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Out-growers are all those who independently grow oil palms outside of the Company's plantations and who sell fresh fruit bunches to the Company.
In West New Britain out-growers have been integral part of the oil palm scheme from the very beginning. When the scheme first started approximately 500 families were selected from areas where there was intense land pressure and re-settled in West New Britain in a land settlement scheme (LSS) funded by the World Bank. The concept was that each settler was allocated a "block" of 6 hectares for the planting of 4 hectares of oil palms and for 2 hectares of reserve food gardens. Settlers were provided with an allowance, materials for house construction, and a loan for seedlings and tools. The initial release of the first 380 blocks had in excess of 1500 applicants. The scheme was an instant success and was enlarged to 1500 blocks. In addition, indigenous village groups and individuals (VOP) now grow oil palms on their own customary owned land. The growth in VOP has been remarkable, as oil palm becomes the crop of choice due to its robust yields and economic returns. The company now has in excess of some 7000 smallholders and the scheme continues to expand. The smallholders produce approximately 30% of the FFB processed by the company.
The company supports the smallholder sector directly through direct interest free credit facilities for seedlings tools and fertiliser inputs. In addition the company collects all the fruit from the smallholder's block on a fortnightly basis. The company also funds 50% of the Oil Palm Industry Corporation (OPIC) which is a statutory body set up by the government to provide extension services to the oil palm smallholder growers in PNG. The company and OPIC work together to improve the smallholder's production and living standards. The average income for a smallholder growing oil palms in West New Britain in 2006 was over 6,865 kina per annum compared to the minimum rural wage that is 1,950 kina per annum. There are many areas for further improvement and a further 50% increase in smallholder yields and incomes is not beyond reach. The combined efforts of OPIC and the company have made the smallholder scheme in West New Britain a model on which many other rural industries want to use as a template for success. |
