Monopoly will not benefit sector, consumers

Editorial, Normal

The National, Thursday January 14th, 2016

 THE Government’s ban on the import of certain vegetables appears to have created a monopoly for a single importer, which naturally means customers are now paying more for these items.

The rationale behind the ban, according to Agriculture and Livestock Minister Tommy Tomscoll, was to promote the local farming sector.

However, given the nature of Papua New Guinea’s fresh produce industry – it’s consistency in supply mostly – a hike in prices was expected. 

Papua New Guineans may, for a time and in the name of supporting the local industry, be prepared to pay a little more for their vegetables.

The ban, which was imposed at the height of a prolonged nationwide drought, raised doubts about whether the local producers would be able to meet the demand.

The answer was not long in coming. Shops literally ran out of vegetables, onions being the most sought-after commodity.

The minister had no choice but to amend it to a partial ban.  

While the man on the street was thinking that it would be business as usual – let his supermarket get back to importing from wherever it was before the ban – that was not to be.

We now know that the partial lifting of the ban actually amounted to issuing an import permit to a single company to source from one particular Queensland-based supplier.

While the traditional importers, the large supermarkets, are waiting in line to be issued import permits, they are purchasing from this sole importer.

And already, as pointed out by the Independent Consumer and Competition Commission (ICCC), the prices of these particular vegetables in supermarkets have shot up. The situation raises a lot of questions. 

It would have been obvious to the minister when he approved only one import permit that was he creating a monopoly for the one importer when previously there was no monopoly.  

Was that intentional on the part of the minister?

We understand that the permit in question as granted on December 1 and after more than a month, no other permit was granted although, as reported in our front page story yesterday, a number of applications are sitting in the minister’s “pending” tray.

And consumers continue to pay more while someone continues to profit.

This also raises the question of transparency and what process was followed to issue that particular permit.

Tomscoll’s explanations about “stringent guidelines” by the National Agriculture and Quarantine Inspection Authority (NAQIA) and there being “no sister motives” behind not granting other import permits do not add.

He reiterated yesterday that only one company has been given the green light to import vegetables from one supplier in Queensland under these guidelines.

In an attempt to palm off the concerns of supermarkets, and indeed consumers in the capital city, Tomscoll said yesterday: “When supermarkets are concerned, they are not concerned on the shortage of those vegetables, my view is that they are only worried about their sales that have come down.

What businessman would not, Minister?

He goes on to say, “They’re more worried about the profits, they’re more worried about the money.  Their perspective is different from ours?” What then is “our perspective”? 

Both the supermarket manager and the local farmer need to earn money from the sale of these vegetables. And the consumer wants the vegetables on the supermarket shelves.  

Moreover, our supermarkets still do not have sufficient local supplies.

The guidelines expounded by the minister may not have been communicated to the concerned supermarkets and most, if not all, have been importing vegetables in the past.

In saying that he wants to promote local agriculture, what concrete measures has Tomscoll taken since he assumed this ministry? 

Agriculture can and should be an important contributor to the economy as well as a source of income and jobs for the population, more so when 80 per cent of tour people live in the rural areas. 

That the ban was aimed at promoting the local industry is understandable and has been welcomed by producers including the Fresh Produce Development Company, which reportedly recommended the ban to the minister.

However, the Government’s track record of serious investment in the agriculture sector still leaves a lot to be desired.  And Tomscoll has inherited this legacy but his current actions are only hurting the industry.

Without seriously investing in agriculture – through extension services to creating markets and importantly subsidised economical transportation services – talk of supporting local farmers will always sound hollow.

It may fall back on the minister to walk the talk by first establishing credible value chains – from producer to supermarket.