THE National Research Institute (NRI) wants the government
to abandon its plan to monopolise the rice industry, saying it’s devastating to
people’s welfare.
The government’s leading think tank is calling on the
government to learn from failed agreements like InterOil, claiming that aside
from natural monopolies which can be justifiable, protectionist monopolies as
in this case are generally considered to be detrimental to overall welfare.
“Current competitive markets in the rice industry in PNG
have proven to be of public benefit as the proposed rice monopoly has the
potential of undoing the benefits of competition including lower prices,
variety of rice products and food security currently enjoyed by the general public,”
it said,
According to NRI, terms and conditions of project proposals
should be thoroughly screened by independent qualified experts apart from the
government team through a detailed cost-benefit assessment to not only
determine project viability but also the opportunity costs involved.
National Research Institute also raised the issues of
profiteering and transfer pricing if Naima Agro Industries, a foreign-owned
company is going to be involved, arguing that the proposal promotes
anti-competition and contravenes the ICCC Act (2002) that propagates
competition and fair trading.
“At one point in time Trukai Industries monoplised the rice
industry in PNG and only through freeing up of the industry through competition
that PNG has now a competitive rice industry with competitors, even though
Trukai industries commands a larger market share,” NRI argues.
It is calling for a free and competitive market and
supports continued competition as it did for the mobile phone industry and the
aviation industry.
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