The Rice Debate: Why Nigeria Can’t Meet Local Rice Production Demand

By Stanley Nkwazema
Since the rice and cement Armada of the early 80s when the late Alhaji Umaru Dikko was Minister under the regime of Alhaji Shehu Usman Shagari democratically elected government which encouraged  importation of several shiploads of rice from the United States and Brazil, to meet the short fall, there have been several claims and counter claims on the quantity of rice consumed by Nigerians, the quantity imported and the quantity produced locally by the established farms and subsistent farmers in the country.
The claims are however getting more interesting following inconsistencies and policy reversal  on the duties to be paid on the imported ones and incentives thereafter for the local producers. In this case the subsistent, semi and well established farms.
While many – from different strata of the society have fallen in love with the local brand of rice to the extent of patronising it as a staple food, others will never have anything to do with the home grown species and qualities for several reasons. They will rather prefer the foreign brands for its peculiar taste and fine grain, others just love it for the status associated with consuming the foreign brands. They have now graduated to the basmati brand which is believed to be better for people diagnosed with sugar problems as it is believed to be low in carbohydrate. Rice is one of the staples in the country and could be found in the homes of the higher class, the middle-income earner and the downtrodden. This is basically why every policy or decision taken by government on the importation or tax on rice affects all homes.

Interestingly, Nigeria is the world’s second and Africa’s largest importer of rice and over the years, the country has depended so much on imports to fill the local supply gap which arose due to inability of local producers to meet demand. Though rice is a staple food for Nigerians, transitional government policies on importation and high processing costs due to infrastructure challenges have failed to foster a condusive environment for local rice production to thrive.
The consumption of rice in Nigeria has grown rapidly over the past decade and is currently at an all-time high of 7 million Metric Tonnes. More so, only 2.7 million MT is produced by the farmers in Nigeria, which presently leaves a gap of 4.3 million MT to be cushioned by importing it into the country. This clearly means that we have only 49 per cent self sufficiency ratio.
At this rate, there is a per capita consumption rate of 27 kilogrammes at $460 per metric tonne.
Rice represents that staple food which falls on the same level of carbohydrate in the class of Garri, corn, yam, across all social strata of the Nigerian society. The Preferred variety is parboiled which is mostly sourced from imports. Rice consumption forecast to grow at minimum of 5% per annum.
According to available industry reports, local production of the commodity fluctuated between 2,400 to 3,600 in the last five years, while imports have grown from 4,800 to 5,850, within the same period ,in geometric projections.
However, since 2011, without capturing informal estimates of cross border trade on the same product from Benin Republic and in some cases Togo, imports have exceeded local production making up over 50% of consumption..

Out of the 36 Nigerian states plus the Federal Capital Territory (FCT), only about eight states ,  Benue, Kaduna, Kano, Niger, Kaduna, Ebonyi, Nassarawa and Anambra farm heavily on the product. Since 2011, imports have exceeded local production making up over 50% of consumption. Informal cross border imports from Benin Republic not captured in formal imports estimates.
Within local production, eight of 36 Nigerian states contribute over 50% of the local production: Benue, Kaduna, Kano, Nasarawa, Niger, Taraba. Nasarawa, Anambra and Taraba states produce over 50% of the product it claims.

Even as Olam Intergrated  $120million  rice farm and Mill in Ondorie, Nasarawa State is the acclaimed leader in the production of rice in Nigeria with over 10,000 hectares fully irrigated farm, Anambra State claims that the large industrial farms in the state have pushed local rice production within its territory from 90,000 metric tons to 210,000 metric tons. At this rate, we shall soon surpass the 320,000 metric tons we consume in Anambra State per annum. This could be verified by the authorities as a landmark achievement.
Conversely, Nigeria imports mostly from Brazil, Thailand, India, Vietnam and USA to meet the 4.3 million metric tonnes shortfall valued at over N365 billion to meet the annual demand which stands at 7 million MT.
The Vice President and Head of Government Relations in Olam, Ade Adefeko, who in a chat, gave a candid insight into the rice palaver after a chat with THISDAY, explained that there were no shortcuts to solve the problem.
Adefeko, who is also the Chairman of the Export Group of Nigerian Association of Chambers of Commerce and Industry NACCIMA, noted that the rice industry was huge but bedevilled with several challenges which was surmountable.

On the issue of value chain of processing, production and end use, he stated that inadequate irrigation leads to highly volatile productivity levels while low levels of farming technologies – mostly rudimentary for subsistence farming, hamper yields due to the inability of  farmers to mitigate impact of weeds, insects and birds.
With the aforementioned , Adefeko disclosed that limited processing capacity would actually  exist, with mill processors generating substandard output due to poor quality control practices, poor drying and sorting techniques and  power failures which lead to high cost of production.
For the end-users, the cost is now passed through several middlemen, squeezing margins for retailers, and perceived high quality of imports leads consumers to shun local produce while the Open market is mostly dominated by the retail channel.

