Revitalising growth in Papua New Guinea's agricultural sector

Abstract

Abstract Agriculture provides a means of livelihood for over 80% of Papua New Guineans and contributes to over 30% of its national income. Although per capita income has not grown much in Papua New Guinea (PNG) since the 1960s, there has been a decline in the relative significance of agriculture and a dramatic rise in the contribution of mining activities. The purpose of this paper is to simulate the government policy and external factors on the agricultural sector using a computable general equilibrium model of the PNG economy. The results show that the resource boom could have a negative impact on the agricultural sector, while exchange rate depreciation and tariff reductions have positive impacts. It is concluded that PNG's best prospects for achieving a broad-based and sustainable growth lie in reinvesting revenues from mining and petroleum in agriculture and rural infrastructure.