Household level analysis of poverty and gender dynamics in Papua New Guinea by Market Development Facility

HOUSEHOLD LEVEL ANALYSIS OF POVERTY AND GENDER DYNAMICS IN PAPUA NEW GUINEA 2018 | Market Development Facility

Acknowledgements

This study was completed in phases with inputs from the PNG Country Team. The writing of the paper was led by Sadia Ahmed, Syeda Samira Saif and Jawad Khan in consultation with the country team, Muaz Jalil and Harald Bekkers.

completion of the report. Finally, thanks to Stella Pongsitanan for the layout and graphics, to Heather Moore for reviewing and editing and to Amy Faulconbridge for reviewing, editing and managing the production of the paper.

The authors acknowledge the inputs from the Australian Department of Foreign Affairs and Trade (DFAT) and other programs in PNG for sharing their insights during the

MDF is funded by DFAT and implemented by Palladium, in partnership with Swisscontact.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Table of Contents

Acknowledgements........................................................................................................................................... i Table of Contents.............................................................................................................................................. ii List of Figures...................................................................................................................................................iv List of Tables.....................................................................................................................................................iv Abbreviations and Acronyms ........................................................................................................................... v Executive Summary..........................................................................................................................................vi 1. INTRODUCTION .......................................................................................................................................... 1 The Market Development Facility and its work in Papua New Guinea ...................................................................2 Overview of MDF in PNG .........................................................................................................................................2 Purpose of this Report .............................................................................................................................................3 2. LITERATURE REVIEW................................................................................................................................... 5 Structure of PNG Economy ......................................................................................................................................6 Infrastructure in PNG............................................................................................................................................... 7 Snapshot of Poverty Status in PNG ......................................................................................................................... 8 Regional Differences.................................................................................................................................................9 Rural to Urban Migration .......................................................................................................................................11 Vulnerabilities and the Wantok system .................................................................................................................11 Overview of Women’s Engagement..................................................................................................................... 12 3. RESEARCH DESIGN AND METHODOLOGY ............................................................................................... 17 Research Questions............................................................................................................................................... 18 Sampling Strategy.................................................................................................................................................. 20 Data Quality Control, Management and Analysis ................................................................................................ 22 Final Sample ...........................................................................................................................................................22 Limitations of the Research .................................................................................................................................. 23 4. POVERTY DYNAMICS - PRIMARY RESEARCH FINDINGS.......................................................................... 25 Summary Overview on Poverty Dynamics............................................................................................................ 26 Poverty Dynamics in the Rural Areas.................................................................................................................... 28 Understanding the farming system in relation to climatic conditions....................................................... 29 The Trading Network and Condition of Markets within which the Poor Operate...................................... 34 The Household Dynamics and Economic Outlook of Different Poverty Profiles........................................ 40 Poverty Dynamics in the Urban Areas................................................................................................................... 48 Overview of Urban Areas .............................................................................................................................48 Household Dynamics and Economic Outlook of Different Poverty Profiles in Urban Areas...................... 49 Poverty Dynamics in the Tourism Sector ...............................................................................................................56 Overview of Tourism Areas.......................................................................................................................... 56

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

5. DYNAMICS OF WOMEN’S ECONOMIC EMPOWERMENT IN PNG............................................................ 61 Women’s Involvement in Economic Activities...................................................................................................... 63 Women’s Roles............................................................................................................................................. 63 Workload...................................................................................................................................................... 66 Control over Income.................................................................................................................................... 66 Decision-making Authority.......................................................................................................................... 68 Access to Assets and Services...................................................................................................................... 69 Gender-based Violence............................................................................................................................... 71 6. PATHWAYS OUT OF POVERTY.................................................................................................................. 73 Opportunities to Pathways out of Poverty for the Rural Poor ..............................................................................74 Diversify and Deepen Income Streams to Strengthen the Farming System at the Micro-level .................75 Improving Market and Farm Efficiencies .................................................................................................... 76 Increase Agricultural Financial Access and Reinvestment ......................................................................... 79 Opportunities to Pathways out of Poverty for the Urban Poor........................................................................... 81 Create Avenues for Absorption of Jobs and Conversion of Skills................................................................ 82 Address Constraints to Growth of Small Businesses and Linking Informal Business Activities to Markets or Large Institutions................................................................................................................. 83 Promote/Introduce Products and Services Relevant for the Urban Poor................................................... 84 Tourism as a Pathway............................................................................................................................................ 85 Pathway Towards Women’s Economic Empowerment......................................................................................... 86 CONCLUSION................................................................................................................................................ 89 ANNEXES....................................................................................................................................................... 90

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

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List of Figures

Figure 1 Proportion of Poor In Different Regions of PNG............................................................................................10 Figure 2 Pathway Out of Poverty of an Average Rural Household In LDC (Losch et al, 2012)....................................13 Figure 3 Different Poverty Outcomes...........................................................................................................................15 Figure 4 Farming System of a Typical Rural Household...............................................................................................30 Figure 5 Major Trading Routes for Fresh Produce/Perishables...................................................................................33 Figure 6 Trading Network Structure for Perishables....................................................................................................36 Figure 7 Different Categories of Rural Households and Possible Pathway Out of Poverty.........................................80

List of Tables

Table 1 Quintile-based GDP distribution........................................................................................................................7 Table 2 Development of Research Questions..............................................................................................................18 Table 3 Final Sample Size of the Study.........................................................................................................................22 Table 4 Synopsis of the Farming System in PNG..........................................................................................................31 Table 5 Snapshot of Household and Economic Outlook of Different Poverty Profiles................................................41 Table 6 Household Dynamics and Economic Outlook in Urban Areas........................................................................50 Table 7 Safety and Security Issues faced by Women in PNG.......................................................................................71

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Abbreviations and Acronyms

CPI

Consumer Price Index

EHP

Eastern Highlands Province

ENSO

El Niño–Southern Oscillation

FGD

Focus Group Discussion

FHousehold

Female Household Head

FPDA

Fresh Produce Development Agency

FTE

Full-Time Equivalent

GDP

Gross Domestic Product

GII

Gender Inequality Index

HDI

Human Development Index

HIES

Household Income and Expenditure Survey

ICT

Information Communications Technology

ICWR

International Centre for Women's Research

IFC

International Finance Cooperation

INA

Institute of National Affairs

KII

Key Informant Interview

LNG

Liquefied Natural Gas

MDF

Market Development Facility

MDG

Millennium Development Goals

MHousehold

Male Household Head

NCD

National Capital District

NRI

National Research Institute

PGK

Papua New Guinea Kina

PMV

Public Motor Vehicle

PNG

Papua New Guinea

PPP

Purchasing Power Parity

World Bank

WEE

Women’s Economic Empowerment

WHP

Western Highlands Province

WTTC

World Tourism and Trade Cooperation

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Executive Summary

Country Context In 2014, the World Bank estimated that GDP growth in PNG was 8.5%, led by the mining and natural resource extraction sectors at 22% of GDP, followed by agriculture, forestry and fishing. However, approximately 39% of Papua New Guineans are considered to lie below the international extreme poverty line of $1.90, while 65% lie below the relative poverty line of $3.10. More than 85% of the population live in rural areas, where poverty levels reach approximately 94%; in urban areas, higher living costs, limited income earning opportunities and

distance from wantok social security systems make conditions for the urban poor particularly harsh. The challenges faced by women in Papua New Guinea are extraordinary. Their contribution to the labour force is almost equal to that of men, though they are usually employed informally and benefit little on a personal level from the countryâ&#x20AC;&#x2122;s growth. Additionally, they suffer from poor access to safe water, excessive workloads, repeated pregnancies, malnutrition and gender-based violence.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

The Study Against this backdrop, this study takes an in-depth look at the dynamics and contexts of poverty in Papua New Guinea. It is hoped that by analyzing MDF’s experience in Papua New Guinea and better understanding the obstacles that prevent individuals from escaping the shackles of low incomes, new pathways and interventions can be designed which will improve local livelihoods of both the urban and rural poor.

In recognition of the burdens carried by women across Papua New Guinea, the study also addresses the ways in which poverty restricts women’s involvement in economic activities and the forms that economic stress have on household relationships and dynamics.

Methodology To best identify the needs of the poor in PNG, researchers categorized households into three groups: the extreme poor, also referred to as the “Strugglers”, who live on less than $1.90 a day; the “Dynamic Poor,” those who make above $1.90 but below the $3.10 poverty line; and the “Non-poor,” those living above the $3.10 line.

By utilizing mixed data collection methods, the report finds that households follow a similar path out of poverty. Strugglers classically focus only on subsistence farming or survival-oriented informal vending. The Dynamic Poor start to expand into additional income generating activities. The Non-poor reach a point in which they can specialize in only one earning activity.

Pathways out of Poverty After a thorough analysis of poverty in PNG, the report sets out a thoughtful strategy to reduce poverty in PNG. Among other recommendations, MDF plans to diversify crops in rural areas, increase access to investment capital and improve storage and transportation efficiencies. In urban areas, they will establish reliable employment avenues for the labour force to build skills and then move into the appropriate work to utilize those skills. The proposal will connect informal businesses to more established institutions and improve access to products, such as food storage equipment. Women will benefit from more diverse income generating sources

if access to markets, investment capital and information expands to specifically target females. With specialized knowledge of wantok networks and local social hierarchies, the MDF PNG country team is in a unique position to introduce new practices that support pragmatic business ventures and investment while respecting cultural traditions and values. Expanding the already well-established partnerships in the region will continue to find new pathways out of poverty for the financially disadvantaged.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

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INTRODUCTION

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

The Market Development Facility and Its Work in Papua New Guinea At MDF, our teams work with businesses, associations and governments in Asia Pacific to help farmers and workers thrive. We use a market systems (MSD) approach to achieve long-term, lasting growth and create sustainable jobs for poor women and men.

Women’s Economic Empowerment (WEE) is central to our work on the ground, and our teams in Fiji, Timor-Leste, Papua New Guinea, Sri Lanka and Pakistan are dedicated to ensuring that our activities benefit women and girls.

Overview of MDF in PNG1 In its first year in PNG, MDF undertook extensive sector scoping and evaluated relevant factors for potential partnerships. After determining the major trends, growth potential, inclusive growth constraints and opportunities and current engagement of poverty stricken individual, MDF decided to focus its strategic engagement interventions on sectors that already involved women and showed potential to employ workers from poor urban and/or rural backgrounds and improve local livelihoods. Based on the analysis of the PNG economy, MDF selected a portfolio that fits well with the development challenges of the economy and is highly suitable for sustainable, pro-poor growth. The initial selection of strategic engagement areas was: • ICT & Logistics: Physical and technological connectivity gaps limit the supply of local products and services to domestic markets. Road networks are sporadic and cover a fraction of the country’s land mass while air and water connections are prohibitively expensive for cargo and travel. MDF looks to find ways to improve these linkages through existing actors and reduce the effects of these physical disconnections digitally. MDF pays special attention to information communication technology solutions that reduce risks for women at work or in public places, when traveling, or doing business in general. • Local Value Addition: The manufacturing and value addition sector in PNG (outside of the extractive industries) contribute only 2.7% to total GDP but employs up to 40% of the formal workforce (60% women). Growth in this sector is critical to diversify the overall economy, capture ‘lost value’ through more raw materials processing – create more value for producers and suppliers of raw materials and reduce ‘unnecessary’ imports. MDF considers all aspects of adding value to local products for both export

and domestic markets. This would include any processing and manufacturing activities that seek to source and add value to locally available raw materials. • Rural Input Services: Over 85% of PNG’s population can be found in rural areas and most are involved in agriculture. Most agriculture in PNG can be qualified as ‘low input – low output’. This is as much a function of lack of access to markets as it is a function of the basic nature of farming in the country. High costs of production coupled with low productivity makes farming commercially unattractive. For women, difficulties around agriculture negatively impacts their already heavy workloads. MDF looks to work in all areas of agricultural inputs with a focus on inputs and technology that help cut production costs, reduce waste, reduce use of scarce resources like water and labour, and increase the ease of cultivation. • Tourism & Hospitality Services: Tourism and Hospitality Services is a nascent sector in the PNG economy and contributes minimally to GDP. However, despite its small size, it is one of the largest employers of poor women. It currently employs up to 22,000 people across the country in various capacities. The industry in PNG is placed strategically to provide both urban and rural employment opportunities, particularly for women. MDF works with the public and private sector in the industry to create more demand for local products, such as handicrafts, and improve the service delivery for actors such as transportation providers, tour operators and retailers. In PNG, MDF invests in partnerships with private and public sector that will create approximately 156 jobs and will increase the income of over 5,980 households by $6,871,000 USD by the end of 2021.

Note: The engagement areas elaborated were determined by the initial scoping exercise conducted by MDF. After the development of a portfolio and conducting this study, MDF further narrowed their strategy to two engagement areas including Agri-business and Emerging Products and Services. Both engagement areas are aimed at facilitating the pathways identified in this report.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

The Purpose of This Report A firm understanding of the complex systems around poor women and men within the country context is critical to successfully improve markets around them. With this knowledge, MDF identifies the factors that impede poor households from progressing out of poverty, what increases their vulnerability to poverty and any women’s economic empowerment restraints that may exist. To make the markets around poor households work to their advantage and be more incentivising, MDF stimulates growth in the sectors and industries relevant for such low-income families.

This study deepens MDF’s understanding of who the poor are in relation to its engagement areas, their interaction with the social systems around them and the factors that contribute to their poverty. Furthermore, the report analyses the relevant literature and primary data on the involvement of women in income generating activities, the social implications of their involvement, their access to services and assets and factors that disproportionately impact their ability to engage in economic activities.

Key Objectives • Understand the household economy of the poor men and women in rural and urban areas in relation to MDF’s engagement areas, including expenses, investments, savings and key decision-making approaches toward income earning activities. • Identify the factors that inhibit poverty-stricken households from taking advantage of current economic opportunities. • Identify specific pathways out of poverty for these men and women that can be achieved through inclusive and innovative business practices. • Further recognize the specific constraints and opportunities of women as well as their control over decisions and assets. • Identify, where possible, pathways to promote women’s economic empowerment in relation to the engagement areas. • Increase knowledge of community structures and their influences on poor household’s engagement in economic activities, women’s economic empowerment and the role of community structures in facilitating or inhibiting economic resilience in the poor households. With a firm grasp on these variables, MDF designs partnerships, informs policy makers and influences business models to provide a conducive environment for disadvantaged men and women to progress out of poverty. MDF’s role is to facilitate changes in the markets where its partners have strong incentives and then collect and analyse information to enhance impact.

The next chapter (chapter 2) reviews the secondary literature in relation to the objectives of the study. Chapter 3 elaborates the research methodology, describes the nature of poverty and household livelihoods in rural and urban households, analyses control over decision making and assets for women and explains

the regional nuances influencing household dynamics. Chapter 4 concludes the findings, explain the pathways out of poverty for rural and urban areas and provides an understanding of the importance of tourism and the pathways towards women’s economic empowerment in PNG.

Beyond Income - A Critical Analysis of Agency Measurement in Economic Programming

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LITERATURE REVIEW Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Structure of PNG Economy The World Bank estimates that as of 2014, the GDP growth of PNG was 8.5% per annum. The five highest contributing sectors to the PNG economy were agriculture, forestry & fishing, mining & quarrying, wholesale & retail trade, construction and administration & support services. Of the key contributing sectors, mining and quarrying sector contributes 22% of the country’s GDP and over 56% of its export earnings2. Natural resource extraction is a significant source of government expenditure although it provides limited employment opportunities for Papua New Guineans. It does serve as a niche market for local products, however, that market itself is extremely small. An example of this is the recent LNG project which provided an estimated 14,000 to 18,000 jobs during the construction period, of which 60% were Papua New Guineans. Post construction, the plant provides only a few hundred jobs for Papua New Guineans. As a market, the estimated demand for fresh produce by the LNG project during the construction phase was about 130 tonnes a week but 80% of this was supplied by imports, while post construction demand is an estimated two tonnes per week most of which is likely to be imported3. The policies around the distribution of benefits from natural resource extraction has created concentric rings of entitlement around each major site: the innermost ring is occupied by the customary owners of the land covered by development licences, the next by ‘project area people’ (however these might be defined), the next by the people or government of the host province, and the outermost ring by the population or government of the nation as a whole (Filer 2005). The 2011 census indicates that the mining and quarrying industry employs less than 2% of the country’s urban population. Mining and quarrying sectors have very low employment elasticity, meaning that the growth in this sector generates less employment compared with other sectors of an economy4. Moreover, the huge influx of foreign reserves by the mining industry has the dual negative effects of: a. making imports of goods and services more affordable and easier (as local production is not able to supply) and

b. fuelling the appreciation, the PGK leading to a loss in competitiveness of other PNG products in international markets, i.e. PNG exports commodities are more expensive than similar products from other countries. The two-key employment generating sectors of PNG are the agriculture, forestry & fisheries sector and the wholesale & retail trade sector. Agriculture, along with forestry & fisheries, contributes 19% of the GDP, and has grown at an average of 4% per year over the last eight years. It employs over 80% of the population, either as workers or as producers, mostly subsistence in nature. IFC estimates that only about 30% of PNG’s land is suitable for agriculture. A large part of the land mass is too steep, too high in altitude (too cold), rainfall is very high, or the land is flooded every year5. About 97% of the land is held under customary tenure and cannot be easily sold or used as security for loans. The agriculture sector in PNG is less productive than it could be, thus as the population grows, less-accessible land will need to be farmed to grow enough food, increasing drudgery and cost of agriculture. The wholesale & retail sector, the third largest contributor to the GDP and employer of about 15% of the population, has grown at a rate of 3% per year. This sector is considered to have the greatest potential for absorbing low-skilled labour in the short-term. Women generally dominate the small-scale retail sector, and the country places high expectations on this sector as the PNG’s Vision 2050 hopes that 50% of PNG citizens become self-employed entrepreneurs. Business income is not distributed equality by way of wage earning and income inequality is high. The country’s Gini coefficient rests at 0.5; the quintile-based income distribution shows that almost 50% of the country’s income goes to the richest 20% of the population. The bottom 40% of the population, which falls below the $1.90 poverty line, live on an income of PGK 1,300 to 2,700 per capita per year. While the third 20% of the population, which includes those living below the $3.10 poverty line, live on about PGK 4,200 per year.

The Social and Economic Impact on the Resource Sector Job Stream in Papua New Guinea Researchers: Colin Filer, Marjorie Andrew, Phillipa Carr, Benedict Imbun, Bill F. Sagir, Rosemary Benjamin, Casper Damien, Jennifer Krimbu, Deane Worobo School/Centre: ANU Enterprise Pty Ltd University/ Australian National University Institutions: PNG Institute of National Affairs University of Western Sydney University of Papua New Guinea 3 Technical and Economic Feasibility Of Selected Fresh Produce Export Pathways In Papua New Guinea, March 2015, Pacific Horticultural And Agricultural Market Access Program (PHAMA) 4 2014 National Human Development Report from Wealth to Wellbeing: Translating Resource Revenue into Sustainable Human Development Papua New Guinea 5 Food and Agriculture in Papua New Guinea Published by ANU E Press The Australian National University Canberra ACT 0200, Australia Email: anuepress@anu.edu.au 2

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Table 1: Quintile-based GDP distribution

Quintiles

Income share held by various quintiles6

GDP distribution according to quintiles

GDP distribution per capita at different quintiles

Lowest 20%

4.74%

1,975,063,200

1,361

Second 20%

9.53%

3,970,960,400

2,737

Third 20%

14.54%

6,058,527,200

4,176

Fourth 20%

22.10%

9,208,628,000

6,347

Highest 20%

49.09%

20,454,821,200

14,098

41,668,000,000

5,744

Total

The MDG 2015 report states that poverty is highest amongst people with no income-generating opportunities, those selfemployed in the semi-subsistence agricultural sector, market vendors and those working in the informal economy, such as small producers/sellers7, where the majority of women are active. Infrastructural problems and low capacities to invest reduce opportunities to earn more from self-employment. The PNG economy also struggles to create opportunities for poor people who may lack skills. Compared to other East Asian and Pacific Island countries, Papua New Guineans have fewer years of schooling (about 9.9 years) and fewer mean years of schooling (about 4 years)8. Insufficient schooling combined with the fact that about 62%9 of the population are between the ages of 15-64 years old and 36% are below 15 years old indicates that a significant portion of the available labour force and the future workforce is low-skilled. Over 50,000 youths

(aged 15–24) are estimated to enter the labour market each year to fill only a few thousand new jobs (Cammack 2007). The situation is even worse for the women. Although the literacy rate of women through primary school is close to that of men, their proportion drops in secondary and tertiary education. Only 13% and 5% of the female population are recorded to have pursued secondary and tertiary education, respectively, as opposed to 16.4% and 9.4% of men10. HIES reports that of the women who are eligible to go to school, those who did not pursue to continue their education cited that “family did not allow” as the second highest recorded reason after “no interest”. Poor skills compounded with the need to satisfy household responsibilities oblige women to provide labour on their own farm or engage in informal trade.

Infrastructure in PNG A picture of the economy in PNG would not be complete without a discussion about its infrastructure. Infrastructure is mentioned as a constraint by almost all businesses regardless of their size, location or sector. Poor road connectivity reduces access to markets, increases the price of good for consumers and makes it more difficult to make a profit. On a scale of 1 (low) to 5 (high) the World Bank ranks PNG at a 2 for quality of trade and transport-related infrastructure.

A ranking of road density (km of road per 100sq km of land) places PNG at 138 out of 155 countries11, and out of PNG's 22,000km of roads, only 15% of these are deemed priority roads and enjoy the focus of maintenance and improvement efforts12. There is no road linking PNG’s two major urban centres, Lae and Port Moresby. There is no rail system in the country13. Rural areas tend to be the most disconnected, where they do not even use domesticated animals such as horses, cattle, or oxen to transport people or goods. In areas

World Development Indicators MDF Summary report 2015 8 Work for human development Briefing note for countries on the 2015 Human Development Report Papua New Guinea 9 Papua New Guinea 2011 National Census Report The National Population and Housing Census for Papua New Guinea 10 HIES 2010 11 https://knoema.com/atlas/Papua-New-Guinea 12 WFP The Logistics Capacity Assessment (LCA) tool Copyright © 2003 - 2013 Atlassian Corporation Pty Ltd. 13 http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Papua-New-Guinea-Infrastructure-Power-And-Communications. Html#ixzz4cghGePcP 6 7

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

where there are roads, transportation expenses are very high. One trucking company said it can be out $1.3 million USD per year between oil or spare parts theft and compensation payments, such as paying for public relations officers to negotiate safe passage for trucks14. This expense is on top of the conventional operational expenses of maintenance, salaries, insurance costs, etc. Due to the inadequacies of road networks, sea and air services provide the best connections between locations. Sea transport is a cheaper option than air travel and is the most practical means for coastal and island locations. However, while there are 22 ports in the country, only five of them are able to receive international and coastal traffic (Port Moresby, Lae, Madang, Kimbe and Rabaul). Inland waterways exist but are insufficient for cargo shipping. There are 587 airports, but only 21 have paved runways and navigation equipment at most of these select national airports are old, unreliable and outdated. Rescue and fire-fighting services are only available at seven airports15. Electricity is available but mainly in urban areas and even then, it can be unreliable and many businesses must rely on generators. Cold storage facilities only exist in ports and are

only available on a short-term basis; warehousing capacity is low mainly due to installation costs and security risks. Mobile telecommunication services are available but ICT is poor in rural areas. However, subscription numbers have grown almost tenfold across the country in the last 10 years.

The costs of improving or building roads (Hughes): New road construction works require the Government to acquire from land from landowners, royalties will be payable for gravel and fill extracted from quarries and river/stream beds. Compensation will be payable for loss of garden plots, garden crops, a wide range of commercial trees, as well as physical improvements such as buildings. This also applies to road widening, straightening, creating drainage etc.

Snapshot of Poverty Status in PNG In PNG, the government developed nationally accepted poverty lines in the landmark Household Income and Expenditure Survey (HIES) of 2009/1016. The poverty line was constructed by estimating the cost of consuming 2200 calories per adult, per day, plus the cost of a few basic non-food items. In monetary terms, the national poverty line is PGK1,609 per capita per year and 39.6% of the population lies below this line17. In comparison, the World Bank estimates that 39.3% of the population are below the international extreme poverty line of $1.90, and 65% are below the international relative poverty line of $3.10. More than 85% of the country’s population lives in rural areas where the incidence of poverty is highest (with approx. 94% of the poor living in the rural areas18). Although poverty levels in urban areas are relatively lower than that of rural, the higher living costs, limited income earning opportunities and the distance from traditional wantoks-supported social safety nets, make conditions for the urban poor particularly harsh.

The fact that all native Papua New Guineans own land in their communities and villages has generally led to a belief that they live in a condition of “subsistence affluence”. In practice, it is not clear how many of the people who do not live in rural village communities could, or would, actually exercise their right to return to their villages (there is some evidence from the primary research of interest for Households to go back but most do not have the means to return). This concept led to the belief that the majority of Papua New Guineans could afford at least basic food items. However, the 2009/10 HIES found that 26.5% of the population consumes less than the required minimum calorie intake of 2200 calorie per adult per day. WFP’s country brief attributes the carbohydrateheavy, low protein and low-fat diet as one reason for poor nutrition in the area. People eat vegetables in very small quantities, and usually reserve meat for special occasions or when disposable income allows (such as post coffee harvest sales). Households that rely on land for their consumption

Trucks Under Siege Case Study By Sadaf Lakhani Social Cohesion and Violence Prevention Team Social Development Department World Bank WFP The Logistics Capacity Assessment (LCA) tool Copyright © 2003 - 2013 Atlassian Corporation Pty Ltd. 16 The 2009/10 PNG HIES is the first comprehensive and nationally representative survey of the socio-economic status of PNG households since 1996. It is also the first that the Government of PNG has officially recognized since the mid-1970s. The survey was conducted from July 2009 to December 2010 in all 19 provinces of PNG, and includes interviews with 4,191 households. In 2012 the findings of the 2009/10 HIES was used to calculate poverty lines that were nationally accepted by PNG. 17 Estimated from World Bank’s Papua New Guinea Poverty Profile Based on the Household Income and Expenditure Survey June 2012 by John Gibson 18 Papua New Guinea, Critical Development Constraints, ADB, 2012 14 15

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

needs may be food secure in “normal periods” but can be forced to reduce consumption in dry seasons, periods of drought, flooding or other natural disasters. Malnutrition tends to be more severe in households with fewer cash income sources. During and after the 2015 El Niño, families that relied significantly on land for consumption were at high risk of falling into poverty.

in common. The limited sources of cash incomes in the country means that the wider population is unable (or less able to) to access services such as education and health. PNG was unable to meet any of the targets for the Universal Millennium Development Goals until 2015. The country ranks 158th on the human development indicators among the 180 countries in the list.

Additionally, Households in PNG are bound by strong social systems and structures around reciprocities governed under the wantok system. It acts as a form of social insurance for households to draw on in times of extreme hardship, reducing the possibility of a household to falling into extreme poverty. However, this does not remain effective when the conditions creating hardship affect all households in a community.

The employment rate in the country is recorded as high as 97%, however, this figure also includes the people self-employed in the agricultural sector. The employment in agriculture is both vulnerable and may not provide a significant cash income. Not having access to cash is a major contributor to poverty and low human development in the country. Environmental factors, which affect the productivity and reliability of subsistence farming, make populations living in less secure areas vulnerable to food shortages and malnutrition.

Therefore, income or a consumption-based poverty line alone does not sufficiently represent the poverty situation of PNG. The majority of the households are subsistence in nature and informal agriculture has traditionally been the provider of subsistence for them but the absence of sufficient cash to purchase nutritious food, essential non-food items or invest in income generating activities can contribute to the poverty status of households. Furthermore, the poor (both men and women) are faced with a range of social and economic shocks throughout the year and thus a broader concept of poverty, or “poverty of opportunity,”19 which reflects the high vulnerability of the population, is even more relevant. Hence, the primary research looks in-depth at all the other factors that influence the poverty status of households in PNG. A review of secondary literature 20 identifies isolation, fragmented markets, lack of income earning opportunities and geography to be important factors in community disadvantage. At an individual level, poor education attainment, low income and malnutrition are characteristics the disadvantaged have

Broadly some of the salient features of an extremely poor household (below USD 1.9/day) entails21: • high child dependency ratio; national estimate is 83.9%; • households report income from remittances is low (less than 5%); even though men were absent, a low level of remittances reflects an absence of employment opportunities in towns and the low capacity for people working in the unskilled labour market to save money; • low dietary diversity; • agricultural income vulnerable to climate change and low resilience and • low education levels. The primary research exhibits the multiple dimensions that influence poverty and household vulnerability. These are discussed in-depth in the subsequent chapters.

Regional Differences There are significant regional differences in poverty and inequality across the country. The “Papua New Guinea Poverty Profiles” report examined the costs of purchasing a basket of goods while living on the national poverty line (which is equivalent to the $1.90 poverty line). The report determined the cost of a basic basket of goods lies between PGK 1,330 – 1,626 for most regions. However, in the National Capital District (NCD Port Moresby) and urban Momase (Lae)

the cost of the same basket of goods ranged between PGK 2,145 – 3,344. The differences are also reflective of the varied income earning opportunities in different locations that are discussed in more details in the Rural and Urban sections. The chart below gives a snapshot of the population distribution in the different regions and the distribution of poor people, living below the $1.90 line, in the different regions.

Papua New Guinea, Critical Development Constraints, ADB, 2012 The list of documents studied to reach these features have been included in the annexes 21 Ibid 19 20

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Figure 1: Proportion of poor in different regions of PNG 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 -

Total Population Pop. below $1.90 line

Southern Region

Highlands Region

Momase Region

New Guinea Islands Region

NCD

Urban Mamose

1,088,529

2,848,791

1,517,070

1,093,267

361,222

345,563

265,601

1,176,551

702,404

488,690

153,519

92,611

Most of the poor live in the Highlands, while the incidence of poverty is highest in the Momase region. Within these regions, the number of poor people are greater in the rural areas; rural communities tend to be more dispersed and less likely to have reliable road connections. A study on the poverty and access to infrastructure found that communities more than 60 minutes travel time to the nearest roads have double the poverty incidence compared to those immediately adjacent to roads. The poorest communities in PNG must travel 75% longer than the non-poor to access the closest mode of motorized transportation. The average rural resident on the New Guinea coast must walk 90 minutes to reach the nearest road, while in the Highlands Region the average walk to the nearest road is more than 4 hours.22 Food shortages can be very common in rural areas. A study conducted in the Obura-Wonenara district by CARE found that rural communities tend to suffer from food shortages in the dry seasons and would consume only two meals a day. Most households consumed very little protein-based food with the main source of protein being tinned fish23.

