Despite consuming about seven million metric tons (MT) of rice yearly, Nigeria produces a meagre 2.7 million MT. This leaves a supply gap of 4.3 million MT to imports, which cost the Federal Government an estimated N360 billion yearly. This figure is expected to rise as consumption is projected to hit 35 million MT due to population growth. Sadly, Nigeria’s quest for self-sufficiency in rice production has continued to be hampered by issues around quality, price instability, and harvesting/processing challenges, among others. DANIEL ESSIET examines the forces against Nigeria’s rice revolution.
With 45, 000 hectares of rice farm, the Chief Executive, T.W. Heritage, owners of Kereksuk Rice Farm in Nassarawa State, Mr. Rotimi Williams, is contributing his quota to the Federal Government’s target of achieving self-sufficiency in rice production and consumption. His farm produces about 8, 000 metric tonnes of rice paddy yearly, which he sells to major milling firms across the country.
However, Williams’ investment and his inroad into the rice sector are still considered a drop in the ocean in Nigeria’s quest for self-sufficiency in rice. This is not his making, but the barrage of unresolved issues and challenges facing him and indeed, other local investors in the rice value chain, which has continued to hamper the nation’s target of self-sufficiency in rice.
Nigeria consumes about seven million Metric Tons (MT) of rice yearly. The country produces 2.7 million MT, leaving a supply gap of 4.3 million MT to imports, which cost the Federal Government an estimated N360 billion yearly.
Experts fear that this figure will rise as rice consumption is projected to hit 35 million MT by 2050, due to population growth. This was why the government came up with the target to achieve self-sufficiency in rice by 2017. However, five months into the target year to end rice importation, there are no visible signs on the horizon that this will be achieved.
Williams and other operators in the rice sub-sector, who spoke with The Nation said issues around quality, price instability, and harvesting/processing challenges, among others, remain the clog in the wheel. They argued that until and unless these issues are resolved Nigeria’s dream of achieving the feat will not be realised.
Williams put the problems in perspective when he lamented that local rice production remained uncompetitive because of rising cost of input. He said for instance, rice farmers and investors are bugged down by rising cost of inputs such as seed, irrigation water, fertilisers and other assorted chemicals and pesticides, among others.
According to him, rice farmers are contending with high electricity bills and other inputs, which have pushed up cost of domestic rice prices. He said prices of domestic rice have doubled in the last two years despite the ban on rice importation. At present, the price of local rice is higher than imported one. A module of 1.4 Kilogramme (kg) of local rice cost N300, while imported one is N200.
“The quality of our seeds is a contributory factor in the high cost of our locally produced rice. The resulting yield from these seeds means that the cost at which millers purchase paddy is high, with varying quality and subsequently, the rice recovered after milling is below the global average of 62 per cent,” Williams explained.
Aside poor quality of seed and disincentive to local rice farmers, there are others like land preparation process and inputs for rice farming, which are lot more demanding than most crops. He pointed out that majority of the rice paddy available for sale to millers are grown by subsistence farmers.
“It is obvious that yields will be a lot less in comparison to the likes of Thailand and India that use full mechanisation process for land preparation. They also use high quality inputs such as fertiliser and high-yielding seeds. We are still playing catch-up with leading rice-producing countries, which makes our produce less competitive,” Williams lamented.
Indeed, experts in the rice sub-sector have said Nigeria lagged far behind other rice-producing countries in seed development and per acre yield. They also believed that lack of strict quality control was a major reason why Nigerian rice did not get much positive response in the market as imported ones.
Funding, according to them, constitute an issue. It was learnt that most banks in the country would rather fund acquisition of machinery than rice production. Coupled with the fact that cost of funds are in double digits, most farmers have no access to such funds and those that have struggled to pay up and this, by extension, reflected in the price of rice.
“Given the high cost associated with the actual production of paddy, there is no subsidisation on the cost of paddy to millers, as we see in Thailand. Therefore, this cost is passed on to the final consumer,” Williams said.
