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The workings of the outgrowers scheme

20 August 2017
Leaders of KCSL with Fresh harvest from their Oil Palm plot. (L-R) Andrew Nanau, Billy Talu and John Inu.

Kautoga Corporative Society Limited (KCSL) is the largest Oil Palm Out-grower in Guadalcanal.

It was established in 1981 under the country’s cooperative Act.

The locally owned Agriculture business is one of three out-growers in north east Guadalcanal that has expanded its operation and is providing employment for members.

Five tribes are represented in the society with seven board members and three of them are directors.

The society is the holder of Fixed Term Estate (FTE) leased to GPPOL for 75 years since 1984.

This month I had an opportunity to chat with the society’s Technical Advisor Andrew Nanau, Field Manager Billy Talu and Secretary and vice Chairman John Inu.

KCSL is a member of Guadalcanal Plains Resource Development Association (GPRDA).

Nanau says as one of the original founders of the cooperative society, KCSL is a legitimate member of GPRDA.

GPRDA has a business arm called GPRDCL.

He said the society is still in the process of determining an internal administration matter to secure dividend from the business arm.

The society leased 600 plus hectares of land occupied by GPPOL’s Oil Palm from which KCSL is receiving royalty payment every month.

The society’s out-growers now have 40 plus hectares of Oil Palm and earn $560 per ton of fresh fruit.

The price of the commodity per ton at GPPOL is not stable due to common price fluctuation at the world market.

However, Nanau says the expansion of out-growers seems to influence drop of price and referred to 2008 when the company paid $1300 per ton.

Nanau described the price fluctuation as a constraint faced by out-growers, adding that the society is not able to produce proper estimate of income because of the unstable prices.

Not only that, the society’s technical advisor says his group also needs improvement in terms of their crop management capacity in order to boost production in the out-growers’ plot.

“Our capacity needs improvement,” he points out.

“We need more input in terms of technical advice,” Nanau added.

“Technically we need input from GPPOL. We need GPPOL to send technical people to assist us improve quality.”

He revealed that the quality of the fruits from Out-growers is not as good as those from palms managed by the company.

A source from GPPOL says out-growers should raise their concerns to the company’s Small-holder Manager, which he described as their first point of contact.

“When they are not sure they should ask for advice, the company will not charge the Out-growers for advice.

“The regular field day meeting with the small holder Manager every month is the official time to share concerns.”

The GPPOL source says the company is looking at boosting small holders by combining them to manage 100 hectares.

KCSL have three pools of workers and these are the maintenance workers, harvesters and wheelers. 

There are eight workers in each pool who work five days a week and are paid on a monthly basis.

The society also engage students during holidays to do part-time job in the out-growers’ plot.

Even though KCSL is recognised as the largest Out-grower, the leaders denied agriculture grants from the government whether through Member of Parliament or responsible ministry to have had any influence in the society’s effort.

However, they believed that installing public funds into the company will help them improve and expand their industry.

 “We are financing our business from our own revenue through fresh fruit purchase, royalty and rental,” Nanau clarifies.

 KCSL is also depending on GPPOL for basic essential tools and materials, however not free of charge.

Cost of tools and materials delivered to out-growers are deducted from fresh fruit purchase.

The company also provides transport and charged the society with each metric ton loaded.

KCSL leaders also call for improvement on transportation and road access for the out-growers.

Recently, the society discussed with GPPOL leasing 70 plus hectares for new Oil Palm plots.

Not only that, the society is preparing new areas of more than 10 hectares to expand out-growers with GPPOL’s new planting procedure.

Nanau says the society is also talking about venturing into tourism business and other Agricultural activities. 

KCSL is no exception to the customary issue of land disputes.

The leaders said other wantoks in Guadalcanal plains also claimed ownership of land areas that belong to tribes that are members of the society.

Nanau says KCSL shared goodwill payments from the mother company with others who are not members of the society to water-down grievances.





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