Locally grown rice is having a hard time competing on price, with the legally imported and smuggled products in Nigeria’s N1 trillion per annum rice market, despite governments’s drive to encourage self sufficiency and job creation in that sector.
In effect, cheap rice imports have continued to take a larger share of the market, while local variants struggle, BusinessDay investigations have revealed.
Figures from the Federal Ministry of Agriculture show that five million metric tons of rice are consumed annually in the country, which amounts to about 100 million 50kg bags of rice. Currently, the minimum price of this 50kg bag in the market is N10, 000, resulting in rice consumption of over N1 trillion annually in the country.
The figures also show that 2.1 million metric tons of rice are
legally imported into the country annually. This amounts to 42 million 50 kg bags of rice, at a value of about N360 billion. It is however doubtful if the remaining 2.9 million metric tons (about 58 million 50kg bags of rice) are produced within the country, as the product is still smuggled in daily, through the borders, especially at Seme.
A 50kg bag of locally produced rice, such as Nerica 8, which is long grained, exactly as the imported rice, goes for between N12,000 and N15,000 in the market. The same quantity of Ofada rice goes for as high N18,000 to N22,000. The landing price of imported rice is less than N9,000 and it is sold for between N10,000 and N12,000 in the market, depending on the brand.
This relative cheapness of imported rice is in spite of the recent 10 per cent import duty and 100 percent levy imposed on it by the Federal Government, which
took effect this January. The market price of imported rice is still lower than locally produced rice, due to the adequate infrastructural provision for farmers in the foreign rice producing countries, and subsidies on rice production by foreign governments.
While moves are being made by the Ministry of Agriculture to increase local rice production, infrastructure, running costs and logistics challenges, which are beyond the scope of the agric ministry, are still hampering efficient production. Government’s Agricultural Transformation Agenda, aimed at developing some key agricultural products along their value chains, with all necessary support, may be yielding some effect, but it has not yet translated to optimal production of rice.
Ibrahim Iroko, president of rice farmers in Itoga, Badagry, says the farmers have enjoyed a lot of government infrastructural support and therefore, are able to sell a 50kg bag of well processed long grained Nerica 8 for N8,000 to marketers who are always on standby to mop up the rice immediately after processing. But the bag of rice gets to consumers at about N14, 000 or more.
Edobong Akpabio, a farmer/chief executive, Visionage Agro-tech Farm, says the marketers are not to blame. She explains, “The high cost of transportation due to bad roads, in addition to extortion by the police, the local government council representatives and miscreants, contribute greatly to high prices of local rice.”
She adds, “Also, many consumers now realise that locally produced rice is healthier than the over-parboiled foreign rice, which have stayed in warehouses in the producing countries for several years before being brought to Nigeria. So, demand for local rice is still very much higher than supply, and this raises the bar. Apart from the fact that imported rice is over-subsidised, the supply has
always been massive and that has helped to keep the price relatively low.”
While admitting that there has been a lot of government support, Abdulghaniyy Ojolowo, producer of Oryza rice, says the very high costs of land development still contributes to the cost of production of local rice and therefore the prices. He urges, “The government can go a step further by developing massive land areas for farming, so that farmers would not have to incur this additional cost, as they expand production.”
Aderoju Odunsi, an agribusiness investor, says farmers and consumers who are complaining about the high prices of local rice and the impending rise in imported rice due to the increased tariff, need to give the Agric Transformation Agenda (ATA) of the current administration time to work.
“The ATA is an all-encompassing programme which includes provision of roads, and other infrastructural support, market facilitation and so on. In a year or two, if well implemented to a logical conclusion, virtually all farmers will benefit, and the prices of locally produced foodstuffs, including rice will reduce.”