By MALUM NALU
The PNG Cocoa Coconut Institute has rubbished projections for cocoa and coconut as contained in the national development strategic plan 2030 (DSP2030) and realigned national agriculture development plan (NADP).
PNGCCI chief executve officer, Dr Eric Omuru described the projections – 554% for cocoa and 400% for copra – as a “joke”.
He made the harsh criticism of the Department of National Planning and Monitoring (DNPM) and Department of Agriculture and Livestock (DAL) at a workshop last Friday focusing on the liquefied natural gas project and its affect on the agriculture sector.
“The projections for various agricultural commodities as contained in DSP 2030 by the DNPM have been adopted as key results areas for the realigned NADP,” Dr Omuru said.
“When I first saw these projections, I thought they were a joke!
“For the cocoa and coconut industries , which I represent in my current job, increase in cocoa production by 554% from the current average of 50,000mt to 310,00mt and for copra, an increase of 400% from the current average of 100,000mt to 440,000mt by 2030 are hard imagine.
“Without consultation with the two industries to project these targets it’s hard to imagine where the DNPM got the background intelligence to set these targets.
“Models that are used to provide projects are only as good as the information or data that it is fed with.
“The allocation of public resources or funds to the two industries is limited as is the case for most of the PNG National Agriculture Research System (NARS) organisations.
“Agencies of government that are vested with powers to allocate resources to agriculture sector agencies or industries must do justice to allocate resources to facilitate the necessary activities that are needed to generate incremental changes over time to meet the targets.
“Sadly this is not the case or reflected in the 2011 development budget appropriations.”
Dr Omuru said against a backdrop of an NADP that attracted negative connotations of the “old” NADP, the DAL must move on the lower level planning process of the realignment with a sense of urgency to convince relevant government agencies that the sector was ready deliver results.
“Reorganising to deliver results is a challenge as we have found in the PNG NARS organisations,” he said.
“Without this critical restructuring or reorganising process and resourcing, it would be counterproductive to talk of delivering results.
“The NARS have their plans and are now implementing them.
“Having commodity plans as noted by Dr Chris Dekuku (of DAL) are good but if they are not resourced, they are just that – ‘plans’.”
Sunday, April 03, 2011
NGIP Agmark supports wealth fund
By MALUM NALU
Major agricultural company NGIP Agmark believes the creation of a sovereign wealth fund (SWF) will help to offset the effects of “Dutch Disease” brought about by the liquefied natural gas project.
Company representative Graham McNally said this at a workshop last Friday focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
“We believe that this approach to containing the effect of rapid economic growth is correct” he said.
“There must be industry recognition and support for this initiative.
“However, demand-driven domestic inflation will remain an issue.”
McNally said the exchange rate was a primary concern for agricultural commodity exporters like NGIP Agmark.
“It diminishes any benefit that has been achieved through structural adjustment policy during past two decades,” he said.
“We should look at a two- tier exchange rate, or more practically, a supported exchange rate for agricultural commodity exports.”
McNally said impending ‘Dutch Disease’ further supported calls for agricultural industry support and investment, in areas such as:
• Investment in tropical tree stock upgrade;
• Tropical tree crop stocks must be seen as a national good;
• Long-overdue replacement of current tree stocks such as coconut and copra;
• Underinvestment in agriculture for several decades; and
• Development or implementation of sectoral strategic plans.
He said there should be public sector investment in agriculture with the aim of reducing costs of production across the value, through building and maintaining roads and bridges, wharves and jetties, and subsiding water transport.
McNally said because of the labour and skilled worker shortage brought about by the LNG project, there should be increased emphasis on smallholder development and a move away from plantations.
Major agricultural company NGIP Agmark believes the creation of a sovereign wealth fund (SWF) will help to offset the effects of “Dutch Disease” brought about by the liquefied natural gas project.
Company representative Graham McNally said this at a workshop last Friday focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
“We believe that this approach to containing the effect of rapid economic growth is correct” he said.
“There must be industry recognition and support for this initiative.
“However, demand-driven domestic inflation will remain an issue.”
McNally said the exchange rate was a primary concern for agricultural commodity exporters like NGIP Agmark.
“It diminishes any benefit that has been achieved through structural adjustment policy during past two decades,” he said.
