Agriculture production drops

Business Reporter CLARISSA MOI discusses with Farmers and Settlers Association president WILSON THOMPSON on the reasons why agricultural production in the country is declining, its issues, challenges and solutions.

AGRICULTURAL production in the country has been decreasing in recent years, according to the Farmers and Settlers Association.
On top of that, commodity boards have been increasing various fees and charges which are affecting farmers.

Q: What sort of fees are being charged?
THOMPSON: The Government set up research institutes for various commodities in the country in the 1980s such as the Coconut and Cocoa Research Institute at Murunas, Madang, the Tavilo Cocoa Research Institute in Rabaul and the Coffee Research Institute in Aiyura, Eastern Highlands.
The farmers are paying:

• RESEARCH levy – for every kilogramme of coffee, cocoa or copra.
  The money goes towards the running of those institutions;
• EXTENSION levy: there are extension services provided under agencies such as the Coffee Development Agency who will go out into the farms, tell the farmers how to look after coffee.
  Diseases are affecting crops like the cocoa pod borer and coffee berry borer.
  The Government applies extension levies which the farmers pay; and,
• TONNAGE fee: the Cocoa Board increased the tonnage fee from K40 to K100 this year.
  The Cocoa Board may have conducted consultation with stakeholders but it is a 150 per cent increase and does not assist the cocoa industry and agriculture sector increase production and exports.

How is it affecting the sector?
In the last 10 years, the Productive Partnership in Agriculture Project (PPAP), funded by the Government and the World Bank, pumped more than K200 million into the coffee and cocoa industry.
But production instead of going up has been going down.
For example coffee, from one million export bags down to 900,000 bags, and last year, it went down to 600,000 bags which was a massive drop.
The commodity boards, research institutes and agencies should explain to the farmers why this is happening because the farmers have paid the money for them to conduct research.
But, for 10 years, they’ve done nothing.
There’s no research coming out of Aiyura regarding the coffee berry borer, how to control it, or with the decrease in coffee production, how to fix it.
Same with cocoa and coconut.
There are no research institutes in operation such as the Coffee Research Institute, Coconut or Cocoa Research Institute.
Coconut and Cocoa Extension Agency Ltd has been liquidated, however, levies are still being collected.
In the case of coffee, growers have not seen any extension services and coffee production is on the decline, from one million bags of export bags to now 600,000 bags so why continue to punish the declining production and the farmers.
Where is the money collected for research and extension going to?
The collection of these fees is illegal because these agencies have not been existing since 2017 or 2018.
But, if they do exist, what work have been done?
Production is showing a very big decline.
If they are visiting the farmers and carrying out those services, production should be increasing as so much money has been put in.
We are calling on the ICCC to investigate because the consumers/farmers are paying the fees but services are not provided.
The Government is trying to encourage agriculture and small medium enterprises (SMEs) that’s why they are putting money into the SME credit scheme, the price support scheme and freight subsidy.
They are doing that to encourage agriculture and SMEs.
On the other hand, they decided to increase the price of everything like vehicle registration fees being increased, fertilisers and petroleum products, among others.
In the agriculture sector, we are already overtaxed.
For example, the Doa rubber plantation does not have electricity so they use diesel for generators to run the factory. They also use fertilisers for the plantation.
Similarly, the oil palm plantation in Northern also uses diesel to run the mill, so the agriculture sector has already been charged various fees and the very agencies that are supposed to be helping the farmers and small businesses like the Coffee Industry Corporation, Cocoa Board and Department of Agriculture and Livestock (DAL) are trying to kill the very people that they are trying to help.
For example, there is a K1 price support for cocoa, the farmer brings in 1000 kilogram of cocoa and is expected to pay the research and extension levies and also the tonnage fee which has increased from K40 to K100.
The Cocoa Board may have conducted consultation with stakeholders but we feel that the sudden increase from K40 to K100 is a 150 percent increase and does not assist the cocoa industry and agriculture sector as it will not increase production and exports.
We are not saying that it is wrong to pay those fees. It is too much, and should be introduced slowly.

Were there any consultations conducted with the stakeholders prior to the fees (tonnage) being increased?
We don’t recall any consultation.
They (commodity boards) are there to help the farmers.
So they should have consulted the farmers with regards to the increase in fees, how much should be increased, and justification for increasing the fees.

What do you think should be done?
As per the Public Finance Management Act (2016 Amended), the authority to amend fees and charges rests with the minister for Finance after consultations, as to the approval granted for the imposition of fees and charges and whether the sector has been consulted.
The finance minister and secretary should not approve the increase of fees that are affecting small businesses and the agriculture sector.
The association members ranging from individual farmers, blocks, plantations, buyers, processors and exporters are concerned about the impact of these decisions and lack of consultation between Government agencies and department such as DAL, Department of Commerce and Industry and Small Medium Enterprise Corporation has to advice on impacts on the SMEs, and the Department of Treasury if these increase are going to affect fiscal policies including contributing to improvement in the agriculture sector or impact on inflation etc.
The Agriculture and Livestock Minister should also look at these concerns about the continued imposition of research and extension levy, huge increase in tonnage fees and charges, and the lack of consultation but also what would this fees create for the industry and sector and the impacts including the imposition of other fees and charges by all Government agencies and establishments to rescind all these charges as it is counterproductive to the sector.
The Independent Consumer and Competition Commission should also investigate on why the fees are being charged but there are no services being provided.
Big companies such as Zenag Chicken, Hargy Oil Palm, PNG Coffee Export, or NGIP Agmark Ltd who are affiliated to us (association) have also been affected.
Our concern is that the cost is then passed down to consumers.
For example, when the cost of chicken feed is increased, the consumer will pay for the increased cost.
It is obvious that this will increase the price of goods and services in the country, especially food.