Nigeria’s huge infrastructure deficit has not helped matter either. Lack of access roads, which increased transportation cost, has continued to frustrate rice farmers. Also, the nation’s perennial inadequate power supply means that rice millers have to run on diesel-powered generators at huge cost.
The Chairman, Kebbi State Rice Farmers Association, Alhaji Sahabi Augie, lamented that farmers are still battling with high costs of inputs, including seeds, fertilizers, chemicals and diesel, used for running milling machines. He said the situation was responsible for rice not being produced cheaply.
Augie said, for instance, that fuel is sold for N180 per litre around Kebbi State, and he needs to buy it daily to operate irrigation pumps. The same applies to all farmers because they use fuel for irrigation water. He, however, expressed happiness that the price of fertiliser has gone down to N5000 a bag.
At the trading and processing ends of the value chain, The Nation reliably learnt from industry operators that sharp practices capable of undermining government’s set target for rice have been going on. For instance, many traders resort to blending and mixing high-quality varieties with low-quality ones in a bid to compete with imported brands.
Some processors are also fingered as being culpable. Some of them in a bid to make quick profits at the detriment of Nigeria’s long-term commercial interest, allegedly process and polish low-quality varieties in a way that makes it difficult for one to differentiate them from the high-quality varieties.
Nigeria insignificant in global chart
Last year, the global production of paddy rice was estimated at 749.8 million MT, translating to about 499.9 million MT of milled rice, according to the United Nation’s Food and Agricultural Organisation (FAO). This volume was produced mostly in the Asian countries.
Nigeria is the largest consumer and producer of rice in Africa. According to Rice Authority, a Philippine online platform for global rice importers and exporters, Nigeria imports about 1.4 million tonnes (4.8 per cent of global rice imports).
Between 2012 and 2015, Nigeria spent over N474 billion on rice importation, according to the Central Bank of Nigeria (CBN).
Right now, major states producing Nigerian local rice include Kebbi, Sokoto, Ondo, Abia, Delta, Kogi, Benue, Kano, Niger, Kaduna, Taraba, Adamawa, Kwara, Ebonyi, Cross River, Bayelsa, Borno, Enugu, Ekiti and Ogun.
Experts said Nigeria has high potential for irrigated rice development with vast but untapped potentials in the flood planes of river Niger, Benue, Cross River, Kaduna-Karadawa Sokoto-River, Gongola, Chad Basin, Ogun, Osun, Imo, Anambra and Benin-Owena River Basins, totaling about 1.4 million hectares.
They note that maintaining a favourable rice supply-demand balance in the future depends largely on the exploitation of the production capacity of the rainfed systems in the Southern part of the country.
Government’s interventions
When President Muhammadu Buhari launched the pilot phase of the Anchor Borrowers’ Programme (ABP) in late 2015, it was seen by many operators and stakeholders as an indication that the government was determined to turn things around in the rice sub-sector.
The programme, which mainly targets small-holder subsistence farmers with a view to helping them scale their businesses to commercial level, encourages farmers across the country to become rice growers on at least one hectare of land each. It also targets millers with the aim of increasing their capacity utilisation.
At the launch of ABP, President Buhari said Nigeria was spending not less than one trillion naira on the importation of food items that could have been produced locally, a situation the CBN said was contributing “greatly to the depletion of the nation’s foreign reserves, especially in the face of low oil revenue resulting from falling oil prices.”
This was why the CBN said it had decided to shift from merely concentrating on price, monetary, and financial system stability to acting as a financial catalyst in specific sectors of the economy, particularly agriculture, in an effort to create jobs on a mass scale, improve local food production and conserve scarce foreign reserves through the ABP.
The implementation of the programme involves the CBN, Bank of Agriculture, Nigerian Agricultural Insurance Corporation, State Governments, integrated millers and farmers.
The Nation learnt that the programme may have started yielding result. For instance, President, Rice Farmers Association of Nigeria (RIFAN), Alhaji Aminu Goronyo, said the price of rice may drop to N6, 000 in the next six months, following the ABP intervention.
