Journey towards Rice Revolution

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Obinna Chima writes on the significant progress recorded in rice production in Nigeria

From Nigeria being the world’s second largest rice importer years back, the narrative appears to have changed as the country continues to take steps to ramp up domestic production.

According to a recent report, Nigeria has overtaken Egypt as the largest rice producer in Africa. The Director-General, Africa Rice Center, Benin Republic, Dr Harold Roy-Macauley, who disclosed this, said Nigeria is now the largest rice producer at four million tonnes a year. Egypt was producing 4.3 tonnes annually but the country’s production had reduced by almost 40 per cent this year. Africa produces an average of 14.6 million tonnes of rough rice annually, he explained.

Indeed, the remarkable achievement recorded by the country in the area of rice production, as disclosed by Roy-Macauley, was the outcome of robust collaboration between the Central Bank of Nigeria (CBN) and the Federal Ministry of Agriculture, that 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.
A report by Lagos-based CSL Stockbrokers Limited showed that the central bank and the federal government have been making substantial efforts to encourage domestic cultivation of rice and to completely eliminate imports using incentives such as subsidised loans, cheap fertilisers, free farm land, and tax rebates.

Presently, the CBN has restricted importers of 43 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.
Currently, 18 states are reputed as reliable rice producers in the country. They include Kebbi, Benue, Ebonyi, Ekiti, the Federal Capital Territory, Jigawa, Kaduna, Kano and Katsina.
Others are: Lagos, Nasarawa, Taraba, Kogi, Zamfara, Ogun, Niger, Kwara and Sokoto.

Clearly, these policies have led to a decline in imports and have resulted in significant rise in the price of imported rice.
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.

In all, the total amount released by the CBN under its CACS from inception to the participating banks for disbursement stood at N596.44 billion for 576 projects as at the end of the fourth quarter of 2018. Of the total number of projects, 34 were in respect of state governments.
The central bank disclosed this in its Economic Report for the fourth quarter of 2018, released recently.

A total of N852.15 million was guaranteed to 5,454 farmers under the Agricultural Credit Guarantee Scheme (ACGS) in same period.
Sub-sectoral analysis of the ACGS showed that food crops got the largest share, amounting to N369.54 million (43.4%), guaranteed to 2,373 beneficiaries; followed by mixed crop sub-sector, which received N162.75 million (19.1%), guaranteed to 1,710 beneficiaries N138.44 million (16.2%) was guaranteed to livestock sub-sector in favour of 564 beneficiaries; while cash crop, fisheries and ‘others’ sub-sectors got N105.28 million (12.4%), N58.82 million (6.9%), and N17.32 million (2.0%), guaranteed to 542, 175 and 90 beneficiaries, respectively.

Analysis by state showed that 30 states and the Federal Capital Territory benefited from the scheme with the highest and lowest sums of N95.83 million (11.3 per cent) and N1.99 million (0.2 per cent) guaranteed to Ogun and Bayelsa states, respectively.

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.
According to the CBN Governor, Mr. Godwin Emefiele, the Bank has created 2.5 million jobs across the country.

Also, no fewer than 850,000 smallholder farmers had benefited from the scheme as N160 billion had been disbursed as of last December.
Emefiele, said the programme has been effective in correcting Nigeria’s imbalances, and suspending the bank’s policy suite will spell doom for Nigeria.

“In the agriculture sector, the Anchor Borrower Programme has ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of rice, supplying key markets in neighbouring countries.
“As at October 2018, a total number of 862,069 farmers cultivating about 835,239 hectares, across 16 different commodities, have so far benefited from the Anchor Borrowers programme, which has generated 2,502,675 jobs across the country,” Emefiele added.

Emefiele assured that the ABP would be used for the production of other farm produce within the country, including palm oil and fisheries.
“It is in light of the success of the Anchor Borrowers Program with regards to cultivation of rice and maize that the Monetary Policy Committee in its last meeting on the 21st of November 2018 recommended that the Anchor Borrowers program be applied to other areas such as palm oil, tomatoes, and fisheries to mention a few,” Emefiele added.

“Our efforts at supporting small-scale farmers and SMEs is based on our awareness of the critical role they can play in supporting our economic recovery and growth, as well as in creating job opportunities for millions of Nigerians.”
The ABP 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. The programme is hinged on three pronged approach namely the out-grower support programme; training of farmers, extension workers and banks; and risk mitigation.

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 over emphasised. 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.
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, also said the government’s policies have started yielding fruits, particularly in the area of rice production.

He said: “It is now evident that we are on the path to becoming self-sufficient in rice production. Indeed, I have no doubt in my mind that Nigeria can be a model for Africa and the world if we join forces and act on evidence.”
According to him, agricultural productivity is currently boosted through time provision of fertiliser and other inputs.
“We are also working on the reduction of post-harvest losses and expansion of market access. The policy thrust is now focusing on deepening financial sector engagement with the agribusiness value chains,” he said.