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Rice: Are we chasing our tail?


Obasanjo-02RICE has assumed a very important position in the food basket of many Nigerians, to the extent we consume six million tonnes per year, of which we produce (grow and process) at best only three million tonnes per year.

Tremendous efforts and investments have been made by various Nigerian Governments over the years, from President Shehu Shagari through President Olusegun Obasanjo, President Umaru Musa Yar’Adua and now President Goodluck Jonathan.

Enormous resources have been poured into stimulating private sector investments with considerable assistance from the Federal Government and State Governments under various agricultural promotion initiatives.

Nigeria has suitable ecology to grow rice paddy virtually all over the country. With dedication, perseverance and national commitment, Nigeria can grow and process enough rice to meet its domestic need.

Indeed, the country can also export to other African countries at the least; where a ready market exists for over 15 million tonnes from West through Central and Southern Africa.

Current Situation Nigeria has been striving hard to grow its capacity in paddy production and processing through massive investments in infrastructure: power, water, irrigation facilities, dams and processing industries and technology.

At this moment, Nigeria has made a serious start, but she is yet uncompetitive and needs even greater investments to compete with other countries in South East Asia, who have been producing rice for decades (with more developed/advanced infrastructure and techniques) and have evolved a culture of rice at a low cost and high yields that are difficult to match.

Unfortunately, each time we make earnest efforts to grow our rice capacity to displace imports, our traditional rice suppliers from South East Asia (India, Thailand, Bangladesh, Vietnam, Cambodia, etc.) double up their efforts (through the Diaspora merchants) to beat us down.

With their production efficiencies, low cost of production, better quality milled rice and other trade malpractices and gimmicks, they are able to weaken our resolve and erode our competitiveness, forcing us to buy from them and to abandon all our well-laid plans, investments and import-substitution strategies.

In the meantime, we commit up to US$2.6 billion to buy 3.0 million tonnes of rice per year. We export out of Nigeria various desperately needed jobs to South East Asia. We further pauperise our people by collecting additional toll as import tariff of over US$1 billion. In the process, we also enrich smugglers and sundry merchants/traders with another US$1.2 billion.

Overall, we bleed US $4 billion to US$5 billion  from our economy  each year on a product we can well produce with little effort and determination. From 2008/2009 we embarked on another cycle of investments in integrated new rice mills, farms, seeds production, infrastructure, and technology and rice agronomy christened import substitution strategy, a component of the ATA.

Suddenly in May 2014, we reversed our policies and allowed rice merchants (parading as investors) to dump on Nigeria over two million tonnes of rice between June 2014 and January 2015. The consequence is a total collapse of the rice market.

This was through legitimate import quota, smuggling and discretional waivers granted by “higher authorities”. Once again we have wiped out local small holder rice farmers, small rice millers and the new industrial level rice processing factories established between 2008 and 2014.

No one in the Rice Value Chain is able to cope with the level of prices at which these imports have landed Nigerian markets. We are enjoying incredible low prices for rice as commodity prices fall in the world market.

Consequently, we have allowed the little progress we have made recently to be completely destroyed, trapping unwary local investors and their bankers in huge debts, while subjecting indigenous farmers to outrageous poverty and agony.

What a disaster!! How will salvation come? Ideally, it would have been better to ban the import of rice, close our doors, windows and all borders to rice import; reform our Customs, bring in excellent, dedicated Customs officers from Mars, who would be deployed to man our borders.

Incorruptible! Rock Solid! We can then continue our massive investment drive in local production for five years. Borrowing money from the World Bank to develop our Rice production – (farms and processing factories).

In less than five years, we would have developed our infrastructure and strengthened our capacity (through vertical integration strategies) to a point we can compete with India, Thailand and others in all areas and factors of rice production.

We can amortise our World Bank loan through the export of 10 million tonnes of locally produced rice to our neighbours in Africa, who may be unable to make the level of investments they require to produce their own needs.

We can also mortgage a small part of our oil revenue to achieve self-sufficiency in rice production and save up to US$4 billion per year going forward. Yes, success is possible! Let’s consider some realistic strategies and smart ways to achieve our national goal.

Yes, let’s restrict imports and deploy a viable quota system to import/supply the national shortfall in our demand for a few years; impose a reasonable tariff on the regulated imports – perhaps 30% across the border; encourage the Governments of Benin and Cameroon to respect our tariff laws and tariff rates; and maintain the same customs tariff as Nigeria; and  let’s pay to these countries, the differential tariff between their own low import tariff rates and the high tariff levels we need them to impose on rice to protect our border.

Given the centrality/importance of their collaboration (in order to prevent smuggling through their borders), it pays Nigeria to subsidize the Benin and Cameroon Governments the needed tariff to protect their income or earnings from rice import.

