The Christmas season is usually a time of joy and celebration, but for Nigerian rice producers, it's a different story. The recent crash in rice prices has left them feeling disappointed and concerned about their future.
Peter Dama, a rice miller and the National President of the Rice Millers Association of Nigeria (RIMAN), shares his frustration. He explains that while consumers are benefiting from lower prices, local producers are suffering significant losses. Dama highlights the import duty waiver granted to select importers as the main culprit, resulting in an influx of imported rice and a subsequent price crash.
"Go to any market, and you'll see rice everywhere," Dama says. "We've always advocated for stopping rice importation, especially with these import waivers that flood our markets and drive down prices."
As Christmas approaches, rice prices have dropped by at least 30% compared to the previous year. A 50-kilogram bag of rice now sells for between N55,000 and N70,000, a significant decrease from the N105,000 it fetched in 2024.
But here's where it gets controversial: Dama and other local producers believe this price crash is not due to increased local production but rather the implementation of waivers that allowed importers to bring in a massive amount of rice, valued at N2 trillion, to tackle food inflation.
The Minister of Agriculture and Food Security, Senator Abubakar Kyari, announced this measure in 2024, stating that the imported grains, including rice, would help stabilize prices. However, the impact has been detrimental to local producers.
Local farmers and millers, who have invested heavily in the sector, are now struggling to compete with importers who can offer cheaper, duty-free rice. Additionally, it's harvest time for farmers, but with the market saturated with imported rice, there's little demand for their surplus rice paddy.
Dama, who has had to shut down his rice mill due to these challenges, emphasizes the high cost of producing local rice, making it more expensive than imported brands. He questions the government's approach, asking if the prices of inputs like petrol and electricity have decreased to support local producers.
"The machines don't run on water or air; they need electricity and fuel, which are expensive. The current situation threatens the local rice industry and could impact food production and affordability in the future," Dama warns.
Jerry Olanrewaju, the Chief Farmer of Africa and Representative of Youth in Agriculture, agrees with Dama's assessment. While welcoming the drop in rice prices, he laments that local producers are not reaping the benefits.
"A year ago, a 50kg bag of rice cost between N80,000 and N100,000. Today, it's sold for as low as N55,000, representing a significant price crash. However, this relief for consumers masks deeper issues within the rice value chain and the agricultural economy," Olanrewaju explains.
He attributes the price decline to various factors, including the strengthened Naira, improved foreign exchange liquidity, and the influx of smuggled rice from neighboring countries. Additionally, reduced consumer purchasing power and speculative pricing by traders have contributed to the current situation.
Olanrewaju emphasizes that local producers are at a severe disadvantage due to high production and processing costs, including rising fertilizer prices, diesel costs, labor, transportation, and mechanization expenses.
"As a rice farmer and processor, our costs continue to rise while market prices drop. Local producers are competing against imported rice from farmers heavily supported by their governments."
Kabir Ibrahim, the President of the Nigeria Agribusiness Group (NABG), describes the situation as a "mixed bag." He believes that unless the cost of inputs is reduced, farmers will be reluctant to return to their farms due to the weakened purchasing power of the Naira.
"The biggest problem is the disparity between farmers crying about low prices and consumers complaining about high prices. Even at these lower prices, it's still unaffordable for many due to fixed salaries."
Ibrahim projects that if the high cost of inputs persists, inflation will worsen, impacting Nigerians negatively. He calls on the Federal Government to declare a state of emergency on farming input prices to ensure sustainable food production and affordable prices.
Dr. Nkechi Okafor, the Chairman of the All Farmers Association of Nigeria (AFAN), Federal Capital Territory (FCT) Chapter, echoes the concerns about the high cost of production in the rice value chain. She points to the influx of imported rice through land and sea borders, causing pain and losses for local farmers.
"The Federal Government has opened the borders, and rice is flooding in. Local farmers are bearing the brunt of these massive importations," Okafor says.
She urges the government to look beyond importation and low prices and focus on long-lasting solutions to support local producers.
Daniel Ijeh, the Chief Executive Officer of EA Daniel Farms, believes the price drop confirms inefficiencies in rice production. He argues that rice farmers should not rely on government intervention but instead adopt best agricultural practices to compete with importers.
"We need to hold rice farmers accountable and encourage them to bring their expertise to the industry. We don't need producers who depend on imports."
As the debate rages on, one thing is clear: the rice industry in Nigeria is facing significant challenges, and finding a sustainable solution is crucial to ensure food security and support local producers.
