the purchaser. Seldom is there any written evidence that the land sale has the general approval of the clan. Instead, land transactions are ad hoc tending to be informal social contracts based on verbal rather than written agreements between vendor and purchaser. It is likely that when disputes culminate in evictions, purchasers will find little recourse through the courts because of the lack of written evidence. Further, there is much misunderstanding of the land tenure rights of those 'purchasing' customary land. Many believe that they have purchased the block
20 outright and have ownership in perpetuity which will allow their children to inherit the land. This is not the case in law as the land remains customary land with the potential for the block to be reclaimed by the customary landowners on the death of the 'purchaser'.
At Hoskins, where the majority of land sales occur, once an area of land and purchase price have been agreed upon, several different land transaction procedures may occur, apart from the entirely verbal agreements mentioned above. The purchase may be recorded on an official Transfer or Lease of Customary Land Form, a Customary Land Transaction Form, and/or a Notice of Change of Ownership Form, and then executed and registered at the Provincial Lands Office (prior to January 1999, OPIC was also executing customary Land Transfers on VOPs). These officially executed forms lack a formal land survey or payment details.
Another procedure used in land transactions is the signing of Clan Land Usage Agreements between the purchaser and a clan leader. The agreement acknowledges that the landowning clan endorses the transfer of the customary land to the purchaser for the cultivation of oil palm. In other words, the clan acknowledges that the land has been taken out of the clan 'commons' and use rights have been granted to an individual. Under a CLUA only the access and use rights have been individuated, not the land itself. However, there have been several cases where CLUA forms have been signed by people unauthorised to dispose of clan land. Finally, as mentioned above, many land transactions remain verbal agreements and are thus open to different interpretations. Indeed, there have been cases in the Hoskins scheme where 'disputed' blocks were resold without the consent or knowledge of the initial purchaser, or a portion of a block of land already sold was sold to another person. In these situations the initial buyer has lost access to the land (without any monies being refunded) or their tenure remains under dispute. In other cases, payment instalments for a block of land have been made to the vendor without any record of the payments being made or the transactions being witnessed by other members of the landowning clan.
A consequence of the informal and undocumented procedures in many land sales is the increasing number of land disputes and insecure tenure. In recognition of the increasing tenure problems on CPBs, OPIC-Hoskins is currently developing a set of procedures for customary land transactions that will overcome many of the current tenure problems on CPBs. For example, all applications for the development of new CPBs must be accompanied with a Clan Land Usage Agreement and a Customary Purchase Contract. These agreements and contracts are recorded by OPIC.
Like the landowning clans described above who permitted villagers from other clans to plant oil palm on their land, there is a growing realisation amongst some younger landowning clansmen at Hoskins that the sale of CPBs to non-clan members is contributing to land shortages for oil palm cultivation. Compounding these grievances is the firm belief, especially amongst younger clansmen, that as customary landowners, they still retain rights in the land sold as CPBs. Like the landowning clans who allowed other villagers access to land for oil palm, the
21 notion of CPBs being lost in perpetuity to outsiders is simply not acceptable. Thus tensions can arise between CPB settlers and landowners when the former views their purchase as providing them with absolute rights of ownership such that there is no need to maintain traditional social and economic relationships with their hosts to validate ongoing access rights.
At Hoskins the ongoing interests of landowners in CPBs after they are sold is reflected in how purchasers who paid out their blocks at some point in the past are faced with demands for extra payments because of inflation in the value of their blocks. For instance, a CPB grower who paid Kl,000 for a 2 ha block 10 years ago, might now be faced with a demand for an additional payment of K2,000 because the current value of his block has risen. These sorts of pressures and demands on CPB growers illustrate how landowners never really accept that their interests in their customary land are abrogated fully whether the land has been sold as CPBs to outsiders, 'given' to co-resident villagers from other clans, or even, as in the case of Popondetta, alienated by the State for LSSs. Thus, in the eyes of customary landowners, the validity of outsiders' continued access to land for oil palm is conditional on their ongoing participation in customary exchange and fulfilling other 'traditional' social obligations. As the extended discussion above has highlighted, 'outsiders' can be co-resident villagers from other clans, CPB growers and, at Popondetta, LSS residents who are not from the customary landowning group.
2.6 Strategies For Achieving Social Development Outcomes: Recommendations to Address Land Issues. There are several potential land tenure issues that may affect SADP's infill programme on customary land and replanting on customary or State land. The nature of potential land tenure problems and conflicts varies between the project sites and the types of land tenure arrangements present in each project area. As outlined in Section 2.1 there are four principal sets of land tenure arrangements operating in the project areas. These include:
* Agricultural State leasehold land on LSSs; * VOP holdings on customary land by major and minor clans; * Land Tenure Conversion blocks; * CPBs on customary land.
Recommendations applicable to each are presented addressed below.
2.6.1 Agricultural State Leasehold land on Land Settlement Schemes For the LSSs, the main issues likely to impinge on the replanting component of the proposed SADP concern: * Transmission of leasehold titles (e.g., disputes over inheritance); * Customary landowner demands for the return of leasehold blocks to customary ownership (or that additional compensation payments be made to customary landowners for this alienated land); * Disputes between long-term caretakers and leaseholders; * Arrears in land rentals; * Rising population pressure on leasehold blocks.
22 Recommendation 2.1 Update leasehold titles to strengthen tenure security. Strengthening the tenure security of LSS blocks with respect to overcoming the current problems relating to the transmission of leasehold titles requires a coordinated approach by OPIC, the Department of Lands and Physical Planning, and the provincial lands offices to address these major lease problems facing these growers. Given the Department of Lands and the Provincial Lands Office lack the capacity to effectively maintain LSS lease records, OPIC should take the leading role until such time these government agencies have the capacity to perform this role. Priority should be given to:
* Conducting an audit of state leasehold titles to update and clarify the status of each leasehold title. This will ensure that the authority and responsibility for managing the block is vested in one person, and thus reduce the potential for disputes over replanting. * Reducing the potential for disputes of the inheritance of leases by introducing a standardised Will for LSS farmers in the three project areas. This task should be supported by the Department of Lands and Physical Planning, Provincial Lands Office, and the Public Curator's Office. OPIC- Hoskins has already commenced promoting Wills among LSS growers and is soon to release a handbook on Will Making for smallholder growers (Yala & Kalinoe, 2006)14. The formal process for title transmission as provided for under the Wills, Probates, and Administration Act is cumbersome, expensive and beyond the financial reach of most smallholder farmers. The efforts to promote the use of Wills among smallholders by OPIC-Hoskins should be supported and extended to Bialla and Popondetta. * Related to the previous point, OPIC should encourage title transfers in Wills that protect the rights of widows to remain on the block after the death of the leaseholder (under the current system, widows have no legal right of tenure after the death of their husbands - the leaseholder).
To assist with implementing the above recommendations, OPIC should be provided with resources (staff and training) under SADP to complete the above tasks as soon as possible. Further, a formal link should be established between the Department of Lands and Physical Planning and OPIC to improve coordination and efficiency.
Recommendation 2.2 Establish new approaches for the collection of LSS leasehold rentals and a more equitable method of setting rentalfees. To provide leaseholders with an easy and transparent means of payment, it is recommended that The National Department of Lands and Physical Planning be encouraged to outsource the collection of land rental fees to OPIC or the milling Companies. OPIC could arrange, through the oil palm companies for the deduction of the annual rental fee from growers' payments on behalf of the Lands Department, and, ideally, should be paid a small commission to cover the costs of the service. There was support for this idea at Hoskins in a recent meeting organised by the National Land Development Taskforce with the management 5 team of both OPIC-Hoskins and New Britain Palm Oil Limited' . Such a system would ensure that there is a permanent record of the land rental payments made by
23 growers. To minimise the impact on growers, rental fees should be deducted during the high crop period.
The Lands Department should move towards a simple and standardised method of valuing blocks rather than the present method of visiting each block separately which is costly and has introduced a high degree of inequity in rental fees amongst growers. A standard method based on area of LSS block and/or area planted to oil palm would provide a simple, more equitable and cost-effective method of setting rental fees.
Recommendation 2.3 Develop strategies to afford greater tenure security to LSS growers at Popondetta. OPIC, customary landowners and LSS growers must address the continuing insecurity of LSS growers by encouraging constructive dialogue between the groups to formulate strategies to improve the security of LSS growers. Church organisations should be encouraged to be part of these deliberations because their members are drawn from both communities. The question of a land rental fee paid to customary landowners by LSS growers should be discussed as a potential solution to these disputes. Some LSS growers are already making informal payments of land 'rentals' to landowners. The palatability of such a strategy might be improved by the fact that many of the blocks in the highly contested LSS areas are occupied by caretakers without leasehold title to their blocks. During meetings with growers for this assignment, we had a sense that there was support for such a solution. Of course, this would require more investigation and consideration before making any firm recommendations (see also Section 2.6.4).
Recommendation 2.4 Address problematic caretaker arrangements. Relationships between long-term caretakers and leaseholder/VOP blockowners should be formalised by OPIC with the introduction of a contract agreement (a Caretaker Arrangement Agreement) between the caretaker and the leaseholder/blockowner. The contract should specify the contract period, the type of work to be done by the caretaker, the terms and conditions of the caretaker arrangements and the proportion of the value of the harvested fruit paid to the caretaker. The percentage payment split between caretaker and leaseholder/blockowner should be modelled on the Mobile Card (see Curry & Koczberski, 2004), with payments made through the company smallholder payment system to ensure caretakers are paid in a timely manner. This will help ensure that the financial incentives for caretakers to harvest oil palm remain strong.
By signing a contract with the leaseholder/blockowner and being guaranteed income, it is envisaged that Caretaker Arrangement Agreements will discourage caretakers from attempting to claim ownership over blocks, refusing to vacate blocks or seeking compensation from leaseholders. However, no contractual agreements should be approved by OPIC before the legitimate leaseholder is identified and the leasehold title to the land is confirmed.
No new harvesting cards should be issued by OPIC to unauthorised caretakers or caretakers who have forcefully taken over blocks as they undermine the security
24 of state leases. The situation in Popondetta is different because many of these caretakers have been occupying LSS blocks for nearly 15 years.
2.6.2 Village Oil Palm (VOP) Holdings on Customary Land
Recommendation 2.5 OPIC to adopt strategies during infill and replanting that i) strengthen the tenure rights of growers on non-clan land, and ii) promote more equitable access to oil palm across village landowning groups. Despite the conflicts occurring on customary land described in Section 2.3, VOP holdings on customary land have generally been very successful. The following recommendations are proposing minimal changes to existing customary practices, and are designed to:
* strengthen the user-rights of villagers farming on non-clan land, and * ensure more equitable access to oil palm across different village landholding groups.
In devising strategies to strengthen the user-rights of oil palm growers on non-clan land and those on LTC blocks, it must be recognised that customary land tenure is not static, but rather is characterised by a high degree of flexibility and dynamism. Tensions and disputes over land, especially intergenerational disputes, are likely to emerge through time and undermine pre-existing agreements or informal contracts. Hence, the following are proposed as three strategies to be discussed with landowning groups.
1. Encourage a form of 'compensation' or 'gift' payment to landowners at the replanting stage for disputed blocks. Smallholders could be encouraged to make a one-off compensation payment, gift or feast (Pondo) when the palms are poisoned, which must be witnessed by the rest of the landowner community. This will serve to legitimise replanting and symbolically recognise the customary landowner group's continuing underlying customary rights in the land. In effect, the conflict over replanting is defused because a right to replant is conferred on the blockholder in a culturally acceptable way, while the underlying rights to the land of the customary landowning group are reasserted.
2. Introduce a land rental fee which generates an income for the landowning group and thus provide some tenure security for the 'tenant'. This more formal rental contract could specify the terms and conditions associated with the use of the land, the annual rental fee, method of payment and period of contract (20 years - duration of one planting cycle). A component of the fee (equivalent to a royalty) should be based on the value of production from the block so that landowners feel they are benefiting from the wealth being generated on their land. This would ensure that any long-term increases in the value of production are shared with landowners. This land rental fee could be a component of a larger Customary Land Tenancy Agreement (CLTA) described in Recommendation 2.7 below.
25 3. When planning feeder and linking roads to optimise infill, it is recommended that close attention be given to the distribution of village landholdings by clans/subclans in an effort to maximise the number of landowning groups within each village with access to a feeder road on their own land. This will raise participation rates in oil palm production and bring about more equitable opportunities for villagers to participate in oil palm production. As outlined in Section 2.3.1 the uneven distribution of village landholdings amongst village clans/subclans, and the requirement that oil palm blocks be located along existing feeder roads means that landowner groups without a feeder road on their land are dependent on other landowner groups within the village to gain access to plant oil palm.
2.6.3 Land Tenure Conversion Blocks
Recommendation 2.6. Address tenure insecurity on LTC blocks. To ensure the sustainability of oil palm production on LTC blocks, in particular those intending to undertake replanting as part of the SADP, it is recommended that strategies to strengthen the user-rights of LTC growers, based on those outlined in Recommendation 2.5 be applied to LTC blocks. Also, the legal status of each LTC block must be determined. This issue is also addressed in the recommendations of the National Land Development Taskforce.
2.6.4 Customary Purchase Blocks
Recommendation 2.7 OPIC to immediately develop a new land administrative system for oil palm developments on Customary Purchase Blocks. The current procedures for dealing with new oil palm plantings on CPBs and the commonly used CLUA form do not adequately ensure user-rights security for the individual purchasing/leasing the land, and nor do they ensure that all members of the landowning group support or benefit from these land transactions. Thus there is a need for OPIC to review its current practices relating to new planting of CPBs. It is anticipated that most infill at Hoskins will be in CPB areas.
A set of preliminary guidelines that should be considered in the design of a new and suitable land administrative system for oil palm planted on CPBs is provided below. The recommended system contains three main elements:
1. The design of a Customary Land Tenancy Agreement (CLTA). 2. Completion of a Land Investigation Report. 3. The Design of a Statutory Declaration Form.
It is also strongly advised that customary landowners and legal experts knowledgeable in customary law be consulted before any new system is established. The recommendations presented here build on existing principles of customary tenure and current OPIC procedures. They aim to ensure customary 16 tenure is not undermined and the current risks and tenure insecurity for people 'purchasing/leasing' CPBs for oil palm production are minimised (see Table 2.3). The three main elements of the new system are outlined below.
26 1. Customary Land Tenancy Agreement (CLTA) It is recommended that OPIC, in consultation with legal experts and customary landowners design a Customary Land Tenancy Agreement (CLTA) appropriate for each oil palm region. The CLTA must be endorsed by local landowners in each project area before being promoted by OPIC.
A CLTA should cover the following elements:
i) Clarification that the person is not purchasing the land outright as in freehold title, but rather leasing the land for a particular land use for a specified period of time, and that the land remains under customary ownership in perpetuity. ii) Three party signatory process comprising landowning clan members (at least four senior clan members, including women leaders), individual/s from the clan who has/have user rights on the land under customary law and the proposed tenant. These signatures must be witnessed by OPIC and a senior staff member of the Lands Department. iii) Agreement that the customary owners relinquish any use rights or management rights to the land for the duration of the lease period. iv) Land boundaries are clearly defined (preferably surveyed and marked with Cordyline 'tanget' or palms). v) Defined lease period, preferably for the duration of the cultivation cycle of oil palm, with renewal options of lease specified. vi) An outline of the rights and obligations of the clan members, the clan leaders disposing of the land and the designated tenant. For example, the rights of the tenant to earn income from the land, to plant commercial and subsistence crops, and to establish businesses, houses and other assets should be specified. The transfer rights of the tenant should also be made clear, as should the rights of the clan leaders to repossess the land due to breaches of the terms of the agreement. OPIC could act as referee in such disputes. Similarly, all covenants on the lease should be specified, such as restrictions on the transfer or sub-leasing of all or part of the land to another person during the lease period, or any restrictions on the disposal of the lease payments by clan leaders. Restrictions may also be imposed on certain behaviours of tenant and family (e.g., drunkenness, lawlessness, etc.) or on clan members (e.g., intimidation of tenant or demands for money beyond specified lease payments). vii) Payment details. This should include details of any up-front payments made or owing to maintain ongoing access rights to the land, the level of annual rental fees, any royalty component based on production and the penalties incurred in cases of default. All payments should be transparent and accountable. Ideally, payments should be deducted through the smallholder payment system with payments paid directly into an account of the landowning group, so that there is a permanent record of payments. viii) As stated in Recommendation 2.5, a component of the fee should be similar to a royalty based on the value of production, so that as the value of production from the block increases through time, landowners will feel they are also benefiting from the rise in the value of the production.
27 ix) Provisions for future contingencies. For example, consideration should be given to what provisions should be made for dealing with lease renewal, the death of the tenant (see Point 3 below) or if the lease were to be revoked for some reason (compensation of the tenant). x) Inclusion of a Land Investigation Report and signed CLUA (see below).
2. Land Investigation Report Before a CLTA is signed, the OPIC land officer should inspect the designated land and complete a Land Investigation Report, together with representatives from the landowning group, to verify ownership claims of the land and that the land portion is not under dispute. The boundaries of the designated land should 17 be clearly defined . Investigations should be conducted to determine what other forms of 'secondary' rights, if any, exist over the land. Also, an assessment of potential future land shortages or inequitable access to land for the planting of oil palm, other commercial crops or food crops by members of the landowning group should be investigated, and whether leasing of the land is in the best interests of the customary landowners.
As part of the Land Inspection Report a community meeting should be held with a sizable representation from the landowning group (at least 50% of members, and with a good representation of women) and/or those individuals or families identified by the community to deal in the land. The community meeting should in the first instance:
1. Record the individual/family unit identified and supported by the landowning group to have the rights, under customary law, to deal in the designated land for lease. 2. Give members of the landowning group an opportunity to object/support the proposed land agreement. 3. Define the conditions under which that portion of land be released on a lease basis.
The meeting should also be used as a forum to determine/alter the following: use rights of the lessor, appropriate rents, dispute resolution mechanisms, and to define how the lease monies will be distributed to ensure all members of the landowning group benefit fairly. Whilst there will be standard rights, obligations and restrictions written into all agreements (e.g., rights of tenant to plant oil palm and prohibitions on clan members transferring the land during the lease period, etc.), the customary landowners of the designated land should be given the opportunity to include additional rules and regulations which they would like to see placed on the land during the lease period (e.g., thoroughfare right of way). This meeting should be announced publicly several weeks in advance. The meeting should be deemed invalid if a sizable representation of the landowning group is not present.
The Land Investigation Report must be approved by OPIC and the customary landowners prior to the signing of a CLTA and issuing of seedlings. Approval of the Land Investigation Report should only be given if all of the following are verified:
28 * The landowners have the right to dispose of the land for lease. * Boundaries are clearly marked. * The land is undisputed. * Secondary right to the land are acknowledged. * Leasing the land will not negatively impact on clan members access to land or undermine their livelihoods and everyday needs. * Attendance at the publicised community meeting to discuss the Land Investigation Report was representative of the landowning group (e.g., women, youth and elderly clan members). * The landowning group agree that the land be leased and are aware of their rights and restrictions on the land under the lease agreement. * The landowning group have in place or are preparing a system for the collection of rents and its fair distribution to clan members.
3. OPIC to work with customary landowners to design a Statutory Declaration Form. Declaration will lessen the likelihood of disputes relating to the A Statutory 8 transmission of user-rights to the children of the tenant in the event of death" . The Statutory Declaration should set out the rights of the tenant to transfer the user-rights to the land to named children in the event of death to allow the continuation until the end of the lease period of oil palm production and any other cash income or subsistence activities. It should be signed by representatives from the landowning group, the individual/family unit identified as having rights under customary law to deal in the designated land, and the tenant. It should be made clear that the Statutory Declaration is subject to the original CLTA.
Other recommendations with specific reference to OPIC in dealing with land matters include:
* OPIC to be given financial and staffing support to: strengthen the Lands Section of OPIC; implement the recommendations outlined in Recommendations 2.1 to 2.7; and, develop its administrative capacity to store and catalogue all property transactions and Land Investigation Reports on customary land. * Customary landowners should be encouraged to open a bank account for land rental payments and develop a system to ensure the monetary benefits of the leased land flow to all members of the group (e.g., to fund community projects such as aid posts). * Further training of OPIC land officers to deal competently with customary land transactions and in conducting detailed and systematic Land Investigation Reports. The latter would include developing skills in surveying and the use of maps, recording genealogies and clan structures, and customary land dispute mediation. * Replace the commonly used term "Customary Purchase Block" with a term that more accurately defines the land arrangement. For example, the terms "Customary Tenancy Block" or "Customary Development Block" would more accurately reflect the situation.
29 Our recommendations have placed much of the responsibility on OPIC for developing a new administrative system for processing and administrating customary land transactions. This is because the Provincial Lands Office and other government departments lack the administrative capacity to deal effectively with these transactions. In the longer-term the Department of Lands will need to work closely with OPIC, but for the foreseeable future it is likely that OPIC will need to shoulder much of this responsibility. It is important, therefore, that OPIC be funded sufficiently to undertake these roles for at least the life of the SADP.
30 Table 2.3. Potential risks and risk miti ation strate ies on Customa Purchase Blocks. POTENTIAL RISKS OF CURRENT SYSTEM RISK MITIGATION STRATEGIES process comprising Land transaction revoked or not recognised by broader customary landowners Formal land agreement including three party signatory because transaction was unauthorised or did not follow customary rules landowning clan members, clan leaders and the potential tenant. governing land allocations. of payments Insecure tenure and eviction Property and land use rights clarified in a CLTA and witnessing and agreements by landowning group. and specified in Disputes over land boundaries Boundaries verified as part of Land Investigation Report CLTA. Boundary market with tanget or betel nut/coconut palms. obligations set Disputes over purchase price and payment instalments Systematic record of all payments and clarification of payment out in CLTA Inappropriate or additional monetary demands from customary landowners. Rights and responsibilities of each party clarified in the CLTA. and improvements on Disputes over the rights of the persons occupying the land and what Specified in the CLTA, including what happens to assets improvements/investments can be made on the land. the block when the lease expires or is not renewed. Unclear customary obligations or expectations of person 'purchasing' the land. Specified in CLTA. Disputes over the rights of the purchaser or clan member to on-sell the land. Specified in CLTA. Rights to use the land may cease at the death of the purchaser/lessee. Specified in CLTA. Inheritance issues not clarified and open to dispute. Specified in CLTA. and records of Clan members do not share fairly in the sale/lease of the land (increasing the risk Payment system formalised through regular deductions that the land will be reclaimed or occupant intimidated by disgruntled clan deductions. members). land administration A sense of marginalisation among some clan members that their 'birthright' has Public forums for discussion are incorporated into the been taken away from them. process. Duration of tenure not specified. Specified in CLTA.
31 2.7 Notes 1. In recognition of the poor state of land administration, the National Land Development Taskforce, which was established by the government to implement the recommendations of the National Land Summit held in Lae in 2005, has a committee - Land Administration Committee - focusing on Land Administration issues (National Land Development Taskforce, 2006). 2. These problems can be compounded further when the leaseholder dies leaving the sons of two marriages to dispute the inheritance. 3. The department dealing with land at the national level is called the Department of Lands and Physical Planning. At the provincial level, the department is called the Provincial Lands Office. 4. Kavugara LSS subdivision has since been developed as a mini-estate oil palm project. 5. Often caretakers are not paid directly by the company for harvested fruit. Instead, payments are made to the absentee leaseholder who then pays the caretaker. Unfortunately for these caretakers, payments may be infrequent or below the market rate for their labour, thereby reducing their motivation to undertake block maintenance and other investments. To limit payment uncertainty the caretaker might also be tempted to sell all or a portion of the harvested fruit through a neighbouring block, leading to problems in debt servicing. 6. In 2002 representatives from the Department of Lands and Physical Planning in Port Moresby visited Bialla to collect land rentals from LSS growers. Because they did not have records of previous payments by growers, the Lands Department collected growers' receipts of previous payments of land rentals to update their records in Port Moresby. Those growers who handed over their receipts were left with no record of their earlier payments. 7. For an overview of the Act see: http:H/www.austl ii.edu.au/au/other/alrc/publications/reform/reform80/05.ht ml 8. In the matrilineal societies of northern WNB, an important distinction is made between land under export cash crops like oil palm and land used for subsistence food production. Oil palm blocks are usually inherited by a man's children while the land used for garden production is still governed by matrilineal principles and so passes to his sisters' sons on his death. 9. In several Oro villages, we came across oil palm blocks planted during the Oro Expansion project that did not have road access. The blockholders claimed that they wanted the tenure security of planting on their own land. Unfortunately for them, the roads were not extended to their blocks. 10. Approximately 1% of PNG's total land area is under freehold title (it is difficult to verify this estimate because there has been no audit of the State land in PNG). The Land Titles Commission, a quasi-judicial organisation that administers the Land Tenure Conversion Act, believes that the proportion of private freehold title may have increased over time. 11. Prior to 2003, smallholder oil palm growers were generally classified as either Land Settlement Scheme (LSS) or Village Oil Palm (VOP) growers. Yala (2004) made the distinction between the Customary Purchase Block growers and Village Oil Palm growers.
32 12. The high price of LSS blocks is helping fuel demand for CPBs. Increasingly, those purchasing LSS blocks are urban-based professionals, business entrepreneurs, high level company and government employees and political elites. High income employees prefer to purchase the much more expensive LSS blocks in WNB because they provide greater tenure security than lower cost CPBs. 13. Section 73 of the Land Act prohibits the sale, lease or disposal of land except to Papua New Guinean citizens in accordance with customary law (see Cooter, 1991). 14. Dr Charles Yala and Professor Lawrence Kalinoe of the University of Papua New Guinea Law School were engaged by OPIC-Hoskins to prepare a Handbook on Will Making and run a Workshop. The workshop was completed in July 2006 and the Handbook is in press. 15. This meeting took place at Mosa, West New Britain on the 8 September, 2006. 16. The balance of maintaining ownership at the group level and securing rights to use land at the individual level has been recognised as one of the better approaches for land policy options for PNG and other Pacific Nations (Fingleton, 2005). 17. It may be necessary for OPIC to charge a fee for this service. 18. Wills are not valid on customary land as inheritance is government by customary law.
33 3 Key Social Issues: Socio-economic and Political Context
3.1 Introduction This section of the report presents an overview of the socio-economic and political contexts of the project areas, with an emphasis on issues that will impact on the success of the SADP in achieving sustainable economic growth for the rural communities, and in particular smallholder households in the proposed project areas. Non-oil palm communities are discussed in the Beneficiaries Assessment report, titled Beneficiaries Assessment Report for the Smallholder Agriculture Development Project, PapuaNew Guinea.
3.2 Changing Demographic Environment: Population Growth Large numbers of migrants have settled in WNB and Oro provinces since the introduction of the oil palm plantation estates and the LSSs. The economic prosperity of the oil palm regions together with high levels of employment opportunities on the company plantations continue to attract migrants from low income areas of the country, some of whom reside with relatives on the LSSs while they look for work. In WNB, excluding the highly densely populated islands of Bali Witu and Arawe, the relatively prosperous oil palm belt from the Talasea Peninsula to Navo has the highest population densities in the province, at up to 130 persons/km2 (Hanson et al., 2001). Between 1980 and 2000, WNB's annual population growth of 3.7%, was amongst the highest in the country (National Statistical Office, 2001), and at this growth rate the population is doubling every 21 years. At the 2000 census, 31% of the WNB population were migrants and the province's Total Fertility Rate at over six was amongst the highest in the country (National Statistics Office, 2001).
The LSSs, especially in WNBP, have experienced considerable population growth since the late 1960s/early 1970s. Population density on the Hoskins LSS has risen from 5.9 persons per block in the early 1970s (Ploeg, 1972) to 13.3 persons per block (222 persons km 2) in 2000, and in 2002 the Bialla LSS averaged 11.1 persons per block (187 persons km-2) (Table 3.1). These population densities are extremely high given the area of the average LSS oil palm block of 6 ha. At the inception of the LSSs a 6.0-6.5 ha block was deemed sufficient for the needs of a single nuclear family. Today, the single household has been supplemented by co- resident households as sons (and sometimes daughters) marry and raise their own children on the block. Commonly, three generations now share the resources of one 6 ha block.
34 Table 3.1. Numbers of persons per block from the early l 990s projected through to 2011 for LSS blocks at Bialla, Hoskins and Popondetta.
LSS YEAR POPULATION PER LSS BLOCK
BIALLA 1994 8.52
2002 11.1
2011 14.88
HOSKINS 1990 8.6
2001 13.3
2011 19.91
POPONDETTA 1990 n.d.
2001 8.2
2011 10.2 Hoskins: Annual growth rate per LSS block 1990-2001=4.968. This growth rate used to calculate projected 2011 population. Bialla: 1994 population obtained from OPIC census survey of all blocks at Wilelo subdivision. 1994-2002 annual population growth rate per LSS block=3.78. The slower growth rate on blocks at Bialla compared to Hoskins may be due to the opening up of Soi and Kabayia subdivisions in the early 1990s. The 3.78% growth rate was used to calculate projected 2011 population per block. Popondetta: 2011 population projection based on census data for annual population growth rate for Oro province between 1990-2000=3.2%. (Sources: Landell Mills, 1991; OPIC, 1994; Koczberski et al., 2001; Koczberski & Curry, 2003; National Statistical Office. 2000). *2011 figures do not take account of the impact of HIV/AIDS related deaths on population growth rates.
The rapid rate of population growth at Hoskins LSS between 1990 and 2000 is partly attributable to the difficulties settlers now experience when attempting to resettle in their 'home' villages and the contraction of off-block residence options. Opportunities for re-establishing themselves at 'home' are becoming remote because of their long absences, together with the fact that many of their children were raised in WNB and learned Melanesian Pidgin rather than their indigenous languages (Curry & Koczberski, 1999). Their home areas are also likely to be experiencing population and land pressures, given that settlers were initially recruited from land-short areas. Further, the large migrant population on the LSSs also attracts many short-term visitors from migrants' home provinces seeking employment, mainly on the private estate plantations (Curry & Koczberski, 1998).
There is also recent evidence of high population density on the CPBs at Hoskins. In a study of 32 CPBs at Hoskins, Yala (2004) found the average number of block residents per CPB to be 12. Given the average size of CPBs is 2-3 ha, then these population densities are very high.
35 The demographic environment on the LSSs in Oro Province is very different, having changed abruptly in the early 1990s when many leaseholders and their families were forcefully evicted from their blocks by customary landowners or fled their blocks in a climate of fear. The evictions occurred during the 1992 election when a popular local candidate incited anti-settler sentiments in a campaign that asserted that the province should be developed by the local population rather than by 'outsiders'. Many blocks were taken over by local customary landowners and those settlers who later returned and successfully reclaimed their blocks often left some family members in their home villages (see Section 2.2.2).
