In Pursuit of Self-sufficiency in Rice Production

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Crusoe Osagie and Obinna Chima who were in Anaku-Ayamelum Local Government Area of Anambra State for an assessment tour of Coscharis Farms Limited last week, report that there is hope in the horizon for Nigeria’s rice sector

In Nigeria, necessity has indeed given birth to innovation and unprecedented effort to develop the real sector.
Until recently, when the government seems to have lost firm control over an economy galloping away like a derailed train, the nation’s financial institutions and other components of the private sector were only interested in sales and importation transactions which return investment in only a few months.

Not anymore. Now, Nigeria must produce or perish and if Nigeria perishes, so will all the financial institutions and other arms of the private sector.
It is on the back of the present realities that the Central Bank of Nigeria (CBN) in collaboration with the Federal Ministry of Agriculture has now focused on areas in the agriculture sector where the country has comparative advantage, in their quest to drastically reduce the country’s huge import bill. One of such areas is the local production of rice.

An analyst at International Grains Council, Jade Savage, recently noted that rice shipments to Nigeria have been limited by government’s effort to prevent cross-border illicit trade.
Rice prices in the global market remain subdued and, according to Savage, “….the reopening of rice imports into Nigeria could have some stabilising impact on global prices.”
Nigeria is the world’s second largest rice importer, with an estimated annual demand of 2.5 million metric tonnes, well above the country’s about 500,000 metric tonnes local capacity.
However, internal stakeholders in rice business insist that local rice production is way ahead of the production figures bandied in the international commodities markets.

But a report by Lagos-based CSL Stockbrokers Limited showed that since 2011 the federal government has been making substantial efforts to encourage domestic cultivation of rice and to completely eliminate imports using incentives such as subsidised loans, cheap fertilizers, free farm land, and tax rebates.

Despite these efforts, domestic production still falls significantly short of local demand. But with the depreciation of the naira and forex scarcity facing the nation, there have been deliberate effort to significantly boost domestic rice cultivation.
The CBN last year restricted importers of 40 items, which included rice, from accessing dollars from the interbank market and bureaux de change. Also, other fiscal policies are making it increasingly unfavorable for the importation of rice. Rice imports through land borders are restricted, while imports that come in through the ports attract sizeable import duties and levies.

Therefore, these restrictions have led to a gradual decline in imports and have resulted in an 86 per cent rise in the price of imported rice. Consequently, the price gap that made cheaper imported rice more attractive appears to be closing gradually, making it a favourable time to ramp up local production.

Also, the CBN through its Commercial Agriculture Credit Scheme (CACS) as well as its Anchor Borrowers’ Programme (ABP) has continued to support genuine local rice manufacturers, in line with its development finance function.

One of such firms is the Coscharis Farms Limited, which has nearly 3,000 hectares of land under cultivation of different varieties of rice in Anaku-Ayamelum Local Government Area of Anambra State. In line with their commitment to local rice cultivation, the CBN Governor, Mr. Godwin Emefiele, the Minister of Agriculture, Chief Audu Ogbeh and some state governors went on assessment tour to the Coscharis Farms last week.

The Anchor Borrowers’ Programme
That ABP programme was designed to assist small scale farmers to increase the production and supply of feedstock to agro-processors. The programme is an initiative of the central bank aimed at creating an ecosystem to link out-growers (small holder farmers) to local processors, increase banks’ financing to the agricultural sector enhance capacity utilisation of agricultural firms involved in the production of identified commodities and as well as the productivity and incomes of farmers.

Already, the pilot phase for rice farmers had been adjudged as successful as it led to increase rice yields and financial rewards to the local farmers. The anchor borrowers’ programme is also a platform to build capacity of banks in agricultural lending to farmers and entrepreneurs in the value chain, reduce commodity importation. It is also expected to reduce the level of poverty among small holder farmers and create jobs while assisting rural small-holder farmers to grow from subsistence to commercial production levels.

