OBG talks to Robert Nilkare, Country Manager for Papua New Guinea, New Britain Palm Oil Limited: Interview

Interview: Robert Nilkare

What are the biggest challenges the palm oil industry faces currently in PNG?

ROBERT NILKARE: The palm oil industry in PNG has been suffering from the lack of infrastructure affecting the overall agricultural sector. The biggest challenges facing the industry is public infrastructure, the Oil Palm Industry Corporation (OPIC) and law and order. The overall success of the palm oil industry has attracted growing interest from the government lately; however, the lack of OPIC extension services to our smallholders is a huge problem and one that can be rectified through a public-private partnership arrangement where the milling companies should perform this task rather than relying on OPIC.

Government support for infrastructure development in roads, bridges and seaports would provide the foundation needed to support and grow economic activity in the palm oil regions of the country. As an example, the tax credit scheme between the state and the private palm oil operators has ensured that over the years vital infrastructure has been maintained. However, a complete review of the mechanics of this scheme and the approval process needs to be completed as soon as possible to ensure it can continue on a sustainable path.

How do you perceive the role of the government in developing the different activities associated with the agricultural sector?

NILKARE: The government’s focus has been sidetracked by the non-renewables sector, where the socio-economic impact is not as long-term as in the agriculture sector. Potential new laws and tax regimes pose a threat to the stability of this sector. This simply boils down to a lack of cooperation and cohesion between the private sector and government. Our priorities must be aligned and our objectives must be achievable. Agriculture is business. In fact the entire sector has the potential to develop and promote the largest small and medium-sized enterprise grouping in any sector, which must be the priority for our government. The sector provides the largest employment opportunities of any sector in PNG.

Our rural areas are full of opportunities, and developing our sector is the best way to reduce urban drifting, along with associated law and order issues. In the past few years, agriculture has become a key word in every political speech. Identifying it as a priority and advocating for it as the way of the future is a good start. The challenge is ensuring more synergy between the government and businesses that have the capacity to underwrite the developments.

What steps should the government and the private sector take to make agriculture more attractive to private investors?

NILKARE: Infrastructure, infrastructure and more infrastructure. This is a major component to ensure your road to success in agriculture. There are obviously other key factors involved, but if you start the investment process by establishing and maintaining critical infrastructure, this will give you the foundation to work from. The other critical requirements are law and order, clear state leases (security of tenure) and tax incentives and subsidies where applicable. There must also be incentives for people to leave the cities to go work in agriculture and programmes to support smallholder farming with financing. Furthermore, until the law and order situation is under control, farmers and companies alike will continue to operate under huge security costs. I believe increased employment in rural areas can solve some of the law and order issues. Agriculture is an important business and is the future of PNG. I think the government needs to do more to promote, protect and ensure its sustainability. We need an overall agriculture investment and administration policy that works in favour of the private sector developers, not against them.