The National, Tuesday 18th September, 2012
By JAMES LARAKI
WE have just observed our 37th Independence Day anniversary.
It gives us the opportunity to reflect on what we have achieved in the last 37 years as a nation and also prioritise what we need do as we move forward.
In our agriculture sector, we have made some progress but not to expectations. There are a number of reasons to this and we need to look at them closely if we were to make any significant progress in the years ahead.
Chief among these factors is the lack of investment in agriculture.
The sector, unfortunately, has not been given the priority it deserves in the last 37 years even though more than 80% of our six million people partly or wholly depend on agriculture for their livelihoods.
It is for this reason that we are once again calling on the government to give this sector a clear and central position in any of our development strategy and provide the necessary investment it deserves.
Over the years, we have seen the national government, as well as our major development partners, continue to think and recognise other sectors as enablers of growth and development. While we do not totally disagree with this, we believe agriculture should be among the top enablers of growth.
We strongly believe that if development is to take place and be self-sustaining, it has to start in rural areas, in general, and the agriculture sector in particular. This is simply because the masses of our population are in rural areas and core problems of widespread poverty, growing inequality, rapid population growth and rising unemployment are direct effects of stagnant and declining economic activities in rural areas.
We see agriculture development as a key to rural development and improvement of livelihoods.
Agriculture development not only delivers outcomes directly related to increased agricultural productivity but also contributes to necessary outcomes in other sectors such as health and education either directly or indirectly by empowering rural communities to look after their health and education through improved food production and increased incomes.
In fact, agriculture needs to be viewed as a central sector in the country delivering long-term outcomes and impacts to all other sectors. Other sectors only contribute with short-term outcomes to agricultural development emphasising again on the importance of agriculture for the overall development in PNG.
In the last three years, we have observed the European Union focusing on education, health and social sectors as per their strategic change.
The AusAID programme in PNG has also changed priorities, now focusing on health (HIV/AIDS), education, law and order and social sectors. This is an indication of declining investment in the agriculture sector.
The national government is focusing on education, health, infrastructure and transport and law and order as the enablers for development. This means that the increases in both the recurrent and development budget this year would be going to these sectors.
Again, this is an indication of declining investment in the agriculture sector and our fear is that this trend may continue.
We, therefore, feel that it is relevant to demand that the national government and other donor agencies reconsider their priorities and include agriculture on equal footing with the other enablers of development that are currently given priority.
Realistically, PNG should be investing around K400 million a year in agriculture if the nation is to avail the real potential of the sector for economic growth and national development. This is so as per the international recommended rate, 10% of agricultural GDP, when agriculture in PNG contributes an estimated 37% (K4 billion) of total GDP.
According to the WDR, such a rate of investment is essential if a nation is to move from the category of agricultural-based countries to transformed economies, a transition towards the developed world.
The current level of public investment in overall agricultural development, on average per annum, is only about K190 million, which is less than 5% of the agricultural GDP including recurrent, NADP allocation to districts, National Development Bank and others.
PNG’s public investment in research and development in the agriculture sector is equally disappointing. The current annual public investment in agricultural research is K30 million, which is only 0.75% of agricultural GDP while the ideal rate is 2.0% (K80 million per annum).
Many developing countries have received very attractive rate of internal return to agricultural research investment and their figures are as high as 43% while it is disappointing for PNG. This explains the current gap and highlights the huge scope for increasing both public and private sector investments in agricultural research and innovations in PNG.
And the government has a duty to its citizens, thus smallholder and subsistence sector demands public sector investment.
PNG has more favorable environment now than ever before for all stakeholders to make positive contribution to innovative agricultural development, in general, and to research, science and technology; in particular.
The 9.5% economic growth projected by the government is achievable with LNG and other resource projects coming on stream but will be accompanied by much higher rate of inflation.
Therefore, this growth should be used for further wealth creation to enable the masses to share and participate in the economic growth.
We once again call on the government to encourage investment in agriculture and invest more in research to generate technologies which could make available improved methods and innovations to stakeholders.