Policy can affect people: Review

 A REVIEW conducted by the Independent Consumer and Competition Commission has found that the Government’s rice policy may affect consumers.

The PNG 2015-2030 National Rice Policy was proposed by the Government with an intention to steer the country away from depending on rice imports to ensure food security by growing rice and setting the nation on-track to be a rice exporting country in the future.

ICCC said that while the policy in its current form would allow the growth of domestic rice producers, it would also increase the prices that consumers will pay.

“The Commission has noted that the Government is proposing to introduce a new Rice Policy to promote food security for PNG,” ICCC stated in a draft report of its 2015 Rice Industry Pricing Review.

“The Commission has therefore considered the outlook for the availability of rice on the international market. There appears to be no evidence or firm opinion that there is any substantial risk that PNG will not be able to continue to import rice to meet its requirements.

“The Commission has evaluated the likely effects that this Rice Policy will have and found that it has the potential to have major negative effects upon consumers and competition in the rice market in PNG.”

ICCC said it was found that even if PNG became self-sustained in rice production this  would not protect consumers from the effects of price shocks in the international market.

It said if the government was intending to introduce policies for increased rice production then it should modify the policy so that it:

•  Would allow the use of subsidies to encourage domestic rice production as this would not harm consumers;
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• would not make use of quota or tariffs, as these would be detrimental to consumers and would also introduce market rents; and,
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• Would not introduce export controls, as this would reduce the efficiency of local production to the disadvantage of consumers and the community.