Given the limited opportunities for second and third generation settlers to return to their 'home' villages, to find long-term off-block employment or to access additional land for oil palm production, it is anticipated that by 2011 (expected completion of the SADP), there will be an average block population of 15 at Bialla, 20 at Hoskins and 10 at Popondentta (Table 3.1). The additional economic pressures this will create, particularly on blocks undergoing replanting, must be taken into consideration when devising credit and repayment schemes for smallholders accessing loans under the SADP. The rising population and economic pressures on blocks were topics constantly raised by LSS smallholders during the Social Assessment. The rising population density on the LSS blocks is leading to:
* Increased economic pressures on blocks as the two oil palm payments received fortnightly or monthly from the milling company must now be spread across several households of varying age, status and household needs. Thus, the capacity for families to meet their household expenditure requirements, accumulate savings or invest in farm inputs is greatly diminished (see also Section 3.9). * Diversification into non-oil palm income sources as families seek to supplement oil palm income to maintain their livelihoods (see Section 3.6). * Social instability and conflict. Inter and intra-household disputes over the allocation of oil palm work and income sometimes lead to the disruption of oil palm production and reduced incentives to invest in farm inputs (e.g., fertiliser) (Koczberski et al., 2001). * Resistance to replanting the block by younger households residing on their parents' block. For example, there were several incidences recorded at Bialla and Hoskins where the sons of leaseholders were stalling the replanting program as they were reluctant to forego oil palm income during replanting. On these populated blocks, households struggle with low per capita incomes and any further fall in oil palm income in the short- term through replanting is difficult to absorb. * The displacement of cooperative household harvesting systems by more individualised units of production where the harvesting is rotated amongst co-resident households. This appears to be a less productive harvesting strategy with increased potential for under-harvesting. * Increased pressure on co-resident families to seek additional land to plant oil palm, most often with insecure tenure. There are now growing numbers of second generation smallholders illegally occupying land,
36 moving into urban settlements around Kimbe and Bialla or 'purchasing' land from customary landowners (Section 2.5). * Related to the previous point, land pressures on the LSS blocks are also leading to more disputes over the 'ownership' and inheritance of the block.
Finally, the potential social instability that may arise due to the increasing number of poor, young third generation households must be given serious attention by the industry as a whole.
3.3. Changing Harvesting Strategies Among Smallholders A major socio-economic transformation is occurring on the LSSs at Bialla and Hoskins as a result the increasing number of co-resident households and economic pressures on the blocks described in Section 3.2. Multiple household blocks are abandoning the cooperative harvesting strategy (referred to by smallholders as wok bung wantaim) where most adults from co-resident households contribute to harvesting and share the income each month'. This is being replaced by more individualised units of production where harvesting and the associated income are rotated amongst co-resident households with little cooperation in production across co-resident households (Koczberski et al., 2001 and Koczberski & Curry, 2002). Growers call this new form of production organisation markim mun. Adoption of the markim mun production strategy is largely an outcome of social stresses and conflicts over work and income on the block. In the transition to markim mun, the father (the original leaseholder) struggles to maintain control over oil palm production as younger, co-resident married sons demand a larger share of the income from oil palm. Married sons, with their own household expenses and needs, demand market rates of remuneration for their work in oil palm. In the transition to markim mun, families can undergo intense social stresses and tensions.
The switch to a markim mun production strategy, which appears to be increasing (Table 3.2), may be less efficient than wok bung wantaim harvesting2 . There is evidence to suggest that oil palm productivity is lower on highly populated blocks that employ a markim mun production strategy than on highly populated blocks that continue to practice the wok bung wantaim harvesting strategy where all adult males participate in harvesting. Under the markim mun system there is less inter- household cooperation in oil palm production and the size of the work group is typically smaller than that of the co-operative wok bung wantaim strategy. Also, if the markim mun strategy emerged in response to prolonged conflict between co- resident households, often the family whose month it is to harvest cannot call on other co-resident households for labour with the result that they are unable to complete a full harvest. The total income and production for the block may therefore be less than it would be under a wok bung wantaim strategy. Yet, for most block residents, particularly women, a shift to markim mun represents a successful innovation if it leads to reduced conflict amongst block residents.
As the number of co-resident households increase on the LLS blocks, more households will switch to a markim mun harvesting strategy. Within five years the markim mun strategy will be the dominant production strategy pursued by settlers at Bialla and Hoskins (Table 3.2).
37 Table 3.2. Population growth and changing harvesting practices. LSS YEAR POPULATION MARKIM WORK 'OTHER' PER BLOCK MUN (%) BUNG (%) MIXED/ HIRED LABOUR (%) BIALLA 1994 8.52* Est. <5 95+ 2002 11.1 32 67 1 2011* 14.88 >50 <50 HOSKINS 1990 8.6 Est. <5 95+ 2001 13.3 50 48 2 2011* 19.91 75 24 1 POPONDETTA 1990 n.d. 0 Est. 95+ 2001 8.2 0 93 7 l 201 t 10.2 <35
Hoskins 1990 markim mun data from C. Benjamin pers. comm. Growth in markim mun figure based on percentage increase in population between 1990-2001. Bialla 1994 markim mun data from extension officers' interview data.
Apart from the lower smallholder productivity associated with markim mun production systems, the implications of an increase in the numbers of blocks moving to a markim mun system during the SADP include an erosion of the father's (the leaseholder) authority to organise, manage and remunerate block labour as production decisions become the responsibility of the household head allocated that month's production (usually one of the married sons). This has implications for the ability of the leaseholder to mobilise labour, make block management decisions and repay farm debts. The implications arising from the switch to a markim mun harvesting system include:
* Greatly reduced motivation to invest in farm inputs, such as fertiliser. * Reduced incentive to undertake block maintenance as no single household is willing to take responsibility for block maintenance. * Limited capacity for individual households to accumulate savings to invest in other businesses or material improvements on the block (e.g., water tanks, housing improvements, poultry projects, etc.). Under a markim mun production strategy, co-resident households may receive only three or four oil palm payments per year making it very difficult to save (see Section 3.9). * Greater desire of co-resident households to avoid loan repayments when households face long periods between oil palm payments and have limited opportunity to save. Several smallholders explained in interviews that when it is a household's allocated month to collect the oil palm income they will attempt to maximise household income by avoiding the monthly deductions for loan repayments by shifting fruit onto the mama card or onto someone else's payment card. The incentive to avoid loan repayments appears to increase under credit systems where repayment rates are high (e.g., 50% or more of monthly income) and/or during low oil palm prices and high cash demand periods (e.g., when school fees are due, or to fulfil customary obligations like brideprice payments).
38 * Likelihood that higher loan repayment rates will add to disincentives to repay loans because the impact of loan repayments falls disproportionately on one or two families. Also, disproportional loan repayments among households raise the risk of disputes arising over the programming of the markim mun calendar, thereby disrupting production.
Strategies to address some of the problems associated with the adoption of the markim mun production strategy that are relevant to the replanting component of the SADP are outlined in Sections 3.6 and 3.9
3.4 Under-harvesting and Household Labour Constraints: Gender and Youth Issues Under-harvesting leads to substantial production losses amongst smallholders, and is a major cause of low productivity among growers. Analysis of 5 years of production data from the Hoskins scheme reveals that the LSS growers achieved 60% of plantation levels of production (tonnes/ha) while VOP growers achieved only 38% of plantation levels. While some of the smallholder-plantation deficit is explained by lower farm inputs in the smallholder sector (e.g., fertiliser inputs), a substantial proportion of the difference is attributable to high levels of under- harvesting, particularly amongst VOP producers.
Investigations at Bialla, Hoskins and Popondetta indicate that labour supply constraints are the primary cause of under-harvesting. The main types of constraints on the supply of labour include:
* Household labour shortages (e.g., small family size, old age, short and long-term illness and physical disability). * Under-utilisation of available household labour or caretaker labour due to contested tenure rights, or disputes over the remuneration of labour. * Reduced availability of household labour due to social commitments or competing economic activities (e.g., off-block employment). * The absence of a market in hired labour.
Understanding the above labour constraints is important for the success of Component 1 of the SADP. The labour constraints can be short or long-term and result in incomplete harvesting, 'skip' harvesting (harvest rounds missed), abandonment of blocks, or abandonment of a portion of an oil palm block (usually at the rear of the block, or an old stand of oil palm awaiting replanting). The effects on productivity of particular types of labour constraints can be exacerbated by a block's physical characteristics. For example, an elderly grower without co- resident sons to help him is much less likely to harvest old and tall palms than a younger, fitter grower.
Typically, two types of labour supply constraints exist among oil palm smallholders: absolute labour shortages; and, constraints that lead to the under- utilisation of labour. Absolute labour shortages can be long or short-term. Long- term household labour shortages usually affect blocks occupied by young married couples, the elderly, sick, physically disabled, or widowed, with little or no co- resident adult family labour. Short-term labour shortages can occur as a result of illness, customary or religious obligations or short-term absences from the block.
39 Families experiencing absolute labour shortages often have difficulty overcoming labour constraints for a range of reasons, such as truncated kinship or social networks that limit the pool of labour upon which they can draw (a problem on LSSs where settlers have been recruited from outside the province). Further, because of the very limited development of a market in hired labour it is often difficult for families experiencing labour shortages to recruit hired labour.
The under-utilisation of labour is also common on caretaker blocks and on VOP and LSS blocks where married sons share the oil palm block with their parents and the father controls the organisation and remuneration of oil palm labour. If the father/leaseholder distributes oil palm income unfairly or sometimes fails to remunerate harvesting labour, the motivation of household members or caretakers to engage in oil palm production is reduced, and people redirect their labour to areas where they are assured a return on their labour. On densely populated blocks disputes often emerge between father and sons and amongst brothers over the remuneration of oil palm labour. As discussed in Section 3.3 disputed remuneration between father and sons reflects different expectations associated with levels of payment for labour and young married men's desire for more financial autonomy and greater control over oil palm income to meet their individual and household needs.
The recent introduction of the Mama Loose Fruit Scheme by the milling companies and the Mobile Card trial by OPIC and PNGOPRA at Hoskins have demonstrated the potential to alleviate household labour constraints by creating a mechanism that guarantees payment of labour, thereby providing an incentive for increased harvesting and more efficient use of oil palm infrastructure (Curry & Koczberski, 2004). For example, until recently women spent little time involved in oil palm production because their husbands often underpaid them for the collection of loose fruit (the fruitlets dislodged from the main bunch during harvesting). The disincentive for women to harvest loose fruit stemmed from low and uncertain remuneration of their labour by their husbands. This payment problem was addressed by the oil palm milling companies through the introduction of a scheme in the late 1990s, known as the Mama Loose Fruit Scheme, which involved the company paying female smallholders directly for collecting loose fruit on their family plots. The new payment mechanism has been very successful because it guarantees payment of women's labour thus removing a disincentive to women's participation in oil palm production.
Assessments of the Mama Loose Fruit Scheme (Koczberski et al., 2001) have been favourable and note the following benefits of the scheme:
* Increased income and financial independence gained by women. * Reduced intra-household disputes over women's labour. * Women's improved share of household oil palm income. * Enables men to remunerate their wives for block maintenance tasks and also provides a mechanism by which men can contribute to household expenses by weighing FFB on the Mama Card. This has led to more cooperative models of household production.
40 * Increased income has enabled women to better meet household expenses such as transport, education, food, health services and to contribute to customary and church obligations. Improved capacity for women to meet customary and church obligations has improved their social standing. * Improved block maintenance. * Increased numbers of female OPIC extension officers.
During the SADP Social Assessment an evaluation of these benefits was conducted to ascertain if the scheme continues to benefit women. Around 85% of female smallholders in all three schemes now have their own harvesting card and the proportion of total smallholder oil palm income paid directly to women varies from around 20% at Bialla to 30% at Popondetta (OPIC data). At Hoskins, approximately 26% of smallholder oil palm income is paid directly to women, and in 2003 women collected over 55,000 tonnes of oil palm with an average weekly income of K49 (OPIC 2003 data), almost double the national minimum weekly wage of K24.68 (Bank of Papua New Guinea, 2005). With access to regular oil palm income, women expressed a desire for training in household budgeting. Such training for women could also be usefully extended to small business management, given the growing population pressures on the schemes.
The authors noted that since 2002, there has been significant strengthening of the Mama Loose Fruit Scheme at Bialla and Popondetta, and much effort has been made by OPIC-Popondetta to increase the numbers of women with bank accounts for direct deposit of their oil palm income. The latter is important as many women were relying on their husbands or sons to hand over their loose fruit income, but the money was often spent by the men.
At Hoskins, women raised two issues relating to the Mama Loose Fruit Scheme. First, there is a trend emerging on the more populated blocks for sons to intimidate their mothers for a share of the loose fruit income. This problem seems to be emerging on blocks where there is a break-down or a dispute in the markim mun production system and the son turns to his mother and expects her financial assistance. This problem appears to be an outcome of population pressure rather than a fault of the Mama Loose Fruit Scheme itself. However, it is a worrying trend that could undermine the success of the scheme. A second issue raised by several women, was that they would like to own their own wheelbarrows to cart loose fruit to the roadside edge of the block. Many use flour bags to cart the loose fruit when the wheelbarrow is being used to cart the FFB. Some women at Hoskins have approached the Loose Fruit Mama Representative on the LPC to request that the company allow loan deductions on the Loose Fruit Mama payments for wheelbarrows.
After almost eight years since female extension officers were employed at OPIC- Hoskins to introduce the Mama Loose Fruit Scheme, their position within the organisation is well established and supported strongly by colleagues and the wider smallholder community. However, at OPIC-Bialla there are no female extension officers, and only one female officer is employed at Popondetta, although the position was vacant at the time of the Social Assessment fieldwork.
41 Building on the success of the Mama Loose Fruit Scheme, OPIC and PNGOPRA trialled a new payment system (the Mobile Card) amongst Hoskins oil palm growers in 2002-2003. The Mobile Card was designed to mobilise smallholder labour on conflict-ridden blocks and labour-short blocks. To overcome labour payment uncertainty and conflict over income distribution amongst block residents (usually between sons or between father and sons), or payment of hired labour, the labourer is paid an agreed proportion of the FFB harvested and weighed on the Mobile Card, with the payment transaction handled by the company. The payment of labour in fruit (a share of the fruit harvested by the worker), overcomes the reluctance or inability of the blockholder to pay cash for family or hired labour. Among the 2002-2003 Hoskins trial blocks, monthly production increased from 75% of the LSS/VOP average without contract labour to 113% during months when contract labour was employed (Curry & Koczberski, 2004). A Mobile Card trial, supervised by OPIC and PNGOPRA, is currently underway at Bialla, and Popondetta has recently initiated its own trial of the Mobile Card.
The results of the Mama Loose Fruit Scheme and the Mobile Card trial clearly demonstrate that by altering payment systems to guarantee the payment of family or hired labour in oil palm production, the milling companies can play a key role in improving the supply of labour for oil palm production. Further, such payment mechanisms tend to reduce intra-household conflicts over labour and allow for a more equitable distribution of income among household members. Thus, it is expected that women and youth on infill or replant blocks will benefit from the increase in household income from oil palm if the milling companies and OPIC seek to strengthen such payment schemes.
3.5 Food Security and Access to Gardening Land Food gardening is a primary focus in the lives of smallholders, particularly for women, and most smallholder households remain heavily dependent on subsistence food production for their daily needs. Most LSS and VOP smallholders grow sufficient food to meet most of their food requirements, and garden food production for sale at local markets provides LSS women with an important source of income. Koczberski et al. (2001) found that female smallholders devote a considerable amount of time to food gardening. In 2000 women allocated almost 2.5 times as much of their labour to gardening than to oil palm, whereas, for men, gardening and oil palm were of about equal importance in terms of the time allocated to each activity.
Further, the study demonstrated the importance of food gardens for maintaining food security, especially on the LSSs where households were much more dependent on gardens than VOP producers. Dietary recall studies at Hoskins revealed that almost 80% of meal ingredients on one LSS subdivision were from gardens compared with about 50% of meal ingredients on a VOP subdivision. This survey was conducted during a period of depressed oil palm prices, when the FFB price fell to around K50/tonne. On the LSS subdivision, the consumption of store foods tended to be concentrated within the first few days to a week of receiving the oil palm cheque. For the following three weeks, households were heavily dependent on garden foods. Thus, food gardens are central to maintaining food security. Their importance to families increases as the number of people on
42 the block increases. They also provide a buffer against low oil palm prices as occurred in 2000. When SADP is considering requests for in-fill plantings, it is important to ensure that sufficient land is set aside for food gardening. Similarly, requests for replanting should also be considered carefully to ensure that those LSS blocks planting 6 ha of oil palm have access to sufficient gardening land.
Evidence from Bialla, Hoskins and Popondetta shows that the majority of LSS women regularly market garden produce. Some families on multiple household blocks where the markim mun production strategy has been adopted depend primarily on income from sales of garden food to support the household during the months when they do not have access to oil palm income. Marketing of garden produce is becoming increasingly important for first generation settlers as they make the transition out of oil palm production to let their sons take over block management. The emergence of this trend was noted in 2000 (Koczberski et al., 2001), and is becoming increasingly common on the LSSs (R. Dewhurst, pers. comm. 20063). Thus, garden production, whether for domestic consumption or for sale at local markets, is a fundamental component of the livelihood strategies of the vast majority of LSS and VOP smallholders. Accordingly, the long-term viability of the smallholder sector depends to a considerable extent on the food and income security provided by access to gardening land.
Yet, despite the importance of garden food in the daily diets of LSS smallholders, access to garden land is declining as more families plant their full blocks to oil palm. LSS women claimed in discussions, as part of this social assessment, that they are spending more time away from their blocks gardening on State, company or customary land, or purchasing garden food at local markets to supplement diets. Preliminary results from a 2006 study of food gardening on the Hoskins LSS subdivision of Kapore, also confirm that the area initially reserved for subsistence food production on LSS blocks, is increasingly being planted with oil palm and cocoa (R. Dewhurst pers. comm., 2006). To overcome the resultant land shortage for gardens a common strategy is to cultivate gardens in areas where palms have been poisoned for replanting. According to Rob Dewhurst (pers. comm., 2006), these areas are intensely cultivated with an average of 8.15 gardens per 2 ha plot of poisoned palms. Portions of land in these poisoned stands may be allocated to friends and extended family for gardens.
The declining access to gardening land and a greater reliance on food purchases has the potential to undermine food security on the LSSs, particularly if:
* The State, private companies or customary landowners tighten access to garden land. * Oil palm prices fall significantly. * Road infrastructure deteriorates to the point where roads become regularly impassable to fruit collection trucks.
Given the dietary and income importance of garden produce to smallholders, it is recommended that OPIC and PNGOPRA give more attention to smallholder food security and the importance of gardens during the replant phases.
43 3.6 A Diversifving Rural Economy Oil palm dominates the rural economy of WNB and Oro provinces, although for the majority of smallholder households, oil palm is only one of many livelihoods pursued. Most VOP and LSS smallholders develop supplementary income sources to augment oil palm income and to strengthen livelihood security. For example, VOP growers, with greater access to land than LSS growers, often maintain one or two types of export cash crops in addition to oil palm (Table 3.3). VOP smallholders view cash crop diversity as a form of income security against fluctuating commodity prices, and they will adjust their labour and investment inputs into different cash crops according to relative prices and returns on their labour.
Table 3.3. Percentages of LSS and VOP blockholders with export cash crops other than oil alm.
OIL PALM COCOA COPRA COFFEE VANILLA RUBBER SCHEME % % % % % BIALLA LSS 1 4 0 5 0 VOP 43 14 4 7 0 HOSKINS LSS 24 10 0 2 0 VOP 62 66 2 10 0 POPONDET TA LSS 2 0 4 0 0 VOP 32 0 25 0 7 Source: Koczberski & Curry, 2003. Smallholder Surveys n=300
With limited access to land, LSS smallholders have tended to diversify into small businesses (e.g., poultry projects and tradestores), the marketing of tree crops (e.g., betel nut) and garden produce. Some smallholders seek off-farm employment. On the LSSs, income diversification is being driven by second generation settlers as they establish their own families on their parents' blocks and seek to diversify their income sources to maintain per capita incomes. In the absence of effective family planning programmes, it is probable that as population and land pressures continue to rise on the LSSs, an increasing proportion of LSS settlers will be engaged in non-oil palm income activities, both on and off-farm.
While the economic diversification occurring in the oil palm growing areas of WNB and Oro follows trends observed in many parts of Africa, Latin America and Southeast Asia, there are important differences. Off-farm and non- agricultural incomes are less significant in the PNG context than in other developing nations. Also, farm income (from oil palm production) remains the dominant livelihood strategy for the majority of LSS settlers with only a tiny minority deriving the bulk of their income from other sources. Unlike many Southeast Asian countries, international labour migration from PNG remains undeveloped and there are limited employment opportunities in PNG's urban industrial sector. Hence, employment prospects are much lower for PNG smallholders migrating to urban areas or to their home areas. Thus, income diversification to supplement oil palm incomes is a vital livelihood strategy for smallholders, which also reflects the capacity of smallholders to respond to socio- demographic and economic change. In discussions with smallholders of income
44 diversification, the picture is one of smallholders actively seeking solutions and finding new ways to maintain their livelihoods and household well-being.
However, there is limited acknowledgment in the industry of the importance of non-oil palm activities to the livelihoods of smallholders. Indeed, non-oil palm activities are often viewed as distractions drawing smallholders' time and energy away from oil palm production. Rather than ignoring income diversification, the challenge for extension services and smallholder development policies is to consolidate and build on these income trends through policies that strengthen linkages between the smallholder sector and the broader regional economy. Income diversification should therefore be encouraged and actively fostered as a strategy for improving the economic and social stability of the LSSs.
3.7 Roads and Transport The road systems in the oil palm smallholder areas of WNB and Popondetta have been deteriorating steadily over the years due to lack of road maintenance by the relevant government agencies (Dickson, 2003). Poor road conditions prevent company and contractor fruit collection trucks from servicing smallholder areas, sometimes for extended periods. Poor roads also mean that a larger proportion of the transport fleet for the collection of smallholder fruit is in the workshop for repairs, resulting in fewer trucks being available for FFB collection, thereby reducing the reliability of FFB pickup schedules. The result is substantial financial costs for both smallholders and the milling companies. Unreliable pickups also undermine the confidence of growers in the industry, and reduce their motivation to produce oil palm.
Dickson (2003, 10) summarises road conditions in the oil palm areas as follows:
* National highways are generally trafficable, although there is scope for considerable improvement. National highways are maintained by donor funding. * Company estate roads are reasonably well maintained. * Most LSS access roads are generally trafficable, but require upgrading and regravelling. * Many VOP access roads are of a very poor standard, and require most maintenance and repair, especially to drainage design and to pavement repairs.
In all project areas visited (especially Bialla and Popondetta), and in most community meetings and individual interviews, the deteriorating state of the roads and associated problems were raised as major concerns of the different communities. Also, consultations with OPIC-Bialla and OPIC-Popondetta revealed that the poor and deteriorating condition of existing roads and the lack of provincial funding for infrastructure were considered the most significant constraints on smallholder oil palm production. Some smallholder areas in Popondetta, in particular, have suffered from very poor road conditions for several years, resulting in growing anger amongst growers regarding the unreliability of harvest pickups. In some areas, oil palm blocks were abandoned temporarily when harvest pickups ceased because of impassable roads4. During 2005 and 2006 smallholders were without harvest pickups for up to twelve months in some
45 areas (e.g., Saio Road, a 34 km road to the north of the Kokoda Highway). In July 2005, a total of 13 roads were declared "No Go Roads" affecting 400 smallholder blocks (LPC meeting minutes No. 05/-05).
A further problem at Popondetta is the fairly large number of smallholders, who under the previous Oro Expansion Project, cleared land and planted oil palm with the expectation that roads would be later built to allow harvesting trucks to collect their fruit. Dickson (2003) estimated that at the end of the Oro Expansion Project, approximately 180 km of roads were not constructed. Although OPIC has secured AusAID funding to complete the roads, some smallholders still do not have road access.
Poor road conditions and unreliable harvest pickups undermine grower commitment to oil palm production, including replanting. When fruit collection is unreliable because of impassable roads or unreliable harvest pickup schedules, smallholders, especially VOP smallholders, will shift their labour to activities where the returns to their labour are assured. They will also be less confident about investing (e.g., replanting) in their blocks. Smallholders are risk averse for good reason, and are reluctant to risk labour and capital where returns cannot be assured. Thus when poor roads are disrupting pickups or the milling company cannot provide reliable and regular pickups, smallholders are less likely to invest labour in their block and commit to long-term investments in oil palm.
3.8 Material Welfare In all three project areas, the familiar refrain from focus groups with smallholders and the LLGs, was how little material improvement there had been in their lives following the introduction of oil palm. Aside from education, where tremendous gains have been made over the years as evidenced by the senior positions in industry and government occupied by second generation oil palm growers, living conditions, particularly on the land settlement subdivisions, have deteriorated through time. This fall in living standards is paradoxical considering that oil palm smallholders have for a long period (38 years at Hoskins, the oldest scheme) had levels of cash income significantly above those of other smallholder cash crop producers.
When the LSS subdivisions were established, settlers were provided with a basic two-room timber house with iron roofing and a corrugated iron rainwater tank5. Over the years, there has been little or no maintenance of the original houses with the result that many are in very poor repair or uninhabitable. The water tanks rusted out long ago with only their concrete slabs as evidence of their former presence. Further, most aid posts are closed or lack medical supplies because of inadequate funding by the provincial governments, so that people must travel to district or provincial hospitals for medical care. Thus, on some key indicators of poverty such as housing, and access to clean water and health services, life quality has declined.
Today, the typical house on an LSS block is one made from bush materials, little different from the types of housing that settlers had in their home villages. Most access their water from creeks and rivers, or from old 44 gallon drums open at the top and fed with rainwater along scraps of corrugated iron sheeting and guttering.
46 As part of the Social Assessment a brief housing and water supply survey was undertaken at each of the project areas, the results of which confirm the claims of smaliholders made in interviews and focus groups. At Hoskins only LSS blocks were surveyed. At Bialla and Popondetta both LSS and VOP blocks were surveyed. Overall, there is little difference in the proportions of types of water supply and housing between LSS and VOP in each project area, but for comparability with the Hoskins data, only the data for the LSSs at Bialla and Popondetta are presented below in Figures 3.1 to 3.6.
For housing, the category 'original house' is the standard house that was provided to settlers when they first settled their LSS blocks. In the majority of cases, these houses are in disrepair and many are uninhabitable. If we consider the main house on the block (the first house that growers identified and described), the percentages of these houses categorised as 'permanent' were 16%, 57% and 10% at Bialla (Figure 3.1), Hoskins (Figure 3.2) and Popondetta (Figure 3.3) respectively. Given that most LSS blocks are now multiple household blocks (Section 3.2) the percentages of all 'permanent' houses per block were 9%, 35% and 5% at Bialla (Figure 3.1), Hoskins (Figure 3.2) and Popondetta (Figure 3.3) respectively. The figures reflect a large and currently unmet demand for better housing.
Bialla LLS Growers
50 -
45 -
0J.
U--- X -- C _
Iron Roof Onginal House Permanent Bush Material |3 Main House *AII Houses
Figure 3. 1. Housing types amongst LSS smallholders at Bialla
47 Hoskins LSS Growers
60
50
40
0 - 40 _ __,_ _-______
ILI
_ _ _ _ - U _
Iron Roof Original House Permanent Bush Material
10 Main House EAII Houses I
Figure 3.2. Housing types amongst LSS smallholders at Hoskins.
Popondetta LSS Growers
70 -
60
50
0
0
Iron Roof Original House Pernanent Bush Material
0 Main House. All Houses
Figure 3.3. Housing types amongst LSS smallholders at Popondetta.
The quality of water supplies has deteriorated through time. When the LSS subdivisions were first settled, each block had its own rainwater tank. The proportions of blocks with rainwater tanks or access to bore water were 18%, 38% and 42% at Bialla (Figure 3.4), Hoskins (Figure 3.5) and Popondetta (Figure 3.6) respectively. It should be noted some water supplies classified as bore water are probably springs which are prone to contamination by people and domestic
48 animals. More worrying, are the numbers of households at Bialla and Hoskins sourcing their drinking water from local streams that are also commonly used for bathing, washing laundry and pots, etc. Given that these streams/rivers flow through highly populated oil palm settlements it is likely that they are contaminated by human waste.
Bialla LSS Growers
90
60
70
60
0 50
40
30
0 - Dnnking Washing Pots/Plates Bathing
O Tank *200 litre Drum 0 Spring Creek/River
Figure 3.4. Main types of water supply amongst LSS smallholders at Bialla.
Hoskins LSS Growers
90
80
60 i 50 50 w 40
Drinking Washing Pots/Plates Bathing
1[ Tank * Bore 0 200 litre Drum U Spring Cl Creek/River
Figure 3.5. Main types of water supply among LSS smallholders at Hoskins.
49 Popondetta LSS Growers
90 -
80
70
60
50
30-E40-
20-30 -l l - X______
Drinking Washing Pots/Plates Bathing
El Tank * Bore El1Spring * Creek/River
Figure 3.6. Main types of water supply amongst LSS smallholders at Popondetta.
When smallholders were asked in interviews and community meetings to explain the seemingly paradoxical deterioration in living standards on the oil palm blocks despite their relatively high levels of income, they offered two main explanations. First, an ever increasing population on the land settlement subdivisions undermines people's capacity to save; and, second, there is no effective savings mechanism for growers.
In Section 3.2 it was explained that population growth rates in the oil palm project areas are high, with mean block populations on LSSs in 2011 projected to reach 15 at Bialla, 20 at Hoskins and 10 at Popondetta (Table 3.1). Population growth is therefore eroding the capacity of families to accumulate savings for farm investment and make long-term investments in housing and water supply, with a consequent decline in material standards of living. This is contributing to considerable social stresses amongst families on highly populated blocks.
The second factor explaining the lack of material progress on many oil palm blocks is the absence of an effective savings mechanism to isolate a component of cash earnings from the many competing demands and traditional obligations placed on the grower. While growers routinely complain of poor quality housing and substandard water supplies, most recognise that the problem is their inability to accumulate savings for these types of investments. As one grower said:
If we see the money, it's finished quickly [no savings]. When we get paid, the money will be spent the same day because once the money is in our hands, the temptation to spend it or the pressure to share it around is too strong to resist. If the company could arrange a savings type scheme where the money is deducted before we see it, then the temptations for
50 wasteful spending would be reduced greatly (Popondetta grower, focus group meeting).
(Section 3.9 provides a more detailed discussion of the smallholder savings issue).
The deterioration through time in the quality of housing stock, water supply and other material conditions of life is more than simply a development problem or a health issue for smallholders. It is an important productivity issue for the industry because it is well established in PNG that housing, water supply, and other material conditions such as access to vehicles are powerful forces for motivating workers, both as employees and as cash crop producers. Moreover, poor quality housing and water supply affects health, and is therefore likely to reduce productivity levels among growers through increased rates of illness. One way to enhance smallholder productivity is to create a savings mechanism similar to the credit schemes operated by the milling companies for farm inputs which would enable smallholder oil palm production to be transformed into material improvements in the quality of life for growers. Such a mechanism would, ideally, lead to systematic and measurable improvements in life quality for growers. An outline of such a scheme is presented in Recommendation 3.3.
3.9 Savinas and Loan Repayments Smallholders identify three related barriers to savings. First, the social pressure to be generous to relatives is great. Traditionally, social status and the reputations of individuals and groups were very much bound up with the redistribution of wealth through social and kinship networks. Status, prestige and respect were not associated with accumulating wealth for personal consumption or personal investment purposes, but in redistributing this wealth through social networks or group projects that had the effect of enhancing the status of the giver and associated group members. These values and thinking remain very strong amongst LSS and VOP growers, especially amongst the latter where customary events are often timed to coincide with oil palm pay-days to allow people to contribute part or all of their pay to the group activity. Also, there is a cultural obligation on blockholders to redistribute a significant proportion of their income amongst the extended family group, and blockholders are often accompanied by relatives to town when they go to cash their pay cheques or withdraw cash from the bank if their pay is paid directly in to a bank account. Indeed, for a blockholder to resist the demands of the extended family on his oil palm payment is to risk social censure and damage to his reputation. Yala (2004) found that 83% of Hoskins growers shared their oil palm income with friends and relatives.
