Avoid Fordlandia debacle in farming

AGRICULTURE

By CYRIL GARE
THE agriculture sector generated K20 billion for the national economy in nine years between 2009 and 2018.
This translates to around K2.5 billion for the national coffers annually. This is through the value chain; from production to processing and marketing and maybe the fourth tier – downstream processing.
One can appreciate the value of this one important sector in our economy, how much it contributes in terms of direct and indirect businesses and spin-offs. So many people, businesses, and the economy depend on it.
Department of Agriculture and Livestock (DAL) deputy secretary Technical Services, Stephen Mombi said this during the swearing of new PNG Rubber Board members in Port Moresby early this month.
Mombi added however, that only K1.147 billion was given back to the sector, which is less than 1 per cent of what its making.
“And in real kina terms, this is about K95 million which, when divided by the 10 commodity boards in the agriculture sector, that’s about K9.5 million every year.”
Mombi said a holistic approach should be taken to boost the sector.
“Each sector including rubber needs to come up with appropriate strategies to move forward.
“Identify avenues which will and can continue to contribute to moving the sector forward,” Mombi said.
In 1977, the agriculture sector contributed as much as 37 per cent of gross domestic product (GDP). Today, the sector contributes less than 25 per cent. In the last 20 years DAL received less 2 per cent from the national budget resulting in a dead-end to its core functions and effective service delivery mechanisms.
In the renewable resources strata, agriculture is the pinnacle, the lifeline for survival as a nation. The paradigm shift as captured in Vision 2050 is buttressed chiefly by agriculture followed by tourism, fisheries and forestry as pillars that will carry the deadweight of non-renewable extractive industries (mining, oil and gas) when they are gone 40-50 years later.
Since 1947 the agriculture administration in Papua New Guinea has no law protecting it when it comes to business investments, meaning that the DAL has no say in how agriculture business investments should be conducted in the country.
This portfolio is vested in other departments such as Commerce and Trade, Lands and Forestry who became project managers on agriculture projects.
Fordlandia
It resembles the tale of Henry Ford’s Fordlandia rubber project in the jungles of Brazilian Amazon in 1927. He engaged engineers and builders to plant rubber at his Amazon property. All of his rubber died and the project declared “failed” because the rubber plants were wrongly planted in a rush without scientific input from agriculturalist or botanists in the beginning.
As such, many businesses in the name of agriculture get thrashed at great cost to the environment, our social values and government expenditure and accountability. Take SABL (special agriculture business leases) for example. In the name of cocoa development which should require cocoa scientists from Cocoa Board or DAL these SABLs instead became all-out logging operations, many of which were illegal as it was later revealed by a commission of inquiry (COI).
Such COIs should continue today as more and more so-called agro-businesses are sprouting sporadically and uncontrollably. Some of them have no money but demand 50 per cent of State equity up front. Some of them went directly to Cabinet to get their not-in-order project documents endorsed and later approach DAL for clearance after experiencing systematic and procedural bounce-backs.
Salient steps have now been taken by the DAL: A national agriculture plan is in place, a national agriculture standards system is in place, and drafts of agriculture umbrella legislations including the Agriculture Administration Adjustment Bill and the Agriculture Investment Corporation Bill are ready for Parliament endorsement.
Some of the main features in the Agriculture Investment Corporation Bill include:

• DAL to issue permits to agro-businesses that will develop 10 hectares of land or more;
• DAL to require all exporters of tree crops such as cocoa, coffee or rubber to grow 10,000 trees or more before being considered for export licences;
• DAL to negotiate for as much 30 per cent for landowner equity in agro-businesses; and
• DAL secretary to become super chairman of all commodity boards.

