The Nigeria Agribusiness Group (NABG) has called on Nigeria to invest in competitiveness by bringing knowledge and innovation into the rice value chain.
NABG President, Alhaji Sani Dangote, gave the submission as a lead speaker at the 3rd Daily Trust Agricultural Conference and Exhibition which held in Lagos while speaking on the topic: “The Rice Economy and Value Chain Issues.”
Dangote, who was represented by the Director-General of NABG, Dr. Manzo Daniel Maigari, stressed the need for Nigeria to standardize practices in the sector, develop protocols for rice farming as well as create an enterprise to enable the private capital into the sector.
“This can only be achieved through clusterization with full value chain development in each cluster. Review past agricultural policies to align them with the current realities and set goals and objectives,” he said.
Commenting on the current situation, Dangote said that production of rice has increased by 60 percent peaking at 4.8m Metric Tonnes in 2018.
According to him, all states in Nigeria can produce rice. “We only need to prioritise, for instance, less dissipation of energy on wheat.”
Rice economy which is estimated at $5.2billion, he said, is projected to hit $6.3billion by 2025.
He disclosed that large scale processors, such as Olam and WACOT, are developing out-grower schemes in conjunction with government, commercial banks, technical and financial partners and input providers.
“Olam Nigeria Limited has announced a total investment of $111million to introduce mechanised rice farming in Nasarawa state. Investors have committed additional N250billion into Nigeria’s rice production and plan to set up additional 14 rice mills.
“This is in addition to the current N300billion already invested by processors. Dangote is projecting to invest $1billion in the rice value chain over the next 5 years.
“We have seen efforts by development partners such as USAID, JICA, GIZ among others to support the development of the value chain.
“NIRSAL and Anchor Borrower Project (ABP) among others have served to boost the rice economy. Nonetheless, core challenges around scalability and sustainability of interventions still remain,” he lamented.
Identifying some of the challenges, he said the combined improved seed production capacity is 100,000 tons satisfying less than 8% of national demand, which means, one extension agent has to cover three times the number of Small Holder Farmer (SHFs) recommended by FAO given the limited number of extension agents in the country.
Also, he mentioned that the mechanization rate is at 0.3hp per hectare compared to up to 8hp in China due to challenges in accessing finance; noting that 70 percent of SHFs produce over one cycle due to low access to irrigation schemes as existing schemes present operation and maintenance challenges.
Other challenges mentioned include: “Only 10 percent of SHFs have clear access to market throughout grower schemes and actor linkage platforms due to limited financing, inefficient data collection and low levels of farmer literacy; 75 percent of milled rice production is dominated by small scale millers with rudimentary equipment, thus impeding quality; poor branding and packaging limits uptake from large scale retailers and high end consumers while an estimated one million tons of rice is being smuggled from Benin and sold to local millers and retailers due to restrictive trade policies.”
All these, according to him, give room for potential business opportunities in scaling up successful business models and capturing unexplored areas.
He therefore called for the establishment of online input distribution platform; seed production and processing unit with a franchise distribution model and digitalized extension services; machinery rental services scheme with online and offline booking platforms; data collection service scheme providing reliable data on production zones, SHFs profiles and milling units among others; branding and marketing advisory services; franchised online linkages platform; transport and storage service provision with warehouse receipt systems; commercial paddy production for large to medium scale millers; digital rice trading platform linking millers with end customers as well as contract milling services.
He further disclosed that NABG as an umbrella body for all agribusiness associations in Nigeria is currently putting together a Rice Stakeholder Dialogue to rub minds with stakeholders and identify practical solutions to some of the challenges, develop a road map for the country to attain self-sufficiency and address the issue of artificial scarcity and price hike.
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