Another major impediment for the pro-poor growth of PNG economy is the unfortunate condition of its infrastructure. The decline in employment in cash crop agriculture is likely because of the deteriorating quality of infrastructure, especially roads, which in some regions could have encouraged producers to abandon production for the market altogether. A limited number of banks in many provinces has meant that many agricultural producers have no access to banking services. The governor of the Bank of Papua New Guinea admitted that the financial services available to agricultural producers were ‘dismal’24. Furthermore, high child dependency and low agricultural income (susceptible to climate shocks) makes households more vulnerable. The report published that 28 per cent of responses indicated that no steps were taken to prepare for disasters25.

22 Gibson, J and S. Rozelle. 2002. Poverty and Access to Infrastructure in Papua New Guinea. Working Paper No. 02-008. Department of Agriculture and Resource Economics, University of California Davis. 23 Rural poverty in remote Papua New Guinea Case study of Obura-Wonenara District Development Policy Centre, Crawford School Of Economics And Government, ANU Cate Rogers, Richard Bleakley, Wala Ola and CARE Integrated Community Development Project Team 24 Booth, A (2009). Employment, education and skills development in Papua New Guinea. INA 25 Ibid

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Household Beyond Income Level- Analysis A CriticalofAnalysis Povertyof and Agency Gender Measurement Dynamics ininPapua Economic New Guinea Programming

Rural to Urban Migration Lack of rural development, provision and maintenance of services and employment in the rural areas, pushes the emerging working age population into the urban areas to seek employment. Labour productivities (the ratio of output per worker in a particular sector relative to the whole economy) in agriculture did not change much; productivity was only around 40 per cent of the national average26. In addition, there may be a case of lack of information and individuals may overestimate their likelihood of securing an urban job. Therefore, three interrelated issues are driving rural urban migration: • Urban / Rural Wage differential • Lack of rural development and employment opportunities • Lack of information about the urban labour market and the need for skills for securing jobs. The costs of living in the major urban centres can be double the costs in other regions that are more rural in nature. Migration led growth in NCD and Lae have led to the development of many squatter areas where most of the unemployed and under-employed, many of whom are youths, live. Young people under the age of 20 account for almost half of PNG’s total population; and they constitute a disproportionate part of the urban poor.27 The International Labor Organization (ILO) estimated that while around 50,000 young people reach working age (age cohort 15-24) and look to enter the workforce in PNG each year, the absorptive capacity of the formal economy (wage) was limited to only about 5,000 people per year. Most have not received an education in their rural upbringing which poses additional challenges for the poor migrating to Port

Mosby, a city where migrants population percentage has increased from 48% in 1990 to 58% in 200028. Thus, for the poor working age population, agriculture, wholesale trade and retail are major employment generating sectors. For people moving to urban areas, the low level of education they have received means they are limited to the informal employment sectors, with equally limited income opportunities.

Poor households therefore suffer a double shock from the rural-urban drift. Not only is the household deprived of an able-bodied member (human capital), they also incur the cost of sending the person to urban areas while receiving limited return. Those who migrate also struggle to move out of urban poverty cycle and lack sufficient funds to return.

Once in an urban setting, job opportunities for unskilled workers is very low and the significant skills gap is currently met by foreign migrant workers. In 2009, the government issued about 30,000 work permits to foreign workers, which is an increase of 336% from the 6,880 work permits issued in 200129. According to a study, those working in the informal sector in Port Moresby had some education, even a few were highly educated and had post-secondary education, thereby limiting opportunities for the uneducated and less educated in the urban sector30, yet rural urban migration continues unabated.

Vulnerabilities and the Wantok system Given the weak infrastructure, limited access to markets and high vulnerability to shocks, the social system (wantok system) acts as a social security system for communities. In PNG, wantok acts both as an enabler and inhibitor in promoting the growth of inclusive markets. Indeed, wantok might provide overall greater resilience against shocks

than businesses: life relies on local exchange and the social networks across PNG. While traveling to urban areas to sell agriculture produce, farmers and traders often use wantok for accommodation and storage31. When faced with shocks such as health, social obligations, wantok support systems provides both a financial and non-financial social safety net.

Booth, A (2009). Employment, education and skills development in Papua New Guinea. INA Project Information Document (PID) Urban Youth Employment Project 28 ILO, 2002. Employment Opportunities for Papua New Guinea Youth report. ILO 29 Papua New Guinea Critical Development Constraints.(2012).ADB 30 Kavan, P.S (2013)Informal Sector In Port Moresby and Lae, Papua New Guinea: Activities and Government Response., University of Canberra Faculty of Business, Government and Law 31 Wang, Y(2014), Women’s market participation and potential for business advancement. The National Research Institute 26 27

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

However, wantok contribution can also be regarded as an additional tax, which stifles the incentive to feed back the profit into small and micro enterprises. As such, some small businesses do not attempt to make profits, but rather strive to generate social prestige in the clan or community, because if they are to accommodate the demands of social networks, they would remain insolvent 32. In one study, a villager responded “…. I would rather do several small businesses at the same time without being noticed. Otherwise, everybody

would come to me and get something from me”33. Thus, the wantok system may constrain micro-enterprises from accumulating profit and reinvesting to expand in to small and medium businesses. This also encourages growth of informal lending for consumption, as it is hidden from wantok system and is more profitable. The following pathway explains this:

Enterprise income >> expense and consumption by household and wantok >> limited saving >> surplus put into informal lending >> no accumulation for investment. Low repayment intention >> sophisticated loan procedures and high collateral in formal channels >> low loan to deposit ratio >> high interest rate and transaction cost in formal channel >> high informal lending and usurious loan >> diversion of capital into non-productive activities. Thus, the wantok system may constrain the growth and expansion of SMEs, instead incentivizing them to remain small at semi-commercial or subsistence level or multiple source of income (low specialization). This is rational from an individual household perspective but leads to suboptimal net economic/social outcome overall. Primary data collection reflects this and shows that the wantok system has a form of progressive taxation e.g. social contribution disproportionately increases for higher income. It could be

argued that the marginal benefits from business expansion could be outweighed by the marginal costs of increased wantok contributions, curbing expansion. However, the wantok system is well-engrained in the social system which also has externalities (both positive and negative) on the economic system. Thus, it is important to acknowledge its significance and promote the use of wantoks in a manner that allows for greater wealth generation, asset accumulation or investment purposes.

Overview of Women’s Engagement Papua New Guinea (PNG) has a largely heterogeneous population with most communities being patriarchal in nature. Social norms often lead to gender subordination. In terms of economic participation, women are extremely active, taking multiple productive roles to meet household basic needs, supplement income balancing with reproductive obligations, which results in high time poverty. The participation of women in the PNG labour force is almost equal to that of men with 67% of women working, as opposed to 68% of men. Women dominate in subsistence employment and are largely engaged in the informal economy (e.g. micro trade) while men are more predominant than women in the urban sector. Secondary findings show that in the formal sector women are mostly involved in businesses that generate less profit, although they generate the highest amount of cash (mostly small-scale cash generators) in the economy and are the most significant contributor to unpaid labour for food production.

Of the total value of household locally produced food consumption, women’s unpaid labour contribution in 1996 was an estimated 2.253 billion kina ($1 billion USD)34. Women are also the key savers in the households. Although women’s economic contribution to PNG is significant, the country’s economic growth does not significantly benefit women on a personal level. The IFC assessment report also shows that only 20% of the labour force in PNG are employed in the formal sector. Fewer than 6% of that figure are women and even then, they have a negative wage differential compared to men. PNG’s Gender-related Development Index (GDI) in 2005 was 0.529, placing it 124 among the 157 countries assessed, with the life expectancy of females being lower than that of males35. Women generally suffer from excessive workloads, malnutrition, poor access to safe water and healthcare service, excessively repeated pregnancies, and gender-based

Ibid Ibid 34 IFC Gender Investment Climate Reform 35 Country Gender Assessment, JICA 32 33

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

violence. Their roles in decision-making is also limited to certain spheres. Incidences of gender-based violence are very high in PNG, which affects women’s participation in the economy. Women are constrained in their ability to run their businesses; there are major security issues for women traveling for

business/trade purposes. Employees often faced difficult work environments that pose additional challenges to women and have economic costs for the businesses.36 The implications on women’s economic empowerment drawn from the secondary literature and the primary research findings are further discussed in greater detail in Chapter 5.

Implications The aforementioned discussion outlines some of the key issues around poverty in PNG. In terms of the poverty line, the present paper draws on previous poverty reports. This study categorises the poor into three groups, those who fall below the $1.90 line, as the extreme poor and those that are above the $1.90 line but fall below the $3.10 poverty line, the dynamic poor; those living above both lines are categorized as non-poor. According to World Development

Indicator (based on HIES 2009), 65% of population are below $3.1 and around 39% are below the $1.9 poverty line. As discussed above, individual households are affected by socio-economic factors that affects how they respond to such changes. Losch et al (2012)37 provide a stylized diagram, validated by econometric cross-country analysis that shows the pathway followed by average rural households in LDC.

Household diversiﬁca�on

Figure 2 Pathway out of poverty of an average rural household in LDC (Losch et al (2012)

As households get more room for maneuver, they send members to earn more money in oﬀ-farm activities

Households eventually reach a tipping point...

Low income, low diversiﬁcation and subsistence farming

... where they have enough money to begin specialize

They eventually become like upper-income countries household’s today, with two partners specialized in one activity each (max)

Household income

In the case of PNG, most households are stuck either at the bottom left corner with low income and subsistence farming (below $ 1.9) or with low income but diversified sources that are low input-low output. Some rural households have moved towards commercial agriculture, supplemented with income from non-farm activities, particularly the wholesale, merchant and retail business (i.e. $1.9 < Income < $3.1).

However, the above diagram only looks at rural households and does not look in to the rural-urban migration dynamics and how that plays in household decisions. The following tree diagram provides a schema of how economic decisions and factors results in different poverty outcome for typical households in PNG.

IFC Gender Investment Climate Reform Losch, B., Fréguin-Gresh, S., & White, E. T. (2012). Structural transformation and rural change revisited: challenges for late developing countries in a globalizing world. World Bank Publications. 36 37

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Figure 3: Different Poverty Outcomes

Commercial farmers/ Non-farm SMEs

Not Poor

Poor

Extreme Poor

Semi commercial farmers/Nonfarm micro enterprise

Experienced wage earners/ informal entrepreneurial vendor

Casual labor/ informal income supplement vendors

Informal sector survival oriented vendors/ unemployed

Subsistence farmers/ casual laborers

RURAL ECONOMY

URBAN ECONOMY

The above diagram shows that the extreme poor households in PNG have two movements â&#x20AC;&#x201C; either they may graduate into the mid-tier with some increase in income and diversify into multiple income sources (with a small degree of specialisation on certain crops) in the rural areas, or send members of the household to move to the urban areas (the right side of the diagram). In the latter case, given the poor education and skill level, insufficient capital, they are not able to enter the formal labour market or accumulate cash for informal business and in such cases, the vulnerability in income and

the high cost of living pushes them back to the poverty level. This may make the household both at the rural and urban centre worse off as members who migrated are not able to send back any income to their family. However, if rural income is sufficiently high, then they may start to specialise in agriculture or send members to the urban centre for better education. If skills are acquired, or capital is used to invest in small/micro business, they may gradually move up the economic levels.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

RESEARCH DESIGN AND METHODOLOGY Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

To address the objectives of the study, MDF employed a mixed method approach for primary data collection backed up by extensive secondary research. Secondary research gave an understanding of the overview of poverty and gender dynamics within Papua New Guinea. This involved a literature review of key resources from well-recognised organisations, and as much as possible, used the most up-to-date data to

inform the study’s overall framework. Secondary research formed the basis of many points of analysis and was further used to contextualise, expand upon, and triangulate findings from the primary data. This exploration provided broader and better statistical evidence when available. A complete list of the literature reviewed can be found in the annexes.

Research Questions To achieve the objectives outlined above, researchers identified the following broad areas for investigation: • What are the household structures and dynamics for different households? • What are the livelihood practices of different households? • What roles do women play in the household and economic sphere? • What are the dynamics between the poor/women and MDFs strategic engagement area?

• What suitable pathways out of poverty are available and what are the constraints to accessing those pathways? Based on the above, MDF narrowed down each research question to a set of constructs which then helped the programme to further narrow down into sets of variables used to detail out the questionnaire. The table below reflects the detailing process from research questions, to construct and finally, to variables.

Table 2: Development of research questions Research Question

What are the different Household structures and dynamics?

What are the different Household livelihood practices?

What role do women play in the Household and economic sphere

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Constructs

Variables

General Household Characteristics

Family size, location, education background, income sources and migration

Asset Ownership

Property and land ownership, decision-making process on what assets to buy and what to sell.

Expenditure Patterns

Major household expenditures, management and decisions on expenditures, ability to save

Socio-cultural Obligations

Amounts of support given and received, reasons for giving and receiving support, sources of support in times of need, types of support provided by wantoks, churches, etc

Incomes and Sources

Sources of income for Households, amount of earning from various sources, details of paid employment income including Full-time equivalent jobs, details of farming activities, sales and income

Women’s Economic Roles and Decision-making

Decision-making regarding household expenditures, including major purchases (e.g. asset), savings, division of labour between men and women, including both economic and household activities, and in paid and unpaid labour, control over mobility and time-use

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Research Question

Constructs

Variables

What suitable pathways out of poverty are available and what are the constraints to access those pathways?

Available Pathways out of Poverty

Opportunities and constraints faced in increasing income, including those of women, details of any support (from government or others) available, received or desired

ICT and Logistics

Access to markets, financial services (bank accounts, loans etc.), mobile phones, and transport, logistical challenges faced in different income earning activities, opportunities and constraints faced specifically by women

Local value addition

Types of successful value additions, challenges faced in value addition, loss in incomes earning opportunities due to lack of value addition, opportunities for local value addition, opportunities and constraints faced specifically by women

Tourism (Specifically for Households earning from the tourism industry)

Skills/knowledge/information needed for tourism industry, drivers of growth in tourism, challenges faced by tourism business, connection to markets for tourism providers/businesses opportunities and constraints faced specifically by women

Rural input (Specifically for Households in rural agricultural areas)

Types of inputs used, sources of inputs, challenges faced in getting inputs, sources of information for inputs, opportunities and constraints faced specifically by women.

What are the dynamics between the poor, womenâ&#x20AC;&#x2122;s economic empowerment and MDFâ&#x20AC;&#x2122;s strategic engagement area?

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Sampling Strategy

The key principle behind the sampling strategy is to include as much variation as possible among respondents so that meaningful common threads and provide MDF information on broad pathways out of poverty applicable to the most number of people.

the Highlands region include the Western Highlands Province (WHP), Eastern Highlands Province (EHP), Simbu, and Jiwaka. Within the Highlands regions, half the sample comes from villages positioned far away from markets and good roads and the other half are closer to markets and good roads.

The urban sample comes from in and around the two major and most densely populated urban areas of PNG Port Moresby (POM) and Lae. Within these urban areas, the population lives in settlement groups. The settlements chosen for the study include a mix of those closer to the urban centre and those further away. Some newer settlements were chosen as they have a developing preference and structure of economic activities and some older settlements were chosen for having more established and developed preference and structures of economic activities. This helped the programme capture a snapshot of the range of economic activities of urban areas.

Finally, for the tourism sample, the study focuses on Milne Bay, a province that has seen a growth in tourism primarily driven by the arrival of an increasing number of cruise ships. The other province where tourism is of increasing economic significance is East New Britain (ENB) islands. These islands are heavily promoted to different categories of tourists due to its many attractions, such as active volcanoes, dive sites and World War II relics.

In selecting the rural sample, MDF chose the Highlands Region as it exhibits a wide variety in soil conditions, climatic conditions38, altitudes and has a combination of perennial cash crops and non-perennial food crops. The select provinces in

Having selected the sampling locations in a manner that would enable MDF to capture as much diversity as possible, the next step was to select respondents. MDF used a mixed methods approach to collect data; the respondent selection for each type of method was based on different strategies. The methods used, and selection process are outlined below:

38 Climate variations in the Highlands have a significant effect on rural livelihoods, according to the WFP overview of the Highlands region during the 2015-16 El Nino event: Subsistence sweet potato production has been severely affected by frost and drought (altitudes above 1700m are particularly at risk of crop destruction from frost). Two provinces (Enga & Southern Highlands) have declared a state of emergency, and thousands of people are reported to be migrating to lower altitudes

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Key Informant Interviews Objective: Key informant interviews (KII) helped researchers understand the reasons behind trends and behaviours in the communities as well as the economic activity opportunities and constraints in an in-depth way. Sampling Strategy for KII: Key informants were either people with a well-regarded position in the society and a significant community insight, such as a magistrate, or community/church leader, or they were selected based on their depth of knowledge on a sector, such as retailers, agriculture extension worker, or a tourism business manager. A complete list of the Key Informants interviewed can be found in the annexes.

Focus Group Discussions Objective: MDF used Focus Group Discussions (FGDs) to validate and seek further information on gender roles within households and in relation to household economic activities. The FGDs also explored if womenâ&#x20AC;&#x2122;s involvement in economic activity was an exception, rather than a norm, in their communities. Sampling strategy for FGD: The women selected for FGDs were those who were involved in some form of economic activity within their households. These were held with women in tourism and rural areas. They were not done in urban areas due to security issues and difficulty of getting women together. A template of the FGD questionnaire can be found in the annexes.

Household Interviews Objective: The household interviews explored the key research questions on poverty, income generation and gender. Whenever possible, the interviews took place with both the male and female heads of household to get the most balanced view. Sampling Strategy for Households: In the rural areas, researchers asked the community to identify one poor and one well-to-do household for the interviews. Tourism households were chosen based on their involvement in tourism-related economic activity. In urban areas, households were selected based on their access to markets, roads, and utilities. Household questionnaires used for rural areas, urban areas and tourism areas used can be found in the annexes.

Gender Interviews Objective: Interviews with women took place individually to better understand their workloads, contribution to household and economic decision-making, savings, access to resources (e.g. land and investments), influence over economic activities, and to gain a better general insight of gender social norms. Sampling Strategy for Women: The participants of the gender interviews were the same women from the household interviews. These interviews were conducted separately, outside the presence of the male head of household, to correlate their responses. Gender questionnaire can be found in the household questionnaires in the annexes.

Structured Observations Objective: Structured observations, guided by notes and questions, occurred during the household interviews. This helped capture housing conditions, visible asset base (e.g. household appliances), access to utilities, access to sanitation, health conditions of the children and adults in the house, soil conditions around the house (vitality of plants in house gardens) and the interaction between male and female respondents while answering questions to understand gender dynamics. Sampling Strategy: This took place in all the households that were interviewed. The guidance given to teams for carrying out structured observation is given in the household questionnaire and can be found in the annexes.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Data Quality Control, Management and Analysis The MDF PNG country team, two people from the MDF Fiji programme, and a team of enumerators and facilitators from the National Research Institute (NRI) conducted the primary research in the field. The team members were split up into four groups. Each group comprised of two members of the MDF team and one enumerator from NRI. Each study group included at least one female member who was responsible for carrying out the gender interviews.

All members of the field team received training and became familiar with the list of questions through mock interviews before the field research began. A daily debrief took place at the end of every day to discuss general findings and adjust when necessary. The interviewers conducted the questionnaires in the local language and dialect and informed each respondent of the objectives of both the interview and MDF.

Facilitators were provided by NRI to introduce the teams to the villages and settlements and help identify households for the interviews. Facilitators are very important in PNG to be able to gain “safe entry” into a community. The overall security of the team and the chance to conduct interviews depended on the facilitators to effectively arrange these meetings.

Researchers recorded all primary data directly on the questionnaires. Afterwards, each team responsible for the interview or discussion undertook a joint exercise to record the data in excel and write separate descriptive household summaries for each respondent household. Annexes include three examples of the household descriptive summaries written by the team, representing the structure of these summaries and an example of the kind of information found in each sampling group.

After the initial design, interviewers pre-tested the questionnaires in and around Port Moresby before finalization.

Final Sample The scope and plan of the study was quite ambitious - but necessary, given the broad range of engagement of MDF in PNG and the high level of diversity in the country. The study captured the diversity within the economic activities conducted by Papua New Guineans and allowed MDF to cross-reference

findings from literature reviews, key informants, structured observations and focus group discussions. The study took place over a three-week period including travel time and fieldwork (enumeration). Demographics of the final sample can be found in the table below:

Table 3: Final Sample Size of the Study Respondent Type

Number Reached

Rural Households

Urban Households

Tourism Households

Gender Interviews

Key Informants Interviews

FGDs

4 (a total of 22 women participated in the FGDs)

Structured Observations

65 (all households of the survey)

In almost all cases, the teams would have liked to expand their geographic and sample coverage more broadly but were unable to do so. For example, in the Eastern Highlands the study group had to replace Okapa district with Kainantu, because the roads to Okapa were so dilapidated that access was very difficult for the team. In Simbu, the team was unable

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to visit Gembog district because a recent landslide made the area inaccessible. In Milne Bay, some relevant villages were at least 2.5 hours away from the Alotau town, which made interviews infeasible. In this case, the team had to reduce the sample size and carry out interviews of villagers who had come to the Alotau market.

Household Beyond Income Level- Analysis A CriticalofAnalysis Povertyof and Agency Gender Measurement Dynamics ininPapua Economic New Guinea Programming

Limitations of the Research The limitations of the research are described below: • The security situation in PNG made it inadvisable to go to communities where a facilitator had been unable to arrange meetings and gain an introduction. Due to poor phone connectivity in some locations, facilitators were unable to arrange an introduction prior to the teams’ arrival and had to arrange one after the team arrived, which was time-consuming. Locations where facilitators did not have contacts could not be visited. • Security risks are higher in urban settlements and the MDF team had to be accompanied by guards and organize evacuation plans for anyone going into these settlements. Facilitators were again used to gain entry to urban settlements, and uniformed guards accompanied teams and waited outside each household during interviews. Although the team made sure to explain the reasons for the level of security to the households interviewed, it is possible some households may not have felt fully comfortable during the questionnaires. • Communities in PNG are widely dispersed, and in some cases, roads are in poor condition. This meant that the study team travelled for long hours. In some cases, bad road conditions made it impossible to reach certain locations, which reduced the overall sample size. To combat this limitation the teams took more time per interview to verify responses so that the quality of information collected was much better even with fewer respondents. • Although the team gathered detailed information on income, expenditure and assets was gathered, most respondents do not keep records and rely on memory to answer questions, leading to recall bias. • In 2015/16 the weather patterns in East Asia and the Pacific regions felt the impact of a strong El Niño event, followed by a weak La Niña. El Niño led to a prolonged dry season in 2015, and the La Niña led to slightly more rains

in 2015/16. This had significant effects on the households of the study. The study team was aware of this and tried to get a sense from households about whether their various responses were likely due to recent severe conditions or if they were typical of a more normal year. Nevertheless, while reading this report it is important to keep this in mind and realize that the ENSO cycles are likely to have affected household consumptions, farm income generation, wantok contributions and are likely to have resulted in households resorting to severe coping strategies. • In a few households, the men of the family were present when interviewers conducted the gender interviews, which may have impacted the information women provided. In cases where this happened, researchers not conducting the gender interview took the men aside to ask them further questions to better allow their colleague to interview the woman without distraction. • In some cases, women were absent from the household during the interview (either due to illness or work), or a woman was the head of the household. In these cases, gender questions on sharing of decision-making or roles and responsibilities between genders were not asked. Thus, not all households had a separate gender interview. Despite these limitations, researchers collected a significant amount of quality information from the respondents. Using mixed methods allowed MDF to cross-reference and validate the responses. The information found is very useful in understanding the nature of poverty and gender in rural, urban and tourism areas and provides MDF with an insight into the pathways out of poverty and ways to strengthen women’s economic empowerment in PNG. The next chapter will present the dynamics of the PNG economy, the overall conditions that lead to poverty in PNG and present the poverty and gender situation of PNG based on both primary and secondary information.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

POVERTY DYNAMICS PRIMARY RESEARCH FINDINGS Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Summary Overview on Poverty Dynamics Primary data collection applied a combination of mixed methods (qualitative and quantitative) and is backed up by extensive secondary research. The primary research helped the team to better understand the nuances behind the critical constraints that poor women and men face that hinders them from benefitting from growth opportunities and the possible pathways out of poverty. The compilation of detailed poverty profiles for a sample of 65 households (Households) covered the rural and urban areas over eight provinces in PNG. The key principle behind the sampling strategy was to cover as much variation as possible among respondents so that common threads emerging from the sample would provide MDF with broad pathways out of poverty applicable to households across different rural and urban settings. As seen from the secondary literature, income generated by PNG does not trickle down equitably to all members of the population given the limited channels of income. Additionally, poverty is highest among those who are selfemployed, working in semi-subsistence production and those working in the informal economy, which forms a large part of the economy. The in-depth interviews across rural and urban areas investigated the elements that contribute to poverty in great detail. Within the study is a collection of expenditure estimates from all households to calculate the total consumption expenditure per capita and then group the households based on their per capita expenditure, into three major categories. The following categories describe the general features: a. Households at or below the $1.90 line are the extreme poor who can be characterised as “Strugglers”. These are the Households typically characterised by high dependency ratio, poor health conditions and a large varied income source (highest generated from agriculture) to diversify income but are primarily subsistence in nature with little or no commercial source of income. Households in this group typically struggle to invest in productive means, have the highest expenditure on food, have high opportunity costs and are highly vulnerable to external shocks. They often rely on greater external support through their wantok networks, resort to interestfree informal loans from relatives, buy necessities on credit and any one shock can put severe pressure on the Household. Households in this category in the urban areas include members between the age bracket of 15 to 24 years of age, unskilled with limited or no formal education who have migrated to urban areas in search of better opportunities and are unable to absorb health

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and economic shocks. Within the study sample, 42% of the households were below $1.90 line. b. Those that fall between $1.90 and $3.10 poverty lines who can be characterised as “Nascent Entrepreneurs/ Dynamic Poor”. These are Households that exhibit relatively lower dependency ratios with improved health conditions, move towards increased specialisation of crops and some investment and willingness to invest in inputs and agricultural production. Households grow on average five crops, of which four generate income, and the highest income earning source is agriculture. They are more resilient to shocks, but still vulnerable and may fall below the extreme poverty line unless their growth trajectory continues. Households within this groups also rely on their wantoks for recovering from shocks, however, unlike the previous group, Households in this category are seen to rely more on loans from money lenders. In the urban setting Household members in this category of Households are above 24 years of age with some degree of secondary/vocational education. They are able to engage in casual labour or enter into the wage labour market, gaining the ability to send some intermittent income back in their villages. Within the study sample, 28% of the Households were between $1.90 and $3.10 poverty line. c. The non-poor households that fall above the $3.10 poverty line can be characterised as “Mature Entrepreneurs.” These are Households that specialize in cash crop cultivations with greater use of inputs and/or have profitable trades/businesses, They have more land under cultivation, their children are less depending and they enjoy good health. These Households have income sources that ensure smooth cash flow throughout the year. However, they have a high amount of outlay on social obligations. Agriculture is the highest income earning source with greater specialisation of crops. Unlike the other two categories, Households in this category do not rely on wantoks, informal loans and informal trade/ wage income to support key expenses, which makes them relatively more resilient than the previous two categories. Mature Entrepreneur Households in the urban areas have formal secondary/tertiary education or vocational trainings, joined formal wage-earning employments or entrepreneur category and are often successful informal actors. If linked to rural areas, they can send remittance regularly. Of the study sample, 31% were above the $3.10 poverty line.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

The aforementioned categories provide salient characteristics of different groups of poor. The following section looks deeper into what makes these groups different and the features that push them towards different categories of poverty, highlighting the variations in household dynamics and economic outlook. A snapshot of this is given in the Annexes. Given the differences in the rural and urban settings,

the categories are further subdivided into urban and rural areas. All the figures in the table are drawn based on the 65 households interviewed, however, 12 households from the rural and three households from the urban areas are expanded upon as mini cases to exemplify the key features of households under the three categories. It also touches upon the regional and geographical differences.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Poverty Dynamics in the Rural Areas

Most of the countryâ&#x20AC;&#x2122;s population of almost eight million people live in rural areas and agriculture continues to be the principle economic activity for 80 percent of the countryâ&#x20AC;&#x2122;s population who live outside the urban centres39. Farming households are mostly characterised as subsistence or semisubsistence farming units, undertaking low intensity shifting cultivation (that operates for one or two years of cropping followed by several years of fallowing)40 while the key income for farmers comes from commercial crops such as coffee and cocoa. Farming is mostly rain-fed but the choice of crop is dependent on various geo and topographical factors. Only 25% of the total land area of PNG is used for agriculture and 20% of the total land area is of moderate potential for cultivation (covering parts of Morobe, Southern, Eastern Highlands or Enga Provinces) and only 7% is of high or very high potential (mostly East New Britain, Western Highlands and East Sepik Provinces). The quality of land and agriculture potential has also shaped the movement of population density in different regions.

