Business
FG, rice producers disagree over importation, local capacity
The federal government and Rice millers have disagreed on the possible best way to address the high price of food, such as rice, which has become a national staple.
The Nigerian government had ruled out the possibility of importing grains as a quick win to cushion the escalating food crisis, and also mandated rice producers to contribute 64,000MT of rice immediately to bring down price, which has risen to over N70,000 per 50kg bag.
However, the millers think otherwise by insisting that government made the decision on their contribution without consultations with them, as the figure they are mandated to produce is based on installed capacity and not actual current production capacity, which is far below installed capacity. They believe that only importation of paddy for the local rice millers would solve the problem of high food price as the producers lack the resources, especially given the cost of inputs, to be able to produce the major staple for most households in commercial quantities.
If the country decides to toe that line, the situation, which is a direct consequence of mass withdrawal of farmers from their farms due to insecurity, will further put pressure on the naira through increased demand for the dollar.
Rice millers last week declared that they lack enough paddy (unhusked rice with the outer hull intact), in Nigeria for the production of rice in commercial quantities, blaming insecurity, which they said had forced many farmers out of their farms.
This came barely one week after the Federal Government claimed that the Rice Millers Association of Nigeria (RIMAN) had committed to releasing about 64,000 metric tonnes of rice to the market.
Early this month, President Bola Tinubu directed the Federal Ministry of Agriculture and Food Security to release about 42,000MT of maize, millet and other commodities from the national strategic reserves in order to address the rising cost of food in Nigeria.
The Minister of Information and National Orientation, Mohammed Idris, had disclosed this in Abuja after a meeting of the Presidential Committee on Emergency Food Intervention.
Idris had also stated that the Rice Millers Association of Nigeria had committed to releasing about 64,000MT of rice to the markets.
“The first one is that the Ministry of Agriculture and Food Security has been directed to release about 42,000MT of maize, millet, garri, and other commodities in their strategic reserve so that these items will be made available to Nigerians.
“The second one is that we have held meetings with the Rice Millers Association of Nigeria. Those, who are responsible for producing this rice and we have asked them to open up their stores.
“They’ve told us that they can guarantee about 60,000 metric tons of rice. They will make that available to Nigerians; to bring out to the market to make food available,” the information minister had told journalists.
But RIMAN’s President, Peter Dama, told journalists that though the government did not meet with his group, there was a lack of adequate paddy locally for rice production.
“No, no, no, we don’t have enough paddy in this country. Farmers lack enough paddy to sell. A lot of farmers have withdrawn services on the farms due to insecurity. This is an addition to the effects of subsidy removal on fuel”,Dama said.
“This did not only affect farmers, but the entire production value chain for rice. And not only rice, but all other food stuff in this country. So, I think everybody is experiencing this in one form or the other. And you will agree with me that it is not only rice, the entire food sector is affected”.
Dama also noted that the floating of the naira had made it tough for rice millers to import spare parts for some of their machines.
“We have spare parts that we have to import, which are not fabricated or produced here in the country, but the floating of the naira has made it tough to get those parts. You will also agree with me that the issue of power is another challenge.”
In January, the Minister of Agriculture and Food Security, Abubakar Kyari, had announced that the Federal Government had commenced the massive production of food crops in order to bring down the prices of food items across the country.
Kyari, who spoke after hosting the Governor of Jigawa State, Umar Namadi, at the headquarters of the Federal Ministry of Agriculture and Food Security in Abuja, said the target of the government was to reduce food inflation, describing it as the major reason for the high rate of inflation in Nigeria’s economy.
He said, “We have programmes to ensure massive production of food so that food will be available for the country in line with Mr. President’s agenda on food security. We also intend to massively produce so as to bring down food inflation.
“This is because today, the number one driver of inflation in the economy is food inflation. So we want to assiduously work hard to produce massively. Mr President has given us the support that we need and we are going to wrap it up, starting with rice production.”
However, according to the National Bureau of Statistics (NBS), the country’s annual inflation rate jumped to 29.90 per cent in January from 28.92 per cent in December 2023, primarily fueled by a continuous surge in food prices.
According to the report, the food inflation rate in January 2024 quickened to 35.41 per cent on a year-on-year basis, which was 11.10 per cent points higher compared to the rate recorded in January 2023 (24.32 per cent).
Similarly, Nigeria’s food inflation rate as of January 2024 is 35.41 percent, according to a report from Trading Economics shared by Statisense on its X handle, topping the list of eight African countries sampled.
In the report, Ghana comes next to Nigeria with 27.1% inflation rate while Cameroon has 10.8%. Benin Republic follows with 5.5% while Ivory Coast has 4.5%. Mali has 1.1% while each of Togo and Chad has 1.1%.
“If the high level of insecurity in the country is not properly addressed, the food crisis we’re lamenting today will be a child’s play compared to what it will be in a year or two”, a public affairs analyst, Ganiyu Olusola, told our correspondent.
“The fact that traders are now hoarding the food items, just to take them to the neighboring countries due to exchange rate advantage is even worsening the situation.’’
Our checks revealed that the cost of rice in Nigeria has soared to unprecedented levels, reaching a staggering N88,000 for a 50kg bag of foreign rice in major retail outlets. This represents a substantial 22.2 per cent surge compared to earlier prices this month, which stood at N72,000. Local rice sells for between n67, 000 and N72, 000.
