Agriculture key to boosting PNG’s economy, says Fleming

AGRICULTURE can allow the economy to be less dependent on the government budget, Bank South Pacific chief executive Robin Fleming says.
Fleming said the sector was “extremely important” as it gave financial independence to the rural-based majority while contributing positively to the macro-level economics of Papua New Guinea.
“It is extremely important and work needs to start now on growing agriculture,” he said.
“You can see how much of a difference the coffee crop and palm oil makes on foreign exchange with US$200 million (K635 million) to US$300 million (K953 million) in foreign exchange this year associated with agriculture. So it can make a huge difference.
“It stimulates economic activity independent of what the government budget is. And that is a key criteria. You want to have an economy that is operating at its optimum, irrespective of what the government budget is. The economy becomes less dependent on fiscal stimulus associated with the government.”
Fleming noted the poor performance of the coffee industry and its impact on foreign exchange revenue.
“The coffee season this year has been nowhere as strong as previous years and that has also contributed to some reduced foreign exchange flows. This year of course was affected by the coffee borer and then you factor in the election,” he said.
“So the normal capacity of people to harvest was not normal as other coffee seasons and it has probably reduced by 20 or 30 per cent and in some instances maybe a little bit more. That has meant there were less flows or the flows are going to be for the later part of the year.”