39 40

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The Highlands Region has the highest population in the country and the largest number of people living below the $1.90 poverty line. Most of the population in this region lives in rural areas and nearly 40% of women and 36% of men are engaged in subsistence or semi-commercial farming. Given the density of poor population in the Highlands, the primary research on rural poor is centred on this region. The regional, topographical and socio-economic systems are highly varied across the country along with the diversity in different ethnic groups. Hence, for the analysis of what contributes to economic condition of rural households in PNG, this section is broken down into the following sub-sections: a. Understanding the farming system in relation to the climatic conditions b. The conditions of markets within which the poor operate c. The household dynamics and economic outlook of different poverty profiles

World Bank Economic Outlook 2017 PNG Rural Development Handbook, Hanson, et al, 2001

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Understanding the farming system in relation to climatic conditions Households in the rural areas have seven ha of land on average. Of which, only 50-60% is used for crop cultivation, mostly for own consumption and some for surplus sales. A study by CARE in 2009 found coffee to be the main income source for 60% of the households and food crops generated incomes for 34% of the households in PNG. The study findings further showed that men managed the cash-cropping subsector while women predominately managed the food crop production41. The following gives a brief snapshot of the key crop production and livestock in the country: Commercial Crops: These include coffee, cocoa, palm oil, copra, among others. Palm oil is the key important agricultural export, but only 4% of rural villagers are involved in production. Cocoa and coffee are the following most important commercial crops. Coffee production amounts to approximately 59,000 tonnes/year42, 85% of which are sourced from small holder farmers that amounts to over 400,000 farmers. Coffee is grown in 16 provinces across PNG but over 90% of the supply comes from Eastern Highlands, Western Highlands, Jiwaka, Morobe and Simbu provinces. Coffee is harvested only once a year and the yield varies between 600-900kg/ha and then households must attempt to sustain the rest of the year on those earnings43. However, given that this income is only annual, these earnings are increasingly insufficient. With poor harvest and a drop in international prices, households are shifting focus to alternative income sources such as food crops and high value vegetables44. Farmers invest in agri-chemicals, and transplant coffee seedlings to continue plantation. Farmers do not invest in buying coffee seedlings or planting materials but some in EHP prune coffee trees to increase productivity and longevity. Households use family labour and do not generally hire labourers for their coffee cultivation except in parts of WHP and Jiwaka where coffee plots are larger, and labour is scarce. Farmers sell coffee either in the form of parchment or red cherries and many small aggregators purchase coffee cherries for semi-processing (pulping and drying) before selling to larger buyers, except in WHP and Jiwaka where the cherries are sold without any

processing. The supply of Cocoa, on the other hand, comes from an estimated 70,000 small holder farmers and the production stands at 42,000 tons as of 200945. Productivity is relatively low but if managed well, cocoa also has significant commercial potential. Subsistence Food Crops: Crops such as sweet potato, sago, cassava, taro, corn, banana, and beans fall into this category. Sweet potato is the dominant staple crop produced throughout PNG averaging at 2.8 million tonnes46, although production is centred in the Highlands, where 75% of the crop is produced47. This is followed by banana (400,000T/ year), cassava, taro, coconut and sago which make up less than 200,000T/year. The staple crops are solely produced for consumption, social obligation and only surplus is sold in times of cash needs (usually a third of the harvest). Sweet potato and cassava are primarily grown for household consumption (a food source for the Household in dry periods) and as feed for livestock (mostly pigs). Semi-commercial Food Crops: Crops in this category are cultivated largely for sales but are also kept for consumption; they include crops such as cabbage, bulb onion, broccoli, cauliflower, carrot, cucumber, potato, peanut, strawberry, ginger, citrus fruits (orange, mandarin etc.). All farmers invest in weedicides to clear their farms before planting these crops and may use insecticides to protect the plants. Farmers mostly rely on imported seeds (at least for the first few seasons, after which they resort to retained seeds), agrochemicals, and fertilizers for cabbage, bulb onion, broccoli, cauliflower, and carrot. Semi-commercial food crops are sold in local markets or in urban/peri-urban areas mostly to wholesalers, public servants, travellers or other locals. The choice of crops also depends on the availability of inputs and perishability (e.g. potato is often cultivated because it can be stored for longer). Livestock: Most households in PNG have pork and chicken as their main source of protein, followed by fish and lamb. PNG’s smallholder livestock sector is estimated to have 360,000 village piggeries, 220,000 poultry farmers, 40,000 owners of small ruminants and 20,000 inland aquaculture farms48.

41 Rural poverty in remote Papua New Guinea Case study of Obura-Wonenara District Development Policy Centre, Crawford School of Economics and Government, ANU Cate Rogers, Richard Bleakley, Wala Ola and CARE Integrated Community Development Project Team 42 PNG Coffee Industry Corporation, 2017 43 Bourke 2009, Agriculture in PNG ‘Conditions, Future Prospects and Dispelling some Myths’ and supported by in depth interviews conducted. 44 The village that Joshua is from has 80-90 households, of which 10-15 households cut down their coffee gardens to grow vegetables as the income is higher and more consistent. SIMBU 45 ACAIR, 2009. 46 Food and Agriculture in PNG 47 Sweetpotato value-chain analysis, 2014 48 Status of livestock production and health research in PNG (2012)

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Smallholder farms are estimated to supply 41% of the meat market while the gap in the supply is met by imports and some large cattle businesses, like Ramu. Chicken production is largely commercialised where farmers invest in feed and dayold chicks for sale. Large businesses, like Zanag and Mainland Holdings, have invested in developing the poultry industry which has reduced the reliance on imports significantly. The imports of meat (mainly lamb) on the other hand is still high at USD 110 million in 201649. There is a growing number of farmers investing in small scale piggeries, however, the support services as feed supply or vet support are limited. Given the cash scarcity of rural households, livestock production not

only offers an opportunity to increase incomes but a way to reduce expenses on protein with a better functioning market. Given the subsistence and semi-commercial nature of farming, farmers in PNG do not rely on any single crop but a combination of crops and livestock. Although detailed farming systems and how they function in different poverty categories are explained in the subsequent sections, the following table gives a snapshot of the typical farming system. In rural PNG, farmers have a combination of income sources and farming systems that combine mature crops such as coffee or cocoa, cash crops such as vegetables, staples and livestock for risk mitigation, which is depicted in the figure below.

Figure 4: Farming System of a Typical Rural Household

Coﬀee Vegetables

Tuber/Root Crops/ Legumes

Livestock/ Fishers

Cocoa

Informal Trade

Mature cash crops Emerging cash crops Meet daily cash needs

Staples for consump�on and sale for cash needs (poten�al as raw material to be processed into other products e.g. animal feed) Liquid asset for immediate cash need or social obliga�on

This combination varies from the Highlands to the coastal areas, and depends on the size of farming households, which are discussed at great length in the next section, but

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the following table briefly summarises the different farming systems in which households are involved.

UN COMTRADE Data (2017)

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Table 4: Synopsis of the Farming System in PNG

Farming System Synopsis • Sweet potato (Kaukau) is grown widely in the Highlands as the staple crop (for both consumption and as feed for pigs) and cassava is grown as a cushion in times of long dry spells, which kaukau is more sensitive to. • In wet periods, kaukau is the preferred diet and cassava is mainly fed to the pigs. • To diversify diets, farmers grow banana, corn, and some beans around the plots dedicated for the staples. Staples

• Usually one or two plots closer to the house are dedicated to kaukau and the crop is rotated with legumes (peanuts) for long fallow periods to revive soil nutrients. • Kaukau is grown on mounds to remove excess water from the roots and kaukau waste is also used to fertilise the soil for high value-vegetables. • A few households may use weedicides to clear a farm before planting. • The interviews revealed that the profits earned from these crops are between PGK100 – 500 per year/Household. • Cash crops include coffee, cocoa, copra and oil palm, although they differ from region to region. • Coffee farmers dedicate the largest plot of land to the crop and plant away from their house gardens. • The coffee harvest is usually done by both men and women, but sales to factories or traders is done mostly by men. • This yearly harvest generates a profit between PGK600-800/ha. • The income from coffee varies depending on the international prices, hence farmers are reluctant to invest significantly given the uncertainties.

Commercial Cash crop

• The average price/kg received by farmers from the sale of parchment is PGK4.5 while the cherries are sold at less than PGK 2/kg. • There is growing interest in speciality coffee which could fetch an even higher premium price by farmers. • Coffee pod borer also affected the overall productivity from the trees. • The coffee plots are often left on their own and some pruning or clearing is done a few months before the harvest period. • Some farmers use small quantities of NPK to increase yields. • The income from coffee comes during the dry period and becomes the source for substituting diets by rice purchases. • The coffee harvest period also is a major spending period on food, iron roofing, social obligations and bride price ceremonies.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Farming System Synopsis • In areas with better access to road infrastructure, fresh produce has become an important source of income. In the Highlands, where the population density around townships is high and road infrastructure is present, many farmers have cut down the coffee trees in favour of fresh produce. • A range of fresh produce is generally grown year-round to supplement income sources.

Semi-commercial/high value crops

• Farmers grow leafy greens such as pumpkin tips, pit pit, aibika, amaranthus and snake beans and in recent years, farmers have started growing higher value vegetables such as cucumber (which is planted in drier months and harvested mostly between November and March), cabbages (year-round with highest supply between September and December) and bulb onions. • Often the best plot closer to the house is chosen for the high value vegetables as cabbages, broccoli, onions or potatoes. • Farmers also invest in fertilisers and crop protection chemicals at varied degree to increase the income from these crops as they sell 80% and the net profit per ha could range from PGK600 – 3,000. • The high variability in profit is subject to the use of inputs, mitigation to diseases, availability of buyers, cost to markets and wastage in ground due to high moisture content and losses during transportation. • Farmers also produce a range of fruits such as pineapple (Oct-Mar), watermelon (Nov-Mar) and Mango (Oct-Jan) to supplement income. • Pigs are an important part of the farming household throughout PNG excluding the Seventh Day Adventist households which keep goat and chicken (or often do not have livestock). • Households feed the pigs with sweet-potato leftovers and cassava. • The pigs are sold in times of cash needs and also serve as a means to contribute to social obligations.

Livestock

• Most households keep village pigs which can take up to two years to reach a mature age. • Some commercial farmers also keep crossbred breeds and invest in stock feed and improved husbandry practices for commercial sale, particularly around Christmas time and for social obligations. • Some households are also involved in commercially growing chicken, which is a high value investment. • With consideration of the average mortality rate, farmers who raise chickens for commercial sale and invest in expensive imported feed can generate between PGK 400-500 for every 50 lot of chicks.

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Transition to vegetables as mentioned by a Community Development Officer in Henganofi:

“The people in this district depended on coffee as cash crop but it has very rapidly moved to vegetables such as cabbages, potatoes, broccoli, onions and carrots. This change has happened just over the past 10 years and villages which have taken these crops up have grown economically and these crops have now become a major source of higher income in the district. Since these crops are for a short period, hence more continuous income can be achieved through the year compared to coffee’s yearly harvests.”

Agriculture is mostly rain-fed, making farmers particularly vulnerable to delayed rains or shorter rainy seasons which in turn affects the timing of crop planting. In the Highlands the food crops are planted before the wettest part of the year, around September/October while some crops, such as cucumber and watermelon, perform better when planted during drier months, to reduce the chance of pest and diseases. Farmers suffer from income shortage and food insecurity during the dry season, a situation that can be worse during periods of drought or El Niño. Those in the Lowlands and closer to rivers and streams do better in the dry season but are affected by floods during the rainy season. The choice of crops is largely influenced by the topography, availability of rain and moisture content in the soil. Crop yields vary between Lowlands (0-1200 m) and Highlands (1200 above). For instance, sweet potato has an average yield of 13t/ha in the Lowlands, as opposed to 15 in the Highlands and the yield of cassava is 22t/ha in the Lowlands which is 5 t/ha more than in the Highlands. Upon investigation during the interviews, it became clear that there are more nuanced differences in land quality and moisture levels that affect the type of crop and their yield. The topography can be divided into four main features- Lowland dry, Lowland wet, Highland dry and Highland wet. Note that dry here refers to a relatively drier condition compared to those areas that have more rainfall. The following section gives a snapshot of the type of crops that are grown in these four regions, as gathered from the primary interviews. Lowland Dry: These locations are typically 1200-1500 meters or less above sea-level with rainfall between 1800 to 2800 mm/year, such as part of Bena in the Eastern Highlands Province and Gafuntina Valley-Henganofi. Farming households in these areas grow staple crops such as sweet potato, cassava and maize, peanuts, vegetables such as cabbages, leafy vegetables and fruits such as citrus and pineapple. While some farmers tried to produce carrots, broccoli and cauliflower, they have not yielded as much as in the other locations given the inadequate moisture content in the

soil. The key cash crop is coffee supplemented by the sale of pineapples and selective vegetables/fruits. Peanuts are often used to fertilise the soil and provide for quick cash in the drier seasons. Lowland Wet: These locations are typically 1600 to 1800 meters above the sea-level with rainfall ranging from 14004000 mm/year, experiencing greater cloud cover and more moisture content in the soil. Examples of such locations include parts of Obura Wonenara, most parts of Jiwaka and Henganofi in the Eastern Highlands Province. Like the Lowland dry region, farmers grow coffee as cash crop, while sweet potato is grown as the key staple crop. Farmers in these locations also grow maize, potato (yield is low compared to the Highlands) and since as recent as 2016 high-cash vegetables such as cabbages, cucumber, bulb onion to supplement income. Highland Dry: Generally, this region is 1800 metres above sea-level and has an average rainfall of 1200-2800 mm/ year. Farmers interviewed in these locations, such as parts of upper Simbu Valley and parts of Karmanuntina, Dunatina Valley- Henganofi, produced staple crops, including sweet potato and maize given that the weather conditions in these high-altitude locations does not support proper coffee production. The relatively less dry locations in EHP can have a coffee harvest of 900 kg/ha of cherries or more whereas drier locations in EHP struggle to harvest more than 700kg/ ha. Farmers therefore resort to the production of different high cash crops as much as possible, such as carrots and potato, or more recently, bulb onions. The trial and error of vegetable production indicates that there is a need for better information on what is practically possible to produce and also a need for mechanisms to improve soil condition for production. Highland Wet: These locations are 2000 metres above sea level and experience an average rainfall between 2300 to 4000 mm/year. This includes Tambul in the Western Highlands Province and Gumini in Simbu. Farmers in such conditions continue to grow sweet potato (albeit, with an above-average

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

seven to eight month growing period) and as the weather conditions do not allow for coffee production farmers to cultivate a range of high value vegetables such as broccoli, cauliflower and potato for income. Some farmers have also tried producing peanuts and bulb-onion, but the high moisture content has not proven a good yield to be difficult. Some farmers interviewed in Gumini reported a 50% loss of bulb onions in the ground due to high moisture. Hence information on the type of crops suitable for production as

per the weather and soil conditions along with inputs or tools for reducing moisture content could be ways of improving yields and reducing loss at the farmgate. It is important to understand these differences in land conditions as these factors affect the income earning abilities of farming households. The wrong choice of crop without appropriate use of inputs and tools can cause a disincentive for farmers to continue investing in crop production at commercial or semi-commercial scale.

The Trading Network and Condition of Markets within which the Poor Operate Trading routes and end markets: PNG can be characterised as a thin market where actors performing specialist functions such as aggregation, trade, packaging, and specialised transport for fresh produce are very limited if not absent. Besides some export commodities such as coffee, cocoa and palm oil, the cultivation intensity is low and much of the demand is fed through imports.

At present, the major trading route for fresh produce or perishables is between the Highlands to Lae to Port Moresby and East New Britain. The key end markets include the mining and oil townships, such as those in the Highlands and New Ireland, that require fresh produce and perishables for their staff and the major end consumer markets include the National Capital District (particularly Port Moresby), Lae and New Britain. The map below shows the key routes and some of the key end markets.

Figure 5: Major Trading Routes for Fresh Produce/Perishables

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

It is also important to note that the purchasing power of end consumers in the provinces is low. Secondary research50 suggests that over 40% of the wealth is controlled by only 20% of the population (who are generally more price inelastic in nature), whereas the bottom 40% of the population live on an income of PGK 1,300 to 2,700 per capita per year, indicating a very thin middle income class which in an ideal scenario would provide for much of the pull and absorption of consumables in any economy.

Over the past years, the GDP per capita (based on PPP) increased which means that the demand for food supply is also on the rise. However, urban demand is met largely by imports and some informal opportunistic national level trade. Similarly, only some of the demand for fresh produce by the mining industry is met by local suppliers while most of the supply is imported. According to the mining industries, the irregularity and inconsistency in volume and quality of perishables supplied discourage them from buying from local suppliers.

The Fresh Produce Potential and Alternatives In 2016, the total value of imported fresh fruits was around $7 million USD while imported fresh vegetables was around $5.6 million USD. These numbers suggest a relatively small gap in the current supply of the market. If the price of fresh produce drops through increased efficiency, the latent demand will be higher. Many households in the Highlands have taken up fresh produce as a means to increase income. However, given the small market size, the farmers which stagger the production of crops to produce smaller volumes at one time and have better access to larger markets are the ones which have benefitted most from entering the market. While fresh produce has been critical is moving these households out of poverty, the small market size means that diversity in other crops, efficient access to market and efficient production will be the primary growth areas, as opposed to increasing the production significantly. Comparatively, around $110 million USD worth of meat and $178 million USD worth of cereals were imported for consumption. Thereâ&#x20AC;&#x2122;s growing interest from businesses to substitute some of these imports where local production is commercially viable. In this context, it is essential to look at markets which have the capacity to absorb production from a large base of farmers while working to improve efficiencies in the fresh produce sector.

Topography and road networks in potentially key supply locations: The Highlands Highway connects many of the districts in the Highlands region to markets and urban areas. The closest market for most households is the village or district-level market, which is generally walking distance to

the residences. However, when it comes to selling larger volumes, farmers travel to the peri-urban or urban areas where the markets are much larger. Some of the key markets include Hagen, Kundiawa, Lae, Kainantu and Chimbu. Given that most farmers travel to the bigger markets to sell larger

World Development Indicators

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

volumes, this often creates glut/oversupply, affecting the price of the produce resulting in either wastage or distress selling (as mentioned across almost all interviews). Organisation of the market players: Interviews indicate that the trading network is highly informal, unstructured in nature and much of it is built on kin or wantok connections. Farmers themselves often travel to the large markets to sell and there is a glaring gap of aggregators/small traders who could formally collect from farmgate and sell to larger traders/wholesalers in the market. The individual cost to market often does not justify the investment in farm unless regularity in sales is ensured. This further resonates the findings of a study that was conducted by FPDA where they found that 45% of the market vendors were growers while 55% were full-time traders51. Interviews with a range of market players indicate that the market is organised in a very informal setting without much formal structure of players, however the current structure operates differently for different crops. • In case of large export crops, such as coffee, the supply chain is more mature and has more players involved in trading. Coffee is produced either by small holder farmers, government leased block holders or plantations. Farmers either sell coffee cherries, dry beans or green beans to exporters. »» In the Western Highlands and Jiwaka, most farmers sell cherries which need to be sold within 6-12 hours of harvesting. Farmers in Western Highlands prefer selling cherries as the coffee exporters are easily accessible due to better road networks. Most of the wet beans are directly sold to the exporters and some lead farmers aggregate the wet beans to sell to the exporters. The exporters also offer farm gate collection services and deduct the transportation costs from the sale proceeds. »» Farmers in more remote locations in these provinces and farmers in Eastern Highlands and Chimbu prefer to sell dried beans using small household owned pulpers. There are two types of mid-tier traders: those who are engaged directly by large coffee exporters to collect coffee on their behalf and those who collect the coffee from farmers either at their farm gates or at the roadside markets. The exporters engage traders in times when the coffee production is low. Seasonal traders also buy coffee from farmers when the coffee prices are high and the margins are significant. »» Some cooperatives and block holders also collect coffee from multiple farmers and rent out the dry mills of the

exporters or the Coffee Industry Corporation (CIC) to make the green beans and then auction the green beans to exporters. This is done only in cases where the volumes are high enough to justify the additional costs and farmers can negotiate on the prices. • In sale of other fresh produce/perishables, there are 4-5 different types of players involved in the trading: »» End farmers often bring the fresh produce directly to the provincial markets, but more commonly, various lead farmers aggregate the fresh produce from their own and neighbouring farms to sell at the provincial markets, either directly to large aggregators such as NKW and Tiningga and/or to a few mid-level traders such as Western Hedges and CHFML. At times, these lead farmer aggregators also travel all the way to POM to sell their produce through their wantok networks. Alternatively, they have members of their family groups/wantoks who collect/offload the shipments at the receiving end in POM to sell in the local market. Lead farmer aggregators most often use their wantok relations to consolidate farm produce to sell in the market52. »» There are a handful of large aggregators/forma traders, such as NKW and Tiningga, who have emerged in recent years. These players either buy directly from farmers or farm aggregators and sell directly to the mining townships or ship their produce to POM to sell to the supermarkets. To ensure quality and regularity in supply, these aggregators often invest in multiple functions (such as reefer trucks or input sales) that in a mature market would be taken up by specialists. »» A few mid-tier aggregators exist, such as Western Hedges and CHFML, who either source directly from their village networks, or lead farmer aggregators, and sell at small quantities to the large aggregators, or they will ship their produce to sell in the local wet markets in POM. The second is the more common way of working. The mid-tier aggregators is most common in other more mature markets, but in PNG, they are limited and are most at risk. This is because they do not have the transaction volume they need nor the financial status to cover the high transaction costs and risks. Also, their investments will not justify to only work across small pockets like the lead farm aggregators. In some cases, they do supply to the large aggregators but there too is an entry barrier as large aggregators prefer direct relationship with farmers/lead farmers to ensure consistency in quality and regularity from suppliers.

Women’s Market Participation and Potential for Business Advancement, NRI, 2014 According to one of the largest shipping agents, they service as high as 50 farmers who individually comes to ship products and in most cases they are lead farmers who aggregate produce of their neighbours. 51 52

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

ÂťÂť There are some pockets of informal local traders who work at provincial markets while others buy from markets, such as Lae, to sell to hotels, supermarkets and large aggregators in that area. These local traders are very opportunistic in nature and would trade in small quantities of whatever is available. It is important to highlight that much of the trading (apart from the large aggregators/traders, such as NKW), happens through the wantok networks of traders or lead farmers living in POM who sell their produce through resellers. This resonates to the trader study done by NRI (2014) where they

found that the majority of traders are absentee landowners. The wantok network creates a safety net for informal traders in managing the supply, transport, overnight storage and trading at the end markets in urban centres. Additionally, the penetration of the local traders/large-medium aggregators in the relatively more remote locations is limited. Much of the trading is very opportunistic in nature, often unstructured and the profit margins are very high, which is often the cause of uncertainties in the market so whatever they can get is ideal. The informal structure and network described above is depicted in the diagram below.

Figure 6: Trading Network Structure for Perishables

End Farmers

Provincial markets like Hagen, Goroka, Chimbu, Kainantu

Local Lae Markets

Pockets of few Local Traders who buy and sell at the local market

Markets e.g. POM Products are either shipped or sent over air freight

Pockets of few local traders buy from the local market to sell in Lae (hotels/supermarket and large aggregators)

Lead Farmers Aggregate

POM based network of large aggregators like NKS, Tinigga

Local network and wantok connections of farmers/small aggregators

Supermarkets

Local wet markets

Local resellers (e.g. at Gordons)

Very few mid level traders (Western Hedges/CHFML)

Few large aggregators like NKW, Tinigga

Other markets (e.g. Mining townships)

Cost of going/travelling to market?: Transportation and market participation can be very costly for individual farming households. Due to the difficult terrain, transportation options to remote areas are limited. One can only take a public motor vehicle (PMVs), which is not conducive to carrying perishables. Poor road conditions result in fresh produce waste during transportation. Adding to the transportation cost (return fare for the passenger and a separate charge for the bags occupying space), the key cost in participating at the market includes - payment for a porter (e.g. 1PGK/ bag) to carry the bags in the market spaces, payment of approximately PGK 2 as a market fee, PGK 1-2 payment per

bag for storage (if sales cannot be completed the same day) and the market fee again for the second day. The cost can go up as high as PGK15 to bring one bag of produce down to the provincial market (as suggested by a key informant interview in Kundiawa). In some cases, interviewees mentioned that if a farmerâ&#x20AC;&#x2122;s stock exceeds more than five bags, they may even have to pay additional charges for public transport fuel costs. The cost of such market logistics further creates a disincentive for farmers to travel to the market. However, managing to get produce to the market does not guarantee that farmers will be able to sell. In most cases, farmers have mentioned that the chances of distress selling, over-supply

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

in the market, absence of sufficient buyers and high wastage during transportation often contribute to poor sales and deter them from investing in production. Assuming the cost to market, the returns do not justify the logic of investing in production. A range of market failures: In addition to poor road conditions, the cost to markets and absence of key specialist functions, the agriculture market in PNG is entrenched with other key market failures. Deeper diagnostic suggests the following: a. Dispersed and low population density coupled with difficult road conditions increases the search, transaction, negotiation and enforcement costs, for businesses, resulting in coordination failures and deterring private investment on formal specialised aggregation and trade functions. Undeveloped trade networks and marketing channels mean that farming households spend a considerable amount of time and expense selling their produce at the market, as highlighted earlier. Following food and social obligation, transportation costs takes up the highest proportion of income (more than 10%) for smallholder farmers. Lead farmers who aggregate produce often ship their products from Lae to POM by and then utilize their wantok connections (residing in POM) to sell their produce. Communities where traders are present, or farmers have come together to aggregate produce to sell to the larger markets, perform better.

The Tevaga Community in A’sehu village, Henganofi: One of the lead farmers in the village invested in a truck to buy vegetables from the community to sell in larger markets. The households in the community also coordinate their fresh produce production to ensure that all farmers can make regular sales in the market. The community leader believes that such entrepreneurial nature is what makes the village different to others despite the similar geographical and socio-economic conditions to the neighbouring village.

b. Limited, or an absence of, appropriate transportation and storage mechanisms contributes to high wastage and limited trade of perishable products. Post-harvest loss due to high wastage is very high and happens at multiple levels. First, carrying produce in bags/billums by way of 53

Interviews with NKW

KII with the Bismark Maritime Shipping

Sweetpotato value chain study, 2014.

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public transport, coupled with the bumpy roads results in damage. Interviews with farmers and companies like NKW indicate a high rejection rate of fresh produce resulting from inappropriate transport. Second, after mid- or largetier aggregators purchase produce from the farmers, they are often not aware of how to best handle and store the food stuffs (such as managing the right temperature for different crops) before moving the produce further up the transport link or even before final sales. Interviews suggest a loss of up to 40-50% at the depo53. Finally, there is a significant loss during transportation to urban end markets, which are usually shipped from Lae to Port Moresby by air freight. This process might take one day to transport to Lae, two days for loading, three days for shipping to POM, and one day for unloading – potentially taking a total of seven days54. During these seven days, the produce or marine products are often stored in local houses which do not have cold storage available, leading to high wastage. Reefer storage on shipping vessels is expensive, so traders often resort to ground transport, which further exacerbates the wastage situation. A study on sweet potato, the most basic PNG staple, suggests that the fragmented and informal trading’s storage inefficiency can account for more than 50% of total product cost. Produce transported from a Highland village to Port Moresby, paired with the post-harvest loss due along the transportation chain can be as high as 30-50% of the product shipped55. Interviews with the shipping agencies indicate that the proportion of fresh produce/perishables to total portfolio of their shipment is small (not more than 10-13%). Produce volumes are inconsistent so vessels do not have enough incentive to invest in more cost-effective cold storage options. The risk of high wastage and poor storage solutions often deters traders from continuing trading in fresh produce/perishables.

Key Informant Interview with a Local Trader in Obura Wonenara: Malak is a local retailer and supplier of fresh produce to Port Moresby. He used to supply large quantities to the local market and succeeded in obtaining an order of 10 tons of fresh produce from CPL. This was an important growth point for him but due to improper storage, the shipment spoiled by the time it reached POM. This loss cost Malak approximately PGK 65,000 and took him four years to recover.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

c. Oversupply results in poor prices, distress selling and wastage. Most households in a region have similar cultivation patterns which leads to a situation of localised oversupply. The cost to market for a small volume often prohibits farmers to go far for sale and when a sufficient volume is reached, most farmers move to limited selective markets which results in a glut. When a new crop is introduced, the initial returns are high but as soon the high returns are demonstrated, and other neighbouring farmers

pick up, a situation of oversupply occurs, diminishing the marginal return for households. This again indicates that there are only a few market pockets and farmers are not able to reach out to potentially varied and larger markets. Only in exceptional cases do farmers from poor coffee growing areas travel to sell vegetables to areas where there is more coffee production and less vegetable production. Such coordination is typically absent.

Farming Household # 17, Angalimp, Jiwaka province: A struggling household is involved in growing a range of crops, but they only receive income from coffee and cucumber. According to the Household, they were the pioneer to introduce cucumber in the area. In the initial years, they generated a high return but as soon as others started following, their returns dropped significantly. When interviewed, they mentioned that they sold cucumbers for PGK0.3/kg in the local market which is far lower than what companies like NKW offers for cucumber to their farmers.

d. There is a general lack of financial resources to invest in productive activities. The current financial services are not geared towards agricultural products or seasons, making repayment cycles difficult. Additionally, large traders often buy on credit and the delayed payments can take weeks and even months, which further limit farmers capacity to reinvest for continued production. According a study by ADB (2012), despite a loan to deposit ratio of 1:4 (which is mostly derived from wage earners and large formal enterprises), lending is poor. As per the last HIES, approximately 16.9% of the population have an outstanding loan (mostly in urban settings)56. This is rooted to high risk of default and banking costs; 10-12% of banking portfolio are found to be at risk. In the limitation to formal credit facilities, farmers often resort to informal channels for loans. The wantok system is important in PNG culture and acts as a social safety net for financial and non-financial support. However, the prevalence of the wantok system, with the cultural tradition of sharing rather than accumulating resources, may also pose a

barrier to investment. The household level section of this report goes into more detail on this topic. e. There is an information asymmetry at different levels. At the farm level, there needs to be more information available on the type of crops to produce, the best inputs to use and better communication between traders and farmers on the availability of marketable crops. Interviews suggest that places with greater exposure to training and information (e.g. through FPDA and DAL) such as Obura Wonenara (KII #4) have progressed relatively more in terms of introduction of new crops to grow such as bulb onions, agro-inputs to use and the crop protection products to use, although the inputs continue to be expensive and protection product supply is limited. Various interviews revealed that farmers often struggle to find information and guidance on the cultivation of new high value crops, particularly bulb onions and potato and how to mitigate disease for these crops.