He told The Nation that in some northern states, paddies now go for as low as N10, 000. Goronyo said the demand and consumption of locally produced rice has increased tremendously in recent time, just as farmers are smiling to the bank as a result of the patronage they are enjoying.
According to him, there has been increased productivity in the north as more farmers have keyed into the CBN’s Anchor Borrowers Programme. He also said his association was mobilising rice farmers to take advantage of the CBN window nationwide to get involved in rice production.
“We are going to assist the Federal Government to produce more than enough rice. It is part of the plan to bring down the price of rice. There are several efforts that we are making to see that in no distant time, the price of rice will come down for Nigerians to have access to affordable milled rice,” Goronyo assured.
The ABP strategy, according to him, entails expansion of areas under rain fed farming and irrigation, reduction of post-harvest losses through mechanisation, improved seed production systems and market development improvement, among others.
Goronyo expressed optimism that price of rice will continue to drop as prices of inputs fall. He said the Association had signed a Memorandum of Understanding (MoU) with some farm input suppliers in the country to ensure prompt supply of cheap fertilisers and pesticides to boost production.
RIFAN President also pointed out that local rice is now well-processed and cheaper than imported ones, resulting in increased demand.
Augie agreed with Goronyo that the price of rice will crash soon, adding that this will be possible if the government works with the private sector to reduce the cost of production.
Private sector operators wade in
The Federal Government through the CBN is not alone in the current efforts to reposition the sector and achieve set target. For instance, Coscharis Farms, which is a 2, 600 hectares rice plantation, funded through the ABP, is aimed at boosting food production in the country, especially rice.
The CBN granted Coscharis Farms a N2 billion Commercial Agricultural Credit Scheme (CACS) to boost its capacity to produce rice all-year round, which is three harvests in a year.
Coscharis Group Chairman , Mr. Cosmas Maduka, said Coscharis Farms Limited will provide full time employment for about 3, 000 people as well as drive ancillary industrial growth in the state when all the phases of the investment are completed.
He said the farm phase of the business employs over 250 people, adding that the rice mill and irrigation components of the investment for which the CBN has given approval in principle to finance, will significantly enhance the capacity of the business to create more jobs and boost economic activities.
Dangote Industries Limited (DIL) has also thrown its hat in the rice cultivation ring. The indigenous conglomerate has since signed a Memorandum of Understanding (MoU) with the Ministry of Agriculture and Rural Development (FMARD) to invest $1billion (N306 billion) on the establishment of full integrated rice production and processing operations across Nigeria.
Farmland in Edo, Jigawa, Kebbi, Kwara, and Niger states, totalling 150,000 hectares, have been penciled down for commercial production of paddy rice. Dangote inaugurated its 8,000-hectare rice out-growers’ scheme in Hadejia, Jigawa State early this year when he distributed rice seedlings to farmers.
The scheme was said to have helped reduce the level of Nigeria’s imports while potentially providing direct and indirect jobs to about 10, 000 Nigerians.
An agri-business Specialist with Agribusiness Supplier Development Programme (ASDP) of the United Nations Development Programme (UNDP), Dr. Nelson Abila, said his organisation was working with some development partners to build the capacity of rice stakeholders throughout the value chain, from farmers to millers and parboilers.
By helping actors along the value chain add value to rice, Abila said the project is helping raise income, improve rice quality, and expand the market for locally produced rice.
According to him, Nigeria has the potential to become a big rice granary in Africa with advantages of having ample suitable lands and water resources, and good climate.
Similarly, Canada’s Department of Foreign Affairs, Trade and Development (DFATD) and AfricaRice, in partnership with McGill University, are spearheading an ambitious project on food security in Africa, with a focus on rice post-harvest handling and marketing.
The project involves Cameroon, The Gambia, Ghana, Mali, Nigeria, Senegal, Sierra Leone, and Uganda. It seeks to introduce improved harvesting and post-harvest practices and equipment throughout the value chain to achieve high-quality grain.