“We should look at a two- tier exchange rate, or more practically, a supported exchange rate for agricultural commodity exports.”
McNally said impending ‘Dutch Disease’ further supported calls for agricultural industry support and investment, in areas such as:
• Investment in tropical tree stock upgrade;
• Tropical tree crop stocks must be seen as a national good;
• Long-overdue replacement of current tree stocks such as coconut and copra;
• Underinvestment in agriculture for several decades; and
• Development or implementation of sectoral strategic plans.
He said there should be public sector investment in agriculture with the aim of reducing costs of production across the value, through building and maintaining roads and bridges, wharves and jetties, and subsiding water transport.
McNally said because of the labour and skilled worker shortage brought about by the LNG project, there should be increased emphasis on smallholder development and a move away from plantations.
Palm oil industry hit hard by LNG
By MALUM NALU
Leading Papua New Guinea export crop palm oil has called for unprecedented public investment in infrastructure to offset the effects of the dreaded “Dutch Disease”.
Industry representative Ian Orell made the call last Friday at a workshop focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
“Priority must be unprecedented public investment, through public-private partnership, in reconstruction and maintenance of roads, roads, roads, bridges, ports and social infrastructure – starting now,” he said.
Orell said there must also be assistance with transport subsidies, fuel subsidies, enhanced tax credit schemes and others.
“Lower PNG kina value of exports and greatly elevated production costs will mean severe bottom line impacts,” he said.
“The existing crippling operating costs associated with the country’s failing transport infrastructure will become critical.”
He said palm oil was already suffering because of the LNG with “damaging HR losses to the boom sector”.
“Many mechanics, engineers, welders, HGV drivers, etc, are leaving (for LNG),” Orell said.
“New recruits are not available.
“HR costs are being driven up.”
He said the palm oil industry was also hard hit with Education Department’s technical vocational education training (TVET) suspending apprenticeship courses.
“Palm oil industry currently has more than 300 apprentices,” Orell said.
“We are being asked to establish our own equivalent facilities.”
Leading Papua New Guinea export crop palm oil has called for unprecedented public investment in infrastructure to offset the effects of the dreaded “Dutch Disease”.
Industry representative Ian Orell made the call last Friday at a workshop focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
“Priority must be unprecedented public investment, through public-private partnership, in reconstruction and maintenance of roads, roads, roads, bridges, ports and social infrastructure – starting now,” he said.
Orell said there must also be assistance with transport subsidies, fuel subsidies, enhanced tax credit schemes and others.
“Lower PNG kina value of exports and greatly elevated production costs will mean severe bottom line impacts,” he said.
“The existing crippling operating costs associated with the country’s failing transport infrastructure will become critical.”
He said palm oil was already suffering because of the LNG with “damaging HR losses to the boom sector”.
“Many mechanics, engineers, welders, HGV drivers, etc, are leaving (for LNG),” Orell said.
“New recruits are not available.
“HR costs are being driven up.”
He said the palm oil industry was also hard hit with Education Department’s technical vocational education training (TVET) suspending apprenticeship courses.
“Palm oil industry currently has more than 300 apprentices,” Orell said.
“We are being asked to establish our own equivalent facilities.”
Coffee industry to be affected by LNG project
By MALUM NALU
The liquefied natural gas project could have disastrous implications for Papua New Guinea’s coffee industry, according to Coffee Industry Corporation economist Kessy Kufinale.
He said this at a workshop last Friday focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
In an apparent reference to the dreaded “Dutch Disease”, where a mineral boom leads to an appreciation of the exchange rate, Kufinale said this appreciation would negatively impact on kina export revenue for coffee.
He painted the scenario of a 10% appreciation in kina against the US dollar from 0.339 - 0.3729.
“Given price 100 US cents per pound, results in a loss of K35 million, 10% of total coffee revenue,” Kufinale said.
“Any change in the export price always affects the producers, not middle men.
“A combination of lower export prices and appreciated exchange rate could spell disaster for our agricultural export industries.
“Our export products will become dearer, hence, less competitive on the world markets.
“Agricultural export producers are currently enjoying high prices and a fall in price will result in more plantations, especially, going out of business.”
