Wednesday, 19 August 2015
Statements by Senators
Samoan Coffee and Cocoa Industry
I rise today to talk about a recent trip I had to Samoa. In Christmas of 2011 my wife, Nancy, and I spent the Christmas break in Samoa. Samoa is a small country of 2,800 square kilometres with a population of around 190,000 people. Being a fifth-generation farmer, I take a keen interest in what is happening in the agricultural sector and, to be honest, in Samoa the answer is not much all. I started thinking about a coffee industry because the climate is right and there is plenty of labour. Samoan people are lovely people, and I thought, 'How can we help these people develop industry and exports especially?'
When I returned I was put in touch with the Executive Chairman of Gloria Jean's Coffees, Mr Nabi Saleh, who in turn paid for coffee and cocoa expert Christophe Montagnon to go back to Samoa with us in June of 2012. From that visit Christophe, with input front Andrew Falconer, whose expertise is in sustainable service management, produced a report on coffee and cocoa cultivation in Samoa. We had a busy week with many meetings, including the Prime Minister and his deputy, the Minister for Agriculture, research people, the association of exporters and manufacturers and other groups.
We discovered at that time that only 12 per cent of the Samoan population is engaged in formal paid employment. The official unemployment figure is 8.7 per cent, but I am sure it is significantly higher because so many are working in family enterprises. In fact, two-thirds of the labour force is absorbed by subsistence village agriculture and fishery. The country has a large trade deficit, and agriculture accounts for just 10 per cent of the GDP while up to 20,000 households practice small-scale, labour-intensive subsistence agriculture of generally less than four hectares.
Samoa previously had a coffee industry, which had been established by the Germans and later managed by the Western Samoa Trust Estates Corporation. The Germans had been growing the brand liberica coffee, but this disappeared in the 1950s because of the popularity of robusta and arabica coffees. Today coffee production barely exists and cocoa production is very low because botanical and agronomical basic knowledge of coffee is badly lacking.
Christophe's report following our trip in 2012 found that Samoa's climate and soil are suitable for coffee and cocoa cultivation. The lowlands are suitable for robusta coffee and cocoa and the high country above 600 to 800 metres above sea level might be suitable for some arabica varieties. The Samoan government decided to revitalise the robusta variety through a stimulus package in 2012. The stimulus consisted of providing some coffee plants—enough to plant two hectares—but it was not a success. That is because there is not a well-identified value chain, there is no clear technical assistance strategy and the vegetal material is of poor genetic quality. Christophe pointed to the industry being hit at various times by cyclones, pests and diseases but said the two main reasons for the stagnation in the coffee and cocoa industries were lack of knowledge and no established value chain.
In July this year, I returned to Samoa after being approached by Mrs Lita Gaugau who is Samoan and works in New Zealand. She indicated her family was keen to establish a large, modern coffee plantation in Samoa. In company with Mrs Gaugau I met again with the Prime Minister, the opposition leader, the Minister for Agriculture and the Australian High Commissioner to Samoa, Ms Sue Langford.
The coffee beans from the stimulus package were being picked. About three years after the trees were planted, they started to produce coffee beans. When coffee beans are picked, they must be processed to remove the shell and the skin leaving the coffee bean ready for roasting. The stumbling block is the fact that Samoa does not have a coffee processing machine. So here is a stimulus package now producing some—I underline some—coffee beans that cannot be processed. I do not think that is a very successful stimulus package.
The main coffee player is the roasting company CCK, run by Australian Ken Newton. The so-called Samoan coffee he is commercialising and of which Samoan people are proud as a national product is roasted 100 per cent from coffee beans imported from Papua New Guinea. Mr Newton said his Samoan coffee volume was very low and of such a low physical quality that it could not be used to produce an acceptable roasted coffee.
What is the problem with Samoa? In my opinion, they have never grown modern varieties. Growing the old German varieties means that the trees grow to a rather high tree. This means that many of the trees are blown over in cyclones, resulting in crop failure. The new varieties are topped, meaning that the top of the young tree is cut off so the tree grows out, not up, and is much more resistant to high winds and cyclones. The industry just does not have the backup of research and agronomic management.
The country is trying to develop its sheep industry and imports the breed Fiji Fantastic. Last year, the country imported 110 of these sheep to form the basis for a new national breeding program, and they hope to build the flock up to around 3,000 over the next decade. The problem is again the lack of industry support and the lack of capital for farmers to build infrastructure. I did notice the amount of dogs roaming and I thought at the time they will not have a sheep industry for long unless they start culling a few or controlling these dogs that are everywhere in the streets. I have been assured by Ms Sue Langford that the program has commenced and that there are signs of it working.
Total Australian official development assistance to Samoa in 2015-16 will be an estimated $37.2 million. I have been informed that a significant amount is directed towards building and upgrading roads to enable better access for agricultural produce. My question is: What agricultural produce?
Perhaps Australia should finance the experts and establish a modern, up-to-date coffee plantation to train and guide the local people on how the coffee industry could be viable. The next stage would be establishing a modern processing plant for the coffee grown. I believe there needs to be more focus on sustainable agriculture.
Samoa has a huge trade deficit. The ships are going there taking all sorts of produce in, but very little is going out. There are thousands of acres of land producing nothing. The previous government gave them a stimulus package—to do what? To plant trees in their national parks to prevent climate change. Why didn't we put it into modern-day varieties of coffee, to let them establish the industry? And do not just sell the coffee beans roasted; process them right through, if they are Robusta coffee, to the stage of instant coffee jars—vertical integration; send a finished product.
I was informed that Samoa has a $2 billion GDP but owes around $1.4 billion, 70 per cent of GDP. That is not a good financial look. I have tried to help these people, and I think we can do a lot for them, but I am being frustrated, especially given that Nabi Saleh, a very decent and generous man, paid for the expert from France to go out to Samoa to do the whole survey and the report. We should be employing these people full time for four years to establish the industry properly, and then Samoa could actually have an industry, vertically integrated, that would allow exports and jobs and would benefit their country.
With the sheep industry, I am informed that soon they will be trying the dorpers, which are a very popular sheep here in Australia. I noticed dorpers are now being run over near Tweed Heads, in a very wet climate. But the Samoans are going to have to fence their country and keep the dogs out, and they need guidance and training in this field as well. There is certainly plenty of opportunity there.
But, if Samoa do not build industries and they keep relying on imports and their debt keeps growing, they will head down the road of Greece to financial ruin, and I would hate to see that. I have helped as much as I can, and I thank those people who have helped me. I thank the Hon. Julie Bishop for her time and her staff for the work they have done in assisting us. But we do not seem to be making any progress. I find it amazing that, in the stimulus package put in in 2012, the government paid people to plant the old 1910 German varieties of coffee trees, which are very old and out of date, and people are now picking those coffee beans, but there is no processing machine. That is like setting up a wool-producing farm, grazing and, when the sheep are ready to shear, you do not have a shearing machine or a shearer and you do not harvest the wool. They are picking the coffee beans but are not processing the beans, so they are being wasted.
They have got to be helped and guided to do it properly so they can secure industries, jobs and vertical integration for coffee and cocoa. They do export some cocoa to New Zealand, which is good. There is much more potential for that. But my concern is, with that $37 million, we are helping them with health and various very important issues, but we need to help them more with industry—work with the Samoan government to see that they get established, grow their economy and save themselves from going down the road of national debt. Their tourism is going okay, but there is plenty of room there. Let us hope that in the future we can help them to establish those industries and they grow, for their own betterment.