Most smallholder farmers and processors in Africa’s rice sector are women, who often have fewer rights than their male counterparts to access the vital resources they need to farm, process, and sell. The project, therefore, hopes to ensure that women farmers obtain their fair share of attention in rice Research & Development (R&D).
The project also aims to develop new rice-based products, explore innovative uses of husks and straw, improve the policy environment, and build the capacity of rice stakeholders.
The project envisages that by 2020, post-harvest losses will decline by 10 per cent and this will help increase farmers’ nominal annual income in the eight project countries by about $32 million.
Fertiliser racketeering, subsidy
are pains
Despite moves to achieve self-sufficiency in rice production, many farmers complain of endemic corruption in the sale and distribution of fertilisers, a critical input for rice farming. This has prevented fertiliser from getting to the right people. Some of the people, who got fertilisers were said not to be farmers, but racketeers, who sell them to real farmers at a premium.
Williams was emphatic that “Except farmers get fertiliser at reduced cost, and tractors free of charge, the situation may not change”. He also said it costs so much to produce a bag of rice to make profit when the government floods the market with subsided Lake Rice.
While lamenting, for instance, that he could not sell his rice after the government had flooded the market with lake rice at subsided price of N13, 000, he said it was challenging for him to cultivate over 4, 000 acres of rice farm without the government support.
Williams argued that government’s continued intervention by way of subsidies to bring down the price of rice would not help private investors, who are spending so much to stay in business. “We are likely to face a major problem if the issue of government intervention to force down the price of rice is not urgently addressed because farmers need to sell the produce, which they have heavily invested in,” he said.
According to him, rice farmers depend on income from their produce to take care of their families and repay the loans they took from financial institutions.
He advised the government to provide subsidies that are rationalised, adding that interventions that are against market competition will not allow dynamism and equitable participation of industry players.
Post-harvest challenges
Although rice, according to experts, grows well in all the six geo-political zones of Nigeria, the demand for polished long grain, stone free and odourless rice by urban dwellers is the reason Nigerians demand imported rice. They noted that at present, locally produced is uncompetitive in the market because it is fraught with stones.
Some foreign large mills, taking advantage of this, would always request for brown rice rather than buy and encourage paddy production by local farmers.
Nigerian growers also struggled to meet quality standards set by foreign agri-businesses, with consumers complaining of having to extract grit from rice. Local rice, according to consumers, is good, but, the problem is the stones in it. This is why they prefer foreign ones that have no stones.
According to experts, the quantity and quality of locally produced rice have been the areas of concern, especially during post-harvest operations, which usually resulted in huge loses. The qualitative losses come mainly as a result of poor handling after harvesting and poor processing techniques.
Farmers, again, have had thousands of bags of rice locked up in warehouses due to the unavailability of mills to process the commodity, a situation that compelled them to manually process the rice, which invariably do not meet market standards.
Aside denying farmers their primary source of livelihood, the situation is seen as an impediment to government’s quest to motivate rice farmers into boosting local production of the commodity to achieve food security and meet the target.
The Country Manager, Harvest Plus Nigeria, Dr. Paul Ilona, told The Nation that rice production suffered from lack of investment in irrigation development and research. This, he said, had slowed the adoption of high- yielding varieties and improved crop management techniques.
Ilona noted that the quality of the local rice had been a major concern to the future of the rice sector.
Way forward
The consensus of rice farmers is that there is the need to mechanise rice farming in the rural areas to increase productivity. Some of them, who spoke with The Nation, said mechanisation remained the key driver for change in the rice sub-sector, as this will not only benefit farmers, but make quality local rice available in the market.
To Williams, Nigeria will not achieve self -sufficiency in rice in the near future unless the government makes the required huge investment in key areas of the rice value chain. He, therefore, advised the government to prioritise the value chain and place more emphasis on quality seed and actual production than milling.
He said this is because the big millers are more concerned with imports than backward integration. According to him, the quality of rice produce by smallholder farmers still falls below the standard and must be strengthened with quality inputs if government is serious about closing the import gap.
