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Abuja pyramid: Nigerians decry cost of local rice

… 2mmts foreign rice smuggled into Nigeria in 2021

 

As President Muhammadu Buhari, his aides, some state governors were in Abuja, the nation’s capital, on Tuesday celebrating what they described as the success of the Nigerian ‘rice revolution’ by unveiling the ‘world’s tallest rice pyramid’ achieved by Nigerians rice farmers; ordinary Nigerians have said that they were not in any way impressed.

 

Most Nigerians, who spoke to Sunday Telegraph at some of the markets in Lagos State, at the weekend, said that they would only take the President seriously when the price of rice starts to fall from its current average price of N28, 000 per 50kg bag  They said before the hyped ‘rice revolution’ started about six years ago, the average price of the 50kg bag of rice was N8,000, but the price rose astronomically within the period to between N27,000 and N29,000.

 

They maintained that the whole concept of Nigeria becoming self-sufficient in rice, would only have meaning when rice is available and at reasonable price in the market.

 

The President unveiled the rice pyramid on Tuesday in Abuja. The one million rice paddy stacked in 15 separate pyramids at the Abuja Chamber of Commerce and Industry ( ACCI) is in collaboration between the Central Bank of Nigeria (CBN) and the Rice Farmers Association of Nigeria (RIFAN).

 

According to RIFAN, the bags of rice were planted and harvested from states across the country under the Anchor Borrowers’ Programme (ABP). Under the Anchor Borrowers’ Programme, one million bags of rice paddy were planted and gathered from states around the country to construct the rice pyramids.  Farmers were asked to return the bags of rice paddy that made up the pyramids in exchange for cash in order to repay the loans they received under the ABP.

 

The CBN’s Anchor Borrowers’ Programme (ABP) started in November 2015, with the goal of providing aid to farmers and influencing the value chain of various commodities in Nigeria.

 

Buhari promises fall in rice price

 

Meanwhile, President Buhari had during the unveiling of the rice pyramid, urged Nigerians to exercise some patience as the growing food production in the country, especially expansion in rice farming, would eventually bring down prices of food, making it more affordable for all.

 

He said that across Nigeria, more than 4.8 million smallholder farmers had been supported by the Anchor Borrowers’ Programme, with increase in production of 23 agricultural commodities including maize, rice, oil palm, cocoa, cotton, cassava, tomato and livestock.

 

“Today, rice production in Nigeria has increased to over 7.5 million metric tons annually. Prior to the introduction of Anchor Borrowers Programme (APB), the average production in Nigeria between 1999 and 2015 was less than 4 million metric tons annually. “I am aware that the bags of paddy will be moving straight from here to rice milling plants across Nigeria, which will lead to the release of processed rice to the markets by the rice millers. The measure will aid our efforts at reducing the price of rice in Nigeria.

 

“Before this administration launched the ABP, there were only 15 standard Rice mills in Nigeria. As of today, we have over 50 Standard and integrated Rice mills, creating jobs and reducing unemployment. We expect additional significant output when two new mills are started in Lagos and Katsina,’’ he said.

The President said the large margins in the business of rice had also encouraged more people to show interest in investing in agribusiness. This came as the Secretary of the Kano State chapter of Rice Farmers Association of Nigeria (RIFAN), Ado Hassan, said that Nigeria would consider exporting rice in future.

He said: “For the fact that Nigeria has not imported even a grain of rice in the last four  years is enough proof that we are already self-sufficient in the commodity. The cultivation of rice is a reality and it will continue to happen.”

Hassan said that Nigeria had become the highest rice growing country in Africa due the support of the Federal Government and the intervention of the CBN.

 

“Today, Nigeria has become the highest rice grower in the whole of Africa. That is a great achievement.” He assured Nigerians that the massive investment in rice cultivation by Nigeria will bring down its price and make it available to the ordinary Nigerians.

 

Deficit persists despite improved production

 

Although President Buhari had said that rice production in the country rose to nine million metric tonnes in 2021 from about 5.4 million metric tonnes in 2015, the Vice Chairman, Senate Committee on Agriculture, Senator Muhammad Enagi, said that about two million metric tonnes of rice is currently being imported or smuggled into the country.

