'Nigeria Depended On Imported Rice for Too Long' [interview] (allAfrica.com)

Rotimi Williams, 34, is a rice farmer and the Managing Director, TW Heritage Company which includes Kereksuk Rice Farm in Benue State. In this interview he talks on why rice farming should be given priority in Nigeria.

Daily Trust on Saturday: Many people your age would not venture into farming, so what motivated you?

Rotimi Williams: I simply ask myself the question ‘if not me, then who?’ The primary problem in Nigeria today is that we wait for others to do things for us and this has to stop. We need to learn to take the initiative. I would like to view this as a ‘Revolution of the Mind’ rather than an agricultural revolution. So, I began with the farm out of Poverty campaign.

DT: What are the potentials for rice farming in Nigeria?

Williams: The potential for rice farming in Nigeria is enormous, but we have become lazy and dependent on imported rice for far too long. The former Minister for Agriculture, Dr Akinwunmi Adesina did a remarkable job in getting agriculture back on track, but most importantly, he led the Rice Revolution. This in my view is only the beginning and the in-coming Minister for Agriculture must follow the line. For example, Dr Adesina ensured that the 2014-2015 rice allocation was given to both rice producers and millers to ensure continued investment in the sector through backward integration. This allowed farmers to fund their activities without depending on bank funding. The minute he left office at the end of his term, another allocation was immediately drafted, which totally excluded producers and favoured only millers. Who then produces the paddy rice for these millers?

In terms of actual rice production, Dangote remains the largest landowner, with 100,000 hectares for rice production, while my company, Kereksuk has 50, 000 hectares, the second largest for rice production in Nigeria. Both farms are not running at full optimisation and even at full optimisation, both companies will produce at best 1.3 million tonnes of paddy. Assuming we are able to achieve 9 tonnes per hectare annually, this translates to approximately 810, 000 tonnes of milled rice, assuming we recover 60 percent of rice after milling. According to figures from the Federal Ministry of Agriculture, the annual demand for rice in Nigeria is approximately 5,000,000 metric tonnes (mt) deducting what both farms will produce at full optimisation will still leave an enormous gap of 4, 190, 000mt.

DT: In what ways will CBN’s decision on the ban of importers from accessing Forex affect rice processing in Nigeria?

Williams: From the perspective of a local rice farmer, the decision by the CBN will certainly encourage investment and participation in the rice sector, but not as easily as CBN suggests, someone still needs to fund this sector. The issues of insufficient rice production in Nigeria cannot simply be narrowed down to rice importation, but a failure to fully understand the rice value chain and address the issues that affect the value chain. If anything, importation itself is a function of our inability as a nation to tackle the issues affecting local rice production and rice traders have simply taken advantage. One of the most prevailing issues with rice production, which till date remains a problem, is that of funding. Our local banks are happier to fund the processing aspect of rice production, but not the actual farming and if we rely on the contribution from the subsistence farmers, there is the issue of quality, quantity as a result of insufficient inputs and the know-how.

Another direct result of the CBN ban on accessing Forex is increased smuggling activities from neighbouring countries. The ban on accessing Forex and 70 percent duty and levy on importers makes Benin Republic and Cameroun a more attractive trading hub for cheaply imported rice and they simply truck it down to Nigerian markets. I thought we had learnt our lessons from 2013, but clearly not, the Nigerian government is going to lose a substantial amount of their revenue to these countries.

So, if the CBN is willing to address the issue of funding for the entire value chain, and not just processing, then by all means, ban importation of rice. However, if this is not going to be the case, I will suggest that the CBN, in consultation with the relevant ministries, come together and reach a common consensus on how to progress, as I am aware that the Federal Ministry of Agriculture, Ministry of Trade and Investment, and Ministry of Finance in 2014 agreed on an import quota system for local rice stakeholders, which phases out in two years.

DT: Why is our locally produced rice more expensive?

Williams: There are too many factors affecting the price of our locally produced rice, but I will mention a few that I feel needed to be addressed with urgency. I will first touch on the quality of our seeds, which I think are playing catch-up with leading rice-producing countries, making our produce less competitive. The resulting yields from these seeds means that the cost at which millers purchase paddy is high with varying quality and subsequently, the rice recovered after milling is below the global average of 62 percent.

The land preparation process and inputs for rice farming is a lot more demanding than most crops and because majority of the rice paddy available for sale to millers are grown by subsistence farmers, it is obvious that yields will be a lot less in comparison to the likes of Thailand and India, that use full mechanisation process for land preparation and all inputs, that is, fertiliser and high-yielding seeds.

The next point is funding. Banks in Nigeria rather take a risk on funding machinery, rather than the production of the raw material, rice. This coupled with the fact that cost of funds are in double digits, most farmers have no access to such funds and those that have access struggle to pay up and this is reflected in the price of rice. Given the high cost associated with the actual production of paddy, there is no subsidisation on the cost of paddy to millers, as we see in Thailand, thus, this cost is passed on to the final consumer.

Another major issue is infrastructural deficit such as access roads, which increases transportation cost and lastly, but most prevailing, power supply. Inadequate power supply means that the rice millers have to run on diesel-powered generators.

Given these challenges faced by rice producers, we now have the issue of cheaply imported and smuggled rice in the market. With uncontrolled influx of cheap imported rice, the locally produced ones become less attractive for consumers.

DT: What advice would you give the government to enhance the growth of rice farming and processing in Nigeria?

Williams: Firstly, take time to understand the entire rice value chain and understand how each section is funded, then create a special fund, with strict compliance and monitoring. I believe that such fund should focus more on large-scale farms as they are better organised to utilise such funds in area of technological know-how and production and easier to monitor.

Secondly, map out the rice processing states and regions for better organisation to aid input distribution and economies of scale. Such arrangements will make it easier for both potential local and foreign investors to identify their areas of investment.

The government needs to have a better understanding of who is doing what in the rice industry and verify all claims, as we have had issues in past with some big corporate organisations claiming to be pioneers, but with no products to show.

As a matter of fact, during the tenure of Dr Adesina, the Federal Ministry of Agriculture found that they were bagging imported rice as local rice. Such an exercise will enable us better understand our position and put policies and measures in place to promote the industry.

Lastly, on the issue of smuggling, I see two solutions. First, an outright ban on rice will go a long way in ensuring that rice brought into the country is limited and for those that are successful, it may be at an unattractive cost. Secondly, drop price of locally produced rice below imported, but this can only be achieved if the other issues are resolved.