Firewalls needed to protect industries

A MINISTRY each for Coffee and Oil Palm and another for Livestock.
That is unprecedented.
No doubt coffee and oil palm have grown large and have the largest potential for growth in PNG.
Can a ministry assist in that growth?
Difficult to tell.
Copra, cocoa, vanilla and vegetable farming have similar potential.
Betel nut needs its own ministry as well.
There is no pun intended here because certain aspects pertaining to health require closer monitoring, policing and management.
It is the largest commodity of exchange on the local market and has been on the basket of goods determining the Consumer Price Index since 1983 or thereabouts.
The technical aspects of how a ministry will operate that is responsible for a single cash crop is difficult to foresee at this early stage, but the general statement the Prime Minister is making is quite obvious.
He wants to give top most priority to agriculture as the backbone and economy-sustaining sector of the future.
We want to post an early alert at this stage that politics has a very curious way of muddling up fully functioning industries and institutions.
We do not need to look any further than the State-Owned Enterprises to know that the State is no great business manager.
There is a simple reason why this is so.
The very principle of government and of business are diametrically opposite.
The State has a mandate to serve the people.
The business exists to grow a profit.
The State serves the majority regardless of status or ability, the business answers to only its owners, the shareholders, and operates only to those places which will grow and prosper the business.
The former is service oriented, the latter profit oriented.
Both can complement each other’s roles but it is often most difficult to carry both responsibilities together because of their opposing nature and operating structures.
That is why the SOEs have never really prospered.
They are curtailed in their operations by government’s social and community obligations.
If the government runs out of money, it will delve into savings and even operational funds of its SOEs.
That has been happening very often in recent times when SOEs have been forced to declare dividends, often beyond their real financial positions to declare such dividends.
We then look at a ministry in charge of Oil Palm under such a light.
Oil Palm is presently the most successful crop in the country.
It brings directly into the country some K1 billion in foreign exchange.
Much of this money is delivered through its various structures right down to the farmer.
West New Britain has grown from a backward province with little internal revenue to the richest in the country with investments in high rise buildings in the capital city to showcase its success.
West New Britain Palm Oil which has engineered this development has ventured into serious cattle farming in the Ramu plains along with its cane sugar and oil palm business.
The ministry of Oil Palm and Ministry of Livestock, therefore, impacts two primary operations of West New Britain Palm Oil.
Whatever Government plans, it must not touch or impact the operations of this company.
It is currently operating at optimal efficiency without government interference with an a-class oil palm refinery in England.
Should government interfere with this company, one of the most successful agricultural firms in the region will be impacted negatively and PNG’s hopes of attracting foreign direct investment in this crucial industry will evaporate.
While the Prime Minister’s intent might be honourable, execution of these new ministries must be done with utmost care and with sufficient safety firewalls to stop politics meddling with company operations and profitability.