Govt to reduce rice import in 2015
IN line with the report by the Food and Agricultural Organisation (FAO) that Nigeria’s rice import will drop by 3.3 per cent to 2.9 million tonnes this year, the Federal Government has disclosed that its import target for the commodity will be 1.3 million metric tonnes(MT).
According to a letter signed by the Minister of Agriculture and Rural Development, Dr. Akinwunmi A. Adesina, addressed to the Co-ordinating Minister of the Economy and Minister of Finance, Dr.Ngozi Okonjo-Iweala, a domestic supply gap of 1.3 million MT was determined for the 2015, down from 1.5 million in 2014.
Indeed, one million MT of this quota has 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% and duty of 10%.
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% and duty of 10%.
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 production and processing.
Under this year’s import quota, the Federal Ministry of Agriculture and Rural Development has identified 22 companies that will receive quota allocations 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 was explicitly made clear that certain criteria informed the trimming down of the number of companies from last year’s figure to what obtains this year.
The letter to the Co-ordinating Minister of the Economy 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 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 three -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.
Paddy purchase outlook from out grower farmers and farmer cooperatives: should include location of farms, volumes of paddy to be purchased, among others.
Ownership of Integrated Rice Milling Facility (with par boilers and dehuskers): size of planned installed capacity (score relative to the largest sized facility, evidence of acquisition of integrated rice milling equipment, e.t.c “In addition to existing millers and new investors, only the re-applying companies who submitted bonds in 2014 were allocated quotas in the current 2015-2016 round.
Companies that failed to present the Federal Ministry of Agriculture and Rural Development with a Bond have not been given quotas for the full year April 2015 to March 2016.
Consequently, import quota allocations to 22 approved companies with a total allocation of 961,000 MT were issued.
Already, the Ministry has sent letters to all the 22 approved companies and copied Dr. Okonjo-Iweala as well as the Comptroller-General of Nigeria Customs Service.
The letter extensively informed the companies of their approved quotas which qualified for 10% duty or 20% levy as the case might be the Comptroller General of Customs was mandated to facilitate enforcement of the approved allocations.