HIES 2010

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Farmers rely on each other for advice on what worked, predominately discovered through trial and error, due partly to illiteracy and because they trust first-hand experience more. However, input information is often regarded as a â&#x20AC;&#x153;business secret,â&#x20AC;? so only close wantok farmers will fully share their techniques. In terms of sales, if farmers do not coordinate production, certain crops are oversupplied or undersupplied. Interviews with NARI and FPDA suggest that introducing new techniques is only useful when the inputs are available and do not take long to demonstrate change. The key problem to incorporate new techniques and inputs is the absence of markets. Farmers are also not aware of quality and grading expectations, which often results in loss or rejection. Traders and aggregators also behave as opportunistic buyers who do not engage in coordinating supply with farmers. f. Informal input trading is often irregular and prices are volatile. There are only a few big shops, like Brian Bell, that sell a limited number of inputs. Much of the input is used for high value vegetable crops and feed for livestock. Farmers often have to travel long distances to selective hardware stores in provincial markets to source inputs, which can be very expensive. For example, the price of broccoli seeds in the Western Highlands Province is as high as PGK 300 for a 100gm packet and a 500g packet of carrot seeds can be between PGK 600-1000. According to farmers, in most cases they use retained seeds or look for

cheaper alternatives and unless they find an affordable price, they cannot justify investing in these crops. Similarly, the cost of animal feed is varied and often quite high. The cost of formulated feed for pigs might cost up to PGK 90 per 40kg bag and only last for two weeks for one pig. This means only commercial farmers can afford to invest in improved feeding practices and most small holders are left out. Feed is so expensive because the grains are imported by large mills, such as Goodman Fielder and Mainland holdings. It is then distributed through major retailers, such as Chemica and Farmset. Given the small number of farmers investing in pigs, the supply is limited and the price can go as high as PGK 3000-4000 per animal. Some small businesses supply cross-bred pigs which grow faster.. However, given the costly and limited feed supply, the market has not grown to meet the demand of these type of livestock. With a diet of boiled kaukau, cassava and kaukau leaves, what most farmers feed their pigs, it can it take up to three years for swine to reach marketable size (based on an interview with NARI and FPDA). The inconsistent demand for these inputs (based on market price variables and financial constraints) also makes PNG farming supply companies vulnerable. Since farmers lack the appropriate information, expertise or desire for these specialty products, retailers are cautious to maintain stock and cover their risks with high pricing margins.

The Household Dynamics and Economic Outlook of Different Poverty Profiles This section explains the household dynamics and socioeconomic features of the different poverty levels by category. Each group manages their livelihoods differently and with consideration of the geographic and market conditions in which they operate (as described above). The financial status of the household is affected by a combination of economic and social factors that push a household either below or above the poverty line. Table 5 highlights the key features of rural households, under different categories, broken down in terms of Household dynamics and economic outlook, which are further elaborated below. Household dynamics includes a description and analysis of the household size, the number of income earning members, dependency ratio, proportion of expenditure

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on food and outlays on social/community obligations (as a percentage of total income). The analysis explains how these different factors interact to influence the socio-economic status of the households. Economic outlook analyses the economic condition in terms of income generation, crop production methods, choice of investments and household copying mechanisms. It includes the number of income sources and the proportion of the largest income source as a percentage of all income sources to be able to understand the spread of income that the household is reliant on; breakdown of the income sources and the combination of crops grown for subsistence and income; land use, productivity, return and the distance to market and coping mechanisms.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Table 5: Snapshot of Household and Economic Outlook of Different Poverty Profiles

Strugglers

(Extreme poor, below $1.90)

Nascent Entrepreneurs/ Dynamic Poor

Non-Poor

(above $ 3.10)

(Poor between $1.90 and $3.10)

Household Dynamics Average Household Size

Average Number of Earning Members

Dependency

70%

67%

62%

Child Dependency (Child/T)

46%

39%

23%

Household Expenditure on Food

51% (adjusted for own production)

42% (adjusted for own production)

13% (adjusted for own production)

(% of income)

45% (non-adjusted)

37% (non-adjusted)

10% (non-adjusted)

Net Support to Community (% of income)

Less than 5%

Approx. 20%

More than 40%

Total Number of Income Sources

Share of the Largest Income Source as % of Total

61%

56%

47%

Wage Job (19% of respondents), Vegetables (25%), Coffee (13%), Fruits (6%), Peanuts (6%), Livestock (13%), Small Trade/Business (19%)

Wage Job (0% of respondents), Vegetables (25%), Coffee (38%), Fruits (0%), Peanuts (0%), Livestock (13%), Small Trade/Business (25%)

Wage Job (0% of respondents), Vegetables (33%), Coffee (17%), Fruits (17%), Peanuts (17%), Livestock (0%), Small Trade/Business (16%)

Agriculture: 51%

Agriculture: 56%

Agriculture: 77%

Livestock: 14%

Livestock: 19%

Livestock: 11%

Other: 35%

Other: 25%

Other: 12%

Farmers grow on average 7 crops, but income is earned from 5 or fewer crops; Production is mostly for subsistence and some surplus sales

Farmers grow on average 5 crops and income is earned from approx. 4 crops; Greater commercialisation with some degree of specialisation is observed

Farmers grow on average 6 crops and income is earned from approx. 4 crops; Greater degree of specialisation/crop intensification and commercialisation

Approx. 1.6 ha

Approx. 3 ha

3 ha or more

Economic Outlook

Type of Income Sources that Make Up the Largest Share of Income (in terms of % of respondents)

% of Income Source per Category

Number of Agriculture Crops that Generate Income

Average Land Size used for Cultivation (Ha)

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Strugglers

(Extreme poor, below $1.90)

Combination of Crops Grown

Inputs and Return

Nascent Entrepreneurs/ Dynamic Poor

(Poor between $1.90 and $3.10)

Non-Poor

(above $ 3.10)

Staple (mostly sweet potato), Coffee (where soil permits), Peanuts, Fruits/Vegetables; vegetables range from 2 to even 8 varieties with a combination of mostly low value and limited high value crops in some places

Staple (mostly sweet potato), Coffee (efforts to sell parchment in most cases), Peanuts, and/or Fruits/Vegetables

Little or no input application Mostly low input crops are grown, and seeds are only bought if any high cash crop is grown

Greater input is used and there is an interest to move towards semi-mechanisation dependent upon cost, availability and information

Cost as a percentage of revenue is much lower indicating greater lower unit cost as production intensity and volume is higher and the crops grown are also high value

Cost as a % of revenue is approx. 8%

There is a shift towards more high value crops

Input cost and profit are both lowest/ha

Cost as a % of revenue is 16%

Input cost/ha is lowest of all 3 categories, but profit/ha is highest

Vegetables range from 1-5 high value varieties alongside some leafy greens for consumption

Staples, combination of Coffee and/or Veg/Fruits and/or Peanuts Vegetables/Fruits range from 1-3 high value varieties relatively in larger volumes or intensity

Input cost is highest of all 3 categories and profit/ha higher than the extreme poor but lower than non-poor

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Average Time Taken to go to Markets

41 mins

66 mins

46 mins

Social obligation remains a significant pot of expenditure and livestock is often a means to cushion against unexpected social expenses. Cultivation of crops that generate continuous income e.g. broccoli, peanuts, bulb onion, cucumber are a source of savings during the dry seasons. In cases of shock farmers generally take the support of neighbours and relatives

Livestock and small trading are key forms of coping in times of crisis. Additionally, income from high value crops or crops grown year-round allows for regularity in income.

Coping Mechanism

Wantok networks and livestock are important means for Household to cope against shock and in shortage of food they would rely mostly on credit from local stores. They have little room to save and reinvest and any form of shock such as illness or unexpected spending or key social obligation can push the entire household down the poverty line making Households highly vulnerable

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Households also rely on wage earning members in the city or other relatives in times of shortage of food or money

Size of the Household, Dependency and Labour Usage: The household dynamics show that Strugglers have a much higher dependency ratio (including child dependency) compared to the Nascent Entrepreneurs/Dynamic Poor and the NonPoor. Interviews suggest that this has implications on work: a higher number of young children in a family leads to more dependency on outside labour. This often deters farming households from choosing crops that require more care (like bulb onions) even if they have a higher return, and can result in forgoing potential harvest increase. This is particularly problematic in places such as Tambul in WHP and Angalimp in Jiwaka where labour can make up more than 50% of the

total cost. Households under all categories are reliant on two key income earning members, which puts additional pressure on families with more members or children under the age of 15. Dependency and labour usage affect land, expenditures and choices of investment. With a limited budget, much of the income is spent on food and there is often a higher opportunity cost for poorer Households on whether to invest money on economic activity or on education. There are cases where the cost of sending children to Lae or POM for higher education in itself puts a strain on households to the point that they are pushed below the poverty line. The case on Household # 31 from Tambul illustrates this scenario.

A Struggling Household The Household has six members with two earning members supporting the rest. The eldest son is completing higher education in Lae. The biggest household investment is education. Although the family grows some high value vegetables and raises livestock, they still struggle with income. They are not able to save any money after key expenditures, which include education costs for the son in Lae, social obligations (which as per the interview took up 48% of the income as per the timeline of analysis) and some basic living expenses. This deters them from making any further investment in production. The incentive is further hampered due to the unavailability of family labour and low return from the sale in local market. This particular household earned the lowest price/ kg for the same vegetable (as opposed to produce grown by a relatively richer household in the area) because the quality of produce was poor (resonating inappropriate use of inputs) and nearby markets have low prices. The Household also used too little feed for their number of pigs, which suggests that they were trying to cut corners to manage priority expenditures resulting in a very high opportunity cost.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Expenditure and Wantok Obligations: The data in the table above indicates that Households under the $1.90 poverty line spend the highest proportion of their income on food. This drops to 37% and 10% for the dynamic poor and the non-poor, respectively. This resonates to the classic characteristic of poorer households globally where the share of food expenditures in the budget remains high for small income and falls as income increases. For poor households, the expenditure on food in proportion to their income is high, however, the actual expense in absolute value is low. The key expenses that farmers have in a typical month include purchasing oil, salt, soap, one or two packets of rice depending on the household size and one or two tinned fish. The cost of tinned fish was between three and five PGK per can, while the cost of one pack of lamb was PGK 15 and one whole chicken cost PGK 25-30. Households purchased one or two meals with protein every fortnight, with the choice of protein based on the income that the Household generates that month. Other key expenditure categories that influence the socioeconomic structure of the household i are education, especially in the earlier years of a family member’s higher education, and wantok/social obligations (17% of total income). One critical primary research finding, supported from secondary literature, reveals that a Household’s wantok obligation is income-dependent. The poorer a family is, the less they must contribute and the richer a family is, the more they must contribute. This social structure is similar to a taxation system and higher income earners are expected to support their wantok during food shortages and for social obligations such as bride price or funeral services. The mature entrepreneurs/non-poor pay more than 40% of their disposable income on social obligations whereas nascent entrepreneurs/dynamic poor and the strugglers pay 20% and 17% respectively on social obligations. Contribution to social obligation is perceived as a progressive tax system for richer households and puts a strain on their savings and investment capacity. It acts as a social safety net for the poorer households and is currently very much expense based, as opposed to accumulation of resources or investment. MDF takes this knowledge as an opportunity to investigate the scope the wantok system further and explore the possibility of channelling this fund into investments for poorer households while being mindful of the social implications. It is important to note that the wantok relation is also an important trading thread for farmers. Most farmers, or lead farm aggregators, use their wantok relations to sell produce in different locations, including major markets, and to minimize the transaction and search costs. Income Sources, Land Use and Farming System: Smallholder farming households operate as a single economic unit where both male and female members are involved in the production

44 |

while crop sales are largely managed by women. Any change in income affects all members of the household. No single income source or crop production enables households to move out of poverty, but rather a combination of crop coupled with non-agricultural activities. Livestock is regarded as a key source of liquidity in times of shock. Most households practice rain-fed agriculture and the key production method is shifting toward cultivation. However, there is an increasing number of household vegetable plots. Farmers engage in mixed cropping, such as cassava and corn, which are mostly low-input and low-output in nature. However, diversification hedges against the risk of periods with no other alternatives (either very dry spells or very wet seasons in which nothing else can grow). In many parts of PNG, high levels of moisture can be a problem when drain construction (e.g. use of mounds for sweet potatoes and yams) removes excess water from crop roots. Primary research shows that all farming households have six to seven income earning streams, but the combination of income and farming systems varies between poverty categories. • Strugglers: Households in this category derive 51% of their income from agriculture, followed by small trade/ business and livestock. It is important to note that more than 60% of their income comes from a single source (which is largely reported to be either vegetables, coffee, livestock or small trade, such as buai sales) which is inflexible and limiting. Any major shock to that particular income can be a devastating blow to a family’s finances. In terms of agriculture, farmers usually use on average 1.6 ha of land and grow up to seven crops, of which only five or fewer bring in income, indicating a subsistence nature of production with produce only sold when there is a cash need. These Households grow a combination of crops in small quantities, such as coffee (where relevant), vegetables (mostly low-value, but possibly with one or two high-value crops in low volume) and staples. Peanuts are often grown for improving soil quality and to supplement income during the dry season. The choice of crops is based on what can grow quickest, needs less input and can be sold quickly. Input is generally spent on very selective high cash crops and there is little room for specialisation. Family labour becomes less reliable with higher dependency rates. Households in this category may buy some seeds for high value crops (if any) and then retain and replicate spores for the following two to three cycles or more. In this category, labour is hired for land clearing and harvesting for coffee, but often farmers struggle to expand production due to high labour cost. No other inputs are used as these households may not know about them or be able to afford them and the production is subsistent in nature. The low production volume forces farmers to sell in local level markets as the cost of transport and market fees are prohibitive.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

â&#x20AC;˘ Dynamic poor: This group uses an average of 3 ha of land and have more income-generating sources (as depicted in Table 5). At 56%, agriculture forms the largest share of income sources. Out of an average of five crops grown, they derive income from four. Farmers grow a combination of coffee and/or vegetables (ranging from 1-5 high value crops) and staples and peanuts. The cultivation of high value crops and semi-processing of raw materials sets them apart from the Strugglers. The relatively more enterprising attitude of farmers helps them gain more income earning opportunities. For instance, farmers in this category buy green cherries, which they then semiprocess into parchment for sale. They also invest more on inputs or improved practices, such as mulching vegetable patches, plating in batches to ensure they have produce to sell consistently and rearing livestock from their (even if they are small in nature). Some have also cooperated with their family members who live closer to the market to grow select vegetables on their land and travel there only for harvest and sale. The households interviewed in this category use fertilisers and pesticides for crops. They have expressed interest in semi-mechanisation for expanding land (given the high cost of labour) if cheaper technologies were available. Compared to the strugglers, this group of farmers have more access to information on crop production. Additionally, households in this category are involved in small trade either, working as small aggregators of fresh produce, selling cooked food, etc. to smoothen and diversify income earnings.

â&#x20AC;˘ Non-poor: The share of the largest income source as a percentage of total is even smaller for this category of households. These Household use more than 3 ha and their income is derived largely from agriculture (77%)- four out of six crops they produce generate income. This group is not reliant on a limited number of low value crops and they enjoy more commercialisation and intensification. This category grows a combination of crops such as coffee, high value vegetables (between one and three varieties) alongside staples and peanuts. They can afford to invest in crop inputs. They have access to more information than the other groups and in many cases, family members may be ex-extension officers or someone with connections to large supermarkets and can provide handling price insight, etc. Despite high input costs, this group has the highest profit per ha because they have higher volumes of quality produce. Unlike the Strugglers, the dynamic poor and the non-poor have production systems that allow for more periodic production rather than just opportunistic production and sales. Households in this category raise livestock for income and protection against shocks; they invest in small trade/businesses e.g. trade stores, flour balls, mobile sawing service, coffee pulping etc., the income of which is channelled back to support daily expenses and investments into productive activities.

A comparative case of the above scenario: Interviews with 3 farming households in Tambul from different socio-economic categories growing the same crops (Broccoli and Cauliflower) with different outcomes. The struggling farming Household used a relatively larger plot of land but the productivity in terms of kg/ ha was nearly two to three times lower compared to the dynamic and non-poor households. The struggler Householdâ&#x20AC;&#x2122;s sale price was relatively lower because the quality did not fetch a high price and they sold in small quantities at the local market. Additionally, the cost/ha of the dynamic and non-poor Households is also higher. Further diagnosis showed that the intensity of production (seed/ha) and the practices used by the non-poor and dynamic household were slightly different as they resorted to better handling practices. The head of the non-poor household was an agriculture extension officer, giving him more information on better cultivation practices. In terms of production inputs, both the dynamic poor and non-poor household were able to leverage existing unpaid labour, unlike the struggling household which had a large dependency.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Market Channels and Distance to Markets: The travel time to market, as depicted in Table 5, is not always a true indicator of socio-economic status. Shorter distances suggests that farmers under the Strugglers category generally sell their produce in the nearby localised village markets as the low input and low output produce does not justify investments to take the produce to larger markets. Only when they have a large quantity would farmers take produce to bigger markets such as Hagen, Goroka and Lae. However, larger markets do not necessarily mean higher prices; farmers would take produce to larger markets to avoid localised market glut. There is still a caveat in that the larger markets, such as Hagen, do not always allow for absorption of all produce and poor-quality produce is often unsold or farmers end up resorting to distress sales. Interviews suggest that the majority of the strugglers sell coffee either on the road-sides or to some local traders (reducing the risk of bearing cost to sales); whereas, the dynamic poor and the non-poor either sell either directly to the factories or to the traders/coffee aggregators (who are also in many cases from the same group) enabling them to draw relatively higher prices and less transportation costs. For vegetable production, there is a clear difference in sale points. Strugglers sell mostly to direct consumers (local government officers/churches/institutions) in the local market and some sell to village-based traders. Only a few sell to city-based traders. This again reflects the opportunistic, low quality and volume of produce that would be insufficient for larger markets. On the other hand, most dynamic-poor households sell their produce to city-based wholesale traders. Similarly, the non-poor generally sell their produce to larger markets to city-based retailers or wholesale traders. Reinvestments and Coping Strategy: Support from wantok networks and livestock sales help Households cope with financial shocks but risks and opportunity cost in the strugglers category remains very high. For example, if these households invest in education, it will often limit investment in other crops. Alternatively, investment in one crop may mean less food for a certain time. They have little or no room to save and reinvest and are highly vulnerable. Any form of shock, such as illness, unexpected spending or key social obligations can push the entire household below the poverty line. The example from household # 8 below demonstrates this case. Dynamic poor Households, on the other hand, manage to save some but the risks and prospects of markets prohibit or influence their investment decisions. Earnings are generally reinvested into education and into high value crop production and livestock. Dynamic poor are also seen to invest in semi-

46 |

processing (e.g. coffee) or improved cultivation techniques and also take up small localised farm level aggregation functions to pool produce and sell to traders in bigger markets. A couple of households interviewed mentioned investing in small plots of land closer to the market to grow high-value vegetables, like cucumber, to cut down on transportation cost. Interviews also suggest their growing interest to invest in basic mechanisation for improving farm efficiency, provided there is a regular market for sale. Mature entrepreneurs/nonpoor invest in greater crop production and use more land and livestock. They have more disposable income which they either save or invest in improved housing, solar lighting, etc. For the most part, investments by all are either made from disposable income or from informal lending by relatives (the interest of which can vary from 30-50% or more) and there was no mention of taking a loan from a bank. It is interesting to note that 33% of the respondents mentioned using bank accounts to save money but none of them have borrowed money. Anecdotal evidence suggests that a record of savings is insufficient to apply for a loan. Additionally, many respondents did not have a bank account at all and attributed the location of the banking service, charges/fees associated with opening and running an account, interest charges not suited to their cycles and paperwork affected this decision. Women especially mentioned issues with literacy and the use of bank cards. Livestock is considered a major resilience strategy for all households and the more income they have, the more they invest in livestock to ensure a base of liquid assets that can be sold in times of shock or need. In some interviews, researchers gathered that livestock is also raised to compensate for any loss in vegetables (either due to poor prices or wastage due to heavy water content in the soil). During times where cash is needed, the strugglers usually cut down their consumption of rice or tin fish, limiting only to what they grow in the house and if that is not sufficient, they buy food on credit or mostly rely on in-kind or informal lending from relatives/wantok networks. Peanuts are also a key source of income during the dry season. For the dynamic poor, livestock remains a key reliance strategy; informal trade is a way to cover daily expenses and the production of different crops (such as vegetables) is a way to ensure that income is generated throughout the year. Relatives, however, remain an important support function in times of emergency. Similarly, the nonpoor rely mostly on livestock (pigs) and crops that ensure year-round supply of funds. If this is insufficient, they draw on their savings or turn to their relatives (e.g. children or nephews) working in the cities for support.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Struggling Household # 8 from Obura Wonenara, EHP- the Effect of Shocks on Struggling Households. A family of six, where the female head of the Household is the key breadwinner, grow six different crops and rears livestock. The Household has been struggling to make ends meet as they have to contribute to a tribal fight compensation for the last four years and a bride price of PGK 500 along with bananas worth PGK 180 in the past year. The situation has gotten worse, as the wife has been sick for the past year, limiting the householdâ&#x20AC;&#x2122;s ability to make any savings let alone investments, beyond recovering from the shocks and meeting basic food and medical needs.

Mature Entrepreneurial/Non-Poor Household # 6 from Henganofi, EHP- Greater Income leads to Positive Dietary Outcomes. A family of eight with multiple agri and non-agri income sources sells coffee, sweet potato, carrots, irish potato and cabbages (which contribute to the highest income). The Household grows cassava and corn for their own consumption. The Household applies a range of inputs to their farm and the family in general is very entrepreneurial. The husband either sells to a village trade or aggregates produce to send to POM via Lae and he himself travels to POM to ensure sales through their wantok networks, while the wife manages the gardens and livestock. Additionally, three major developments had positive implications on the Household and the village at large. First, in 2007 a number of farmers attended a FPDA training, following which they began cultivating vegetables such as cabbages, potato and carrots for sale. Second, presence of a middleman in the village encouraged farmers to continue sales and third, improvements in road condition in 2009 led to more frequent visits by PMVs allowing people to transport fresh produce relatively easier. All these factors combined have not only helped smoothen cash flow earning through the year for the Household but have also improved their diets. The husband mentioned â&#x20AC;&#x153;Because carrots, broccoli, cabbage, bulb onion and potato give us a lot of cash, we have cash throughout the year. Previously we relied only on coffee but as we have a good road and a village buyer, we can grow these other crops. Prior to growing these crops, we struggled to buy household items, we would only eat rice during the coffee season but now we can eat rice whenever we want to; in fact, we now eat rice every week.â&#x20AC;?.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Poverty Dynamics in the Urban Areas

Overview of Urban Areas According to the 2011 PNG census, the country’s urban population increased by 38% over 10 years, about 40% of which are migrants from rural areas. The two major urban centres of PNG, Port Moresby and Lae, have 78% (about 706,000) of the urban population. About 40% of the population in Port Moresby live in settlements57, while those who are originally from Lae/NCD live in villages within the city. Settlements visited by the MDF PNG team consisted of households from different provinces, with people from the same province living together in a cluster, making their own wantok. Of the villages visited by MDF in the urban centres, the residences were all originally landowners in the area and are from the same wantok. Within the sample of locations covered, new settlements and relatively old settlements were chosen to understand the differences for people who may have migrated recently. Community Structures: All households interviewed have been in these settlements for the past five years at least and are either landowners or have built their own house in those areas. Nearly 70% of the households interviewed either send one of their family members or they themselves visit their relatives in the provinces at least once a year. The reason 57

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one may visit ranges from a regular yearly family visits, to social obligations to religious festivals. The settlements are mostly comprised of people from different provinces. They select community leaders to represent their provinces or clans who are part of a law and order committee specific to the settlement, responsible for managing peace, resolving disputes and making decisions. Key informant interviews strongly suggest that conflicts occur within all communities and therefore, there are community mechanisms put in place by the community leaders to control conflict, unlawful activities and crime. The highest incidence of dispute results from disagreements over land or water, followed by disputes over domestic violence, physical assault and theft (HIES, 2010). Disagreements are generally resolved or mediated within the community and only escalate to the formal legal system if it gets out of hand. Some settlements have community magistrates to preside over conflicts and there are some settlements such as in Burns Peak in POM, that have Ward Councillors who represent their communities in the local government. There are also women’s organisations in the settlements that represent women’s issues and help them conduct micro or informal trade.

PROJECT INFORMATION DOCUMENT (PID) Urban Youth Employment Project

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

In most settlements, there is a communal water supply with water taps located in the main centre. The communal committees carry out activities, such as arranging the collection of utilities rent from their clusters or organizing various community activities. In one community in Lae, the leaders also try to control the prices of various items sold to mitigate the risk of exploitation. They even encourage men not to sell cooked food so that women can earn from those activities. In all settlements, the church is significant influence and is a source of encouraging more economic activities. Income Earning Activities: The main income earning activities in the settlement are informal trading, mostly in the form of producing garden produce for sale, reselling fresh produce (from main market to settlements) and table markets selling betel nuts, beverages, snacks and cigarettes. These activities are mostly led and managed by women. As detailed below in the economic outlook, households in the urban areas derive their income from multiple sources and like in the rural areas, there is no single source of income that lifts the poor out of poverty. Households generally rely on multiple income sources with a combination of wage employment and informal trade. Informal activities are also a lucrative option given the low entry and exit barriers with no legal implications (e.g. licences or fees). Interviews also indicate that income from casual and wage employment is seen as a means of

gathering capital to set up small or micro informal business such as room rentals, livestock rearing (mostly poultry and pigs), floriculture or small trade-stores that allows them to meet daily needs. Wage employment acts more as a cushion to enable households to earn a consistent or reliable income on a regular basis. Given the low absorption of labour in the urban centres, many people rely on informal income earning sources which include production and trade of illegal products such as home-brews and marijuana, as it provides quick money for the youth. A few interviewed households provided insight on young household members involved in such as activities and others who are struggling to pull them out. One of the key informant interviewees in Lae mentioned that the production and sale could go as high as 10-15 home brew containers of 500ml per day sold at PGK10-15/bottle. The prevalence of alcohol and drugs contribute to activities that cause disorder in the communities. Settlements that have access to land earn from farming while those close to the sea earn from fishing. Settlement population is increasing and this is starting to put pressure on the availability of land. Hence the price of rentals (rooms for rent) is raising and is considered a good source of income.

Example of negative externality of youth unemployment in urban settlements (Key Informant Interviews in Lae and POM): One of the community leaders emphasised that unemployment is a huge problem for the youth and as a result, many of them get involved in illegal activities (such as home brewing) to generate income for their daily survival. Despite consultations and strict legal repercussions, such activities continue. Another community leader said that as these activities persist, women’s mobility has become limited and unsafe in the community.

Household Dynamics and Economic Outlook of Different Poverty Profiles in Urban Areas This section explains the household dynamics and socioeconomic features of the different groups of urban poor and the way households in each of these groups manage their livelihoods. For the purpose of the research, MDF focused on Lae and NCD. Just as in rural areas, the combination of income and number of income sources are key factors that separate poor from non-poor households. Occupation is also a crucial factor. With a specialization in a profitable informal trade, supplemented with wage income from skilled or unskilled employment, can be a pathway out of poverty; although return from skilled employment is roughly 25%

on average. The interviews indicate that extremely poor households struggle to enter the labour market, a claim supported by existing literature on PNG labour market. The urban poor analysis is divided into three types of households. There are the “strugglers.” who are the poorest of all the categories earning less USD 1.9/day, the “nascent entrepreneurs/low skilled job-holders” who are the equivalent of the dynamic poor in the rural areas earning between USD 1.9/day and USD 3.1/day and the “mature entrepreneurs/ skilled job holders” who are non-poor in nature. It is important

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

to note that the sample of strugglers is much smaller and hence a better comparison is between the poor and nonpoor households.

and outlays the social/community obligations spending as a percentage of total income. The analysis explains how these different factors interact to influence the socio-economic status of the households. The economic outlook analyses the economic condition in terms of income generation, types of income sources, choice of investments, coping mechanisms of households and what distinguishes different groups of households especially in their means of accumulating capital.

Table 6 summarises the particular features of the different household categories. As in the rural poverty analysis, the household dynamics includes descriptions and an analysis of the household size, the number of income earning members, the dependency ratio, the proportion of expenditure on food

Table 6: Household Dynamics and Economic Outlook in Urban Areas

Strugglers

(Extreme poor, below $1.90)

Nascent Entrepreneurs/ Dynamic Poor

Non-Poor

(above $ 3.10)

(Poor between $1.90 and $3.10)

Household Dynamics Avg. Household Size

Avg. # of Earning Members

3.4

2.4

Dependency (NP/T)

55%

66%

61%

Child Dependency (Child/T)

15%

35%

20%

Household Exp. on Food (% of income)

51%

34%

33%

Household Exp. on Utility

22%

Household Exp. on Edn.

10%

Household Exp. on Transportation

21%

Net Support to Community (% of income)

-6%

-5%

17%

Total # of Income Sources

Share of the Largest Income Source as % of Total

60%

67%

71%

Income Sources

All respondents mentioned having informal trade/small business as a key income source, while 67% of the respondents mentioned casual wage from casual labour or period work as another income source

All respondents mentioned having informal trade/small business as an income source, while only 86% of the respondents mentioned wage as one of the income sources

All respondents mentioned having informal trade/small business as an income source, while only 55% of the respondents mentioned wage as one of the income sources

Economic Outlook

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Strugglers

(Extreme poor, below $1.90)

Wage as Source of Secondary Income (% of respondents)

Average Time to go to Markets

Coping Mechanism

Non-Poor

(above $ 3.10)

(Poor between $1.90 and $3.10)

Mostly trade stores and informal trade58

Small businesses such as carpentry/room rentals/ pmv ownership/poultry rearing/door-to-door gardening services followed by informal trade and fishing

Most of the respondents mentioned informal trade as the highest source of income followed by small businesses such as managing trade store, renting rooms or generators, rearing livestock, floriculture and fishing. Informal trade comprises of fresh produce trade, table market sales of betel nut, smokes, water, beverages, snacks, etc.

