• Blame FG For Threatening Local Rice Production
• UGWU: We Did Not Contravene Import Waivers

RICE is considered a staple food for Nigerians.  Statistics indicate that rice imports gulp several millions in foreign currency, even as the country depends hugely on rice imports to meet local needs.
It was perhaps in an attempt to boost local production that the Federal Government in 2009 through the Private Partnership Project (PPP) approved the setting up of 17 rice mills in the country.

Investigations by The Guardian showed that although it could not achieve the 17 mills, it however, set up some in various parts of the country including Kano, Ebonyi, Taraba, Kebi, Niger and Nnewi.

The aim was to enhance and encourage local production of rice and boost agriculture. This followed the discovery that the country produces rice, but lacks facilities that could enhance processing to enable them compete favourably with those of the foreign countries.

Although the project commenced with setting up of rice mills in some places, including the mills at Ebonyi State (Ebony agro) and Enugu State (Tara agro), the inability to access local paddy, power, water, and favorable credit facilities among others are now threatening the mills in Enugu and Ebonyi, three years after their commissioning.

A visit by The Guardian to the 42,000 tons capacity Tara agro in Adani, Enugu State and the 30,000 tons capacity Ebony agro in Ikwo, Ebonyi State indicated that the mills are being under utilized as a result of these challenges.

It was gathered at the Ebony agro in Ikwo with 132 workers that the section that mills local rice had not been operated since November last year, because local paddy could not be sourced in sufficient quantity.

Although production was going on, when the reporter visited, such was made possible by the recently procured brown rice from Thailand, whose quota was given to rice millers and investors by the Federal Government in 2013 to keep the mills operational.
Promoter of both mills, Charles Ugwu, told The Guardian that Federal Government, in an attempt to provide local paddy and ensure that the mills did not stop functioning, approved certain quota for the millers.

He said: “ The Federal government in 2013, decided to grant quota to Rice millers and investors in the absence of paddy. They gave quota mostly to the big traders –Stallion, Olam, Elephant group etc.
“Government gave a little bit to us (that is the Nigerian indigenous rice millers that were set up under the PPP). In the case of Ebony agro, they gave us 15,000 tons and 21,000 tons for Tara. We didn’t complain even when the quota they gave us was too small. We didn’t complain because our focus was to mill local rice. These two mills I have (Ebony agro and Tara agro) got altogether 36,000 tons. We imported 25,000 tons of brown rice (not finished rice). Everybody else that they gave quota brought finished rice, which they sold at the ports in Lagos or Port Harcourt and took their money and went to the bank. We bought brown rice and we are milling it and waiting for when we get the paddy. That is the situation. Our quota is 36,000, but we imported 25,000 tones. When the 25,000 tons arrived, 10,000 went to Tara agro Adani, and 15,000 is now being milled here in Ikwo, Ebonyi state.”

However, this import quota is now brewing crisis between operators of the mills and Customs officials, who have accused them of not only exceeding their import quota, but intended to defraud government by the act.
Customs has threatened to seal up the mills, should their operators fail to pay the balance on the import, which accrues to several millions of naira and has refused to listen to the defence of the companies.

Ugwuh said: “There was no intention to defraud government. We have not exceeded our quota. Our quota is 36,000 and the import is 25,000. We paid the duties, but Customs appear not to be listening. The Ministry of Agriculture has written to them, to leave Ebony agro alone, they are part of the Federal Government establishment. But they are insisting that as far as they are concerned, they don’t know that we are sister companies. It is a matter of convenience in handling the cargo that we brought it in one bill of laden. The reason was that when the order was placed in February 2014, no ship wanted to come to West Africa from Thailand because of Ebola and any ship that wanted to come, came under what is called ‘Inducement cargo.’  For convenience we brought the goods under the name of Ebony agro.  The duty was N640 million as calculated by Customs for the consignment, which we paid. I am not a trader.  I have a mill that runs. We have 132 workers here. So why is Customs harassing us? This is a Federal Government project and they want to kill it by asking us to pay another duty. We have written everybody there and they continued to insist that we should go and pay when we are not liable.”

He continued: “We are working with enormous handicap in terms of infrastructure. We don’t have water; we don’t have electricity. We depend 100 per cent on diesel and Customs cannot come out to help us.

They left people who imported finished rice and continued to harass Ebony agro that we cheated. It is very annoying because I am here on personal sacrifice to prove that this Federal Government policy can work. That is why I am here. I am the Chairman of both companies and we are working as efficiently as we could to ensure we survive in the face of difficulties we found ourselves. We haven’t sold the paddy anywhere in the market yet Customs continued to harass us.
“The House of Reps waded into the matter. Those who owe know that they owe. We made presentations and the National Assembly saw that we are sister management and told Customs that they should consolidate our imports based on the quota we were given. If you do that, you will discover that we imported our quota of 25,000 against the 36,000 that we were given and we have 11,000 still left if we want to import it.

When we spoke to them, they said National Assembly does not give them orders that we should go to the Ministry of Finance. We have been to the Ministry of Finance, which promised to process the case and advise
the Customs.”

He continued: “At a time, there was no paddy. My warehouse now is empty because there is no local paddy. The CBN is now trying to help us find paddy. I couldn’t find paddy is southeast. The only place where paddy is available is in Kebbi. When I go to other places to buy paddy by the time I bring it to my factory and mill, nobody will buy my rice, it will be useless because the cost will have tripled. The transport differential between my factory and those places is

outrageous. The little paddy we are getting now is because there was a glut in massive import of finished rice by the big traders, thereby preventing the local farmers from selling their paddy. Now the market is changing a little bit. We didn’t have paddy to work with. I have 132 workers; will they be idle? If I was selfish and tried to cheat the government, I will bring the rice in and sell it at the ports”.

Ugwuh disclosed that government could help sustain the local millers by putting up policies that could favour and encourage local production, stressing that policy somersault, especially on imports does not encourage local production.

He stated that there was need to encourage irrigation so as to have an all year round production, stressing that availability of market was also necessary for the local millers to succeed.

The Federal Government through the Bank of Industry had given loans to rice millers to set up mills in various parts of the country. In 2012, the mills in Enugu and Ebonyi were commissioned.
Chief Ugwuh said that the Federal Government has an investment of approximately N800 million in Ebony agro mill from the total investment of about N2.6 billion.

He said that because of crisis in Taraba State, the Federal Ministry of Agriculture approved the relocation of the Tara mill to Adani in Enugu, where government invested about one billion naira under the Private Partnership Programme (PPP).
“The two mills are running but all the mills built by the government under this partnership have a problem of paddy availability. Paddy was not available regularly. The immediate past Minister tried very hard to ginger up the generation of paddy. He tried to improve the irrigation schemes and make Nigerians participate in agriculture, especially in rice production; still, we don’t have adequate paddy production,” he said.

Ugwuh said that growing rice locally required the commitment of government, stressing that the huge investments on rice would become a mirage without a concerted effort to grow required raw materials that could service the mills. He said it would also on the long run reduce the price on locally produced rice and make it affordable and available to all.