NRI wants govt to stop rice monopoly

By SHIRLYN BELDEN
THE National Research Institute wants the government to abandon its rice monopoly plan.
The State’s leading think-tank said monopolising the industry “will be devastating to the peoples’ welfare”.
It called on the government to learn from other failed agreements like InterOil, saying natural monopolies could be justifiable but protectionist monopolies, “as in this case, is generally considered harmful to the overall welfare of the people.
“Current competitive markets in the rice industry in Papua New Guinea have proven to be of public benefit,” it said in a statement.
“The proposed rice monopoly has the potential of undoing the benefits of competition, including lowering prices, variety of rice products and food security enjoyed by the general public.”
It said issues such as profiteering and transfer pricing would be raised.
The report’s authors Dr Modowa Gumoi and Logea Nao said the rice monopoly proposal to the government carried a great opportunity of promoting anti-competition, which contravened the Independent Consumer and Competition Commission Act (2000) that supported fair trading and competition. 
Minister for Agriculture and Livestock Sir Puka Temu presented a proposal to the NEC, which has yet to decide on it.
The proposal calls for a foreign company, Naima Agro Industry, to become the sole supplier of rice by growing it in Central.  
NRI, under the economic policy programme of the Wealth Creation Pillar, suggested that terms and conditions of project proposals should be thoroughly scrutinised by experts for project viability and opportunity costs involved.
 “At one in time Trukai Industries monopolised the rice industry in PNG and only through freeing up of the industry through competition does PNG now has a competitive rice industry with competitors, even though Trukai Industries commands a larger market share,” it said.
NRI is calling for a free and competitive market and supports continued competition as it did for the mobile phone and aviation industries.