 

This is just as the committee said, in 2021, the production of milled rice in Nigeria was estimated to amount to 5 million metric tonnes. Enagi disclosed this at a meeting with multi stakeholder group on rice council advocacy bill promotion.

 

The interactive meeting was organised by the United Nations Development Programme (UNDP) – Global Environment Facility (GEF), in collaboration with Women Farmers Advancement Network (WOFAN), among others.

 

Enagi stated that Nigeria’s rice production rose from 3.7 million metric tons in 2017 to 5.0 metric tons in 2021. He said: “In spite of this, 6.7 million metric tons of rice is consumed in Nigeria annually, resulting in a deficit of about two million metric tons, which is either imported or smuggled illegally into the country”.

 

According to him, Nigeria should consider putting in place a National Rice Development Council and a comprehensive national rice development roadmap that would guide the country into self-sufficiency and export. He added that the establishment of the National Rice Development Council will transform the activities of rice farmers, processors, millers, researchers, marketers and other relevant stakeholders across the rice value chain.

 

According to a recent KPMG report, three million tonnes of rice were imported into Nigeria in 2018, via the nation’s shipping ports as well as informal cross-border channels. Nigeria imports most of its rice from Thailand, India, and the USA.

 

Also, Data from the United States Department of Agriculture (USDA) indicated that in 2021, Nigeria imported 2 million metric tonnes of rice, a 5.6 per cent growth from the 1.9 mmts imported in 2020. Conversely, Gro Intelligence, an agricultural data platform, puts Nigeria’s rice output at 4.9 million tonnes in 2019, up 60 per cent from 2013 — but well below local consumption of 7 million tonnes.

 

Similarly, data from www.statista.com disclosed that Nigeria’s production of milled rice has been growing since 2010, from 2.181 mmts to 3.423mmts in 2013. It fell abysmally to 3.038mmts in 2013, rising to 4.536 mmts in 2016, 4.470 mmts in 2017, 4.538mmts in 2018, rising highest to 5,050mmts in 2019, fell again to 4.890 in 2020 but rose to 5mmts in 2021. According to analysts, with increased local production capacity, Nigeria is currently the largest producer of rice in Africa.

 

Worries over government’s claims

 

A Sunday Telegraph market survey showed that in 2015, when the country produced a meager two million tonnes, the price of the commodity was cheaper, available and affordable.

 

Reports had it that the price of a 50kg bag of imported rice was sold between N8, 567 and N8, 700, while the local rice was less. The price of a paint bucket measurement was N800 across markets. Currently, when Nigeria has supposedly increased its production to nine million tonnes, when the price is expected to drop, it has gradually hit the rooftop.

 

As at Wednesday, according to the global rice market, the price of a 50kg bag of rice in Abuja was between N23, 000 to N25, 000; between N23, 000 to N26, 500 in Lagos; N23, 000 to N25, 000 in Plateau State; N24, 000 to N27, 000 in Kwara State and N23, 500 to N26, 500 in Rivers State.

 

A 25kg bag was sold between N13, 000 to N14, 000 in Lagos and N11, 500 to N13, 000 in Sokoto State. The 1kg of brown rice, popularly called Ofada is between N1, 500 and N2, 000, while a 50kg bag is sold for N55, 000 and N60, 000.

 

According to data by Index Mundi, a global trade portal on import and export, in 2020 alone, a total of 1.56 million tonnes of the grain valued at N350 billion($780 million) were smuggled to Nigeria’s neighbouring ports.

 

The Chairman of Rice Farmers Association in Kebbi State, Muhammad Augie, who noted that rice is cheaper in Nigeria than other commodities, said there are several factors contributing to the rising price of the commodity.

 

“When rice was within the range of N10, 000 in 2015, fertiliser was selling for N5, 000 or less; the input for irrigation was selling at N16, 000.

 

Now, prices of inputs have gone up to over 200 per cent and it is not only rice that is costly now. If you compare the price of everything from that year till now, you’ll discover that the prices have increased. “The value of naira is different then. So, those are some of the factors.

 

Again, some people are sabotaging the efforts of the government to ensure we produce what we eat; they stockpile local rice to create artificial scarcity. There are many factors contributing to this development.

