How Nigeria can sustain momentum in rice production as border reopens

For Nigeria to sustain the momentum and progress made in its rice production despite the reopening of its land borders, local parboiled rice must compete favorably with imported rice, experts say.

Given the importance of rice – a key staple in the Nigerian diet, the government has since 2014 accorded high priority to boosting its production.

The government, through the Central Bank of Nigeria (CBN), set up the Anchor Borrowers’ Programme (ABP) to offer smallholder farmers credit facilities at a single-digit interest rate in form of inputs.

Since the inception of ABP in 2016, the CBN has committed more than N200 billion to support over a million farmers under the ABP initiative with rice growers accounting for the highest percentage of recipients of the money.

The efforts are showing results, and Nigeria is now producing 4.78 million tonnes of rice annually, according to the United States Department for Agriculture (USDA) – 2019 grain report.

The country’s parboiled rice also has gained acceptance at home which is aided by improved production and milling capacity.

The numbers of rice mills both integrated and cottage have increased by more than 50 per cent as the government and private sector operators continue to make more investments in processing.

Average crop yield per hectare of rice rose from two metric tonnes per hectare to an average of three metric tonnes of the same acreage, owing to the renewed government commitment.

The Food and Agricultural Organisation (FAO) had, in 2017, attributed the continuous growth recorded in the country’s rice production to input assisted programmes such as the ABP initiative.

However, despite farmers increasing productivity per unit area over the last few years, Nigeria’s rice has remained uncompetitive owing to the high cost of paddy as it constitutes 70 per cent of the total rice processing.

Also, perennial problems, such as insufficient supply chain integration, weak infrastructure, lack of capacity for farmers’ low use of farm mechanization, have led to high cost of production.

Similarly, the closure of the land borders for sixteen months further led to a spike in the prices of local parboiled rice as the 4.7 million MT milled rice, is still 2.3 million MT below Nigeria’s 7million MT annual demand as stated by the Agricultural Ministry.

To ensure that the progress made thus far and investments in the industry are sustained, experts say the government must provide key infrastructures apart from finance to drive down cost of production.

They stated that the country’s average yield per hectare of the crop must be in line with the global average of 6 metric tonnes per hectare to boost productivity while calling on farmers to adopt mechanised farming to translate from subsistent to commercial agriculture.

“Our local rice is not competitive because of the cost of paddy. Cost of paddy alone constitutes 70 per cent of the total rice processing,” said Rotimi Fashola, general manager, Elephant Group.

“If the cost of paddy can drop as a result of abundant supply and processors can have loans at single digit, then local brands of rice can compete favourably with imported varieties,” Fashola said.

He added that the Nigerian Custom still needs to do its job effectively and efficiently to stop smuggling now that the borders are reopened.

Fashola noted that the cost of production cannot be drastically reduced if farmers are not using tractors and modern farming technologies to boost productivity.

According to him, the total functional tractors in the country do not exceed 5000.

“With lower production cost per hectare and constant yield per hectare, farmers will reduce their price of paddy and in turn millers will reduce their cost of milled rice,” he said.

Mechanisation in Nigeria agriculture, which can expand the value chain and create more jobs, is lacking, according to NOI Polls.

Nigeria is one of the least mechanised farming countries in the world, with the country’s tractor density estimated at 0.27hp/hectare, which is far below the Food and Agriculture Organisation (FAO) recommended tractor density of 1.5hp/hectare.

Nigeria is 132nd out of the 188 countries worldwide measured by FAO/United Nations in terms of the number of tractors in the country. This is one reason farming has been mainly subsistence, rather than commercial.

Nigeria, Africa’s most populous country, needs $3 trillion to bridge its huge infrastructural gaps, according to a report by a global rating agency – Moody Investors Services.

Road and rail systems are insufficient to facilitate the movement of goods and services as the country is badly hit by huge infrastructural decay.

Energy remains a big infrastructural challenge in Nigeria, with its deficits increasing operational cost for rice processors and reducing their expansion rate.

“Most rice mills are running on generator plants and this constitutes the bulk of their production cost,” said Abiodun Olorundenro, operations manager, Aquashoots Nigeria.

“We need to address infrastructural problems as it has continued to limit the sector and make our products not competitive,” he said.