Nigeria loses $5b annually to rice smugglers
Nigeria’s 12.2 million rice farmers may soon face extinction as the adverse effect of smuggling bites harder against them.
Minister of Agriculture and Rural Development, Audu Ogbe made this observation on Wednesday, while briefing newsmen at the Presidential Villa, after the Federal Executive Council ( FEC ) meeting, presided over by President Muhammadu Buhari.
Ogbe said Nigeria, with a huge market for rice, is facing smuggling harms estimated at 5 billion USD per annum in loses to smuggling activities, even as he said local rice consumption rate is hovering between 7 and 8 million tons per annum.
” We have been able to convince our local millers to bring down theirs to N110,000 per ton, from N150,000 to allow Nigerian rice sell at N13,500, and they agreed, but the smugglers are doing us a lot of damage, doing of $5b worth of harm annually, according to the World Bank report. I wish we could sell at N5,000 but we can’t because of smugglers”
Ogbe, speaking on specific actions approved by the Federal Executive Council to check smuggling, said the Federal Government is going to revive the Memorandum of Understanding (MoU) signed between Nigeria and the Republic of Benin, during the era of former President Olusegun Obasanjo, to check harmful activities against each other along their borders, as part of immediate measures to end smuggling of rice into the country.
“There is an MoU between Nigeria and Republic of Benin, entered into when former President Obasanjo was in office, that we would work together not to compromise each other’s interest. That MoU has not been implemented fully, so we are going to take it up. Already, the Vice President has been working with the Committee which he heads and he is working with the Minister of Finance, Comptroller-General of Nigerian Customs and also the Ministry of Agriculture. “
He added that “We will brief you as we progress.”
According to the Minister, rice smuggling thrives along the region bordering Nigeria and the Republic of Benin on the western axis and the Nigeria / Niger Republic borders, in the north.
“Between September 2015 and now, rice importation through the ports has dropped from 644,131, tons to 20,000 tons in September, this year. This means that by the early part of next year, we can literally say that we are closed to total self sufficiency in rice. On the other hand, to the west of Nigeria, rice importation has increased to 1.33m tones at the Republic of Benin. They don’t eat parboiled rice but the white rice. So, every grain of rice landing there is heading for Nigeria through smuggling.
“Some of it also comes in through Niger Republic. These are issues we have to deal with because we are creating jobs through our local rice production. There are 12.2 million rice farmers in the country now.”
BusinessDay gathered that the smuggling is placing Nigeria’s 12.2 million rice farmers, who are currently targeting production capacity of 18 Million tones of paddy rice annually, in great danger of job losses.
This is just as government also expressed fears that current policy gains in the agriculture sector, with specific reference to efforts at boasting local rice production may be lost to intense smuggling activities currently going on along Nigerian borders.
Investments in the sector is also said to be very huge, with a large rice mill costing as much ad $4m.
The minister announced that two more rice mills are about to come onstream, including those being established by Coscharis and Dangote Rice Mills.
“The smuggled rice comes subsidised from Thailand and it is going for N12,500, they are determined to make sure we do not succeed. The local millers are facing threats of extinction because of the heavy competition.
The minister, who announced that Council also gave approval for the development of foundation seeds for maize to the Institute of Agricultural Research, ABU Zaria, added that one of the challenge is that we do not have the right variety of seeds, so the yield per hector is very poor, we have the lowest in the world.
“So, that is research is going on and the funding is N155 million for 30 tons of foundation to multiply to 230 tons of improved seeds, which will be given to seed companies to multiply.
“The other issue was the question of smuggling. In Mr. President’s speech to the National Assembly yesterday, he gave a very strong warning about smugglers who bring in unauthorised commodities through the unauthorised borders into the country. We have to deal with that because, while we are making a great deal of progress in our grains production, smugglers are busy compromising the success we have achieved.
” I was in the largest mill in the country in Kano, two days ago, they were selling rice for N15,000 for 50kg. You know your country very well, there are middlemen who do all kinds of things and I told the millers to increase the number of their distributors because there is no point saying it is N15,000 in their factory when out there, somebody is hoarding.
“The same thing happened to maize. Some people filled their warehouses with maize and shut the place so that the prices were so high that poultry farmers could not get access to maize in the market. So, people went to import, crash the prices and they started complaining. There is no where rice is selling for N20,000”
Minister of State for Aviation, Hadi Sirika announced that FEC also approved bilateral air services agreements between Nigeria and the State of Canada
“As part of our efforts to connect every Nigerian engaged in trade and commerce to business, the FEC approved bilateral air services agreements between Nigeria and the state of Canada. This will open businesses, connect Culture trade and Commerce between Canada and Nigeria.”
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