Secondly, there are multiple competing demands on the monthly oil palm income: bank and milling company loan repayments; credit repayments to local stores; school fees; general household expenses; new consumption desires; customary and church obligations; social pressures on men to gamble and join beer drinking parties immediately following the monthly oil palm payment; and, the financial demands of immediate and extended family. These various demands on the oil palm income often mean that there is little opportunity to save (and the temptation to avoid loan repayments is high). This helps explain why most of the oil palm income is withdrawn from a grower's bank account in the days immediately after oil palm payments are deposited. Staff at the Bank of South Pacific, Bialla,
51 confirmed that around 90% of smallholders withdraw their entire oil palm payment, leaving only K20 or K30 to keep the account open.
Pressures on the monthly oil palm income are particularly acute on the more populated leasehold blocks where the income is spread across several co-resident families. Each family may eam income from oil palm only several times each year because oil palm production - and the corresponding income - is rotated each month amongst co-resident households (Section 3.3). In the months when they are not earning income from oil palm, families are dependent on subsistence production or income from sales of food crops at local markets (Section 3.5). Inevitably, they accumulate debts (school fees, tradestore debts, etc.) in the low income months between oil palm payments, which are repaid when it is the family's month to harvest oil palm. Thus, population growth is eroding the capacity of families to save. Robert Dewhurst reported that in his sample of 42 households on the Kapore subdivision of the Hoskins LSS, the majority of respondents (17 respondents) claimed that the monthly oil palm income lasted about four days once deductions for tools, loan repayments and school fees were paid, with only 11 respondents claiming the income lasted for two weeks.
Thirdly, as mentioned in Section 3.8, the absence of an effective savings mechanism to isolate a component of cash earnings from the demands of the traditional exchange economy and other competing demands on income is seen by growers as a major constraint on their ability to accumulate savings. The absence of an effective savings mechanism is an important factor explaining the lack of material progress on many oil palm blocks, and is perhaps best illustrated by how the oil palm industry addressed the lack of smallholder investment in farm inputs (the lack of a savings mechanism is a significant constraint on smallholder productivity across all export crop industries). If oil palm companies were to rely on smallholders to finance farm inputs and tools from their own savings after receiving their monthly payments, the vast majority of growers would never have been able to finance farm inputs because the myriad demands of the traditional economy described above would have consumed any savings.
Very early on the oil palm industry recognised that it was extremely difficult for most smallholders to accumulate savings for farm inputs, and so they responded by supplying smallholders with farm inputs such as fertiliser and tools on credit. Credit extended to smallholders is recouped through the smallholder payroll system with loan repayments from growers' monthly oil palm earnings deducted before payment is made to the smallholder. By deducting from smallholder payments the costs of farm inputs advanced to growers, the companies have effectively isolated a component of smallholder income from the demands of the traditional economy. Thus, unlike most other export crops in PNG where there is very little investment in farm inputs, oil palm smallholders have ready access to tools and other inputs because of the savings mechanism provided by the companies.
While the industry has been able to effectively address the issue of savings for farm inputs by deducting loan repayments at source from growers' payments, the absence of an effective savings mechanism for housing, water supply and other material improvements remains a major barrier to improving living standards.
52 Whilst providing training for growers on household budgeting and savings might raise savings rates, the absence of an effective savings mechanism that isolates a portion of income from the demands of the extended family and the traditional economy is a much more import factor explaining the low savings rate.
Finally, the high level of demands on oil palm income also help explains why some smallholders try to avoid the monthly loan repayments deducted by the company by shifting their fruit to the Mama Card or to other smallholder payment cards. As raised in Section 3.3, the desire to avoid loan repayments is more likely to occur on highly populated LSS blocks, especially those blocks practicing the markim mun production strategy. It is also probable that high repayment rates (at 50% of monthly income) act as a disincentive to repay loans, particularly when repayments coincide with low oil palm prices and high cash demands (e.g., school fees or customary obligations).
3.10 HIV/AIDS HIV/AIDS is expected to impact severely on the oil palm industry and has the potential to undermine the objectives of the SADP (Sales, 2004). To date, 70% of all reported HIV infections in PNG are in rural areas. Based on trends from 1997- 2003, Sales (2004) predicts that over 17% of the oil palm population in WNB could be HIV positive by 2017 (equivalent to the current level in South Africa), with devastating effects on worker productivity. An increasing prevalence of high risk precursors, including sexually transmitted diseases, urinary tract infections and pelvic inflammatory diseases in the oil palm communities supports this prediction. An increasing incidence of tuberculosis is a further negative indicator. AIDS-related deaths are also being reported by oil palm companies. The highest prevalence of HIV/AIDS is in the oil palm provinces of Milne Bay (59 cases), followed by Oro (54), New Ireland (42) and West New Britain (25).
Mobility, high risk behaviour and poverty are contributing factors in the rising incidence of HIV/AIDS. Sales (2004) notes that high risk behaviour is commonplace among oil palm employees and smallholders. The breakdown of social controls, the early age for first intercourse (15 to 16 years), multiple sexual partners by both sexes whether unmarried or married, and sex for food favours and cash contribute further to the risk of HIV infection. In the oil palm industry, those in mobile jobs (e.g., supervisors responsible for large geographical areas), LSS settlers living away from the social strictures of their villages and family members displaced from overcrowded smallholder blocks are most at risk.
Basic awareness of HIV/AIDS is widespread in the community. However understanding of high risk activities and when to seek professional advice is poor. Although a national plan and strategies exist, the national response has not yet been adequately instituted. The current health system and health care worker capacity have recently declined and are currently inadequate to provide the necessary health services, and Provincial Aids Committees (PACs) have experienced difficulty coordinating and distributing IEC (Information, Education and Communication), condoms and training. Fear of identification, the long wait for test results, limited capacity of staff to provide advice and problem management have contributed to at-risk people being unwilling to seek treatment.
53 Sales (2004) notes that the existing community level ABC (Abstinence, Be faithful, Condoms) strategy has had limited impact.
Because of these difficulties and the greater demand for scarce resources from non-oil palm provinces where HIV/AIDS prevalence is higher (e.g., NCD with 4,439 reported cases), Sales (2004) argues that the oil palm industry cannot rely fully on the public sector to address the problem. Thus, it would appear necessary for the industry itself to take some preventative actions to address the rising incidences of HIV/AIDS among the oil palm communities.
3.11 Law and Order Many law and order problems, especially on the LSSs, are exacerbated by the growth in the number of under-employed young men, and a high level of male drunkenness around oil palm paydays. Alcohol abuse frequently causes family conflicts, including physical violence, community disharmony and broader law and order problems. In meetings with women on the LSSs and VOPs and with extension officers as part of the Social Assessment, the problems of alcohol abuse and men's wasteful expenditure on alcohol to the neglect of their financial obligations to the family were topics commonly raised. Hence, there is the potential that increased incomes, as a result of replanting and infill, may be translated into greater social problems and community disharmony. Strategies to mitigate this risk should be considered so that the expected social development outcomes of the SADP are not undermined.
3.12 Strategies for Achieving Social Development Outcomes: Recommendations to Address Socio-economic and Political Context The key recommendations discussed below relate to capitalising on the opportunities offered by SADP to improve the quality of life of smallholder growers. The recommendations are concerned with loan repayments, creating a savings mechanism for sustainable improvements in living standards and developing strategies to support the diversification of the rural economy and the changing socio-demographic and economic environment of smallholder production.
3.12.1 Loan Repayments for Replant Blocks and Infill Blocks There are clear long-term income advantages for smallholders from replanting old and tall stands of oil palms. However, there is a sizable group of growers for whom replanting will result in short-term economic hardship. Smallholders that would be hardest hit financially during replanting are:
* Smallholders with the majority of their palms over 15 years old. * VOP producers with a single, 2 ha stand of oil palm. * Elderly or widowed farmers who are part-time/semi-retired smallholders. * Families on populated multiple household blocks where oil palm income is already thinly spread across households.
For these smallholders there is a significant disincentive and understandable reluctance to replant because of the short-term financial 'double disadvantage' it causes. By this we mean smallholders are required to go into debt (replanting
54 loan) at the same time as their capacity to repay loans is reduced through the loss of income from 2 ha of poisoned palms. For many smallholders replanting has short-term risks which may lead growers to delay replanting for as long as possible, particularly in the context of fluctuating commodity prices, and other uncertainties such as income loss through illness, social conflicts or irregular and unpredictable fruit pickups. The additional economic pressures and risks associated with replanting for these growers identified above must be taken into consideration when devising credit and repayment schemes for smallholders accessing loans for replanting under the SADP.
The recommendations provided below include short-term strategies covering the five years of the SADP project, and longer term strategies which would go beyond the life of the SADP, and may not be introduced immediately to coincide with the beginning of the SADP.
Recommendation 3.1 Implement short-term strategies to lessen the financial hardship of loan repaymentsfor smallholders undertakingreplanting. Among some of the short-term strategies recommended to lessen the financial hardship of lost income during replanting include giving consideration to how loan repayments are structured. Although the allocation of loans for replanting and infill has yet to be decided, it is probable that the milling companies will assume responsibility for the collection of loan repayments as deductions from growers' payments. To ease the economic pressures on growers and to reduce the motivation of growers to avoid loan repayments, two recommendations are made for how loan repayments should be structured.
First, it is recommended that loan repayment rates should not normally exceed 30% of the monthly oil palm payment. An exception might be when oil palm prices are relatively high during high crop periods. The incentive to avoid loan repayments appears to increase when loan repayment rates are high (e.g., 50% of gross monthly income) and/or during low oil palm prices and high cash demand periods (e.g., when school fees are due). Also, as noted in Section 3.3, high repayment rates on markim mun blocks mean that the impact of loan repayments can fall disproportionately on the families residing on the block. This will create strong incentives to avoid loan repayments and raise the probability of disputes arising over the programming of the markim mun calendar, thereby disrupting production. Thus, low rates of repayments are the preferred option for most growers.
Second, it is recommended that loan repayment rates be reduced during periods of depressed oil palm prices. The value of credit schemes to smallholders could be enhanced significantly by making repayment rates more flexible to take account of fluctuations in oil palm prices and crop availability. This would help maintain smallholder interest in oil palm production during periods of low prices and also reduce incentives to avoid loan repayments (see Section 3.3 where loan repayments are discussed further).
Further recommendations to ease the financial pressure on growers during replanting include:
55 * Giving VOP producers with only 2 ha of oil palm the option of poisoning only I ha at a time. Once the first I ha is back in production, the second is then poisoned and replanted. * Arranging Mobile Card contracts as part of a replanting package for heavily populated blocks. For some multiple household blocks undertaking replanting, it may be useful to provide a Mobile Card contract so that they can earn income by harvesting other blocks while they wait for their new palms to come into production. The card would help overcome the severe financial pressures on highly populated blocks following palm poisoning. * Encouraging income diversification on the newly replanted LSS blocks. This might include the promotion of the cultivation of profitable market crops on newly replanted blocks to provide an income source until new palms come into production. In areas poisoned for replanting, many smallholders already cultivate garden crops for sale at local markets. This should be encouraged further and ways identified to promote the cultivation of high value crops (such as tobacco, peanuts, bananas, sugar cane, spices and green leaf vegetables) to compensate for short-term losses in oil palm income. * Increase block productivity by raising harvesting rates.
Recommendation 3.2 Implement long-term strategies to lessen the financial hardship of loan repaymentsfor smallholders undertakingreplanting In the longer-term the industry should consider moving towards some form of replanting levy as suggested by Brophy (n.d., p.3), which could possibly be extended to other farm inputs (e.g., a Growers' Fund, see description of Bialla Growers' Fund under Recommendation 3.3). A small replanting levy per tonne would significantly reduce the perceived hardships on growers undertaking replanting because most, if not all, costs could be financed from accumulated savings. A replanting levy would remove the incentive to shift fruit to avoid loan deductions because the levy would apply to all production. In fact blocks with loans for other purposes, would effectively be penalised for shifting fruit to other blocks to avoid loan repayments because the replanting levy would be recorded as being part of the replanting fund of the block through which the fruit was sold to the company.
Some of the advantages a replanting levy would offer include the following:
* Relief from some of the short-term financial pressures of replanting by removing the 'double-disadvantage' of reduced income when old palms are poisoned and loan repayments for seedlings commence. * Reduced financial risks associated with replanting. * Elimination of incentives to shift fruit because there would be a financial cost of doing so. * Enhanced success of other initiatives to raise productivity (e.g., Mama Card and Mobile Card which are sometimes used to avoid loan repayments).
56 While Brophy (n.d., p3) notes that there is merit in considering a replanting levy he cautions that "there is a need for a detailed investigation of the long-term intentions of the milling companies, and the acceptability of such a levy to the smallholders before proceeding". We endorse Brophy's view that a replanting levy warrants further consideration.
3.12.2 Improving Living Standards through New Savings Mechanisms There are many factors impinging on smallholders' ability to accumulate savings from oil palm income (Section 3.9). Growers frequently expressed concerns about declining living standards and their inability to accumulate savings to improve living conditions on their blocks. It is therefore necessary that mechanisms to improve the savings rate among smallholders be explored so that the expected increase in household income resulting from replanting and infill is translated into material improvements in people's quality of life. As explained in Section 3.8, the lack of improvement in growers' living standards might not, at first sight, appear to be within the purview of the oil palm industry because it could be argued that it is a matter for growers themselves to determine how they spend their income from oil palm. However, it is a critical production issue: good housing, water supply and other material improvements are powerful motivating forces for smallholders and employees; declining living conditions create dissatisfaction and can act as a disincentive to invest in farm inputs.
Recommendation 3.3 Introduce a savings mechanism to facilitate improvements in living standards. One way to enhance smallholder productivity is to create a savings mechanism to enable smallholder oil palm production to be transformed into material improvements in the quality of life for growers. Such a mechanism would, ideally, lead to systematic and measurable improvements in life quality for growers.
Such a savings mechanism would provide a powerful incentive for growers to raise productivity. Rather than most income being expended on immediate consumption or dissipated through extended kinship and social networks because of the demands of the traditional exchange economy as at present, a proportion of that income would be isolated from such demands and therefore be available for investment in improved living conditions.
Importantly, there would be a strong demonstration effect for other growers not participating in the savings scheme. The benefits of most initiatives to raise smallholder productivity while leading to higher cash incomes for participating growers are usually invisible to non-participating growers, because the cash is often dissipated. However, a savings mechanism which leads to improvements in the material conditions of blocks (e.g., improved water supply and housing), would be highly visible to other growers and therefore expected to generate much more interest in the scheme amongst the broader smallholder population.
As indicated in Section 3.9, growers themselves are aware that the demands of wantoks are a major constraint on their ability to accumulate savings. It is clear, however, that there is a large unmet demand for such a savings mechanism as
57 evidenced by Bialla smallholders enthusiastic embrace of the Growers Trust Fund which was established in 2001 by OPIC and the Bialla Oil Palm Growers Association. The fund operates as a levy on production which is deducted at a fixed rate per tonne from growers' payments. It is useful to consider briefly how this fund operates because it offers a model for how such a savings mechanism might be established.
Background to the Bialla Growers Fund The idea of a growers' fund emerged initially in response to the decision of the previous management regime of Hargy Oil Palms to withdraw company credit to smallholders. With the management change at the company in 2001 and the reintroduction of smallholder credit facilities, the Bialla Oil Palm Growers Association (BOPGA) together with OPIC decided to push ahead with the introduction of the fund with the long-term objective of making smallholders less dependent on company credit. With the broad acceptance of growers, the fund was established in 2001 with a KI/tonne deduction from growers' payments.
The fund is administered by a board of trustees made up of smallholder representatives and OPIC, with HOPL providing some accounting assistance. When the fund was established, 2% was paid into an impress account for administration fees, 58% to an administration account (individual grower accounts), and 40% allocated to IBDs. The initial priority of the fund was sexava treatment and tools. In the longer term, the board of trustees intends to expand the scope of the fund to include fertiliser, block development and replanting.
By May 2002, there was K131,016 in the fund which had increased to K240,000 by August 2002. In 2004, with the consent of growers, deductions were increased to K5/tonne. By the end of July 2006, the fund stood at K1,149,000 with K600,000 already expended on tools for growers.
The scheme has proved popular with smallholders and many growers would like to see the deduction rate increased so that the scope of the fund can be broadened .6 beyond farm inputs to cover large expenses like school fees and housing . Many growers have indicated to OPIC that they would be willing to sign up to KI0 to K20/tonne deduction rates for special purpose savings. The reason for the scheme's success is that a component of smallholder income is isolated from the demands of immediate consumption and the pressure of wantoks to redistribute income through the traditional economy. For growers, they are absolved from the responsibility of not distributing funds to wantoks because it is locked away in special purpose accounts that cannot be drawn upon for other purposes.
The overall aim of introducing a savings mechanism as part of SADP activities is to create a strong and direct relationship between oil palm production and material improvements in standards of living on the blocks. In Section 3.9 it was pointed out how the relationship between oil palm income and material living standards is very weak at present because of the way the traditional economy undermines people's capacity to transform cash income into improved living conditions. By introducing a savings mechanism that allows oil palm income to be transformed into physical assets that contribute directly to improved quality of life, a powerful
58 motivating force for enhancing smallholder productivity would be hamessed in oil palm production.
As indicated above, it is also important to recognise that the effect on productivity would not be limited to smallholders participating in the scheme; it would also provide an incentive for other farmers to enrol in the savings scheme because of the visible evidence of rising living standards as oil palm income is transformed into improved water supply and better quality housing of participating blocks.
In implementing such a savings and loans scheme it is important that debt levels remain manageable for smallholders and do not take too long to pay off. The Oro Housing Loans Scheme is instructive of what can happen when debt levels are perceived to be too high relative to income (for further discussion see Koczberski et al., 2001, 154). Oro housing loans averaging K7,851 per grower were provided by the RDB to Oro oil palm growers in the late 1970s. The size of the loan was high relative to annual income, and once the houses were built, growers were faced with very long periods of loan repayment which began to undermine their motivation to produce oil palm, especially in the later years when their houses fell into disrepair (8% interest charged on the loans). Many growers began shifting fruit to neighbouring blocks to avoid loan repayments. By January 2001, less than 14% of loans had been repaid in full, and the average loan balance stood at approximately K6,322, a 19% reduction on the original loan made more than 20 years previously.
It is recommended that the average loan size not exceed K5,000 and loan applicants should not be carrying too much other debt. Ideally, loans should not exceed 25% of the average annual income of growers, which for most growers would be about K3,000. To accommodate and encourage the early repayment of loans, smallholders should be able to increase voluntarily their repayment rate above the minimum rate per tonne, and be allowed to make additional cash payments off their loans when able to do so. This means, for example, that during high crop periods or when prices are high, growers should have the opportunity to pay off their loans more quickly without penalties for the early payout of loans.
The Model Described A brief overview of a potential model for a simple Savings and Loans Fund is described here. We recommend that the savings and loan scheme begin with improving the supply of potable water, as this is the most pressing need raised by smallholders during focus group meetings (Section 3.8). We recommend that the scheme be established under the banner 'Wara i Laif' (Water is Life - emphasising the health dimension of water supply) with growers provided with small loans for heavy duty plastic rainwater tanks (e.g., the 2000 litre Tuffa Water Tank). Rainwater tanks would be an ideal way to introduce the scheme to growers because: 1) water supply is a very important issue for growers, especially women; 2) it would create a fixed asset for growers relatively quickly without a long period of loan repayment; and 3) its high visibility would have a marked demonstration effect on other growers.
To maintain the interests of growers without them becoming overburdened with debt for extended periods and thus losing motivation, the scheme, when fully
59 implemented, would function as a series of small loans each tied to a specific physical asset that is useful and valued by growers, but which adds value incrementally to the preceding loan/asset. While the scheme would commence with water supply, the example of housing illustrates more clearly how small discrete loan packages could build on each other to create substantial improvements in the quality of life of growers. The first small loan would be for a standard quantity of roofing iron that could be used immediately to roof a bush material house, and therefore has immediate utility to the family taking out the loan. After this initial loan is paid out, the second stage would be a loan for iron posts which would include their cementing in position by a contractor, and a hardwood timber frame for the house. With the posts and frame in position, and the roofing iron added from the previous loan, the walls and flooring could be constructed from bush materials. The third stage, which for many growers would be the final stage, would be a loan for hardwood timber flooring. The internal and external walls would again be constructed of bush materials (e.g., woven thatch matting) attached to the house frame. For some growers, a fourth stage of timber planking on the external walls might be added. By operating as relatively small incremental improvements in living standards financed by small discrete loans, the motivation of growers to produce oil palm is maintained. As one extension officer at Popondetta, described it, such a scheme would provide growers with a "ladder of progress" where each step is easily attainable by most growers, but when viewed overall represents a substantial improvement in living conditions.
We propose that the savings and loans scheme be established as a revolving fund in which a fixed number of loans are out at any one time. When a loan is paid off those funds then become available to the next borrower. Because each loan is relatively small, it would be anticipated that there would be relatively rapid turnover of borrowers in the scheme, and growers will quickly become accustomed to how the scheme functions.
It is anticipated that there will be a large demand for loans when the scheme is implemented. Rationing access to loans should be through a savings deduction in order that a deposit of around 30%-40% of the value of the asset to be purchased is saved. This would ensure that the high producers qualify earliest for loans, so that the first set of growers participating in the savings and loans scheme during the implementation and bedding down phase of the scheme would be the most productive growers, and therefore least likely to default on their loans. Also, there is evidence in PNG that savings deposits as a condition for loans is a prerequisite for successful micro-finance schemes and loan programmes (see Brophy, n.d.)
The savings deduction per tonne of production for the deposit should not be less than the minimum rate of repayment of the loans. This will ensure that by the time a grower commences repaying a loan, he/she is accustomed to the level of repayment and has adjusted his/her lifestyle to accommodate repayments. Should a grower decide not to proceed with a loan during or at the end of the savings deduction phase, then they should be able to opt out of the scheme without a significant penalty being imposed on them.
We now turn to explain how the savings and loans components of the scheme would operate in relation to the funding of rainwater tanks. Each 2000 litre heavy
60 duty plastic Tuffa tank costs approximately K5,000 to install including guttering. The total cost may be reduced significantly with the awarding of a contract for the supply and installation of tanks. To qualify for a Wara i Laif loan, growers must first save a deposit of K2,000 to qualify for a loan of K3,000. The loan queue would therefore be determined by the order in which growers reach their K2,000 deposit. A savings deduction of about K40/tonne is paid directly into the grower's Wara i Laif savings fund (50 tonnes production required to accumulate the deposit). Once a grower qualifies for a loan (the full deposit is saved), but the loan is delayed because the maximum number of loans has been made already, growers should be permitted to continue with their savings deductions until loan funds become available. Growers in this situation would therefore require a smaller loan when they are eventually granted loans.
It is important that an effective policing mechanism is in place to ensure timely loan repayments and the minimisation of rorting by growers shifting fruit on to their neighbours' blocks to avoid loan deductions. It would be useful and effective to enrol growers and their associations in the policing of the scheme. For example, the names of borrowers, together with the commencement dates of their loans and the balances outstanding should be posted publicly in a prominent place in each subdivision, such as the OPIC noticeboard. Growers should be aware that when the maximum number of loans is out, further loans to other growers become available only when an existing borrower pays off his/her loan. People should also know where they are in the queue for loans, so they can put pressure on borrowers to repay their loans quickly. The success of the scheme depends on growers valuing the scheme as a long-term strategy for improving their quality of life. It therefore makes sense for growers to accept much of the responsibility for ensuring the success of the scheme by monitoring the repayment of loans and discouraging abuse of the scheme.
How to Finance the Scheme? The savings and loan Scheme should be established as a partnership amongst growers, their associations, OPIC and the companies in each project area, with some seed funding from SADP/GoPNG. It might also be useful to have a private banking or savings institution (e.g., PNG Microfinance) to administer the scheme, and provide some of the capital for the fund. Using the example of Bialla, approximately K2 million would establish the fund. Initial contributions from each of the partners might be as follows:
61 SADP/GoPNG K600,000 Bialla Oil Palm Growers Association K100,000 HOPL K200,000 Administering Financial Institution K1,000,000 TOTAL FUND K1,900,000
In the first year of the Wara i Laif fund there would be sufficient monies for the supply and installation of over 600 rainwater tanks. With the most productive growers receiving the first 600+ loans, they are also the group with the greatest capacity to repay their loans and therefore would be anticipated to repay their loans early, thus freeing up funds for loans to other growers. Thus it is expected that in the first few years of the scheme, most growers will experience the benefits of the revolving funds.
In terms of administration, it is recommended that the companies deduct the savings deposit from growers' payments and then recover the loans through the smallholder payroll system. The participating financial institution would manage the funds and keep track of savings and loans accounts and notify the company when loan repayments should commence and cease.
It would be desirable in the longer term if the grower associations in each project area were to provide 100% of the funds in each revolving fund. This would enable the other contributors to the fund to gradually reduce their share of the fund as the associations increased their share. The long-term objective would be for the funds to be fully financed by growers themselves.
Finally, there should also be a management board made of the grower associations, OPIC, the company and the administering financial institution. The LPC might provide the core of this board supplemented with appropriate people from the provincial administration, local financial institutions as well as the administering financial institution. For the security of the scheme and growers' funds it is essential that control does not fall to only one institution or organisation.
3.12.3 Improving Living Standards Through Broadening Research and Extension Programs Recommendation 3.4 OPIC and PNGOPRA to pursue strategies to increase smallholder harvesting rates to raise incomes, thereby creating more employment opportunitiesfor youth and women and improving debt servicing
The Mama Loose Fruit Scheme and the Mobile Card show how institutional arrangements can improve household relations and benefit youth and women in commodity production through initiatives that modify payment systems to guarantee remuneration of labour. New payment initiatives like the Mama Loose Fruit Scheme and the Mobile Card should be encouraged where necessary on infill and replant blocks to maximise smallholder productivity, create employment opportunities for youth and women, and improve debt servicing (see Recommendation 4.10 for more detail).
62 Recommendation 3.5 PNGOPRA to support further smallholder research that aims to achieve a more economically, socially and environmentally sustainable smallholder sector.
It is recommended that PNGOPRA give priority to smallholder research projects that seek a better understanding of the many socio-economic and demographic factors affecting smallholder productivity (e.g., population growth, land tenure issues, HIV/AIDS, etc). This will enable PNGOPRA to formulate strategies to deal with the changing demographic and socio-economic circumstances confronting LSSs and VOP growers. See Recommendation 4.8 for more detail.
Recommendation 3.6 PNGOPRA to develop strategies for improving food security on the LSSs, given the trend ofplanting the full block to oil palm.
See Recommendation 4.8 for more detail.
Recommendation 3.7 PNGOPRA to undertake a comprehensive HIV/AIDS risk assessmentfor the industry.
Given the potentially devastating social and economic impacts of HIV/AIDS on smallholders, the oil palm industry and the PNG economy, it is imperative that the industry, through PNGOPRA, give a high priority to addressing this issue through research and education. The smallholder sector, particularly the LSSs, is a node in extensive migration networks that span most of PNG including urban centres. The migrants moving between settler home areas, urban centres, plantations and the LSSs are typically young and sexually active, making the LSSs 'hotspots' for HIV/AIDS. As a priority, PNGOPRA in association with the milling companies and extemal organisations (e.g., PNG Institute of Medical Research and/or Anglicare), should undertake a comprehensive risk assessment for the industry (the smallholder sector and plantation workforce together). When this is complete PNGOPRA and the industry will be in a better position to develop strategies to address this major issue.
3.12.4 Improving Income Security By Diversifying the Rural Economy To lessen the economic pressures on multiple household LSS blocks practising a markim mun production strategy and to maintain household economic security, the development of supplementary income sources should also be encouraged. In making this point we argue that the promotion of supplementary income sources should not be confined to blocks undergoing replanting, but rather be an integral part of OPIC's general extension strategies. Under high population densities and growth rates on the LSSs it is unlikely that diversification of income sources would disrupt or detract from oil palm production. The reverse is likely to be the case as livelihood diversification contributes to social stability. Livelihood diversification and income security are known to be positively associated with levels of farm investments. The development of supplementary income sources would increase the propensity of smallholders to replant and assist them to develop a long-term perspective on oil palm investment and production rather than on short-term returns to meet their immediate and pressing needs.
63 Recommendation 3.8 Develop strategies to support the diversification of the rural economy. To lessen the financial hardship of replanting and to maintain household economic security, income diversification should also be encouraged, including improving the skills of under-employed youth on the LSSs, CPBs and VOPs. This could be achieved through providing small business-oriented and employment-related skills training.
Population growth contains both risks and opportunities for the industry. On the LSSs continued population growth in the absence of a corresponding growth in income and employment opportunities is likely to lead to greater social instability. Indeed, a persistent feature of PNG's economic development has been the inability of employment growth to keep pace with population growth (McMurray, 1995). However, the high concentration of capital assets (human, financial and social) in the oil palm growing areas of PNG means that there is potential to develop a strong broad-based rural economy in these regions. This broadening of the region's economic base could begin by strengthening the informal economy and reinforcing income diversification in extension messages as well as promoting new forms of non-farm employment. Such strategies might include the upgrading of facilities at roadside markets, training in financial management and record keeping for small businesses, the devolvement of some milling company and extension agency roles to smallholders such as the establishment of small-scale workshops for wheelbarrow and harvesting pole repairs and the sale and transport of farm inputs. As part of the SADP, a small business/welfare officer should be employed by OPIC in each project area to coordinate training by external organisations and to provide advice and training to smallholders and the wider community.
Finally, gender and generational issues should be an important area of concern for the SADP because the meaningful participation of women and youth in oil palm production is crucial for the social sustainability of SADP and for the oil palm industry as a whole. Currently there is high under-employment of youth on the LSSs in WNB and Oro, and ensuring they are a focus of SADP activities to diversify livelihoods would enhance the social sustainability of the SADP and contribute to greater social stability and a lessening of law and order problems in the oil palm growing areas.
64 3.13 Notes
1. NBPOL at Hoskins has recently moved to paying smallholders fortnightly. 2. Time was not available during the fieldwork for the Social Assessment to update figures on harvesting strategies used by smallholder households. 3. Robert Dewhurst is a Geography Honours student at The University of Nottingham, England, presently conducting a study of the role of food gardening in the context of rising population pressure in Kapore LSS subdivision. 4. In one community meeting at Girua Road, Sorovi LSS in Oro Province, the Social Assessment team witnessed several growers vent their anger at the OPIC officer present for the loss of income they incurred as a result of the road being impassable to trucks for harvest collection. 5. In addition to a house and rainwater tank, settlers were provided with tools (e.g., axes for forest clearing), oil palm seedlings and a small fortnightly allowance, financed by a loan from the Papua New Guinea Development Bank. Loan repayment commenced after the first harvest, and most people we interviewed at Bialla and Hoskins had repaid their loans within 10 years, many within six years. 6. The attractiveness of such 'compulsory' savings schemes to growers is evident in how Bialla growers in July 2006 agreed to an additional deduction of K2/month per block for the provision of aid post health services. With ten aid posts in the Bialla oil palm subdivisions closed because of funding shortages, growers have willingly signed up to pay the wages of aid post workers and the cost of renovating aid posts, in an agreement with the provincial government in which the provincial health department funds medicines. The Growers Fund will also contribute K1,000 per month to this initiative.
65 4 Institutional Assessment
4.1. Introduction This section presents the findings of the assessment of the capacity of the various institutions representing the communities potentially affected by SADP activities. The objectives of the assessment are to:
* Assess the institutional capacity of the grower associations to mobilise and represent their communities, including how existing planning and monitoring mechanisms affect the access of the poor to benefits and services. * Examine and document the interactions between the communities and their local governments at village, ward and LLG levels, including how existing planning and monitoring mechanisms affect the access of the poor to benefits and services. * Document institutional assets in poor communities that enable the poor to interact with formal organisations. * Assess the capacity, behaviour, effectiveness of service delivery, decision- making processes and governance issues of the main institutions and organisations representing the communities to be affected by SADP activities.
