Agriculture

With more than 25% of total GDP coming from the agricultural sector it represents a significant part of the PNG economy.

PwC is locally and internationally recognised for its expertise in the agricultural sector. We act as auditors and tax advisors to the top agricultural companies in the country.

The Agricultural sector accounts for approximately 25% of the GDP of PNG. Beyond Papua New Guinea’s urban areas agriculture remains the principal economic activity and provides a subsistence livelihood for most Papua New Guineans. Indeed, 85% of the population rely directly on subsistence farming to provide their basic needs and have little if any contact with the formal economy.

Papua New Guinea has fertile soils and a favourable climate which permits cultivation of a wide variety of cash crops. Production of cash crops is usually centred around plantations but significant smallholder production also exists either for onward sale to the plantation or to any of the numerous commodity boards set up to stabilise prices and improve the bargaining power of the smallholders by acting as a centralised buyer and seller. There are approximately 600 plantations, mostly on the New Guinea part of the mainland, producing coffee, copra, rubber, tea, and palm oil. These commodities represent the main agricultural exports of the country.

Agriculture: History and trends

During the 1970’s there was rapid growth in the cash economy, largely in response to the development of primary export industries. During the 1980’s this growth continued at a steadier pace, reflecting increased competition and some lower commodity prices. The agricultural sector was largely static in the early 1990’s and has declined in the last few years. A significant factor in this reversal was the 1997 droughts caused by the El nino weather pattern. The drought wreaked havoc on Papua New Guinea’s coffee, cocoa and coconut production, the mainstays of the agricultural economy and a major source of export earnings. The coffee crop was slashed by up to 50% in 1997 and has not really recovered since.

Other reasons for the decline in this sector of the economy can be traced to lower cash crop prices on the world market, the process of localisation in plantation business, (particularly the coffee industry), the politicisation of the state agricultural development boards as well as difficulties experienced with local and often competing landowner groups

Other crops produced within PNG are sweet potato, various fruit and vegetables as well as poultry and pork but these are usually for local consumption. Unfortunately, due to the difficult terrain beyond most towns and ports, combined with the failure to adequately maintain the transport infrastructure that has been constructed, it is very difficult to move food from the areas of production to the urban centres. The result of this has been that despite the climatic and soil advantages PNG enjoys it is a net importer of food

The biggest challenge for the agricultural sector in PNG is to open up the country for commercial production of food, develop the transport infrastructure that will allow the country to feed itself whilst at the same time ensuring that the environmental issues in this pristine country and the needs and expectations of landowners are addressed.

Agricultural exports classified by commodity

(In K Millions f.o.b.)


The real decline in agricultural exports is offset by a significant fall in the value of the Kina. In US$ terms agricultural exports actually declined considerably.

Agriculture: Land usage

The biggest challenge for the agricultural sector in PNG is to open up the country for commercial production of food, develop the transport infrastructure that will allow the country to feed itself whilst at the same time ensuring that the environmental issues in this pristine country and the needs and expectations of landowners are addressed.