PNG GOVERNMENT VOWS SUBSIDIES TO BOOST FARM SECTOR

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By Melanie Vari-Turia

PORT MORESBY, Papua New Guinea (April 14, 2000 - The National/PINA Nius Online,)---The government has assured the agriculture sector that it will provide freight and input subsidies to encourage increased production and create income earning and employment opportunities.

A tax credit scheme is also currently being considered.

These were among policy initiatives announced by Agriculture and Livestock Secretary Miri Setae, on behalf of the Minister, Mao Zeming, during a sugar seminar hosted by Ramu Sugar this week at the Park Royal Hotel.

Mr. Setae said 85,000 people entered the workforce every year and nearly half a million children were born every five years and yet formal sector employment had declined by 1.1 percent since 1989.

"For PNG to make a significant impact on its employment problems, it has to concentrate on the agriculture and informal sector," he said.

Mr. Setae said investment in agriculture would dictate the future of PNG at every level and would affect all of the basic problems the country was currently facing. Without investment there would be little hope of solving law and order and unemployment problems, he said.

"The Government recognizes the efforts of the private sector and various non-government organizations in providing supportive agro-business services to local farmers," he said.

He said policy issues that needed to be better addressed included better government extension services for farmers and business groups and the community; provision of appropriate training for farmers in collaboration with relevant agencies such as the Small Business Development Corporation (SBDC) and an improved information delivery system.

Mr. Setae said that in order for the investment climate to improve the government had to address issues related to land tenure, law and order, access to capital, transport and infrastructure costs, corruption and general perceptions of the effectiveness of the government.

Meanwhile, in relation to the land tenure issue, Ramu Sugar chairman Peter Colton noted that all the company sugar and cattle developments had occurred on customary land.

"We work with traditional landowners because they’re not the enemy; they, Ramu and the Government want development," he said.

Food production in the Ramu Sugar area actively involved 80 percent of the adult population there, helping to lower the region’s unemployment rate.

The company also paid K 50 million (US$ 19 million) in annual employee salary payments with an additional K 20 million (US$ 7.6 million) spent in Lae alone. Produce is also purchased from 150 independent farms at an annual cost of K 1 million (US$ 380,001).

 

PAPUA NEW GUINEA URGED TO PROTECT SUGAR INDUSTRY

Port Moresby (April 14 – 2000 - The National/PINA Nius Online,)---A world authority on sugar has advised Papua New Guinea to continue to support and protect its sugar industry, which has achieved a lot in terms of industrial and social development in a relatively short time.

The warning came after Ramu Sugar chairman Peter Colton had said that it would spell disaster for the local sugar industry if the government proceeded with its plan to drop the current import tariff of 82 percent to 40 percent on January 1, 2006.

A. C. Hannah, the head of economics and statistics at the International Sugar Organization, said the World Trade Organization (WTO) should attack the "big boys and leave developing countries alone," but that it was currently not acting in this way because it had been corrupted by big business interests in countries like the U.S.

Mr. Hannah said the interests of developing nations involved in the sugar industry has not been addressed and blamed this on the varying tariff rates and quotas that had been set by WTO as a result of manipulation by interests within the major markets, particularly the European Union (EU) and the United States.

He gave the EU market as an example, which imposed very high tariff on some products, closing off the market to smaller competition.

Mr. Hannah said the European quotas for Africa, the Caribbean and Pacific island nations were strongly contested and that it was difficult for PNG to benefit by becoming a party to the EC’s sugar protocol.

In PNG’s case, sugar imports were banned from 1984 to 1996, with the ban lifted in 1997 and replaced with an import tariff of 82 percent on July 1, 1999.

This is expected to go down to 76 percent on January 1 next year and then to fall to 70 percent on January 1, 2003, before dropping to 40 percent in 2006.

There are currently two levels of tariff rates being used -- the bound rate, which is a maximum agreed to with WTO for the period 1995-2004, and the actual tariff rate, which is less than, or equal to, the former.

For 1999 and 2000, PNG’s actual tariff rates have been in the 80 percent margin, which is higher than for other developing countries like Indonesia, Egypt and the Philippines.

Mr. Colton told the seminar that Ramu Sugar, one of the country’s most successful agribusinesses over the past quarter century, would meet its demise if the tariff rate was slashed to 40 percent.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

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