Five years after Nigeria launched what seemed at the beginning to be an aggressive push to achieve sufficiency in local rice production, the widely consumed staple has not only increased in cost but has become increasingly out of reach for the average consumer.
The aggression with which government has pursued its agenda on production of rice, often described as Nigeria’s ‘political crop’, since 2015 has not been seen in other commodities in recent history. The country was expected to boost yield and productivity in general from the intervention promoted mostly through the Anchor Borrowers’ Programme (ABP) of the Central Bank of Nigeria launched in November 2015. But the results have so far not justified all the investments and sacrifices made.
Yes, rice farmers and especially the millers have been making more money, but perhaps at the detriment of over 180 million consumers who can only afford to consume less rice (than before) as it becomes increasingly expensive. The foreign rice has become an outlawed item, even though it would be cheaper if it were still allowed easy access into the country, despite being brought from faraway nations like India and Thailand. For five years, rapidly boosting productivity to justify all the rice sufficiency rhetoric does not appear to have been a focus of government, much less one that had any thought-out strategy backing it.
Simply put, “it is all drama”, said Ajayi Adekunle, managing director, Double Door Limited, who has been in the rice business for about 20 years, first as an importer and now as a distributor of local rice.
“The seriousness to put what they are preaching into action is not there,” Adekunle said.
He would further lament that many rice millers deliberately create scarcity to force prices up, by conniving with racketeers to make the product unavailable directly from factories unless through third parties. He named such millers in Kebbi (one linked to a former governor), another in Kano, which is perhaps the most popular brand from the state, and yet another in Offa, Kwara State.
BusinessDay had exclusively reported last year that the Central Bank of Nigeria (CBN) reached an agreement with rice millers in the country to sell a 50kg bag of rice at the rate N14,000 to their distributors. This was described as the CBN’s way of ensuring prices did not become excessively inflated on the back of the border closure. According to a credible source, the CBN was also monitoring rice distribution across the country, having requested to be furnished with a list of rice distributors and suppliers in every geopolitical zone where each rice miller supplies.
Read also: Olam set to deepen local rice production to curb post COVID-19 food crisis
However, since the closure of Nigeria’s borders in particular to foreign rice, the local variant has retailed for as high as N31,000 per 50kg bag, a N17,000 mark-up from the price it should come from the milling companies.
“We have done some analysis and came to the conclusion that local rice should not be selling beyond N16,000 or N17,000 per 50kg bag, but it is currently selling over N20,000,” said Emmanuel Ijewere, vice president, Nigeria Agribusiness Group, in a phone interview last year November.
One year later, the situation has, in fact, worsened and at the time of filing this report sold between N21,000 and N25,000 in Lagos, for instance.
“Some individuals sit, bribe somebody and buy a quantity of rice, jack up the price because there is a perceived shortage,” said Ijewere.
However, perceived shortage or not, Nigeria simply has not developed the capacity to produce enough rice to meet the country’s requirements.
While the Agriculture Promotion Policy, 2016-2020 shows Nigeria had a rice deficit of 4 million metric tons, it is difficult to accurately determine just how much increase has been recorded in local rice production. No official data in Nigeria can be referenced to state how much progress has really been made and what is left.
The country has made several policies and compelled all and sundry to make sacrifices all in a bid to drive local rice production, attempting to sell a dream that Nigeria will become self-sufficient in rice production. The country’s border closure was even largely on account of efforts to stop ‘rice smuggling’, as foreign rice which remained cheaper than the locally made ones was a source of headache for local farmers.
While a number of farmers have seen their fortunes changing on account of rice prices that have continued to increase, as earlier reported by BusinessDay, for the consumers, their weak wallets are put under continuous financial strain.
In 2014, an 80kg bag of paddy rice could sell for at best N4,000, but as at June this year (2020) at the peak of high prices, the same rice sold for as much as N24,000, six times more than it sold six years ago. Prices have gradually reduced with the new harvests but still higher than they were at the beginning of the year due to a multitude of reasons. Clearly, farmers have been making more money and this, even without necessarily increasing their individual production volume.
On the other hand, a 50kg bag of milled rice which sold around N10,000 in 2015 today (in 2020) sells for N23,000 on the average.
Mohammed Augie, chairman, Rice Farmers Association of Nigeria (RIFAN), Kebbi State, also told BusinessDay that paddy rice, which sold for as much as N20,000 for a 75kg bag, is now down to N14,000.
“It is natural for price of rice to increase along with that of other commodities because it is not only rice that has gone up in price,” said Augie.
He attributed rise in prices to the COVID outbreak that grounded many businesses, saying some businessmen who wanted to save their money decided to buy paddy and hoard. The exchange rate also contributed to initial spike in prices, as increase in price of other goods meant rice farmers had to charge higher so that they could afford other things they needed. From N12,000 per 75kg bag before COVID to N20,000 at its peak, the price has now reduced to N14,000 on the average.
Devastating floods and insecurity have also made those able to produce rice charge a premium on it. Nevertheless, that the price of local rice continues to surge uncontrollably after five years of the country investing in hundreds of thousands of farmers and scores of rice milling companies through the CBN/ABP and other programmes indicates less focus has been given to boosting productivity.
Farmers only have to do the bare minimum to produce something and expect to rake in more cash than ever before simply because the price of their produce would appreciate, especially without the regular cheap foreign alternatives that forced market equilibrium.
On the other hand is wheat, which coincidentally was flagged off along with rice when the ABP was launched in Kebbi in 2015. Ironically, while rice has appeared to get more attention, wheat has been neglected and is today Nigeria’s highest agricultural good import, gulping over N400 billion in 2019.
“If you look at the rate of consumption per capita, we consume more wheat than rice in this country,” said Salim Muhammad, president, Wheat Farmers Association of Nigeria.
Muhammad had noted during a webinar by the Guild of Nigerian Agriculture Journalists (GNAJ) this year that there is a high demand for wheat products in Nigeria as well as high consumption of wheat. However, production has struggled to increase over the years as the sub-sector appears to be suffering neglect from government and policymakers, with Muhammad describing wheat as a ‘political crop’, a statement often made in reference to rice.
“Every Nigerian household consumes bread, noodles, and pastas. But what is my country doing to produce enough wheat for the consumption locally in the country?” he asked.
While the price of flour varies by location and usage (based on volume), it has increased by as much as 50 percent from N7,000 per 50kg bag to N14,000 at present. Bread prices have had to increase with varying margins across the country, likewise other products made from wheat flour.
“We could not produce today as we have a backlog of unsold bread from yesterday,” said Kabir Ibrahim, who owns a bakery in Katsina.
According to him, N50 was added across board to the various sizes of bread but has been met with complaints from consumers who say it is too costly. Yet, the prices of inputs even apart from wheat flour continue to increase with sugar also selling at N18,000, likewise other additives.
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