• Friday, June 14, 2024
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BusinessDay

How year-long border closure boosts productivity, spurs investment in rice production

Chinedu Ogah, a member representing Ikwo/Ezza South Federal Constituency in the Federal House of Representatives has distributed 200 bags of 25kg rice seeds and shared N70 million to farmers in the constituency.

The decision by Federal Government to shut down the country’s land borders with its West Africa neighbours over a year ago has boosted agricultural productivity and spur investments in rice production.

Since the border closure, Nigerians shifted their consumption preferences from foreign brands of par-boiled rice to locally produced varieties.

The situation has also made farmers and millers ramp up their production to meet the ever-increasing demand for rice – key staple in the Nigerian diets.

The country’s rice production has increased significantly as shelves of traders across the country are now dominated by local brands of par-boiled rice.

“Since the border closure, lots of farmers who have abandoned growing rice have returned and even other farmers are shifting to rice cultivation because the market is there now and it is profitable,” Muhammed Augie, former chairman, Rice Farmers Association -Kebbi chapter said.

“Nigerians are now changing their preference to local brands and consuming it more,” Augie said.

Data from the Thai rice exporters association shows that Nigeria imported a total of 2,796 metric tons in the half-year 2019 and 1,192 metric tons in the corresponding period of 2020.

This indicates a decline of 1,604 metric tons in 2020 when the policy became effective.

The resilience that the country has built unwittingly against the COVID-19 pandemic in the area of rice production is a testament of the Anchor Borrowers Programme and border closure policy.

Despite food prices making rapid climbs in the country owing to COVID-19 restrictions to contain the spread, local rice prices were relatively stable when compared to other grains and this is relatively due to the large supply.

The increasing demand for rice in the country has also created investment opportunities for potential investors.

“Lots of youths made investments in rice production owing to the border closure policy. Some invested in the aggregation of paddy for millers while others in the cultivation of the crop,” said a rice dealer who does not want his name mentioned on print.

“Any new entry of farmers into farming wants to cultivate rice because of the huge market now. We are now consuming our rice and this is market for farmers,” he further said.

“This is the best time to invest in the rice value chain,” he advised.

The United States Department of Agriculture (USDA) puts Nigeria’s milled rice 2018/2019 production at 4.78 MMT, up over 2.5 percent from 2017/18 figure of 4.66 MMT.

The agricultural sector grew 1.58percent in the second quarter of 2020 despite the disruptions of the COVID-19 pandemic on economic activity that plunged the country’s economy contracted by 6.1percent.

But experts say the country can only sustain the progress made thus far when prices of local brands become price competitive and lingering structural problems such as insufficient supply chain integration, lack of capacity for farmers and infrastructural deficit which remains a threat to local production are addressed.

According to them, the country will eventually reopen its borders, saying when local brands become price competitive it is a disincentive for importers.

“The prices of local varieties have to reduce further. Before the border closure, imported brands were selling for N13,500 even after paying traffics, bribing the customs and transportation,” said an expert who spoke on anonymity.

“The government needs to provide key infrastructure to drive down production cost as well as ensure that farmers yield per hectare increases,” he added.