The Institutional Assessment relied largely on key informant interviews and focus group consultative meetings for information gathering. The following organisations and institutions were the main focus of the Institutional Assessment:
* Local Level Governments (LLG) in each oil palm region. * Community and village-based groups. * Women's groups. * Church groups. * Grower associations. * OPIC. * OPRA.
LLGs and the Growers Associations were given most attention. In interviews with key informants from the relevant organisations, attention was given to the:
* Roles of the various organisations and how they function. * Responsibilities of the different organisations, particularly how these are determined and reflected in policy and action. This was to gain an understanding of the rules governing each organisation's behaviour, decision-making processes and accountability procedures. * Resources. Access to resources, resource allocation, and the capacities of each organisation to mobilise resources. * Relations between the different organisations and their relationships with their client communities. Attention was given to each organisation's links to the community, particularly the poor, and how each organisation was accountable to its client community. This also included an assessment of
66 the level of respect and trust that the community accords each organisation.
4.2 Local-Level Government The information presented below is drawn from interviews and focus group meetings with LLG representatives in each province, and, where available, from the records held by each LLG. Appendices 4-10 present summaries of the institutional capacity assessment for the six LLGs in WNB and Oro provinces that will be potential beneficiaries of the SADP.
4.2.1 Organisational Structure and Responsibilities The Organic Law on Provincial Governments and Local-level Governments, 1995, defined a new system of relationships amongst the national, provincial and local governments which provided the foundation and structure for Local Level Government (LLG). Under the law, LLGs were given new powers and responsibilities to be providers of local development and service delivery (e.g., water and power supply, social services, housing, aid posts and clinics, maintaining peace, and providing community sport, recreation, and cultural and industrial shows), and to enact laws, with the aim of improving the delivery of basic services.
The organisational structure and composition of LLGs are specified under the Organic Law and the Local Government Act, 1997. The LLG assembly consists of an elected head of the LLG and local ward members (Ward Councillors), two of whom are representatives of women's organisations. The Assembly must meet no less than quarterly. The Local Government Act provides for a Ward Development Committee (WDC) for each LLG with the role of advising the LLG on community matters and determining the ward's needs in relation to services, programs and infrastructure. WDCs consist of: (a) a member elected for the ward; and (b) up to a maximum of five associate members, at least two of whom must be women.
Section 33A of the Organic Law also provides for the establishment of Joint District Planning and Budget Priorities Committees (JDPBPC) in each district. The committee comprises the MP representing the open electorate and up to three members appointed by the MP and the heads of the LLGs constituting the District. The tasks of the committee are to:
* oversee, coordinate and make recommendations for district planning, including setting budget priorities for consideration by the provincial and national governments; * determine and control the budget allocation priorities of the LLGs; * approve LLG budgets for presentation to the LLG and make recommendations concerning the budgets; * prepare rolling, five-year development plans and annual estimates for the districts; and * conduct annual reviews of the rolling, five-year development plans.
The structure of the LLGs, with member representation from local wards, including female representatives from local women's organisations, provides a
67 solid foundation for building links with their communities for the initiation of projects and the delivery of services. However, whilst the structures are in place, LLG activities are generally severely constrained by funding shortfalls to the extent that basic services for the community cannot be delivered. Typically, LLGs lack the resources to perform even basic administrative functions (see below). Similarly the WDCs (and the JDPBPCs), which also have strong links with their communities, are unable to function effectively because of funding shortfalls. Most of the LLGs, WDCs and JDPBPCs were not functioning effectively'. For example, the preparation of the five-year development plans (see below) requires collaboration between the WDCs and LLG Assembly and Management before plans are presented to the JDPBPC. However, due to the limited functioning of the JDPBPC committee (and inadequate funding), all LLG representatives interviewed complained that the five-year development plans they had each designed shortly after being elected had not been implemented. This is very discouraging for LLG representatives, and partly explains why there was little evidence of effective planning and budgeting processes in most of the LLGs visited as part of this institutional assessment (see below).
4.2.2 Administrative and budgetary management practices The administrative functions of LLGs are set out in the Local-level Governments Administrative Act, and include:
* preparing corporate plans and estimates; * preparing a rolling, five-year development plan; * preparing an annual plan that takes into account the rolling, five-year development plan; * preparing annual budgets based on the annual plans; * keeping proper accounts and records of all transactions and affairs; * ensuring necessary arrangements and participation at fora on renewable natural resources; * constructing and maintaining infrastructure and facilities that are the responsibility of the LLG; and * initiating and implementing programmes for youth and women.
Many of administrative functions listed above are either not performed or are not acted upon by relevant committees or provincial departments (e.g., the submission of five-year development plans are not acknowledged by the provincial authorities). As indicated above, the most important factor constraining the capacity of the LLGs to undertake their activities was the grossly inadequate funding they received from the national and provincial governments. Under the Organic Law, LLGs are supposed to receive annual grants from the National Government in the form of administrative support grants, development grants, town and urban services grants, and district support grants. These grants are channelled through the national Member of Parliament (MP) and the provincial administrations.
Tables 4.1 and 4.2 reveal that the levels of grants to the LLGs from the National Government are well below levels prescribed under the Organic Law. Actual funding over the past few years has been insufficient for LLGs to provide even minimal services to their communities or to conduct basic administrative
68 functions. In most cases, LLGs are doing well if they have sufficient funding to cover building maintenance and repairs.
Table 4.1: Oro Province: Mandated minimum and actual LLG and Village Services Grants (8 rural LLGs). YEAR MINIMUM LLG ACTUAL ACTUAL AS % LLG AND VS GRANT OF MANDATED SECRETARIAT L GRANTS* MINIMUM* TRANSFER 2002 3,245,069 1,137,900 35 l 2003 3.314,628 403,200 12 209,400 2004 3,385,927 385,900 11 294,700 * As per Schedule 5 of the Organic Law (Source: adapted from Lubett, 2004).
Table 4.2: West New Britain: Mandated minimum and actual LLG and Village Services Grants (10 rural LLGs). YEAR MINIMUM LLG ACTUAL ACTUAL AS % LLG AND VS GRANT OF MANDATED SECRETARIAT l GRANTS* MINIMUM* TRANSFER 2002 4,312,958 1.369,300 32 377,000 2003 4.418,045 491,700 11 198.800 1 2004 4,525,970 553,056 (est.) 12 198.800 * As per Schedule 5 of the Organic Law (Source: adapted from Lubett, 2004).
The Social Assessment team heard a range of reasons for funds not reaching the LLGs, most of which related to fiscal governance issues, both at the national and provincial levels. Several LLG representatives also pointed out that the distribution of funds allocated by District Administrators is not always transparent and funds sometimes do not reach the wider community, the intended beneficiaries.
Because of funding constraints some LLGs and ward councillors were actively soliciting funds from alternative sources to finance local development initiatives. For instance, Bialla Rural LLG, under the leadership of its dynamic president, sought funds from the private sector. HOPL has assisted the LLG to establish an oil palm mini-estate (25 ha) which will come into production in 2007. Mini estate income will be used to develop the resources and assets of the LLG and to fund local development projects. Also, at the time of fieldwork this LLG was liaising with the National Housing Commission (NHC) to purchase NHC-owned houses at Bialla Station with the intention of renting out these investment properties to raise revenue for the LLG. Similarly, the Kokoda Rural LLG in Oro Province recently presented a submission to the provincial government for approval to empower the LLG to collect a Head Tax to enable them to generate a regular and predictable income to fund services for their community.
Another factor constraining the ability of the LLGs to deliver services is their lack of management skills, particularly in relation to administrative and budgetary functions. For example, despite the funding and structural problems constraining the capacity of the LLGs to perform their public duties, there was little evidence of mechanisms for effective planning and budgeting in most of the LLGs visited as part of this institutional assessment. LLG members interviewed were aware of
69 their own and colleagues' limited technical and management skills. Their views were reinforced by an assessment of the current management and technical skills of heads of LLGs and Ward Councillors, which revealed an acute lack of the necessary skills and experiences to perform the roles and responsibilities expected of them. The skills identified most frequently in need of upgrading included:
* project planning and design; * budget planning; * administrative and technical skills; * community needs analysis; and * project management.
There was also a perception among several LLG representatives that there was a general lack of awareness and understanding among many newly elected ward councillors and some heads of LLGs of their roles and responsibilities as stipulated in the Organic Law.
4.2.3 LLG Relationships with their Communities The structure of the LLGs, with member representation from local wards, including female representatives from local women's organisations, provides a sound foundation for developing strong linkages and relationships with communities. In addition, there are many experienced and respected community leaders elected to LLGs who are highly motivated and keen to initiate development and services in their areas. However, despite the good intentions of many LLG representatives, the under-resourcing of LLGs together with limited management and administrative skills, mean that there are few opportunities for the poor to access basic services and community development programs. The inability of the poor to access services and development through their LLGs undermines support and confidence in the LLG system. To summarise, the erosion of the community's confidence in the LLG system stems from the following factors:
* Lack of service delivery by LLGs and ward councillors. Due to the funding constraints faced by LLGs, provision of services is often not possible. Many community members blame the lack of services on mismanagement or misappropriation of funds by their LLG representatives rather than considering external factors that prevent funds from reaching the LLGs. Rumours of corruption in LLGs, which are rife, are extremely damaging and make it difficult to build alliances and trust with the broader community, especially the poor. * Lack of reliable and timely funding to finance joint activities between LLGs and community-based organisations (CBOs). This hinders the development of closer relationships and partnerships between LLGs and CBOs. In some areas (e.g., Kokoda) this has resulted in NGOs and CBOs bypassing their LLG representatives altogether to negotiate directly with their national MPs to procure funding for community development projects. * Limited ability of the Ward Development Committees to design and develop community projects because of the lack of funding. Again, this
70 hinders community participation and undermines confidence in these organisations. * Lack of awareness in the community of how LLGs function and the funding constraints under which they operate. As pointed out above, this lack of awareness of LLG functions and funding constraints leads the community to believe that their LLG representatives are not addressing their needs and concerns.
4.2.4 Summary Table 4.3 presents a general summary of the organisational strengths and weaknesses, and capacity building needs of the six LLGs in WNB and Oro provinces.
Table 4.3. Organisational strengths and weaknesses and capacity building needs of LLGs in the oil palm growing regions of WNB and Oro provinces. ORGANISATIONAL ORGANISATIONAL INSTITUTIONAL STRENGTHS WEAKNESSES CAPACITY BUILDING NEEDS Well established networks and Inadequate funding to deliver Training and skills capacity links with the community. services that meet community building required in the needs. following areas: Focus of activities and concerns is at the local and Limited planning. management * Awareness training for ward village level. and financial skills to prepare councillors and LLG budgets and perform required representatives of their roles Representation of women in duties. and responsibilities as the organisation. defined under the Organic Minimal experience in Law. Organisational structure sound preparing project funding * Preparing project funding and potentially manageable. proposals. proposals (including goal- orientated planning). Many committed and dedicated Minimal experience in project * Financial planning and community representatives management. budgeting. who want to make a difference. * Project management and Lack of partnerships with facilitating local service community organisations. provision. Accounting and record Lack of awareness and keeping procedures. understanding of the Organic * Governance and Law reforms and the roles and transparency issues. responsibilities of heads of Community needs LLGs and Ward Councillors. assessment. Ineffective committees such as * Participatory approaches to the WDCs and JDPBPC. community development. * Project monitoring and Lack of confidence/trust in evaluation techniques. LLG by segments of the community.
Few resources and assets to perform required duties.
71 The capacity of LLGs to perform the functions and responsibilities allocated to them under the Organic Law on Provincial Governments and Local-level Governments 1995 has been constrained severely by the lack of reliable and timely funding from the provincial and national governments (Appendices 1-6 and Table 4.3). Furthermore, as representatives from the Wards and LLG themselves pointed out, there are also acute skills shortages and inexperience in managing community service provision projects among local councillors and LLG representatives. Together, these factors have contributed to a lack of trust and respect for some local LLG and ward representatives among many community members. Typically, community members point to the absence of any physical evidence of progress in development such as improved infrastructure or service provision.
Thus, the potential for successful partnerships between LLGs and community groups for the delivery of basic public services that meet community development goals as outlined in Component 2 of the SADP, is currently hampered by the need to develop the institutional capacity of the LLGs and by the need to instil community confidence in the LLG system. Given the lack of LLG capacity, it might also be worthwhile for SADP management to consider facilitating private sector partnerships with LLGs and community groups to improve income opportunities in villages that do not have access to oil palm income (see Recommendation 4.4).
4.3 Local Community Oraanisations As in other areas of PNG, civil society groups such as NGOs and CBOs do not have a strong effective presence in WNB and Oro (Table 4.4). The main providers of non-state services in WNB and Popondetta, and the most stable and effective organisations, are those associated with the various churches.
Table 4.4: The main NGO, CBO and church-related groups present in the three roject areas. TYPES OF BIALLA HOSKINS POPONDETTA ORGANISATION Church Groups Catholic Church. Catholic Diocese of Anglican Diocese of Catholic Women's Kimbe (includes Popondetta Association. Kimbe Diocese Anglican Health Lutheran Church. Catholic Women's Services South Seas Evangelical Association. Lutheran Church Church. Lutheran Church Assemblies of Gbd. (Mothers' group). United Church. South Seas Evangelical Church. Assemblies of God. United Church.
NGOs The Nature The Nature Conservation Conservancy. Conservancy. Melanesia. Mohonia na Dari.
CBOs Village-based sporting, Village-based sporting, Village-based sporting. youth and women's youth and women's youth and women's groups. groups. groups. Landowner Groups. Landowner Groups. Landowner Groups.
72 BOPGA. HOPGA. POPGA. LSS ethnic LSS ethnic associations. associations.
4.3.1 Church Groups The churches in WNB and Oro provinces, like most other regions of PNG, have long been primary providers of local services such as education and health. Moreover, they are the most important vehicles through which the local population, particularly women, participate in civil society, and they often play a central role in village social life. In many rural areas of WNB and Oro provinces, the churches are the only organisations providing services for people. When government services such as aid posts are closed because of a lack of funding or staff shortages, it is often the established churches that people rely on to fill the gap. In the Hoskins and Bialla regions, the Catholic Church and United Church are the main established church organisations servicing the local population, while at Popondetta, the Anglican Church is the dominant church providing health care, education and community and pastoral services. It is estimated that around 80%- 90% of the population of Oro Province belong to the Anglican Church, and in WNBP, the Catholic Church runs approximately 90% of the schools. Thus the churches have strong and extensive networks throughout their communities.
Most women's and mothers' groups (and many youth groups) are affiliated with local churches. Church networks provide women with access to resources and skills that are often not available locally. Women's church groups cover a broad spectrum of concerns and activities from spiritual and religious fellowship to addressing the economic and social concerns of women and their families. For example, the Kimbe Diocese Catholic Women's Association (KDCWA) provides leadership training for women and household budgeting. Overall, women's and mothers' church groups are very popular partly because they provide women with experiences beyond the immediate family and kinship group, and engage them in social and economic activities beyond the domestic sphere.
Importantly, for this assessment, the churches, especially the larger established churches, have a demonstrated capacity to manage a range of community programmes and health and education services that display: sound administrative and financial management; quality leadership, in terms of experience, commitment and general business acumen; and very efficient and cost-effective service delivery. For example, the Anglican Health Service in Popondetta runs three health centres, 12 health sub-centres, 12 aid posts and has trained numerous village health volunteers. Similarly, the Kimbe Catholic Diocese manages schools and health clinics in each of their 19 parishes. The effective network and management structures of the churches and their culture of honesty and transparency make them excellent local coordinators and facilitators of community development.
A further character of the larger established churches is their capacity to respond in a timely manner to the changing needs of the community. The ability of the church to respond quickly to capitalise on new opportunities and community needs is illustrated with three recent examples. The first concerns a trial in 2003
73 at Hoskins of a new payment system for oil palm smallholders (the Mobile Card trial - see Curry & Koczberski, 2004). Seven different church denomination groups enlisted in the trial and used the new payment system as a means to raise funds for their activities by allowing church members, who were smallholders, to make donations to church organisations in oil palm fruit rather than in cash. This greatly increased the income of the churches and enabled them to fund a range of new initiatives, including various building projects and regional conferences (this payment mechanism has potential to fund on a sustainable basis other community initiatives such as sporting clubs and schools).
The second example concerns the WNB Volcano Disaster Evacuation Program in response to the Mt Pago eruptions in August 2002. The Provincial Administration lacked the administrative and management capacity to deal with a situation requiring the mass evacuation of large numbers of villagers. With the churches' involvement (in association with private sector companies), the resources (communication, transport and funding) were mobilised quickly and efficiently to evacuate and resettle people in safe areas. A third example is the current work by Anglicare on AIDS awareness through their 'Stop AIDS' programme, introduced in response to the rising incidence of HIV/AIDS in PNG. These three examples illustrate the institutional capacity of the established church organisations to respond to the changing needs of their communities. Thus, the churches constitute a considerable pool of skills and human resources with very strong links into their communities.
Despite performing competently in the provision of services to their communities, established church groups themselves recognise that their work is constrained due to several factors. Typically these include lack of funding, poor technical and computer skills, and declining infrastructure (e.g., aid posts in need of repair). The capacity of the smaller and more recently established churches to manage community projects is also constrained by lack of experience in planning and managing community projects and limited technical and financial skills. The strengths and weakness of the various church groups are summarised in Table 4.5.
Table 4.5. Organisational strengths and weaknesses and capacity building needs of the various Church groups in WNB and Oro provinces. ORGANISATIONAL ORGANISATIONAL INSTITUTIONAL STRENGTHS WEAKNESSES CAPACITY BUILDING NEEDS Much experience in Financial constraints. successfully managing For smaller and more recently community projects and Deteriorating infrastructure established churches, training providing services (established (established Churches). and skills capacity building is Churches). required in the following areas: Limited planning, management Competent staff and strong and financial skills to manage * Financial planning and leaders (especially of community projects (small and budgeting. established Churches). recently established churches). * Project planning, managing, monitoring and evaluation. Efficient and effective use of Limited interaction of churches funds. with other institutions For established churches, (government, non-government computer skills upgrading. Extensive networks and links or local business) that provide from the community level similar services.
74 through to the international level. Smaller churches lack technical and financial skills. Well respected and trusted by the community.
Sound organisational and management structures.
Sound governance and financial transparency.
Capacity to respond quickly to community needs and new opportunities.
4.3.2 Non-Government Organisations Some of the environmental NGOs constitute another group of organisations with well developed administrative capacity and financial management skills are. The Nature Conservancy (TNC) in WNB and Conservation Melanesia in Popondetta both have international links and strong on-the-ground presences. For example, TNC is establishing a network of Marine Protected Areas (MPAs) in Kimbe Bay, WNB. To develop this strategy, TNC is working closely with the wards and LLGs to identify areas of the Bay with high marine biodiversity values for inclusion in the MPA network. They recognise that the success of the MPA network depends on the goodwill and cooperation of villagers as well as the support of the ward councillors and LLG representatives. TNC also recognises that most coastal villagers are dependent on marine resources for their livelihoods (both for subsistence and cash income), and, consequently, it may be necessary to consider alternative livelihoods such as cash cropping as a way of reducing dependence on marine resources. With its links into many coastal communities and good relations with ward councillors and LLGs, TNC is well-placed to provide training to ward councillors, LLGs and village communities, particularly in areas such as project management, administration and budgeting. TNC, like many other well-established NGOs, has considerable experience of delivering training packages to their client communities.
4.3.3 Community and Village-based Groups In addition to the formal organisations of church organisations and environmental NGOs, there are numerous, usually ephemeral, informal community and village- based groups and committees. Activity levels of village-based groups tend to fluctuate considerably depending on the specific purpose of the group at a particular point in time. For example, village groups (usually based on kinship) may form to achieve particular goals such as constructing a fish pond, poultry project, cocoa fermentary or village tradestrore. Once a project has been established the group may disband, but re-form when a new need is identified. Thus, these village groups tend to wax and wane depending on the perceived needs of the community or kinship group at a point in time. The fluctuating activity levels of these groups should not be interpreted as a failure of the group, but as an indication of the capacity of these groups to form to mobilise labour,
75 capital and other resources when there is an identified need in the village. Sports, music and youth groups are some of the more important social and civil organisations available to young men in the villages.
An insight into the institutional capacity of CBOs can be gained by briefly considering the experiences of the Kimbe branch of the PNG Community Development Scheme (CDS) in its efforts to enhance the institutional capacity of these local organisations. CDS, which is supported by AusAID, channels financial and technical support to PNG NGOs and CBOs to build their capacity to undertake community development activities. They have had mixed results in this endeavour. The coordinator of the CDS branch at Kimbe commented that there are several major organisational constraints/weaknesses affecting the performance and effectiveness of the local community groups in WNB. The two most important constraints/weaknesses are:
1. Insufficient capacity, in terms of personnel and other resources to undertake project tasks. Most groups lack basic skills in budgeting, literacy, record keeping, and project management. They also lack the fiscal discipline to keep projects on track for timely completion. 2. The widespread practice of group leaders 'personalising' the group's assets such as outboard motors, drum ovens and other equipment. Thus, assets meant for the group's use are appropriated to become the de facto personal property of group leaders.
Weak institutional capacity is common to most community-based groups in PNG. The main areas of weakness are in skills and knowledge related to the following areas:
* book keeping and general budgeting; * literacy and record keeping skills; * project management; * understanding the project purposes; * distinguishing between personal and group objectives/purposes of projects; * absence of skilled support staff.
As mentioned in Section 4.2, there are potential opportunities for partnerships to be encouraged between the private sector and LLGs/community groups to develop sustainable livelihoods for villagers without access to oil palm income. The example of smallholder cocoa is discussed in Recommendation 4.4.
4.4 Oil Palm Growers Association 4.4.1 Organisational Structure and Responsibilities Each project area has its own smallholder oil palm growers association: Bialla Oil Palm Growers Association (BOPGA); Hoskins Oil Palm Growers Association (HOPGA); and Popondetta Oil Palm Growers Association (POPGA). Each association is governed by a constitution and is made up of voluntary members from the VOP and LSS smallholder community. An annual subscription fee of K36 is deducted from members' oil palm income (K3 per month). Membership fees fund most of the operating costs of the association. The role of the
76 association is to represent the interests of smallholders to industry bodies such as the companies, OPIC and PNGOPRA, and to national and provincial governments. It is the only organisation that formally represents the interests of growers. Presently, HOPGA and POPGA representatives are lobbying the national government for a review of the oil palm pricing formula. The formula determines the proportion of the international price of palm oil paid to smallholders for their fruit by the milling companies.
The grower associations consist of an elected executive committee headed by a Chairman and Deputy Chairman and a representative from each smallholder division. POPGA holds elections for executive positions every four years while BOPGA and HOPGA hold their elections every two years. The Chair and Secretary of each association sits on the board of OPIC and represent smallholders at Local Planning Committee (LPC) meetings. LPC meetings are attended by OPIC, PNGOPRA and the milling companies and are an important forum for stakeholder representatives to discuss smallholder production issues and other matters related to the smallholder population. An examination of LPC meeting minutes for the period June 2004 to June 2006 for Bialla, Hoskins and Popondetta, indicates that participation in LPC meetings by executive committee representatives of the grower associations has been regular and active.
4.4.2 Administrative and Budgetary Management Practices Each association has an office and administrative support funded by annual membership fees with some additional assistance from OPIC.
From a perusal of LPC minutes in each project area and interviews with a range of stakeholders, it is clear that the capacity of the grower associations to carry out their functions varies greatly through time. The effectiveness of an association depends largely on the managerial abilities of the executive committee, membership numbers (income), and the quality of the relationship between the executive and OPIC and the milling company. When the executive committee has a good working relationship with OPIC and the milling company, very productive collaborative partnerships can develop to the benefit of smallholders. For example, BOPGA's current representative on the OPIC Board has a good relationship with OPIC and the milling company, and over the last few years the Association has proposed and introduced some excellent schemes for smallholders (see Section 3.12.2). In contrast, when relationships are strained, then collaboration may cease and the opportunity to develop initiatives in the interests of smallholders is lost.
Growers in all project areas complained of a lack of transparency and accountability concerning the disbursement of membership fees by association executives. While some of these complaints arise because many growers are unaware of the association activities on which their fees are being spent, most growers in the three regions can recall past instances of financial mismanagement and/or misappropriation of members' fees which resulted in a loss of confidence in their associations. These past experiences make them suspicious of whoever happens to be on the executive, even if they are doing a good job. There have been incidences at Hoskins where the milling company has stopped deducting membership fees on behalf of HOPGA when it was suspected that growers' funds
77 were being misappropriated. Smallholder confidence in their associations could be enhanced if there were greater transparency and accountability.
4.4.3 Relationship with the Smallholder Community The extent of smallholder involvement in the grower associations varies amongst project areas and through time, reflecting the level of smallholder confidence in the associations to deliver benefits to members. As pointed out above, the success or otherwise of an association largely reflects the effectiveness of the chair and executives in meeting the needs of members as well as the executive's relationship with other stakeholders. For example, HOPGA's membership fell from 500-600 members in the mid 1990s to 89 growers in 2000, representing a massive loss of confidence in the association's executive following the misappropriation of members' funds. However, by 2004, membership of HOPGA rose to over 2,000 growers due in part to sound leadership of the association and smallholders joining the association to gain access to a proposed smallholder savings and loan scheme being designed by OPIC. By mid 2006, although membership numbers remained high, the working relationship between HOPGA and OPIC had deteriorated sharply, hindering the effectiveness of HOPGA.
BOPGA currently has a very good relationship with smallholders, OPIC and the milling company. Over the last five years it has successfully introduced several initiatives for smallholders, which go beyond oil palm production to encompass broader quality of life issues. For example, in 2001, as outlined in Section 3.12.2 BOPGA spearheaded the introduction of the Growers Trust Fund. The fund operates as a levy on production whereby growers contribute K5/tonne to cover farm investments. The scheme has been very successful and popular with smallholders. More recently, with the backing of smallholders, BOPGA has proposed an additional K2/month per block deduction to revitalise aid post services in the oil palm subdivisions.
Sometimes there is a perception amongst growers that their association represents sectional interests. For example, there has been a long-standing grievance among LSS growers in Popondetta that POPGA does not represent their needs because the association is dominated by local landowner interests (VOP growers). Many LLS growers believe their concerns do not coincide with those of VOP growers who have secure customary tenure and greater access to land. Nor do these LSS growers feel comfortable that many POPGA members do not accept or recognise the legitimacy of LSS leases. For example, in the past POPGA has proposed that the milling company restrict transport contracts for the cartage of smallholder fruit to local Oro people, thereby excluding LSS business entrepreneurs. Recently, however, the LPC committee has permitted an LSS grower representative to attend LPC meetings.
One group of smallholders who are seriously underrepresented in the grower associations is women. Although they now account for over one-quarter of total smallholder production, there is not one female representative in any of the associations. Women cannot join the association unless they are leaseholders, or have a VOP block registered in their own name. Given that women's involvement in oil palm production is increasing (primarily through the Mama Loose Fruit
78 Scheme), it is desirable that they have some form of formal representation on the grower associations.
4.4.4 Summary Table 4.5 summarises the organisational strengths and weaknesses and capacity building needs of the oil palm growers associations in WNB and Oro provinces.
Table 4.5. Organisational strengths and weaknesses and capacity building needs of the grower associations in WNB and Oro provinces. ORGANISATIONAL ORGANISATIONAL INSTITUTIONAL STRENGTHS WEAKNESSES CAPACITY BUILDING NEEDS Extensive networks and links Limited planning, management Training and skills capacity with smaliholders. and financial skills to building required in the effectively meet the needs of following areas: Active involvement in OPIC's smallholders. Local Planning Committees. * Financial planning and Significant fluctuations in the budgeting. Organisation structure sound leadership skills of the * Governance and and manageable. executive committee associated transparency issues. with the rapid turnover of * Community needs Capacity to develop innovative executives. assessment. strategies to meet smallholder * Project planning, managing, needs. No female representatives on monitoring and evaluation. the executive committee. Increased representation of Lack of financial transparency women and women's concerns and accountability. in oil palm production. Limited experience managing proj ects.
As mentioned above, the performance and capacity of the grower associations to represent the interests and needs of smallholders varies greatly depending on the abilities of elected executives to meet the needs of smallholders and the relationship of the executive with other stakeholders, particularly OPIC and the milling companies. Like many other under-resourced community and smallholder organisations in PNG, the oil palm grower associations can occasionally suffer from ineffective leadership or from individual or political ambitions being put above the concerns of growers. Sometimes the grower associations are viewed as a training ground for potential political candidates. However, equally the associations can be very positive agents of change as evidenced by the recent initiatives of BOPGA to improve the welfare of growers.
4.5 Oil Palm Industry Corporation (OPIC) 4.5.1 Organisational Structure and Responsibilities Agricultural extension services to smaliholders were initially under the management of the Department of Agriculture and Livestock (DAL). In 1992, as part of the government's corporatisation and agricultural reform policies, the Oil Palm Industry Corporation (OPIC) was established as a semi-govemment agency.
79 Whilst the overall management of OPIC is sound (see below), governance problems exist at the national level due largely to the ongoing problem of obtaining government gazettal of formal appointments such as the General Secretary and the OPIC Board. Under the OPIC Act, an OPIC Board consisting of seven directors (three smallholders, two state representatives, and one representative each from POPA and PNGOPRA) should be directing the management of the Corporation. However, the Board has not been functioning officially for several years.
The OPIC Secretariat, based in Port Moresby, co-ordinates the programs in the five project areas. It is also responsible for policy development, planning, training, sourcing funds, and liaising with all stakeholders in the oil palm industry. An OPIC field office is established at each project site and managed by a Project Manager. To facilitate OPIC's role, Local Planning Committees (LPC) have been established in each of the five project areas. The LPC consists of the OPIC project manager, and representatives from the local grower association, provincial government, milling company and PNGOPRA. The Committee meets regularly to discuss, plan and monitor the work of OPIC and to act as a forum for stakeholders to raise various issues of interest or concern. In each project site visited as part of the institutional assessment the LPCs were functioning well. Monthly meetings were attended regularly by all the major stakeholders with the exception of the provincial government representative. Since the introduction of the Mama Loose Fruit Scheme at Hoskins in 1997, the Hoskins LPC has had a female smallholder attend LPC meetings to represent the interests of the Loose Fruit Mamas.
OPIC's key objective is to raise smallholder productivity. Under the OPIC Act, the central role of OPIC is to promote and encourage increases in smallholder productivity by the more efficient provision of extension services to smallholders. Strategies to achieve this as specified under the Act include:
* the implementation of improved husbandry technologies to increase production by smallholders; * the introduction of techniques for effective control and regulation of oil palm pests and diseases by smallholders; * the development of representative grower groups amongst smallholders; * to promote the use of improved management techniques for cultivation, harvesting and quality control techniques by smallholders; * to collect, compile and circulate information, statistics data relating to growers, crops and land amongst smallholders; * to provide advice and disseminate information and educate smallholders regarding oil palm production methods; and * to consult, liaise and collaborate with the State and other agencies and authorities concerned or involved in the palm oil industry as well as growers and organisations interested or involved in the oil palm industry.
All of the above functions indicate that OPIC has a highly significant role in influencing smallholder income and thus the wellbeing of smallholders.
80 4.5.2 Administrative and Budgetary Management Practices OPIC is financed by a smallholder crop levy of K4.00/tonne which is matched by a voluntary company contribution, and together they account for approximately 93% of OPIC's income. The balance of funds is provided by annual grants from the national government. However, the size of the government grants is decreasing, reflecting the wider decline in government support for oil palm infrastructure, and agriculture more generally2. In 2005 income totalled over K2 million at Hoskins and approximately K1.3 million each for Bialla and Popondetta. Occasional international aid funding provides additional financial support for the organisation. OPIC's financial accountability mechanisms and transparency were found to be sound at each project site, with regular monitoring through the monthly LPC meetings.
