Rice production upsurge, but price fails to yield ground

Since the renewed commitment to explore robust revenue generation from the agricultural sector, the President Mohammadu Buhari’s administration has heavily thrown its weight behind improving widespread cultivation of rice in the country.

In the last few years, an appreciable chunk of investment from both public and private pockets has flown in the direction of supporting farmers across states for increased productivity, the establishment of rice mills, bridging knowledge and technicalities gaps of cultivation and provision of access to financing, particularly for improved farm implements.

Buhari touted ensuring annual construction of four rice mills last Tuesday, during a stakeholders meeting on the Rice Value Chain at Aso Rock Villa, where he commended them their investments in rice mills cited in rural parts of the country.

In the last quarter of 2017, a state of the art rice mill factory with about 288 metric tonnes of daily capacity of parboiled rice was inaugurated in Gezewa local government area of Kano state. Eight rice mills were built between 2015 and 2018 with the president flagging off the CBN Anchors Borrowers scheme in Birnin Kebbi, in Kebbi State in November 2015. Two additional rice mills including the 120,000 metric tonnes WACOT Mill in Kebbi and the one million tonnes Dangote Rice Mill equally came on stream.

Similarly, Atiku Bagudu, the governor of one of the country’s leading rice-producing states, Kebbi, at a parley with the president said Nigeria’s production had advanced from 5.7million tonnes to 17million metric tonnes as a result of increased milling capacity of eight additional mills established last year. These initiatives affirm the government’s acknowledgment the fact that unlike any other cash crop in Nigeria, rice is the most devoured staples with consumption per capita of 32kg.

Its consumption, according to data, grew over time from 4.7% to a towering 6.4 million tonnes in 2017 while it accounted for about 10% of household food spending and 6.6% of total household spending in 2011.

Also crop production, according to 2017 GDP report, significantly drove the agricultural sector, accounting for 91.79% of overall nominal growth while agriculture as a whole made an annual contribution of 21.06% to the Gross Domestic Product, recording a growth rate of 11.29% higher than 9.61% in 2016.

Unfortunately, these reflections of surge in local rice production have not effectively translated to the price reduction for many end users of the commodity and in spite of the anti-smuggling campaign of the government; local rice is still having a difficult time with market dominance. According to the National Bureau of Statistics (NBS) report on Selected Food Price Watch, local Ofada variant, for instance was at its highest cost at N770 per kilogramme in Oyo state, agric rice sold loose at N485 in Bayelsa and medium-grained rice highest at N460 in Bayelsa. Whereas popular imported brands such as the Stallion goes for about N15,320 per 50kg bag, its premium long grain rice for N22,500, Caprice currently sold for N14 ,500 per 50 kg bag, Mama gold sold for N15,000/50kg and Royal Stallion sold at N14,500/50kg.

Reacting to the question of price, president Buhari defended the situation saying: “The narrative out there is wrong. Other countries are undertaking economic warfare on us. There is no nation in the world that can produce and sell to Nigeria freshly grown rice equivalent to what is produced in Nigeria at the prices that Nigerian farmers are selling.” Buhari said.

Recently, Aminu Goronyo, the chairman of the Rice Farmers Association of Nigeria (RIFAN) at a meeting with the Rice Processors Association of Nigeria (RIPAN) also stated that a bag of rice would be crashed lower than N10,000 with increased productivity. But Agricultural analysts believe the prices could continue on the high side until the factors influencing production are sincerely addressed.

Apart from the giant milling firms with the required wherewithal, many individual farmers who mainly drive the local production agenda are yet to integrate mechanization in their operations, despite the finance bridging Anchors Borrower’s Programme. The criticisms which have trailed the scheme range from the exploitative nature of fund disbursement to existing issues of soaring pump prices among others.

The intermediary between the government and the main farmers, business a.m. learnt might be derailing the scheme’s intention to support farmers through access to affordable farming implement as the implements were allegedly distributed at rates higher than the market prices.

According to Zainab AbbahAliyu, a farmer in Gadau Local government area of Bauchi state, price reduction may not be as feasible as the government has claimed if the cost of production exceeds projected output for farmers.

“Zaria people have pulled ou t o f t h e g ove r n m e nt scheme of rice production. Most people are pulling out because it is very exploitative. The consultants they get for the anchors borrower’s scheme turn around and reap the farmers off. They get machines obtainable at the market for about N35,000 and resell for close to N60,000. The seed we can get from the market at about N4,000 is sold at N7,000.

They sell chemicals of N1000 at N3,000. Has the government helped the farmer?” Abbah-Aliyu asked rhetorically. About three years ago, she sold local rice of 100kg at N4600 before it abruptly doubled on the nerve of increased fuel price. According to her, “the raining season is usually tedious since the price of fuel to run our machines has tripled. In some cases, farmers entire production would not match the cost of what has been collected from the government.”

The panacea, for Abbah is not just reviewing the structure of the loan, substantial effort should be channelled into mechanised harvesting.

“Another pain of rice farmers is harvesting which needs to be mechanised. We are not asking for British style mechanization or American style but simple handheld implement. If you go to Alli baba, one will get some of these things for $100 but the government people will buy it for millions. It is simply the will to do right,” Abbah-Aliyu said.

According to a Price Waterhouse Cooper (PWC) study of potentials in the Nigerian rice production chain, the country could raise productivity, raise yields, cut post-harvest losses and shore up farmer’s income generation if mechanization is adequately adopted.

Sadly, Nigeria’s mechanisation has remained low at 0.3 horsepower per hectare (hp/ha) against the trend of robustly mechanised agricultural systems such as India with 2.6hp/ha and China with 8 hp/ha. The country currently possesses an estimated 22,000 agricultural tractors, relative to one million and 2.5 million in China and India respectively, according to the PwC report titled, “Boosting rice production through increased mechanisation.”

Yields have also remained at 2 tonne per hectare, which is about half of the average achieved in Asia. However, the mechanisation gap the report avers could be viewed as laced with numerous opportunities for investment across the agricultural value chain by sustaining an enabling environment that ensures mechanisation is profitable.

The government, according to the study should reorder its priorities to address challenges around land tenure and ownership, provide rural infrastructure and extension services and ensure transparency and accessibility of incentives to all investors. But for Abbah Aliyu, the government should push beyond mapping out the rice producing areas for distribution of farming implements to monitoring the implementation processes undertaken on its behalf.