The programme is hinged on three pronged approach namely the out-grower support programme; training of farmers, extension workers and banks; and risk mitigation.
The ABP is expected to be taken to 26 states. But at the initial stage, the 14 states been targeted are Kebbi, Sokoto, Niger, Kaduna, Katsina, Jigawa, Kano, Zamfara, Admawa, Plateau, Lagos, Ogun, Cross-Rivers and Ebonyi for rice and wheat farmers to advance their status from small holder farmers to commercial or large growers. Under the programme, the Central Bank of Nigeria had set aside N20 billion of the N220 billion micro, small and medium enterprises development fund to be given to farmers at single digit interest rate of maximum nine per cent per annum, in line with government’s aspiration to achieve food security. Already, N15.7 billion had been disbursed.
According to Emefiele, the fall in oil prices had given the country a timely reminder that it has no other choice but to diversify the economy away from oil, and into agriculture, manufacturing, services, and other non-oil sectors.

He added: “We have our agenda at the CBN. Our agenda is to see how, instead of importing rice, we produce rice locally. By doing that, what you will find is that the demand for the importation of rice would cease and we would begin to see ourselves as a rice exporting nation. That would help to conserve our forex reserves. We are very determined to attain this. We spend huge amount to import items which could be produced locally, thereby exporting jobs to other countries at the detriment of our local industries.

“The Anchor Borrowers’ Programme is one of the CBN’s policy initiatives to pursue the aforementioned development objectives, namely the creation of jobs, reduction in food imports, and diversification of our economy.
“The Programme aims at creating economic linkages between over 600,000 smallholder farmers and reputable large-scale processors with a view to increasing agricultural output and significantly improving capacity utilisation of integrated mills.”

President Muhammadu Buhari had during the inauguration of the scheme, decried the huge sums spent by the country importing food items that could be produced locally.
He added: “The importance of agriculture in the economy cannot be overemphasised. Prior to the advent of oil, our country survived on agriculture production. During this period, the economy was built on agricultural activities and our gross domestic product grew steadily.
“Economic diversification is no longer an option for us, it is the only way for economic momentum and the drive to prosperity.” he added.
According to him, the only way to do this was to go back to the land and develop agriculture.

Self-sufficieny in Rice

According to Ogbeh, with the gradual extension of the Anchor Borrowers’ Programme to 26 states in the country, the federal government would end importation of rice in the next one year. The Minister of Agriculture aid this during an assesment tour to the Coscharis Farms Limited. Ogbeh stressed that unless Nigeria is able to feed itself, the country cannot be said to be truly independent. According to him, the food importation bill of the country which stands at between $2 and $3 billion is unacceptable.

“This amazing, I have seen similar things in Kebbi and I am seeing this big one (the rice farm), and am very proud of Coscharis and the effort the Anambra State governor is making to support him. In another one year, we will have no need to import one grain of rice into this country.
” In fact we may stop rice importation sooner than that. It is final word I am telling you, because Nigerians have proven that they can do it and I am proud that I can see this thing in Anambra. Because peole who don’t know Anambra do not even know what potential exist for agriculture.

“I am also proud of the role the CBN is playing because they are giving a lot of credit support, even allocating the scarce foreign exchange that we have to a critical sector like agriculture. To the younger people here, there is future in agriculture. Don’t run away from it even though it is tough,” the finance minister said.

CBN Pledges Support

Also, Emefiele who was in Anambra State, said the central bank was spurred to raise its support to the agricultural sector because the country ran into a situation where it reserves had been badly depleted.

The central bank governor wondered why Nigeria, despite its vaste arable land would continue to import rice, tomatoes, and even milk.
He said 26 states that have shown interest in the ABP, adding that the Ministry of Finance as well as officials of the central bank are currently on assessment tour of the state that had shown interest in the project which is aimed at ensuring that Nigeria becomes self sufficient in food.
Furthermore, he said the Kebbi state governor, the state where the pilot phase of the ABP was carried out, had been mandated by President Muhammadu Buhari to head all the state governors that would be involved in the ABP.

