Why Nigerian rice is more expensive than foreign counterpart

27.06.2017

RICE production in Nigeria in the recent past have gained momentum following some policies of government and the approach which farmers have adopted in this modern days farming.

 

Policies and programmes of the government which includes the Growth Enhancement Support (GES) Scheme, the Anchor Borrowers Scheme among other, have succeed in solving one of the major problems of Nigerian farmers which is availability of farm inputs.

The two agricultural programmes mentioned above centers on provision of fertilizer, seeds, mechanisation and other farm inputs to increase yield and create wealth.

After all these programmes by the government to make rice available to Nigerian, it is no longer new to know that Nigerian rice is more expensive than the imported rice from Thailand, India and China.

According to stakeholders in the rice sub sector, there are a lot of international and local forces behind the price disparity between the local and foreign rice.

While some stakeholders maintained that unavailability of farm inputs and consequently low yield per hectare of local rice majorly contributes to the high cost of Nigerian rice.

Others argued that imported rice is sold at auction price in the importing countries; thereby making the importers buy the product below international price, which when imported into Nigeria could be sold cheaper than the local rice.

According to the Governor of Kebbi State, Ibrahim Bagudu, the international price of rice per ton is $700, but when countries like Thailand auction their rice which has been in storage for over 7 years and declared unfit for human consumption, they sell it for $150 per ton.

When the buyers approach the Nigerian borders with the rice, they Nigerian Customs will place import duty based based on the $150 per ton, at the end, the importers may end up spending just $200 per ton, while the cost of production and other things involved in the production process costs the Nigerian farmer about $700 per ton.

In this case, there will be no fair competition among the two rivals, the importer may choose to sell the rice very cheap per bag and still make profit, while the Nigerian farmer will consider the cost of production and profit which at the end of the day will make the local rice more expensive.

According to the Governor Bagudu “The biggest challenge is that we don’t understand that rice is an internationally trading commodity, because of that, other countries with which we are competing with, they always try to ensure that we keep buying.

“Countries particularly Thailand, India and china buy a lot of paddy from their farmers and keep in storage, sometimes as long as 9 years, by so doing, they are supporting their farmers, their farmers do not worry about market, so country like Thailand may have 8 million tons of rice in storage, so occasionally they will auction the ones that is almost going bad and not fit for human consumption because you can use rice for animal feed or ethanol, so they auction the rice for that sector, but because it is an export auction, so those companies that import rice to Nigeria will go and buy up the rice.

“Sometimes those auction is sold at 20 per cent the international price of rice, for instance if rice is $600 per ton, in April this year, Thailand auctioned 1.62 million tons of rice at about $140 per ton while the market price is about $700 per ton, so what that does is that if the importer brings that rice to Nigeria, he is not bringing the rice at international prices, so the local farmers cannot compete with that price and that is why we think that imported rice is cheaper that locally produced rice.

“What other countries have done in other to correct that is that they tell their customs to disregard the price the importer said he imported the rice and use the parameters they have, that is what the custom is supposed to be doing.

“The custom just rely on what the importer declares, if he says I bought rice for $140 per ton, so they charge him 60 per cent of $140, he will still bring the rice into Nigeria at about $200, so the poor Nigerian farmer who is offering rice for $500 will be said to be uncompetitive, whereas if that importer were to buy fresh rice from anywhere, he cannot bring it into Nigeria below $700 per ton.

“This is the biggest obstacle and without it being popularised, the possibility of sumasulting policies because the consumer will say that local rice is expensive, it is not expensive because we are not comparing it will equivalent elsewhere, we are comparing it with rice that is auctioned that is seven to eight years old and there is no way the two can be the same.”

“The imported rice does not have the same aroma with that of the locally produced, the imported rice has a white substance which is the preservative”.

Meanwhile, another stakeholder maintained that the cost of cultivating rice in Nigeria is a contributing factor to why the rice is more expensive than the foreign rice.

Dr Rose Gidado, a scientist and the Country Coordinator of the Open Forum On Agricultural Biotechnology (OFAB), said insect and pest infestation, soil salinity also contributes to low yield which in return makes the local very expensive.

She further said that farmers spend more on purchasing farm inputs which may not give them the actual yield per hectare they require.

“The cultivation of Nigerian rice is more cumbersome, you have to use a lot of farm inputs for you to be able to make something, you need a lot of fertilizer for you to get good harvestable yield, and farming is all about yield.

These harvestable yields are dependent on several factors, such as soil fertility, insect and pest infestation and harsh weather condition, like salinity especially rice which is easily affected by salinity, that is the soil that contains much salt.

For the farmer to make the soil fertile so that a good result will be achieved, he has to purchase the fertilizer, and fertilizer which an essential commodity for farming is scarce and expensive for the farmers to purchase.

Other contributing factors is the presence of weed in the farms, once the soil is fertile, it will be overtaken by weed, because the nutrient the crop needs is also then nutrient the weed needs to survive.

So, all these things put together contributes to the Nigerian rice are expensive because the farmers spend much money to put more input into the rice farm, and after harvest, they will want to recoup all the money they spent, and trying to do that, the price has to go high”, Dr Gidado added.

In order to increase production, she said that the government can adopt new biotechnology which will enhance productivity and according to her, help reduce the price of the local rice.

“To come out of this, we have to adopt technologies that help like the use of modern biotechnology tool, genetic modification tool.

“Presently, the Cereal Research Institute undertaking a project, the Nitrogen-use Efficiency Water-use Efficiency and Salt Tolerance (NEWEST) rice that will really help because the technology that is being adopted for the rice really maximizes uptake of the nutrients from the soil, with little fertilizer, the expected yield will be achieved.

“The NEWEST rice allows the farmer to plant where there is high concentration of salt, because the rice has been modified to tolerate salt.

“It reduces the use of farm inputs, it can be planted where there is little rain because it is Water efficient and also intercrop the rice with other crops, so it has a lot of advantages over the conventional rice”, she noted.

Furthermore, the National Chairman of the National Association of Grain Storage Practitioners of Nigeria, Chief Eric Ozongwu said the foreign rice is highly subsidized from the production countries, while ours is not subsidized.

He said the importing countries have better high yielding seeds to produce more than what we have, adding that “the highest we can get here is 7 tons per hectare but over there you can get as much as 12 tons per hectare, so with that, the price automatically becomes lower.”

“They use a whole lot of mechanization in rice production, like tractors, harvesters are readily available, but here in Nigeria we use a whole lot of manual labour, and even when we get the paddy, we don’t have enough milling plant, fertilizer is very expensive here compared to fertilizer over there.

“What most government do in developed society is that they buy off the paddy from the farmers and sell at cheaper prices to encourage the farmers to go back to farm, but in Nigeria, the case is different.

“Like what the CBN is doing presently through the Anchor Borrowers scheme, if they intensify that approach and give facilities to farmers on a very low interest rate because you cannot use commercial bank interest rates to make headway in agriculture.

“So if it is sustained over the years, it will help to bring the prices of rice down, and the National Seed Council should do a lot by giving us a high yielding seed so that we can increase the yield per hectare”, Ozongwu added.

It is now obvious that some local forces contribute in making Nigerian rice expensive. The government needs to do a lot in addressing these issues so as to encourage farmers to produce more rice.

 

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