Image : PNG’s Central Bank Governor Loi Bakani. Credit: BAI
The Governor of the Bank of Papua New Guinea has called for a national plan to make the country self-sufficient in food production, with capacity for export. Loi Bakani outlined his proposal at last month’s National Planning Consultative Summit in Lae.
Papua New Guinea must use its comparative advantage in food, according to central bank governor, Loi Bakani.
He believes PNG should follow the lead of other Pacific and South-East Asian countries, which have been able to convert their subsistence agriculture-based economies, placing them on a development path.
‘My view is that, the objective we set is very much in line with the one that was set by some of the other developing countries—self sufficiency in food production’, he told the Summit.
‘We should produce all the food we can to feed ourselves and the future generations.’
‘The experiences of other countries point to potential economic growth of Papua New Guinea.’
Bakani’s view is echoed in the government. National Planning Minister, Richard Maru, told Business Advantage PNG last year, that each year PNG imports K3–4 billion in food that it could produce itself. The biggest item, he said, was rice, followed by dairy products from New Zealand and chicken feed from Australia.
‘We want to attract investors into sectors like coffee and palm oil,’ Maru said, ‘which have growth potential not just in terms of the primary production of the crops, but also the processing to final end product.’
Sustaining economic growth
Bakani noted that after the very high growth rates during the construction and early production stages of the PNG LNG project, ‘economic growth tapered off in the last two years-2016 and 2017’.
But, he said, the experiences of other countries point to potential economic growth of Papua New Guinea—in the medium to long term—of 6-7 per cent per annum.
‘To achieve it, the Government has to ensure that most of the GDP generated by the plan is domestically generated.’
He warned against the financing plans of some of the Exim Banks, which ‘have a condition of foreign inputs, in the range of 80 per cent and above.’
Bakani said PNG has a significant comparative advantage in the food sector.
‘We are blessed with a large fertile land mass, excellent climatic conditions, plenty of water sources that can enable us to become self sufficient in food production for our present and the foreseeable future generations.
‘The country is in close proximity to some of the markets that are major importers of food, so that all the excess productions beyond the domestic demand can be exported.’
‘There are many other products PNG should be growing, ‘like tropical foods, fruits and vegetables, for example’.
Bakani said that as well as eggs and chicken products, dairy and milk products, there are many other products PNG should be growing, ‘like tropical foods, fruits and vegetables, for example’.
‘What we have seen in the last seven years are only the first steps in a long walk that will show the real potential of this land of ours, to feed ourselves, our future generations and the scarcity of food supply of some of our neighbours.’
Bakani called for the government to prepare over the next five years, a detailed ‘Agricultural Development Plan’, which would outline which products could be introduced, and at what pace they would be developed in which suitable districts.
‘It will have to detail the conversion of the affected population from subsistence farmers to cash crop growers.
‘It will have to clearly define the necessary infrastructure developments that will have to be implemented, to enable this change to materialise. It will also require clearly identifying which other supporting industries and businesses will have to be developed to enable this change to happen.’
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