Central Dairy Ltd has taken offence to an article in one of the dailies titled “Trade Protection, did it help?”
Published on Thursday February 13, the article made reference to tariffs supposedly imposed on dairy imports that are intended to protect Central Dairy Ltd (Ilimo Dairy Farm).
In response, Central Dairy Ltd said: “For the avoidance of all doubt; it is advised that there has never been, nor are there currently tariffs and custom duties of any kind whatsoever that are levied on imported dairy products and as such, Central Dairy Ltd has never received any form of protection as an infant industry or otherwise.
“It is unfortunate that publications of this sort are not factually verified by the author, who has made previous publications of the same nature in the past, in circumstances in which an easy and simple fact check with Central Dairy Ltd, or PNG Customs or the Department of Treasury would have established the true facts.
“As for the facts themselves: Ilimo Dairy has slashed the price of fresh milk previously 100 percent imported into PNG by a 50 percent margin, from approx. 12 kina to under 6 kina (plain and simple), other products produced by the Ilimo Dairy Farm (yoghurts, flavoured milk and others) have shown similar discounts to the PNG consumer.
“Furthermore, due to the competition with the imports by a local producer, the lesser quality Ultra Heated Treated (UHT) milk products imported into PNG, that were retailed at above 6 Kina a litre prior to Ilimo coming on board, have dropped to as low as 4 Kina a litre at the centres where Ilimo products are sold in competition with the imports and which include POM, Hagen and Lae (and there are instances where they are retailed below their landed price in PNG!).
“Further, social and economic benefits delivered through Central Dairy Ltd include the creation of 200 new jobs at a time of a shrinking job market, engagements of hundreds of outgrowers in Central Province that supply components of the feed the farm requires (maze and Guinea Grass) turning subsistence farmers into cash cropping farmers, conservation of forex, training, upskilling and the introduction of innovation never before seen in the entire region and much more.
“Indeed, a case for protecting PNG manufacturers can be made, particularly infant industries, if PNG wishes to grow its economic base, such protections by way of tariffs, custom duties or other forms of direct or indirect subsidies are afforded by all of PNG trading partners to their producers, these may include grants, rebates, concessional finance and much more.
“The view that PNG farmers and agriculture producers are required to compete in their home market with no protection against established industries overseas, is in our view plainly erroneous and has nothing to do with PNG’s national interest and is intended to frustrate any attempt by PNG to break the vicious cycle, in which it is expected to feed its people with expensive imports draining its foreign currency reserves, amongst others.
“Farmers and producers in other countries that sell their goods in the PNG market enjoy protections in their home market including; subsidies, grants, cheap concessional finance, modern infrastructure, extension services, free R&D, tax umbrellas/concessions and direct government interventions at time of need (drought relief, diesel rebates and other grants), all of which are not available to the PNG farmers and producers.
“Imputing a PNG manufacturer that has not received any form of tariff protection, with a misleading article that explicitly states that it has supposedly received such protections, is malicious, sinister and leads us as a reasonable reader to the conclusion that there may very well be ulterior motives and oblique intentions in play.”