This may sound radical, but it is indeed the only way we can achieve price parity in Lagos, Port Harcourt, Cotonou and Yaoundé to prevent the subversive impact of smuggling.

Yes, there may still be trickles of smuggling coming from dare devil smugglers but the volume would be insignificant to do any damage to us.

This policy would need to be sustained for three years at least within which Nigeria can drive hard to grow local capacity and competitiveness. With the massive investments being made in rice production, we can uplift our capacity and strengthen our competitiveness against the sporadic destruction of our activities in the Rice Sector, every election year.

Vertical integration of our activities will ensure efficiencies, and cost effectiveness at every stage such that Nigeria achieves world viability in rice and then openly compete with other world producers.

Indeed, when the irrigation schemes for rice are linked to fish production (aqua culture), the overall benefit to our nation would be very great.

It is worth it to think globally to uplift our nation beyond smuggling and its catastrophic effects on us. Delivering local rice as near as possible to world commodity price levels, we can ensure market access for our local production without India, Thailand and elsewhere delivering rice far cheaper than we can produce the commodity.

This is the progress we need! Yes, it is possible to achieve! Finally, for the policy to succeed, Nigeria must make strong and determined efforts to give market access and patronage to locally milled rice that are properly and effectively graded. Wider Economic Impact Ask CBN. Nigeria is spending a whopping US$9 billion annually on four commodities (wheat, rice, sugar and fish).

•Can we muster political will and national determination to reduce this by 50% in three years?  • What other vital national need or infrastructure can we afford to establish with US$4 billion savings we can make – just by changing our habits and adjusting our trade policies with our neighbours within ECOWAS?  • Is anybody awake in Nigeria? • Ugwuh, an engineer and a former Minister of Commerce and Industry , wrote from Abuja

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  • vic


  • Maigari

    A very sound opinion indeed. The small holders growing rice were literally wiped out this season. Not just rice, even sorghum (Guinea corn) and maize farmers faced the same collapsed market. Unfortunately most of the government policies are tuned and oriented for the media where we read and hear and see ‘massive progress made’. In actual fact the small holder is on his own from the seeds supply, fertiliser and harvest to marketing, there is simply no government presence except on the Media for him. Add to that the defeating silence on the fickle weather and lack of advice on what cereals best suit the weather pattern.

  • Adefila Johnson Gbenga



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    Director General

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    August 2013 – March 2014 (8 months)Lagos, Nigeria


    International Aviation College Ilorin Nigeria

    January 2012 – June 2013 (1 year 6 months)Lagos Road, besides Ilorin

    International Airport

    Accountable Manager

    Director International Operations

    Air Nigeria

    2010 – October 2011 (1 year)

    Director of Flight Operations

    Virgin Nigeria Airways

    February 2010 – January 2011 (1 year)Murtala International Airport, Lagos

    Line Captain; Technical Pilot; Training Captain; Training Manager;

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    April 2004 – April 2006 (2 years 1 month)Lagos, Nigeria

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  • emmanuel kalu

    very good article and policy idea. however here is the problem with everything nigeria does. we have good policy, however implementation and enforces of the laws are very bad. which is the result of corruption. the current rice policy is working, but it needs a firmer grip on it. the quota system should be aggressively reduce, and any importer that cheats should be ban from importing for a period of time. our customs needs to work better. any importer that excess their quota, should have their goods seized, their license to import revolked, ensure that they pay the import duty and levy, and a huge fine. we need to send a strong message to stop it. local production should be massively encourage, supported and protected. there should be a way to ensure that less smuggled goods are sold in our markets. massive campaign to inform the people of the cost of purchasing smuggled goods. the local union of rice grower can help with this.

    • Odus

      emmanuel kalu – A question was once posed to a known drug dealer…….”why do you ship your product to these community?” he answered “Because the people demand for it!!!”Let’s face it, until you bring back patriotism inNigeria, like the days of WAI (War Against Indiscipline); when almost every Nigerian home has the green and white flag on the their roof top and with a sincere heart for the country, our people will always prefer an imported goods to made in Nigeria products. Remember the slogan “Ibo made”? That’s just to show you our people don’t appreciate our own talents. but it’s not their fault! The blame should be on the leadership that not only send their own children to schools in foreign land, get medical care outside Nigeria, vacation in a country the size of a Nigeria city and invest in foreign products and services while they fly over in a private jet; their own crumbling infrastructures and then have the audacity to now bring their children from Europe and America to rule over the very people they ran away from. Until we come together and end the crazy ideology and crazy philosophy of their self centered thought process, we’ll continue to get the same result. Something I recently noticed at the local Airport in Lagos, are young brothers and sisters selling properties in Dubai! They size you up and approach you about buying properties in Dubai! I have travelled a bit but never seen anywhere where Nigerian properties are marketed on the floors of any airports. Where do you think this idea came from?