The money’s in, now it’s down to business for pearl farmers
Manihiki pearl farmers met at 10am on Friday with the Minister of Marine Resources (MMR), Hon. Teina Bishop. Also in attendance was Secretary of Marine Resources, Ben Ponia, and the Cook Islands Pearl Authority (CIPA) Chair, Tina Browne.
The meeting followed the signing on Thursday of two agreements facilitating access by pearl farmers and technicians to a portion of $1.5 million in funding from New Zealand Aid for funding pearl farm production requirements. The fund is to be administered by the Pearl Production Credit Scheme (PPCS). This scheme is one component of the Tripartite Arrangement for Cook Islands Pearl Industry Revitalisation 2011-2014, which will see a total of $3.1 million provided by New Zealand “to develop sustainable pearl farm production capacity, implement strategic marketing and sales promoting initiatives, and develop key stakeholder capacity towards managing an integrated pearl industry.” The main partners to the agreements signed on Thursday are CIPA, MMR, Bank of the Cook Islands (BCI), Manihiki Island Council and the Manihiki Pearl Farming Authority (MPFA).
The production meeting between the pearl farmers and Minister Bishop was held to give information to farmers on the next step in the process, which involves pearl farmers applying for loans under the scheme. Ponia noted that of the $1.5 million approved, the funds will be dispersed throughout four key areas. The first area is marketing and around $800,000 has been earmarked for this, which will be administered by CIPA. Subsequent areas for funding are support of the Pearl Exchange scheme run by CIPA, as well as covering salary costs of an overall Project Coordinator. The last key area is for capacity building of the pearl production industry in the Cook Islands.
In the third week of February, Ponia will take a team from MMR with accompanying BTIB officers to Manihiki. Browne noted, “The intention is to assist the farmers in preparing their business plans.” She added that part of the work will also involve determining whether those wishing to apply for a loan under the scheme are in fact eligible to apply for a loan. Ponia noted that there were certain preconditions for the loan and each applicant will be required to hold a valid farming permit from the Manihiki Island Council and be a member of MPFA. Furthermore, MMR staff will be conducting monitoring surveys to assess that farmers are complying with the management plan. Benchmark surveys are already being carried out by MMR, who will collect baseline information from each of the farms to assist with business plans. Interest rates on the loans will be relatively low and this is due to BCI receiving a commission for their services in managing the loans. Ponia announced that Rangi Mitaera-Johnson has been employed by MMR as a Business Advisory Support Officer, as well as to provide support to MPFA.
Ponia and Browne both emphasised that the $500,000 of government funds reserved to underwrite the loans are “not a hand-out”. Ponia commented, “Government is guaranteeing $500,000 on that loan scheme. So if there’s a default by farmers, it comes from government coffers... [if there are] defaults [on the loans], our tax payers will pay for it.” He stressed that the funding initiative should be seen as more of a business scheme and that the long-term intention is to see the scheme become self-sustaining. Browne added that this was one of the reasons sound business plans were vital to the scheme.
The sentiment expressed by the farmers in attendance was positive overall, however one of the biggest concerns was around the marketing and selling of the pearls. It was agreed that production output needed to increase in order for Cook Islands pearls to become a viable option for buyers in major markets, such as China, however some farmers expressed that they did not wish to increase their production if there was no guarantee that pearls they produce will be sold at a profit. Some were concerned that $800,000 for marketing was going to CIPA when farmers weren’t completely happy with the marketing direction of CIPA. One farmer expressed, “The marketing strategy enunciated by CIPA has not got the majority support of farmers and retailers. So it is really that marketing strategy that we need to have, to buy in. That’s what we need as part of our business plan. So at some point we need to come together and revisit the marketing plan for our industry so that we can all know in which direction we are going.” Another farmer expressed concern at CIPA’s ‘Avaiki’ branding strategy, as opposed to branding pearls produced in the Cook Islands as ‘Cook Islands Pearls’. “One of the areas we need to look at also is, in reality, marketing wise we just can’t compete other markets in numbers – in volume. But we can definitely compete in quality. When I say quality – it is proven! I’m still sold on ‘Cook Island Pearls’. You talk about Cook Islands and people know where it is. ‘Avaiki’ is non-existent. Tahiti sells ‘Tahitian pearls’, Australia sells ‘Australian Pearls’. I think there is more value in actually promoting ‘Cook Island Pearls’.”
In the end it was identified that one of the key areas in increasing profits for pearl farmers will lie in reducing production costs. Some of the issues discussed included ways to reduce fuel costs, as well as issues with labour. Minister Bishop suggested that one solution could be to bring in Chinese labour, which was something he discussed with the Chinese during his visit to China. Furthermore, the grant to purchase equipment from China should contribute to the reduction in costs for farmers. The group plans to meet again to further discuss marketing issues, and will also attend information sessions at MMR to understand the loan application process they will be undertaking. -Ngariki Ngatae

Headlines : Times 290 02 March 2009
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