NRI against monopoly of rice production

IN reference to a letter from “Nationalist”, let me make it clear that NRI’s stance is that while we do not oppose domestic rice production, be it on a large or small scale. We do oppose the monopolisation of it.
This is because it is harmful to the welfare of everybody with high prices, substandard quality, irregularities in production and supply as well as lessened variety.
We therefore propagate continued competition in the rice industry.
The author calls for the promotion of a large-scale domestic rice production to assure food security.
Though we agree, the current reality is that the high cost structures coupled with inadequate infrastructure and support services make it a financially-infeasible proposition.
In fact, it is because of this financial infeasibility of the proposed rice pro­ject in the Kairuku-Hiri electorate of Central province that has led to deve­lopers requesting for government assistance such as duty-free imports of capital equipment, tax breaks and increased tariffs on rice imports.
Although food security can be assured with domestic rice production, this can only be justified if such production eventuates in a market environment that is self-sustainable without government assistance, to ensure fair pricing.
We do not agree to a monopolised rice industry that is propped up by government assistance.
The draft deed of agreement between the developer of the proposed Kairuku-Hiri project and the government does not guarantee that rice will be produced domestically.
The author seems to think that food security is about production only.
Far from it.
Food security and human survival is more about affordability than availability.
With high cost structures and stagnant wages, a monopoly-induced cost structure may further compound prices and make rice unaffordable to low-income citizens, hence threatening survival.
We agree that rice is currently imported, although we are not sure if the K500 million import bill quoted is in order.
A monopolised rice industry that rides on government support in the long run may be more costly and threaten human survival than the rice import bill.
We concur that natural disasters in countries we import rice from may affect us who depend on it.
But surely, contingency measures are in place to counter this.
The author asserts that Trukai has a monopoly over the import and distribution of rice and has not used its windfall profits to venture into a large-scale production.
We cannot speak for Trukai but although they may command the larger share of market, the current industry in PNG is a competitive one, with other players such as Homestate, National Rice Distributors and Lam’s Trading.
The author also compares PNG to Indonesia and the Philippines but the comparisons are inappropriate be­cause the conditions and cost structures in those countries are very diffe­rent to that of PNG.
It is important that decisions of national importance are not based on nationalist sentiments but on realities. We must assess the costs and be­nefits of any proposed venture to ensure we benefit to the fullest.
We would like to clarify that our comparisons and arguments were merely to remind ourselves that competition has benefitted us all and monopolies can be detrimental to our welfare.
We encourage the author to contact us for further discussions.

Dr Modowa Gumoi
Port Moresby