Interestingly, Olam located 265 km south east of Abuja on the banks of the River Niger, commenced business in 2011, with an initial investment of N25 billion. The company presently cultivates 4,450 out of 9,479 hectares, employing 1,044 regular and 450 seasonal farmers out of which 959 are from the local communities. The farm is expected to yield 10 MT per hectare (over two annual crop cycles), based on four varieties of high-yield rice tested with the West African Rice Development Association. With 4,040 hectares already under cultivation, a further 3,000 hectares on target for 2016/17, up to 1,000 workers are employed on the farm depending on seasonality
About 4,000 farmers including 500 women are currently engaged in the programme, with a target of 16,000 by 2018, ultimately supplying 30-40% of the mill’s capacity. In 2014, the company introduced seed of high yield variety and evenly distributed to 888 farmers involving 990 Ha. Olam collects rice in four warehouses, controls quality and hires transport to factory.
In the current farming season, 4,000 farmers have been mobilised to produce one of the best qualities of rice that can compete with imported products in the domestic market – creating high-end rice from Nigeria, and for Nigerians
Scalability of the nucleus model is significant, and it is hoped that other players will replicate the success of Olam’s rice farm to further enhance Nigerian food security

Again,  in other to help farming communities thrive and commit to the next generation through, the company is providing school buildings, materials and scholarships for students and connecting communities through development of 54km of roads between surrounding villages. It also ensures access to clean water and electricity through provision of boreholes and solar lamps.
Unarguably, the biggest player for now, many believe that Nigeria will need more companies in the mould of Olam to achieve local production needs and sustainability. After a recent observation of the Olam trend, which typically has embodied the traditional inclusion and bettered it
Adefeko, who spoke with THISDAY in Abuja, is however advising against taking a hasty decision on the issue without commensurate plans to bridge the wide gap. “Government wants to ban rice importation by 2017 and wheat by 2018. How do they want to take care of the gap that has been in existence and will further widen?  You do not take care of policy issues by political fiat or by electoral cycles of four years. It might cause a major food crisis. There must be a rethink on this issue if we want to avoid serious problems because rice is a staple food consumed by all.

He warned that the ban could be detrimental to the nation’s economy as smugglers will feed fat on the porosity of the nation’s borders and enrich their pockets. “The truth is that there will be plenty sides to the ban. The revenue will drop. Few will benefit by smuggling in the product because of the porosity of our borders.”
Again “before we can do that we need to stimulate the local production and marketing of the product. Many still feel imported rice is still the best. But our soil is better conditioned to produce nutritious rice. Our mills are also improving. But you don’t encourage them by an outriht ban.
To the NACCIMA export group head, four years are just too short. “it will be near impossible to sail”.
A case in point, Paddy Costs is currently about N175,000  per tonne , up from N120,000. This will translate to rice being produced and sold at round   N14,500 to N15,500.
However, the Minister for Science and Technology, Dr. Ogbonanya Onu, while confirming that the country spends over N365 billion annually on the importation of rice ,reiterated Federal Government’s focus on food security, saying Nigeria had no business importing food.  ”It is lamentable that, the country is spending over N1 billion daily, on importing rice, for instance. Its time every Nigerian takes agriculture more seriously, adding that Nigeria must feed Nigerians. There is no reason Nigerians will go to bed at night on an empty stomach,” he insisted while pleading that more needed to be done to realise the lofty dreams for a stable and prosperous nation in food self sufficiency.

Onu said “even as many believe that before we talk of banning rice importation, we must increase our local rice productivity level to avoid food scarcity in the future. All hands must be on deck to support PMB’s economy diversification to agriculture, because this will create jobs and food sufficiency.
Although it seems the Federal Government has already concluded plans to suspend importation of the country by 2017. But in conflict with the plan for 2017 that the policy would not be enforced until it has developed local industries to produce maximally for local consumption
The Zamfara State Governor and Chairman of Nigerian Governors Forum, Alhaji Abdulaziz Yari, had recently after a joint meeting with the Vice President, Yemi Osinbajo, the Governor, Central Bank of Nigeria, CBN, Mr. Godwin Emefiele and permanent secretaries of federal ministries stated that with the emerging political will power of the present government and the availability of arable land, Nigeria can sustain itself with rice production.

“The meeting was on the new policy on agriculture and food sustainability. We discussed how we can boost rice production in Nigeria and start thinking about how we are going to put policy in place on how rice importation will be banned in the country. We have the potential. We have the human resources. We have the arable land to grow rice. In the next two years, we will not need to bring rice from outside Nigeria. We are going to ban it. It is only in Nigeria, a country of millions of people, that there is no food security. We discussed the policy with the relevant permanent secretaries and CBN governor.
“The policy is going to be in place and we gave our commitment that we are ready to support the government policy in ensuring that Nigeria becomes self-sufficient in food production in the next two years. Nigeria is currently a major importer of rice. Now, the political will is in place to stop it. We in about nine states are going to be seriously engaged in massive rice production. We are hoping that in the next two years, rice importation into Nigeria will be banned. We are committed and the political will is in place,” Yari said.

It would be recalled that the Bank of Industry (BOI) had shortly before the present administration came into office disclosed that it is working with the Ministry of Agriculture on a N13 billion Rice Intervention Fund for the establishment of 10 integrated rice mills and six cassava mills across the country. The Bank explained that the objective of the Federal Government’s Agricultural Transformation Agenda is not only to increase crop production, but also to create value-added food processing industries as a means of reducing food imports. But that project we gathered may have gone the way of others and yet the problem lingers.
The truth, however, is that having rice mills all over the the country without the concomitant rice farms is like to putting the cart before the horse.