ICCC opposes Central rice project

THE Independent Consumer and Competition Commission (ICCC) has strongly opposed the proposed commercial rice project in Central province by Naima Agro-Industry Ltd because it has identified possible negative implications.
The ICCC opposed certain concessions in the project deed of agreement, particularly granting exclusivity rights to Naima for a 20-year period, which will grant a monopoly to the company.
Some possible negative implications identified by the commission are:
lThe effect of sustainability lessening competition in the market, leading to the developer gaining monopoly power over the rice industry in PNG; and
lThe PNG economy has had bad experiences with business operating with monopoly power in delivery of particular products or services in the past and present, and rice now being the staple food it is obviously too risky to allow a monopoly in the rice industry as the welfare of all rice consumers would be at stake.
The commission was against the concession requested by Naima to impose 60-100% levy on other rice importers for at least 24 months.
Major negative economic implications ICCC believed would prevail in the economy should other rice importers be penalised with high levy included:
lDriving all existing major players out of rice market, including growers, millers and importers.
This would mean loss of jobs for people being employed by the existing rice suppliers.
 in the country. This is unfair for some players who had been investing in PNG for a long period of time;
* A most definite outcome of huge rice price inflation, which will result in consumers paying up to 100% more than the current market prevailing price.
From the commission’s vast experience on pricing in the retail and wholesale industry, especially on the declared goods and services which the commission monitors, prices at retail and wholesale level do not follow what is expected or projected in such proposals since most players in the these markets seek to exploit all available opportunities to maximize profits.
Once tariff protection