HITHERTO, Nigeria was one of the world’s largest importers of cement. Today, going by the claims of glut in the market, the country produces enough cement locally to make it a net exporter. Within a decade, Nigeria grew local production by about 1,000 per cent, a revolution that has been described as swift and decisively powered largely by Dangote and Lafarge.
In recent times, there have been questions on the nation’s ability to replicate the cement revolution in rice production. Can Nigeria move from being the world’s largest importer of rice to being a zero importer, in two years? That is, the 2015 target set by government to cease the importation of rice and become self sufficient.
Specifically, with a current yearly consumption of about 5.2 million metric tonnes compared with a production capacity of 3.4 million, with imports catering for the remaining 1.8 million, according to statistics by Olam, the country's rice consumption is expected to jump to 35 million metric tons by 2050, some 30 million metric tonnes over the present consumption pattern in the country.
Albeit many have argued that cement is not rice, as rice has to be grown, while cement is simply manufactured. Like everything that has to be grown, rice lies at the mercy of nature: farming cycles, soil quality, disease, rainfall, flooding, among others. For instance, last year’s devastating floods have caused a reassessment of Nigeria’s rice-producing capacity with government’s 2015 target hanging in the balance.
That Nigerian may achieve its projections for rice production in the country, stakeholders have called for an active collaboration of private and public sectors in order to increase production capacity as well as meet local demand for the product.
Already, five countries account for more than 80 per cent of the world’s exports of rice: India, Thailand, Vietnam, Pakistan and the United States. On the import table, things have changed dramatically with about 36 countries jointly claiming responsibility for 80 per cent of exports, a table where Nigeria prominently features.
President Goodluck Jonathan had said in August 2011, at a meeting with the International Fund for Agricultural Development that, “There is no reason why Nigeria should be importing rice. We have all that is needed to grow enough for domestic consumption and have a surplus we can export to other countries.”
A close observation at Nigeria’s appetite for the staple food, as well as government’s ambitious self-sufficiency vision for rice, places emphasis on government’s effort to create an enabling environment to grow the current production capacity in the country.
To this end, a sizable tariff has been slammed on imported rice, with the federal government imposing a 100 per cent special levy on the importation of the commodity in Nigeria to protect local millers.
Interest in commercial rice processing increased steadily over the past three years, with almost a dozen new entrants considering greenfield or refurbished milling operations.
Sadly, many mills in Nigeria are not processing due to lack of quality paddy, competing business priorities, or lack of equipment or technical know-how. Even if all mills were running at capacity, processing would meet only a fraction of demand.
The Federal Government at the weekend however noted that Olam’s investment in rice cultivation saying would close the gap in rice importation and increase Nigeria’s self sufficient in rice production soon, if adequate partnership is enhanced.
Chairman, Presidential Committee, Rice Price Benchmark, Dhiru Ado-Kurawa during the committee’s visit to Olam Farm Project in Doma, Nasarawa State said farm project sited in 9,400 hectares would place Nigeria in a platform to produce enough rice and especially explore the export market.
He said: “The committee has the responsibility of monitoring rice in the country and regulates the price for rice imports. We have been a part of government encouraging rice production in Nigeria and monitoring the existing rice producers. Importation is encouraged because it is very easy for importers to get banks that support them with letters of credit while they just sit back in their air-conditioned offices and place orders for rice imports. “We are very impressed with what Olam is doing; to have cultivated 6,400 hectares this year, in Nigeria is a boost. What we have here is just like want you can find in Thailand, Brazil, among other leading countries in rice cultivation. We have realized that importation will not do us any good and that is why we want to support local production and support those who are in the business of growing rice like olam. We spend hundred billions of naira importing rice into this country, imagine for a moment what that kind of money will do for this country if it is retained here’’ he said.
Kurama urged other rice importers to start backward integration to fast track government efforts to be self sufficient in rice production.
He said that he was convinced that with more of this kind of investment in the country, rice exportation would be achieved.
The chairman however reassured of Federal Government’s plan to reduce rice smuggling to the barest minimum to protect rice investment in the country.
Kurama said the popular belief that imported rice are better milled will soon be a thing of the past if all these policies are strictly followed.
“High duty is to capture revenue but more importantly to support local production of rice through a barrier process and protection of the investments made by local farmers. I am very impressed by what I have seen here at Olam’s farm especially because Nigeria consumes 5.2mmt of rice yearly. If we are serious and really mean business, we can cultivate all the rice we need here in the country and have the surplus to export.”
“We have been relegated to preventable poverty because there are no jobs especially in the rural areas, whereas we can channel our energies and efforts into rice cultivation and processing and save for ourselves hundreds of billions every year. The government is 100 per cent behind any company that will make this kind of investment, because this is a partnership with government to reduce the huge import since Nigeria has the dubious honour of being the second largest importer of rice in the world.
“We have to plant our own food and not abandon feeding ourselves just because we have oil. We have other needs that can be met with the money saved from food importation because a penny saved is a penny earned. Most of our local rice production is consumed in the rural areas and that is why you hardly find them in the towns and cities and some are equally being exported to our neighbouring countries. We need to close this gap and government has been encouraging millers to mill our locally produced rice. At the end of the day when the gap between production and processing is closed, rice importation will be a thing of the past in Nigeria,” he said.
On the reason behind the hike in tariffs on rice imports, he explained thus: “The committee realized that most importers were under-invoicing. If rice is $700 for instance they quote $200 as their buying price. Government decided to set up this committee to find out the international market price of rice and fix the quota for importers. Government decided to put in place a high duty on imported rice and it has worked because now it is very clear that the Customs Service is the second largest revenue earner for government after oil and rice is the highest revenue earner for the Customs.
“The high duty is to capture revenue but more importantly to support local production of rice through a barrier process and protection of the investments made by local farmers. Blanket Waivers were given to importers of rice in 2008 to prevent food shortage and that was because we were not ready then. Now the government is ready, the Nigerian people are also ready in trying to grow our own rice and there is enough information on how this can be achieved.
“Nigerians should please bear with the government because the price of rice will go up as we have shut the door to import and that same price is going to shoot up the production of rice locally and our farmers will have the opportunity to make more money. We have to go through the little hard time it will take for our farmers and millers to catch up with satisfying local demand in terms of quantity and quality. And from what we have gathered I can assure Nigerians that by the end of this farming season, we are going to see more rice than we have ever seen in the history of this country because of government’s policy to encourage local production.”
Head of Rice Farm Project, Olam, Regi George, said that the company is cultivating 6000 hectares this year and the output would be 70,000 tonnes.
George said that the company decided to construct over 20 kilometre of road to aid ease of access to the farm, including other facilities, noting that the company has improved its milling capacity in order to aid the quality of rice made available in the market.
Besides, stakeholders have noted that investors who can efficiently operate a mill and secure a consistent supply of paddy will benefit.
According to them, “Investors may also consider for-profit intermediary businesses, which cost-effectively deliver extension, inputs, and financing to rice growers and secure improved quality paddy for high-grade commercial processors. Investments in "post cottage milling" services can provide high margins to wholesalers seeking to provide clean and stone free rice in the middle of the price/quality spectrum.”
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