 

“If you compare the price of rice with other commodities, you’ll discover that rice is the cheapest in Nigeria; a bag of maize is currently selling for N130,000, a bag of cassava too has increased; likewise the cost of everything. Despite this, rice is still among the cheapest foods in Nigeria.”

 

Augie said in advanced countries, the government subsidizes the price of input for farmers, noting that the reverse is the case in Nigeria as farmers get input at market price. He added that issues of high cost of transportation, cost of fuel and irregular power supply and others are actually impacting the price of rice.

 

The National Deputy President of RIFAN, Segun Atto, who confirmed that rice production has increased tremendously, said a  lot of factors were associated with the price increase.

 

76% of disbursed loans unpaid

 

The Central Bank of Nigeria (CBN) says 3.8 million farmers have, so far, benefited from its Anchor Borrowers’ Programme (ABP). Yila Yusuf, Director of CBN Development Finance Department of the apex bank, said that N554.61 billion had been disbursed through the programme since its inception in 2015.

 

However, it was disclosed that out of the disbursed fund, only N114 billion has been repaid, while 76 per cent of the loan at N440.61 billion is still outstanding. Boboye Olaolu, an economist with CSL Stockbrokers, said the apex bank must put in place a well spelled out loan repayment plan.

 

“There is a need to have metrics that track performances and increase in yield of farmers, so as to better measure the success of the programme.”

 

Osita Nwanisobi, CBN’s director of corporate communications, said reconciliation of various accounts is ongoing and issues regarding repayment will be resolved once it is concluded. “We’ve made it known to the farmers that this is not a grant,

 

but a loan,” he said. Gbolahan Ologuro, an equity analyst at Cordros Capital, noted that considering that fiscal actions towards stimulating the agriculture sector have been slow, this has compelled the apex bank to intervene.

 

“Certainly, one would expect that the Ministry of Agriculture would be in a better position to administer and manage such interventions given their technical know-how. Hence, I think collaboration with the ministry is a more viable option of getting far-reaching and sustainable results,” he said.

 

Quest for food self-sufficiency opens N525bn opportunities

 

With the Federal Government pushing to ensure Nigeria’s food self-sufficiency, there is a seed gap demand and supply of over 320,000 metric tons and anyone with a solution is sure to make money.

 

There are only 314 firms registered as players in the seed market and many are not operational.

 

There is a huge billion Naira opportunity waiting for Nigerians to tap into in the seed industry, as the Federal Government intensifies its efforts to ensure the country is selfsufficient. Nigeria’s seed industry potential is estimated to be N777.38 billion but what is domestically available is valued at N252.35 billion, leaving a N525.04 billion gap.

 

The most recent data from the National Agricultural Seed Council (NASC) reveals that Nigeria’s total national seed requirements for major crops, including maize and rice, stood at 413,417.64 metric tons (MT) as of 2017.

 

Recently, the Nigerian poultry sector highlighted the country’s grain issues, stating that 5.6 million tonnes of maize will be required to satisfy feed demand.

 

This is a tremendous business opportunity for Nigerians and farmers to tackle Nigeria’s agricultural production problem while also making money. How Nigerians can tap into the available opportunity?

 

There are over 200 million mouths to feed in Nigeria and currently, only a total of 314 registered seed companies are registered by the National Seed Council, and many are said not to be in operation.

 

Speaking on the opportunities, the Director- General, the National Agricultural Seeds Council, Dr. Phillip Ojo, noted that Nigeria seed sector is capable of generating N2.22 trillion within three years if the potentials of the sector can be well harnessed.

According to him, with 10,355 metric tons of Early Generation Seeds (EGS) to produce 918, 743 metric tons of Certified Seeds it will, in turn, produce 103, 079, 253 metric tons of food from 46,250, 733 hectares.

He said: “This will in turn add N2.2227 trillion to the economy and employ 18,500,293 farm families along agricultural value chains.”

Chief Executive Officer, Green Vine Farms, Abiodun Olorundenro, revealed that most of the seeds in the market today were imported and this is because the country does not produce enough seeds.

 

He added that demand outweighs supply and to bridge the gap, a lot of merchants are importing seeds for farmers. The consumption far exceeds production with a yearly average deficit of about 2.4 million tonnes recorded between 2007 and 2018.

 

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