Despite being banned, rice smuggling keeps rising. Over two million metric tons of parboiled rice from Thailand and India were smuggled into the country last year, making it impossible for the government to meet its self-sufficiency target in the commodity’s production. Although a new target has been set for 2020, there are fears that it may also not be met, unless the government musters the political will to halt smuggling. Assistant Editor CHIKODI OKEREOCHA reports.
The Federal Government appears caught between the rock and the hard place in achieving its target for self-sufficiency in rice production.
Despite inching closer to achieving the feat, rice smugglers through the numerous borders have continued to throw spanner in the works.
For instance, the Minister of Information and Culture, Alhaji Lai Mohammed, said the Federal Government’s rice revolution had paid off, as 60 per cent of rice consumed in the country is now produced locally.
Quoting the Rice Millers, Importers and Distributors Association of Nigeria (RIMIDAN), the Minister said over two million metric tons of parboiled rice were smuggled into Nigeria last year. According to him, the smuggled rice came in through the borders with Benin, Niger and Cameroon.
He said, for instance, in Benin Republic, the demand for white rice, which is consumed in Benin, against parboiled rice in Nigeria, is 400, 000 mt. Yet, the country, with a population of about 11 million, imports between one million and 1.2 million mt of rice annually.
“Who are they importing for? Nigerians of course. In fact, as Nigeria’s rice import falls, Benin’s rice import increases. Most of the parboiled rice imported by Benin eventually lands in Nigeria through smuggling,’’ Mohammed said. He said smuggling was the biggest challenge facing rice production in Nigeria.
It is easy to see why this is so. For one, the difference in the price of the local and foreign rice as a result of influx of smuggled rice has been a major discouraging factor for rice farmers. This makes people prefer the foreign rice because of the price difference.
He gave an insight on this disincentive when he said smuggled rice costs between N11, 000 and N13, 000 per 50kg bag, while Nigerian processed rice sells for between N14,500 and N15, 000 per 50kg bag.
He said the price of local rice was higher because Cameroon and Benin Republic lowered their tariffs on rice to between zero and five per cent to encourage importation and subsequent smuggling into Nigeria.
Mohammed added that Thailand and India give high subsidies to rice farmers and rice processors, adding, however, that local rice producers had made some representations to the government on how rice could compete favourably, in terms of pricing, with the heavily-subsidised imported rice.
Perhaps, more importantly, the upsurge in rice smuggling is hurting the Federal Government’s revenue generation efforts. The smugglers, who are seen as the greatest saboteurs, have been ravaging the economy and denying the government huge sums of legitimate revenue.
For instance, a recent World Bank report on smuggling in Nigeria stated that an astonishing $5 billion (about N1.45 trillion) worth of different goods, including rice, are smuggled into Nigeria yearly through Benin Republic alone.
The report further noted that over 25 per cent of the total annual revenue collected by the Nigeria Customs Service (NCS) was lost to smugglers each year. Going by the Customs’ projected revenue for last year, which is approximately N600 billion, it means that the Service may have lost N200 billion in revenue last year alone.
Smuggled rice also poses serious health challenges to consumers. The minister, at a briefing, raised the alarm over the unhealthy status of smuggled imported rice being dumped in the country. He urged Nigerians to reject the rice. He said the government could not guarantee the healthy status of the rice, having spent months on the high seas and warehouses.
The minister appealed to Nigerians to complement the government’s efforts by consuming only locally-grown and processed rice, which, according to him, “is fresher, tastier and healthier.”
“We don’t know where or how imported rice is made or how old it is. It is reported that most of the rice dumped on us are old and probably rejected.
“The citizens of those countries do not eat this rice. The citizens of Benin also do not eat it. But they send it to us. Unhealthy foods are dangerous to health. So let’s eat what we can vouch for,’’ he said, a fortnight ago while reeling out figures, which indicated that local rice production was growing exponentially.
Mohammed said for instance, within two years (September 2015-September 2017), rice importation from Thailand fell from 644,131 MT to 20, 000 MT, representing over 90 per cent drop.
While putting Nigeria’s current rice consumption at about six million MT of milled rice, he said the country produced 2.5million MT of milled rice in 2015. By 2017, it rose to 4million MT, leaving a gap of 2million MT. “Our target is to fill that gap by 2020,’’ he said.
The minister added that from only 13 integrated rice mills in the country in 2015, the number rose to 21 by 2017. Quoting the Rice Processors Association of Nigeria (RIPAN), he said from five million rice farmers in 2015, the number has also gone up to 11 million.
