EXCLUSIVE: Rice War: Agriculture Minister Battles Asian Cabal

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Mr Ray Banner

The war is quite fierce, but it has been swallowed almost completely by the fever-pitched political activities in the country occasioned by the 2015 general elections. The country, led by the Minister of Agriculture and Rural Development, Dr. Akinwunmi Adesina, is confronting frontally an Asian rice cabal that is bent on scuttling the country’s rice policy which is aimed at making the country self-sufficient in rice in the next couple of years. In fact, the target is for the country to become a net rice exporter in the next three years.

adewunmi adesinaBut while the Federal Ministry of Agriculture and Rural Development (FMARD) is working assiduously towards realising this dream, some Asian companies have their plans well laid out to flood the country with imported rice. Already, they are overshooting the rice importation quota allocated to them and have also refused to pay the necessary duties and levies amounting to over N28 billion associated with the importation. But Dr. Adesina said they must pay. “Every company must follow the rules and there are no sacred cows. The days are gone when they can bribe and get what they want. I will not allow them to scuttle our self sufficiency drive in rice production. I cannot be bought or bribed. They must pay for the excess rice they imported above their allowed quota at preferential rate”, he maintained.

The National Assembly has thrown its weight behind Dr. Adesina as he prosecutes the rice war. The House of Representatives last Thursday resolved to investigate the companies involved in rice importation under the federal government policy aimed at encouraging investment in local rice production. The companies fingered are Popular Farms and Mills owned by Stallion Group and Olam Nigeria Limited.

The House regretted that Popular Farms and Mills, with an unpaid outstanding import duty of over N15 billion, has imported another 85,000 metric tonnes of rice into the country.

Honourable Simon Arabo expressed concern “that the actions of these companies are capable of scuttling the nation’s self-sufficiency drive in rice production ……”.

Corroborating the position of Honourable Arabo, Dr. Adesina said this is not the first time foreign importers have tried to derail government rice self-sufficiency policy. “They have always sabotaged every rice policy of the Federal Government even the efforts of the Presidential Initiative on Rice put in place between 2001 and 2003 by the Federal Government. The foreign importers had even falsely argued that rice production in Nigeria is not economically feasible and uncontrolled imports should be allowed”, he noted. But according to him, the reality is completely different.

The country’s new rice policy which was approved by President Goodluck Jonathan on May 26, 2014 is already yielding the desired dividend. The policy encouraged investment in local rice production and milling through the introduction of an import duty differential on rice (brown and polished) imported by rice investors compared to rice traders. Rice investors that have milling capacity with verified Domestic Rice Production Plans (DRPP) enjoy an import duty of 10% and levy of 20% while traders will pay an import duty of 10% and levy of 60%. By the rice policy also, importation of brown or polished rice would be limited to the national supply gap for import-grade rice to be determined by an inter-ministerial committee chaired by FMARD, with membership drawn from the Federal Ministry of Finance, Federal Ministry of Industry, Trade and Investment, and the National Planning Commission. The Committee shoulders the responsibility of issuing rice import quotas at the preferential duty of 10% and levy of 60% for 80% or more of the national supply gap to existing and new rice millers/producers.

By last year, experts put Nigeria’s national rice supply gap at 1.5 million metric tons. But Dr. Adesina said the national supply of import grade rice will decline to 1.0 million metric tons this year, 0.3 million metric tons in 2016 and to zero in 2017, when the country is expected to become self-sufficient in rice production. This is based on the projection that by 2017, new rice mills being purchased by investors such as Dangote Group, Honeywell Group and Wacot would have gone into full production. Dr. Adesina said these investors and others have acquired and are developing over 270,000Ha of rice fields to supply their rice mills with paddy. Dangote Group, a major importer of rice has taken steps to become a major producer of rice. The Group is developing 150,000HA of rice fields in different states of the country that will produce one million metric tons of paddy rice per annum within four years. Elephant Group, another major importer of rice is developing 10,000Ha rice field and is investing $300million in a 76,000MT/annum rice mill. “It is actually a mark of success of the rice policy that we have got pure importers to look inward and put up investments into domestic rice production”, Dr. Adesina said.

Nigerian farmers have also shown an impressive performance in response to government’s new rice policy that favours local rice production and milling. According to Dr. Adesina, since the launch of the Agricultural Transformation Agenda (ATA) by the current government in Nigeria, the country has witnessed a rapid growth in paddy production from 4.5million MT in 2012 to 7.89million MT in 2013 and 10.7million MT in 2014. He attributed this rapid growth partly to the addition of a completely new rice growing season – the rice dry season farming programme.rice

Nigerian entrepreneurs have also seized the opportunity created by the increased paddy production in the country to establish rice mills. According to FMARD, rice mills have risen from just one integrated rice mill in 2010 to twenty by end-2014 with a combined capacity of 700,000MT/annum. The monetary value of this effort is quite handsome: the estimated additional paddy produced of the 7million MT has been put at N407billion. Dr. Adesina said this is money that has been re-directed into rural rice producing communities of the country between 2011 and 2014 from foreign rice growers.

Certainly, these are not the best of times for foreign firms in Nigeria that are engaged in rice importation, especially those that have failed to embrace the new rice policy. They are facing stiff competition from Nigerian rice importers who have embraced the new rice policy and have become major investors in rice production in the country. The reality is that Nigerians have decided to yank off the cloak of dependency in rice and are now ready to produce enough rice for local consumption and would be making a foray into the export market as soon as possible. According to the National Planning Commission, the price of rice is dropping. It attributed this development to the increased domestic rice production. From all indications, Nigerians are set to feed Nigerians as far as rice goes, but first the “Asian Rice Tigers” must be tamed.

 

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