Analysis

Irony of Nigeria’s Rice Importation

by Timo Shihepo

Nigeria, it is often said, is a paradox.

The country is rich, yet poor. It is one of the most naturally endowed nations on the continent of Africa.

The most populous black nation in the world is often likened to the biblical Promised Land, which is flowing with milk and honey.

But observers said the largest percentage of the milk and honey have been cornered by the smallest percentage of the citizens, who have been ruling the country since Independence in 1960.

Nigeria has land area of 910,768 square kilometres (sqkm) with 2,820sqkm (2003 estimate) of irrigated land. About 33.02 per cent of its land area is arable.
With this, agriculture, it is expected, ought to be the mainstay of the nation’s economy. Well, it was at Independence but the discovery of oil almost immediately after self rule, generally regarded as the oil boom era put an end to that.

Thereafter, attention shifted from agriculture to oil, which has continued to be the main source of the nation’s revenue. Observers have blamed the country’s woes on the over dependence on oil to the detriment of other non-oil sources, particularly agriculture.

The country is regarded as the largest producer of rice in West Africa, but it unfortunately relies on a massive importation of rice.

In the country, rice consumption has dramatically increased since the 1970s and creating a substantial surge in rice imports since then, making rice a political commodity in the country.

On one side, rice became a critical component of the Nigerian diet and the other side, a major consumer of the country’s foreign exchange.
The Federal Government imposed a ban on rice imports in 1985 with the objective of increasing domestic production in meeting the increasing demand for the product.

However, in 1995 the import ban was removed as the local supplies, although showing improvement, failed to meet the demand.

The lifting of the ban resulted in rapid increase in imports, despite repeated hikes on import duty. Nigeria has continued to be an attractive market as compared to other West African markets as it imports parboiled rice which is of relatively higher value unlike other regional countries.

There was also bilateral trade between Nigeria and Thailand which was described as robust and Nigeria imports one million tonnes of rice, valued at $700 million (about N106 billion), from the Peoples Republic of Thailand every year.

This was disclosed by Prasit Damrongshitama, the Chief Executive Officer of Chareon Pokphand, CP, Group of Thailand, who led a team of Thai businessmen on a courtesy visit to the office of the Executive Secretary of Nigerian Investment Promotion Council (NIPC).

He described Nigeria as the second largest importer of Thai rice.

In view of the popularity of rice as a staple food in the country and the heavy importation bill, the administration of former President Olusegun Obasanjo in 2002 decided to promote local cultivation and milling of the product by adopting new hybrid varieties to boost production through the Rice Development Initiative.

The government’s aim was to have three million hectares under cultivation by 2007. according to the initiative, using small operators as its plank. By 2006, Nigeria would have attained five million metric tonnes of rice production and by 2007 and 2008, the local rice farmers involved should have started exporting the commodity to West African countries.

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The initiative also projected that by 2012, Nigeria would have become the largest producer and exporter of rice in Africa.

According to the Nigeria Agribusiness Report, the country’s rice import bill is currently thought to be around $1 billion. To address this situation, local company, Notore Chemical Industries, according to report, has begun initiating a project in Nigeria’s main growing states. The initiative focuses on three main points: food security, job creation and income enhancement.

The Notore Foods, a subsidiary of the company, has so far agreed to collaborate with local governments to build production plants in Cross River and Taraba states. The plants will be vertically integrated, allowing for a 20,000 hectare farm, as well as significant milling capacities.

Such a dynamic step is typical of the new wave of public-private investment initiatives that many believe will have a profound impact in shaping the future of Nigerian farming.

These projects will only be successful if the private companies are given the necessary support from the state governments and afforded a favourable socio-political framework in which to operate.

Transparency, according to observers, is key, as is the ability for the correct inputs to be easily acquired and dispersed to the relevant areas. The Nigeria Agribusiness Report forecasts a particularly favourable outlook for Nigerian agriculture through to 2013, as reform efforts reap marked rewards.