Apart from ‘Dutch Disease’, Kufinale said the coffee industry was already losing a significant portion of its skilled labour force to LNG.
“Coffee exporters and plantations have reported that they have lost workers to LNG,” he said.
“This creates skills gap within these organisations.
“To retain skilled workers would add to their already high labour costs.”
Kufinale said major freighting companies operating along the Highlands Highway were shifting to service the LNG and neglecting the long-established coffee industry.
“Smaller coffee exporters, especially nationals, are resorting to small private truck operators, despite the higher risks this entails,” he said.
Kufinale said the port facility in Lae was unable to handle increased traffic.
“Delayed shipments due to congestion is potentially damaging to PNG’s reputation as a reliable supplier of coffee,” he said.
Kufinale said appropriate fiscal, monetary and exchange rate policies needed to in place to mitigate these negative impacts on the competitiveness and sustainability of PNG’s agricultural export commodities
“LNG windfall revenues must be invested in agriculture, particularly in areas like infrastructure development; rehabilitation and expansion; quality improvement; freight subsidy; and research and extension.
“Investments in the agriculture sector that have had significant impact on the lives of our rural citizens abound.
“Use these as guides to invest windfall LNG revenues if our economy and its people are to be continued to be sustained long after LNG is gone.”
The liquefied natural gas project could have disastrous implications for Papua New Guinea’s coffee industry, according to Coffee Industry Corporation economist Kessy Kufinale.
He said this at a workshop last Friday focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
In an apparent reference to the dreaded “Dutch Disease”, where a mineral boom leads to an appreciation of the exchange rate, Kufinale said this appreciation would negatively impact on kina export revenue for coffee.
He painted the scenario of a 10% appreciation in kina against the US dollar from 0.339 - 0.3729.
“Given price 100 US cents per pound, results in a loss of K35 million, 10% of total coffee revenue,” Kufinale said.
“Any change in the export price always affects the producers, not middle men.
“A combination of lower export prices and appreciated exchange rate could spell disaster for our agricultural export industries.
“Our export products will become dearer, hence, less competitive on the world markets.
“Agricultural export producers are currently enjoying high prices and a fall in price will result in more plantations, especially, going out of business.”
Apart from ‘Dutch Disease’, Kufinale said the coffee industry was already losing a significant portion of its skilled labour force to LNG.
“Coffee exporters and plantations have reported that they have lost workers to LNG,” he said.
“This creates skills gap within these organisations.
“To retain skilled workers would add to their already high labour costs.”
Kufinale said major freighting companies operating along the Highlands Highway were shifting to service the LNG and neglecting the long-established coffee industry.
“Smaller coffee exporters, especially nationals, are resorting to small private truck operators, despite the higher risks this entails,” he said.
Kufinale said the port facility in Lae was unable to handle increased traffic.
“Delayed shipments due to congestion is potentially damaging to PNG’s reputation as a reliable supplier of coffee,” he said.
Kufinale said appropriate fiscal, monetary and exchange rate policies needed to in place to mitigate these negative impacts on the competitiveness and sustainability of PNG’s agricultural export commodities
“LNG windfall revenues must be invested in agriculture, particularly in areas like infrastructure development; rehabilitation and expansion; quality improvement; freight subsidy; and research and extension.
“Investments in the agriculture sector that have had significant impact on the lives of our rural citizens abound.
“Use these as guides to invest windfall LNG revenues if our economy and its people are to be continued to be sustained long after LNG is gone.”
‘Con’ palm oil projects on the rise
By MALUM NALU
The palm oil industry has warned the people of Papua New Guinea to be wary of “con” oil palm projects appearing all over the country.
Palm oil representative Ian Orrell, in a no-holds barred presentation, told a workshop focusing on LNG and agriculture last Friday that this was all done with the purpose of logging, and was already giving a bad name to the established industry.
Agriculture Minister Ano Pala and his department acting secretary, Anton Benjamin – who have been supporting such special agriculture and business lease (SABL) projects all over the country – were not present to hear Orrell’s words as well as other important agricultural matters, as they had left for China the previous day.
Orrell said this “virtual” palm oil industry had seen the emergence of many “oil palm” agro-forestry projects, all with a focus on securing forest conservation areas (FCAs).