However OPIC's income barely covers its operating expenses, particularly at Bialla and Popondetta, due in part to the declining funding contribution from the national government. To address these budget pressures, the organisation is cutting costs by lowering the ratio of extension officers to smallholder blocks (now approximately one extension officer to 300 blocks), and by reducing its field staff and vehicles. The reduction in staffing and other resources has made the challenge of improving smallholder productivity that more difficult. Also, the capacity of OPIC to address new emerging issues amongst smallholders such as the impacts of population growth (e.g., changes in smallholder production strategies, law and order, etc), generational change (e.g., inheritance of leases, challenges to land tenure on VOP blocks, etc.), and the social and economic impacts of HI/AIDS, are that much more difficult to tackle with a diminishing budget. The lowering in the ratio of extension officers to smallholders is anticipated to continue as government funding declines further.
Despite its financial and staffing limitations, OPIC usually performs well in meeting its annual smallholder production and replanting targets, and has worked well with the companies in coordinating smallholder harvesting schedules. OPIC has been active in introducing initiatives to address low smallholder productivity and related issues. Table 4.6 lists several innovative initiatives and extension programmes that have been introduced and are currently operating at Bialla, Hoskins and Popondetta.
Table 4.6. Smallholder initiatives and extension programmes at Bialla, Hoskins and Popondetta. BIALLA HOSKINS POPONDETTA Mama Loose Fruit Scheme Mama Loose Fruit Scheme Mama Loose Fruit Scheme and appointment of female and appointment of female extension officers extension officers
Farmer field days (in Farmer field days Farmer field days (in association with association with PNGOPRA) PNGOPRA)
Mobile Card Trial (in Mobile Card Trial (in Mobile Card Trial (in association with association with PNGOPRA) association with HOP). PNGOPRA and HOPL)
Replanting program Replanting program Replanting program
81 BIALLA HOSKINS POPONDETTA
Growers' Fund (in Savings and Loans scheme Growers' Fund (proposed) association with BOPGA) (proposed)
Irrevocable Fertiliser Order Standing orders for fertiliser (long-term) Distribution of HIV/AIDs Distribution of HIV/AIDs Distribution of HIV/AIDs awareness posters for awareness posters for awareness posters for smallholder smallholders smallholders
Appointment of lands Appointment of lands officer Appointment of lands officer officer (Wills and lease (Wills and lease transfers) (Wills and lease transfers) transfers)
Smallholder health fund (in Oro Expansion Project association with BOPGA) proposed
Perhaps the most significant OPIC scheme for improving smallholder production and household welfare in recent years has been the Mama Loose Fruit Scheme which began at Hoskins in 1997, and since has been adopted at Bialla and Popondetta. This payment scheme involves the milling companies paying female smallholders separately from their husbands for collecting loose fruit (the fruitlets dislodged from the main bunch during harvesting) on their family plots. The new payment mechanism encouraged women to become more involved in household oil palm production and has proved successful because it guarantees payment of women's labour, thus removing a disincentive to women's participation in oil palm production. Presently, approximately 26% to 30% of smallholder oil palm income in all three project areas is paid directly to women, and at Hoskins in 2003 women harvested over 55,000 tonnes of oil palm fruit generating an average weekly income per 'loose fruit mama' of K49 (OPIC 2003 data), which is approximately double the national minimum weekly wage of K24.68 (Bank of Papua New Guinea, 2005).
Fertiliser application has long been the central plank of OPIC's extension program to increase smallholder production, but sometimes the promotion of fertiliser amongst growers has been in isolation of other important factors influencing productivity such as harvesting rates and other broader social and demographic factors which affect the supply of smallholder labour (see Sections 2 and 3). Whilst the Mama Loose Fruit Scheme, Mobile Card trials, Growers' Fund, HIV/AIDS awareness, and the recent attention to land tenure issues, indicate a broadening of OPIC's approach to smallholder productivity, the promotion of fertiliser remains the most dominant extension strategy.
However, there is a strong case for OPIC in WNB to become more selective about which groups of smallholders are encouraged to purchase fertiliser. PNGOPRA's agronomy trials have demonstrated clear yield benefits of fertiliser in Popondetta. Yield responses to fertiliser are lower in WNB, and the increased gains of fertiliser are only realised if smallholders harvest a consistently high proportion of their crop. Given that a significant proportion of smallholders (both LSS and
82 VOP) regularly under-harvest, then strategies to promote fertiliser application rates, must be undertaken in conjunction with strategies to raise harvesting rates.
Apart from the Mama Lus Frut Scheme, OPIC has given limited emphasis to under-harvesting in extension strategies. However, research conducted by PNGOPRA at Bialla and Hoskins has revealed that incomplete harvesting, with a marked edge-effect in which harvesting rates decline from Phase 1 to Phase 3 plantings at the rear of the block, is one of the primary causes of low smallholder productivity (Koczberski & Curry, 2003; Curry & Koczberski, 2004). Similarly, smallholder studies at Bialla and Hoskins in the early 1990s also recognised that the gains from fertiliser would be limited because of under-harvesting (Landell Mills, 1991).
4.5.3 Relationship with Smallholder Community Generally, OPIC and its extension staff have a good relationship with smallholders as evidenced by the popularity of OPIC radio programs broadcast in WNB by the PNG National Broadcasting Commission, and by the typically well- attended field days for growers organised by OPIC. However, OPIC's relationship with smallholders can become strained when deteriorating road conditions lead to late, irregular or cancelled pickups of smallholder fruit (a problem in the past at Bialla and Popondetta). OPIC is often blamed unfairly for these problems, which can sometimes limit the effectiveness of its work. For example, in Popondetta, several years of very poor road conditions led to some roads being designated as 'No-Go' areas for harvest collection, which caused much resentment towards OPIC and severely restricted OPIC's ability to deliver extension programmes during this period. Thus, in an environment of declining government funding for essential infrastructure such as roads, OPIC's relationship with smallholders can come under great pressure.
In many discussions with smallholders undertaken for this assignment, growers, especially on the LSSs, said that they would like OPIC to expand its role to address some of the social problems affecting smallholder households and communities such as intergenerational disputes, difficulties with household budgeting and savings, law and order concerns, land pressures, and water and housing (Section 3). There have been past attempts by the different OPIC branches to collaborate with the banks or with provincial government departments (e.g., the Department of Agriculture and Livestock, Department of Health) during farmer field days to address these broader welfare concems of growers. Unfortunately, they have not evolved into ongoing collaborative extension programmes. Further, it is unlikely that OPIC extension staff have the training or skills to provide advice on these broader social issues. Yet, as stated in several places in this report, there is a pressing need for these services, and OPIC is probably best placed to take the initiative in coordinating such activities/services.
Despite the introduction of the Mama Loose Fruit Scheme, numbers of female extension officers and female representation at OPIC LPC meetings remains low. For example, OPIC-Hoskins is the only branch to have invited a female smallholder to represent the interests of women farmers at LPC meetings, and OPIC-Bialla does not yet have a female extension officer. Given the limited channels for female representation in the industry, further efforts to increase the
83 number of female extension officers and female representation at LPC meetings should be a priority for OPIC.
4.5.4 Summary Overall, despite governance problems at the Board level, OPIC is a well managed and transparent organisation that operates competently within tight financial constraints. The wealth of skills and experience within the organisation has contributed to the successful introduction of several innovative smallholder programmes and initiatives. The organisation has also demonstrated a capacity to work successfully with the milling companies, PNGOPRA, the grower associations and smallholders. Based on previous work by the consultants in other commodity crop industries in PNG, OPIC is one of the most effective extension agencies in the country.
However, as outlined in Table 4.7 OPIC's capacity to perform its roles and responsibilities effectively is constrained by funding problems, falling staffing levels, poor roads and an extension strategy that is too narrowly focused on fertiliser promotion to the partial neglect of factors contributing to under- harvesting and the broader socio-economic dimensions of smallholder production.
Table 4.7. Organisational strengths and weaknesses and capacity building needs of the OPIC in WNB and Oro Province. ORGANISATIONAL ORGANISATIONAL INSTITUTIONAL STRENGTHS WEAKNESSES CAPACITY BUILDING NEEDS Effective leadership and Non functional OPIC Board Training and skills capacity management. building in the following Declining ratio of extension areas: Sound governance and officers to smallholders. Recruit officer to establish and financial transparency. coordinate collaborative Financial constraints. programs with external Extensive networks of links organisations to address some with smallholders. Narrow focus of extension of the emerging needs of strategies. smallholders which are now Regular Local Planning affecting smallholder Committee meetings. Limited capacity of land productivity (e.g., budgeting, section of OPIC to deal with HIV/AIDS, etc.). Capacity to develop the range of land issues , . . innovative strategies to meet affecting smallholder Increased emphasis in smallholder needs. production. harvesting. Limited female representation Strengthen lands section of amongst extension staff or on OPIC to hasten updating of LPC committees. LSS lease and VOP records, as well as smallholder wills program (might involve seconding staff to OPIC from the Lands Department). Recruit female extension officers at Bialla and reserve position for female representatives on LPC at Bialla and Popondetta.
84 4.6 Papua New Guinea Oil Palm Research Association (PNGOPRA) 4.6.1 Organisational Structure and Responsibilities OPRA is an incorporated not-for-profit organisation that constitutes the research arm of the oil palm industry. It conducts agricultural research and development for the milling companies and smallholder growers, and provides technical support and services to the industry. The five principal areas of research include:
* Agronomy * Crop nutrition * Entomology * Plant pathology * Smallholder livelihoods.
In addition to the research areas listed above, PNGOPRA is also involved in a diverse range of other short-term activities for the oil palm industry and external organisations. For instance, over the last few years, PNGOPRA has been involved in collaborative logistic and monitoring work with Higaturu Oil Palms, the Department of Environment and Conservation and the Oro Provincial Wildlife Office to protect the Queen Alexandra's Birdwing Butterfly (Ornithoptera alexandrae) (QABB). QABB is an IUCN Red Listed threatened species and is also on the CITES Appendix 1 list of species threatened with extinction. Presently, PNGOPRA is planning a research and conservation project in collaboration with Conservation International to develop a sustainable program for the long-term survival of the butterfly.
OPRA's research is carried out at three main research centres: Dami Station, WNB; Higaturu, Oro Province; and, Alotau, Milne Bay Province. PNGOPRA also maintains substations at Bialla and Kapiura in WNB and at Poliamba, New Ireland Province.
Membership of the organisation is made up of all the oil palm companies operating in PNG (including Ramu Sugar Ltd which has recently diversified into oil palm) and OPIC. Each Member has a representative on PNGOPRA's Board of Directors and on the Scientific Advisory Committee (SAC), a sub-committee of the Board of Directors. The SAC meets annually to review the previous year's research and to set the research priorities for the following year.
4.6.2 Administrative and Budgetary Management Practices OPRA is financed by a research levy of Kl.77 per tonne of FFB on Member companies and smallholders. Levies account for approximately 64% of PNGOPRA's income, with external funding from the PNG government and overseas donors accounting for 36% of income. Oil palm levies finance PNGOPRA's recurrent costs and external funds are used to support specific research projects.
A review of PNGOPRA's annual research reports from 2001-2005 shows an impressive record of winning external research funding, conducting high quality world-class research, fostering links with high calibre international researchers, and maintaining a tightly focused research programme that has generated
85 substantial dividends for PNG's oil palm industry. Table 4.7 lists the main areas of research within the five principal research groupings in 2005.
Table 4.8 2005 PNGOPRA research projects. AGRONOMY ENTOMOLOGY PLANT SMALLHOLDER AND CROP PATHOLOGY LIVELIHOOD NUTRITION STUDIES Nutrient cycling Sexava Integrated Pest Epidemiology of Mobile Card Trial and soil fertility. Management. Basel Stem Rot. (payment trial to increase productivity Overcoming Weevil pollination of Ganoderma of smallholder labour). Magnesium oil palm. population studies. deficiency in Population growth and volcanic ash soils. Conservation - Pathogenicity of impacts on livelihood QABB. Ganoderma. strategies. Fertiliser response trials. Finschaffen Disorder. Biological control of Development of an Ganoderma. extension manual for Yield fluctuation Weed pests using OPIC officers. monitoring. insects as bio-control agents. Land tenure issues. Smallholder fertiliser Oil palm pest species recommendations. recognition.
Nutrient use Development of a efficiency field managers' 'tool calculations. kit'.
Two areas of research that require further strengthening are studies on strategies to minimise the environmental impacts of oil palm activities and an increased focus on smallholder research. Whilst PNGOPRA has been steadily building an environmental dimension into its research programme (e.g., slow release fertilisers, studies of movement of nutrients in soil and plant uptake of nutrients, IPM strategies and QABB conservation), it would be desirable if PNGOPRA were to make this commitment more explicit to stakeholders and the public. This might involve an environmental cost-benefit analysis of research projects/interventions to quantify potential environmental benefits and costs of specific research projects. While probably all of PNGOPRA's research generates positive environmental retums through more efficient use of inputs, for example, such information would be useful for the industry and provide information to supplement existing economic cost-benefit analyses and yield/productivity analyses.
This environmental cost-benefit analysis of research projects should also extend to work for extemal organisations. A good example is the monitoring work of QABB with Higaturu Oil Palms, the Department of Environment and Conservation, the Oro Provincial Wildlife Office, and possibly Conservation International in the near future, to develop a sustainable program for the long-term survival of the butterfly. This project has the potential to generate high environmental returns at a low cost to PNGOPRA. A greater accounting of the environmental returns from PNGOPRA's research would also help counter rising
86 criticisms of the PNG oil palm industry by national and international environmental NGOs. Indeed, greater collaboration between PNGOPRA and reputable environmental NGOs in PNG is encouraged.
OPRA's research on smallholder productivity using a livelihood approach commenced in 2000, but remains a small component of the organisation's overall research programme. However, given the rapidly changing socio-demographic context of smallholder production (population growth, generational change, land tenure issues, food security, growing threat of HIV/AIDS), and the high rate of under-harvesting amongst smallholders, the smallholder research programme at PNGOPRA should be expanded.
4.6.3 Relationship with Smallholder Community While PNGOPRA's impact on the smallholder community is considerable through the effects of its research programs, direct contact with the smallholder community is much less than that of other stakeholders like OPIC and the smallholder sections of the milling companies, and is mainly confined to joint field days with OPIC. PNGOPRA's contribution to these field days is mainly in the form of explaining fertiliser recommendations and the provision of information about major pests and diseases of oil palm, and this work is highly regarded by smallholders. Given that the smallholder research component of PNGOPRA is likely to expand in the future, it would be both useful and desirable to expand PNGOPRA's presence in the smallholder sector. Some directions are outlined in Recommendations 4.
4.6.4 Summary The main strengths, weaknesses and capacity building needs of PNGOPRA are summarised in Table 4.9.
Table 4.9. Organisational strengths and weaknesses and capacity building needs of PNGOPRA. ORGANISATIONAL ORGANISATIONAL INSTITUTIONAL STRENGTHS WEAKNESSES CAPACITY BUILDING NEEDS Strong and effective Smallholder livelihood studies Social science research leadership and management. only a minor component of methods for smallholder PNGOPRA's research research, with an emphasis on Highly efficient and effective program. a livelihoods approach to research programme. researching production issues. No full-time smallholder This would encompass: Good working relationship research officer employed. with milling companies and * social factors determining OPIC. Absence of economic cost- production strategies; benefit analysis of smallholder * population growth; initiatives from perspective of * gender and generational smallholders (e.g., income effects on production; gains from fertiliser inputs * under-harvesting; under different harvesting * income diversification; rates). * land tenure issues; * food security; Absence of environmental * HIV/AIDS. cost-benefit analysis of research interventions.
87 OPRA is clearly a very productive and efficient research organisation which is held in high regard by all stakeholders. It undertakes a broad range of research services that have delivered considerable benefits for the companies and smallholders. However, given that VOP producers achieve only 38% of the production per ha of company plantations and LSS producers achieve only 60% of plantation production, there is much scope for increasing smallholder productivity (figures calculated from five years of production data at Hoskins). There are very large gains for the industry and income gains for smallholders in raising smallholder productivity, but this necessitates an increased emphasis on smallholders in PNGOPRA's research and other activities.
4.7 Strategies to Achieve Social Development Outcomes: Recommendations to Address Community Driven Development The institutional assessment of the various LLGs in WNB and Oro Province reveals that the potential of LLGs to forge partnerships with community groups for the delivery of basic public services at the community level as outlined in Component 2 of the SADP is currently inhibited by the need for capacity building of the LLGs and the need to improve community confidence in the LLGs' capacity to deliver. Further, given the inexperience of LLGs in managing community development projects, SADP management should not expect LLGs to perform successfully the functions of local development outlined in the proposed SADP as soon as funds become available.
Recommendation 4.1 Provide capacitv buildin2 activities for LLGs to improve the success of the community development component of the SADP.
Before SADP commits funds to LLGs to enable them to become local co- ordinators and managers of community-driven development in partnership with CBOs, it is recommended that SADP first give attention to:
* Awareness programmes for LLG representatives on issues of governance, transparency, and their roles and responsibilities under the Organic Law. * Improving the capacity of LLG representatives to prepare project funding proposals and financial plans. * Developing the management and organisational capacity of LLGs (see specific training needs outlined in Table 4.3) to co-ordinate and manage community projects. * Training LLG representatives in community needs assessment and participatory approaches to community development. * Training LLG representatives in project monitoring and evaluation techniques. * Fostering community trust in and respect for the LLG system through improving awareness of how the LLG system operates and the financial and bureaucratic obstacles faced by LLGs in performing their duties. * Initiating dialogue between LLGs and CBOs to turn around CBOs' negative perceptions of LLG operations and performance.
Recommendation 4.2 LLGs should be partnered with community or-anisations that are well established with proven track records in community development.
88 Due to the limited capacity of LLGs, it is recommended that in the early years of developing LLG partnerships with local organisations, that the community partner organisation be well established with proven administrative and financial management skills to compensate for the absence of these skills in the LLGs. Thus, skills deficiencies in the LLGs would be compensated for in the partner organisations.
Further, local organisations with proven track records may be well-placed to provide formal and informal training to ward councillors, LLGs and village communities in areas such as project management, administration and budgeting. In this way local organisations would function as capacity building agents for LLGs. An assessment of how the training needs (e.g., project management, administration, record keeping, book keeping, etc) of ward councillors and LLGs could be met by local organisations is recommended.
Potential organisations for initial partnering and training of LLGs might include the established church-based groups (e.g., Anglican Church and Catholic Church), well-established NGOs (e.g., The Nature Conservancy), or possibly private sector organisations with the capacity to work with LLGs to deliver much needed services (see Recommendation 4.4).
Recommendation 4.3 Address the weak institutional capacity among local community and village basedgroups.
Whilst there is great potential for community and village-based groups (and the smaller less established churches) to be effective drivers of community development, many are constrained in achieving their goals by skills shortages and poor financial management. The main areas of weakness are in skills and knowledge related to the following areas:
* book keeping and general budgeting; * literacy and record keeping skills; * project management; * understanding the project purposes; * distinguishing between personal and group objectives/purposes of projects; * absence of skilled support staff.
Recommendation 4.4 The community development component of the SADP investigate the potentialfor facilitatingpartnerships between local entrepreneurs and LLGs/community groups to develop sustainable livelihoods for villagers without access to oil palm income.
The majority of small farmers who are not oil palm growers, and therefore will not benefit directly from proposed SADP infill and replanting components, have smallholdings of cocoa. The productivity of these smallholdings is extremely low, with cocoa stands typically overgrown and characterised by high pest and disease levels (e.g., Black Pod and Canker), and trees long past the optimum age for replanting. A range of factors explains low productivity including inadequate levels of block maintenance (little or no pruning, and little control of shade,
89 weeds, and pests and diseases), lack of extension services, high levels of under- harvesting and poor market access.
In addition to very low productivity, a large proportion of smallholder cocoa growers earn well below their potential income because they do not have access to inexpensive processing and transport facilities. Currently, the 96% of cocoa farmers who sell wet bean cocoa do not benefit from the value added from processing and selling dried cocoa beans. For example, cocoa farmers generated an average of K3.07 per kilogram from the sale of dried cocoa beans compared with KO.58 per kilogram from wet bean cocoa in 1998 (Omuru et al., 2001). The combined effects of very low productivity with sales of wet bean rather than dry bean, mean that there is considerable scope to increase the incomes and living standards of villagers in project areas without oil palm.
Since about 2003, with the contraction of cocoa extension services, the Cocoa Coconut Institute of PNG has been exploring ways to raise smallholder productivity through the development of alternative models of service delivery involving the private sector. One promising model that is now operating in WNB (and ENB) is the Nucleus Enterprise (NE) model of smallholder extension and service provision (see Duigu & Omuru, 2003). Based on a user-pays approach to service delivery, the NE is:
* smallholder-driven; * financially sustainable; and * involves the private sector in the delivery of services to growers.
Each NE is made up of 100-200 smallholder growers and their families and is serviced by a Private Sector Service Provider (PSSP) located centrally amongst each farmer group. The PSSP provides processing facilities and a nursery. Smallholders supply wet bean to their PSSP and receive a portion of the dry bean price. The PSSP processes the wet bean, and transports and markets dry bean to exporters in town. The PSSPs also provide extension services, the latest planting material, and sometimes arrange transport from the cocoa block to the fermentary. Economies of scale, especially in transport and processing, improvements in processing technologies and on-site extension advice and training are raising smallholder productivity and incomes, and the quality of the final product. Preliminary assessments of the NE indicate significant improvements in smallholder income from cocoa for participating farmers.
In WNB, Kimbe Bay Shipping Agency (KBSA) recruited a former senior extension officer from CCI to establish NEs throughout the province. Over the past couple of years KBSA has established a cocoa nursery at its compound east of Kimbe town and has been supplying new farmer groups with high quality planting material. KBSA has also been training groups of farmers and PSSPs in cocoa management including pruning, shade control, and pest and disease management as well providing training in processing of cocoa beans. Several NEs have been established in WNB. During the social assessment, the team visited one of the largest, Wanjikai, a PSSP near Hoskins town, led by Mr Sammy Jeff who is providing extension services and processing to several groups of farmers in Hoskins LLG (5,000 farmers have signed up for cocoa seedlings but at
90 present Mr Jeff does not have the nursery capacity to supply this volume of seedlings). Wanjikai has been operating as a NE for approximately two years.
The NE enterprise model that has recently been established may provide SADP with a cost-effect strategy for strengthening livelihoods in non-oil palm communities within SADP project areas. The provision of small amounts of funding to establish cocoa nurseries, for example, would greatly assist with the establishment of NEs amongst farming communities. Such initiatives could be developed as partnerships between PSSPs and farmer groups organised by ward development committees or community/church groups. These livelihood initiatives for non-oil palm communities should be explored further during SADP.
4.8 Strategies to Achieve Social Development Outcomes: Recommendations to Strenythen the Capacity of Oil Palm Institutions in meetiny the needs of smallholders.
The following recommendations are targeted at the three main organisations working with smallholder: the grower associations, OPIC and, PNGOPRA.
Recommendation 4.5 Strengthen the capacity of the Grower Associations to represent the needs and interest of their members.
It is recommended that:
* The executive and long-term administration staff of each of the grower associations to receive training in bookkeeping, record keeping, and in governance and transparency issues (see Table 4.5). Most importantly, financial and management accountability procedures must be improved to ensure greater accountability to growers. This would require training in areas of planning, budgeting, govemance and community needs assessment. * Grower associations should aim to enhance accountability standards and transparency regarding the disbursement of members' fees. Possible strategies include improved information dissemination regarding the activities the association performs on behalf of growers. For example, executive representatives could make occasional guest appearances on the OPIC NBC radio program to inform growers of their work. Also growers associations should be encouraged to make available at their local OPIC sub-divisional office annual reports and accounts to members, and to have a greater presence at OPIC field days. * An additional place reserved for women on the executive. This might require a change to the constitutions of the associations to allow women who are not leaseholders or an owner of a VOP block to stand for election. . To better meet the needs of growers, the grower associations be encouraged to take on more responsibility for services that address some of the social and economic problems confronting growers. BOPGA has already implemented initiatives in this direction and can provide a template for such activities (See Recommendation 3.3). Membership fees provide a regular and predictable income source that would assist the
91 association to become involved in a range of activities beyond oil palm, but which are indirectly related to productivity because they enhance the quality of life of growers. Potential activities include funding workshops on household budgeting and savings, health issues (e.g., HIV/AIDs, STDs, family planning and nutrition), youth issues (e.g., alcohol and drug abuse), law and order and alternative income opportunities. Workshops could be conducted in association with local NGOs, church organisations, banks and relevant private sector or government institutions.
Recommendation 4.6 Strengthen the capacity of OPIC to perform its roles and responsibilitiesmore effectively.
It is recommended that:
* The government be encouraged to proceed with the gazettal of the OPIC Board and the General Secretary position. * A needs analysis be conducted to identify the training requirements of OPIC extension staff. One area where extension officers' skills could be improved is in dealing with the increasingly complex reality of smallholder production where productivity is influenced by an expanding range of indirect socio-demographic factors (Sections 2 and 3). For example, extension officers' skills could be enhanced with an emphasis in training on a livelihoods approach or diversified farming systems approach to extension. Such training could be carried out in conjunction with a broadening of OPIC's extension strategies outlined in Recommendation 4.7. Those extension officers showing potential for future promotion should be given the opportunity to upgrade their education to diploma or degree level. * A small business/welfare officer should be recruited to establish and coordinate collaborative programs with extemal organisations to address some of the emerging needs of smallholders which are now affecting smallholder productivity (e.g., budgeting, HIV/AIDS, small business training, etc.). In taking greater account of the socio-demographic and economic context of smallholder production, OPIC is encouraged to collaborate more closely with organisations that can provide the types of services required to enhance the social wellbeing of growers and their families, and thus improve the long-term social stability of the smallholder sector. As highlighted in Section 4.5.3, smallholders were of the view that OPIC should expand its role to address these broader issues. It is anticipated that the recruitment of a small business/welfare officer would strengthen and consolidate trends already in place amongst smallholders, especially amongst LSS growers. For example, by facilitating income diversification some presently under-employed labour would be absorbed in new income generating activities, thereby adding to the social stability on the schemes. * Each scheme should have a female smaliholder representative attend LPC meetings. * Female extension officers should be recruited at Bialla and Popondetta.
92 The capacity of the Land Sections of OPIC be strengthened to deal with the range of land issues affecting smallholder production (see Section 2 for further detail).
Recommendation 4.6 OPIC to combine its extension efforts to promote fertiliser with broaderstrategies to raise harvesting rates.
While long-term, irrevocable fertiliser orders that lock-in smallholders to monthly deductions for the purchase of fertiliser may be appropriate for some high producing growers who regularly harvest all or most of their crop, they may not be appropriate for less productive growers, and actually undermine harvesting incentives. For example, the income gains from fertiliser application may be marginal or even negative for low producers who regularly under-harvest. The benefits become even more marginal during times of low oil palm prices (see Landell Mills, 1991; Koczberski & Curry, 2003). Given that a significant proportion of smallholders regularly under-harvest, then strategies to promote fertiliser application rates must be undertaken in conjunction with strategies to raise harvesting rates. By raising harvesting rates, the benefits of yield increases from fertiliser inputs will be realised by smallholders.
Strategies to overcome under-harvesting can begin by simply targeting those growers who regularly practice 'skip-harvesting' and identifying appropriate strategies to promote regular harvesting. Information on skip harvesting is easily accessible from production records held by the milling companies. Also, the Mama Loose Fruit Scheme and the Mobile Card have shown how adjustments to smallholder payment systems that guarantee the payment of family or hired labour in oil palm production can reduce intra-household conflicts over labour and the under-utilisation of youth labour, thereby raising harvesting rates and productivity.
Devising effective strategies to improve harvesting rates requires paying more attention to the range of socio-cultural, economic and demographic factors influencing smallholder productivity and general livelihood strategies (see Landell Mills, 1991; Koczberski et. al., 2001; Koczberski & Curry, 2003; Curry & Koczberski 2004). As highlighted in this report (see Sections 2 and 3), smallholder productivity is more than simply a reflection of farm inputs, availability of credit, and block management skills. Productivity is also an outcome of a range of indirect factors that influence smallholders' motivations to produce oil palm. These indirect factors are often reflected in low rates of harvesting, i.e., under-harvesting. For example, land tenure disputes (related to inheritance of LLS blocks, between customary landowners and LSS leaseholders, between customary landowners and LTC blocks, and between caretakers and blockowners), changes in production strategies (e.g., shift from wok bung to markim mun), an inability to make material improvements in living conditions (e.g., housing and water supply), or high debt levels can all affect the motivation of smallholders to produce. These types of indirect factors mean that increased inputs of fertiliser may not necessarily lead to increases in smallholder productivity.
93 Recommendation 4.8 Expand the smallholder livelihood studies section of PNGOPRA to supportfurther research that will enhance smallholderproductivity and incomes with an emphasis on achieving a more economically, socially and environmentally sustainable smallholder sector.
There are very large gains for the industry and income gains for smallholders in raising smallholder productivity, but this necessitates an increased emphasis on smallholders in PNGOPRA's research and other activities. Given that VOP producers achieve only 38% of the production per ha of company plantations and LSS producers achieve only 60% of plantation production, there is much scope for increasing smallholder productivity.
The expansion of the smallholder livelihood studies section of PNGOPRA should begin by firstly, recruiting a smallholder research officer with a diploma/degree in agriculture and with training in social science research methods, preferably to Masters level. Ideally, the person would have prior experience of social science research in agriculture. Second, PNGOPRA should develop priority areas for smallholder research which aim to:
* Improve smallholder productivity through research that promotes a greater understanding of intra-household relations of production and constraints on the supply of family and hired labour. In particular, research should focus on the relationships amongst harvesting rates, fertiliser use and smallholder income and the deployment of family labour in oil palm production. * Seek a better understanding of the many socio-economic and demographic factors affecting smallholder productivity (e.g., population growth, land tenure issues, HIV/AIDS, etc.). This would enable PNGOPRA to formulate strategies to deal with the changing demographic and socio- economic circumstances confronting LSSs and VOP growers. * Focus on developing economic and environmental cost-benefit analysis of research innovations/production strategies tailored to accommodate the broad typology of household types and production strategies pursued by smallholders. For instance, current fertiliser recommendations for smallholders do not take account of differential harvesting rates amongst smallholders, which means that for some growers the economic incentives to produce oil palm are undermined when the costs of fertiliser are not recouped through increased production and income. Thus, a cost-benefit analysis of fertiliser use by smallholders should determine the optimum rate of fertiliser application (from a smallholder perspective) for each project area given the price of oil palm and the cost of fertiliser under different harvesting rates. * Understand the influence of quality of life issues (e.g., housing, water supply, social stability, family relationships, etc.) on smallholder productivity. The most extreme example, is the LSS grower who under- produces to dissuade harassment and demands of money from customary landowners. * Examine the role of food gardens in food/livelihood security, especially given the trend amongst LSS growers to plant all their blocks to oil palm. It is known that food gardens provide food security for families as well as
94 an income source for women. Research in this area should determine smallholders' dependence on food gardens for subsistence and cash needs, and consider how changes in the availability of land for food gardens is affecting food security (e.g., location of garden land - on-block and off- block - and how informal access rights to off-block garden land are determined and policed). The outcome of this research should be a food security plan for LSSs.