33%

29%

82%

Of those with wage income, 33% mentioned wage as the secondary source of income

83% of the respondents in this category mentioned wage as the secondary source of income

Of those with wage income, 100% mentioned wage as the secondary source of income

Wage earnings comprise an average 39% of their total income earned

Wage earnings comprise approx. 24% of the total income earned

Wage earnings comprises approximately 31% of the total income source

13 minutes

19 minutes

15 minutes

All households mentioned saving a portion of their income for emergencies and in times of need, they borrow only from family members or relatives

All households mentioned saving a portion of their income and more than 50% of the Households mentioned that savings is done for customary obligations. In times of shortage, none of the households mentioned of borrowing money from the bank; rather they borrow either from relatives or informal money lenders or in shortage, they buy food and household necessities on credit

All except one Household mentioned that they do some form of savings for either emergencies, to build a house, reinvest in their trade and/or customary obligations. Only 54% of the respondents said they take loans and with the exception of one, all Households receive those loans from relatives. Wage is seen as a critical source of income smoothening when there is a shortage from other sources

Type of Income Sources that make up the Largest Share of Income (as prioritised by respondents)

Informal Trade as a Major Source of Income (%)

Nascent Entrepreneurs/ Dynamic Poor

Informal trade comprises of fresh produce trade, table market sales of betel nut, smokes, water, beverages, snacks, etc. Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Strugglers

(Extreme poor, below $1.90)

Investments

Nascent Entrepreneurs/ Dynamic Poor

(Poor between $1.90 and $3.10)

Non-Poor

(above $ 3.10)

Across the board, the majority of respondents said that income from wage employment is their way to save and invest in their informal trade or they use their income from petty trade to expand into other forms of trade. Then, they will borrow from family members of relatives. Informal trade is seen as a source of regular income to meet daily family needs and informal trade does not require any formal skills nor are there any legal requirements.

Household Demographics and Expenditures Demography and Dependency: Table 6 summarises household demographics. As mentioned above, the number of struggling households interviewed was much smaller compared to the other categories and hence, the comparison between the poor and non-poor households (that is, the non-poor mature entrepreneurs and the other two categories) offers greater insight. Non-poor households have relatively fewer household members and as the table indicatives, non-poor households have a lower dependency ratio. Neither the average household size or dependency is a major issue affecting poverty in the urban areas. What is more important is the number of earning members in the household and the combination of income sources (which is discussed below). Although the Household size affects expenditure, the key distinction is the combination of income sources. Household Expenditure: As in the rural areas, the non-poor households’ share of income spent on food is relatively less than the poorer households, whereas the share of income spent on community or social obligations is disproportionately higher. The average annual Household expenditure is significantly higher for urban households compared to rural households. Across the three categories, the average annual Household expenditure in the urban areas is double if not more than that of the rural areas. For example, in the rural areas the average annual expenditure of households in the category of struggling households is approximately PGK 5,400, whereas in the urban areas, the strugglers have an annual Household expenditure of PGK 10,900. Detailed analysis shows that across all categories of Households, food take up nearly 35% of the total Household expenditure followed by alcohol/buai consumption (20%), transportation cost (15%) and utilities (9%).

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The utilities, transport and education cost structures further differentiate the Household categories, as seen in Table 6. The utilities cost category comprise of an electricity cost and spending on fuel for cooking and water, which is generally woodchips, firewood and kerosene. While electricity cost is similar across poverty Household categories, which groups use firewood and kerosene vary as some groups cook more often over an open flame, which is less efficient. The research suggests that the more money a household has, the more they will spend proportionally on education. The proportion of household transportation expenditure varies: (a) if the informal trade involves buying and selling across different locations, the cost of transportation is higher and (b) the relatively less poor households spend more on visiting relatives and families in the provinces. Family ties to rural areas can also act as a trade network to bring and sell produce. Housing and Access to Services: Interviews with the Strugglers show that people in this category live in poor conditions with little or no access to electricity or decent sanitation facilities, thereby increasing the likelihood of facing health shocks. Households in the category of “nascent entrepreneurs/low skilled job-holders” have relatively better housing, often with wooden posts and proper walls. Households in this category have access to water and some electricity (either free or managed through informal channels). Unlike the other two categories, mature entrepreneurs or non-poor households live in better conditions and their houses have covered walls and iron roofing as well as access to electricity, water and sanitation. The nascent entrepreneurs are the net receivers of community support, while the non-poor households are a major contributor to as a substantial amount of their disposable income goes back to the community, similar to the rural areas.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Combination of Income Sources Urban households have an average of three to four income sources, but is more important the combination of the type of income sources. Households have a combination of informal income sources or informal and formal wages. Informal income sources are largely table marketing of products such as betel nuts, cigarettes, drinks or other fast-moving goods or trading fresh produce, fishing and gardening. Wage income is largely comprised of casual or formal jobs such as those in the construction and hospitality sectors. Informal income allows for weekly cash flow regularity to support daily necessities whereas formal jobs are a reliable source of income to support large fixed costs. Wage jobs are also seen as a mitigation strategy in cases where informal trade income can be variable. Women mostly engage in informal trade to support the daily cash needs. Jobs in Urban Areas: Interviews (both in-depth and key informant) suggests that most of those with formal jobs have zero to one year of experience with annual earnings of about PGK 9,500 per year. These are mostly entry level jobs and require low skill base. Many of the jobs in the urban centres are either in the informal economy or are a combination of casual or formal labour in the construction, wholesale, retail and hospitality industries. There are also some employment opportunities in the processing units of some FMCG companies like Coca Cola or Paradise Food. In almost all cases, the employing organisations provide basic on-the-job-training. As employees gain experience and their skill level increases, so does their income. Some jobholders would pay for such training to increase their skills but lack the time or funds to do so. The annual income of an employee with two to five years of experience can expect to earn PGK 13,000. Informal Activities: The low barrier to entry and exit this field due to little or no required skills, documentation, licencing and taxation means that people can relatively easily set up informal businesses. All the households in the urban sample are involved in some kind of informal business activity, and this is generally their highest income earning activity. There are no specific differences in the types of informal businesses that poor and non-poor households carry out, but the differences generally affect the scale of the business. People generally prefer informal business activities with fast turnovers, and those that do not require experience/skills. However, if a person has a special skill, they prefer to make their living in that way, as in the case of fishermen and carpenters. Business investment sources mostly come from formal jobs or wantok contributions, the next popular investment source are other businesses. Only the non-poor are will take a bank loan for a business and usually this would be for a business activity that generates a lot of income e.g. PMV business. The ability to channel savings from one income source into investments is indicative of a pathway out of poverty.

Wage income channelled for investments in informal trade/business (examples from Household # 3 and 14). Household # 14 in Lae: In this household, while the husband is engaged in a formal wage-earning job as an equipment operator, the wife is involved in informal trading and table marketing. While informal trade is seen as a regular cash generator, much of the capital for buying inputs for this trade is often derived from the husbandâ&#x20AC;&#x2122;s savings when the cash for reinvestment from the informal trade income is low. Household # 2 in NCD: The head of the household accumulated savings from his wage employment to invest in the construction of a room for rent, the proceeds of which was channelled to expand further.

All businesses face cash flow shortages mainly due to people purchasing items on credit. Business activities, such as trade stores and informal trading (e.g. selling daily items but without a store, probably just on a table in the market or in front of the house) quickly face high competition as these have the lowest entry barriers. Other challenges include: spoilage for the fresh produce and fishing businesses and high transport costs for informal trading business or selling cooked food. Security issues exist but are only considered a significant hassle for large-scale trading or for PMV business. In the urban areas, land availability is an issue that places a strain on agriculture-related business. People recognize the benefits of diversifying their businesses but tend to struggle with start-up capital, or (especially if the business is new) not having the right knowledge about markets or the skills necessary for carrying out the business The following looks at the nuanced differences in income sources for different categories of households: â&#x20AC;˘ Strugglers: These are households with limited income, and as such try to diversify as much as possible to make ends meet. They struggle to gain formal employment and are mostly reliant on informal activities or casual labour. Informal activities include selling fresh produce, snacks, water, or other types of table marketing. For all households, informal trade forms the primary income source. Of the households interviewed, two-thirds mentioned wage (mostly casual labour) as a source of income and of those, it was still only 39% of their total income. Table 6 also

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

shows that only 67% of those with wage income consider this job to be a primary source of income although it does not earn the most money from their income generating activities because they can rely on it more consistently. Of the total number of members of the households interviewed, 37.5% did not have any education, which is much higher compared to other categories of households. This has implications on the type of jobs these household members can secure, having greater reliance on small informal trade. â&#x20AC;˘ Nascent Entrepreneurs/Low Skilled Job Holders: Households in this category have four income sources on average and all respondents mentioned informal trade/small business as an income source, while 86% of the respondents mentioned wage as one of the income sources. Wage income is either from low skill casual work or formal employment such as a cook, hotel waiter or oil company staff. Most of the respondents interviewed under this category mentioned wage as a secondary source of income that contributes to roughly 24% of their earned income. The type of work that makes up the largest share of income includes small businesses such as carpentry, room rentals, gardening, informal trade and fishing. It is also interesting to see that the total number of earning members are higher than the strugglers and the proportion of family members completing grade five and above and the number of members completing college or vocational education is also higher than the struggling households. â&#x20AC;˘ Non-Poor/Mature Entrepreneurs/Skilled Job Holders: Households in this category specialise in informal trade with some household members engaged in skilled casual or formal wage labour market such as machinist, equipment operator, quality control assistant or hospitality staff. All

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respondents mentioned having informal trade/small business as an income source, while only 55% of the respondents mentioned wage as an income source. All households earning wage income mentioned that it is the secondary source contributing to roughly 31% of total income. Most of the respondents mentioned informal trade as the highest source of income, followed by managing trade stores, renting rooms or generators and fishing. Informal trade comprises of fresh produce trade and/or table market sales of betel nut, cigarettes, water, beverages, snacks, etc. Of the respondents in this category, 64% mentioned wage as the secondary source of income, making up approximately 31% of the total income source mostly derived from formal wage employment. The Household category has an average of three incoming earning members. There is a larger proportion of households completing between grade 5-10 and a larger proportion of household members completing college or technical vocational education relative to the other groups. Most households are of enterprising nature with a vision to make further investments. It is important to note a distinction of wage employment between the three groups. Although the proportion of Households mentioning wage as a primary income is higher for struggling Households relative to the other groups, the share of income to total is not very high. This is particularly rooted to the type of jobs they do which is mostly casual labour (e.g. welder in steel industry). Households earning between 1.9 to 3.1 USD/day were seen to derive their wage income from a combination of casual and formal employment but in case of the non-poor Households, all of the wage income comes from formal employment such as school teacher, sales assistant, housekeeper at large hotels or positions at processing units which all require a certain degree of education or skill set relative to others.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Savings, Investment and Coping Strategy The pattern of savings, investment and coping strategies of different categories of households is as follows: • Strugglers: Households in this category are not able to save much and are vulnerable to external shocks. Any savings are kept aside for emergencies and in times of need, the group borrows only from family members or relatives. The reliance on small informal trade means they are only able to support some daily cash needs with little reinvestment capacity. At the same time, the inability to invest in education or skills mean they are not able to secure better skilled jobs and often have to resort to informal jobs or low paid casual work, resulting in greater desperation for other informal activities. • Nascent Entrepreneurs/Low Skilled Job Holders: All households mentioned saving portions of their income and more than 50% of the Households interviewed said this is done in case of emergency or customary obligations. In times of shortage, none of the households mentioned borrowing money from the bank; rather from relatives or informal money lenders. In times of shortage, they buy food and household necessities on credit. Much of the potential for savings is affected by unplanned expenditures, late payment from credit clients, poor sales or poor prices result from market oversupply. • Mature Entrepreneurs/Non-Poor: All except one Household mentioned that they do some form of savings for emergencies, or to build a house, support higher education, reinvest in their trade/business and for customary obligations. Only 54% of the respondents said they take loans and except for one Household, all of these loans came from family members or relatives. Wage is seen as a critical source of income smoothening when there is a shortage from other sources. Some of the key factors affecting income include poor sales and spoilage, glut in the market from increased number of suppliers and unplanned expenditures for social obligations. In times of shortage or strain on income, households reduce their consumption, rely on family members or draw on regular wage income. Households in this category are much more entrepreneurial in nature and have a vision to reinvest in existing or new income sources.

Plan for reinvestments by Mature Entrepreneurial households. Household # 15 in NCD: The head of the household works as a professional assistant at a government establishments and on off days, he goes fishing and sells his catch in the local market. Although the latter is a fall-back income option in addition to his wage income, he plans to invest in a dinghy and motor with his retirement entitlement so that he can catch fish in larger volumes and sell to the restaurants. Household # 3 in NCD: The household’s main source of income comes from fresh produce trading, specifically buying fresh produce from the largest wet market in POM and reselling to other smaller markets. The household is entrepreneurial and attempts to save some for reinvestment. The male head of the household started off as a security guard when he first moved to POM from the Highlands in 1993. He saved from his salary to invest in his informal trading business, which he started in 1997. He used the capital to initiate fresh produce trade and continues to channel the returns back to expand the volume of business.

Across the board, most respondents said that income from wage employment is a way to save money and then invest in an informal trade, the income of petty trade can then be used to expand into other trade areas. Business expansion is possible after borrowing funds from relatives. Informal trade acts as a source of regular income to meet daily family needs and informal trade does not require any formal skills or have any legal requirements.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Poverty Dynamics in the Tourism Sector

Overview of Tourism Areas Tourism is a relatively small sector in PNG, making up only 1.9% of the GDP in 201659. Nonetheless, it is one of the key formal job providers in the economy, directly and indirectly employing approximately 1.7% of the total workforce, making up approximately 52,500 jobs60. The economy in PNG is dependent on either natural resource extraction (for government income) or on agriculture (for the majority of the population). Given its relatively weak manufacturing industry and the slow-down in construction, tourism is a critical area for job creation both in urban areas as well as in remote locations where access to larger markets to sell agricultural produce, or agricultural productivity in itself, is low. From 2011 until 2016, the sector grew an average of 5% per annum61 and it is projected to grow at a steady rate of 5.4 % per year between 2017 and 202762. A spike in the number of cruise ships coming to the country gives much needed exposure to the countryâ&#x20AC;&#x2122;s tourism potential. However, the sector generates most of its income from niche adventure

tourism, business visitors and PNG residents visiting the provinces. The international visitors survey conducted by TPA, in collaboration with IFC, showed that the total visitors to the country reached 86,403 in 2017 while the visitors coming for holidays in PNG stayed for an average of more than 10 days in the country. On average, visitors spent USD 231 per day and at least 50% of that went into the local service industry. The cash inflow from tourism into households comes through job creation, small enterprises as taxi owners, tour operators, fishermen, fresh produce suppliers, handicraft sellers, informal traders and through community fees from the visited tour sites. Additionally, given the remote locations of some of the tourism sites, tourism businesses provide additional services to the local communities through their established supply chains such as that of fuel, medicine or food items.

59 World Travel and Tourism Council, 2017 https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2017/ papuanewguinea2017.pdf 60

ibid

World Bank Group, 2017 https://www.ifc.org/wps/wcm/connect/17c127c0-2754-4940-9292-12cf232f6ceb/Factsheet_PNG-Demand-AssessmentHighlights.pdf?MOD=AJPERES 61

62 World Travel and Tourism Council, 2017 https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2017/ papuanewguinea2017.pdf

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

The Diving Segment While the average spending per visitor is $231 USD, some niche areas of tourism can stimulate a higher inflow of cash to the local economy, particularly in the remote locations with limited access to markets or low agricultural productivity. In the diving segment, for instance, one diving package can cost around $3000-5000 USD (excluding the flights) and the segment receives 2000-2500 divers each year. An additional 1000 divers can bring as estimated $3-5 million USD to the local economy. The diving numbers declined in the recent past from 3500-3800 visits per year due to a lack of funding mechanism into the marketing of the product and the closure of three major liveaboard operators yet the segment offers an opportunity to have significant contribution to channelling money in the country.

The research on tourism took place in Milne Bay and East New Britain, two of the provinces selected as tourism hubs by the government of PNG, to study the dynamics of households engaged in the sector. The respondents included service providers, formally employed, handicraft traders and fresh produce suppliers. Given the mobility challenges, the study focused on households living closer to the townships but also includes those employed by or supplying to relatively

remote resorts to understand the nuances in the dynamics. Given the relatively small size and nature of sector, a limited number of households are involved directly. The sample size for the study was kept from 11 households to understand how it works and how the program can facilitate elements to provide pathways out of poverty and women’s economic empowerment.

Overview of Households in Tourism All households that earn from tourism-related sources also have other income sources. Households involved in tourism have higher education levels, the male head of household (MHousehold) has about 9 – 10 years of schooling while FHousehold have 8 – 9 years of schooling. Among tourism households, women were involved in the income generating activities related to tourism in 10 out of the 11 households. Either they were the main person carrying out the activity or they played a supporting role (managing finances, cooking food, cleaning carvings, etc.). The women who were the main person carrying out the tourism related activity would generally keep a part of their earnings as a secret savings. Those who provided a supporting role generally had their own separate source of income for secret savings. Hotels and resorts tend to hire more women than men especially for roles in housekeeping, working a front desk, and food and beverage service. Tour operators prefer to hire women as tour guides for city tours as they are also better at handling cruise ship tourists. Overall, the likelihood of women being employed in the tourism sector is higher than that of men.

In tourism, 73% of the households saved in banks and 60% of the women had bank accounts, mainly because the women were formally employed in hotels and resorts. At least two women in each tourism household owned a mobile phone. Women working or involved in tourism related activities did not mention any personal or business-related security issues. The causality in these cases is not clear as the higher access to bank accounts and mobile phones could also be attributed to higher household educational levels and formal employment. Overall, more educated households do find it easier to find employment in this sector and engage with both tourists and tourism businesses. The sample mainly included Households with member(s) employed in the sector or those managing small businesses to supply products or services to the sector. The sample didn’t include communities that receive fees for the tourism sites, where the amounts paid are small yet are the key means through which the larger tourism businesses benefit the communities around them. The dynamics of community fees require more in-depth analysis through the partnerships that MDF forms with tourism businesses.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Who is involved in the sector?

Tourism, much like migration from rural areas for urban jobs, provides a cushion to households that may have lost a main source of income or have limited access to productive agricultural land or markets. Four households in the sample (36%) either didn’t have access to agricultural land or didn’t have access to markets to sell fresh produce. Getting into the industry became their key source of income. One household which had agricultural land saw upward mobility (were able to purchase electronics) from handicraft sales with an increase in cruise ships. Such examples indicate that even households with access to agricultural land can benefit from tourism where the income can be higher and steadier. Of the eight households in the sample which had access to agricultural land, three households did not sell their produce commercially while the remaining five did not have agriculture as their main source of income. While agriculture is a primary source of income for the most in PNG, there are households which do not have access to land and markets or are disadvantaged through tribal conflicts or a sudden loss of steady wage income. Such situations make Households extremely vulnerable to poverty and food scarcity. For households in desperate need, the business environment provides limited opportunities to alternative wage employment. Tourism is one of the sectors in some locations which provides opportunities to bring households out of vulnerability. In the sample, two households entered into the industry because they faced a sudden loss of a formal employment and tourism became the means to come out of the vulnerable situation.

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Broadly, two direct beneficiaries of the sector are the households employed by tourism and those who supply products and services to the sector. The salient features for these two categories in the sample include:

Employed in the Sector The major employers in the tourism industry are tour operators, small-scale businesses and accommodation providers. • Tour operators have some permanent staff and hire others temporarily when cruise ships arrive as bus drivers and tour guides to coordinate trips. The tour guides that are connected to accommodation providers also have the opportunity to take other types of guests (e.g. business travellers or holiday tourists) around to the tourist sites. • Accommodation providers provide permanent employment opportunities that require low initial skill levels. They hire receptionists, security staff, administrative staff, housekeeping staff, food and beverage staff, divers etc., most of which absorb low skilled workforce and up-skill them through in-house and on-the-job trainings. Local knowledge and relations with the surrounding community also provides opportunities for low skilled employees to perform additional roles. One respondent from the study was a security guard who would also perform the role of a tour operator to earn additional income. Although there are training organizations that teach skills for food and beverage workers, housekeeping and others, additional on the job training is considered essential. Accommodation providers also hire a number of experienced maintenance staff for work such as plumbing or gardening. Two accommodation providers in Alotau employ about 137 people full time.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

• Small-scale businesses that work in the tourism industry also provide employment opportunities which generally go to family or wantok members. One tourism household owns three taxis and hired two of his brothers as drivers. A fisherman who supplies to hotels and resorts hires five people from his community (one skipper and four fishermen). Most of these businesses started recently and flourished as tourism increased.

come via cruise ship and are older (above 40 years old) because they are more likely to hire services and spend more money. Younger tourists do not spend as much. Handicraft sellers also sell to older tourists who come via cruise ships but tend to sell more to local tourists as opposed to international ones. Local tourists mainly travel for business purposes and gifts are purchased by both hosts and the visitors.

Within these three categories, tour guides generally earn the least in the industry given the seasonal nature of their employment. The highest paid are the permanent jobs within hotels and resorts at a supervisory level (e.g. supervisor of security guards, F&B supervisor). The average FTE in tourism is about 1.1, but at a supervisory level, this can go up to 1.3. Most of those coming into the tourism industry are young and get jobs through referrals or due to their experience in the sector. Most employees have some tourism and hospitality training. Although employers may not be satisfied with the quality of the training, employees believe trainings helped them acquire the skills they need to secure a job.

All small businesses related to tourism claim that their business has grown in the last five years, and they think it will continue to grow. These businesses have a profit margin of about 56%, and wages make up about 24% of their costs, they also receive unpaid help from family members. Even though the margins are high for the respondents in the sample, the small number of tourist arrivals mean that income is seasonal and annual growth stays limited.

Employers’ demand for workers does not translate to a supply of jobs for the unemployed in tourism industry. Employers claim it is difficult and takes long to find workers, while employees claim it is difficult to find a job and to get into this industry. Employers in the tourism industry do not provide transportation to their workers and they may travel for an hour to reach their workplace. Some employers, however, try to compensate for this by providing on-site accommodation for their workers. Employers that do not provide transportation or accommodation face high turnover as workers are likely to leave for jobs or businesses closer to home63.

Small Business in the Industry Small businesses that operate in the tourism industry include: • Businesses that sell to tour operators, or accommodation providers (e.g. larger tourism organizations) as fishermen, farmers, handicraft sellers or bus drivers. Accommodation providers are consistent buyers (although volumes vary with seasonality) while there’s been a recent increase in tour operators making their purchases around the arrivals of cruise ships. • Businesses that sell to tourists directly, such as taxi drivers, tour guides, and handicraft sellers. The preferred customer group for taxi drivers and tour guides are independent tourists (tourists that do not book an organised tour) that

Two households from the sample went into tourism related businesses after seeing the increasing demand for goods and services from the increasing number of cruise ships and other tourists. The choice of business is influenced by people’s experience, knowledge or skills. For example, a tour guide should be well versed in local history and handicraft sellers should know how to produce their wares. Larger tourism organizations that source from small businesses claim that the main issue they face is inconsistency in supplies. The local markets cannot supply some of the items that larger organizations need, resulting in those hotels and resorts in Milne Bay sourcing some of their fresh food items from Port Moresby. Small businesses say that larger tourism organizations pay more than the market price and hence are the preferred buyers for their fish, fresh produce or other raw materials. There is a gap in the supply and demand. One reason the supply chain is not organised with consistency is because suppliers are not aware of the buyer’s needs. Along similar lines, small businesses that sell to tourists have limited information on what tourists want to buy or want to see. They must know some basic concepts, such as tourists are more interested in historical places such as a war cemetery rather than a supermarket, or that tourists would be interested if they heard the history of a place as opposed to just seeing it. Handicraft sellers have limited information on what kinds of handicraft items or what sizes tourists want, particularly what Australian tourists are able to buy due to quarantine rules.

63 Tiwali Dive Resort pays less then Driftwood Resort, yet employees of Driftwood have left for Tiwali because the Tiwali provides on-site accommodation for their workers.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

DYNAMICS OF WOMENâ&#x20AC;&#x2122;S ECONOMIC EMPOWERMENT IN PNG Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Of the 8.1 million people in PNG, 49% are women with a median age of 22 years. Despite the near equal balance of population, the gender inequality in relation to economic opportunities and social status is significant. UNDPs gender inequality index for PNG is 0.595 ranking it 143 out of 159 countries of the world64. Nonetheless, this is an improvement from a ranking of 0.674 of 2011. The average life expectancy

of women has increased from 59 years65 to 65 years66, bringing the country in line with the global trend of women outliving men. This particular section draws on the existing secondary literature to supplement the primary research findings on women’s participation in economic activities and the dynamics around women’s economic empowerment.

United Nations Development Programme. 2015, http://hdr.undp.org/en/composite/GII

Country Gender profile JICA 2010

http://hdr.undp.org/en/countries/profiles/PNG

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Women’s Involvement in Economic Activities

Women’s Roles (a) In the rural economy Subsistence and cash agriculture in PNG is a key household activity, where both women and men share productive roles. According to government statistics, over 80% of the country’s food production is produced by women (Country Gender Profile, JICA 2010). While women take the lead in crops that ensure subsistence and opportunistic sales for daily cash income (e.g. vegetables and sweet potato), they provide key support roles for farming more commercial crops, such as coffee and cocoa. Interviews suggest that women are primarily responsible for a range of roles across all crops such as planting, weeding, watering, pest-management, harvesting, post-harvest handling to sale of agricultural produce, while men are mostly responsible for clearing the bush, preparing the land, digging ditches, and harvesting bulky crops. More often, men are involved in the sale of heavy and/or commercial crops such as Taro, Banana, Potato and Coffee. Apart from crops, women are heavily involved in rearing livestock (pigs, goats and chicken) while sale responsibilities are shared with the men. Interviews indicate that in most cases, women, as part of their marital responsibility, are obligated to work on family gardens, which are large plots where key staples or high value vegetables are produced, the proceeds of which are used to support large Household expenditures. Alongside the common plots, women also produce small kitchen gardens for subsistence food, the surplus of which is sold in the market for an additional income controlled by women. Secondary

literature also suggests that in predominately patriarchal societies in PNG, women’s access to productive resources such as land and credit is limited, affecting productivity. According to studies, Overfield (1995) finds that women’s secondary right to land often pushes them into food production and marketing where men’s dominance is low. Women’s primary responsibility for managing regular food supply and daily expenses also incline them to get involved in small trade (such as selling buai, cooked food or flour balls) in the local villages to supplement other income and meet the daily cash needs. Both men and women are involved in a variety of the crop production process, working as family unit and pooling the profits. However, their perception of who brings which part of the income is very distinct and clear. When asked of the economic activities and income generated by different members of the household, the responses indicated that women support all forms of agricultural activities but the income they bring in are from their own separate income streams (e.g. small trade and vegetable plots) which are much smaller compared to men. Figures from research interviews suggest that men bring in two to four times more income than women, although women contribute more labour if the activities are combined. Although regional difference exists, women’s working hours in labor usually exceed those of men (ADB 2006, Brouwer et al., 1998). This resonates across all the interviews. The box below gives a snapshot of an average rural Papua New Guinean women’s day:

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

A non-market day (when there is no harvest) Wake-up at 6 in the morning; prepare breakfast for the family and prepare children for school; work on the garden until 12 noon. Return home during the hottest part of the day between 12 to 3.00 pm, manage other household chores, prepare feed for the pigs and evening meals for the family. In the late afternoon when it is cooler, return to the farm until late evening.

A market-day (when there is harvest) Wake up at 6 in the morning; prepare breakfast for the family and children for school and then attend to the farm. If there is harvest, collect it and take it to the market. Depending on the distance to market, it may take the entire day to sell the produce and return. Prepare the evening meal for the household. Across most interviews, respondents mentioned that if there is oversupply in the market, they either sell at whatever price they can or give away the produce to be able to catch the transportation on time before it gets dark. Only in a few cases did they mention returning the next day to sell the unsold produce (if the market is close enough). Market days are also the only opportunity to use the proceeds to buy the daily Household necessities. According to most of the interviewees “Every daylight hour is spent on doing something, I am never free. The only time for rest is when it is dark and on Sunday afternoons.”

Livestock is a key asset for the household’s resilience and is an important source of income generation. As mentioned above, rearing livestock, including food preparation and animal health management is led by women. Livestock is generally sold either by the husband or at the farm where buyers from the neighbouring area would visit directly. However, the type of livestock reared has workload implications. For example, while traditional pigs do not require close attention, the hybrid pigs which are much more commercially valuable require greater attention and care in terms of feeding. When it comes to fishing, generally women are mostly involved in inland or coastline fishing (of shellfish/crabs/seacucumbers/small river water fish); while men are responsible for commercial or deep-sea fishing. Women are also primarily responsible for managing the marine product sale on behalf of the men at the market, either raw or smoked fish, for consumption. Women’s informal involvement in the fishing industry is estimated to be 20-50% of the annual yields (JICA, 2010)67.

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Country Gender Profile, JICA, 2010

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

(b) In the urban economy Formal sector

Informal sector

Women’s involvement in the formal economy is extremely low with very little employment opportunities. As of the last census report (2011), the labour force participation by women (as percentage of population) is 60.5% and women account for only 6.5% of the total wage employment, most of which is absorbed in the wholesale and retail industry, real estate renting and business service activities, education services, private households and the hospitality industry. Note that besides retail and trade, all the others comprise of a small portion of the wage employment sector. According to the interviews in Lae and Port Moresby, much of the employment opportunities for women are in the fish processing industry (such as Besta and Frabel factories as well as Majestic Seafoods Ltd in Lae) particularly in packaging and in the hospitality sector, especially in the housekeeping unit. According to a study conducted by the Pacific Islands Forum Secretariat (2008)68, an estimated 7000 women work in the PNG tuna industry, particularly in handling, cleaning and canning. Most interviews reflect that the fishing industry absorbs semi-skilled or unskilled labour while completing a certain education level (at least grade 10 or higher) allows for greater absorption in these industries, particularly hospitality. Because it is so difficult to find jobs, and the situation is even more difficult for women, competition to find jobs in the tuna processing and canning industry is extremely high, despite poor and unsafe working conditions and low wages. This also reflects the education level of women; data from the Census 2010 suggests the share of female population in labour force decreases with the increased level of education. As of 2011, the percentage of female population that completed grade 10 and 12 is approximately 19% and 4.9% respectively. Given the limited opportunity for women in the formal sector, most of these more educated women are self-employed in the informal sector.

