The .Aus 1 ?lk r National Ce."'tre fo,· '.le. :ii· ,.., Pacific Research Monogra� i�, Copra marketing and price stabilization in Papua New Guinea 145° , -··-··--··-··-··-·· -·· '�·-··-··-··-··-··-··- -- �" ,9� '(.,� �'(.,� .. Admiralitiits lnseln .,.,. : Luf 00• Manus(l��I) . 00• " ·�J>; .... � . BISMARCK - . Namaui�ai(l904): o· : .IKerawara I 1888-9 ! ) v ...,:..__� 1 �' Map 1 German New Guinea Pacific Research Monograph 17 copra marketing and price stabilization in Papua New Guinea A history to 1975 Harry H Jackman Series editor Helen Hughes National Centre for Development Studies Research School of Pacific Studies The Australian National University Canberra Australia 1988 © Harry H. Jackman 1988 This work is copyright. Apart from those uses which may be permitted under the Copyright Act 1968 as amended, no part may be reproduced by any process without written permission. All or part of this work may be copied by members of educational institutions and libraries for the purpose of research, study or teaching provided the source is acknowledged. National Library of Australia Cataloguing-in-publication entry Jackman, Harry H. ( Harry Hans) . Copra marketing and price stabilization in Papua New Guinea. ISBN 0 7315 0520 4. 1. Copra - Papua New Guinea - Marketing - History. 2. Coconut industry - Papua New Guinea - History. I. Australian National University. National Centre for Development Studies. II. Title. ( Series: Pacific research monograph; no. 17). 380.1141461 ' 09953 Printed in Australia by The Australian National University National Centre for Development Studies Research School of Pacific Studies The Australian National University GPO Box 4 Canberra ACT 2601 Australia iv Abstract Until the 1960s, copra was Papua New Guinea's major export. sale of coconuts and copra was the coastal villagers ' main source of cash. Over the years , the coconut plantations have employed hundreds of thousands of Papua New Guineans , for many of whom it was their first contact with the monetary sector of the economy . The coconut industry made a considerable impact upon the lives of plantation workers and village producers , and its social consequences were far-reaching. Because the coconut palm is not merely the source of copra but also an important, often vital , source of food and shelter for about one-third of the population, the coconut industry's role in the national economy continues to be important. It makes a valuable contribution to the achievement of government policies and programs for rural development. However, Papua New Guinea has never had more than a minor share of the world's copra production. It has therefore been a price-taker, and it seems destined to remain that . As growing world demand for coconut products is expected to continue in the foreseeable future , Papua New Guinea is seeking to expand its coconut industry. This book takes an economic-historical approach and gives an account of marketing and price stabilization in Papua New Guinea's copra industry. Although the subject is a relatively narrow one , it merits being seen in the wider context, as an aspect of the economic history of Papua New Guinea. The book concludes that laissez-faire marketing before World War II held back the coconut industry , and that the oligopoly of two Australian companies was detrimental to the interests of villagers and planters alike . Government monopoly in overseas marketing, introduced as a war­ time measure and continued since then , and compulsory price stabilization, have been of great value to the industry, and their continuation is recommended. v Contents Preface ix Acknowledgments xi A note on currencies and weights xii Abbreviations xiii Chapter 1 Introduction 1 Chapter 2 Blood on the coconut 5 Chapter 3 Some progress, helped by legislation 30 Chapter 4 From high hopes to deep despondency 60 Chapter 5 Beginnings of centralized marketing and price stabilization 82 Chapter 6 Village producers gain a greater share 114 Chapter 7 Selling on a volatile market 161 Chapter 8 Saving for a rainy day 198 Chapter 9 Conclusion 221 Appendices I A note on the commencement of the expropriation of German properties in New Guinea, and on the Royal Commission on late German New Guinea 227 II Members of the Copra Marketing Board of Papua New Guinea, 1952 to 1974 229 III Speech by Sir John Guise on the Second Reading of the Co-operative Societies Bill 1981 230 IV Graphs 234 v Tables 236 Plates 265 References 268 vii Plates 1 Husking coconuts 265 2 A simple village drier 265 3 An improved village drier 266 4 M.V. Papua, owned by the PNG Co-operative Federation, loading copra at Moveave, Gulf Province 266 5 Ceylon drier with sliding roof, producing hot-air quality copra 267 6 Half nuts on the bed of a Ceylon drier 267 Maps 1 German New Guinea Frontispiece 2 Areas of early copra production and export 7 3 Papua New Guinea: copra producing regions and Copra Marketing Board depots and agencies , 1974 32 viii Preface