Rice Processing Cost: Consumers To Pay More As Millers Groan

  • Rice millers in the country are currently battling the rising cost of diesel, petrol and erratic electricity supply.   The situation has pushed the...  A rice mill in Kano

    Rice millers in the country are currently battling the rising cost of diesel, petrol and erratic electricity supply.  

    The situation has pushed the cost of processing rice at the mills to an unprecedented level, and this may translate to an increase in the final product in the market. 

    Findings in the market showed that a 50kg of milled rice, which some months ago sold between N25,000 and N28,000, now goes up to N32,000 for some of the popular brands, as at the time of this report.

    For weeks now, power supply across the country has been epileptic and some small scale millers who mostly operate during the day are now forced to stay awake anytime of the night to use electricity anytime it comes.

    Major millers who rely heavily on diesel to run their factories also face exceptional increase as the product has now reached a record high of N600 per litre. In some places, reports showed it goes for up to N650.  

    They said cost of production had increased, leading many of them to suspend production.  

    Alhaji Ali Sarkin Noma, owner of Ganzaki Rice Mill in Jalingo, told Daily Trust on Sunday that a litre of diesel now sold at N600, as against N400 few weeks ago.  

    He said there was also the scarcity of diesel and poor power supply from the national grid.  

    Sarkin Noma explained that consumers of locally processed rice would pay more because of the increase of diesel and paddy rice.

    According to him, they purchase paddy rice from markets across the state and transport fares are up.

    He said a 50kg bag of locally processed rice was sold at N23,500 before the increase of diesel, and now, millers have no option than to increase their prices in order to remain in business.

    Musa Garba, another miller, also told Daily Trust on Sunday that he reduced his production level from 600 bags of paddy rice to about 100 bags daily because of high cost of diesel and poor power supply.

    He said consumers of locally processed rice would pay more if the current trend of high cost of diesel was not addressed.

    A large-scale irrigation farmer, Yahaya Mafindi, said many rice farms had dried because farmers could not afford to buy both diesel and petrol to water their rice farms.

    Yahaya Mafindi stated that rice millers got supply of paddy rice from irrigation farmers this time and many farmers are unable to fully cultivate their farm, which means there will be less paddy rice for the millers.

    Meanwhile, findings revealed that a liter of petrol is now sold at N300 while diesel is sold at N600 in Jalingo.

    In Kano State, it was gathered that all the three categories of rice mills operating in the state are virtually affected by the ongoing fuel scarcity. The mega, medium and small scale mills in the state are all complaining about the current fuel scarcity.

    According to the proprietor of Premier Rice Company, Ilyasu Nazifi, an engineer, many rice mills are running on diesel, which is currently selling at N500 per litre, which he said had made production very expensive. He explained that the fuel hike in price and its scarcity had affected not only production but other logistic aspects of the rice value chain.

    He further revealed that the price of rice had not changed as rice has been one of the main stabled commodities in the country. He, however expressesed worry that rice mills would be left with no option than to increase the price should the hike and scarcity persist longer than necessary.

    He called on the authorities concerned to arrest the situation before it gets out of hand and result in an increase in the price of milled rice.

    It was also revealed that most rice mills across the state are really finding it very difficult to keep the business going due to issues surrounding the current fuel scarcity.

    Malam Hannafi Alhassan, an operator of a small rice mill in Mariri Kumbotso Local Government of Kano State, said he had to increase the processing charges per bag of paddy to N3,000 from N2,500 due to the hike in the prices of diesel and petrol, as well as its scarcity. 

    Another small-scale rice mill operator Habu Baffa Kiru said he had stopped milling for the mean time pending the availability of diesel, as he claimed he could not afford to continue milling with the current price of diesel.    

    The situation is not different in Katsina State as the situation resulted into lean revenue for the millers in recent months.  

    Alhaji Mustapha Mu’azu Maiauduga, the manager of Beto Rice in Malumfashi, said that unlike before, people were less patronizing their packaged rice ostensibly because of the price.  

    “The assumption of every Nigerian is that when rice is locally produced and milled, its price has to come down, but unfortunately we cannot sell a 50kg of milled rice less than N22,000 due to surge in the cost of production. Diesel is now over N400 a litre and there is no consistent electricity supply to operate our machines,” he said.

    Another rice miller in Funtua, Abdulrazaq Isma’ilm said because of high cost of production they had since resolved to operate as service providers. 

    “We now don’t mill rice for sale directly here; rather, we mill for individual consumers and rice sellers who bring in their paddy. This, in our consideration, is more profitable to us as we only charge N2,500 per bag of paddy rice. We have regular customers across Faskari, Kankara, Funtua, Bakori and Danja local government areas,” he said.

    On whether they operate on diesel or electricity, Abdulrazaq said for the business to be sustained one would be on electricity, otherwise cost of diesel would force the business to fold up.’

    Daily Trust on Sunday observed that people from far and near now prefer to go for local rice sections of Dandume, Funtua or Bakori to make choice of the stable instead of going for the packaged one which now costs above N22,000 per 50kg.

    Rice millers in Kaduna State are also expressing worry over what they described as high cost of production due to poor and epileptic power supply, as well as the scarcity and high cost of petrol and diesel.

    Our correspondent reports that small-scale processors who rely on firewood for the parboiling process of paddy rice say a ban on tree felling in Kaduna State has equally impacted on production cost which has resulted in the high price of rice in the market.

    Imam Saidu, who operates a local rice mill in Kaduna, described the situation as sad, saying that rice, one of the major staple foods in Nigeria, is now becoming unaffordable for low income earners. 

