Tuesday, February 21, 2012

National interest a must in rice negotiations


WHILE negotiations are reported to be underway for the proposed Central province commercial rice project, there is already air of controversy, calling on the negotiation team to scrap any plans for monopoly.  
The negotiation team led by the Minister for Agriculture and Livestock, Sir Puka Temu, says the project is a first its kind and wants to see it come through.
Sir Puka is arguing that no one has put their hand up to invest in commercial rice production in PNG in the last 35 years or so and the interest shown by the investor in the Central province should be supported.
The minister says he is aware of the many challenges such investments brings and the negotiation team is assessing the particulars of the project agreement.
He has called on those concerned not to jump up and down, while negotiations are still going on.
But the National Research Institute (NRI) and, the Independent Consumer and Competition Commission (ICCC) have made their intentions clear, calling on the government to abandon any plans to monopolise the rice industry, saying it’s devastating to the people’s welfare.
John Mazi checking on his rice plants at his backyard garden at 10-Mile, outside Lae
Smallholder rice growers from the Mul, Western highlands, having look at a rice field at the Highlands Agriculture College during a rice farmers training

They have called on the government to learn from failed agreements in the past and present, and not to grant monopoly without proper assessment of the likely negative implications on the people’s welfare and the Papua New Guinea economy.
With rice now being a staple food, these agencies are of the view that it is too risky for the government to allow monopoly in the industry.
They are concerned the welfare of rice consumers will be at stake if monopoly is granted.
They are of the view that benefits enjoyed by the public under the current competitive markets are likely to be done away with any plans of monopoly.
Currently,  the public is benefiting from competitive environment including lower prices, variety of rice products and food security.
These concerns have merit now that rice has now become prominent in the household food baskets with about 300,000 tonnes consumed annually.
 For the benefit of the rice consumers, we would assume that any negotiations on this front are undertaken with a sense of care and responsibility.
For the benefit of the people, we would expect all players to work out what is best for the national interest, superseding those of investors, rice importers, and any individuals or organisations.
Global issues such as of food security, volatile food prices, and likely impacts of climate change on the rice industry needs to be taken into account as well along with other negative impacts in the short and long term.
While any plan to grant monopoly is not welcome, we urge all players to look at the best possible options to developing the rice industry in the country, including any potential to growing rice locally.
Currently, almost all the rice consumed in PNG is imported.
Despite many attempts made to increase production, only about 10,000 tonnes is produced locally.
This is so despite rice can grow in PNG and has been grown for over 100 years.
 Research and development of rice over the years have also indicated that it can be grown in PNG, with promising varieties already identified.
Many attempts to promote domestic rice production over the years have had limited success. Despite renewed interest and recent reports of a surge in rice cultivation by local farmers throughout the country, domestic rice production still remains minor and highly local.
The Central project is reported to be worth around K5 billion and is a major investment in the agriculture sector, with an estimated 100,000 hectares of commercial rice.
This will certainly bring increased benefits to landowners and local communities, in terms employment, training, and other spin-off benefits.
Such projects will lead to self reliance and contribute to reduction in import bills.
It is an important project that will bring many changes and benefits to the people of the district, Central province, and PNG.
The project is likely to provide an opportunity for PNG to produce rice on a larger scale.
Reports indicate that the project,  once developed,  is expected  to generate some 5,000 jobs, produce over 3 million tonnes of rice, save over K600 million in import bills and earn in excess of K3 billion per annum.
Beside the huge financial gains, it will certainly raise the profile of the agriculture sector in PNG to new heights.
While such projects are likely to bring many benefits, any agreements reached should always consider national interest over others.
The current controversy on granting of possible monopoly to the rice and it negative impacts needs to be considered seriously.
We hope the government will consider all options available and come up with win-win solutions for all players in the industry.
We also feel that it is about time for the government to revisit all existing agreements in place to come up with what is best for all concerned parties.
We believe the current debate and controversy surrounding the rice industry is a healthy one and at the end of the day we would expect national interest to prevail.

No comments:

Post a Comment