Recommendation 4.9 Strengthen links between PNGOPRA and the smallholder sector
Given that the smallholder research component of PNGOPRA is likely to expand in the future, it would be both useful and desirable to expand PNGOPRA's presence in the smallholder sector. This would mean integrating smallholders more closely into PNGOPRA's activities through increasing PNGOPRA's presence at OPIC field days, strengthening ties with smallholders and improving the dissemination of research results to oil palm communities. Some directions this could take include:
* Establishing a network of part-time, 'barefoot research assistants' in each project area at a ratio of one research assistant to about 300 blocks. Educated to at least Grade 10, these research assistants would link in to PNGOPRA's smallholder research programme during data collection periods. At other times, they may serve a monitoring role and receive periodic training in data collection methods, record keeping and identification of pests and diseases, etc (they would become the eyes and ears of PNGOPRA in the smallholder sector). They would also provide a feedback mechanism to ensure that the research of PNGOPRA is meeting the needs of smallholder growers. A small annual honorarium could be paid in recognition of their service to PNGOPRA with formal short-term contracts when they are called upon for data collection for externally funded projects. * Greater smallholder attendance at research presentations at PNGOPRA's annual SAC meetings. Ideally, smallholder representatives (one from each project area) would have a degree in agricultural science and be willing share this information with their communities. * Encouraging OPIC project managers from each project area to attend research presentations at PNGOPRA SAC meetings. The OPIC project managers of each scheme should also attend SAC meetings, because they are best placed to shape smallholder policies based on the latest research findings from PNGOPRA. * Enhance the dissemination of research findings presented at PNGOPRA's annual SAC meeting in a form suitable for the growing educated population of smallholders. While PNGOPRA's SAC meetings provide an excellent forum for information dissemination to senior industry personnel of the latest research findings of its scientists, much of this research would be of considerable interest and benefit to smallholders. If SAC's annual research results were re-packaged in a format suitable for smallholders and disseminated through OPIC field days and possibly on the OPIC radio programme in WNB, a significant proportion of the
95 smallholder community would learn and benefit from PNGOPRA's research findings. This information would cater to the information needs of the rapidly growing component of the smallholder population who is relatively highly educated. Expand PNGOPRA's involvement in OPIC field days at Hoskins and Bialla (OPRA-Popondetta is already involved in OPIC field days).
Recommendation 4.10 PNGOPRA to initiate collaborative work with OPIC to target under-harvesting in extension activities, especially duringfielddays.
OPRA has completed preliminary work on under-harvesting (see Koczberski & Curry, 2003; Curry & Koczberski, 2004) and it would be desirable for the results of this work to be incorporated into extension messages to promote full and complete harvesting. Emphasis should be given to the higher production and income advantages of wok-bung over the markim mun harvesting strategy. Here the importance of family cooperation and social cohesion for regular and full harvesting should be highlighted. Secondly, there is a need to improve growers' understanding of the potential income gains of fertiliser when combined with strategies to achieve full harvesting. Thus extension backed with further research by PNGOPRA could emphasise the relationships between harvesting rates, fertiliser use and smallholder income.
4.9 Notes 1. It was suggested that because these two committees have members appointed rather than elected, then such committee positions can be open to nepotism. Moreover, some members of these committees do not have the skills to effectively carry out the duties expected of them. 2. Public investment in agriculture in Papua New Guinea is below that of many of the poorest Asian and African countries (DFAT, 2004).
96 5 Monitoring and Evaluation
This section presents participatory survey tools and methods for monitoring and evaluating the SADP. The section is in two parts. The first presents guidelines and instruments for conducting household-level baseline surveys, and the second part identifies key socio-economic indicators for monitoring and evaluating the three main components of the SADP.
5.1 Household-level Baseline Survey The household-level baseline survey has been designed to assist with:
* Monitoring of the socio-economic impacts of the SADP. * Measuring project performance during and after SADP's implementation phase.
The proposed baseline survey is comprised of two main data collection instruments in each project area: a household questionnaire survey to be conducted among smallholder households and a series of focus group discussions with identified communities in each project area. The baseline survey data should be augmented with secondary data collated from previous smallholder studies in the project areas, OPIC and milling company production and loan data, and other relevant records from local government agencies such as health, education and lands departments.
The conceptual framework for the household-level baseline survey draws on the Sustainable Livelihoods Approach (SLA) (Chambers & Conway, 1992; Ellis, 2000) which provides an analytical framework for understanding smallholder livelihoods. SLA encourages a broad approach to thinking about how a project directly and indirectly affects peoples' livelihoods. A key feature of the SLA is its recognition of heterogeneity within rural communities, the diversity of agricultural and non-agricultural livelihood strategies (and their interactions) among and within rural households, and the role of access to resources and assets in building and sustaining peoples' livelihoods. Several key principles and characteristics of the SLA make it a suitable framework for the household surveys. These can be summarised as follows:
. recognises that people pursue diverse livelihood strategies (commodity production is therefore viewed as one of a range of livelihood strategies); * seeks to understand the factors enhancing or constraining people's choice of livelihood strategies (social and cultural variables in addition to economic variables are important for this understanding); * seeks to understand the factors constraining the benefits derived from particular livelihood opportunities; * acknowledges and teases apart the diverse influences on people's livelihood strategies (e.g., kinship, gender, age, ethnicity, infrastructure, socio-political factors, etc.).
97 5.1.1 Household Questionnaire Survey Three household surveys have been designed, each of which is designed specifically for smallholders undertaking infill and replanting while being affected by road maintenance and upgrading (see Annex 1, 2 and 3 at the end of the Chapter). For the purposes of these surveys a household is defined as all those members of the family and extended family residing together in the same or nearby houses, usually sharing the resources of an oil palm block as well as sharing other household resources (e.g., food gardens, other cash crops, etc.). Typically, meals are shared frequently between members of neighbouring houses.
The broad topic areas covered in the household surveys include:
* holdings of oil palm and other cash crops including betel nut palms; * population and demographic characteristics; * subsistence resources; * range of livelihood strategies which capture differences by gender, age, ethnicity and access to land; * access to services; * main household expenses; * other physical assets influencing wellbeing (e.g., water supply, housing, access to transport, etc.).
The household surveys will rely primarily on the collection of quantitative data, supplemented with a limited amount of qualitative data collected at the same time. Data pertaining to oil palm production (e.g., tonnes harvested, age of palms, fertiliser application) and loan repayments will be collated from OPIC and milling company records to complement the household survey data.
Sampling Framework and Survey Sites In each project area, it is recommended household questionnaire surveys be conducted at five survey sites covering both LSS and the main types of VOP smallholders (see Beneficiaries Assessment Report). Table 5.1 presents a matrix for the proposed household surveys and collation of production data in each project area. The matrix indicates that VOP smallholders have been differentiated into three subgroups according to the type of land tenure under which smallholder blocks are managed. For example, while there are small numbers of Customary Purchase Blocks (CPB) at Bialla and Oro, they are a major category of VOP producer at Hoskins, and therefore are treated as a separate category for the purposes of the household interviews. Similarly, at Oro, Land Tenure Conversion (LTC) blocks are common and have quite distinctive characteristics that set them apart from standard VOP blocks on customary land. Finally, production data should be collated for LSS blocks where road upgrading is occurring in the absence of replanting (there will be no infill associated with LSS plantings). These data will provide an indication of the effect of road improvement on smallholder productivity.
98 Table 5.1. Matrix of data collection sites by type of smallholder grower in each project area (H H S = household survey; PD = production data). ROAD INFILL & REPLANT & PROJECT UPGRADE ROAD ROAD AREAS ONLY UPGRADE UPGRADE LSS 4 X 4 Bialla Hoskins PD HHS PD HHS PD Oro VOP X Bialla (customary Hoskins landowner) PD HH S PD HH S PD Oro VOP X 4 Bialla (LTC/CLUA PD HHS PD HHS PD Oro VOP X 4 4 (CPB/CLUA) Hoskins I PD HHS PD HHS PD
For logistical and methodological reasons it is proposed to spatially cluster the household surveys in five subdivisions in each project area after careful selection of locations with reference to production data and discussions with OPIC extension officers. In our experience, oil palm smallholders are frequently absent from their blocks (e.g., attending to food gardens elsewhere, visiting sick relatives in town, etc.). By having sample households clustered in five main sites, travel times between interview locations can be reduced substantially. This means that if an interviewee is not present, it is relatively easy to call back later the same day when he/she has returned to his/her block. Further, a spatial cluster of sample households allows the influence of very local-level factors to be determined (e.g., the impact of a sexava outbreak). Also, by intensely sampling a smaller area, it is possible to build in cross-checks as a means of assessing the quality of the data collected.
Because of the strongly gendered division of labour in PNG society, it would be desirable for household surveys (and focus groups discussions - see below) to be conducted by a male and female research team. This would help ensure that the perspectives and experiences of both men and women are reflected in the survey data. There is a large body of literature that reveals that the interests of men and women often conflict in agricultural production and in a wide range of other areas.
5.1.2 Focus Group Discussions Complementing the household surveys, five focus group meetings in each of the survey sites should be conducted following analysis of the household survey data. Focus group discussions would enable aspects of the data emerging from the household surveys to be explored more fully with a broader reference group in a participatory forum that includes representatives of the community beyond the direct project beneficiaries. In addition to the topics/issues of importance revealed by the household survey data, these focus groups should also explore the community's expectations (baseline phase) and actual experiences (implementation phase) of SADP activities in relation to the following:
99 * The changing socio-cultural context of the village/community, especially as it relates to oil palm production (e.g., adjustments to land tenure to accommodate infill). * General living standards and people's aspirations in relation to SADP activities. * Impacts of poor roads, old and tall palms, or limited access to commodity crop income. * The areas of their lives people feel will be improved as a result of infilling, replanting and/or road upgrading. * Any other concems that participants bring to the focus group discussions.
The above topics should be explored across several dimensions including, for example, age, gender, access to land and so on to obtain an indication of inclusiveness.
5.1.3 Action Plan An action plan for implementing the two components of the household baseline survey is presented in Table 5.2.
Table 5.2. Action plan for household surveys and focus group from survey design to report writing. TASK RESPONSIBILITY DURATION OUTPUT Recruit team leader and OPIC SADP co- Time needed to identify Recruitment of team six member survey ordinator and recruit suitable leader and survey team team people (4 weeks) Train survey team in Team leader, survey Two weeks Survey team skilled in participatory survey team, driver and admin survey collection techniques and test pilot support staff techniques household questionnaire Refinement of household questionnaire Selection of survey Team leader and Three days in each Support from village sites and sample support staff in project area and community leaders households consultation with OPIC for household surveys to commence Conduct household Team leader, survey Four weeks Household survey data questionnaire survey in team, driver and collection phase five survey sites in each support staff completed project area Check and code data, Team leader, support Three weeks Data entered, checked and enter data on staff and data entry and ready for analysis computer assistants
Data analysis Team leader and survey Two weeks Summary household team survey results Community and Village Team leader and survey Three days in each Collection of qualitative Focus Group meetings team project area data to complement household survey results. Report writing of Team leader Four weeks Submission of report to household baseline OPIC/SADP team. survey
100 5.1.4 Estimated Costing Approximately US$200,000 (including travel, car hire and accommodation costs of team).
5.2 Key Socio-economic Indicators The socio-economic indicators presented in Tables 5.3, 5.4 and 5.5 have been formulated for project monitoring and evaluation of the three main components of the SADP as outlined in the TOR. These indicators involve a mix of quantitative and qualitative measures to assess SADP progress and impacts on the livelihoods of beneficiaries and to measure the degree of inclusiveness of SADP activities. Whilst the indicators are sufficiently comprehensive to capture the impacts of SADP in a broad range of areas pertaining to the wellbeing of affected communities, they will require some modification prior to commencing the monitoring and evaluation program. This is for two reasons. First, to ensure a high degree of community participation in the process, beneficiaries should have the opportunity to identify indicators that they perceive to be important measures of their own wellbeing. These indicators should become part of the suite of indicators constituting the monitoring and evaluation program. Second, there should be recognition that there might be a need to adjust indicators to suit the different situations/conditions present at each data collection site, and to accommodate changes in the project environment as they occur. In other words, some indicators may have more value at one site than another, and it is likely that the relative importance of issues will change through time, thus, requiring some adjustments to the set of indicators.
5.2.1 Socio-Economic Indicators for Component I Component 1: Smallholder Productivity Enhancement.
Goal: stimulate economic growth for rural communities. Objectives:
* Increase in the numbers of smallholders participating in oil palm production in the areas serviced by existing oil palm infrastructure. * Replant aging oil palm blocks through ensuring that sustainable financing mechanisms are in place to meet current and future replanting needs. * Plant new village oil palm (infill) in response to smallholder demands on land still available within the areas covered by existing oil palm infrastructure. * Upgrade and restore access roads to existing smallholder oil palm blocks, and maintain all existing and upgraded roads used for oil palm fruit collection, with the establishment of sustainable financing mechanisms for road maintenance.
The socio-economic indicators developed for Component 1 are divided into two main categories:
101 * Livelihood security: This encompasses income, income diversity, income distribution within households, financial independence, savings, land tenure security, farm and non-farm investments, and food security.
* Material and social well-being: This includes material assets such as housing, access to safe drinking water, law and order, community and household relationships, education and health, individual status, access to and control over resources.
Given SADP's emphasis on participation and equity issues as described in the TOR, the indicators developed pay particular attention to the distributional impacts of the SADP (Table 5.3). Component I indicators are designed to link into the household-level questionnaire surveys, and are outlined in Annexures 1-3.
102 Table 5.3: Socio-economic indicators for Component 1: Smallholder Productivity Enhancement. OBJECTIVE: SOCIO-ECONOMIC INDICATORS MEANS OF VERIFICATION STIMULATE ECONOMIC GROWTH FOR RURAL COMMUNITIES I Replant aging oil palm Economic livelihood security: blocks through ensuring * Proportions of eligible blocks/smallholders that sustainable financing granted credit for replanting and infill by * OPIC data and HH surveys mechanisms are in place gender, age and ethnicity. * OPIC data to meet current and future * Proportions of old blocks replanted. replanting needs. * Total HH income from oil palm (& FFB * OPIC/company data tonnage). * Income distribution within HHs/between genders (gender & generational * HH surveys/OPIC data distribution). * Number of income sources per HH * HH surveys (income diversity). * Proportions of smallholders defaulting on * OPIC data. . . loans. * HH surveys Plant new village oil palm * Levels of household and personal savings. blocks (infill) in response * Capacity to meet major HH expenses (e.g., * HH surveys & Focus groups on available land within school fees & customary obligations). areas serviced by existing * Access to informal urban & roadside * HH surveys oil palm infrastructure. markets. * Capacity to fund farm and non-farm * HH surveys & OPIC data investments. * Participation rates of youth and women in * OPIC data infill activities. * HH surveys * Application rates of fertiliser/other farm * HH surveys & OPIC data inputs. * Harvesting rates for each planting phase. * HH surveys * Regularity/frequency of fruit pickups. Upgrade and restore * Land tenure security of replant & infill * HH surveys & Focus groups access roads to existing blocks (LSS, VOP and CPBs). smallholder oil palm * Access to land for food gardening * Household surveys and interviews blocks, and maintain all (livelihood security). existing and upgraded roads used for oil palm Material and social well-being: * HH surveys & Focus groups fruit collection, with the * Participation rates of youth and women in establishment of decision-making in block management & * HH surveys & Focus groups sustainable financing oil palm production. mechanisms for road * Housing (proportions of permanent, semi- * HH surveys & Focus groups maintenance. permanent & bush material houses). * Water (proportions of blocks with access to * HH surveys potable water - tanks & bores). * Education (proportions of children of different ages in school). * HH interviews, Focus groups & * Health (distance to nearest functioning aid Health Dept data post; presence/absence of targeted programs of HIV/AIDS awareness). * HH surveys, Focus groups & * Access to other services (e.g., local provincial government data. markets, courts & law enforcement agencies. etc).
103 5.2.2 Socio-Economic Indicators for Component 2 Component 2: Local Governance and Community Participation.
Goal: stimulate economic growth and service delivery for rural communities. Objectives:
. Develop and test a sustainable mechanism for local governance, embodying fiscal decentralisation principles by providing 'untied' resources to increase participatory and inclusive planning and local accountability at the community level through LLGs entering partnerships with NGOs, churches, CBOs, village-level groups and line agencies to plan and implement local activities. * Promote self-reliant local development. * Capacity building of community organisations, ward development committees and LLGs.
The socio-economic indicators for Component 2 reflect the priority given to capacity building in recommendations 4.1 and 4.3 and the suggested modifications of project activities in Component 2 (Table 5.4). As outlined in Section 4.7, the potential of LLGs to forge successful partnerships with community groups to plan and implement local initiatives is presently limited by the need for capacity building of the LLGs and the need to improve community confidence in the LLGs' capacity to deliver. This is the reason for emphasis being given to monitoring changes in the capacity of LLGs and community organisations in this component of the project. Also, given that the objective of Component 2 is to promote community driven development, beneficiaries should be involved in developing the socio-economic indicators so that they reflect what people themselves perceive to be important measures of community development and changes in quality of life.
104 Table 5.4: Socio-economic indicators for Component 2: Local Governance and Community Participation.
OBJECTIVE: SOCIO-ECONOMIC INDICATORS SOURCE OF VERIFICATION STIMULATE ECONOMIC GROWTH FOR RURAL COMMUNITIES
Develop and test a * Numbers of successful partnerships Number of LLG-community sustainable mechanism between LLGs and community groups organisation partnerships in place. for local governance by leading to community development. providing 'untied' resources to LLGs to * Community trust in and respect for the Interviews and focus group meetings enter partnerships with LLG system (increase in social capital). with LLGs, community groups and NGOs, CBOs. churches, coordinator of Component 2. village-level groupings * Capacity of LLGs to mobilise local and line agencies to plan communities for various local initiatives. Interviews with LLGs, community and implement local groups and coordinator of Component initiatives. * Perceptions of changes in quality of life. 2.
* Involvement of community in local Numbers and quality of completed Promote self-reliant local decision making (including women, youth community infrastructure projects (e.g., development. and other marginal groups). renovated aid posts, water supply projects, etc). * Improvements in community infrastructure and facilities. Numbers of capacity building training classes/workshops completed by staff C b o * Capacity of LLGs and community groups of LLGs and community groups. Capacity buildingof to prepare project funding proposals and .. | community organisations, preare p c l a. Review of quality and success of ward development ancl plans. funding proposals prepared by LLGs committees and LLGs. Management and organisational. capacity and community groups. of LLGs and community groups to co- ordinate and manage community projects.
* Skills in financial planning, budgeting and record keeping procedures among LLGs and community groups.
* Improvement in Leadership skills in community.
* Ability to meet community needs.
105 5.2.3 Socio-Economic Indicators for Component 3 Component 3: Project Management and Institutional Support.
Goal: enhance the sustainability of local development processes by strengthening institutions involved in assisting rural communities to define their priority needs, and the capacity of service providers to respond to these needs. Objectives:
* Strengthen the ability of the grower associations to represent the interests and needs of their members. * Strengthen the capacity of OPIC to respond to community demands. * Support PNGOPRA's research on smallholder oil palm production.
The socio-economic indicators for Component 3 reflect the extent of improvement in the capacity of local institutions to respond to community needs (Table 5.5).
106 Table 5.5: Socio-economic indicators for Component 3: Project Management and Institutional Su pport. Objective: Stimulate Socio-economic Indicators Means of Verification Economic Growth for Rural Communities
Enhance the sustainability * Skills in financial planning, budgeting and * Records of training attendance and of local development record keeping procedures among the completion by executive and processes by executive and long-term administrative administrative staff of each growers strengthening institutions staff of each growers association. association. involved in servicing the smallholder sector. * Accountability standards and transparency * Types of information dissemination in the disbursement of members' fees. adopted by grower associations to inform growers of the organisation's activities (e.g., newsletters, OPIC radio appearances, OPIC field days). Improve the capacity of local institutions to * Representation of women in growers * Numbers of women involved in decision respond to community associations and at LPC meetings. making in the grower associations and at needs. LPC meetings (check of minutes of meetings). * Grower associations capacity to meet the * Allocation of membership fees to needs of growers. activities that meet growers' needs (e.g., funding training workshops for growers) (examination of accounts and interviews with growers). * Improvement in the skills capacity of OPIC * Numbers of OPIC officers attending staff. training programs or upgrading their educational qualifications.
* Increased capacity of OPIC to address the * Broadening of the extension program; changing socio-demographic and economic strengthening of the Lands section of context of smallholder production. OPIC; increased emphasis on under- harvesting in extension messages and strategies (review of materials used in extension, interviews with OPIC lands officers). * Recruitment of female extension officers at * Numbers of female extension staff OPIC-Bialla and OPIC-Popondetta. employed by OPIC at Bialla and Popondetta. * Strengthening of smallholder livelihood * Recruitment of agriculturalist/social studies section of PNGOPRA. scientist; increase in PNGOPRA research on improving smallholder productivity and addressing broader quality of life issues affecting smallholder production; greater links with the smallholder sector; greater collaboration with OPIC to devise strategies to overcome under-harvesting (review of research project documentation and output). * Incorporation of HIV/AIDS-related * Completion of a comprehensive projects into research activities of HIV/AIDS risk assessment report for the PNGOPRA. industry.
107 ANNEX 1 TEMPLATE FOR SADP HOUSEHOLD BASELINE AND MONITORING SURVEY FOR REPLANT BLOCKS
Date: Interviewer: VOP/LSS/CPB Subdivision Section Block No.
Name of Smallholder:
SECTION 1 Block Details LSS VOP 1. I Subdivision: Section: Block No: Palms details Planting Date Area Planted Number Planted Phase I Phase 2 Phase 3 Additional planting _
T otal______
If VOP block go to Q1.6.
1.2 Name on lease title 1.3 Original owner deceased: Yes/No. Year of death:_ 1.4 Title under dispute: Yes/No. Reason for dispute:
1.5 Details of person mana ing the block Who is managing the block? (tick 1 box only) Name Relationship original owner xxxxxxxxxxxxxxxxxxxxxxxx spouse of original owner xxxxxxxxxxxxxxxxxxxxxxxx son/daughter of original xxxxxxxxxxxxxxxxxxxxxxxx owner relative of original owner relationship to original owner: non-relative caretaker/or relationship to original owner: spouse, son, daughter of caretaker new owner (purchased Year of purchase: block) Purchase price: Go to Section 2.
1.6 Is the VOP block: a) Customary land of blockowner. b) Customary land belongs to another village clan, subclan or lineage. c) "Customary Purchase Block" (person from outside the village).
1.7 What documents have been signed and lodged with OPIC and the Lands Department detailing the land arrangements?
1.8 Have any payments been made for the land? Yes/No -amount.
108 1.9 If this is not your own customary land, are there any obligations on you to help the landowners in order to secure your access rights to the land?
.10 How would you rate your land tenure security to your oil palm block: a) very strong (mi papa/mama graun) b) good c) uncertain.
1.11 Any other comments on land issues:
SECTION 2: Population and Demographic Details 2.1 Household 1: Head of Block/Household Sex Age Note TICK('1) if TICK(q1) if NOTE if m/f Group Ethnicity still at school living with living or year of parents or note grade papa & elsewhere born and place left school mama. of birth of children Man Meri ISt born m/f 2nd born m/f 3rd born m/f 4th born m/f 5th born m/f 6th born m/f 7th born m/f 8th born m/f gth born m/f IOth born m/f
2.2 Number of adopted children living with family? Number 2.3 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 2.4 No. of members of family in paid employment: (full-time) - (part-time) -
2.5 Household 2: Circle relationship to head of block household: 2nd Wife Mother Father Son Daughter Brother Sister Other specify): Sex Age Note Ethnicity of TICK( ) if still TICK( ) if NOTE if m/f Group parents and place at school or living with living or year of birth of note grade left papa & elsewhere born children school mama. Man Meri ISt born m/f 2nd born m/f
3rd born m/f
4 th born m/f
5 th born m/f 6h born m/f 7t born m/f
8 th born m/f
9 th born m/f I oth born m/f
109 2.6 Number of adopted children living with family? Number 2.7 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 2.8 No. of members of family in paid employment: (full-time) _ (part-time)
2.9 Household 3: Circle relationship to head of block household: 2nd Wife Mother Father Son Daughter Brother Sister Other (specify Sex Age Note TICK(4) if TICK(4) if NOTE if m/f Group Ethnicity still at school living with living or year of parents or note grade papa & elsewhere born and place left school mama. of birth of children Man Meri 1st born m/f 2ndborn m/f
3 rd born m/f 4th born m/f 5thorn nm/f 6thornm m/f 7th born m/f 8th born m/f 9th born m/f I Oth bo m/fn
2.10 Number of adopted children living with family? Number 2.11 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 2.12 No. of members of family in paid employment: (full-time) _ (part-time)
2.13 Total population 2.14 total number of households -
If there are more than three households complete another survey sheet.
SECTION 3: Oil Palm Production 3.1 What alternative economic activities do the households intend to pursue during the replant phase when the palms are immature?
3.2 Are there any disputes amongst family members regarding the decision to replant? Yes/No. Comments:
3.3 Will replanting undermine your land tenure security. Yes/No. Explain.
3.4 Do you have any outstanding bank or company loans currently? Yes/No. If yes, collect details on amount borrowed and repaid, and the system of repayments. Data to be collected from OPIC, milling company or bank. Data to be attached to survey form.
3.5 Production data for block for 2006 to be collected separately from OPIC and Milling company. Data to be attached to survey.
3.6 Is there a Mama Card on the block? Yes/No
110 3.7 How many households share the oil palm income? -
3.8 Do you have: a) a rotation (makim mun) system of harvesting on the block (one month money is allocated to an individual person). b) wok bung (all block residents work together in harvesting and sharing the oil palm money).
3.9 If markim mun system exists on block, how does it operate: a) harvesting work and money allocated to one individual/household. b) wok bung harvesting and money allocated to one individual/household.
3.10 Is the markim mun system often disrupted due to disputes? Yes/No. Comments:
3.11 How is the mama card used on the block? Markim mun/wok bung. Comments:_
3.12 Which HHs (HH No.) have access to Mama Card income?
SECTION 4: Details of Cash Crop Income. 4.1 Do you have any of the following (circle one or more): Mini-Estate income Cocoa Copra Vanilla Timber Other
4.2 Mini Estate Oil Palm: When did you last receive income/royalties from the estate? Year:- Month How much did you receive?: K_
4.3 Cocoa: How many blocks do you have (circle): 1 2 3 No. of cocoa trees Is the cocoa harvested? planted/ area planted Circle one (ha) I. Y/N Why not?
2. Y/N Why not?
3. Y/N Why not?
4.4 When did you last sell cocoa? Year:_- Month How much did you eam from your last cocoa sale?: K_ Did you sell wet or dy bean? (circle). No. of bags of dry bean?_ 4.5 Do you own a fermentary/dryer? Yes/No.
4.6 Copra: How many coconut blocks do you have (circle): 1 2 3 No. of coconuts Do you collect coconuts to make copra? planted/ area planted (ha) I. Y/N Why not?
2. Y/N Why not?
3. Y/N Why not?
4.7 When did you last sell copra? Year: Month_ How much did you ean from your last copra sale?: K No. of bags?-
111 4.8 Vanilla No. of vanilla Have you sold any vanilla? planted 1. Y/N Why not?
4.9 When did you last sell vanilla? Year:- Month How much did you earn from your last vanilla sale?: K
4.10 Timber |Do you receive timber royalties | Do you sell sawn timber? l Y/N Y/N
4.11 When did you last receive timber royalties/sell sawn timber? Year- Month How much did you earn?: K_
4.12 Do any household members receive income from the following? ACTIVITY Y/N Do you earn income: 1. A few times each week. 2. Once a week. 3. Once a fortnight 4. Once a month or less. 5. A few times each year. 6. Seasonally Circle one Selling garden food at 1 2 3 4 5 6 markets Selling cooked food at 1 2 3 4 5 6 markets Betel nut (wholesale) 1 2 3 4 5 6 Saksak 1 2 3 4 5 6 Tobacco 1 2 3 4 5 6 Tradestore 1 2 3 4 5 6 Kerosene sales 1 2 3 4 5 6 Fuel sales (diesel/petrol) 1 2 3 4 5 6 Firewood 1 2 3 4 5 6 Fish sales Petty trading (smoke, 1 2 3 4 5 6 beer) PMV enterprise (car or 1 2 3 4 5 6 boat) Banis kakaruk 1 2 3 4 5 6 Pigs 1 2 3 4 5 6 Landrents 1 2 3 4 5 6 Remittances (money 1 2 3 4 5 6 from wantoks living elsewhere) Other? 1 2 3 4 5 6
4.13 Rank the most important sources of household income from most important to least important. Household I Household 2 Number 1. Number 1. Number 2. Number 2. Number 3. Number 3. Number 4. Number 4.
112 Household 3 Number 1. Number 2. Number 3. Number 4.
4.14 Last week did Mama sell food at local markets? Yes/No.
4.15 Comments on household economic activities.
SECTION 5: Household Accessibility to Services 5.1 Assessment of household's accessibility to se rvices SERVICES ESTIMATED MODE OF DURATION FREQUENCY ACCESS DISTANCE TRANSPORT OF TRIP 1. Few times RANKING 1. walk 1. < 30 min. each week. (how do you rate 2. PMV 2. 30- 60 2. Once a week accessibility to 3. private min. 3. Once a the service) vehicle 3. 60-90 fortnight 1. Good 4. other min 4. Once a 2. Fair 4. 90-120 month or 3. Poor 5. 120 min+ less 4. Affected by 5. A few times seasonal each year rains 6. Never Markets 1 2 3 4 12 3 4 5 1 2 3 4 5 6 1 2 3 4 Aid Post 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 Hospital 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 Community 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 School Secondary 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 school Village 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 court Extension 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 advice Church 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 Commodity 1 2 3 4 12 3 4 5 1 23 4 5 6 12 3 4 buyer (e.g. for cocoa or copra) Town 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4
5.2 Have you experienced any problems with the current road situation (e.g. seasonal road closures, constraints on accessing services)? Ask for examples. 1. 2. 3.
SECTION 6: Garden Access 6.1 How many gardens does Household I have? Household I Purpose: 1. food only. | Location: 1. on block. 2. on sl ol 2. market. 3. mixed food/market I another block. 3. on customary
113 land. 4. on government/company land. Garden 1. 1 2 3 1 2 3 4 Garden2. 1 2 3 1 2 3 4 Garden 3. 1 2 3 1 2 3 4 Garden4. 1 2 3 1 2 3 4
6.2 How many ardens does household 2 have? Household 2 Purnose: 1. food only. Location: 1. on block. 2. on 2. market. 3. mixed food/market another block. 3. on customary land. 4. on government/company land. Garden 1. 1 2 3 1 2 3 4 Garden 2. 1 2 3 1 2 3 4 Garden 3. 1 2 3 1 2 3 4 Garden 4. 1 2 3 1 2 3 4
6.3 How many ardens does household 3 have? Household 3 Purpose: 1. food only. Location: 1. on block. 2. on 2. market. 3. mixed food/market another block. 3. on customary land. 4. on government/company land. Garden 1. 1 2 3 1 2 3 4 Garden2. 1 2 3 1 2 3 4 Garden 3. 1 2 3 1 2 3 4 Garden4. 1 2 3 1 2 3 4
SECTION 7: Household Expenses: How much does the family spend per annum on the following:
7.1 School fees (p/a) How much did you pay? How much owing? Where did you obtain the money from?
7.2 Customary expenses (e.g. brideprice etc) _ (p/a) When did you last contribute to a customary event? How much did you contribute? Where did you obtain the money from?
7.3 Church donations (p/a) When did you last donate money to the church? - How much did you donate? Where did you obtain the money from?
