BusinessDay... the voice of business: Managing the Rice crisis

Managing the Rice crisis
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Anonymous on 14 May, 2008 02:00:00
 
The intention, it said, was to check the steep rise in price, make a greater
quantity available in the local market and stave off a potential crisis that
would arise from a sustained scarcity. This was to be done under a zero tariff
regime as the 100 percent charges comprising 50 percent duty and another 50
percent rice development levy was suspended for six months.
However, just as swiftly as the announcement was made, the planned direct
massive importation by government was jettisoned. Rather, private organisations
are now to be encouraged to undertake the importation under the zero tariff
regime. In addition, N10 billion fund would be set aside for rice farmers to
access as loan to boost local production.
The rethink on the part of government may have been prompted by criticisms that
attended the earlier plan. From federal lawmakers, farmers to the consuming
public, government's direct involvement was seen as another platform for public
office holders to take undue advantage of a dire situation, perhaps to enrich
themselves.
The major challenge before the Federal Government on the rice issue is to
evolve a sustainable strategy that will not only reverse the spiralling cost of
rice but also boost local production. Will the zero tariff within a six-month
period achieve these objectives?
In the wake of the global food crisis, traditional rice producing countries had
imposed restrictions on their export of rice. The limited availability of the
produce had the immediate effect of precipitating an increase in the price of
rice in the international market.
When the Federal Government made a public show of its intention to import
500,000 tonnes of rice within six months, further pressure was put on the
market, jerking the price higher. Available data have it that the price of rice
had gone up by more than 17 percent as concern grew on its availability in the
international market.
Organisations involved in rice importation have already stated that the period
of the zero tariff is too short for the target to be met while some are
sceptical that the 500,000 tonnes can be mopped up from the international
market. In effect, the objective of forcing down the retail price of rice cannot
not be guaranteed given the pressure in the global market and the attendant
increase in the tonnage price of the produce. Again, if the view of rice dealers
that the six months timeline is anything to go by, Nigeria may be caught in a
web of repeated extension of the zero tariff buffer.
Both strategies do not seem to hold out much hope of a reprieve for the people
even in the short term. The ultimate and long term solution to the rice crisis,
in our view, is for greater efforts to be made to boost local production.
Virtually every agricultural belt in the country is conducive for rice
cultivation.
We are dismayed by government's response to this challenge. While it was ready
to commit N80 billion for importation within six months, only N10 billion could
be considered to boost local production. Our discomfort with the rice
development fund is the fact that the N10 billion is neither the product of a
research on the real needs of rice growers nor was the decision taken in
consultation with stakeholders. Besides, no guidelines have been given on how
the N10 billion will be disbursed.
Rather than continue with this armchair approach to the rice challenge,
government should consult with stakeholders and rice growers, evaluate their
real needs and evolve workable strategies to boost local production of rice.
That is the way forward.