He said there was a land grab using SABLs, with over 5.3 million hectares lease-lease back (LLB) to third parties, which is land alienation, usually for 99 years.
“Most profess to be for ‘palm oil’ development,” Orrell said.
“This poses a massive reputational risk for the country and its palm oil exports.
“This will directly affect our market access and is blocking real development opportunities from real investors.
“The ‘real’ palm oil industry must take, and is taking, an active role in supporting awareness, opposition and mitigation activities to prevent these abuses of customary land and resource rights.”
Orrell said there had been no government support for the “real” palm oil sub-sector, with over 15 years of government facilitation of new palm oil developments - “which has led to?”
He questioned the national development strategic plan 2030 (DSP2030) and national agriculture development plan (NADP) aims to triple palm oil exports by 2030, as well as an expressed strong desire for new investors.
“It appears PNG is being advertised overseas as a large available ‘land bank’,” Orrell said.
“Departments and politicians are courting any entrepreneurial proposal, no matter how little expertise, credentials or lack of financial capacity is exhibited.”
The palm oil industry has warned the people of Papua New Guinea to be wary of “con” oil palm projects appearing all over the country.
Palm oil representative Ian Orrell, in a no-holds barred presentation, told a workshop focusing on LNG and agriculture last Friday that this was all done with the purpose of logging, and was already giving a bad name to the established industry.
Agriculture Minister Ano Pala and his department acting secretary, Anton Benjamin – who have been supporting such special agriculture and business lease (SABL) projects all over the country – were not present to hear Orrell’s words as well as other important agricultural matters, as they had left for China the previous day.
Orrell said this “virtual” palm oil industry had seen the emergence of many “oil palm” agro-forestry projects, all with a focus on securing forest conservation areas (FCAs).
He said there was a land grab using SABLs, with over 5.3 million hectares lease-lease back (LLB) to third parties, which is land alienation, usually for 99 years.
“Most profess to be for ‘palm oil’ development,” Orrell said.
“This poses a massive reputational risk for the country and its palm oil exports.
“This will directly affect our market access and is blocking real development opportunities from real investors.
“The ‘real’ palm oil industry must take, and is taking, an active role in supporting awareness, opposition and mitigation activities to prevent these abuses of customary land and resource rights.”
Orrell said there had been no government support for the “real” palm oil sub-sector, with over 15 years of government facilitation of new palm oil developments - “which has led to?”
He questioned the national development strategic plan 2030 (DSP2030) and national agriculture development plan (NADP) aims to triple palm oil exports by 2030, as well as an expressed strong desire for new investors.
“It appears PNG is being advertised overseas as a large available ‘land bank’,” Orrell said.
“Departments and politicians are courting any entrepreneurial proposal, no matter how little expertise, credentials or lack of financial capacity is exhibited.”
Friday, April 01, 2011
Wafi-Golpu gold deposits threefold
HARMONY Gold mining company, Africa’s third largest producer of the precious metal, has revealed that the company’s Wafi-Golpu joint venture with Newcrest Mining Ltd in Papua New Guinea may be three times the size of its next biggest mine, The National reports.
According to a presentation posted on the Harmony website, Wafi may yield as much as an annual 700,000 ounces of gold and 320,000 tonnes of copper.
The company was still working on sizing up the resource.
Harmony, which produced 1.43 million ounces of gold last fiscal year, was digging mines abroad as depleted South African reserves became more difficult and dangerous to excavate, coupled with rising cost of labour and electricity.
In the financial year ended June 30 last year, Harmony’s Tshepong mine yielded about 217,000oz of gold.
The company climbed 3.66 rand, or 2.7% to 99.61 rand - the highest level since April 2009 close of the Johannesburg trading, giving Harmony a market value of US$6 billion.
Wafi may add US$1.5 billion to US$2 billion, or about 40%, to the value and make the company a takeover target, RBC Capital Markets said last week.
Wafi’s content was estimated at 16moz of gold, 4.85mt of copper and 55,000t of molybdenum, or a total gold equivalent of 38.5moz, according to the presentation.
It added that only Freeport-McMoran Copper & Gold Incorporated’s Grasberg mine in Indonesia and Ivanhoe Mines Ltd’s Oyu Tolgoi deposit in Mongolia have higher gold equivalent grades.
