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ANALYSIS: Why Nigeria’s Border Closure May Worsen Cost Of Local Rice - Business - Nairaland

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ANALYSIS: Why Nigeria’s Border Closure May Worsen Cost Of Local Rice by Shehuyinka: 2:06pm On Oct 29, 2019
SINCE the Federal Government launched a border closure policy in late August, the decision has triggered mixed reactions from Nigerians, neighbouring countries and regional bodies.

Farm produce from neighbouring nations such as Benin Republic, Togo, Ghana meant for the Nigerian market rots away daily due to the government’s policy. And the cost of food items in Nigeria, particularly rice, is on a steady rise.

For instance, prior to the land border closure, a 50kg bag of rice that was sold at N13, 000, now goes for N25, 000.

As at 2011, Nigeria annually spent N24.5 trillion importing food items into the country. Five years after, a different report put the figure of four major imported commodities – Wheat, Rice, Sugar and Fish at $11 billion (4 trilliion). Experts have argued that Nigeria’s fertile soil places it at advantage to grow rice in over 18 states across the country, thus feeding itself with the commodity which has an annual estimated import figure of N356 billion.

For reasons partial border closure appears to be the right decision, the above figure is invariably assumed good enough to create local jobs. Rather, what we have are continued job exports through persistent food imports. Former Ministers of Agriculture and Rural Development, Dr. Akinwumi Adesina and Chief Audu Ogbeh, as well as former Agriculture Minister of State, Heineken Lokpobiri, have repeatedly claimed rice and frozen foods illegally imported through the land borders lack good nutritional value compared with local varieties. They argued further that such imports keep crippling local capacity and government efforts to promote farming, especially among the youth. Ironically, more than 18 states from the 36 across the country have the potential to grow rice.

Some of the states include Kebbi, Ogun, Kaduna, Adamawa, Sokoto, Kano, Katsina, Cross Rivers, Ebonyi, Benue including the Federal Capital Territory (FCT) to mention but few.

Most importantly, the sector has significantly enjoyed the attention of repeated administrations either in terms of funding or policy. Aside from Levy and Excise Duty-free tariff for agricultural commodities, the sector has enjoyed World Bank loans through the FADAMA projects and recent FADAMA Additional Funding I and II. The CBN, as at April 2019 says it has so far disbursed N174.48 billion to farmers via the Anchor Borrowers Programme (ABP). And since the border closure, the federal government boasted to have raked in N1.4 billion and arrested 319 suspected smugglers.

But, despite these interventions and the recent land border closure, believed good enough to ensure self-sufficiency in rice production, the nation might continue to witness higher costs of rice except deliberate and sustained actions are taken in selected areas. The ICIR identifies these to include farm mechanisation, extension services, subsidy for farmers such as the Growth Enhancement Support Scheme (GES), establishment of more rice milling centres, improved finance – single-digit interest rate; banks until lately have been recalcitrant to lending to farmers and even those who do do so at high-interest rate; addressing infrastructure deficit and awareness creation on insurance or early warning system against flooding or natural resources that could affect farm harvests.

Statistics have shown that Nigeria’s large population is fed by subsistence farmers largely in rural communities. Majorly, 80 percent of rice grown in the country which is about 3.7 million tonnes is produced by smallholder farmers while the remaining 20 percent is cultivated by commercial farmers. Yet, local consumption of staple food stands at 6.4 million tonnes as of 2017.

Invariably, this implies an almost 50 percent deficit in local consumption. Cultivation has also been manual, usually through the use of cutlasses, hoes and other crude equipment; hence the level of production output. As such, Nigeria clearly has a high deficit in farm mechanisation, a factor threatening local rice sufficiency target.

A 2017 report from the PriceWaterCoopers (PWC) titled Boosting Rice Production through Increased Mechanisation revealed that agricultural mechanisation in the country has remained so low at 0.3hp/ha unlike 2.6hp/ha in China and 8hp/ha in India.

The report further put the estimated figure of tractors in the country at 22,000 farm machines, relative to 1 million in China and 2.5 million in India – all top rice-growing nations.

“We estimate that increasing the mechanisation rate in Nigeria from 0.3hp/ha to 0.8hp/ha in the next 5 years, can double rice production to 7.2 million tonnes. To achieve this, we estimate that Nigeria will need to at least triple its current stock of machinery over the same period,” the report says.

READ MORE: https://www.icirnigeria.org/fisayo-soyombo-and-the-legal-propriety-of-prosecuting-an-undercover-journalist-a-dialogue/

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