NRI saysPNG Government's rice import quota discriminatory

The PNG's National Research Institute has described the Government’s proposal to allocate up to 80 per cent rice import quota to a preferred candidate as discriminatory, unfair and anti-competitive.

The think tank also said the failure by the Government not to make available the proposed rice policy for public scrutiny, coupled with the absence of domestic rice production data prevented meaningful analysis.

The proposed policy came under scrutiny in an NRI report titled “Rice import Quota System in Papua New Guinea: Issues and Policy Options” (Volume 9, Issue 7) which was published on September 2 by the government-funded organisation.

The report highlighted the benefits of competition in PNG and its link to an efficient outcome and allocation of economic resources. But there is a danger that the proposed quota allocation system ‘will frustration competition and create an inefficient rice market in the country’ and lead to the Government breaching World Trade Organisation rules.

“Reflecting on PNG’s dreadful experiences of monopolies in the delivery of crucial goods and services, the article cautions that emergence of a monopoly trader in the rice industry is a dangerous prospect, especially with rice fast becoming a staple food throughout the country – the cost of survival for many households will increase.”

The NRI is the latest organisation to express concern at the controversial proposal after the Rural Industries Council (RIC), the Independent Consumer and Competition Commission (ICCC) and Australian rice producers Trukai and local PNG farmers warned against giving an 80 per cent quota to a single company.

“The article highlights the need for an optimum method to allocate quotas for importing rice. It also recommends for import quota arrangements that are transparent and disclosed in a publicly available policy document. To avoid conflict of interest, import quota allocations should be made to trading companies; no allocation of quota should be made to domestic rice producers,” the NRI said in a statement yesterday.

Prime Minister Peter O’Neill, in a statement to the PNG parliament recently, said the controversial proposal had to be approved by the National Executive Council (NEC). Nevertheless Trade Minister Richard Maru told parliament last week that the proposed policy was against WTO rules.