The informal sector accounts for nearly 23.2% of the employed and it largely consists of trading a range of produce in the open market. A study by the Institute of National Affairs suggests that the proportion of households relying on the informal economy to some extent was approximately 80 percent69 (NRI 2014). Lower education and skills levels, the need to be in close proximity to the household, coupled with the responsibility to ensure regular cash income (to reduce vulnerability of Households) for the family as well as the perceived complication of paperwork and credit facility, oblige women to take up informal trade. Of businesses that are in the formal sector, the most are run by men. The Internal Revenue Commission estimates that 90% of businesses registered for tax are run by men and women business owners are much more likely than men to own completely informal enterprises. Of women business owners, 61% operate informally, compared to 45% of male business owners70 (IFC 2010). The most common activities under informal trade includes managing small kiosks/stalls, money lending, trading fresh produce/fish, selling cooked food in the open market, sewing meri blouses, house cleaning for others and open table sales of buai/betel nut, cigarettes, soft drinks, water, etc. According to a study conducted by UNIFEM, nearly 85% of the vendors in the market are women (JICA 2010). Informal trade is also a means for women to have a side income for their own savings and for emergencies. There is often this fear of husbands misusing income either on alcohol or on another wife, and the inconsistency of men’s engagement in formal or productive occupation, for which women want to have their own pot of money to sustain in times of need.

Focused Group Discussion suggests:

“Women are better sales persons as they are better budgeters and there is also a feeling that women are more capable of sitting diligently and staying focused in the market place, whereas men would be more likely to become inattentive or indulge in gambling or other activities.”

68 Sullivan, N. and B. Ram-Bidesi. 2008. Gender Issues in Pacific Island Tuna Fisheries: Case Studies in Papua New Guinea, Fiji and Kiribati. Pacific Islands Forum Secretariat, Forum Fisheries Agency and 69

Secretariat of the Pacific Community. p. 35. Women’s Market Participation and Potential for Business Advancement, NRI, 2014

Gender and Investment Climate Reform Assessment, IFC 2010.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Workload Women are subject to long work hours for a variety of reasons. They may feel the need to comply to the traditional culture of being the primary caregiver and be responsible for leading and providing support to farms. To ensure adequate cash to run the household, they may need to undertake multiple income earnings streams for both the household and self. Women in PNG, on average, work nearly twice as many hours as men (including household chores)71. As mentioned earlier, women take up multiple productive and reproductive roles in the rural areas throughout the day including carrying produce and waiting long hours to sell in the market. Where opportunities exist, they resort to productive roles that enable them to earn separate income streams for their savings. Primary research also supports the secondary literature; women in general are involved in at least two to four income earning categories and within a single category (e.g. crop production) and takes more than five lead and support roles (as mentioned above) that use very basic and manual tools and processes. According to a recent rapid assessment in the Jiwaka province by CARE, when asked to rank the varied forms of discrimination against females, such a heavy work burden is often perceived

as the most serious form of violence against women and girls72. Bride price payment gives husbands authority over a woman’s labour and terms such as “slavery” have been used in references to this overburdening (Care, 2018). In parts of Milne Bay, interviews show that women additionally often work from evening until 2 in the morning, the only time available after all other responsibilities are completed, to weave baskets or prepare handicrafts for sale to the tourism market. It is important to note that interviews indicate women continue to take part in additional productive side roles to earn a separate income and draw out savings if the income from the common pool is increased. Often, the increased labor performance improves the woman’s recognition as a valuable member of the household and allows her to compensate herself with additional withdrawals from the common pot of income (if separate streams of income are not available). Given the significant time poverty issue but understanding a woman’s need to continue to be involved in productive roles for economic independence, introducing labour and time saving devices or techniques to improve women’s productivity could be useful to address their workload.

Control over Income Women are generally considered to be better money managers and negotiators. While they typically hold and manage the income for this reason, this does not imply that they have greater control. From most interviews in the rural areas, it was evident that the pot of control for money was separated into three forms, a central pot which pools in money from all income sources, a man’s pot of income that is either earned by the man or given to him as allowance from the income earned and woman’s pot of money. A woman’s pot of money comes from “secret savings” generated from the sale of produce from the plot that she owns or leads. Women have full control of the money earned from her plot of land but for the rest, she must keep the husband informed of any earnings and expenditures. It is important to note that women only have access to land use and not ownership of land so if they wish to produce in a separate plot of land, she is expected to secure permission. Of the respondents, 84% mentioned having secret savings. In fact, both male and female members mentioned of having a

secret savings and it was not a surprise to each other, but they are not aware of the amount kept aside. Women explained that whether the men knew about the amount or where the savings was kept depended on how comfortable they felt that the man would not spend the money unnecessarily on gambling or alcohol. While it is important to note that there are cases where knowledge of income and expenditure is undertaken by men of the households alone however, in many Household, if husbands demand certain payments, women are often obliged to pay them. Insubordination can lead to repercussions such as physical violence (drawn from key in-depth interviews). Secret savings are generally kept for emergency needs, school fees, medical needs and the women’s own expenses. In some cases, women also mentioned that they draw on the secret savings to support the men to contribute to key customary/ social obligations as it is an important sign of holding status in the community (inability to do so can often be considered shameful for the family).

Gender and Investment Climate Reform Assessment, 2010

CARE Rapid Gender Analysis Papua New Guinea - Highlands earthquake, 2018

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Focused group discussion with a women’s group in Tambul: It was said, ‘sometimes the man doesn’t tell the women what he keeps in his pocket’. But often, it is only an open secret because each is aware of the volumes of sales, prices and local contacts. For example, if there is a visitor to the wife, the husband gets an idea that she will probably have received money (respondents said this while laughing). It is also common for women to work with their female friends to grow food on a ‘secret’ (to the husband) plot on the other woman’s land. Secret money would be used, for example, to buy blankets. When asked why it was thought that men and women felt the need to have these secret money stashes, they said that there may be a sudden tribal fight, and so the money acts as security, and if the women need to leave quickly, they would have something to leave with.

Households interviewed in the urban areas behaved similarly to those in the rural areas in consideration of control over income. However, households with relatively more educated members demonstrated more egalitarian structures where control over income was shared. It is important to note that a woman’s formal employment does not necessarily mean

she has full control over how her income is used; there are cases found (e.g. in Port Moresby) where the economic condition of the household determines monetary control, which typically lies with the head of the household (e.g. father/husband).

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Decision-making Authority Cultural norms often determine the roles that men and women assume in the society where women are seen to be care givers and have the primary responsibility of ensuring there is enough food for the household. In most cases, men are culturally perceived to be the heads of households which explains how decisions are made, in areas ranging from jobs, business and income to family planning. There is recognition that women are important breadwinners for the family, yet the general sentiment is that women should consult their husbands or male members of the household for decision-making. At the rural household level, women are generally responsible for making expenditure decisions about food, household necessities, education and clothing, while large expenses such as social obligations, loans and agriculture/livestock investments are jointly decided, or men-led. Decisions on agricultural input is either taken jointly or the person more responsible for a certain crop will decide. For example, men generally take the responsibility to decide what pesticide to buy for coffee whereas women would decide on the vegetables. Women decide the type of feed used for livestock as they are primarily responsible for rearing livestock but the decision to sell the animal or invest in expanding the stock would be done jointly or in consultation with the husband. However, even in spheres where the wife is the primary decision maker, she needs to keep her husband informed of the expenditures, the negligence of which may lead to conflict. Women also

take the lead on saving money for emergencies and sudden household needs. There are many instances where women are seen to own and manage their own income streams (e.g. separate small vegetable plots) over which they have complete control. The decision-making authority is similar in the urban areas, however, womenâ&#x20AC;&#x2122;s authority is greater on pots of income she controls, although both parties expect a degree of transparency. At the community level, decision-making is mostly led, and done, by men. Women may separately discuss with their husbands and share their opinion (as mentioned by an interviewee during the study) but community level decisionmaking is done by the men of the community. This may vary for locations such as part of East New Britain, Milne Bay, New Ireland and Bougainville which are more matrilineal in nature. Women do have separate groups and associations where they bring up their issues and those associations are more about cooperating on income generating activities, which women often use to supplement their income. However, with greater performance in productive activities (e.g. good performance of crops and livestock), womenâ&#x20AC;&#x2122;s recognition and influence in the household community at large is improved and they are seen to be valuable members of the family and influential people to approach for advice, which in turn improves Household dynamics.

Household interview at Henganofi: The women in Asehu-Tevega village are highly acknowledged by their husbands for their contribution to food crop production commercialisation since 2010. With greater importance in generating income, they have more control and autonomy in financial Household decisions. The women are driving a lot of changes in the commercial production of fresh produce.

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Access to Assets and Services In terms of agriculture, the challenges to assets and services for men include securing a regular buyer for produce along with access to agricultural inputs and tools, as elaborated in the previous chapter. However, the constraints are more intense for women when it comes to land, information and extension services, finance and safety in participating in markets. • Land: Only 30% of the total available land is suitable for agricultural produce. Out of that, more than 95% is held under customary law. Besides some exceptions, such as in parts of East New Britain, Milne Bay, New Ireland and Bougainville, most land ownership is managed under a patrilineal system where men are the custodians of the land and the male head or senior male members of the community decide how it will be used. Women may use portions of excess land with the permission of their husbands or the male family head, but it is at the men’s discretion. Traditionally, this insecurity leads women to engage only in small scale, short cycle crop production like vegetables rather than crops such as coffee or cocoa. The limitations to land rights precludes women from securing loans or even engaging in long term crop production. Their area of production is related to subsistence or for small surplus sales and this is also one of the reasons why much of the decision on crop production on common land is either jointly taken or led by men. • Information and Extension Services: Constraints around access to information is common between men and women, although they have different networks and their information channels are varied. Interviews from the Western Highlands indicate that women share cultivation information while at the market and often share the information with their husbands. Cultivation information, they said, is generally passed by word of mouth and there was little mention of training or formal information services targeted to women. Church is often a key source of information and inputs for women where they gather together not only to discuss productive information but also social issues. Women also have community groups both in the rural and urban areas but again, those are mostly used as a social platform rather than an economic platform. Secondary literature suggests that in the rural areas, cultural inhibiting factors make it difficult for women to acquire useful and updated information and technology. When extension workers share technical information at village gatherings, women have the role of preparing food and drinks, while men attend the meetings. The information 73

Country Gender report, JICA 2010

Country Gender Report, JICA 2010

does not get to the women without taking special measures, such as arranging women-only gatherings with a female extension worker73. This is further validated by primary interviews with NARI officials who mentioned that in some cases, they send out their female staff (albeit few) to actively reach out to women. He also added that in many regions, particularly the Highlands, the men will dominate

One of the female farmers mentioned: “If I am the second person to start off cabbage farming, I go and get some advice from the first person who started doing it. But this is only shared amongst close friends, because this is your income earning opportunity, and you would only help out your very good friend. You wouldn’t want to give away your competitive advantage to just anyone.” She also added, “Mostly women go to women (to pass practices and knowledge), and men go to men.” Having said this, Mr. Korowa qualified, “If I have a sister who is a good farmer, I will go to her.” The interview also mentioned that “it is difficult for women to understand the pesticide instruction bottles – as most women are illiterate. Instead, women often get advice from women who have used the product before. Most of the time, people don’t read the instructions, they just try out the products, by trial and error. Nowadays it is changing a bit, but, in general, people are not interested in reading the instructions, and instead, ‘we are doing it from what others did.’]”

much of the talk during the training, unlike places like New Guinea Island and East New Brittan, where women are often included in such information sharing sessions. However, even where specific provisions are made for women’s participation, extension workers in most provinces visit more male farmers than female farmers. Unless the training is conducted on family smallholdings, women’s participation in training is limited by their for childcare responsibilities and other domestic obligations.74 Mobile

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

technology could be another possible vehicle to share information but only in 50% of the households interviewed did women own a mobile phone. On an average, a household would have about three mobile phones but only one would be owned by a woman if at all. This fact is associated with trust as the husband may believe the wife has other relationship if they have access to their own mobile phone. Interviews suggested that although women may not always own a phone, they are often able to use their husband’s phone. Understanding mobile phone access and use is important to develop both information and financial products using mobile technology. • Access to Training and Skills Development Opportunities: As mentioned above, there is a general dearth of employment and skills development opportunities for both men and women; but women are at relatively more disadvantageous position than men. Women’s literacy rates are low, and they have lower relative levels of education attainment (50.9% for women compared to 63.4% for men) limit them from further exploring formal skills development and employment opportunities. In tertiary education, females are predominantly enrolled in the study areas such as nursing, secretarial work and teaching. A recent survey by Deloitte and UNDP indicate that females make up less than half the staff of approximately 61% of businesses within their sample. While businesses in Port Moresby have a relatively greater share of women in their workforce, it is much less in Lae and Madang. In the agriculture sector, exposure to formalised training from FPDA is limited and women generally gather their improved agricultural skills either by consulting their husbands or other female farmers in the community and as mentioned earlier, church organisations. When it comes to non-agricultural skills, such as sewing, or handicrafts, women’s organisations, local NGOs and church organisations are the main source of skills development. Interviews with female members of the households working in the tourism sector show that tourism is one of the more mature industries where women pursue either a higher degree or vocational skills to become employable. • Access to Financial Services: Women generally keep their savings at home. Only 21% (14 out of 65) women saved via a bank account. Generally, those with a bank account had a formal job and the bank account acted as their salary account. Those with bank accounts stated that it helped them to save and gave them greater control over the money. Those who did not have bank accounts mentioned that bank procedures were complicated, fees were high, distance to bank branches make it costly to manage accounts, reliable local agencies were absent in rural areas (usually small shops) to handle cash deposits and withdrawals and they did not have a consistent source of income or they already had a joint account with their spouses. Literacy is also a key impediment for not 70 |

maintaining a bank account, both in the rural and urban areas. While business management skills are low for both men and women, women in particular struggle with the basic cash flow management of profit and loss for their businesses. Loans are similarly complex for women and there was very limited mention of taking loans as she expects she will have to pay some hidden cost. A study conducted by NARI (2014) indicates that despite “startup loan” provisions by MFIs, the loan uptake is very low as people prefer to informal lending. One of the major reasons for this is the 30% equity requirement for the loan takers without a security guarantee – a difficult upfront savings for these applicants.

In-depth interview with a female employee at the Tawali Resort: “It is relatively easier to a secure loan if you are in formal employment.” Tawali assists their staff in securing funds. The employee who intends to take a loan has to write a letter explaining to the company the reason for the loan. Then, the company would write a letter of recommendation for the bank. The relevant documentation is handed in for processing and an approval is received in two weeks.

Women tend to have fewer sources of funds than men. Where men rely on both family and community members for funds, none of the women mentioned community members to be a source of funds. Women turn to family members, moneylenders or to employers (in tourism or urban areas where the woman is formally employed) for funds. Moneylenders charge quite high interest rates which is why a third of the women have emphatically said they will not take loans when they fall short of money. • Market Participation: As stated earlier, women are very active in the market and assume multiple roles as buyers, traders and sellers. However, a woman’s mobility is limited by the risks of theft and harassment. Safety and security issues can threaten personal safety and security or their business (or income earning activity). It is interesting to note that even though no research questions explicitly asked about safety and security issues faced by women, 45% of female interviewees mentioned a threat to their person and/or a threat to their business is a constraint to their commercial enterprises and personal lives. This fact alone is telling of insufficient security and safety of women in PNG. The table below further illustrates the nature of threats that women face.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Table 7: Safety and Security Issues faced by Women in PNG Nature of Safety and Security Threats

Frequency

Number of women facing any kind of safety and security problems either at home or related to their business

Number of women whose earnings are affected by safety and security issues

Number of women who feel a threat to their business also affects their person

Number of women who feel the threat they face is mainly to their business

Number of women who face physical violence at home and that has affected their income or savings

In-depth interview with two key community leaders in the Western Highland Province: Whether or not a woman is local affects her safety. “As Western Highlanders, we feel safe, but women who come from out of town to sell their cacao, face different risks. This is because everyone from the area knows us and our family members; whereas, a woman from outside has no family around her to protect her.” The interviewees also added that in some locations, there is a greater risk of theft, physical abuse and even kidnapping. Hence, young women are not often sent to the market from afar. To improve their safety, they often are accompanied by other males they trust or travel in groups.

Gender-based Violence The prevalence of gender-based violence is high in PNG with over two thirds of women estimated to suffer some form of physical or sexual violence in their lifetime (ODI, 2015)75. According to the ADB country gender assessment, the most commonly cited factors triggering domestic violence are drug and alcohol use, lack of economic opportunities or employment and a weak legal enforcement. There is also a common consensus that the current legal system is inadequate to address the issues. Court proceedings are time consuming, expensive and are often difficult for women to access. In many cases, the customary rules prevail and often prohibit women from accessing the existing legal means.76 The economic status of women and the household in general have implications on gender-based violence. A wife’s greater economic independence relative to her husband is often perceived as a contributing factor to conflict. On the other hand, there are numerous examples that suggest

that economic distress and the inability of the wife to meet basic household responsibilities for financial reasons, also contribute to gender-based violence and any productive activity that reduces that burden can mitigate those risks. Apart from taking a tole at the household, gender-based violence also has a price at the firm or business level. A study conducted on multiple firms in PNG revealed that on average, each staff member loses 10.8 days of work as a result of gender-based violence (2 days lost to ‘presenteeism’, 5.3 days lost due to absenteeism and 3.6 days lost helping other victims of GBV during work time). The cost of staff time lost to firms can vary between 2-9% of the total salary outlay. Such a significant cost indicates that there is clear business incentive for firms to introduce means and socialisation methods to mitigate the risk of gender-based violence.

In-depth interview with the female income earner of a Household in Milne Bay: Since she started making handicrafts, she earned more income and was able to assist the family. She explained that her husband used to complain because cash was limited and always questioned her suspiciously whenever she decided to go to the market. She added, “Now he treats me differently. When I want to go to the market, I just go without any concerns or arguments.”

Gender Violence in Papua New Guinea, ODI, 2015

Country Gender Assessment, 2012. Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

PATHWAYS OUT OF POVERTY Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Opportunities to Pathways out of Poverty for the Rural Poor

The primary research, supported by the secondary literature, confirms the structural problems that contribute to multiple market failures and the household socio-economic dynamics that preclude poor households from benefiting from any available growth opportunities. However, the understanding of how different categories of households develop resilience to reduce their vulnerabilities, despite existing challenges, shows that there are pathways out of poverty that can be facilitated by the program. The pathways are relevant for both men and women in rural poor households and a nuanced womenâ&#x20AC;&#x2122;s economic empowering path is elaborated in section 6.4. From the analysis, it is clear that there is no single crop or income source that can lift households out of poverty. Also, the market size and availability of players for any single crop or value chain is not sufficiently large enough or dense enough on which a specific type of specialist function should focus. Most farmers in PNG grow a combination of more mature cash crops, staples, newly introduced cash crops (typically horticultural crops). In addition, farmers manage livestock as a cushion against shock and informal trade as a means of meeting daily cash needs. Farmersâ&#x20AC;&#x2122; strategy is to opt for diversification of crop production and income sources, not abandoning mature crops all together, but hedging their bets, and combine mature, expanding and emerging cash crops to the extent that the local market systems allow. 74 |

To be able to move out of poverty or reduce vulnerability, farmers need to be able to find alternative income sources to diversify risk. They also must have the knowledge to appropriately reinvest in something reliable and rewarding that allows the Household farming system adequate consumption, income and safeguard against shocks. Therefore, MDF should aim for a balanced portfolio of interventions that facilitates an optimal farming system that enables appropriate investments in the right crops and inputs; connects farmers to aggregation systems and markets, provides them access to information and support in the development of specialist functions that reduce the transaction costs. MDF partnerships should strengthen coping strategies by making homestead gardens more productive and introducing more productive cropping patterns. Analysis suggests three major strategies or pathways that MDF can facilitate to help people come out of poverty and reduce the vulnerability of rural households. These are further broken down below. 1. Diversify and deepen income streams to strengthen the farming system at the micro-level 2. Improve market and farm efficiencies 3. Increase agricultural financial access and reinvestment

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Diversify and Deepen Income Streams to Strengthen the Farming System at the Micro-level Farmers in PNG have a strong risk averse strategy in farming, growing small quantities of multiple crops with a combination of matured (e.g. coffee), expanding cash crops (e.g. vegetables) and emerging cash crops (e.g. staples that can potentially be sold as raw materials to be processed into in-demand products). Since the market sizes are too small to produce a larger quantity of fresh produce, gains are not derived efficiently. Coffee and cocoa provide guaranteed income. However, the prices fluctuate and pod borer has affected production. While it is important to increase the efficiencies of existing supplies, presenting additional income avenues gives farmers access to new markets while increasing the opportunity to specialize in some products and helps farmers be more productive and resilient. Thus, MDF’s work in agriculture would optimally focus on looking at crops as part of a system that allows both specialisation and diversification. The following could be done to improve the different elements of the farming system: • Mature Crops: Crops such as coffee are exported as commodities and are increasing competitive in the global market. With volatile prices and production issues related to diseases, PNG should slowly look into more premium niche markets to be able to secure higher price per unit. Simultaneously, quality issues need to be addressed through improved productivity and post- harvest handling techniques and information on disease prevention. MDF could also support services that would be beneficial for farmers, such as savings products that help them bridge the gap between payments for harvests and investments in the next cycle. Additionally, other investments into diversified products to be intercropped to produced alongside coffee, such as honey, spices, ginger, or vanilla, could be introduced to reduce the risk of coffee vulnerability. Similarly, in cocoa, there is room for improved fermentation techniques and specialization in grading and more targeted information on farm management and disease control for improving yields of existing plants. To address quality constraints and improve plot management practices, most work will need to be with the coffee exporters on building stronger backward linkages and supporting certification processes to enable them to better cater to niche segments. • Expanding Cash Crops: Aside from the mature cash crops, emerging horticulture cash crops are becoming increasingly popular. Where farmers have options, there is a clear drive to cultivate perennial crops in a relatively extensive manner and invest time and resources in faster growing cash crops. However, horticulture as a sector is much less formed, with constraints related to the distribution of inputs (notably seeds and machinery), information (cultivation techniques, the right choice of crops in relation to topography and

season), aggregation and trade of produce (fragmented system poorly connected to main markets, high losses and risks for farmers) and the availability of specialist functions to reduce wastage related to transportation, storage and packaging. If markets do not start to function better, local gluts may prevent farmers from benefitting from the existing demand. It is important to note that although the demand for fresh produce is growing and there is potential to substitute import; the size of the middle class and the absorption capacity of fresh produce will hit a saturation point and farms should make effort to develop a combination of income sources rather than only push for a single horticulture crop. This is an area where much work can be done (as discussed further below) but the number of market actors that MDF can work with appears to be limited. For some actors involved in horticulture, this is still a side business. • Investment in Livestock: Livestock, particularly pigs, have been an integral part of the farming Household in PNG as a liquid asset to cushion against shocks, cater to social obligations and supplement/improve dietary needs. The market, however, has not been commercialised as there is a limited supply of expensive feed, limited use of yield increasing breeds and inputs and is surrounded by inadequate service industries. Within some communities, there is a growing interest to purchase goats and cows, although farmers travel to different parts of the country to procure them. The industry for chicken is more mature and commercialised, however, the mortality rate and cost of production is high, the latter of which stems from the use of imported feed which constitute around 80% of the total input price. On the other hand, the domestic market exists. The country imports a large quantity of meat and local production can potentially become more commercially competitive. Investments in the livestock would include working with private sector investors to: »» Introduce the supply of locally produced feed - both concentrates and feed - by using local raw materials such as maize »» Supply high yielding breeds, particularly pigs, goats and cows »» Improve access to information on rearing practices and veterinary services The range of work could vary between chickens, pigs and dairy animals. However, the general area of intervention remains localisation to feed and inputs at an affordable and competitive price. Information on appropriate input usage and rearing practices can reduce mortality rates.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

• Promoting Semi-processed and Niche Products: Farmers in PNG can expand into products that source both raw materials for end markets (e.g. honey, specialty coffee, spices, cocoa based products, floriculture) or crops to be processed into other final products, such as cassava for breweries or maize for locally produced feed/commercial fodder. In addition to these small markets, improving

markets around peanuts and beans, which can be grown during the dry period, would reduce Household vulnerability in long dry spells which affects key staples, like sweet potato. There is significant potential in the commercial processing of these raw materials but larger market actors need to initiate investment to reach the desired scale and achieve efficiency gains.

Improving Market and Farm Efficiencies A. Access to Information on Profitable Cropping Patterns, Practices and Markets • Information on production to improve yield and reduce wastage at farm: From the previous section it’s evident that there is clear asymmetry of information on production techniques and cropping patterns. Market demand contributes to the differences between the non-poor and the poor households. It is critical to provide information to Households on cultivation and post-harvest techniques, profitable cropping patterns (what to produce where and when), staggered cultivation for prolonged harvest, crop calendars/crop varieties, appropriate use of crop protection products and to address misconception in the use of fertilizers and crop protection products, and educate populations on the availability of seeds and early warning of diseases. This is even more important for the newly introduced semi-commercial crops. For example,

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in Simbu, farmers learned how to grow potatoes and obtained seeds from FPDA but were unable to control the diseases that attacked the crop and lost the majority. Information on these topics could be provided through multiple sources, spanning the public and private sector, as well as traditional stakeholders, such as the church and village chiefs. One of the most credible sources reported has been FPDA and large buyers/aggregators (typically supermarkets like Tininga buying supplies). Such information could be embedded as part of their supply network and through retail outlets selling agricultural crops. Similar to the situation with crops, information continues to be a problem for livestock rearing and the likely channel of inputs could be the large feed sellers through their distribution network.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

• Information on market to reduce wastage from oversupply and distress selling: Production is largely driven by Household needs as opposed to market demand leading to glut and low supply periods. Similarly, for commodities, farmers do not have access to information about the quality requirements and lose out on additional income opportunities. Farmers also take the risk and time of bringing the produce to the markets despite having limited information about the demand. This increases the vulnerability of the farmers and they end up being involved in distress selling. These challenges are caused by the limited number and capacity of aggregators and

traders for different products. The trading function in more mature markets acts as the backbone on providing information and finance into the agriculture industry and the lack of it impedes the growth of the industry in PNG. Hence, working with aggregators on farm scheduling and crop planning can reduce the risk of wastage and distress selling. Apart from buyers, traders, retailers and government agencies, MDF may capitalise on ICT solutions through telecommunications and media outlets to improve information dissemination to address the gaps as identified.

B. Access to Affordable/Cost Reducing and Efficiency Increasing Inputs Access to labour and cost-saving tools for the more entrepreneurial farmers to reduce costs and improve farm efficiencies will allow households to specialise their production at a more commercial scale and may become a market for other produce from smaller farmers. Expanding the leading and dynamic farmers will provide the pull for the industry by making local products more affordable and consistent for retailers and processors. Attention needs to be given to the following categories of inputs: • Access to timely, good quality and affordable seeds (especially for semi-commercial cash and food crops): As mentioned in the section above, farmers are willing to invest in seeds for crops that give high returns or have an assured market buyer. However, they often struggle to find affordable seeds and have to travel long distances to urban centres and even then, the seeds kept may not be of good quality. Since an assured market is a trigger for investing in good seeds, MDF can work with large supermarkets/ aggregators to promote appropriate varieties and make seeds available in a timely manner. Information on crop scheduling and the amount of seeds used can be sourced through this channel. MDF may also work with interested distribution partners with sufficient reach (possibly large wholesalers selling multiple rural products), to improve access to affordable and quality inputs for major staples, horticulture, agriculture and storage equipment. • Fertilisers and crop protection products: Farmers mostly use fertilisers and crop protection products on cash crops, such as coffee and high-value vegetables. Fertiliser is often used only in moderation on subsistence food crops and staples but if used appropriately, it could help farmers increase their yield. Again, the prohibitive price of such inputs, along with an undeveloped market, often does not justify the investments, hence, similar channels, as referred to above, can be utilised. Additionally, MDF may

work with large feed suppliers, like Farmset, to promote other products alongside feed. • Introduction and access to cost/labour saving device and tools to improve farm efficiency: Currently, farmers mostly use simple spray machines and there is little use of labour saving tools. Coffee is the only crop where simple processing tools are used to convert cherries into parchment. Primary interviews indicate interest from non-poor and dynamic poor farmers to invest in semimechanisation, labour-saving devices or farm productivity tools if they would be available and affordable. Tools include hand held ploughs, two-tire tractors, dredging mechanisms. Alleviation techniques to reduce moisture content of vegetables, geo-textiles/mulching, and the use of poly tunnels/high tunnels (unlike the cost prohibitive greenhouses) could be cheaper alternatives for farmers to reduce frost affects and extend the period of harvesting. These steps can help plan crop production, sales and irrigation/micro-irrigation facilities (e.g. drip irrigation/ treadle pumps), depending on the proximity to a water source. Again, MDF can work with large aggregators, distributors or retailers of construction materials or feed suppliers to promote these products. Alternatively, other financial instruments or mechanisms such as rentals, balloon payments, value chain finance, savings or loan products redirected to input usage can be tested (more is discussed below). • Localisation of affordable feed: MDF can support large commercial feed producers or distributors in the production of feed using local ingredients. The introduction of alternative options, such as concentrates, along with rental or sale of silage machineries and a range of feed packages can ensure affordability. This needs to be complemented with information on rearing and feeding practices, optimum age/weight for sale and veterinary services.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

C. Improve Market Linkages and Reduce Post-harvest Losses â&#x20AC;˘ Promoting aggregation: The limited aggregation function, along with an informal trading structure, means farmers must cover long distances to get to markets and the prohibitive costs mean they will only go if there are large volumes to sell in the bigger markets, which results in glut. Evidence also suggests that when wantoks come together to appoint an aggregator in their network or investment in aggregation and dedicated transport, the results are more successful. Hence, working with a range of players to promote trade and aggregation of produce for sale is critical to reduce transaction costs to farmers. Aggregation also needs to take place at multiple levels to reduce trader search costs. Therefore, MDF can work with wholesalers/ large retailers or any interested private sector partner to provide supply and demand information to producers and help enable scheduled sourcing. Using networks/ICT solutions (e.g. mobile applications) to connect farmers to traders, and vice versa, will ensure a steady supply of products to markets and an more efficient connection between production areas and sources of demand will prevent localised oversupply and reveal market driven pricing. MDF can also assist in the local context, such as the use of wantok network or traditional collection points, and match trader days with traditional market days into partnerships. MDF can also explore relatively more established trading/distribution channels to see if those can be leveraged for trading other new/in-demand products.

