Paper: The Economic Value of Customary Land

This paper discusses the economic value of customary land in Papua New Guinea. Data from pilot surveys of land use in the Eastern Highlands Province and Madang Province is used to engage with the national debates over land.

An opportunity cost evaluation approach demonstrates that low financial returns mislead and lease valuations probably greatly underestimate the real value of productive land in PNG. Average family farm cash income ranges widely, but is often only around 1000 Kina per year, on farm land of about one hectare. However when that figure is combined with the subsistence food and housing value of the land, the equivalent value may be well in excess of 15,000 Kina.

Lease valuations may only be 50 Kina per hectare, plus uncertain royalties; and some have been less than this. An 'education effect' may help those employed and in small business gain similar or greater incomes from their farm land, than the 'full-time' farmers.

Customary landowners would do well to consider fuller valuations of their land, and the range of possible income supplementation options. The idea of a choice between poverty-struck subsistence farming or corporate development (logging, plantation cropping) seems to be a false dichotomy.

There is evidence to suggest that customary land owners would do best to look at supplementing (rather than abolishing) their subsistence practices and maintaining (rather than alienating) their customary lands.