Monday, February 20, 2012

NRI: Monopoly on rice bad for PNG consumers


THE National Research Institute says the creation of a rice monopoly by the proposed commercial rice farm in Central province will be detrimental to the overall welfare of the people, The National reports.
This is according to its Spotlight publication “Creation of monopoly in rice industry detrimental to people’s overall welfare” launched by director Dr Thomas Webster last Thursday.
 Members of the industry, landowners and representatives from the state team and various stakeholders were present to share their views on the proposed K5 billion-project in Kairuku-Hiri district.
A senior research fellow at NRI, Dr Madowa Gumoi, said the idea of the government granting exclusive tariff protection to the developer, Naima Agro Industry Ltd, would hike price of rice products and put most existing market players out of business.
 “NRI instead propagates for continued competition as it did for the mobile phone market, which saw the introduction of Digicel to compete with bemobile and similarly for other industries like aviation,” he said.
The NRI report was presented by Gumoi and Logea Nao, a project officer in the economic policy research programme at NRI.
The Independent Consumer and Competition Commission (ICCC) said the granting of  20 years exclusive rights to the developer would mean all other small scale rice farmers in PNG would cease growing rice.
“Government’s effort and investment of promoting small scale rice farming will be a total waste,” it said in a statement.
“The developer will then absolutely have monopoly power in rice cultivation in the country. “Commission’s stance on this project is very clear as it’s against the exclusivity arrangement and
80% import levy on other rice importers but fully commend and supports the project.

1 comment:

  1. I am in support of the view of NRI that the rice project is fully supported.
    However, the idea of giving the tax and relief for this number of years is not accepted.
    If the company/developer wish to invest get a developer who will not pressure this sovereign nation, PNG to give this tax holiday and 80% import duty to the other rice players in the market.
    Let us look to other developers may be from Vietnam which is the leading rice supplier in the world today, or even go to PR China(Taiwan) or Thailand. Why is the minister of Agriculture persistantly supporting this particular firm? The public is speaking with the data/statistic from NRI. I strongly oppose the tax holiday and 80% import tax but support the project with a new developer which can go by the independent state of PNG's policies.