Among the main features in the Agriculture Administration Adjustment Bill, DAL will get back all extension services functions from provinces to headquarters, and create an authority to monitor the performance of CEOs of commodity boards.
In the 2018 national budget, the agriculture sector experienced a quantum leap from ‘neglect’ to ‘interest’. Then Treasurer and Deputy Prime Minister, Charles Abel announced that agriculture was the biggest winner.
The sector had seen the biggest increase from K385.7 million in the 2017 supplementary budget to K665.9 million or a 72 per cent increase.
Much of the increase was captured in the capital component, with a jump of over 140 per cent. This includes support for the Productive Partnership in Agriculture Programme (PPAP), national cattle breeding farm, freight subsidy for cocoa and coffee (Cocoa Board has since made savings of more than K100 million through the freight subsidy scheme), strategic defence against coffee berry borer and the regional nurseries project.
A K100 million agriculture commercialisation fund was established and further funding of K100 million provided to the National Development Bank for small and medium enterprises (SME) lending.
The People’s Microbank received K20 million.
Fifty million kina (K50 million) is provided for industrial centre development, particularly to support SME incubation centres.
Then DAL secretary, Dr Vele Pat Ila’ava welcomed the Government’s increased focus on agriculture in the 2018 Budget.
“I’m very happy with the budget outcome so far,” Ila’ava told The National (Nov 29, 2017 edition).
“I’d like to thank the O’Neill-Abel Government for coming good on their Alotau Accord II commitment which is to make agriculture our number one economic priority.
“I’m happy that they have transferred that into the budget.
“Having a quick look at the budget papers, and listening to the ministers (Abel and National Planning’s Richard Maru), most commodity boards had got double their public investment programme (PIP) funding.
“That’s welcome news. Some of the commodity boards that were not funded are now being funded, like the Livestock Development Corporation (LDC) and the Rubber Board.
“The challenge is now on us in the agriculture sector to get ourselves organised and work with the Government to grow the economy of this country,” the former secretary said.
The Marape-Steven Government continued to fund agriculture in the 2020 budget: Agriculture SMEs received K200 and the National Development Bank K100 million.
Yet, there is more to be done to revamp agriculture to the 1977 level or better. Diversifying (downstream processing) agricultural primary products like copra, cocoa and coffee into value added tertiary products like soluble cocoa, soluble coffee, and tens of coconut fragrances, flavour, and pharmaceuticals are the challenges in the waiting. Inter-sectoral collaborations with universities, the PNG Science, Research and Technology Secretariat and companies under the Government’s research and development (R&D) initiatives through the Responsible, Sustainable Development Strategy will be an honourable way forward.
Foremost is the need to conduct a national agriculture survey in the country using Geography Information System (GIS).
DAL technical officer Heai Hoko told a joint (DAL, Food and Agriculture Organisation – FAO – and other state agencies) workshop in Port Moresby last July that the department has been carrying out “estimated planning” without a proper systematic approach to generate baseline statistical data.
Hoko said agriculture has played a major role in PNG’s economy in which the Government has given priority to the sector in its planning and budgetary allocations.
The last agriculture census in PNG was conducted 40 years ago and it is outdated. The lack of baseline agriculture statistics poses a severe challenge for the Government to monitor and evaluate the impacts of agriculture projects and national development indicators in the agriculture and rural development sector.
FAO national technical officer Mirriam Mondia also told the same workshop that this agriculture census would be targeting household farmers and FAO would be supporting a pilot agriculture census specifically in provinces that FAO has its major projects.
She said there was a dire need to improve and upscale the tools and systems currently used in information management in agriculture for complete information on the situation of farmers in the country.
Soon after taking over the leadership on May 30, 2019, Prime Minister James Marape has outlined his aim to make PNG the ‘food basket of Asia’.
“I don’t want PNG to be known as an oil and gas and gold country. I want PNG to be known as a country that is the food basket of Asia,” the PM told an audience at the Lowy Institute in Sydney, Australia during his state visit there in July last year.
He said boosting agriculture was essential for diversification and sustainability in PNG’s economy.
“I want to point my country towards agriculture for 2025 and beyond,” he said adding that “investing in the sector will return a lot of dividends for the nation.”

• Cyril Gare is a freelance writer.