FG: Price of Rice will Fall Within One Month

  • Approves N25bn to offset debt it owes Discos

 Omololu Ogunmade  and  Olawale Ajimotokan in Abuja

All things being equal, the price of rice in Nigeria will drastically fall within the next one month, the federal government assured wednesday.

This disclosure was made by the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, while briefing State House correspondents at the end of the weekly Federal Executive Council (FEC) at the Presidential Villa in Abuja.

Ogbeh said the government had been concerned about the high cost of rice which he described as the most consumed commodity in Nigeria. The trend, he added, resulted in the recent meetings of both the rice growers and millers during which he said both parties resolved to crash the price of rice in the next four weeks.

According to him, both the rice growers and millers had agreed that the price of paddy – raw  and unprocessed rice in the farm – would be reduced to a cost that will be easily affordable by rice millers who will in turn sell the milled rice at a competitive price that will be within the reach of average consumers.

He said given this development, the price of locally consumed rice would become as low as that of imported or smuggled rice. This development is expected to make rice import or smuggling henceforth unattractive.

Ogbeh also said the council mandated the ministry to investigate the recent export of poor quality of yam to the United States by a company with a view to discovering why such products of low quality were exported from the country.

Ogbeh also said a bill meant to repeal Export Prohibition Act which prohibits the export of some locally produced items such as yam, rice, among others, to enable the country export such products and grow the economy is already before the National Assembly.

“We have been mandated by council to brief you on one or two developments in the agriculture sector. One is a new development about the consignment of yam which was exported from Nigeria to the US which, according to a report that we heard today, was found to be of poor quality.

“The ministry will investigate it because the ministry is not an exporter. Exporters are private sector people. We will investigate both the company that exported and ask the quarantine department to check and find out why such a consignment left here.

“The second issue is that in the last two days, rice growers in Nigeria and rice millers have been meeting. We are very concerned about the price of rice which is the most consumed commodity in Nigeria today.

“This means in the next one month, since the harvest of rice has begun in earnest, the price of rice will become reasonable and the cost of rice would have reduced substantially. We shall continue to pursue that. The ministry is also equipping farmers to make rice harvest easier so that the cost of rice harvest will substantially reduce,” he said.

In his own briefing, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, said the council approved N25.9 billion to offset the debt owed by the federal government to electricity distribution companies (Discos).

According to him, the approval followed the verification of the claims of over N67 billion debt made by the Discos against the federal government.

He said the balance of N41 billion was not owed by the federal government but rather by some states and local governments as well as some international organisations classified as the federal government institutions.

Fashola said the decision of the government to offset the debt was government’s own way of fulfilling its own commitment to the private sector with the aim of promoting the growth of the private sector.

He also said the move was part of power sector recovery programme, pointing out that further verification of debts owed by states and local governments had been approved by the National Council on Power.

The minister also disclosed that the Discos also owe the federal government over N500 billion, being the cost of energy which he said they took and have not remitted.

He said: “We presented a memorandum to council to approve the verified sums of monies owed by the ministries, departments and agencies of government to distribution companies for electricity supplied to them. You might recall that over time, since the inception of this administration, the claims of debts owed by this administration to distribution companies have been a matter of concern.

“We had committed that those figures would be verified and the verified sums, the government would pay. We have completed the verification and as was announced in the monthly power meeting, we now asked council to approve the verified sum of N25.994 billion owed by MDAs of the federal government to be paid to the Discos out of the claims of N67.41 by the Discos. There is differential of about N41 billion. That differential arose because some of the claims do not belong to the federal government. The debts are owed by some states and local governments. Some are owed by public international organisations that have been classified as government institutions.

In a related development,  the federal government, Rice Farmers Association of Nigeria (RIFAN) and  National Rice Millers Association of Nigeria (NRMAN) have moved to guarantee national food security by reducing the price of rice before the end of the year.

The resolution was the highpoint of yesterday’s tripartite understanding agreed to by Ogbeh, Chairman of NRMAN, Mohammed Abubakar and Chairman of RIFAN, Aminu Goronyo.

The parties agreed to review and reduce the market price of processed Paddy rice which ranges from N16,000 to N17,000 to about N13,000for the 2017/2018 wet season farming.

Government rice policy has seen a major reduction in rice importation from 500,000 metric ton in 2015 to 58,000 mt in 2016.

Ogbeh highlighted government’s desire to continue to procure machines and support rice farmers so that they can maintain the MoU between the farmers and millers to sell paddy at N110,000 per metric tonnes. Presently a ton of paddy is sold at N150,000.

The minister appealed to RIFAN to desist from unnecessary hiking of the price of paddy, saying such would give smugglers the leeway in market, while ordinary Nigerians will be unable to afford the price of the local food staple.

 He stated further that with efforts being put in place, the price of rice will be reasonable and can be afforded by all Nigerians.

“I want to make a passionate appeal to RIFAN. Millers will be unable to buy if the farmers hike the prices of the product. And if the millers can’t buy, a day will come when the mills will shut down. If that happens, people won’t find rice in the market and smugglers will take advantage of the scarcity. Any breach of the agreement reached will benefit the smuggler while the Nigerian consumers will suffer most,” Ogbeh admonished.

Speaking after the meeting, Goronyo said RIFAN predicted that cheaper rice would flood the market this year in view of the anticipated bumper harvest by farmers.

He said the rice farmer association and the millers had agreed in principle to collaborate in the interest of Nigerians.

He gave the cost of production and high interest rate as the main reasons responsible for the high cost of rice in the market, saying Ogbeh had promised to bring the cost of production to the barest minimum.

“Though Nigerians were once buying a 50kg bag of rice for N18,000, today the cost of a 50kg bag of rice is N14,000 to N15,000 which supports the fact that the prices are coming down and will go further down to not even N7,000 but N6,000 for a 50kg. Just give us few months,” Goronyo pleaded.

He said the government rice production scheme will benefit the smallholder farmers estimated at 12.2 million or 90 per cent of the registered rice farmers in Nigeria.