Take heed of rice policy concerns, researcher says

 DEVELOPMENT policy researcher Paul Flanagan says Papua New Guinea should heed of concerns raised on its 2015 rice policy.

This followed warnings by the Independent Consumer and Competition Commission not to give a monopoly rice producer a quota to control rice imports in its 2015 rice industry pricing review. According to ICCC, the national rice policy stated that it would give “pioneer investor” status to an “investor willing to commit over US$2 billion (K5.7b) and establish large scale (100,000 ha) highly-mechanised irrigated rice farms with the capacity to produce over 300,000 tonnes of rice locally by 2030”. Under the policy, a pioneer investor would be given a 10-year quota to import rice, would not have to pay any duties on imports, and would get other tax benefits.

“A quota, especially to a monopoly, will push up prices and profits,” Flanagan said.

“Not surprisingly, the commission found that the rice policy could have major negative effects upon consumers and competition.

“It especially warned about the granting of pioneer investor status. It said no domestic rice monopoly is created by the issuing of pioneer status to only one rice grower.”

Flanagan said a recent announcement by Agriculture Minister Tommy Tomscoll of a US$2b investment project to grow rice in Central was a concern.

“The US$2b figure caught my eye: it is exactly the threshold required to get that pioneer status and the scale is big enough to be a monopoly.”