Harmony’s management last year estimated the cost of building a mine at Wafi at US$2.5 billion to US$3 billion.
According to a presentation posted on the Harmony website, Wafi may yield as much as an annual 700,000 ounces of gold and 320,000 tonnes of copper.
The company was still working on sizing up the resource.
Harmony, which produced 1.43 million ounces of gold last fiscal year, was digging mines abroad as depleted South African reserves became more difficult and dangerous to excavate, coupled with rising cost of labour and electricity.
In the financial year ended June 30 last year, Harmony’s Tshepong mine yielded about 217,000oz of gold.
The company climbed 3.66 rand, or 2.7% to 99.61 rand - the highest level since April 2009 close of the Johannesburg trading, giving Harmony a market value of US$6 billion.
Wafi may add US$1.5 billion to US$2 billion, or about 40%, to the value and make the company a takeover target, RBC Capital Markets said last week.
Wafi’s content was estimated at 16moz of gold, 4.85mt of copper and 55,000t of molybdenum, or a total gold equivalent of 38.5moz, according to the presentation.
It added that only Freeport-McMoran Copper & Gold Incorporated’s Grasberg mine in Indonesia and Ivanhoe Mines Ltd’s Oyu Tolgoi deposit in Mongolia have higher gold equivalent grades.
Harmony’s management last year estimated the cost of building a mine at Wafi at US$2.5 billion to US$3 billion.
Bench warrant sought for arrest of doctors
By JACOB POK
AN application for a bench warrant to arrest the doctors on strike is expected to be made at the Waigani National Court this morning, The National reports.
The National Doctors Association and its members have been cited for continuously failing to comply with last Friday’s court orders restraining them from going on strike.
The court will, today, also hear submissions on contempt proceedings against the doctors for defying the court order.
Justice Catherine Davani yesterday upheld last Friday’s restraining orders pending the hearing of the substantive matter.
She issued the orders while dismissing the doctors’ motion to set aside the restraining order.
Davani also noted that the doctors’ claims where not related to the previous agreements but were new, ambiguous and unregistered.
She said the NDA, being professional men and women, had circumvented the law and established processes to achieve their goals.
“That is a dangerous trend and one that can lead this nation to anarchy as other unions and citizens of this country are observing with interest.
“This court will not condone the NDA’s claims and condemn it in the strongest possible terms,” Davani said.
“The processes in relation to the resolving of industrial claims are available to the citizens of this country and must be utilised.
“There are no short cuts.
“Parties should not resort to strike action at their whim. Rules and processes must be followed.
“In this case, we have professionals, being doctors, who are uncompromising and will not allow due processto take its course. That, again, should not be allowed to happen,” Davani said yesterday.
She earlier warned NDA executives to refrain from “flaunting” their issues in the media, while they continued to go on strike and described their actions as “fervently breached of the court order”.
AN application for a bench warrant to arrest the doctors on strike is expected to be made at the Waigani National Court this morning, The National reports.
The National Doctors Association and its members have been cited for continuously failing to comply with last Friday’s court orders restraining them from going on strike.
The court will, today, also hear submissions on contempt proceedings against the doctors for defying the court order.
Justice Catherine Davani yesterday upheld last Friday’s restraining orders pending the hearing of the substantive matter.
She issued the orders while dismissing the doctors’ motion to set aside the restraining order.
Davani also noted that the doctors’ claims where not related to the previous agreements but were new, ambiguous and unregistered.
She said the NDA, being professional men and women, had circumvented the law and established processes to achieve their goals.
“That is a dangerous trend and one that can lead this nation to anarchy as other unions and citizens of this country are observing with interest.
“This court will not condone the NDA’s claims and condemn it in the strongest possible terms,” Davani said.
“The processes in relation to the resolving of industrial claims are available to the citizens of this country and must be utilised.
“There are no short cuts.
“Parties should not resort to strike action at their whim. Rules and processes must be followed.
“In this case, we have professionals, being doctors, who are uncompromising and will not allow due processto take its course. That, again, should not be allowed to happen,” Davani said yesterday.
She earlier warned NDA executives to refrain from “flaunting” their issues in the media, while they continued to go on strike and described their actions as “fervently breached of the court order”.
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