Commodities:  Oil & Oilseeds Feed & Meal Grains Pulses Spices Sugar & Gur Fibre Plantation Others
You Are Here: Home > Commodities > More News
More Articles...
Danger with government’s domination of rice production, by Jerry Uwah

Danger with government’s domination of rice production, by Jerry Uwah

June 13, 2018


Nigeria may gradually be returning to the days when agriculture was the fulcrum of the economy.Considerable strides are being made in key areas especially rice production.Audu Ogbeh, Nigeria’s minister of agriculture insists that rice imports have been reduced by 90 per cent.

Ogbeh is so elated by increase in rice production that some months ago he talked his way into trouble with the Thai ambassador to Nigeria.


Ogbeh had boasted that rice production in Nigeria had reduced imports so drastically that some rice mills in Thailand were being shut down.The Thai ambassador argued vehemently that Ogbeh had lied.He demanded an apology but Ogbeh responded with graveyard silence.The dispute died a natural death without anyone knowing who was telling the truth.The Thais might not have shut down their rice mills, but Africa’s largest economy is just beginning to learn the ropes on self-sufficiency in food production.If rice importation has dropped by 90 per cent, one could therefore argue that Nigeria now produces more than five million out of the six million tons of rice it consumes annually.That is good news.However, the bad news about the boom in agriculture is from the method of farming, ownership structure of most of the seemingly successful agric ventures, low crop yield and the source of funding the sector.The unsettling news about the boom in rice production is that most of the big rice farms are owned and operated by state governments.Very few in the private sector are involved in big time rice farming.Lagos State government produces Lake Rice in collaboration with Kebbi state government.It is also building a giant rice mill.Ogun State is working out a similar venture with another northern state government.


What is probably the largest rice seedling facility in the country is being built by the Cross River State government.The danger with government’s ownership of the rice farms is that the three tiers of governments in Nigeria are very bad businessmen.Successive governments often pursue different programmes to the detriment of what their predecessors started.A classic example of that is the Obudu Ranch Hotel in Cross River State which the administration of Donald Duke developed with N10 billion loan.Duke developed the ranch to international standards.


The only cable car in Nigeria was installed in the ranch.Today Obudu Ranch is a shadow of itself.Duke’s successors apparently did not share his idea. They left the ranch to deteriorate.Even the cable car has been grounded.A similar thing could happen to the rice farms and mills now spear-heading Nigeria’s campaign for selfsufficiency in food production.Successive administrations might abandon the farms or mismanage them to the extent that they could no longer be sustained.The ultimate is for the private sector to be involved in the massive food production process.The federal government agricultural development programme is largely tailored to support the micro-farmer with small loans of about N1.2 million per beneficiary.The target is the funding of 100,000 farmers in each state.They would each cultivate about five hectares of land.The federal government hopes to create millions of jobs from that venture while it also tackles the nation’s food security problem.If it is well managed and implemented religiously, government could kill two birds with one stone from the scheme.However, Nigeria’s food insecurity could only be tackled when the private sector is empowered to embark upon massive mechanised farming.


Many banks would not touch Nigeria’s large scale farmers with a 10-foot pole because the high risk in the business makes them endangered fund seekers.Investors in Europe and the United States are eager to invest in Nigeria’s agricultural sector.Ironically, Nigerian farmers are not approaching the foreign investors with feasible investment packages.A foreign investor with an investment portfolio of $300 million would not listen to a request for $500, 000 from a Nigerian farmer.The cost of monitoring an investment of $500, 000 might be the same as that for monitoring an investment of $10 million.Foreign investors prefer big ticket projects which Nigerian farmers are not well groomed for.The next problem is the high cost of production and low crop yield in Nigeria’s agric sector.


Production cost in Nigeria’s agric sector is so high that Thai rice farmers would pay high cost of freight and 70 per cent tariff and still enter the Nigerian market with their rice competing favourably with Nigerian rice.The high cost of production is a factor of the primitive method of farming that accounts for 60 per cent of the food produced in the country.The nations that feed Nigeria with rice, palm oil and chicken all depend heavily on mechanized farming.Nigerian farmers still depend on climbers to harvest palm fruits on trees some 50 feet into the sky.Malaysian farmers use mechanical devices that allow the operator to harvest palm fruits from the ground.The cost of an egg has surged from N30 to N50 because we import the yellow corn used for blending chicken feeds.These and the high cost of funds are issues government must address to sustain the boom in agriculture



Technical Research
Wednesday, May 22, 2019
MCXAluminium MiniMay19123.75123.95122.15122.3
More Futures prices..