Prime Minister James Marape has outlined his aim to make Papua New Guinea the ‘food basket of Asia’. What opportunities does this create for business?

Prime Minister James Marape speaking recently at the Lowy Institute in Sydney. Credit: Lowy Institute

‘I don’t want PNG to be known as an oil and gas and gold country. I want PNG to be known as a country that is the food basket of Asia,’ Prime Minister James Marape told an audience at the Lowy Institute in Sydney late last month.

‘We have very rich organic food in PNG and I want to supply the Asian market with that organic food into the future.’

Marape argued that boosting agriculture is essential for PNG’s economic diversification and sustainability.

‘I want to point my country towards agriculture for 2025 and beyond.’

‘Investors who are out there, with money to invest, will attract the right government incentive if you come to us and want to partner in this space.’

He said investing in the sector ‘will return a lot of dividends’ for the nation.

‘Investing in food will secure our nation, not only for security but more importantly for economic activities whereby people who own land can be participating in the sector.

Marape said the government is ‘looking to invest’ in agriculture.

‘Investors who are out there, with money to invest, will attract the right government incentive if you come to us and want to partner in this space.’

State-owned enterprise Kumul Agriculture Limited was established in 2018 under the previous O’Neill Government to pursue development in agriculture and hold state interests in the sector, such as the National Plantation Management Agency Limited, Sepik Agro Industries Limited and Central Dairy Limited.

Diversification and integration

Farmers at Gerehu Vegetable Markets. Credit: DFA

As many have argued over many years, boosting agriculture would have a significant employment impact and bring more of the rural population into the formal economy.

According to the recent World Bank report, Papua New Guinea—Recovery Amid Uncertainty, the livelihoods of millions of Papua New Guineans depend on agriculture:

‘Around 87 percent of Papua New Guineans live in rural areas, and 75 per cent of these are engaged in a variety of subsistence and cash income agriculture activities.’

However, the report argues that agricultural export require more institutional support:

‘Inevitably, institutional coordination and capacity building, involving both the public and private sector, will not only be more effective in terms of impacting on rural livelihoods, it will also be more efficient in reducing delivery costs.

‘Diversification in agriculture activities is crucial to securing sustainable rural livelihoods.’

‘Except for palm oil and copra, there has been a steady overall decline in agriculture export volumes over the last decade.

‘Diversification in agriculture activities is crucial to securing sustainable rural livelihoods.’

Integration

The World Bank report says integration of agriculture activities is key to securing sustainable livelihoods and points to some of its own programs in PNG as potential models for future success.

‘In general, integrated farming is the practice of mixing activities—such as cash crops and livestock —to maximize income from different sources and complement land and labor demands throughout the year.

‘Initiatives such as the Productive Partnerships in Agriculture Project (PPAP) are promoting mixed farming and the integration of crops other than cocoa and coffee.

‘Examples include the integration of cocoa with galip nut trees or using gliricidia trees as shade, which in turn serve as support for vanilla vines.

‘There are possibilities for including spices, depending on the climate and soil conditions.’

The report also points to the commercial possibilities of ‘value-added’ products.

Second to none

Prime Minister Marape maintains that the quality of PNG agricultural produce is high.

‘You pick up a banana, or you pick up a pineapple or a pawpaw that is grown in PNG, and they are second to none—globally speaking.

‘I look at greater Asia—that is two billion people who need to have a cup of coffee a day.

‘Three billion people will need some rice every day. Someone needs to grow that rice and that coffee.’

Marape said the population growth in Asia means that the region will require more food.

‘PNG stands ready to cater to Asia.’

What this may mean for business

• If the government follows through on its rhetoric, businesses are likely to receive government support in the agriculture sector.
• Businesses that can overcome institutional and logistical shortcomings in PNG could have strong export markets in Asia.
• The PNG population is more skilled in agriculture than any other sector and businesses that can harness those skills have an opportunity.