Men make history and not the other way round. In periods where there is no leadership, society stands still. Progress occurs where courageous , skilful leaders seize the opportunity to change things for the better (Harry S. Truman , former President of the United States of America, quoted in P. Lawrence (ed. ), Quotations for Our Time , 1980:243) . I first learned something about villagers ' participation in the copra industry of Papua New Guinea in 1948, when Douvere Nou and Piripo Taunakekei asked, then the acting officer-in-charge of the Rigo Sub-District, to assist the people of Kapakapa to market their copra. Neither they nor I knew that the venture which they organized closely resembled a co-operative. It was the beginning of my active involvement with co-operatives and other forms of commercial organization among Papua New Guineans . The involvement lasted for twenty-six years , during which I held appointments as co-operative officer, assistant registrar of co-operative societies, registrar of co-operative societies, chief of division (business training and management) , chief of division {business extension) , and foundation chairman of the co-operative education trust. During the 1950s and 1960s, co-operatives marketed most of the Papua New Guineans ' copra. They were the first significant locally-owned and managed business enterprises . Many Papua New Guineans who are or were prominent in their nation's affairs gained their first experience in co-operatives . Koivi Aua {alias Tommy Kabu) , Samson Rawo , Sogo Sebea, Posu Semesevita and others who played a significant part, and some expatriates who showed them the way, notably E.O. {'Speed' ) Graham , can no longer tell the tale, and time does not stand still for Sir John Guise, Arua Udu Nou, Sir Tore Lokoloko, Mahuru Rarua­ Rarua, Martin Tovadek , Zibang Zurenuoc and others who remain. This monograph tells something of their contribution to the emergence of modern commerce among Papua New Guineans . It also tells about expatriates, such as J.C. Archer, B.E. Fairfax-Ross, W.J. Grose, I. McDonald and C.J. Millar , who worked for equitable and efficient marketing in the copra industry of Papua New Guinea. As. J.D. Legge has pointed out , 'a history of this kind is faced by the inevitable difficulty of striking a compromise ix between a thematic and a chronological approach' (Legge 1956:vii). Although the chronological approach sometimes makes it arduous to follow through a particular aspect of the topic, for example shipping or price stabilization, it has been chosen because the foremost objective of this monograph is to tell a story of interest and value to Papua New Guineans , including those not directly involved in the copra industry. x Acknowledgments This monograph is based on my thesis , 'A History of Markets, Marketing and Price Stabilisation in the Copra Industry of Papua New Guinea, to 1975' ( University of New England 1986) . I am grateful to Dr E.K. Fisk of the Research School of Pacific Studies in the Australian National University who showed me his method of research and , like other members of the School , in particular Dr H.N. Nelson , gave valuable advice . Dr. P. J.Cah ill, University of Queensland ; Dr S. G. Firth , Macquarie University; Mr M.J. Phillips , Reserve Bank of Australia; Sir Henry To' Robert, Bank of Papua New Guinea; Professor R. F. Salisbury, McGill University; and Messrs G. Sontag and E. Mylord, Deutsches Institut fUr Tropische und Subtropische Landwirtschaft, were among others who provided valuable information. The staff of the Australian National Archives, National Archives of Papua New Guinea, Mitchell Library , National Library of Papua New Guinea and University of Papua New Guinea Library courteously gave expert assistance. Many people in Papua New Guinea, in particular Mr W.H. Dutton , M.P. ; Mr M.B. Hart, Coconut Products Ltd ; Sir Tore Lokoloko ; Mr J.M. Middleton, Kulili Estates ; and Mr M. Rarua­ Rarua, M.P. , readily responded to my enquiries. The Copra Marketing Board of Papua New Guinea facilitated my research when I worked for the Board as a special project officer from January to May 1975, and it supported the final research in Papua New Guinea eleven years later. On both occasions , the Board allowed me unrestricted access to its records . Sir John Guise, current chairman, Mr W. J. Grose, his predecessor, Mr J. Bae , current general manager, and Mr D.J. Stewart, his predecessor, and their staff were unfailingly helpful . My greatest debt of gratitude is to the supervisor of my thesis, Professor Malcolm Treadgold, who was as patient with my academic shortcomings as he was pains taking in encouraging my research and writing. The maps and graphs were drawn by cartographers in the Research School of Pacific Studies, Australian National University, who used as a basis a map and graphs drawn for the xi original thesis by the late Edgar Ford, of the Australian School of Pacific Administration.