Achieving sufficiency in rice production requires a dedicated Customs Service

by Editor

November 13, 2017 | 1:06 am
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Last year, Nigeria set a target to be self-sufficient in rice production by 2018, and this culminated in one of the rare occasions that, government will go beyond rhetoric in actualising an objective.
The Anchor Borrowers’ Programme (ABP), an initiative of the Central Bank of Nigeria (CBN) was launched by President Muhammadu Buhari in Kebbi state to kick off the rice production agenda. Rice importation was also made more stringent, with the imposition of 70 percent tariffs on any importation (at least that which is done legally and through the ports).
These ongoing reforms now appear to be finally bearing fruits, as the volume of rice exports to Nigeria from Thailand, one of the world’s leading rice producers has dropped sharply between 2015 and 2017. This appears to be a beginning of the gradual reversal of $1 billion spent on rice imports annually.
Data by the Thailand Rice Exporters association shows that 644,131 metric tonnes of rice was exported to Nigeria in 2015, while 58, 260 MT was exported in 2016, and as at September 2017, rice exports to Nigeria stood at 20, 973 Metric tonnes. This represents a 58.5 percent decline between January and September 2016 and the corresponding period in 2017. However, when compared to 2015, Thai rice exports to Nigeria have dipped 96.74 percent.
Tunji Owoeye, managing director, Elephant Group Plc, and chairman, Rice Investors Group of Nigeria attributed the decline in rice imports to the commitment of both government and private sector in Nigeria, to end the era of needless importation. This, he says has manifested through incentives for local food production from the Federal Government, and championed by the Central Bank of Nigeria through its Anchor Borrowers’ Programme.
According to Owoeye, by discouraging imports, while at the same time encouraging local production, and supporting the value chain in ramping up production, the country has been able to achieve appreciable growth in self-sufficiency in food production, particularly, rice.
The agriculture promotion policy of the Federal Government for 2016 – 2020 showed that rice production in the country at 2.3 million metric tonnes, with a four million tonne deficit from the country’s 6.3 million metric tonnes demand. The deficit has been attributed to insufficient supply chain integration which remains a nagging issue in achieving sustenance. The deficit was previously filled through a combination of massive legal imports through the ports, and unabated smuggling through the many porous land borders. The situation even though said to have improved, still remains vulnerable.
The concluding part of the FMARD policy document captured above, which highlights smuggling, is where some bad news lies for Nigeria.
While rice exports to Nigeria have dipped (from at least Thailand), increase in imports by neighbouring countries such as Benin may imply more smuggling in getting the commodity into Nigeria. Data by the Thai rice exporters showed that Benin Republic has between January and September 2017 imported 1,330, 809 metric tonnes of rice, a 51.9 percent increase from 876, 228 metric tonnes which was imported within the same period last year. Comparing the 2017 imports (so far) to total imports in 2015 also shows there has been a 65 percent increase.
BusinessDay investigations in Benin republic this year saw one of our reporters blending into the rice smuggling racket and successfully crossing back into country with some bags of rice. This, in a process our reporter described to be seamless.
Many farmers across the country stopped cultivation of rice for several years as smuggling made it unprofitable for them to even sell their paddy. Now, the restriction on importation and general attention being given to the commodity is encouraging many to go back to it.
The importation of foreign rice has been described as being responsible for the Made-in-Nigeria rice becoming relegated, and increase in importation by neighbouring countries like Benin who do not consume rice as much as Nigerians may create a setback for the country through increase in smuggling.
Farmers were not the only ones affected by the erstwhile massive importation of rice into Nigeria. Those who had grown businesses around milling rice paddy were also affected. But, with current conditions, such players which had packed up were emboldened to also return to milling rice.
Akai Egwuonwu, CEO, Anambra Rice Limited had lamented after the mill commenced operation in 2008, it was shut down after a year (in 2009) till 2012 due to “excess importation of foreign rice that we cannot compete against.”
The closure saw a multi-million dollar investment wasting away while the hundreds of jobs it could have created, taxes it could have paid to government, and even returns on investment all made non-existent.
Godwin Umeaka, managing director, Coscharis Farms also shared these sentiments when he said “the government needs to sustain the fight against illegal importation of goods (especially food) into the country by securing the borders effectively.”
The buck therefore rests squarely on the Nigeria Customs Service in ensuring that the rice production policy does not suffer any setback on account of smuggling.
Some stakeholders in the value chain had expressed the view that a lot is being done by the Customs service to forestall smuggling into the country. It is further said that what government needs to do is strengthen the resources of customs to do much more than they are doing. However, the Customs service still has a lot to do to ensure the policy on local production succeeds.
In 2016, cumulative from just six states: Kebbi, Kano, Bauchi, Plateau, Ebonyi, and Anambra, showed that their rice production has reached 5,436,000 metric tonnes of paddy rice. At 60 percent milling efficiency, Nigeria would have achieved 3,261,600 metric tonnes of milled rice from the six states. Deducting this from the estimated 6 million tonne country-wide requirement shows production has reduced the country’s rice deficit of 4 million to 2,738,400 metric tonnes. This suggests the rice deficit has been reduced by 31.54 percent within only one year of concerted efforts and determination by several thousands of farmers across the country.
Data from more states would reveal even more insights, and therefore makes it less surprising that exports from Thailand have indeed dropped by about 97 percent. The question of course, also comes up; why is the local rice not so visible? Answering this will remain difficult for as long as urban centres like Lagos, Abuja, and Port Harcourt remain flooded with Benin republic’s excess rice imports, which have been smuggled into Nigeria.

by Editor

November 13, 2017 | 1:06 am
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