Indian Queen Basmati Rice by Bharat Industrial Enterprises limited
Indian Queen Basmati Rice by Bharat Industrial Enterprises limited

Nigeria’s economy, owing to the low oil prices, contracted for the first time in 25 years in 2016 but agriculture is one of the few beneficiaries of the government’s radical steps to counter the effects of a crippling dollar shortage where rice farming in particular is enjoying a boom — a rare bright spot in a country enduring its worst economic crisis in a quarter of a century. And yet the drive to cut an annual food import bill of $20 billion has run into the kind of problems that have long troubled Nigeria’s efforts to build up an economy outside its dominant the oil industry. But as rice imports became dearer, demand for locally produced rice — a staple food in Nigeria — soared, drawing businessmen from all over to buy directly from smallholder growers. Prices for Nigerian rice increased nationwide last year by about 60 per cent, according to the National Bureau of Statistics.

In an effort to protect its dwindling foreign reserves, the central bank introduced restrictions in 2015 on the allocation of dollars for imports that it said Nigeria should be produced locally — including rice.  Agriculture accounts for about 24 per cent of gross domestic product, but Nigeria depends on petrodollars for 90 per cent of its export earnings and 70 per cent of state revenues. The country has vast amounts of arable land but produces little of what it’s more than 180m people eat. Rice can be grown across the country, yet groceries and markets nationwide stock produce from Thailand and China. Domestic agriculture is dominated by smallholders and subsistence farmers. Experts say inefficient processing and high production costs in Nigeria have typically meant wholesalers have been able to sell Asian rice for less than that is produced locally. The challenge is ensuring that Nigerian rice is produced efficiently enough to be commercially viable for farmers. Another problem is the lack of capacity to mill on a commercial scale. Several of the country’s mills are not functioning and most process small amounts of rice.

Until 2015, Nigeria imported up to 4 million tons of rice annually, a staggering 46% of its total consumption, much of which was smuggled from the western neighbor Benin Republic. But this has fallen to about 700,000 tons as authorities now monitor the border. Moreover to boost local production, the central bank piloted a scheme last year in several northern states to supply materials such as fertiliser to help poorer farmers. The initial results have been promising. The states included in the pilot reported an increase in rice production of 20 per cent last year compared with two years ago, according to the statistics bureau.

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