New study: Palm oil a viable industry here

Source:
The National - Wednesday, March 23, 2011
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A NEW study on the economic benefits of the palm oil industry in PNG shows it is an economically and environmentally viable industry with the potential to raise the living standards of half a million people.Launched yesterday, the report titled The economic benefits of palm oil to PNG by international consultancy firm ITS Global, PNG is in a perfect position to capitalise on oil palm development as a response to strong global demand for food staples and a domestic need for nutrition and food security.ITS Global principal Alan Oxley said growth in this industry would have an immediate, sustainable impact on local and national economies.“It is estimated that one million hectares of designated area are available for palm oil development in PNG.“If just 420,000 hectares of this land were developed with palm oil, the industry would generate more than K104 billion in revenues over 25 years, providing 105,000 jobs annually and support close to 540,000 communities.“The prospects for economic development are enormous,” he explained.Commissioned by the Rimbunan Hijau (PNG) Group, this report showed that over the past 15 years, palm oil has recorded the greatest increase in real income out of major crops such as cocoa, copra and coffee.To show how profitable the industry is, the report found that palm oil smallholders on a two-hectare plot receive an annual income of K5,586 - almost double the country’s minimum wage, whose returns are almost 10 times those from cocoa.With traditional palm oil producing countries slowing down due to land restrictions and productivity concerns, PNG is in a prime position to fill future supply shortages.This means the next 10 years would see global demand for palm oil increase by 30%, reflecting the growing consumption for palm oil as both a food product and as a feedstock for biofuel.National Planning minister Paul Tiensten said agriculture, which has been the economic backbone of PNG for a long time, accounted for a third of today’s gross domestic product, which has been dwarfed by the growing contributions of export earnings from minerals and oil.He said the growing population was worsening problems such as competing land pressure, soil degradation, pests and nutritional dietary deficits, which the government was now working to ensure that agriculture sector reinvents itself.Tiensten explained that one way to do this was to increase cultivation areas and yield improvements by small holders which were the critical ingredients in the coffee, cocoa and copra industries.“This was important for the palm oil industry because the prospects for growth here were much stronger due to the potential for expansion from increased plantation investments.“As Minister for National Planning, I have the firm belief that palm oil had demonstrated the potential to drive economic growth in the agricultural sector,” Tiensten said.