National interest a must in rice negotiations

By JAMES LARAKI

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.

So true political sayings

The problem with political jokes is that they get elected. ~   Henry Cate, VII  

We hang the petty thieves and appoint the great ones to public office. ~ Aesop 

If we got one-tenth of what was promised to us in these acceptance speeches, there wouldn't be any inducement to go to heaven. ~ Will Rogers  

Those who are too smart to engage in politics are punished by being governed by those who are dumber.  ~ Plato 

Politicians are the same all over. They promise to build a bridge even where there is no river. ~ Nikita  Khrushchev 

When I was a boy, I was told that anybody could become President; I'm beginning to believe it. ~ Clarence Darrow

NRI: Monopoly on rice bad for PNG consumers

By ANCILLA WRAKUALE

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.

Porgera power supply sabotaged

SABOTAGE of the power supply between the Hides power station and the Porgera Valley in Enga province has disrupted power service to Porgera town and the mine over the past two weeks, The National reports.
 However, repairs to the line were almost complete – a welcome news for the mine and the community.
Four transmission line towers were allegedly cut down two weeks ago by an armed group connected to a Southern Highlands clan.
The damage halted production at the Porgera mining operation, one of the world’s largest gold mines, owned by Barrick Gold Corp and Mineral Resources Enga.
Barrick Porgera general manager Greg Walker said that closure of the operation meant gold production was halted until power was restored.
He said they had been working hard to restore power and resume production at the mine.
“We have been working hard to repair the towers over recent days, and we are looking forward to working at full production again,” he said

Air Niugini to cancel Wednesday Hong Kong flight

AIR Niugini will withdraw its Wednesday services from Port Moresby to Hong Kong, effective Feb 29, The National reports.
 Flight number PX 008 to Hong Kong on Wednesday and the return flight PX 009 on Thursday will be taken off the schedule, while PX 008, which operates on Monday with the return flight on Tuesday will remain.
The last Hong Kong flight on Wednesday will be this week with the return flight on Thursday.
Air Niugini advised passengers who been booked and ticketed to travel on Feb 29 that they would be transferred onto Monday’s service to Hong Kong.
It advised that they could also rebook on PX 392 to Singapore on Tuesday and Thursday to connect to Hong Kong.
Passengers on the return Hong Kong/POM service will be re-routed to Singapore to make connections with PX 393 on Thursday.
Air Niugini had advised customers to note the above changes to ensure a smooth travel.

EU trade group to meet government, private sector representatives

By SALLY TIWARI

A DELEGATION from the European Union trade mission will be in Port Moresby this week to discuss with government and private sector representatives a bilateral trade agreement, The National reports. The delegation, which included experts on trade, fisheries and development issues, will be led by European Commission director general for trade Peter Thompson.
The bilateral PNG-EU trade agreement was known as interim economic partnership agreement and was initiated in 2007, signed in 2009 and ratified by EU and PNG in 2010.
The agreement provided for free access to the EU market for all products from PNG.
Issues to be discussed at the conference included benefits and the opportunities for increasing exports, support for the implementation of the agreement and its possible expansion to cover other issues such as services and investment.
Thompson said the EU believed in the potential of PNG and trade relations should help transform potential into benefits.
“Jointly with our friends and partners from PNG, we are determined to make the most of our agreement,” he said.
Ambassador to the European Union Martin Dihm said: “So far the tuna processing industry had benefitted under the agreement.”
He said aside from oil and minerals, other products being exported from PNG included palm oil, tea, coffee, cocoa and minerals.
Head of operations for economics, trade and governance, Peter Van Den Heuvel said PNG had to diversify its exports from raw materials to manufactured goods to attract investment and create more employment.
He said a major challenge for trade in PNG was lack of infrastructure such as testing laboratories and electrical energy, which would be discussed during the conference.
Papua New Guinea is the only country in the Pacific to have a trade agreement with the EU.
The two-day conference will be held on Wednesday and Thursday with an expected 80 participants.

PNG Ports pays K15 million to state

By BOSORINA ROBBY

The PNG Ports Corporation has paid K15 million dividend to the Independent Public and Business Corporation, The National reports.
 IPBC managing director Thomas Abe said since 2007, no state enterprise has paid any dividend to the corporation.
The PNG Ports dividend will be paid in three instalments of K5 million per month.
The first K5 million was paid last Friday.
Abe said the two main aims for state enterprises to pay dividends were to instil commercial discipline and practice to make them efficient, and to make a return on investment to their shareholders - the people of PNG -  through the government.
“Public enterprises must remember that they are owned by the people of PNG who fund them through millions of kina a year in taxes, licences and charges,” he said.
“They are entitled to get a return on their investment just like any other shareholder-investor.
“These dividends will go to help meet the cost of the government’s objectives.”
Acting PNG Ports chief executive officer Stanley Alphonse said the company was able to make dividend payments on the back of some extraordinary trading results last year.
“The shipping business is based on derived demand and the past performance of the economy –  driven by the hydrocarbon and resources sector –  has enabled our company to make this announcement,” he said.
“That level of profitability might or might not be repeated as it is contingent to domestic and global economic conditions including legislative and regulatory pressures.”
Alphonse said PNG Ports was committed to continuing port modernisation and improvement, which started in Lae and Port Moresby with the support of its shareholders and stakeholders.
Abe said the dividend was to partly recompense IPBC for a dividend payment it made to the consolidated revenue fund in January of K50 million.
The early dividend payment was based on an agreement between the IPBC and Treasury department in return for the government’s commitment to fund a shortfall of K900 million for the state’s equity funding of the PNG LNG project.