7.4 Does the Papa (Yes/No) and the Mama (Yes/No) have a savings account?
SECTION 8: Household Material Well-being and Assets 8.1 Total number of houses on the block:
8.2 Complete for each house on the block: circle answer House 1 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 2 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
114 House 3 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 4 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
8.3 Water Source: circle answer Source of 1. Tank Distance from house. water for 2. Bore 1. On block drinking 3. 200 litre drum 2. Close (less than 10 min. walk to water) 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk) Source of 1. Tank Distance from house. water for 2. Bore 1. On block washing 3. 200 litre drum 2. Close (less than 10 min. walk to water) pots, etc. 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk) Source of 1. Tank Distance from house. water for 2. Bore 1. On block bathing 3. 200 litre drum 2. Close (less than 10 min. walk to water) 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk)
8.4 Rank from I to 3 main sources of cooking fuel: Kerosene - Firewood - Gas
8.5 How many of the following items do the residents of this block own? Item Number Item Number Kerosene lamps Bush knives Pressure lamps Wheelbarrows Mattresses Radio/cassettes Cooking pots Generators Pairs of shoes or Esky boots Car/PMV TV/video motorbike
SECTION 9: Social Well-being and Expectations 9.1 What are the three main reasons why the family wants to replant? 1.. 2. 3.
9.2 What benefits do the family expect/desire from replanting? 1.. 2. 3.
9.3 Do you foresee any problems that may arise from replanting?
115 9.4 Comments by interviewer (ask questions on intra-household relationships, labour demands, land issues)
116 ANNEX 2 TEMPLATE FOR SADP HOUSEHOLD BASELINE AND MONITORING SURVEY FOR INFILL BLOCKS
Date: Interviewer: VOP/LSS/CPB Subdivision Section Block No. Name of Smaliholder:
SECTION 1: Population and Demographic Details 1.1 Household 1: Head of Block/Household Sex Age Note TICK( ) if TICK(i) if NOTE if m/f Group Ethnicity still at school living with living or year of parents or note grade papa & elsewhere born and place left school mama. of birth of children
Man____ _ Meri I5' born m/f
2 nd born m/f 3d born rn/f 4th born m/f 5th born m/f |
6th born m/f _ __ 7th born m/f _i"born m/f
9sh born m/f I O' born m/f
1.2 Number of adopted children living with family? Number 1.3 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 1.4 No. of members of family in paid employment: (full-time) _ (part-time) -
1.5 Household 2: Circle relationship to head of block household: 2nd Wife Mother Father Son Daughter Brother Sister Other specif): Sex Age Note Ethnicity of TICK( ) if TICK( ) if NOTE if m/f Group parents and place still at school living with living or year of birth of children or note grade papa & elsewhere born left school mama.
Man ____ Meri I't born m/f 2nd born m/f
3 rd born m/f 4h born m/f
5 th born rn/f
6 th born m/f 7th born rn/f 8' born rn/f 9 sh born m/f I th born m/f
117 1.6 Number of adopted children living with family? Number 1.7 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 1.8 No. of members of family in paid employment: (full-time) - (part-time)
1.9 Household 3: Circle relationship to head of block household: v 2nd Wife Mother Father Son Daughter Brother Sister Other (speci ): Sex Age Note TICK(4) if TICK(4) if NOTE if m/f Group Ethnicity still at school living with living or year of parents or note grade papa & elsewhere born and place left school mama. of birth of children Man
Mst b iorn rn/f ______
2 nd born m/f 3 rd born m/f 3dborn m/f 5th born m/f
6 th born m/f 7th born m/f 8th bom m/f 9th born m/f IOh born m/f
1.10 Number of adopted children living with family? Number 1.11 No. of temporary visitors (visitor is any person staying for more than 7 days) 1.12 No. of members of family in paid employment: (full-time) - (part-time) -
If there are more than two households, complete another survey sheet.
SECTION 2: Land Ownership Details of Oil Palm Infill block 2.1 Area of land to be planted to oil palm _ hectares
2.2 Is the land for oil palm development: d) Customary land of blockowner. e) Customary land belongs to another village clan, subclan or lineage. f) "Customary Purchase Block" (person from outside the village).
2.3 What documents have been signed and lodged with OPIC and the Lands Department detailing the land arrangements?
2.4 Have any payments been made for the land? Yes/No -amount.
2.5 If this is not your own customary land, are there any on-going payments or other obligations on you to help the landowners in order to secure your access rights to the land?
2.6 How would you rate your land tenure security to your oil palm block: a) very strong (mi papa/mama graun) b) good c) uncertain.
2.7 Any other comments on land issues:
118 SECTION 3: Details of Cash Crop Income. 3.1 Do you have any of the following (circle one or more): Mini-Estate income Cocoa Copra Vanilla Timber Other
3.2 Mini Estate Oil Palm: When did you last receive income/royalties from the estate? Year:- Month How much did you receive?: K_
3.3 Cocoa: How many blocks do you have (circle): 1 2 3 No. of cocoa trees Is the cocoa harvested? planted/ area planted Circle one (ha) I . Y/N Why not?
2. Y/N Why not?
3. Y/N Why not?
3.4 When did you last sell cocoa? Year:__ Month How much did you earn from your last cocoa sale?: K_ Did you sell wet or dra bean? (circle). No. of bags of dry bean?_ 3.5 Do you own a fermentary/dryer? Yes/No.
3.6 Copra: How many coconut blocks do you have (circle): 1 2 3 No. of coconuts Do you collect coconuts to make copra? planted/ area planted (ha) 1. Y/N Why not?
2. Y/N Why not?
3. Y/N Why not?
3.7 When did you last sell copra? Year: Month How much did you earn from your last copra sale?: K No. of bags?_
3.8 Vanilla No. of vanilla Have you sold any vanilla? planted 1. Y/N Why not?
3.9 When did you last sell vanilla? Year:- Month How much did you earn from your last vanilla sale?: K_
3.1 0 Timber Do you receive timber royalties Do you sell sawn timber? Y/N Y/N
3.11 When did you last receive timber royalties/sell sawn timber? Year- Month How much did you earn?: K
3.12 Do any household members receive income from the following? ACTIVITY Y/N Do you earn income: 1. A few times each week. 2. Once a week. 3. Once a fortnight 4. Once a month or less. 5. A few times each year. 6. Seasonally Circle
119 one Selling garden food at 1 2 3 4 5 6 markets Selling cooked food at 1 2 3 4 5 6 markets Betel nut (wholesale) 1 2 3 4 5 6 Saksak ._ 1 2 3 4 5 6 Tobacco 1 2 3 4 5 6 Tradestore l 2 3 4 5 6 Kerosene sales 1 2 3 4 5 6 Fuel sales (diesel/petrol) 1 2 3 4 5 6 Firewood 1 2 3 4 5 6 Fish sales Petty trading (smoke, 1 2 3 4 5 6 beer) PMV enterprise (car or 1 2 3 4 5 6 boat) Banis kakaruk 1 2 3 4 5 6 Pigs 1 2 3 4 5 6 Landrents 1 2 3 4 5 6 Remittances (money 1 2 3 4 5 6 from wantoks living elsewhere) Other? 1 2 3 4 5 6
3.13 Rank the most important sources of household income from most important to least important. Household I Household 2 Number 1. Number 1. Number 2. Number 2. Number 3. Number 3. Number 4. Number 4.
3.14 Last week did Mama sell food at local markets? Yes/No.
3.15 Comments on household economic activities.
SECTION 4: Household Accessibility to Services 4.1 Assessment of household's accessibility to services SERVICES ESTIMATED MODE OF DURATION FREQUENCY ACCESS DISTANCE TRANSPORT OF TRIP 1. Few times RANKING 1. walk 1. < 30 min. each week. (how do you rate 2. PMV 2. 30- 60 2. Once a week accessibility to 3. private min. 3. Once a the service) vehicle 3. 60-90 min fortnight 1. Good 4. other 4. 90-120 4. Once a 2. Fair 5. 120 min+ month or less 3. Poor 5. A few times 4. Affected by each year seasonal rains 6. Never Markets 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 Aid Post 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 Hospital 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4
120 Community 1234 12345 123456 1234 School Secondary 1234 12345 123456 1234 school Village 1234 12345 123456 1234 cour-t Extension 1234 12345 123456 1234 advice Church 1234 12345 123456 1234 Commodity 1234 12345 123456 1234 buyer (e.g. for cocoa or copra) Town __2_3_4__ 1234 12345 123456 1234
4.2 Have you experienced any problems with the current road situation (e.g. seasonal road closures, constraints on accessing services)? Ask for examples. 1. 2. 3.
SECTION 5: Garden Access 5.1 How many gardens does Household I have? Household I Purpose: 1. food only. Location: 1. on block. 2. on 2. market. 3. mixed food/market another block. 3. on customary land. 4. on government/company land. Garden 1. 1 2 3 1 2 3 4 Garden 2. 1 2 3 1 2 3 4 Garden 3. 1 2 3 1 2 3 4 Garden4. 1 2 3 1 2 3 4
5.2 How many Jardens does household 2 have? Household 2 Purpose: 1. food only. Location: 1. on block. 2. on 2. market. 3. mixed food/market another block. 3. on customary land. 4. on government/company land. Garden 1. 1 2 3 1 2 3 4 Garden2. 1 2 3 1 2 3 4 Garden 3. 1 2 3 1 2 3 4 Garden 4. 1 2 3 1 2 3 4
SECTION 6: Household Expenses How much does the family spend per annum on the following:
6.1 School fees (p/a) How much did you pay? How much owing? - Where did you obtain the money from??
6.2 Customary expenses (e.g. brideprice etc) _ (p/a) When did you last contribute to a customary event? How much did you contribute? Where did you obtain the money from? o
121 6.3 Church donations (p/a) When did you last donate money to the church? How much did you donate? VrWhere did you obtain the money from?
6.4 Does the Papa (Yes/No) and the Mama (Yes/No) have a savings account?
SECTION 7: Household Material Well-being and Assets 7.1 Total number of houses on the block:
7.2 Complete for each house on the block: circle answer House I 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 2 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 3 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 4 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
7.3 Water Source: circle answer Source of 1. Tank Distance from house. water for 2. Bore 1. On block drinking 3. 200 litre drum 2. Close (less than 10 min. walk to water) 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk) Source of 1. Tank Distance from house. water for 2. Bore 1. On block washing 3. 200 litre drum 2. Close (less than 10 min. walk to water) pots, etc. 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk) Source of 1. Tank Distance from house. water for 2. Bore 1. On block bathing 3. 200 litre drum 2. Close (less than 10 min. walk to water) 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk)
7.4 Rank from I to 3 main sources of cooking fuel: Kerosene - Firewood - Gas -
7.5 How many of the follo ing items do the residents of this block own? Item Number Item Number Kerosene lamps Bush knives Pressure lamps Wheelbarrows Mattresses Radio/cassettes Cooking pots Generators Pairs of shoes or boots Esky Car/PMV TV/video motorbike
122 SECTION 8: Social Well-being and Expectations 8.1 What are the three main reasons why the family wants to plant oil palm? 1. 2. 3.
8.2 What benefits do the family expect/desire from cultivating their own oil palm plot? 1.
3.
8.3 Do you foresee any problems that may arise from owning your own oil palm plot?
8.4 How is income currently shared amongst family members?
8.5 How does the family propose to allocate the work and share the oil palm income when the block is established?
8.5 Comments by interviewer (ask questions on intra-household relationships, labour demands, land issues)
123 ANNEX 3 TEMPLATE FOR SADP HOUSEHOLD BASELINE AND MONITORING SURVEY (General Survey)
Date: Interviewer: VOP/LSS/CPB Subdivision Section Block No. Name of Smallholder:
SECTION 1: Population and Demographic Details 1. I Household 1: Head of Block/Household Sex Age Note TICK(4) if TICK( ) if NOTE if m/f Group Ethnicity still at school living with living or year of parents or note grade papa & elsewhere born and place left school mama. of birth of children Man Meri Ist born m/f
2nd born m/f 3rd born m/f
4 th born m/f
5th born m/f 6th born rn/f 7tborn rm/f 8th born m/f 9th born rm/f IOth born m/f I___I
1.2 Number of adopted children living with family? Number 1.3 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 1.4 No. of members of family in paid employment: (full-time) - (part-time) -
1.5 Household 2: Circle relationship to head of block household: 2nd Wife Mother Father Son Daughter Brother Sister Other specify): Sex Age Note Ethnicity of TICK( ) if still TICK(4) if NOTE if m/f Group parents and place at school or living with living or year of birth of note grade left papa & mama. elsewhere born children school Man Meri I" born m/f
2 nd born m/f 3 rd born m/f 4th born m/f 5 born m/f 6 born m/f
7th born m/f 8" born m/f 9 born m/f I oth born r/f
124 1.6 Number of adopted children living with family? Number 1.7 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 1.8 No. of members of family in paid employment: (full-time) _ (part-time)
1.9 Household 3: Circle relationship to head of block household: 2nd Wife Mother Father Son Daughter Brother Sister Other (specif): Sex Age Note TICK(4) if TICK(4) if NOTE if m/f Group Ethnicity still at school living with living or year of parents or note grade papa & elsewhere born and place left school mama. of birth of children Man Meri Ist born m/f 2nd born m/f 3rd born m/f 4th born m/f 5tborn m/f
6 th born m/f 7th born m/f 89born mr/f 9t' born m/f IOth born m/f
1I.10 Number of adopted children living with family? Number - 1.11 No. of temporary visitors _ (visitor is any person staying for more than 7 days) 1.12 No. of members of family in paid employment: (full-time) - (part-time) -
If there are more than three households, complete another survey sheet.
SECTION 2: Block and Production Details 2.1 Complete block details Palms details Planting Date Area Planted Number Planted Harvested? I st planting Y/N Why not?
2nd planting Y/N Why not?
3rd planting Y/N Why not?
Additional planting Total
2.2 Mama Card: Yes/No
2.3 Between 2005 and 2007 have poor road conditions stopped trucks collecting your oil palm yes/no. If yes, estimate how many pick-ups were stopped due to bad road conditions during 2005 and 2006 _.
2.4 Were you paying off a bank or company loan during this period? yes/no.
(Information for Q 2.3 and Q2.4 can be verified from company records).
125 The following questions relate to last pick-up 2.5 Last pick-up did you have any bunches/loose fruit collected by the truck? Yes/No.
2.6 Last pick-up how many nets were weighed on the papa card? - mama card?-
SECTION 3: Details of Cash Crop Income. 3.1 Do you have any of the following (circle one or more): Mini-Estate income Cocoa Copra Vanilla Timber Other
3.2 Mini Estate Oil Palm: When did you last receive income/royalties from the estate? Year:- Month How much did you receive?: K_
3.3 Cocoa: How many blocksdo youhave(circle): 1 2 3 No. of cocoa trees Is the cocoa harvested? planted/ area planted Circle one (ha) I . Y/N Why not?
2. Y/N Why not?
3. Y/N Why not?
3.4 When did you last sell cocoa? Year:_- Month How much did you earn from your last cocoa sale?: K Did you sell wet or dry bean? (circle). No. of bags of dry bean? 3.5 Do you own a fermentary/dryer? Yes/No.
3.6 Copra: How many coconut blocks do you have (circle): 1 2 3 No. of coconuts Do you collect coconuts to make copra? planted/ area planted (ha) 1. Y/N Why not?
2. Y/N Why not?
3. Y/N Why not?
3.7 When did you last sell copra? Year:_- Month How much did you earn from your last copra sale?: K No. of bags?_
3.8 Vanilla No. of vanilla Have you sold any vanilla?
.planted 1. Y/N Why not?
3.9 When did you last sell vanilla? Year:- Month How much did you earn from your last vanilla sale?: K
3.10 Timber Do you receive timber royalties Do you sell sawn timber? Y/N Y/N
126 3.11 When did you last receive timber royalties/sell sawn timber? Year- Month How much did you earn?: K
3.12 Do any household members receive income from the following? ACTIVITY Y/N Do you earn income: 1. A few times each week. 2. Once a week. 3. Once a fortnight 4. Once a month or less. 5. A few times each year. 6. Seasonally Circle one Selling garden food at 1 2 3 4 5 6 markets Selling cooked food at 1 2 3 4 5 6 markets Betel nut (wholesale) 1 2 3 4 5 6 Saksak 1 2 3 4 5 6 Tobacco 1 2 3 4 5 6 Tradestore 1 2 3 4 5 6 Kerosene sales 1 2 3 4 5 6 Fuel sales (diesel/petrol) 1 2 3 4 5 6 Firewood 1 2 3 4 5 6 Fish sales Petty trading (smoke, 1 2 3 4 5 6 beer) PMV enterprise (car or 1 2 3 4 5 6 boat) Banis kakaruk 1 2 3 4 5 6 Pigs 1 2 3 4 5 6 Land rents 1 2 3 4 5 6 Remittances (money from 1 2 3 4 5 6 wantoks living elsewhere) Other? 1 2 3 4 5 6
3.13 Rank the most important sources of household income from most important to least important. Household I Household 2 Number 1. Number 1. Number 2. Number 2. Number 3. Number 3. Number 4. Number 4.
Household 3 Number 1. Number 2. Number 3. Number 4.
3.14 Last week did Mama sell food at local markets? Yes/No.
3.15 Comments on household economic activities.
SECTION 4: Household Accessibility to Services 4.1 Assessment of household's accessibility to se rvices SERVICES ESTIMATED MODE OF DURATION FREQUENCY ACCESS DISTANCE TRANSPORT OF TRIP 1. Few times RANKING
127 1. walk 1. < 30 min. each week. (how do you rate 2. PMV 2. 30- 60 2. Once a week accessibility to 3. private min. 3. Once a the service) vehicle 3. 60-90 min fortnight 1. Good 4. other 4. 90-120 4. Once a 2. Fair 5. 120 min+ month or less 3. Poor 5. A few times 4. Affected by each year seasonal rains 6. Never Markets 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 AidPost 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 Hospital 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 Community 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 School Secondary 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 school Village 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 court Extension 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 advice Church 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 Commodity 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4 buyer (e.g. for cocoa or copra) Town 1 2 3 4 1 2 3 4 5 1 2 3 4 5 6 1 2 3 4
4.2 Have you experienced any problems with the current road situation (e.g. seasonal road closures, constraints on accessing services)? Ask for examples. 1. 2. 3.
SECTION 5: Household Expenses How much does the family spend per annum on the following:
5.1 School fees _ _ (p/a) How much did you pay? How much owing? Where did you obtain the money from?
5.2 Customary expenses (e.g. brideprice etc) _ (p/a) When did you last contribute to a customary event? How much did you contribute? Where did you obtain the money from?
5.3 Church donations (p/a) When did you last donate money to the church? - How much did you donate? Where did you obtain the money from?
5.4 Does the Papa (Yes/No) and the Mama (Yes/No) have a savings account?
SECTION 6: Household Material Well-being and Assets 6.1 Total number of houses on the block:
6.2 Complete for each house on the block: circle answer
128 House I 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 2 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 3 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
House 4 1. Permanent 3. Haus morota comments on condition: 2. Semi-permanent (Copper roof) 4. LSS original settler house
6.3 Water Source: circle answer Source of 1. Tank Distance from house. water for 2. Bore 1. On block drinking 3. 200 litre drum 2. Close (less than 10 min. walk to water) 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk) Source of 1. Tank Distance from house. water for 2. Bore 1. On block washing 3. 200 litre drum 2. Close (less than 10 min. walk to water) pots, etc. 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk) Source of 1. Tank Distance from house. water for 2. Bore 1. On block bathing 3. 200 litre drum 2. Close (less than 10 min. walk to water) 4. Spring 3. Medium distance (10 to 20 minute walk to 5. Creek/river water) 4. Far (more than 20 minutes walk)
6.4 Rank from I to 3 main sources of cooking fuel: Kerosene - Firewood - Gas
6.5 How many of the following items do the residents of this block own? Item Number Item Number Kerosene lamps Bush knives Pressure lamps Wheelbarrows Mattresses Radio/cassettes Cooking pots Generators Pairs of shoes or Esky boots Car/PMV TV/video motorbike
SECTION 7: Social Well-being and Expectations 7.1 What benefits do the family expect/desire from improved roads? 1. 2. 3.
7.2 Do you foresee any problems that may arise from improved roads?
129 7.3 How is income currently distributed among family members?
Comments by interviewer (ask questions on intra-household relationships, labour demands, land issues)
130 6 Bibliography
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133 Appendix 1. Terms of Reference
Terms of Reference (TOR) for the Social Assessment of the "Smallholder Agriculture Development Project"
1. BACKGROUND 1.1 Projection Description The proposed revised SADP' is a rural community development project designed to encourage further and sustainable economic growth and enhance community participation and local governance in the rural areas of the four oil palm growing provinces:
* Stimulate economic growth for rural communities. The proposed Project would realize the economic growth potential of oil palm production as the main income generating activity for smallholders in the project areas. Smallholders currently account for approximately 47 percent of the total land planted under oil palm in PNG, so that sustainable and viable production by this sub-sector is important for the national industry, as well as for individual household welfare.
The Project would respond to expressed community needs for: (a) an increase in the number of smallholders participating in oil palm production in the area serviced by the existing oil palm infrastructure; (b) rehabilitation and maintenance of critical access and fruit collection roads; and (c) assured access to funding for replanting of palms when they are too tall to be harvested.
* Improve service delivery for rural communities through supporting participatory local governance. Many village economies in PNG have stagnated due to a breakdown in the delivery of government services and the absence of an alternative participatory framework for community-based development. Local-Level Governments (LLGs) could be potentially effective local coordinators of community participation2. LLGs, however, have not been given the adequate resources and authority to carry out this role3. The project would establish and test inclusive and equitable mechanisms designed to work with communities through existing local government structures and procedures to create an enabling and replicable model for more effective and accountable service delivery.
Proposed Approach
The Project would work with the existing smallholder community framework in the oil palm areas to meet their expressed needs and would develop the capacity in communities in the non oil palm areas to mobilize themselves' to articulate their priority needs to service providers. The proposed project will ensure that culturally appropriate informed participation mechanisms will be in place for all the segments of the communities regarding decision making related to prioritization and planning decisions, and to guarantee equity of access to project benefits.
' The original project concept (ref. PAD July 2003) focused on: (i) strengthening the village oil palm sector to make it more sustainable, and (ii) supporting rural development in non oil palm growing areas through establishing pilot Community Driven Development (CDD) mechanisms. 2 LLGs have been mandated with the role of local development managers following the Organic Law of 1995, having powers to make decisions and raise revenues, and responsibilities to draw up development plans. 3 Most LLGs appear to be receiving no more than 15% of their legal entitlement in local-level government and village services grants from the National Government.
134 * In the oil palm areas, the existing relationship between the community groups and their formal oil palm grower's association representatives, using OPIC, PNGOPRA and the milling companies as service providers, would continue. Means to further develop the capacity of OPIC to understand and to respond to the concerns of communities would be included. In addition, as effective mechanisms for community interaction with other service providers are developed, the smallholder group's framework would be linked to the formal LLG framework to broaden its access to service providers. * In the areas without palm oil infrastructure, the Project would develop and test mechanisms aimed at promoting community participation in defining priority community needs and accessing service providers through inclusive participatory planning mechanisms within the existing LLG framework. The specific social mobilization and joint consultation/planning arrangements would be adapted to particular socio-political conditions existing in the different project areas (especially in West New Britain and Oro Bay) to ensure inclusive and equitable access to information, participation and benefits.
Given the severity of the HIV/AIDS epidemic in PNG, the Project would support on going and planned HIV/AIDS prevention activities in the project areas in close coordination with the Bank's HD strategy, as well as the wider donor community and local stakeholders. To ensure a strong community ownership and participation, special attention would be given to incorporate gender-balanced activities and culturally adequate consultation mechanisms among the various groups of the communities in the different project areas and components 4
Project Development Obiective
The Project Development Objective would be to establish sustained economic growth and improved local service delivery in the rural areas of four oil palm growing provinces through an integrated approach to development, promoting local governance and community participation.
Proiects Components
Component 1: Responding to Community Demands for investment in the smallholder oil palm sector. The key elements demanded by smallholders to enable reliable and sustainable cash income for their household welfare and economic growth are: (a) re-planting of aging oil palm blocks (about 6,500 ha during the project period) through ensuring that sustainable financing mechanisms are in place to meet current and future replanting needs; (b) planting new village oil palm (about 6,000 ha) in response to smallholder demands on land still available within the areas covered by oil palm infrastructure; and (c) upgrading, restoring access roads to existing smallholder oil palm blocks (about 500 km), and maintaining all existing and upgraded roads used for oil palm fruit collection, with the establishment of sustainable financing mechanisms for road maintenance.
To achieve this, the Project would use the existing smallholder service provider demand and supply frameworks, and enhance this capacity where necessary through the institutional
4 Based on Social Safeguard Pohcies OP 4 10 Indigenous Peoples, the proposed design of the overall project approach wil ensure Inclusion regarding decision making related to prioritization and planmnng decisions, and equity regarding access to project benefits to all the segments of the population by developing specific and culturally adapted social-political consultation approaches Pamcular attention wil be given to significant variations (if any) between or among the varnoas idigenoas groaps in the different project areas as well as the various means of obta.i.ng access to land when appropriate
135 strengthening component. The latter would include improved services in the area of HIV/AIDS.
Component 2: Basic infrastructure and service delivery through community participation.5 The aim of this intervention would be to develop and demonstrate a sustainable mechanism for local governance, embodying fiscal decentralization principles by providing "untied" resources through a block grant to increase participatory and inclusive planning and local accountability at the community level through Local Level Governments (LLGs) in selected target areas in the project provinces 6. LLGs would enter into partnerships with NGOs, churches, and line agencies, to enable community-based organizations (CBOs) and village- level groupings to plan and implement local activities. The approach is to promote self- reliant local development through five initiatives: culturally appropriate community mobilization, facilitated by local motivators trained by NGOs; identifying, prioritising, submitting and ranking activities from CBOs and wards, through a transparent, equitable and inclusive participatory process, for funding from the LLG's development budget; integration of community development activities into the LLG planning and budgeting process; direct and assured transfer to LLGs of conditional annual development grants based on the formula set down in the Organic Law, with transparent conditions to ensure accountability and effective use of funds by both LLGs and recipient communities; and capacity-building of CBOs, ward development committees and LLGs.
Component 3 - Strengthening Local Institutions. The component would aim at enhancing the sustainability of local development processes by strengthening institutions involved in assisting rural communities to define their priority needs, and the capacity of service providers to respond to these needs. A unit would have to take responsibility for overseeing the various components of the project, and be responsible for coordinating any budgetary requirements and the monitoring of implementation. OPIC, as one of the major service providers, would receive assistance to ensure its capacity to respond to community demands, especially in the interaction with grower community groups, women's groups and grower associations; it would also include an engineering unit to supervise the access road construction/maintenance operations. The oil palm grower associations would be assisted to strengthen their ability to represent the interests and needs of their members. PNGOPRA would receive support for particular aspects of research on smallholder oil palm production, particularly in the area of socio-economic studies to provide a greater understanding of the different types of households in the smallholder sector and the bases for smallholder attitudes. Environmental monitoring would also be supported. All project agencies would mainstream GoPNG HIV/AIDS awareness/prevention program.
5 The proposed project would test community planning and implementation of basic public services through demonstrating efficient, socially and gender inclusive, and transparent community-driven mechanisms using existing local govemance framework (LLG and Ward Committees) for all communities in selected target areas in the project provinces in a first phase. The sub-projects selected by the communities (public good small scale infrastructure such as minor roads, culverts, small water supply for the community, training, etc.) would not only positively influence the quality and efficiency of equitable service delivery, but would also develop the capacities within communities to come together to solve issues of mutual concem while reinforcing the local governance planning, social accountability and resource mobilization capacities (for more information see LUBETT 2004). As a successful methodology is demonstrated, the concept would be expanded into other areas of the project.
6 Three locations, two in Oro and one in West New Britain provinces, have been identified as priority candidates for this phase.
136 1.2 Project Area and Beneficiaries
The Project would be implemented over a five year period in the country's four main oil palm growing provinces: Oro and West New Britain and, on a smaller scale, in Milne Bay and New Ireland. The proposed project area would include the smallholder oil palm areas and selected LLGs in these four provinces. The beneficiaries would include local government institutions, oil palm smallholder households, and other members of the rural communities including all the various categories of the community in the project provinces.
2. OBJECTIVE The objectives of this assessment are to define the means to: (i) increase opportunities for optimizing social development outcomes through identification of Project beneficiaries and their needs, ideas, and expectations, (ii) verify the validity and outcomes of the consultation process that has given rise to the proposed smallholder oil palm and road construction components, (iii) examine possibilities for effective community participation and oversight in LLG planning and budgeting; (iv) verify the validity of the resulting approach(es) for inclusive community participation in LLG governance and equity in access to project benefits, and (v) identify and propose mitigation measures for any adverse social impacts which might be caused by the Project. This assessment shall give special attention to significant variations (if any) among the various indigenous groups7 by identifying the various communities, consulting with them and undertaking social assessment to assess potential project impacts, both positive and adverse. Specific social mobilization and joint consultation/planning arrangements would be adapted to particular socio-political conditions existing in the Oro and the two West New Britain project areas in order to ensure that decision making would be inclusive and there would be equity in access to benefits. Ultimately the Social Assessment must serve as guidance during project preparation to adjust and if necessary re-design project activities with the active support and involvement of individuals and groups that will potentially be the beneficiaries or otherwise affected by the SADP activities.
3. TASKS TO BE CARRIED OUT 3.1 Social Assessment The consultant will: I. Collect quantitative and qualitative background information from relevant sources such as Government departments and authorities at national, provincial and district levels, academia and research institutions, NGOs and CBOs, and from discussions with key informants. These data must complement and build on already existing information (e.g., existing studies and literature).
2. Conduct, jointly with the Environmental Assessment consultant, a fact-finding workshop in Port Moresby. The client (OPIC) will assist with the physical organisation of this workshop. In the Oro and West New Britain project areas, the consultant will hold "fact-finding" consultative meetings with community representatives, LLGs, grower associations, women's groups, other relevant stakeholders. This will inform planning for the stakeholder analysis.
7As referred in the World Bank revised OP 4.10 on Indigenous People
137 3 Social and stakeholder analysis: 3.a. Gather anthropological information (primarily socio-political) on significant variations (if any) between or among the indigenous groups in the project areas of West New Britain and Oro regarding local political economy leadership, political competition, decision making, representation, and relations/linkages to the LLGs. This would both provide information on key stakeholder groups/categories at the community level, and information on local decision-making to inform the specific approaches to be used in different project areas to ensure informed participation of the local population.
3.b. Analysis of the current functions and capacities played by the farmers' and other stakeholders' principal social organisations (i.e., women's groups, ward, LLGs, church, grower associations, village committees, NGOs, and CBOs).
4 A household-level baseline survey will be required for the monitoring of social impacts and to measure Project performance during and after the implementation period. The actual data collection, analysis and report presentation of the survey will not have to be part of the Social Assessment. The Social Assessment must, however, provide a detailed framework and operational instruments, such as action plan, units of analysis, questionnaires, checklists for group discussions, staffing plan, costing etc, for the household baseline survey. The design of the survey would be based on the findings of the stakeholder analysis, and the survey would be an integral part of the system for monitoring socio-economic performance under the Project, which is described in the Social Assessment;
5 Analysis of land tenure in Oro and West new Britain with a focus on factors that might influence equity in access to the benefits to be provided by the project for new oil palm growers.
6 Conduct an Institutional Assessment of the capacity of the various institutions representing the communities. For instance, it will consist of an institutional capacity assessment of the grower associations to mobilise and represent their communities and an analysis of the interactions between the communities and their local governments (at village, ward and LLG levels). Particular attention will be given to the existing planning and monitoring mechanisms (including social accountability) of the grower associations and of the Local Level Governments in their budget and development plans design and implementation to identify constraints to equitable access to benefits and/or services for the poor. This Assessment will also examine which institutional assets exist in poor communities, taking into consideration any existing institutional linkages allowing the poor to interact with formal organisations (LLGs, NGOs, Churches, Line Agencies and Extension services). In this process, it will assist in the design of incentives which could give existing groups in poor communities a stake in project objectives and outcomes. It will also assess the LLG administrative and resource mobilization capacities: budget, planning, implementation and monitoring, local revenue mobilization opportunities, etc.