The administration’s rice revolution has also not done badly from investment perspective. Alhaji Mohammed put RIPAN’s total investment in the economy at over N300 billion, while upcoming investments would amount to N250 billion.
He projected that the new investments will add 5, 000 jobs and additional 1,775,000 MT of integrated rice milling capacity, while saving $300 million foreign exchange from import substitution through local processing.
The minister noted that the new investments were made when Nigeria was in recession, indicating investors’ confidence in President Muhammadu Buhari and the Nigerian economy.
“The investments have not stopped as 15 more mills are about to take off, including the Dangote Rice Mills to be established in six states with a total capacity of about one million MT,’’ he said.
The minister said with the significant increased production in rice paddy, Nigeria’s rice import bill, which hitherto stood at $1.65 billion yearly, dipped by over 90 per cent.
He attributed the exponential growth in local rice production, which moved Nigeria closer to ending rice importation, to the sustained implementation of the Anchor Borrowers’ Programme launched on November 17, 2015.
Buhari had in line with his administration’s economic diversification agenda through the agric sector, launched the Anchor Borrowers’ Programme (ABP) to support farmers through input distribution and loans to boost rice production across the country.
The programme, which is being managed by the Central Bank of Nigeria (CBN), was also aimed at stabilising input supply to agro processors and addressing the country’s negative balance of payments on food items.
Presidential fertiliser initiative to the rescue
Apart from benefiting from the ABP, the ongoing rice revolution, The Nation learnt, also drew strength from the setting up of the Presidential Fertiliser Initiative (PFI) in December 2016 by Buhari.
Set up to deliver commercially significant quantities of affordable and high quality fertiliser at the right time to over 500,000 farmers across the country, the initiative has helped push up fertiliser production capacity to 2.22 million MT.
To date, the programme, according to the Managing Director, Nigeria Sovereign Investment Authority (NSIA), Mr. Uche Orji, has contributed to the resuscitation of 14 moribund blending plants, which represent 55 per cent of total installed capacity in the country.
Also, more than six million bags of 50kg NPK 20:10:10 fertiliser have been produced locally and distributed to farmers. Orji stated that after one year of running the programme, the import of finished fertiliser had reduced drastically.
“For the 2017 wet season, it was estimated that about N60 billion from the 2017 budgetary provisions for fertiliser was saved, while another saving of $150 million was conserved from foreign exchange window,” he said.
Orji added that the success of the PFI was evidence that Nigeria can sustainably produce fertilisers locally at a reasonable price without subsidy.
Encouraged by the 2.22 million metric tons made-in-Nigeria fertiliser production capacity, the Federal Government has announced plans to revive 12 moribund fertiliser blending plants to bring to 23 the total number of plants that will partake in this year’s PFI.
Doubts over self-suffiency target
Although, some of these significant milestones must have galvanised government to declare that the country will achieve self-sufficiency in rice production by year 2020, the excitement and optimism generated by the declaration were however, tinged with fear.
The thinking, and rightly so, is that without first articulating workable strategies to rein in rice smugglers, government’s latest rice self-sufficiency target may go the way of previous targets that were never realised.
Recall that Minister of Agriculture and Rural Development, Chief Audu Ogbeh, had earlier assured that Nigeria will be self-sufficient in rice production by the end of last year.
Ogbeh had given the assurance at the First International Cocoa Summit, organised by the Federal Ministry of Trade and Investment in collaboration with Cocoa Farmers Association of Nigeria (CAN) in Abuja, last year.
Although Chief Ogbeh said then that rice production had improved tremendously across the country as a result of the CBN’s ABP, government failed to meet the target, due largely to rice smuggling.
Again, sometime this year, Vice President Yemi Osinbajo said Nigeria will stop rice importation by the end of the year. But as it turned out, the pronouncement was made without recourse to the realities on ground.
RIMIDAN faulted Osinbajo’s statement. Its Secretary, Shaibu Mohammed, said it was impossible for the country to achieve self-sufficiency in rice production by the end of the year because of the influx of smuggled rice through the land border.
According to Shaibu, smuggling of the product was frustrating efforts so far put in place by rice farmers towards rice production in the country. The frustration, he stated, stemmed from the difference in the price of the local and foreign rice, as people prefer to buy the foreign rice, which is cheaper.
Will government summon the political will to halt rice smuggling and address other issues around price instability, quality and harvesting/processing? Answers to these will determine the success or otherwise of the new year 20202 target for rice self-sufficiency.