The demand for staple foodstuffs in the Papua New Guinea urban sector

Abstract

Food production in Papua New Guinea has in the past been almost exclusively confined to subsistence production, with the country's modern sector largely dependent upon imported foodstuffs. A rapid increase in urban population and Government desire for a more self-sufficient economy have made domestic food production a matter of the highest priority. In this study, analysis is made of the most comprehensive household expenditure data available to date, with the primary objective of estimating expenditure elasticities for staple foodstuffs. The most notable aspect to emerge is an apparently higher expenditure elasticity for traditional staples than for modern staples such as rice, wheat products and sugar. Examination is also made of the effect of the different price relativities between traditional and modern staples at the various urban centres. Utilising the estimates of expenditure and relative price elasticity obtained together with forecasts of future urban population, the demand for staple foodstuffs until 1986 is estimated. In addition, the implications of different strategies for the supply of domestically produced staple foods to urban markets are examined. Particular attention is paid to the value of rice and wheat product imports necessary to complement such supply strategies. Finally, factors relating to an integrated pricing policy for all staple foodstuffs are discussed.