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â&#x20AC;˘ Introducing access to packaging, transportation and storage solutions to reduce wastage: Both primary and secondary research indicates there are losses at different points of the chain from production to final sale. Nearly half of the crop can be lost due to poor packaging, transportation and storage inefficiencies from the localised to final market level. Proper packaging and storage can increase the shelf-life of agricultural produce, making it more attractive for up-market buyers. Improving packaging techniques could include introducing simpler packaging materials, such as crates, to reduce spoilage during transportation. Again, investment in packaging material would only be possible if there is a market to sell to and hence large aggregators/buyers could be entry points to introduce such products and services. The absence of appropriate storage solutions at the local market level, during shipping and at the ports, contribute to high spoilage as well. Proper storage can reduce the effects of glut, reduce spoilage and extend the supply period of perishables. Partnerships to introduce low cost bulk storage solutions suited to the needs of the perishables, either with existing players (e.g. transportation and shipping services or large aggregators) or new entrants, could address this problem. Additionally, traders and aggregators need to be privy to proper handling and packaging technique information.

Household Beyond Income Level- Analysis A CriticalofAnalysis Povertyof and Agency Gender Measurement Dynamics ininPapua Economic New Guinea Programming â&#x20AC;&#x192;

Increase Agricultural Financial Access and Reinvestment Cross-cutting between both secondary income sources and market efficiencies is a farmer’s ability to reinvest in their farm enterprises. A farmer’s production is largely need-based (with the exception of certain crops) and hence, most of the proceeds from crop sales are already dedicated to certain expenditures with little or no savings. This limits the ability of farmers to reinvest in their enterprise as they run into challenges to purchase good quality seeds or inputs at the time of need. There is some indication from existing MDF partnerships such as New Guinea Fruits (NGF) that shows

that when markets are accessible and consistent, farmers do reinvest in growth. However, entry of new farmers into those markets is hindered by their ability to arrange seed capital. An analysis of non-poor households reveals that the ability to reinvest into the appropriate crops or inputs is an important pathway for expanding a farming system and reduce vulnerability. In partnership with public and private sector agencies, MDF can introduce and promote a range of financial instruments or options to ensure smoother cash flow and to promote reinvestment.

A. Access to Suitable Agriculture Credit Given the limited formal credit facilities available for agriculture, farmers borrow from relatives and wantoks to invest in inputs. Such lending is often interest based and may require farmers to pay up to 50-100% interest based on the period of the loan. The lender’s incentives are around the loan itself, hence the interest rates are high. There are some agri-businesses that do provide credit to their aggregators and farmers to invest in the farm and these such credits are more suitable, though are limited in volume due to the limited capacity and size of the credit lending businesses. To increase access, these lenders need to expand their reach so smaller aggregators

and traders have formal financing options. This will be instrumental in benefitting the broader base of farmers. Both formal finances (e.g. suitable agricultural loans) and other instruments, such as value chain financing, factoring77, product financing (e.g. trader’s credit and pre-financing) and input supplier credit, in coordination with financial institutions where payment is made to the retailers upon issuing of receipts from farmers, can be developed suited to the need of the market. Additionally, MDF can explore the wantok system to encourage a reinvestment outlook, as opposed to the current system of it being consumption-oriented.

B. Support Reinvestments in Farming Through Savings Farmers currently struggle to save and reinvest in their farm, partly due to high social expectations and cash scarcity. The income from coffee can support smaller investments in agriculture, however, such practices are limited, and the onetime bulk cash is often paid off on pending expenditures and credits. Often, this lump sum is insufficient to channel cash

flow throughout the year. Mechanisms and tools to facilitate savings for reinvestment will smooth cash flow and allow farmers to grow their enterprises. Saving mobilizations and the wantok management network may also be considered as future areas of work to stimulate farmers to accumulate, invest and graduate out of poverty.

MDF can encourage both access to suitable agriculture credit and reinvestment saving in partnership with a range of private sector players, including large buyers/aggregators/wholesalers and financial institutions. To initiate certain models, MDF could leverage existing commercial value chains, such as coffee and cocoa and use that data to replicate, or use parts of the model on other crops or inputs.

The diagram below captures the characteristics of different categories of households and the possible pathways out of poverty, subject to the changes in the aforementioned functions.

77 “Factoring is a financial transaction whereby a business sells its accounts receivable or contracts of sales of goods at a discount to a specialized agency, called a factor, who pays the business minus a factor discount and collects the receivables when due. Factoring speeds working capital turnover, credit risk protection, accounts receivable bookkeeping and bill collection services. It is useful for advancing financing for inputs or sales of processed and raw outputs that are sold to reliable buyers.” (Miller and Jones, FAO 2010)

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Figure 7: Different Categories of Rural Households and Possible Pathway out of Poverty

High diversiﬁca�on into mul�ple low-input; low-output crops for own consump�on; opportunis�c need based sales and oﬀ-farm income sources to hedge against risks

Tipping point of increased diversiﬁca�on into higher value crops/livestock and oﬀ-farm ac�vi�es and move towards specialisa�on within those income sources Households increase specialisa�on with a balanced por�olio of income sources

Household diversiﬁca�on

DYNAMIC POOR

STRUGGLERS Suppliers to greater localised demand generated by other categories Gradual demonstration eﬀects Labour to semi-commercial or commercial suppliers

Combination of income sources (higher value crops/staples/livestock) for commercial purpose Specialised in increased number of crops Informed investments in crops, inputs, tools and semi-mechanisation Increased eﬃciencies and reduced wastage Reduce cost structures Increased working capital for reinvestment in income sources-crop production and semi-processing

Subsistence nature of farming system

NON-POOR Increased eﬃciencies and reduced wastage of crops Reduced cost structures Deepening of edxisting commercialisation of crops that households specialise in Increased working capital for reinvestment in income sources Investment in reliable and rewarding farming system for adequate consumption, income and safeguarding risks Investment in specialist functions Demonstrate pioneering investments

Household income

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Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Full commercial produc�on into specialised farm systems

Opportunities to Pathways out of Poverty for the Urban Poor

Like rural households, no single income source can lift a household out of poverty in an urban setting. Households need to have a combination of income sources to reduce vulnerability. With little or no entry and exit barriers, informal trade and small businesses are seen as a significant source of income for all households and wage employment is considered a steady source of regular income that is often used as working capital for investing in petty/informal/ micro trade. However, the differences in the nature of wage income is critical in urban households. Poorer households often struggle with poor literacy skills and are tied to the unskilled low paid jobs, whereas the members of the nonpoor households secure relatively higher paid work and often more skilled jobs, which have a growth progression (e.g. in the hospitality industry).

Analysis suggests three major strategies or pathways that MDF can facilitate to help people come out of poverty and reduce the vulnerability of rural households. These are further broken down below. 1. Create avenues for absorption of jobs and conversion of skills, 2. Address the constraints of small businesses growth and link informal business activities to markets or large institutions, 3. Promote or introduce products and services relevant to the urban poor. The pathways are relevant for both men and women in urban poor households. However, a more nuanced pathway towards WEE is elaborated in page 86.

The analysis suggests three key pathways, on which MDF can work, to contribute to poverty reduction and vulnerability of the urban poor:

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Create Avenues for Absorption of Jobs and Conversion of Skills • Support investment opportunities that create more jobs in the urban areas: The youth account for almost half the population of PNG and comprise a large part of the urban poor. In Port Moresby alone, there are more than 40,000 unemployed young people, many of whom have missed out on completing their education due to their life circumstances and do not have the necessary skills for entry-level jobs. With 40% of the population under the age of 15, an UNDP study estimates that nearly three million people will join the work force in the next 20 years (Deloitte and UNDP, 2017).78 Currently there is a large gap between the number of people hoping to enter the workforce and the capacity of the formal economy to absorb them. This is further exacerbated by the fact that many lack the skills and educational background required for those few positions that do exist. It is for this reason that much of the current employment takes place in informal markets, either in informal trade or casual labour. A little over 60% of the current labour force is in the agriculture sector (mostly unpaid), followed by the services sector and then in industry (ILO 2017)79. There is a critical need to absorb the growing youth population both at regional, and national, levels. With growing services, construction and retail industries, there will likely be opportunities among businesses in urban areas for employment of more national staff. MDF could explore the opportunities around job matching and support businesses with recruitment processes, such as with service industry enterprises supplying to construction or mining sectors. This would help the businesses grow and offer greater employment opportunities. Another avenue could be to support local investments in, and the expansion of, emerging sectors, such as tourism and hospitality, construction, housing, gas projects, onshore processing in the fisheries industry (e.g. in Lae), food processing or simpler manufacturing units. All of these steps can help create new job opportunities. • Reduce the skills gap and improve technical skills for greater employability in the formal sector: An estimated 2.5 million people work in the informal economy, compared to only 500,000 in the formal sector. Aside from too few

How to Grow Employment in PNG, Deloitte and UNDP, 2017

Employment and Environmental Sustainability Fact Sheet, ILO 2017

How to Grow Employment in PNG, Deloitte and UNDP, 2017

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job opportunities in the formal sector, a discrepancy between the skills employers want and what the potential employees have is a key contributing factor why people cannot secure these jobs. All secondary literature points to low skills levels in the available workforce in PNG. A recent study suggests that skills shortage is one of the single most important factors that impede businesses from hiring (Deloitte and UNDP, 2017)80. The problem around this gap has been reported to be more acute for jobs that require managerial skills, professional services (e.g. IT services, accountants, administration), hospitality, wholesale and retail (particularly food trade, waiter, kitchen hand and shop assistant) followed by trade occupations (e.g. construction trades, electrical, machinist, site supervisor). The primary study shows that pay scales in low-skilled entry level jobs are low but people tend to earn more after just two years of experience. Thus, those who join the workforce with higher skills or gain skills faster are likely to earn more and be hired. With the small pool of skilled people, the turnover is also very high, with a national average of 38%. Companies are also reluctant to invest in staff training. While organizations will need to continue to provide trainings that are tailored to their specific needs, there is a potential benefit to provide basic skills or knowledge in clerical work, customer service expertise for waiters including basic numeracy or literary. The scope of this education project could link employing organizations and training providers (TVET or other institutions) so instructional programs are upgraded and new entrants to the workforce are more attractive to employers. Additionally, coaching for soft skills, such as teamwork, management or work ethic, can also lead to increased retention and performance. The competency gap can also be minimized by improving the potential labour force’s awareness on the type of skills that employers are looking for and what opportunities exist. This is also particularly true to ensure inclusivity in terms of women’s employment (which is discussed in detail in chapter 5).

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Address Constraints to Growth of Small Businesses and Linking Informal Business Activities to Markets or Large Institutions Both secondary and primary research show that the size of the informal economy is significant in PNG: making up approximately 90% of the population’s employment (Deloitte and UNDP, 2017). As mentioned in the urban Household analysis, much of the informal trade involves micro businesses, such as petty trade, selling cooked items and very small-scale retail of garden produce. There are also some growing businesses, such as rentals, transport, floriculture and livestock. Much of these micro-businesses have no entry/exit barriers and business imitation is very high, resulting in ever-increasing competition and eroding profits. They are also often needs-based, which means when they have sufficient cash for certain needs, they will cease trading. • Promote and link informal businesses to markets or large institutions as ancillary industry: Business owners that tap into different markets are more likely to sustain. There are a few informal business activities for which households believe there is a demand, but they do not know where or how to approach buyers. This would include livestock sales (i.e. poultry, eggs, pig farming), floriculture (selling flowers to hotels and events), small scale printing/photocopying, catering to the mining and construction industries and more. MDF PNG may explore opportunities to link informal business activities, such as support services (catering, maintenance, etc.), to markets or large-scale institutional buyers, such as real estate agencies, construction companies, mining and food suppliers to the hospitality industry and others. There is a need for a graduation process from micro to small-scale businesses. Currently, much of the small-scale businesses that comprise the ancillary industry is catered to by either imports or foreign-owned companies. MDF can explore opportunities to support small businesses to provide ancillary services to the larger industries. An entry point for this project would be to map the service requirements of these large industries, such as construction, mining, food processing and FMCG companies. • Addressing logistical constraints faced by informal businesses: Spoilage, transport (either high costs or access difficulties) and security are among some of the top challenges that informal businesses face. These mostly affect businesses that deal in perishables, such as fishing, fresh produce, betel nut sales, lunch pack sales and canned drink peddling. These businesses all struggle

to find adequate facilities for storing their products in a manner that increases shelf life and reduces their chance of loss. Having access to good quality storage facilities in markets, or in settlements, could reduce wastage and the cost of doing business. Additionally, safer and more reliable transportation options could reduce the risk of undertaking business activities by these micro-entrepreneurs. • Enabling access to finance to stimulate growth and diversification of businesses: Primary research indicates that the working capital for investment into micro and small businesses is generated from equity, informal loans from money lenders and savings from wage employment. There was little or no mention of formal loans. Affordable access to finances that allow businesses to increase their scale, reduce costs or diversify into more profitable income sources are necessary. This can come from loan structures that are aligned to business revenue flows and supporting financing organizations to identify profitable trends in businesses and offer products in those areas, alongside educating clients on cash flow and business management. The high bank fees and complications around documentation often prohibit people, particularly women, from taking bank loans. Research reveals that those in poverty must have access to an easier mechanism for loan disbursement. Alongside loans, cost saving products can also be introduced to create a consistent cash flow, which can be channelled into investments. • Tapping into employment as a conduit for stimulating informal income earning activities: Primary research found that all urban households are involved in some kind of informal business activity. Seven out of 18 informal business activities started from funds earned through formal employment. Those who earn money from jobs provide start-up funds to other members of their families, especially to the women. In some cases, people get the idea of a new income earning business activity from their work places (e.g. selling lunch pack, informal moneylending or supplying flowers to their employer). Some employers provide loans to their employees. Sometimes these loans are used for consumption but other times, they are used to start up informal business activities. Frequently, women, who have fewer sources to turn to for money, ask their employers for loans for consumption or to start an informal business activity.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Formalizing the processes through which employers can, with low risks to themselves, arrange loans for their employees could increase the income of employee households and might create additional income generating activities for women (either for women employees themselves or for women in the employee’s households).

Researchers need to gather more data on the ways existing, formal jobs create or grow informal businesses, whether those businesses are likely to generate employment and whether the owners of these new businesses are likely to be women.

Promote/Introduce Products and Services Relevant for the Urban Poor While the aforementioned points discuss the potential for the urban poor as suppliers or employees, there is also potential for them to be customers of a range of different products or services. Products and services for the urban poor could address both societal problems, such as health and safety concerns and financial struggles. The analysis in section 4.2 includes a breakdown of the key components of household expenditures which show food, transportation and utilities as the main expenses. • Food makes up 35% of total household expenditure on average (which goes up to 51% for the poorest households). Primary interviews suggest that vendors make as much as a 50% profit margin on fresh produce and perishables. However, the issues around spoilage due to poor transportation and storage, market inefficiencies (as mentioned in the rural analysis) and the vulnerability in sales contributes to the high cost of food. Introducing cheaper storage or packaging solutions, as mentioned in the rural pathways section, can reduce those cost structures. • Transportation is significantly higher for relatively lesspoor households, as it includes repatriation costs, but also many of those visits are a way to continue wantok trading relations. Supporting aggregation models might

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reduce those costs somewhat, but only if it reduces the frequency of trading visits. A bigger entry point for MDF in transportation services is to facilitate the provision of safe and reliable transportation for people in employment and executing business transactions. Many employers provide transport to and from work. This ensures workplace attendance and significantly reduces personal travel-based security risks. The latter is particularly important for female workers. Organizations may outsource employee transport to service providers, have their own drivers and vehicles or may pool resources with other organizations in the same location to provide transport for all their employees. • MDF could also explore opportunities to partner with private sector enterprises to promote products and services to reduce the strain on cost of utility. Currently, the bulk of this cost is comprised of electricity, cooking fuel and water. Possible scope could include working on cheap solar powered solutions for households or communities and promoting products such as fuel-efficient cooking methods. Similarly, increased sanitation and hygiene product availability would improve the lives of those living in poverty.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Tourism as a Pathway

While there are specific areas to increase the benefits from tourism, such as improving training opportunities for people wanting to join the sector or improving the tools available for handicraft suppliers, the sector’s size is still small to have significant outreach. This, however, does not reduce the importance that the sector has as a pathway out of poverty for households in remote locations. For instance, only two households in the sample lived in thatched houses and didn’t have electronic items, such as a TV or Fridge, while all other households interviewed either had iron roofing or more concrete structures to live in and owned electronic appliances. While even poor urban households do often have access to multiple appliances, it is important to note that the sample also included households which were not urban and two remote households had generators to run the appliances. These households were different from the remaining village and were more affluent. The recent growth in the arrival of cruise ships has also encouraged existing enterprises to explore opportunities in the sector move upwards economically. Three households in the sample started offerings products and services to the tourists after the growth and increased household incomes being earned. The tourism market is considered more lucrative

by small enterprises, for instance, the fish supplier and taxi business interviewed earned a higher income by supplying to the sector as opposed to the general market. The sample studied underlined the importance of alternative industries in PNG which can provide both wage employment and become a market for good and services. The programme direction will need to increase the scope and size of tourism to create additional opportunities for households, particularly around long-term adventure tourists in niche markets to increase the employment created by the sector and also growing its consumption capacity for local goods and services to increase incomes. For example, the total number of people directly employed in the sector is estimated to be 18,000 jobs and the capacity of the sector to provide additional jobs will be through the sector’s growth. While there can be merits to provide additional training opportunities, but the sector’s absorption capacity is still low and it has also successfully upskilled the people it employed through inhouse training. Similarly, a focus on promoting sectoral growth by addressing the challenges faced by the businesses in the sector as improved marketing and new product development will be critical to increase the opportunities that the sector provides as a pathway out of poverty.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Pathway Towards Women’s Economic Empowerment

Much of the broader economic constraints and pathways out of poverty in the rural and urban areas of PNG, as mentioned above, are common to, and equally relevant for, both men and women. However, there are nuanced differences in challenges women face in particular that hinder their growth opportunities. This section details the ways in which MDF can facilitate women’s economic empowerment through the economic interventions, as proposed in the rural and urban analysis above. In the rural areas, households operate as an economic unit where both men and women are involved in multiple lead and support roles. Considering their significant involvement in agriculture (production, post-harvest handling and retailing) and livestock (animal rearing), the suggested pathways mentioned for the rural poor is very much relevant for women. However, the following suggests some additional activities that the program needs to consider when designing interventions to address issues around income diversification, access to inputs and information on application and agriculture finance.

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• Diversification of income sources for greater economic resilience: Although women are involved in a range of support roles in agriculture, their income from their own separate income streams (e.g. small trade and vegetable plots) is much smaller compared to men because their plots of land and production volumes are relatively smaller and serve the purpose of meeting daily needs or subsistence. Therefore, expanding the market for a range of products that women are highly involved in, or in control of, such as fresh produce and livestock, is expected to generate greater income earning opportunities for women. Such income opportunities would also enable them to expand their pot of savings, giving them greater economic independence. However, project designers must take care not to create a double or triple burden for women, as they are obligated to prioritise the economic activities that are common for the household over own separate streams of income. On the flip-side, women’s ability to generate separate income streams or savings to contribute to other household needs may improve their recognition in the house as a valuable contributing member.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

• Improve women’s productivity on farm through targeted information and access to appropriate inputs: Since women are primarily involved in a range of support roles, such as planting, watering, application of crop protection products, harvesting and post-harvest handling, their access to information on availability and appropriate use of inputs is absolutely critical for improving overall farm productivity and for reducing wastage. Introducing time and labour-savings inputs such as mulching, silage and irrigation/micro-irrigation facilities would reduce their workload. Increasing knowledge and information on input usage would improve their ability to influence decisions on their farm and the economic activity should give them greater control, making them feel more empowered. »» Using the right medium of information provision: Women currently have very little or no access to information channels and the few network mediums are their husbands, other women’s networks and the church. While extension officers often visit men, the time and venue of information delivery is frequently not conducive for women’s participation. Even if they are present, they are mostly involved in preparing meals. Hence, to improve women’s participation, information must be consciously promoted and targeted to them. This can be done in a range of ways. For example, there can be dedicated extension officers meeting women on relevant information needs, dissemination sessions can be either conducted separately for women or during times when they can participate and the venue can be selected with them in mind (closer to the households or centred in the communities). Information can also come through church organisations, other women’s networks and through extension arm of buyers (some of this is already taking place in the vegetable production sphere). In cases where women are not able to participate, the extension officers or information service providers should encourage the male members of the household to share the information with the women (highlighting the economic benefits of doing so) and then follow up to check that have passed on the information. Men should not be precluded from access to this information or it will negate the program’s purpose. »» Promoting inputs, while considering women are potential clients: MDF could partner with private enterprises to promote products that are relevant for both men and women. It is important to regard women as significant clientele, as they are largely involved in agriculture and play a critical role in input application. Retailers can market various products and tools toward women that will both reduce their workload and increase farm production, such as smaller packets

of seeds or feed, appropriately sized crop protection products (e.g. pesticide bottles or sprays), mulching techniques and micro-irrigation systems. During sale transactions, venders can share information regarding appropriate usage and on health effects (such as the correct dosage of insecticide and the application of safety materials to mitigate the risk of health hazards). In case these inputs are meant to reduce a woman’s workload, MDF should investigate the affects and how women spend the additional time, and if they use it to partake in other economic activities, if it is a choice or an obligation. In urban areas, women’s economic empowerment could be facilitated through: • Enabling women to access and retain formal job opportunities: Currently, a very small percentage of women are involved in formal employment. This is rooted to the following key reasons: (a) poor literacy skills (b) women’s perception that there is little conducive job opportunity available for them and (c) flexibility. In terms of formal wage jobs, women are mostly involved in the service sector (e.g. hospitality and retail) or in few agroprocessing industries. MDF could work with vocational or training institutes to attract potential female staff to prepare for existing job opportunities in the urban areas; inform women of potential job opportunities and match the prospective applicants to appropriate jobs; offer training to improve employability and work with businesses to create a more conducive environment to absorb and retain women at work. MDF can facilitate the latter by working with key leading businesses, or business associations, to organize demonstrations on safer transportation, promote work flexibility so women can balance their jobs with their reproductive tasks and address issues to reduce absenteeism or presenteeism at work. • Access to working capital for informal trade investment: Women are largely involved in informal trade, such as selling garden produce, or cooked food, and micro-businesses, such as poultry and pig rearing, floriculture, etc. Much of the working capital generated for such investments derive from wage job savings or informal loans from money lenders or other family members. There is little or no use of formal bank loans due to the documentation process, bank charges, lack of collateral and the high upfront savings that need to be shown to compensate for lack of assets. These factors prohibit women from entering more ambitious forms of trade or other sources of lending. MDF can explore the option of working with financial (even non-bank) institutions to introduce saving and lending mechanisms, targeted to women, to support investment in small businesses and trades. This goal can be coupled with coaching, to improve cash flow and

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

business management. Improvements for both rural and urban areas: • Improve conditions for market participation: This may not always happen in partnership with the private sector, but if there are opportunities to work with other government or development agencies, MDF could use their data collection to provide insights into the importance of promoting safer transport, and market conditions, for women to participate in the market. Both men and woman raised the concern of theft and physical harm when traveling to markets, but women are particularly vulnerable to harassment and robbery which precludes them from going great distances. Partnerships that enable farmgate pick-up may mitigate such risks, but this may not be applicable in informal trade where women must continue to participate in market spaces. • Promote financial instruments and ICT solutions to manage finance: Primary and secondary research indicates that women in most cases have secret savings (either from their individual work or from a joint activity) and cash income transparency with other household members can often make them subject to unplanned expenses or the risk of violence. Although they are expected to inform their husbands of any expenditure decisions, they would prefer to keep aside money secretly, in a safe location (the degree of this varies between households). Thus, earnings kept, or payments made, through individual bank accounts could give women greater control of their

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income. This could be facilitated by working with financial institutes with the conscious understanding that literacy is an issue and proximity to bank branches or agents also needs careful consideration. Additionally, although ICT solutions are a useful means of making transactions and mobile phone penetration at the PNG household level is improving, women often do not own a mobile phone. They have to rely on their husbands, or other household members, to use the phone and therefore, ICT solutions for financial transaction designers must carefully consider this fact. Similarly, the design of bank accounts to transfer proceeds of sales by buyers should consider whether these are individual accounts or if they can be accessed by both the male and female members of the household so women are not excluded from accessing the fund. • Reducing business blind spots: It is important to showcase the financial benefits of engaging and targeting women as potential suppliers, employees and customers, as it is often not understood. Hence, it is absolutely critical to understand womens roles so that appropriate measures can be taken to provide the right information and tools that address both WEE constraints and the business bottomline. Companies can use socialisation campaigns, courtyard meetings and role models to increase the appreciation of their contribution to the household economic gains and mitigate the risk of violence, which will also address disruption to supply and reduce business costs from absenteeism or presenteeism.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Conclusion This paper reveals that poverty and household vulnerability is strongly linked to structural market inefficiencies and that there is no one single crop or income source that can lift a household out of extreme hardship. In both rural and urban areas, upward economic mobility possibilities will increase if farm systems are more efficient, labour absorption avenues are present, workforce skills are developed, and investment capital is generated consistently and accessibly. These improvements will benefit both men and women in PNG, but additional steps are necessary to empower the very active female labour force present in the area who face special gender-based constraints. Based on this research and analysis, MDFâ&#x20AC;&#x2122;s overarching country strategy should focus on Agribusiness and Emerging Products and Services to promote agricultural and economic diversification and inclusion. These two broad umbrellas encapsulate the programâ&#x20AC;&#x2122;s original pillars of ICT & Logistics, Rural Inputs Services, Tourism and Value Addition. The findings suggest that no single crop is dynamic enough or connected to enough market actors to be the lone solution for poverty reduction. A farmerâ&#x20AC;&#x2122;s strategy should begin with diversification and as their income increases, they can specialise and incorporate emerging cash crops to the extent that the surrounding market system allows. MDF can facilitate this approach by making farming systems more productive and enabling these entrepreneurs to take advantage of opportunities

by supporting key crop and livestock value chain development with economic potential. By improving input distribution, information availability, produce aggregation (especially for expanding crops) and agro-processing of basic crops into other in-demand produce, households can become more resilient. Alongside agribusiness support, MDF can partner with organisations in SME development to facilitate job creation in emerging sectors, such as in the tourism industry. New service product generation should crosscut the entire business community, including agricultural market actors, and provide access to business information and financial instruments that reduce transaction costs. To support new businesses, all proposals should have broad application, such as developing reliable local mobile phone networks, especially in promising markets. With specialised knowledge of wantok networks and local social hierarchies, the MDF PNG country team is in a unique position to introduce new practices that support pragmatic business ventures and investment while respecting cultural traditions and values. Utilizing this insightful research will assist program managers to build meaningful projects that respond to the poverty dynamics of the area. Expanding the already well-established partnerships in the region will continue to find new pathways out of poverty for the financially disadvantaged.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Annexes

Select Cases on Rural Poverty Analysis

Tambul, Western Highland Province Altitude and Rainfall: Tambul, (WHP) has high rainfall (average annual 2300-4000mm) and has high potential for intensive agriculture. Conforms to Sweetpotato + Taro based system. Altitude varies from 800 m in the lower Kaugel Valley, to over 4000 m on the upper slopes of Mt Giluwe.

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<1.9

<3.1

Non-poor

Struggler

Nascent entrepreneurs

Mature entrepreneurs

33%

29%

Six Household members; two income earning members; four children (two going to primary school, one attending secondary school and another son completing higher studies in Lae)

Seven Household members with two income earning members supporting five children

A total of seven Household members were not under the age of 15. All children are or have pursued education. Two sons are in Lae- one working while another is completing higher education

Seven income sources: one from livestock (approx. two pigs sold at K500 each), five from agri (broccoli, cauliflower, sweet potato, potato and peanuts which are bought from other farmers to resell) + one non-agri-non-wage (trade store)

Six income sources: three from agri (Brocolli, Cauliflower, Potato and some small income from strawberry), one from livestock (pigs one sold as high as K10,000) and some occasional sales of cooked food (Taro).

Five income sources: one livestock ( > 4 0 p i g s ) , t wo a g r i ( B ro c c o l i , Cauliflower), one non-agri (trade store) and one wage (son living in Lae)

68% of Household income comes from agriculture and the largest income source is cauliflower while the smallest income source is the trade store

Largest income source comes from broccoli/cauliflower and smallest income source is strawberry

Approx one ha is used for cultivation

Has nearly eight hectares but uses only three ha as the rest are uncultivable

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Has three ha of land, of which only 1.2 ha is used for cultivation

Tambul, Western Highland Province Crops: The Household grows five different crops and high value vegetables (broccoli and cauliflower) are grown three times a year; mostly for sale. Shifting cultivation is done for staple crops that is mostly used for consumption and pig feed. Inputs: Land is rain fed and water is sourced from nearby creeks. Seeds are bought, and herbicide is applied on high cash vegetable crops, but availability of seed is often a problem. Planting materials, fertiliser and labour to plough the land take up major shares of the cost (hired 10 labour at 10K/day/person). Given that their family labour is insufficient (all young children), they must hire more labour compared to other Households. In addition, the cost to take vegetables for sale is too high and the small return does not justify investments for the reinvestment/expansion of production. The Household is off the electric grid connection. Fish meal is bought for pigs. Return: It is interesting to note that this Household's productivity of broccoli and cauliflower is 6T/ha and 5T/ha respectively which is far lower than the non-poor Household (32). Also, the sales price is as low as PGK0.21/kg given the quality.

Crops: Vegetables are grown mostly for sale (with focus on broccoli and cauliflower) while root crop (Taro) is used mostly for consumption and some sales. Inputs: Seeds are bought for high cash vegetables e.g. broccoli, while fertilisers and chemical sprays are used for all crops. Household practices shifting cultivation but has plots dedicated for high value vegetables. Sugarcane and Sweet Potato are intercropped. Household has easy access to grid water system (one min away) and were able to access water even during the drought. Household only used a few labourers for planting seeds but did not need more or for other times as their family labour was sufficient (only hired five labourers and had to pay K10/person/ day). Fish meal was purchased for pigs. The Household has grid connection.

