THE COMPETITION BETWEEN Papua New Guinea and Australia in imported grains is a David and Goliath contest where David will always lose unless our farmers have tariff compensation.
Economist may be able to demonstrate that the multiplier effect of such an initiative could make the idea a plus for the economy.
A network of seed and produce merchants would channel the tariff compensation and associated paperwork. This would enable feed manufacturers to be located in most towns supplying the local economy.
There is a lot of lip service given to developing rural areas of PNG. But truth is the distribution systems are undeveloped for anything other than servicing the expatriate dominated sectors.
This has led government advisers to promote SABLs and other forms of land alienation for major export crop production. Under this regime the developers do most of the work themselves, relieving the pressure on government.
It does, of course, result in the intensification of the plantation economy and mentality and PNG continues to be an importer of goods that should be produced locally for internal consumption.
Because of continued lack of local development in rural areas, there is a constant supply of cheap agricultural labour for such major export crops. In effect the villages subsidise export crops. They have become labour production units; where the price of labour does not reflect the actual cost of maintaining the labourers’ family.
The family is maintained by subsistence gardening back home. (There are references to this in various literatures). The South Pacific farm labour scheme makes PNG one of a number of dormitory states for Australia and New Zealand convenience with little hope of improving our farming communities.
I would like to refer to how the agriculture sector started in Australia.
The efforts of early Australian farmers has been described in various books. That they had a hard life is indisputable; they did, however, have a benefit that I have not seen mentioned clearly. They were competing against imports that came a long way by quite inefficient sailing ships.
The imports came to the main centres in quite poor condition and at a relatively high price. They had no need of tariffs or of tariff assistance.
This tyranny of distance effectively acted as a high tariff on imports. The early farmers of Australia, who were very inefficient by standards of today, did not need a tariff to enable them to compete against produce from developed parts of the world.
The cost of transport to Australia and the poor quality import was effectively a high tariff; this produced the viable farming communities of that time.
The really enormous amounts of produce entering PNG are not tomatoes and potatoes so much as wheat, maize, soybeans and various mixes for animal feeds. PNG cannot compete with Australia’s highly efficient farmers on equal terms.
We need sufficiently high tariff assistance in concert with a purchasing policy on imports which will enable our farmers to start developing their skills to compete with the world. We have the land, we have the people and we need tariff assistance to enable us to compete with imports.
Of course prices of products using agricultural imports may rise. But when the price of meat products, snacks etc increases, it will be accepted that it is for the benefit of the majority of the people who share Papua New Guinea.
The entry of rural people into the grain market will have enormous benefits. Excess production will be mopped up by an increase in livestock numbers. There will be more and cheaper local food in the markets.
The government often miscalculates the effect of its policies on the rural sector. Keep in mind that farmers are conservative and do not forget bad memories easily.
I remember clearly when, pre-independence, Dr John Guise, as Minister for Lands and Agriculture, presided over the scheme that would revolutionise vegetable production in the PNG Highlands.
The government undertook to buy all the vegetables that could be produced by Highland farmers at a guaranteed price and some millions of dollars were allocated. Free seed was provided to places as remote as Obura-Wanenara.
It was a great success and so many vegetables were produced they had to sell kaukau to Lahamenegu Plantation piggery at half the purchase price. Further loads of kaukau and vegetables were delivered to the Goroka Garbage Dump and to the end of Lae wharf.
The money ran short and Lowa Marketing was instructed to buy just half of what was delivered by any single farmer. That is half of a bilum or a half of a truck load. This was bad for the aspiring farmer who had invested in a tractor or paid labour.
The Law of Unintended Consequences had kicked in and the farmers received a blow that entered the Highlands psyche for a long time.
The lesson to be learnt is that, if the farmer believes he has a fair return for his effort and the distribution network is fixed, we may all get a welcome surprise.
Distribution is more easily fixed for dry produce, corn, dried cassava and soy bean than for fresh vegetables.
If Australia sees a need for tariff compensation, how much more important should it be to Papua New Guinea?