It was also recently reported that about N49 billion worth of rice was delivered at the Lagos Port between November 2010 and mid-January 2011. Over 83,600 metric tonnes or 1.67million bags of rice, worth about N13.7 billion had arrived at the port in November 2010, ahead of Eid-el Kabir celebration.

It was also recorded that vessels carrying about 174,749 metric tonnes or 3,494,980 bags of rice, worth about N28.7 billion berthed at the ENL terminal of the Apapa Port, Lagos, in December ahead of the Christmas and New Year celebrations. While about 39,750 metric tonnes or 795,000 bags of rice, worth N6.5 billion arrived at the port. There are 1,000 kilograms in a metric tonne, while a standard bag of rice weighs 50 kilograms and sells for N8,200 on the average in most parts of the country.

But the Chairman of the Rice Farmers Association of Nigeria South-West, Pastor Bode Adenekan, according a newspaper report, described the level of importation as “sheer waste of money.”

He condemned the importation of rice into the country, adding that it was detrimental to Nigeria’s agricultural and economic development.

“It is a waste of money. Government should think of the farmers. If that money is invested in our farmers, so much quantity of rice will be produced between now and August. The government should stop the importation of rice into the country,” Adenekan was quoted.

He urged the government to empower the local farmers, saying, “we have expanse of green land, which can be used for growing rice.”
The chairman also appealed to existing and potential political office holders to focus on agriculture to improve the welfare of the people and enhance the prosperity of the country.

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An economist, Mr Tunde Adetiloye, who spoke on the rice importation, told the Nigerian Compass that: “Our soil is good for the growth of rice yet we import N106 billion worth of rice from Thailand. Our soil is good for agriculture like theirs and yet we can’t produce and meet our demands. Why isn’t our government supporting our farmers to produce more so we can be self-sufficient. The same problem is occurring in other industries like the oil and gas, textile, etc. We have created a situation where foreigners see our country as a fertile ground for easy money. We don’t provide adequate support for our own industries. Instead we take the easy route, more importation. And we have nothing else to give them except oil.”

But Mrs Olamide Aderele, an agriculturist, has a different opinion.

She said: “It is competitive advantage at work. Thailand is the world’s largest exporter of rice, and it makes sense for Nigeria to get its rice from there. But Nigeria should learn from them, and import their technology and know-how to further develop agriculture in Nigeria.

“We have the fertile land, the human resources and the capital to grow our own food, yet we spend so much money importing while our own people suffer in poverty. You have it all and can’t take advantage of it. If our leaders could only have the foresight to invest half of the $700 million in our own farmers, Nigeria will become a rice exporting country within three years. But our leaders cannot do that, they have to reserve the licence for their cohorts. Even the banks are involved in rice importation.

“Unfortunately, consumers demand for rice which has become a basic staple in Nigeria and has grown so exponentially in the country along with demand for better quality parboiled rice than the local Ofada variety. Nigeria is already Africa’s second-biggest producer of rice behind Egypt and growing in addition of course to being Africa’s top producer of soya-beans and the world’s top producer of cassava and yam, as well as one of the top producers of cocoa.”

According to her, the Stallion Group has a N165 billion venture to boost rice production in about 10 states in collaboration with Thailand, while Notore has two 20,000-hectare rice projects in Cross River and Taraba states.

“And of course, there are the Zimbabwean farmers’ rice farms in Kwara and Nasarawa states,” Mrs Aderele said.

According to her, milling in Nigeria has witnessed a fairly basic processing technology.

She said: “Typical issues faced are lack of access to improved technologies, high costs of energy for parboiling, lower output quality, limited government incentives. Other issues relate to irrigation systems, research and development, pests and disease management, soil fertility management, effective farm implements, access to institutional and infrastructural support credit facilities, unorganized delivery of inputs and sales and distribution channels.”

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