7 Review the current arrangements and make recommendations for possible improvements for (i) participation in the decision making regarding equitable service provision by OPIC, oil palm grower associations and milling companies, (ii) equitable access to the benefits from the support to oil palm cultivation, and (iii) inclusive
138 community participation in transparent LLG governance that leads to equity in access to project benefits).
8 Formulate the Social Assessment Report which should (i) Propose guidelines for adopting a socially sustainable project design -these guidelines must be based on stakeholders equitable access to available project activities in consideration of their economic, social, ethnic, and gender differences to ensure inclusion regarding decision making and equity in access to benefits; (ii) Formulate key socio-economic and social accountability indicators for project monitoring and evaluation;
9 Conduct a Beneficiaries Assessment and subsequently prepare a Beneficiaries ParticipationFramework (BPF). Propose a framework for beneficiary participation in project implementation & management in order to encourage the sustained involvement of already participating smallholder farmers and to ensure continued inclusion of additional smallholders as they become involved in oil palm production. Propose a similar framework for beneficiaries who would not have the opportunity to participate in oil palm production but could potentially benefit from organized communities interactions with service providers and identify measures to avoid, minimize, mitigate or compensate any adverse effects. The framework will also include an outline of grievance procedures, monitoring and evaluation arrangements and the budget for implementing the planned measures.
10 Include in the Social Assessment report socio-economic performance indicators for evaluating the implementation of the Project; the latter have to be created taking the stakeholders/beneficiaries considerations into account. The report should recommend any necessary changes to the proposed project design and/or implementation arrangements;
11 Prepare a Land Acquisition andResettlement Policy Framework according to World Bank guidelines although it is not expected that any major land areas are going to be acquired under the SADP. The consultant must also investigate possible problems in the Project areas that might arise from settlers moving off Land Settlement Schemes (LSS) and establishing new blocks on customary land.
The overall Social Assessment, which will require the direct supervision of highly experienced international leadership, would oversee the operations in the project areas. A number of teams of locally recruited persons, to be determined, would be expected to assist the team leadership. The team leadership should create a discussion forum of experts, pertinent to social issues, from interested departments and institutions. This forum would offer guidance to the team leadership during the Social Assessment.
4. EXPECTED OUTPUTS AND DURATION OF TASK The consultant will be required to produce a number of reports as outlined above. The reports must present the study's findings and define proposals for each of the critical issues identified. The main documents are: * Workshop Report addressing social issues; * Social Assessment Report; Beneficiaries Assessment Report and BPP Framework; and * Resettlement Policy Framework The reports must first be submitted in draft form to OPIC. Following comments on the draft reports, the consultant will prepare the final documents.
139 The total duration of the assignment will be about 13-weeks, which could include about 5- days for desk review, about 10-weeks for field activities, and about 15-days for writing the detailed Social Assessment report.
The estimated timetable for the assignment will be around the following period: * Desk Review: Beginning June 2006. * Port Moresby workshop (with EA consultants): 20 June 2006 * Field Visits: Early July to early September 2006 * 1st draft of reports: Early October 2006 * Final draft (incorporating comments from OPIC, DEC and the World Bank): Early November 2006 * Consultation on final report and future actions to be taken: Early November 2006
140 Appendix 2: List of people and groups consulted at Hoskins NAME ORGANISATION Otto Pukam OPIC Project Manager, Hoskins Frank Lewis OPIC Senior Project Manager, Hoskins Steven Oiza OPIC Field Manager. Hoskins John Kama OPIC Reuben Taukuru OPIC Divisional Manager Jack Yalikunga OPIC Divisional Manager, Siki Michael Buka OPIC Divisional Manager, Nahavio Frank Bao OPIC Divisional Manager Maxwelline Ganubella OPIC, Lands Officer Sawi Lawila OPIC Lands Officer Elizabeth Rawa OPIC Mama Lus Frut Officer Ian Orrell PNG Oil Palm Research Association, Director Tapas Pokus NBPOL, Smallholder Manager Village meeting: Andrew Woody and others at Mai village Mai VOP Jim Bruse, CPB owner, Waisissi VOP Waisissi village Willie Nilmo HOPGA. Chairman Francis Tangwari HOPGA, Director on OPIC Board Bruno Sengo. HOPGA Committee member for Kavui LSS subdivision Bruno Valuku. HOPGA, Vice Chairman of
Jack Sanaru HOPGA Acting Publicity Officer Scholie Glenjus HOPGA Administrative Officer Tana Yanzinga HOPGA, Consultant to Growers Association John Gauri Co-ordinator Co-ordinator, Community Development Scheme, Nahavio Theodora M. Field Worker, Community Development Scheme, Nahavio Daniel Somi. Financial Administrator. Kimbe Diocese Catholic Women's Association
Elizabeth Edo Kimbe District Health Service (Talasea District) Hilda Sapun Member Representative for Women in WNB Provincial Assembly
Michael Turikia Secretary to the Governor of WNB Province Mr. Bonly Tiun Vice President, Mosa LLG Focus group with Mosa LLG. Jack Mulai Ward Development Committee, Mosa LLG. Councillor, Ward 7 and others. Edward Wambun Executive Officer, Mosa LLG Marcelyn Sausa Administration Officer, Mosa LLG Gabriel Mou Vice President, Hoskins LLG
Focus group with Hoskins LLG. Luke Valuka, Ward Development Committee, Hoskins LLG Ward Councillor and others Patrick Loku Chairman, Hoskins LLG Roy Naiab Manager, Hoskins LLG
John Executive Officer,Hoskins LLG Sammy Jeff NEE/ Private Sector Service Provider
Dickson Sammy Smallholder, Hoskins Raymond Laupu Kimbe Catholic Church, Catholic Youth Coordinator
141 Alice Billi Women's Representative, Mosa LLG, President Mosa Women's Association Barnabas Nomp CPB owner, Rerengi Focus Group. Alios Lehi and ILG committee Rerengi Land Group, Rerengi VOP members (8 males and 3 females) Peter & Edna CPB owners, Rerengi VOP Mathew Pokia, General Manager Rerengi Land Group, Rerengi VOP Female Chimbu smallholders CPB residents, Rerengi VOP Mima and family Kavui LSS Focus Group, Kavui smallholders (9 male and 5) Kavui LSS female focus group Windu Sari and family Kavui LSS Albert Apeles and family Kavui LSS Maria, female smallholder Gaungo VOP Jo Sogi Gaungo VOP Jim Bruse CPB owner, Waisisi VOP 88 smallholder households in Sections, 1, 2, 3, 4, Kapore subdivision 5, 6, 7, 8 (interviewed and surveyed) Elizabeth Warpen Mama Lus Frut Rep, Kapore LSS Meeting with members of Imhea Himanato Morobean Land Group. Andrew Woody Mai VOP Walain Ulaiwi The Nature Conservancy
142 Appendix 3: List of people and groups consulted at Bialla NAME ORGANISATION Stephen Kamis Project Manager, OPIC Esau Horris OPIC Board Director Paul Kausa OPIC Division Manager, Division 3 Simon Sumunda OPIC Division Manager, Division 2 Jimmy Bira Division Manager Division I OPIC Lands Officer Henry Turuo OPIC Mobile Card Officer Gerard Niu OPIC Mobile Card Officer Anis Ropi OPIC Extension Officer Focus group with members of Ewasse United United Church, Ewasse Village Church (14 men 10 women) Senis Awe. CP CPB, Endy Estate at Kaiva VOP Peter Langu and family CPB, Maututu VOP
Baobao Sagare and family Maututu VOP
Focus Group (9 Female smallholders) Bubu VOP Meeting (4 male) Baikakea VOP Two female smallholders Baikakea VOP Winston Eremu OPRA
John Gaa President, Bialla LLG James Una. LLG Manager Bialla LLG Manager Focus group with Bialla LLG ward committee Bialla, LLG members Sharlotte Belawa, DPI Extension Officer Nolene Pidik, Community Development Officer Community Development Officer Akuila Herman, Bank of South Pacific Hillary S. Sinaki Branch Manager, Rural Development Bank John Tapi and family Barema LSS Ricky Towarii, Barema LSS John Taja, Alambi Kombuli, Matthew Kul. Wilelo LSS Wilelo
Focus Group Section 7 (11 men and 6 women) Wilelo LSS Meeting with Sepik growers, Section 3 (5 males, Wilelo LSS 2 female) Jim Kasam and family Wilelo LSS 20 smallholders in Division I (interview and Uasilau/Lalopo LSS. Sale Lss/VOP survey) 23 smallholders in Division 2 (interview and Tiaru LSS, Wilelo LSS, Barema LSS, Kaiva survey) VOP. Gomu VOP, Baekakea VOP, Pakisi VOP 27 smallholders in Division 3 (interview and Soi LSS, Kabaiya LSS, Gigipuna VOP, Noau survey) VOP).
Meeting with Growers Association (Present Esou Bialla Oil Palm Growers Association Horris, Director of OPIC Board. Lawrence Malindu - Chairman of Tiaru. Sam Tiaro. Chairman o f Usualia. Thomas Vitikut, Chairman of Barema) Bernard Tiaru LSS Andrew Tiaru LSS Steven Patiken Hargy Oil Palms Col Campbell Hargy Oil Palms Kosmos Kauve Hargy Oil Palms David Mather Hargy Oil Palms
143 144 Appendix 4: List of people and groups consulted at Popondetta NAME ORGANISATION Graham King General Manager, Higaturu Oil Palms Ltd Jojo Papap GIS officer, Higaturu Oil Palms Ltd Leo Ruki OPIC Project Manager Graydon Hango OPIC Field Manager Henry Viare OPIC Divisional Manager Alex Kimana OPIC Divisional Manager John Asiri OPIC Divisional Manager Alex Keri Jima OPIC Divisional Manager Michael ? OPIC Divisional Manager Robert? OPIC Lands Officer
Bito Mula OPIC Extension Officer Adelbert Gangai Conservation Melanesia Clement Kerahu POPGA Chairman Arthur Sehopa, POPGA Secretary Focus Group 25 smallholders (18 men and 7 Jackius Tomo's block, Jonito VOP. Sorovi women) Division Focus Group 13 smallholders (8 men and 5 Girua LSS, Sorovi Division women) Focus Group 19 smallholders (11 men and 8 Kakandetta VOP women) Focus Group 23 smallholders (13 men and 10 Augustus Aipo's block, Divisional Chairman women) Wasseta and Boro Focus Group 30 smallholders (18 men and 12 Julius Jorute's block, Divisional Chairman, OPIC, women) Waseta-Korobata, Saiho-Aeka Division Focus Group 8 smallholders (6 men and 2 Stanton Haiva's block, Koropata Village women) Focus Group 5 smallholders (3 men and 2 Kevin, LSS block, Igora women) LSS grower Johnstead Safitoa (came to visit team) HOUSING & WATER SURVEY 33 smallholders at Igora (interview and survey) Igora LSS 10 smallholders at Sorovi (interview and survey) 10 blocks Sorovi LSS 10 smallholders at Sorovi (interview and survey) 10 blocks Sorovi LSS 7 smallholders at Ilimo(interview and survey) 7 blocks Ilimo VOP 20 smallholders at Saiho (interview and survey) 20 blocks Saiho VOP
Focus Group with community and representatives Kokoda Rural Local Level Government (LLG) from Kokoda Rural Local Level Government (LLG) (16 men and 11 women) Focus Group with community and representatives Oro Bay Rural Local Level Government (LLG) from Oro Bay Rural Local Level Government (LLG) (15 men and 9 women) Provincial Lands Officer Oro Provincial Government Provincial Health Officer Oro Provincial Government
145 Appendix 5. Institutional Capacity Assessment of Bialla Rural LLG.
Name of Organisation: Bialla Rural Local Level Government (LLG)
Roles of Organisation: Functions as local development manager as stipulated in the 1995 Organic Law on Provincial and Local Level Governments, having powers of law-making, decision- making and revenue collection.
Responsibilities of Organisation: Under the 1995 Organic Laws of the Government of PNG, the LLG has responsibility for designing and implementing development plans.
CAPACITY ASSESSMENT Resources and assets The LLG has a) a 25 hectare oil palm block (3,000 oil palms) that will come into production in 2007; and b) an office currently undergoing renovation that houses public servants and other LLG staff. The current leadership has plans to acquire resources and build the asset base of the LLG. Representation The LLG is made up of 18 ward councilors and two nominees (currently both women), one representing women, the other representing NGOs. Internal organisational processes An LLG Assembly comprising ward councilors and nominees meets on a quarterly basis. Under the Organic Law which allows for the appointment of up to 5 management staff, the LLG is managed by a Manager, an Executive Officer, and Administrative/Personal Assistant. LLG staff performing district and/or LLG level functions work side-by- side with public servants. Administrative and budgetary Management practices are in place. WDCs, the LLG Assembly and management practices Management were involved in the preparation and production of the Five Year Development Plan before its presentation to the Joint-District Planning & Budget Priorities Committee (JDP&BPC). Concentration of trust accounts at the District/Provincial Treasury and unreliable fund disbursement has undermined and underutilised the potentially effective practices. Design and management of The LLG's ability to design and manage community/smallholder community/smallholder projects projects has been constrained by the lack of funds. The Management and Assembly have been very discouraged by the non-implementation of the 5-Year Development Plan in the past three years. They see their efforts in preparing it as a waste of time and are often blamed unfairly for the lack of development in the LLG. Effectiveness of service delivery Untimely and unreliable funding has resulted in very poor service delivery. Organisational constraints and * Lack appropriate strategies and technical skills to deliver services. weaknesses * Limited use of their full mandate as stipulated in the 1995 Organic Law on Provincial and LLGs. especially in the area of law-making. * Unable to contract community-based organisations to provide services due to lack of funding. * Poor dialogue with WDC/community about funding constraints. * Resultant negative community assessment of LLG performance and lack of community trust. Organisational strengths * A legal mandate. * Lean and manageable organisational structure. * Good relations and/or network with smallholders/community groups and public servants. * Working environment integrated with public servants: o enhances skills and expertise.
146 * Commitment to transparent and effective planning: o initiated income generating projects (oil palm planting) o initiated office renovations to facilitate transparent operations o liaising with National Housing Commission to purchase housing at Bialla Station for rental investments. * Potential future income from oil palm plantings. Capacity building needs of the * Human resources development. organisation * Training in community participation techniques and strategies: o business skills o self-reliant sustainable income generation o equity issues. * Communication facilities. * Technical skills training in planning, preparation of budgets and project proposals. Perceived needs of organisation * Clearly defined strategies to deliver public services. * Enabling legislation to ensure timely and adequate transfer of funding from the provincial and national governments. * Authority to channel Ward Trust Accounts to sustainable strategies to meet community-defined needs: o clean accessible water supply o aid post or health facilities. * More community awareness, engagement and participation in community-based activities. * Closer links with WDCs to encourage community participation. * Technical skills in planning, preparation of budgets and project proposals. * Training needs analysis as the basis for training programme. * Clearly defined locally relevant monitoring and evaluation indicators.
147 Appendix 6. Institutional Capacity Assessment of Ward Development Committee, Bialla Rural LLG.
Name of Organisation: Ward Councillors/Ward Development Committee (WDC), Bialla Rural Local Level Govemment (LLG) Roles of Organisation: Function as the principal community advisory unit to the Local-level Government, and determine the needs of the ward in relation to services, programs and infrastructure. Responsibilities of Organisation: Established following the 1995 Organic Laws of the Government of PNG and consists of: (1) member elected for the ward (councillor), who is the Chairperson of the WDC, and; (b) up to a maximum of five associate members (of whom at least two shall be women) appointed by the councillor. The WDC has responsibilities in advising the LLG on matters relating to their community and identifying the needs of their respective ward in regard to services, programs and infrastructure.
CAPACITY ASSESSMENT Resources and assets The WDCs have very little in terms of resources and assets. However, most indicated having Trust Accounts that could be used to channel any development funds. Representation Consists of: (I) member elected for the ward (councillor), who is the Chairperson and; (2) up to a maximum of five associate members (of whom at least two shall be women) appointed by the councillor. Internal organisational processes The WDCs are made up of five representatives, representing: (1) Women & Youth; (2) Churches; (3) Law & Order; (4) Health and (5) Education. Most of the councillors indicated that their WDCs are mostly made Up of people who had contested the elections. Administrative and budgetary These are in place but have been underutilised. The initial identification management practices and preparation of the LLG's Five Year Development Plan begins with the WDCs before it goes to the next level, i.e.. LLG level. The lack of proper fund disbursement has undermined their potential to operate effectively at the village level. Existing Ward Trust Accounts represent potential channels for grant disbursement for proposed community activities. Design and management of The WDC's ability to design and manage community/smallholder community/smallholder projects projects has been constrained by the lack of funds. Non-implementation of the 5-Year Development Plan in the past three years has been very discouraging and frustrating. Effectiveness of service delivery Delivery of services is very poor due to funding constraints and lack of necessary/appropriate skills. Organisational constraints and * Appointments of WDCs are often riddled with nepotism. weaknesses * Infrastructure such as aid posts, schools and churches are run down and/or deteriorating and badly in need of repair and maintenance. * Lack appropriate strategies to deliver services. * Lack of capacity and technical skills. * Unable to contract community-based organisations to provide services due to lack of funding. * Resultant loss of community confidence.
148 Organisational strengths * Legally recognised mandate. * The WDC has the closest linkages and relations with the community and with smallholders/community groups. * The structure is lean and manageable. * Gender equity (two female and three male representatives). Capacity building needs of the * Communication facilities. organisation * Technical skills training in financial management. * Training in monitoring and evaluation methods. * Training in community participation techniques and strategies: o business skills o self-reliant sustainable income generation o equity issues. * Training needs analysis. Perceived needs of organisation * Clearly defined strategies to deliver sustainable community services. * More community awareness, engagement and participation in community-based activities. * Closer interaction with community groups such as churches, schools and NGOs. * Closer liaison with and understanding of major oil palm stakeholders. * Technical skills in financial management. * Training needs analysis. * Careful sequenced introduction of proposed activities to avoid 'band- aid' solutions. * Clearly defined relevant monitoring and evaluation criteria.
149 Appendix 7. Institutional Capacity Assessment of Hoskins LLG.
Name of Organisation: Hoskins Local Level Government (LLG)
Roles of Organisation: Function as local development managers as stipulated in the Organic Law of 1995, having powers of law-making, decision-making and revenue collection.
Responsibilities of Organisation: Established by the 1995 Organic Laws of the Government of PNG; having responsibilities to draw up development plans and facilitate their implementation.
CAPACITY ASSESSMENT Resources and assets The LLG has very little in terms of resources and assets. Has a vehicle (utility) that is quite old. Plan to construct a Women's Resource Centre but lacks funds at present. Representation The LLGs are made up of nine ward councillors and two nominees one representing women, the other representing NGOs. Internal organisational processes The LLG has an LLG Assembly that meets on a quarterly basis. Apart from the nine ward councillors, there are two nominees (I women representative & I NGO representative - also represented by a woman). The LLG is managed by a Manager, and Executive Officer, Administrative Officer, a Revenue Officer and a Rules officer (the Organic Law only allows for appointments of up to five management staff). Administrative and budgetary These are in place but require major training and improvements in management practices skills and capacity and financial resources to be effective. Management was involved in the preparation and production of the Five Year Development Plan before its presentation to the Joint-District Planning & Budget Priorities Committee (JDP&BPC). Design and management of Their ability to design and manage community/smallholder projects has community/smallholder projects been constrained by the lack of funds. Non implementation of the 5- Year Development Plan in the past three years has been very discouraging to the management and assembly. They see their efforts in preparing it as a waste. Effectiveness of service delivery Delivery of services is very poor due to funding constraints. Organisational constraints and * Lack appropriate strategies to deliver services. weaknesses * Lack knowledge of their full mandate as stipulated in the 1995 Organic Law on Provincial and LLGs, especially in the areas of law- making and decision-making. * Unable to contract other organisations to provide services. * The LLG President is the Deputy Governor for WNBP and is away most of the time at Kimbe. No induction procedure for newly elected Ward Councillors and/or LLG Presidents and management on the roles and responsibilities of the LLG as stipulated in the Organic Law. Organisational strengths * Legal mandate. * Good relations and/or network with smallholders/community groups. * Lean and manageable structure. The Manager is proactive and understands the LLG system and how it can be improved. Capacity building needs of the * Human resources development. organisation * Communication facilities. . Technical skills training in planning, preparation of budgets and project proposals.
150 strategies: * Training in community participation techniques and o business skills o self-reliant sustainable income generation o equity issues. and adequate transfer of funding from the provincial Perceived needs of organisation * Timely and national governments. (roles and * Adequate understanding of their mandate responsibilities). and project * Technical skills in planning, preparation of budgets proposals. and/or * Induction procedures for newly elected Ward Councillors of LLG Presidents and management on the roles and responsibilities the LLG as stipulated in the Organic Law. funds. * Enabling legislation to ensure timely distribution of process. * Strategies to include community groups in planning indicators. * Clearly defined locally relevant monitoring and evaluation
151 Appendix 8. Institutional Capacity Assessment of Mosa LLG. Name of Organisation: Mosa Local Level Government (LLG) Roles of Organisation: Function as local development managers as stipulated in the Organic Law of 1995, having powers of law-making, decision-making and revenue collection. Responsibilities of Organisation: Established by the 1995 Organic Laws of Provincial and Local Level Governments, having responsibilities to draw up development plans and facilitate their implementation.
CAPACITY ASSESSMENT Resources and assets The LLG has very little in terms of resources and assets. A new office is being built at the Kapore subdivision which is more central to its constituents. A market place for the sale of local garden produce is being built for the people in the LLG. Representation Made up of 8 ward councillors and two nominees representing women and NGOs. Internal organisational processes The LLG has an LLG Assembly that meets on a quarterly basis. Apart from the 8 ward councillors, there are two nominees (I women representative & I NGO representative). The LLG is managed by a Manager, Executive Officer, Administrative Officer, a Revenue Officer and a Rules officer (the Organic Law only allows for appointments of up to 5 management staff). Administrative and budgetary These are in place but require major training management practices and improvements in skills and capacity and financial resources to be effective. Design and management of Their ability to design and manage community/smallholder projects has community/smallholder projects been constrained by the lack of funds. However, they have initiated a poultry project and a new market place for the sale of Relationship with Community food crops. The LLGs are made up of ward councillors and two nominees comprise that of a women's representative and NGO's representative. Good relations exist with the community. Effectiveness of service delivery Delivery of services is very poor due Organisational to funding constraints. constraints and *Lack appropriate strategies to deliver services. weaknesses * Lack knowledge of their full mandate as stipulated in the 1995 Organic Law on Provincial and LLGs. especially in the areas of law- making and decision-making. *Unable to contract other organisations to provide services. Organisational strengths * Good relations and/or network with smallholders/community groups and/or ward development committee (WDC). *Lean and manageable structure. Capacity building needs of the *Human resources development. organisation * Communication facilities. * Technical skills training in planning, preparation of budgets and project proposals. Perceived needs of organisation * Timely and adequate transfer of funding from the provincial national governments. and * Adequate understanding of their mandate (roles and responsibilities). * Technical skills in planning, preparation of budgets and project proposals.
152 Rural LLG. Appendix 9. Institutional Capacity Assessment of Kokoda Govermment (LLG) Name of Organisation: Kokoda Rural Local Level development manager as stipulated in the Roles of Organisation: Functions as local 1995 Organic Law on Provincial Governments and Local Level Governments, having powers of law-making, decision- making and revenue collection.
1995 Organic Laws of the Government of Responsibilities of Organisation: Established by the PNG; having responsibilities to draw up development plans and facilitate their implementation.
CAPACITY ASSESSMENT in Kokoda Sub-district station and shares Resources and assets The LLG is headquartered office facilities with the sub-district. ward councillors and two, currently female Representation Made up of 24 elected nominees who represent women. meet The LLG Assembly comprised of ward councillors, and nominees Internal organisational processes Project on a quarterly basis. The LLG is managed by a Manager, Officer, an Executive Officer, and Keyboard Operator. District administrative staffs work side-by-side with the LLG staff to perform sub-district level functions. reforms but are underutilised due to the lack of Administrative and budgetary These comply with the funding. For example, in the 2006 grants so far, there was no management practices adequate has grant for administration. The lack of proper fund disbursement the LLG's potential to operate effectively and undermined Little disempowered WDCs who have not been funded since 2002. prescribed evidence exists of effective planning processes beyond the Five Year involvement in the preparation and production of the Planning Development Plan before its presentation to the Joint-District & Budget Priorities Committee (JDP&BPC). design and manage community/smallholder Design and management of The LLG's ability to projects has been constrained by the lack of funds. Non-implementation community/smallholder projects very of the 5-Year Development Plan in the past three years has been discouraging to the management and assembly. Delivery of services is very poor due to funding constraints. Programs Effectiveness of service delivery capacity are usually tied to the budget so when there is no funding, their to deliver services is nil. level: constraints and * Governance issues at district and provincial Organisational among senior ranks at the Provincial weaknesses o Disinterest in reform Administration to o District support grants of K500.000 pa are usually directed the National MP and fail to reach LLG or ward level. Law on * The vague LLG mandate stipulated in the 1995 Organic law- Provincial Governments and LLGs especially in the area of making requires the implementation of separate bills (by-laws) endorsed by the Department of Provincial and Inter-Government Relations: eg., Internal Revenue Bill prepared and presented to the o to Provincial and Inter-Government Relations for approval empower the LLG to collect Head Tax amongst other things. * Irregular use of Finance Forms and Vouchers allows unauthorised persons access to funds. * Lack appropriate strategies to deliver services. provide * Inability to contract community-based organisations to
153 services, and unreliable and untimely funding. * Resultant low confidence by NGOs and community-based organisations in the LLG administration. They do not consult LLGs but go straight to National MPs. Organisational strengths * Personnel who are committed to their work and are reform oriented. * Closer to smallholders/community groups. * Lean and manageable structure. Capacity building needs of the * Human resources development. organisation * Communication facilities. * Technical skills training in planning, preparation of budgets and project proposals. * Training in community participation techniques and strategies: o business skills o self-reliant sustainable income generation o equity issues. Perceived needs of organisation * Resolution of governance issues in provincial and district administrations. * Clearly defined strategies to deliver public services. * Timely and adequate transfer of funding from the provincial and national govemments. Funds to be transferred as a lump sum rather than on monthly instalments that make it difficult to implement programs: o Improve capacity to provide start up capital for potentially self sustainable local initiatives such as the Kokoda Vocational School, Kokoda Rural Health Centre, DAL Nutritional Improvement Project and a proposed Airline PNG/Kokoda Women's Credit Scheme potato seedling supply project. * Mechanisms to build trust amongst communities, stakeholders. NGOs and This will involve community awareness, engagement and participation in community-based activities. * Technical skills in planning, preparation of budgets and project proposals. * Effective locally relevant monitoring and evaluation mechanisms.
154 Appendix 10 Institutional Capacity Assessment of Oro Bay Rural LLG.
Name of Organisation: Oro Bay Rural Local Level Government (LLG)
Roles of Organisation: Function as local development managers as stipulated in the 1995 Organic Law on Provincial Governments and Local Level Governments, having powers of law-making, decision-making and revenue collection.
Responsibilities of Organisation: Established by the 1995 Organic Laws of Provincial Governments and LLGs of PNG, having responsibilities to draw up development plans and facilitate their implementation.
CAPACITY ASSESSMENT Resources and assets The LLG has very little in terms of resources and assets. The District and LLG infrastructure used at present were built in 1966 and are badly in need of renovation or repair. Representation Made up of 26 elected ward councillors and two nominees representing women thus giving a total of 28 LLG Assembly members. These represent over 22,000 people. Internal organisational The LLG Assembly meets on a quarterly basis. The LLG is processes managed by a District Administrator (DA), an Assistant DA, a Revenue Officer and a Project Officer. The LLG initiated and imposed fees on: (1) bags of betel nut leaving the Oro Bay wharf at K5 per bag; and (2) land fees on logging activities at KO.30 per cubic metre as part of its internal revenue collection activities. Administrative and budgetary These are in place as required in the reforms stipulated in the management practices 1995 Organic Law on Provincial Governments and LLGs but are underutilised due to the lack of adequate funding. Limited evidence of effective planning and budgetary practices beyond: (I) participation in the preparation and production of the 5-Year Development Plan before its presentation to the Joint-District Planning & Budget Priorities Committee (JDP&BPC); (2) submission to the District Roads and Bridges Improvement Program for Upgrading and Rehabilitation of Feeder Roads and Bridges Improvement Program in the Ijivitari District. Provincial and national governments do not disburse funds properly. When disbursements do occur distribution is not transparent and so undermines the LLG's potential to operate effectively. The DA has discretion over fund allocation. Design and management of The LLG's ability to design and manage community/smallholder community/smallholder projects projects has been constrained by the lack of sufficient funds and the appointment of unqualified people to positions. For example, a corrective officer/warder has been appointed as a Project Officer. Non-implementation of the 5-Year Development Plan in the past four years has been very discouraging to the management and assembly. Effectiveness of service delivery Delivery of services is very poor due to funding constraints. Programs usually are tied to the budget so when there is no funding, their capacity to deliver services is nil. This is exacerbated by the poor working relationship between the DA and the LLG President or Members (Ward Councillors). Thus funding has not been disbursed by the DA to the wards. Access
155 to Popondetta by most of its constituencies is still a problem due to poor road infrastructure. Organisational constraints and * Lack appropriate strategies to deliver services. weaknesses * The LLG's mandate as stipulated in the 1995 Organic Law on Provincial Governments and LLGs, especially in the area of law-making is vague and therefore requires separate bills (by- laws) that has to be endorsed by the Department of Provincial and Inter-Government Relations to implement. The LLG does not have the capacity to prepare by-laws. * Many NGOs and CBOs in the LLG area but unable to help them or to contract them to provide services due to lack of funding. This has resulted in NGOs and CBOs losing confidence with the LLG administration. * Poor working relationship between the DA and the ward councillors. * Non-operational WDCs following four years of failure by the LLG to act on proposed activities. * District Support Grants from the National Government usually given to their National Parliamentarian and not disbursed to the LLG level. * Inability by LLG to sack incompetent staff if they are "Public Servants". * The Local MP appointed the DA who happens to be his supporter. * Ward Councillors are elected members but are only paid a monthly allowance. * Isolation due to poor roads. Organisational strengths * Have an LLG President and Ward Councillors with a genuine commitment to their work. * Closer to smallholders/community groups. * A potential resource base provided by the many existing NGOs. Capacity building needs of the * Human resources development. organisation * Communication facilities. * Technical skills training in legislative procedures, planning, preparation of budgets. and project proposals. * Training needs analysis. * Exposure to good practices in situ possibly through a WB volunteer program. * Training in community participation techniques and strategies: o business skills o self-reliant sustainable income generation o equity issues. Perceived needs of organisation * Timely and adequate transfer of funding from the provincial and national governments. Funds to be transferred as a lump sum rather than on monthly instalments that make it difficult to implement programs. * Clearly defined strategies to deliver public services. * Strategies for dialogue and trust building amongst communities, NGOs and other stakeholders. This will involve community awareness, engagement and participation in community-based activities. * Technical skills in legislative procedures, planning, preparation of budgets and project proposals. * The position of the DA to be advertised and the best applicant to be recruited. * Re-organisation of cocoa and coconut industries on oil palm model to improve services and marketing.
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