Emefiele explained: “We have been importing milk for over 60 years. There is a company that has been producing milk for 60 years, and I say it is time those kind of companies begin to produce our diary in Nigeria. We like to encourage and congratulate Coscharis. We are congratulating him because this is a man that for over 30 years has been in the business of machines, spare parts, and car importation.

“But simultaneously, about 29 years ago, he started cultivating the idea that agriculture is the base. We started this with him almost about two years ago when we granted him a N2 billion CACS. With his own resources, he added to it and that is why he is where he is today. Those are the type of things we need to continue to encourage.

“And about a month ago, he came to the CBN that we need to come and see what he has done with the CACS fund we gave to him. I must say that I am delighted that he has used the money well. And when he came, he requested for more money because he wants to have the capacity to produce rice all-year round, that is three harvests in a year. To do so, he needs irrigation and he needs his mill.”

To this end, Emefiele disclosed that the Committee of Governors of CBN on Wednesday gave approval for Coscharis Farms to set up a mill as well as an irrigation.
“That is the kind of support we would give people who have shown interest, because there is no foreign exchange to import food, when we can produce food in the country. After that, the next stage is to begin to encourage Coscharis Farns together with the Anambra state governor for supporting the initiative, to be able to create jobs for the youths and other people called Anchor. The Anchors grow the rice, you take them up from them, harvest it, mill it and sell to Nigerians.

“We have naira, and we would lend to people so that we can grow our food and feed our people. Forecast has it that by 2050, Nigeria would have the third largest population in the world. So, we need to begin to prepare for that day. Nobody is going to prepare for us and we must be able to feed our people,” Emefiele added.

Coscharis Boost for Job Creation
The Chairman of Coscharis Group, Mr. Cosmas Maduka, in his remarks, stated that Coscharis Farm Limited will provide full time employment for about 3000 people as well as drive ancillary industrial growth in the state when all the phases of the investment are complete.
He said the farm phase of the business currently employs over 250 people, adding that the rice mill and irrigation components of the investment for which the CBN has given approval in principle to finance, will significantly enhance the capacity of the business to create more jobs and boost economic activities.

Maduka however called on other arms of the federal government to be more responsive to requests from the private sector to enable them achieve their set business goals in good time.
“Although the government is providing support, a lot more assistance is still required from the government. Government should respond to our needs and requests faster to help us meet our investment goals. For example, we have made a request for waivers for the importation of our farm equipment and it has been lying there for over a year without any approval. The government should respond faster,” he said.

He commended the CBN for agreeing to provide financing for its rice mill and irrigation, while also thanking the Federal Ministry of Agriculture for the decisions to allow the company use its silos for the storage of grains harvested from the farm.
Recalling how he took the decision venture into agriculture, Maduka said the plan began about 29 years ago but only became tangible two years ago, commending governor Willie Obiano for his intervention in the land dispute with the host community which had stalled the venture for almost three decades.

“It is a dream of 29 years before becoming a reality two years ago. It did not happen by accident at all. Obiano gave us the push to actually do it. He gave us the enabling environment.
He took care of the problem of insecurity and now we have expatriates from Europe and other parts if the world without any problem,” he said.

He stressed that it was essential for Nigerians to raise their capacity to produce food and feed the teeming population, noting that with the population of the country set to hit 500 million by the year 2050, there would be certain humanitarian crisis if the nation cannot produce what it eats.

Governor Willie Obiano of Anambra State said: “We are hoping to catch up with Kebbi. We are currently doing 210,000 metric tonnes. We call on CBN to support Coscharis Farms and other small holder farms because they are structured here. Through the agro-intervention funds we got N1.5 million and disbursed it and now we want N5 billion. There is much money in farming- you feed yourself and sell others.”

His Kebbi State counterpart, Alhaji Atiku Abubakar Bagudu, who was also at the event said: “We are happy that since last year when the president launched CBN’s anchor borrowers scheme in Kebbi, the state governments have been keying into the project. This shows that the president’s call, with the support of the Minister of Agriculture and the Central Bank of Nigeria was heard. With these developments, it is obvious that we are on our way to rice sufficiency.”