Tag: rice import

Former Minister of Commerce and Industry, Charles Ugwuh has urged the Federal Government to declare a five-year import ban on rice imports, a measure he said would save $2.6billion yearly.

He said government should intensify efforts at producing enough of the commodity rice locally to meet domestic demand.

He said within the given five year period, the Nigeria Customs Service (NCS) should protect the nation’s local rice output against smugglers.

“All hands should be on deck by the financial sector, local distributive trade, all agencies of government, as well as all stakeholders to support the national initiative on rice,” Ugwuh said.

“If we drive this to success, it would encourage even greater success and confidence to tackling other products and programmes that are relevant to prosperity and the nation’s well-being,” he added.

Ugwuh, who spoke in Abuja,  made a strong case for a viable reward system, that would encourage people to strive towards enforcement and compliance by agencies of government,  stressing compliance with the measure will help grow the nation’s economy.

He said: “We can grow rice and save over $2.6 billion per year that we currently spend on rice imports,” pointing out that Nigeria could be self-sufficient in rice production in no time.

Ugwuh said : “We call for a total ban on rice imports for at least five years to enable Nigeria produce its own food given the enormous natural resources and endowments we have. The nation can be self-sufficient in rice. We can eliminate food imports and save $9billion annually on wheat, rice, sugar, and fish. Nigeria cannot afford to waste such a huge amount and export vital jobs overseas, when massive unemployment is such a great challenge threatening our national survival.

“Nigeria has suitable ecology to grow rice paddy in virtually all over the country. With dedication, perseverance and national commitment, Nigeria can grow and process rice to meet its domestic needs, and indeed, export to other African countries at least, where a ready market exists for over 15 million tons from West through Central and Southern Africa.”

Nigeria, according to him,  has been striving hard to grow its capacity in paddy production and processing through massive investments in production infrastructure, power, water, irrigation facilities, dams and processing industries and technology.

He said Nigeria has made serious progress, adding that more is required, including greater investments to compete with other countries in South East Asia, which have been producing rice for decades and have evolved a culture of rice at low cost and high yields that are difficult to match.

“Unfortunately, each time we make earnest efforts to grow our rice capacity to displace imports, our traditional rice suppliers from South East Asia (India, Thailand, Bangladesh, Vietnam, Cambodia, among others) double up their efforts through Diaspora merchants to beat us down,” he said.

“With their production efficiencies, low cost of production, better quality milled rice and other trade malpractices and gimmicks, they are able to weaken our resolve and erode our competitiveness, forcing us to buy from them and to abandon all our well-laid plans, investments and import-substitution strategies,” Ugwuh added.

In the meantime, we commit up to $2.6 Billion to buy 3.0 million tons of rice per year, he lamented.

“We export various desperately needed jobs out of Nigeria to South East Asia. We further pauperise our people by collecting additional toll as import tariff of over $1 billion. In the process, we also enrich smugglers and sundry merchants and traders with another $1.2 billion,” he stated.

NIGERIA’s rice import target  for this year has been reduced to 1.3 million metric tonnes.

In a letter signed by the Minister of Agriculture and Rural Development, Dr. Akinwunmi A. Adesina, and addressed to the Co-ordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, he said a domestic supply gap of 1.3 million MT was determined for 2015, down from 1.5 million in 2014.

He said one million MT of this quota had been set aside as allocations to existing rice millers, importers and new investors with approved Domestic Rice Production Plans (DRPP), at a preferential levy of 20 per cent and duty of 10 per cent.

This year’s supply gap is 200,000 MT lower than 2014, as rice importers with no DRPP will account for the remaining 0.3 million MT at the higher levy of 60 per cent and duty of 10 per cent.

In 2014, rice importers and new investors were required to post a Domestic Rice Production Performance Bond from a qualifying bank to clearly demonstrate their commitment to domestic investment plans in rice production and processing.

Under this year’s import quota, the Federal Ministry of Agriculture and Rural Development, identified 22 companies that will receive quota allocations for 2015 out of the number that was approved last year.

In the letter titled, “Approved List of Companies Allocated Rice Import quota for April 2015- March 2016 period”, it is stated that certain criteria informed the trimming down of the number of companies from last year’s figure.

It reads in part: “In line with the Federal Government’s policy (“the Policy”) to ensure self-sufficiency in rice by 2014, domestic rice production and milling operations continue to rise, which has resulted in a reduction in rice requirements of the country”.

As was the practice in 2014 and in line with the policy, the allocation of import quotas continues to be made along the explicit criteria set for encouraging domestic production and domestic milling of rice, to lead to self-sufficiency. These criteria are based on the extent of existing domestic milling capacity as well as along four (4) specific items that assess each company’s ongoing investment outlay  into domestic rice production and milling.

These include the following: Domestic Rice Production Plan (DRPP): demonstrate evidence of current or planned investment in domestic rice production over a 3-year period, size of investment, proof of land acquisition and establishment of rice fields and paddy production, paddy purchase outlook from Paddy Aggregation Centres (PAC): Demonstrate a clear plan of purchase of paddy from PACs, should include location of PACs, volumes of paddy to be purchased among others.