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Lake Rice: Subsidy withdrawal responsible for price hike

By Gbenga Salau
25 August 2019   |   4:15 am
Two years, eight months after Lake Rice was introduced into the Lagos market and about a year after it went off market, it has been re-introduced though with over 15 per cent price increase.

Lake Rice

Two years, eight months after Lake Rice was introduced into the Lagos market and about a year after it went off market, it has been re-introduced though with over 15 per cent price increase.

At the unveiling of the rice in December 2016, in Lagos, former Lagos State Governor, Akinwunmi Ambode described the event as historic because the Memorandum of Understanding (MoU) between Lagos and Kebbi States in March 2016 had begun to yield the needed fruit.

According to him, the rice was grown and milled in Nigeria, with extreme high quality assurance. “We have Ofada and imported rice but we want to show our people that Lake Rice is the way to go. The major different between Lake Rice and imported type is that imported rice has a minimum storage capacity of five and six years, but Lake Rice is fresh,” he noted.

Before the rice went off the market, 50kg bag of Lake Rice was sold for N12, 000; 25kg bag for N6, 000 and 10kg bag for N2, 500 in about 10 different locations across the state that were the sales points. The state government then said residents could only buy one bag, as it wanted to ensure that the rice got to everybody.

To increase the availability of Lake Rice beyond the 10 sales points, in December 2017, the state government sought the participation of major rice distributors by signing a partnership with them for the transportation, distribution and marketing of Lake Rice.

Former Special Adviser to the Governor on Food Security, Mr. Ganiyu Okanlawon, who signed the agreement on behalf of the state government, said it will ensure that residents get Lake Rice not just from designated sales centres, but also from the open market at the official government price.

Okanlawon explained that the agreement valid for one year in the first instance might be extended by mutual agreement for additional period.

Responding on behalf of the distributors, the Iyaloja of Daleko Rice Market, Mrs. Ibilola Sholaja thanked the state government for the opportunity given the distributors to be part of history in the sale of Lake Rice. She assured that distributors would abide by the terms of the agreement.

But, in May 2018, the state government revealed it had subsidised Lake Rice to the tune of N1.049b from December 2016. It said that effort was aimed at sustaining food sufficiency and food security in the state.

The immediate past Commissioner for Agriculture, Mr. Oluwatoyin Suarau said the rice was sold at a highly subsidised rate of N12, 000 per bag of 50kg, which helped crashed the skyrocketing price of other rice across the country.

Suarau explained that the subsidy included cost of transportation, bagging and difference in cost price of the rice from other brands, adding that a total of 150 marketers and other ancillary service providers have been empowered through the sale of Lake Rice.

Surprisingly, by the third quarter of 2018, after the government had signed an MOU for mass distribution and sales, the rice was no longer available at sales points and markets. And that was the scenario till Ambode left office in May 2019.

As Lagosians were preparing to celebrate this year’s Eid-eI-kabir, the state government announced that Lake Rice would be available for sale.

The Permanent Secretary, Ministry of Agriculture, Dr Olayiwole Onasanya said the price of a 50Kg bag of the rice would be N14,000 instead N12,000; 25kg bag would be N7,000 instead of N6000 while 10kg bag would go for N3, 000, instead of N2,500, warning that it should not be sold above the approved prices.

Many residents were surprised that the price had gone up. Also, the state government in announcing a new price regime did not provide explanation. This is aside from the fact that the sales were now limited to about 10 points.

When The Guardian contacted the Ministry of Agriculture for explanation of some of the issues raised above, the Public Relations Officer promised to book an appointment with the Permanent secretary, to give insight into why the price was raised and why the sales was not expanded, but limited to special sales points, he has not done that, as at press time.

However, an informed source said the price was raised because Governor Babajide Sanwo-Olu felt the state government could no longer continue to subsidise Lake Rice. When the source was asked to provide insight if it was total withdrawal of subsidy or partial, he said he was not sure if the Governor’s directive was about total or partial subsidy withdrawal.

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