The in­side view: Give Pa­pua New Guinea agri­cul­ture the break it needs

Made in PNG - - AGRIBUSINESS -

Paul Barker ar­gues for a far greater em­pha­sis on Pa­pua New Guinea’s largest and most wide­spread eco­nomic ac­tiv­ity—agri­cul­ture.

Lip ser­vice is of­ten paid to the im­por­tance of the agri­cul­tural sec­tor, which pro­vides the liveli­hoods for over 80% of Pa­pua New Guinea’s pop­u­la­tion. Con­cern is also ex­pressed at the level of ur­ban pop­u­la­tion growth and the lim­ited ca­pac­ity of PNG’s towns to ab­sorb such num­bers.

Yet, for years, suc­ces­sive gov­ern­ments have largely ig­nored the needs of ru­ral house­holds.

The sec­tor’s in­sti­tu­tions cer­tainly need re­form to make them ac­count­able, prin­ci­pally to PNG’s own farm­ers. Some can cer­tainly be merged, and the Department of Agri­cul­ture and Live­stock con­verted into a largely pro­ducer-con­trolled, pro­fes­sional and re­spon­sive or­gan­i­sa­tion.

But nei­ther agri­cul­ture’s prospects, nor other in­dus­tries’ (in­clud­ing man­u­fac­tur­ing or tourism), can be guar­an­teed un­less the econ­omy is com­pet­i­tive.

The O’Neill Gov­ern­ment’s com­mit­ment and fo­cus on in­fra­struc­ture, law and or­der, ed­u­ca­tion and health, and espe­cially shift­ing funds to the Dis­tricts, sus­tain­able de­vel­op­ment and di­ver­si­fi­ca­tion is a wel­come and over­due shift in favour of or­di­nary PNG house­holds and ru­ral ar­eas, in­clud­ing suf­fer­ing farm­ers (if the ca­pac­ity is there to im­ple­ment the bold aims).

Whether they are ru­ral or peri­ur­ban farm­ers/gar­den­ers, PNG’s pro­duc­ers re­quire:

• land (usu­ally just a few hectares), with ad­e­quate ten­ure se­cu­rity to make long-term com­mit­ments

• mar­ket ac­cess (that they are suf­fi­ciently close to mar­ket out­lets, or a re­li­able road, air or ship­ping ser­vice to get pro­duce out with­out it de­te­ri­o­rat­ing un­duly) • ad­e­quate price, which in turns re­quires

• suit­able and con­sis­tent world or lo­cal mar­ket, which in agri­cul­ture is of­ten not the case. Sta­bil­i­sa­tion schemes were pro­vided hith­erto in PNG for some ma­jor crops to re­duce price/in­come fluc­tu­a­tions • suit­able ex­change rate (i.e. that the kina is not too strong against the cur­rency—of­ten US dol­lars for cash crops—in which the prod­uct price is set). With ma­jor in­fluxes of for­eign ex­change into PNG for re­source projects, the kina tends to ap­pre­ci­ate,

un­der­min­ing farmer prices and re­turns.

• safety, se­cu­rity and low risk of pro­duce theft

• avail­abil­ity of qual­ity and pest/dis­ease-re­sis­tant plant­ing ma­te­rial

• skills (in pro­duc­tion, mar­ket­ing and business)

• mar­ket in­for­ma­tion and know-how, espe­cially en­tail­ing new

ma­te­rial or how to add value • ac­cess to im­proved pro­ducer sup­port, through co­op­er­a­tives,

group mar­ket­ing and pri­vate part­ner­ships • ac­cess to sav­ings, credit and ad­vice • risk min­imi­sa­tion through crop di­ver­si­fi­ca­tion, sta­bil­i­sa­tion or sup­port ar­range­ments when prices fall below a cer­tain thresh­old, and in­sur­ance.

PNG has mil­len­nia of agri­cul­tural pro­duc­tion and skills be­hind it. It has good agri­cul­tural land. The coun­try has no op­tion but to foster its agri­cul­tural sec­tor and associated down­stream pro­cess­ing and value-adding, both as it pro­vides sound long-term and broad-based op­por­tu­ni­ties for the ma­jor­ity of the pop­u­la­tion, and also be­cause there are no op­tions to ab­sorb its fast-grow­ing work­force for the fore­see­able fu­ture.

The cost of liv­ing is ex­traor­di­nar­ily high, even for a de­vel­oped coun­try. Go­ing for top-qual­ity niche prod­ucts is one way to over­come high costs, but it’s cru­cial that these over­all costs are re­duced to re­ally in­crease op­por­tu­ni­ties. Many of these costs fall in the cat­e­gory of ‘pub­lic goods’ pro­vided by the State. Poor roads, polic­ing, util­i­ties, ex­ten­sion ser­vices etc. un­der­mine business and op­por­tu­ni­ties, but could be ad­dressed if gov­ern­ment uses its rev­enue much more ef­fec­tively and ac­count­ably.

Now is the chance for gov­ern­ment to demon­strate that it recog­nises the crit­i­cal role of agri­cul­ture in pro­vid­ing broad house­hold needs and in­come, as well as 30% of GDP and sus­tain­able pro­duc­tion and ex­ports.

Paul Barker is Di­rec­tor of the Pa­pua New Guinea In­sti­tute of Na­tional Af­fairs, a pri­vately funded, non-profit think-tank based in Port Moresby.

‘PNG has mil­len­nia of agri­cul­tural pro­duc­tion

and skills be­hind it.’

Palm oil is now PNG’s num­ber one agri­cul­tural ex­port.

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