Crops: Major focus is on broccoli and cauliflower. Other vegetables grown include pumpkin. Root crop (sweet potato) is grown mostly for own consumption and some sales. Mounds are done to avoid more water being collected in the soil. Inputs: Water is used from nearby creeks and the Household is off the electric grid connection. The head of Household was the first person to work as an extension officer and has more knowledge on cultivation. Household practices shifting cultivation and crop rotation. Broccoli and cauliflower is grown after sweet potato and the sweet potato waste is used to fertilise the soil for the high cash crops. Inputs such as fertiliser and spray are used for high cash vegetables and fish meal is bought for pigs. Labour was hired to help in harvesting, packing and taking the produce to the market. High cost of labour is often mentioned as a deterrent to expansion. The Household is well aware of better handling practices and how to reduce spoilage from better packing. Return: The productivity of broccoli and cauliflower is the highest compared to the other Households at 15.1 T and 15.9 T respectively. This could be possibly due to better fertiliser and input application and intensive farming as they use more seeds in smaller plot compared to others.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Tambul, Western Highland Province The Household is able to make some savings after all expenditures are made. A large proportion of their income is spent on social obligation. There is willingness to expand production, but cost of labour and transport is too high and without a good (better price and regular sales) they do not want to risk further investment in agriculture. Savings are reinvested in inputs for the high return income sources, e.g. high value vegetables and pigs.

The Household was able to make savings. They received a much higher price for the same crop (e.g. broccoli) although the reason is unclear.

House is located near the main road with access to local station market but the bigger market- Hagen is nearly two hours away. Selling at the bigger market can be costly- K14/person return, K7/seat for bags, K2 market gate fee, K2/night if bags are kept if not sold on the same day and K1/bag for porter

The Household is located very close to the station and hence have easy access to local health centre, school and market. But to be able to sell large volumes, they need to travel to Hagen which is two hrs away. Similar costs are applicable as above.

1.5 hours away from the Hagen market but costs are quite high (as mentioned above).

Income is only so much to support their basic needs plus education for their son. In times of need, support is taken either from relatives and/or through informal lending.

Livestock and other income help them cope as interview indicates that they had very healthy pigs. Even after wantok obligation, they had some savings. If needed they rely on relatives for monetary support. For instance, this year, financial support was taken from relatives to work on the house construction and for covering for education.

High value vegetables and livestock ensure regular income flow but in time of crisis they are able to get money from their son who is working in Lae.

Household is not able to make any savings after key expenditures (education, social obligations and Household necessities). The Household also recently made some investments to construct a house which is currently under construction. Social obligations take up nearly 48% of their income. They intend to increase production, but return is very low in agriculture- nearby markets are slow moving with small volume; bigger markets are faced with glut. Additionally, there is not much family labour and external labour is expensive that deters expansion. This Household got the lowest price/kg of the same vegetable crop (broccoli) compared to the other two categories.

Reinvestments were made only on key income sources (high value vegetables and feed for pigs). The Household also made some investments on improving the house condition. All of this was possible while paying for one of their son's education in Lae.

Investments in fish meal is made but interviews indicate small expenditure for a sizeable pig lot which shows they are even cutting down optimum feed.

Support was received from relatives as pigs to pay for social obligation

Support in the form of pigs and food was given to relative to pay for social obligation and compensation. The household gave a pig worth K5,000 to a relative for compensation in the past year. This has put strain on their savings. While husband is mostly involved in vegetable production, the wife takes the lead on peanut production and managing the trade store. She keeps aside some savings from her control of money on the trade store. The amount earned is well informed to the husband, but she prefers to keep it aside to avoid unnecessary expenses e.g. alcohol consumption.

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Wife manages the strawberry and cabbage garden and is in control of her income. She saves separately from that income source. Wife has key responsibility to sell produce in the market.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

The household gave away 30 pigs worth PGK 50,000 to neighbours and relatives to support them during the extended dry period and drought. The contribution was done in 2015 and they have not recouped that payment yet but is very optimistic they will get it back.

Wife is primarily responsible for selling fresh produce in the market, as they are perceived to be better at bargaining. She does not manage any separate income stream but is able to keep separate savings from the Household income pool.

Angalimp, Jiwaka Lowland

Dei, Western Highlands Province Lowland

<1.9

<3.1

Non-poor

Struggler

Nascent entrepreneurs

Mature entrepreneurs

45%

30%

38%

Only two income earning members but have to support a big family of 11 with five children under the age of 15 and one son studying in POM. The Household spent nearly 28% of their income on food while education consumed 35% of their Household income.

10 Household members with only two income earning members, five children (three under 15 years of age), they have to look after three of their relatives who live with them.

Total of nine Household members: only two income earning members, six children (one under the school going age while the rest are all pursuing education with one son in studying in Lae). The house is not connected to main electricity grid nor water grid. They have solar light. 17% of total expenses goes into education while nearly 60% is for social obligations.

Eight to four from agri (coffee and cucumber are main, opportunistic sales of peanuts and citrus), two livestock (chicken, three pigs - pigs are generally kept for social obligations). Majority of their income comes from agriculture and the largest income source as a percentage of total is 90% indicating that majority of income is reliant on a single crop.

Four to three from agri (coffee and cucumber are main and opportunistic sales come from watercress), one nonagri non-wage (flour balls), one livestock (sells chicken + raises pigs but have not sold any); 68% of total income comes from agriculture. Coffee is the highest income earner but the percentage share of the highest income earner to total income is 44% meaning that their income is better spread across other crops.

Seven income sources: six from Agri (coffee, sweet potato, peanuts, mandarin, cucumber, beans) and one livestock (pigs); 81% of total income comes from agriculture and the largest income source takes up 57% of the total income.

A total of 3.8 ha - 3.2 ha for coffee + 0.6 ha for cucumber

Six ha for coffee and one ha for cucumber

Household has 16 Ha of land but uses six ha for cultivation (two for coffee, two for food crop, one for peanuts and the rest for other types of opportunistic production)

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Angalimp, Jiwaka Lowland

Crops: The Household grows a total of six crops, of which four bring income. Coffee (sold as red cherries) and cucumber are the main cash crops while corn and sweet potato are grown for own consumption and pig feed. Household grows cucumber five times a year and it is grown as it is ready for harvest in a very short time. It is useful to note that this particular Household was the pioneer who introduced cucumber farming in the area. They were making good money in early years and as others started following, returns lowered over time. Household practices shifting cultivation but has one plot dedicated for cucumbers. Coffee is the most profitable crop for this Household followed by cucumber (but they receive approx. PGK0.30/kg unlike PGK1.50/kg offered by buyers like NKW). However, the return/ha from coffee is approx. PGK 667 which is lower than coffee returns from EHP as the cost/ha is far higher in Jiwaka due to the high labour cost. Inputs: The Household has access to a nearby water creek. Insecticides are used for cucumber plants and seeds were bought (mainly for cucumber) once, for own multiplication in later years; seeds for staple crops are all grown. Seeds for peanuts are most expensive. Herbicide is used for coffee plants and labour is hired for land clearing and picking coffee cherries during the harvest season. Labour is the most expensive input (80% of all cost). Labour is often scarce and costly as more and more people (those who would come from southern Highlands to work) are moving to POM and Lae. There is opportunity for mechanisation as the land is flat.

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Crops: The Household grows a total of four crops (coffee, cucumber, watercress and sweet potato). Coffee and cucumber are the main cash crops while sweet potato is grown for own consumption and pig feed. This particular Household is rather enterprising. In addition to growing coffee, during the harvest season they hire a neighbour's vehicle to go around collect coffee from other farmers to sell to the final buyers. The Household sells coffee directly to the factory which helps them fetch a higher price than the roadside. Peanuts are kept as buffer for dry season. Cucumber is grown as it is ready for harvest in a very short time. They grow this crop three times a year. Household practices shifting cultivation but has one plot dedicated for cucumbers. Cucumber is also the most profitable. Compared to the Household17, their yield/ha, cost of input and the return on cucumber is higher and it can possibly be due to the use of better seeds. This Household is also getting a higher price/kg (PGK 0.47/ kg compared to 0.34/kg that Household 17 sold for). Inputs: The Household has access to a nearby water creek. Insecticides are used for cucumber plants and seeds are bought (mainly for cucumber and peanuts); seeds for staple crops are all grown. Herbicide is used for coffee plants and labour is hired for picking coffee cherries during the harvest season. Labour is the most expensive input and is getting more scare and costly as more and more people (those who would come from southern Highlands to work) are moving to POM and Lae.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Dei, Western Highlands Province Lowland

Crops: Household grows a total of seven crops, six of which ensure income. Coffee (sold as parchment), peanuts and mandarin are the key commercial crops. Peanuts and mandarin are grown and sold all year round which allows some regularity in income. the Household practices shifting cultivation and in most cases, does intercropping (peanuts with corn/cucumber). The Household also grows sweet potato and cassava which are only sold when needed but are mostly for home consumption or used as feed for pigs. Coffee productivity is similar to other farmers, but their cost/ ha is marginally lower than the other Households in the area as they use family labour/wantok but their return is lower than EHP. Inputs: The Household uses weedicide for coffee and pesticides for all crops and buys seeds only for peanuts. The Household is able to access water from nearby river.

Angalimp, Jiwaka Lowland

Dei, Western Highlands Province Lowland

In general, the Household has multiple income streams but struggles to save. A large part of their income is spent on social obligation. With small savings over time the Household was able to buy one ha of land land near Kindeng market to grow vegetables so that they can easily sell in the nearby market with no cost of transportation. The Household tries to keep some savings for the dry period but a sudden shock such as a large social obligation can take up all their savings. This is what happened this year. Whatever they were able to keep was spent on compensation leaving with either very little or no savings. In general, the returns from crops are low as there is an oversupply of the same crop by farmers pushing the prices down. They often resort to distress selling.

The Household is able to make some savings after key expenses and majority of the savings are for education for their children. The Household intends to use additional fallow land for production but is reluctant to do so given the high labour cost.

45 mins to the main road and another 35 mins to the main market (Hagen). The closest market is Kindeng which is approx. 10 mins drive. Household travels to Hagen market only when they have big surplus to sell or for medical purposes, otherwise the cost of transportation does not justify investments in crop. The key costs to market include: PGK1/bag for porter; 2PGK/bag for market fee; 2 PGK/ bag for storage (if not sold on the same day) and PGK2/bag once again for market fee the next day.

45 mins to the main road and another 35 mins to the main market (Hagen). The closest market is Kindeng which is approx. 10 mins drive. Hagen market is used only for large volumes otherwise the return is too small given the cost on transport and market fees.

They go the nearest Nunga market. However, they do go to the main Hagen market from time to time whenever they have big quantities of produce to sell. Their house is located close to the market with fairly reasonable connection. It takes 30 min an hour to get to Hagen market.

Cucumber is grown multiple times during the year and peanuts are grown for dry period. However, to supplement other payment for social obligations (e.g. bride price) they borrow money from relatives (informal lending). Pigs are raised for emergencies and to pay for large expenses.

The Household uses different income streams to ensure that they have a continuous flow of income throughout the year. Household consumption is managed by sweet potato and peanuts and the informal trade is a means of ensuring daily expense support.

The Household has a number of crops that ensures income throughout the year. In times of crisis the Household resorts to selling pigs or asks for support from relatives.

In general, the Household has multiple income streams but struggles to save. A large part of their income is spent on social obligation. With small savings over time the Household was able to buy 0.5 ha of land near Kindeng market to grow vegetables so that they can easily sell in the nearby market with no cost of transportation. They benefitted from a wantok price. The Household tries to keep some savings for the dry period but a sudden shock such as a large social obligation can take up all their savings. This is what happened this year. Whatever they were able to keep was spent on compensation leaving with either very little or no savings. In general, the returns from crops are low as there is an oversupply of the same crop by farmers pushing the prices down. This Household also mentioned that for some products the local market demand is not there so if they cannot sell them to the right market/buyers then all the value is lost e.g. Capsicum.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Angalimp, Jiwaka Lowland

96 |

Dei, Western Highlands Province Lowland

Traditional/community obligation plays a significant role in their economic status and is a constraint to savings. The Household had to pay a large amount for the church renovation which consumed a major part of their income. However, they benefit from reciprocal support - e.g. they were supported by their wantok to pay for bride price, got a cheaper price for land purchase and the community members often support the children with pocket money for lunch.

Social obligations play a major role and outflow on wantok obligation is fairly large for this Household compared to inflow. A tribal dispute caused the Household to offer five pigs worth PGK 5000 to a rival clan as compensation. It is important to note that the incident was death caused as a result of domestic violence which resulted in further tribal dispute. Wantok also gave economic benefit- this Household hires a car from his wantok to buy coffee from farmers and sell to final buyers (an aggregation function). As part of social obligations, the Household also had to support a relative with pigs to pay a fairly large amount for bride price.

Social obligation took up a major expenditure. The outflow (PGK 19,650) was much higher than inflow (3,520). The Household had to pay in cash, food and pigs for bride price, however received some support in the form of cash, food and pigs from relatives.

The wife is primarily responsible to sell fresh produce, citrus and peanuts in the market. She also has her own small plots of vegetable.

Wife works on the vegetable garden and is involved in informal trade of selling fried dough. She is also primarily responsible for the sale of vegetables in the local market.

Wife supports husband in crop production but she is more responsible for peanuts, mandarin and small vegetable plots. Her income from those crops are relatively less than the husband.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Kerowagi, Simbu

Gumine (Simbu)

<1.9

Poor (<1.9) better off than Household 13

<3.1

Struggler

Nascent Entrepreneur

67%

33%

40%

A large Household with nine members in total, two of whom are income earners and one who is more than 60 years of age. All children in the Household are pursuing education. The Household spends nearly 60% of its income on food while 30% is spent on Buai and alcohol.

A small Household with three members. It is a female headed Household with two sons, one is school and the other starting college in Kundiawa.

A total of 5 Household members, of which two are income earners and three children (two primary school going).

Six income sources - five from Agri (Bulb onion, Sweet Potato, Sugarcane, Banana, Cabbages), Wage income (Priest at a church)- 82% of the income comes from agriculture while the rest is wage income. The largest income source as a percentage of total income is 41% and is generated from the sale of bulb onions.

Seven income sources- Agri (cabbage, broccoli, peas, carrots, bulb onion), two livestock (chickens, 15 pigs) - largest income source as a percentage of total income is 74% and that comes from chicken/pig sales. Agriculture only brings 8% of total income which means not much is derived from crop cultivation. For e.g. the Household is not making profit from cabbages given the cost of seeds plus they are selling at K0.7/kg in the local market whereas companies like NKW pay K2.20/kg

11 income sources- eight Agri (cabbage, bulb onion, carrot, beans, corn, sweet potato, potato, broccoli), two livestock (chicken and goats) and one fish pond - 67% of the total income comes from agriculture while the rest from livestock. Cabbage brings the major share of income for the Household.

2.2 ha (0.5 ha of church land and 1.67 ha owned by Female HouseholdH): One ha is for sweet potato; 0.05 ha for sugar cane, 0.01 ha for banana, 0.6 ha for bulb onion and the rest for other vegetables.

Two hectares, of which one is used to grow commercial crops as cabbage, broccoli and carrots while the other purely for sweet potato.

One hectare of farmland

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Kerowagi, Simbu

Gumine (Simbu)

Crops: The Household grows five different crops namely, bulb onion, cabbage, sugarcane, banana and sweet potato. Given the high altitude, the Household is not able to do coffee but only vegetables and food crops like sweet potato. All these crops are grown for consumption and some surplus sales. The staple crop (sweet potato) takes seven to eight months for it to be ready for harvest whereas the harvesting period for sweet potato at low altitude is much lower. It is important to note that the highest income is from bulb onion, yet the market price that they receive is far lower (PGK 1.47/kg) than what they would get from companies like NKW (PGK 4/kg). Given the amount of time, labour and effort it takes for the bulb onions to be ready, the Household is planning to move to other crops such as cabbages, garlics and carrots. Similarly, the Household grew strawberry last year but abandoned it simply because it requires consistent labour and rain.

Crop: The Household grows seven different types of crops. Five brings income (cabbages, broccoli, peas, carrots and bulb onions) while the other two (corn and sweet potato) are for own consumption and pig feed. However, the productivity for all crops is very low and income earned is also insignificant. Given the high moisture content in the soil, there is high crop loss (e.g. 25% of cabbages and 50% of bulb onion were wasted in the ground).

Crops: The Household grows eight types of crops all of which are grown for both consumption and sales. This Household is quite enterprising as they also grow carrot and onion seeds for sale. Although cabbage brings the highest income, it is only because of the volume. The per kg price of cabbage is very low (in comparison to Household 13 who is also from Simbu). This is primarily because they rely on the local school for sale and during season a large number of farmers sell cabbages. Moreover, they are often not able to sell everything (approx. 10kg/bag is wasted due to the inability to sell). In such situation, the farmer simply dump them or gift to friends and relatives in the community.

Inputs: The Household used retained seeds for most crops and were also given seeds (e.g. bulb onions) for free by the church. It is important. The Household does not apply any fertiliser or pesticide. The Household has access to water from a nearby creek. Sales: Almost all crops are for consumption and the surplus is sold in the local market. The Household expressed interest to change to other crops from bulb onion as it requires more labour (despite the fact that it brings more income). Much of the savings are made for children's education. The Household has only started to try out new crops and the need for labour and the regularity in sales is a key factor for them to consider continuity of crops. The Household mentioned that they grow cabbages but often struggle to sell as there is no regular market for it.

98 |

Inputs: Seeds are bought for cabbages, broccoli and bulb onions while the rest are all retained seeds. Insecticide such as Keratin is also bought for vegetable application and they use chicken manure as fertiliser. Feed is purchased for livestock. Access to information is fairly sufficient and they are often visited by organisations like CARE who provide cultivation information. Sales: Much of the crop sales is done in the village market where the prices are very low. The Household is reluctant to travel to relatively larger markets in Kundiawa given the poor road connection, particularly during the wet season (which is the case most of the year). Education is seen as a key investment and the Household is saving for their son's college fees. They are also raising pigs to sell in time for his education. Much of the investments are made in input purchase for raising livestock (feed for chicken and pigs). This year the Household also made additionally investments in pig pens and feed, so it is expected that the Household would recoup the investment in the coming year.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Inputs: Seeds are bought for high cash crops and regenerated for three cycles. The Household received two trainings from local NGOs which have improved their basic farming skills. Sales: They mostly sell to the Boromil market with occasional sales in the Dirima and Gumine station. Irregularity in sales and drop in prices remain a major concern for the Household. The farming Household is quite enterprising as they sell various inputs (bulb onion and carrot seeds and goat manure) and invest in crop production to increase high cash vegetable production. They also raise livestock to cover for the loss in vegetable sales in years when price runs low. For e.g. the farmer uses the sale of goats as a means to invest in the farm as the production and markets for the fresh produce are not always reliable.

Kerowagi, Simbu

Gumine (Simbu)

Sweet potato and vegetables are planted to ensure continuous flow of income. However, the Household struggles at times to meet the basic needs or sometimes the funds they have is not sufficient to support their immediate needs. In such situation, the Household buys food/daily necessities on credit. The Household also has three pigs which are kept for emergency purposes.

Much of daily cash flow is ensured through the sale of chicken and pigs, particularly during the coffee season when others have money from coffee sales. Additionally, they get support from one of their daughters and sonin-law living and working in the district station. They have also provided cash for building the pig-pens.

The farmer â&#x20AC;&#x2122;s motivation to raise livestock is to cushion against their farm losses (i.e. poor seed production such as low bulb onion seeds in heavy rain or drop in prices due to saturated market). For instance, the Household sold a goat to supplement income from cabbage farm that was not doing well. The Household was also supported by the NGO community during the drought period with two cartoons of tin fish. The local MP also assisted with a 20 kg rice for the Household which cost around K70 and the Household also received drought relief totalling K167.50.

In the last 12 months, the Household has not received any monetary support. The Household receive benefit from the community from the work they do around the church and sometimes benefit from the food that is given to the church as offering. The Parish Priest quite often support the Household with seeds. However, the Household did pay out money for bride price and hauskrai.

The Household got support from family member in terms of food (rice and tinfish) and stock feed (finisher) for the pigs. However, they had to pay a total of K200 for bride price and hauskrai.

The sister of the male head of the Household supported them to invest in buying day old chicks. However, the Household had more cash outlay than inflow and they gave away two goats as compensation and bride price; gifted food items, and other livestock to relatives, the community and the church. The Household spent K100 on basic store goods like soap, salt, oil and gave to the people in the community. They also allowed relatives to benefit from the Householdâ&#x20AC;&#x2122;s sweet potato plots.

The wife is economically very active. Both prepare gardens, but she is mostly involved in selling the crops. She mentioned that the money she earns is for the household and whatever amount of money saved, is from the contribution of both her and the husband. She does not keep any secret savings.

This household head is a female, who is separated from her husband for 16 years but still live on her husbandâ&#x20AC;&#x2122;s village. The reason she lives in her ex-husband village is to raise her sons so they are aware of their land rights and other birth rights. She financially supported all three and adopted daughter to school with no support from her ex-husband. She is economically active, she considers raising chicken and pigs instead of food crops. She travels into town twice a month to buy chicken and pig feed.

Both the husband and wife are involved in farming but harvesting and selling is primarily done by the female head of the Household.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

Henganofi (EHP )

Bena, EHP

Non-poor

<1.9

poor (<1.9)

Mature Entrepreneur

Struggler

50%

33%

A total of eight Household members, with four pursuing education. The total number of income-earning members in the Household are four as the couple lives with the husband's parents who have their own coffee farm.

A total of six Household members. Generally, three income earning members (wife is the key income earner alongside her husband and his sister). The wife has been sick for the past year and hence was not able to contribute much to the Household income. Two children going to school while one is 11 months old. It is important to note that nearly 30% of their total income is spent on food and more than 40% on alcohol and buai. Wife's illness has also drawn out large medical expense for the family.

The Household has six members with three children (two under the age of 15) pursuing education and one son 18 years of age supporting the family on the farm. The son also offers labour on others' farms to earn additional income. The Household spend approx. 70% of their income on food.

Six income sources- Agri (cabbage, coffee, sweet potato, carrots and potatoes), nonagri (sale of buai and cigarettes). 98% of income comes from agriculture and the percentage of income from the largest income source is only 41% (cabbages) which means that they have income coming from multiple crops and not just one.

Seven income sources- six Agri (Coffee, four types of leafy vegetables and peanuts), one livestock (chicken). Largest income source as a percentage of total income is 62% and that comes from coffee and the smallest income comes from sale of surplus leafy greens. This indicates that although the Household relies on a range of crops to draw whatever form of income, the rest of the crops are mostly low input, low output, low priced crops.

Four income sources- four Agri (coffee, pineapple, peanut), one non-Agri (selling flour balls). The largest income source as a percentage of total income is 63% (earned from the sale of flour balls), while pineapple brings the highest income from all crops.

5.1 ha in total:

2.7 ha in total

2.4 ha coffee, 1 ha for sweet potato, 0.7 carrots and 1 ha cabbage

0.5 ha own coffee plot, 1.5 ha access to open coffee plot, 0.2 for peanuts and less than 0.5 for vegetables.

Total land under cultivation is 1.2 ha of which 0.4 is for coffee, 0.3 ha for pineapple and the rest are for other food crops.

This area has better land quality and the altitude is good for growing high value vegetables. Forested land has more moisture level than grassland. They are able to grow more range of crops.

100 |

Obura-Wonenara (EHP)

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

Henganofi (EHP )

Obura-Wonenara (EHP)

Bena, EHP

Crops: The Household grows a total of seven crops out of five bring income. Corn and cassava are for own consumption, while the rest are all for consumption and sale, e.g. sweet potato. The key commercial crops for the Household are cabbages, carrots and potatoes. The Household farms on a relatively larger land compared to others and the coffee productivity is also higher given their plantation is in a new land with very young trees. They also get a slightly higher price/kg of parchment sold.

Crops: The Household's main cash income comes from coffee while only surplus peanuts and greens are sold in the market for daily cash needs. Production of any other crop beside coffee is very much subsistence in nature. It is important to note that the productivity of coffee is not very high (750kg of red cherries/ha) which is also due to the old and low-quality plant that the Household has access to. No pruning has been done in years.

Crops: The Household grows five types of crops, two of which are for own consumption (leafy vegetables and sweet potato) and three are for consumption/sale. It is important to note that the Household grows peanuts alongside other crops to fertilise the soil and is also an useful source of cash income. Pineapples are grown between November to March which is also a good source of income in the dry season.

Input use: The Household applies NPK for these high value crops only and uses herbicide for the coffee crop. The Household got support from villagers for land preparation and harvesting and paid K420 for labour food at different occasions. The Household buys the seeds for cabbages and carrots from POM when the husband goes to sell the produce.

Input: The Household applies weedicide for the coffee plot and the seeds used for all crops are retained. The Household was has been reluctant to invest in high cash crops because the seed prices are high and they felt there was no steady buyer to buy if they had produced. The cost to the market does not justify their investment. Only recently the Household started preparing land to grow bulb onion and carrots. The presence of a local buyer has been the key motivation for them to consider growing high value crops.

Sales: The Household sells most crops to a village buyer who takes the crops to POM/ Lae for sale. The village buyer is supported by the village and has purchased a vehicle to collect all produce to sell to markets. They also sell in the local market. The fresh produce sales started from a group a villagers who attended a FPDA training in 2007 and the development of a road to the market. The presence of a buyer has given them the confidence to grow high value vegetables. The Household invests in fertilisers and seeds for high value cash crops, invested in solar lighting and increased the number of livestock they owned. The Household also increased consumption of rice and protein (tin fish, chicken, lamb) and was making savings for children's education. The village is 40 minutes to the closest station (henganofi station) and almost two hours from the closest township (Goroka). The village does not have a paved road and the PMVs cannot go up during the wet season.

The Household has been struggling financially as they are having to pay for compensation for a tribal fight for the last four years. This has limited the capacity to reinvest outside of recovering from the shocks in addition to paying for the wife's medical fees. They have only invested some on new crops this year after some encouragement from church elders and due to the presence of a middleman in the area. The Household is two minutesâ&#x20AC;&#x2122; walk to the main road that leads to Kainantu (K1.00 bus fare) and it takes five minutes to reach Kainantu where the main market is located

Inputs: The Household does not apply any inputs to their coffee plants and mostly uses retained seeds for their crops.

Children's education is seen as the key investment for this Household and only this year the Household is starting to invest in buying inputs for the cultivation of high cash crops such as bulb onions. The Household has been reluctant to invest in seeds given the high price and the unavailability of regular buyers for high cash crops. The Household is in Gelehi Village in Benabena area, access to the village markets is five minute (walk). To travel to Goroka urban market, the Household walks for 2 km down to main highway road and catch a pmv on main highway to travel to Goroka urban market (20 min).

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea

| 101

102 |

Henganofi (EHP )

Obura-Wonenara (EHP)

Bena, EHP

Livestock (15 pigs and three goats) is kept for sale and social obligation. Coffee income alone is not sufficient as the income is mostly eaten up by social obligation expenses. Thus, investments in other cash crops has been an important means for this Household to manage other expenses.

Savings from coffee is not enough so the Household depends on the sale of chicken and some peanuts to cover for the dry season. Additionally, they get support from the husband's parents in form of money and food when they are short supply of food and money for daily consumption.

The Household grows pineapple and peanuts in the dry season. Savings from pineapple, peanuts and income from sale of flour balls brings some cash during the dry season. Additionally, the Household has six pigs (three grown pigs and three piglets) which are raised to meet social obligations and also for their sons if one of them decides to get married. They get food on credit from family canteen when they run short on stock and they are also supported by their niece who supplies food and sometimes money to support them if there is a need.

The household supported a relative with K700 who's studying in POM and also gave a pig worth K1200 and food for hauskrei. The Household also said that the pigs it had could be used for social obligations. The Household received a small sum of K70 for a bride price payment.

Most of the income was spent on bride price and hauskrai this year. It was noted that K500 and six bunch of banana worth K180 was given as contribution to bride price; K405 was given to compensation

The household contributed a total of K116 to hauskari and contributed food to pay for bride price.

The wife usually manages cultivation of sweet potato, potatoes and sale of buai. However, she is responsible for the sale of almost all crops. Previously she would go to Lae but now the Household prefers to sell to the middlemen or village buyer. Men in the Household have perception that women do a lot of work and they are the main keeper of the Household so most male head allows their wife to take care of the money. In this Household the wife manages and keep all the Household income.

The female head is the key breadwinner for this Household. She was sick most of this year and it greatly affect the cash flow of the households, and farming for Household consumption. Most of the household decision making on Household expenses are discussed by husband and wife. Although the wife is the key income earner and saver for the Household, her husband's mismanagement and alcohol consumption is often a problem. She is obliged to give him money if he asks and if she refuses it results in violence. This way much of her savings have been eaten away and she is cautious about making investments due to such fears.

The women seem to do most of the marketing to provide for family needs during peak and off-peak pineapple and coffee seasons. She also sells flour balls to ensure money for daily Household necessities. She has greater control over pineapple and flour ball sales as she is involved in selling them.

Household Level Analysis of Poverty and Gender Dynamics in Papua New Guinea â&#x20AC;&#x192;

• Fiji: Level 5, Fiji Development Bank Building, 360 Victoria Parade, Suva, Fiji Islands • Timor-Leste: 2nd Street, Palm Business & Trade Centre, Surik Mas, Dili • Pakistan: 95-E/1, Syed Shamshad Haider Road, Hali Road, Gulberg III, Lahore, Pakistan • Sri Lanka: No. 349, 6/1, Lee Hedges Tower, Galle Road, Colombo 03, Sri Lanka • Papua New Guinea: Level 6, PwC Haus, Harbour City, Port Moresby, Papua New Guinea

info-MDF@thepalladiumgroup.com www.marketdevelopmentfacility.org This publication has been funded by the Australian Government through the Department of Foreign Affairs and Trade. The views expressed in this publication are the author’s alone and are not necessarily the views of the Australian Government.