Rural livelihoods in PNGColin HuntSchool of EconomicsThe University of Queensland

Rural Livelihoods in PNG

Population

Rural 82%

Urban18%

PNG’s Dual Economy

Small scale

Large scale

PNG’s exports, kina millions

Agric, 2226 Forest;

477Marine;

233

Minerals; 9144

Rural economy

SUBSISTENCE

+Surplus

MIXED

Cash crop /fishing+Handicrafts+Processing+Subsistence

COMMERCIAL

Cash crop /fishing+Processing +Transport

INDUSTRIAL

LoggingProcessingPalm oilCoffee Fishing/canning

Informal - Formal

Human Development Indicators, PNG-Aus

INDICATOR PNG AUS

Life expectancy 61.6 81.9

Years of schooling

4.3 12

Gender inequality

2.96 7.84

Gross national income/head

US$

2,230 38,690

Ag. Performance 1.

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20406080

100120140160180

Agricultural volume Series2Population

Inde

x

19921994

19961998

20002002

20042006

20080

50100150200250300350400450500

CocoaCoffeeTeaCopraCopra oilPalm oilRubber

‘000

tonn

esAg. Performance 2.

Rural development impediments

theft/violence ability to save and borrow inadequate transport/roads poor schooling/ag. extension

Regress ?

• Law and Order X

• Corruption X

• Skilled labour X

“ROADS TO RUIN” POST COURIER 2001“In the absence of a large works

program...economic growth will be reduced and poverty will be perpetuated.

Progress

Digicel bilong ples

Roads

A boom?

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

Minerals

Agriculture

Pric

e in

dex

Palm oil projection

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

0

100

200

300

400

500

600

700

800

Area

Export value

Hect

ares

US$

mill

ions

Positives RSPO cert

Demand Lease land

But Costs high

Labour short Popn. density Land disputes

Palm oil production, PNG

•Nulceus estate

•Smallholder ~35% of production

•Company acquires land under lease- leaseback

Landowner benefit, export logging, US$ millions, 2011

National govern-ment in-

come (log tax), 69

Landowner royalty, 11

Landowner dev’ment, 34

Logging company profit; 38

To impact rural livelihoods?

Special Agricultural and Business Leases

(SABLs) *

A way of increasing logging, without real agricultural development and without environmental management

To impact rural livelihoods?

Reduction in Deforestation and Forest Degradation (REDD) programs

To replace logging?

To impact rural livelihoods?

Massive resource projects Fall in value of exports affecting livelihoods

of millions of small producers?

Is change sustainable?

Economic impacts: Sustained or transient?

Social impacts: Food security, income distribution issues?

Environmental impacts: Forest loss and pollution?

Rural Livelihoods in PNG

Colin HuntSchool of Economics

The University of Queensland

c.hunt3@uq.edu.au

Logging oil palm and livelihoods in Papua New Guinea___________________

Symposium at James Cook University20 April, 2011