    He said the rice sector, like other agricultural sectors, was debased by security and infrastructural challenges, as well as economic challenges.

    “Our farmers are unable to produce the required paddy rice because of the insecurity in most parts of the rice producing states. Now, with the little we are able get from farmers, the cost of processing the rice is now high because our machines work on diesel since the government’s power is inefficient and unreliable, especially at the moment,” he said.

    Daily Trust on Sunday gathered that epileptic power supply, coupled with scarcity and high cost of petrol and diesel, has surged the price of rice in the market. Our correspondent gathered that a bag of 50kg of rice which sold at N22,000 late January is now sold at N27,000. 

    Also speaking in Kaduna, Alhaji Idris Sarkin Alhazan Rigachikun, a local miller said, “We used to process and bag each 50kg of rice at N2,200, but we now do it at N3,000. There is no electricity, so we have fallen back on the generating set, and you know the present situation in Nigeria.”

     

     

     

  • ‘How investments in agric is boosting quality rice production’

  • Anchor Borrowers Programme ( ABP ) The Central Bank of Nigeria (CBN)-led Anchor Borrowers’ Programme (ABP) was created to increase banks’ financing to the agricultural sector and create economic linkage between smallholder farmers and reputable large-scale rice processors. Private sector investments in rice farming has also created opportunity for consumers to get the best output from the market, writes COLLINS NWEZE Samuel Oyetunde, a cashier at a new generation bank, paid his mother a routine visit. Upon his arrival, he was served his favourite meal of rice, native stew and chicken. Samuel spooned the food,   and the taste exploded on his tongue. As he closed his eyes to savour the delicacy, the unbelievable happened. His teeth crushed some stones and sand hidden in the rice. Samuel was filled with disbelief and sadness. Unfortunately, many of consumers can identify with Oyetunde’s plight. Subconsciously, consumers make themselves vulnerable by patronising loose rice sold in open basins in neighbourhood stores and open markets. The danger is that the loose and unpackaged rice sold to consumers in basins are exposed to stones, rodents, insects and importantly easily contaminated by other food items as well as unfavourable sanitary conditions. Moses Abiodun, a farmer, who has benefited from the Central Bank of Nigeria’s (CBN’s) Anchor Borrowers’ Programme (ABP) funding for rice farming in various states, said the solution to this was to buy packaged rice. He said over N620 billion had been released for the ABP in over six years of implementation with consumers demanding packaged rice. through the transfer of bacteria or other microorganisms from other substances to rice. There are three main types of cross contamination: food-to-food, equipment-to-food, and people-to-food. “For instance, putting contaminated foods and non-contaminated foods under the same roof can result in food-to-food cross contamination. This allows harmful bacteria and fungi to spread and populate. Secondly, it is a known fact that bacteria can survive for long periods on surfaces like storage container and basins, when they are not washed properly or unknowingly contaminated with bacteria resulting in equipment to food contamination,” Abiodun explained. Furthermore, Adigun said people could easily transfer harmful bacteria from their bodies or clothes to loose and exposed rice in basins. For example, a person may cough into their hand or touch other food items in the store and continue to sell loose rice without washing their hands in between. This also occurs when several consumers sample the rice by handling it before purchase. “Cross contamination can have serious consequences as it can compromise consumer health and safety. Proper food safety practices like rice packaging can significantly reduce risk of cross contamination,” he stated. Another farmer and Managing Director, CountryMade Farms Limited, Timothy Nnodim, said some rice manufacturers  complied with the National Agency for Food and Drug Administration and Control’s (NAFDAC’s) regulations and international food safety standards to protect the integrity of their brands and ensure quality and wholesome rice, but some rice traders in the open market continue to undermine these efforts with loose rice. He said: “What then is the way forward? The answer lies in making informed decisions to purchase only quality, packaged and hygienic rice like Big Bull rice. Big Bull Rice is an indigenous, premium quality parboiled rice. It is sortex-cleaned, stone-free and has a high-swelling index. It is produced in a state of the art automated rice milling factory, which has eliminated handling to the barest minimum hence giving you rice produced in the highest hygienic condition. “With Big Bull Rice, you are assured of good quality, safety and the great taste of homegrown ingenuity. It is  available in open markets, neighbourhood stores, supermart, Modern Trade, among others. in varying SKUs (50kg, 25kg, 10kg, 5kg, 2.25kg and 750g) to fit consumers’ preference.”
     
  • Rice Production In Nigeria Increases To 5.8m Tonnes

  • Alhaji Aminu Goronyo, President Rice Farmers Association of Nigeria (RIFAN) has said annual rice production in Nigeria has increased from 5.5 million tonnes in 2015 to 5.8 million tonnes in 2017. Goronyo disclosed this on Wednesday in Abuja. He said that in 2015, Nigerians spent not less than N1 billion daily on rice consumption, adding while spending had drastically reduced, consumption had increased because of increased local production of the commodity. “The consumption rate now is 7.9 million tonnes and the production rate has increased to 5.8 tonnes per annum,’’ he said. The RIFAN president said that the increase was as a result of the CBN’s Anchor Borrowers Programme (ABP) with a total of 12 million rice producers and 4 million hectares of FADAMA rice land. Goronyo said that the programme since inception had created economic linkage between Small Holder Farmers (SHF) and reputable large-scale processors, thereby increasing agricultural outputs and significantly improving capacity utilisation of processors. The ABP was launched by President Muhammadu Buhari on Nov. 17, 2015 in Kebbi, aimed at creating a linkage between anchor companies involved in the processing and SHFs of the required key agricultural commodities. The fund was provided from the N220 billion micro, small and medium enterprises development fund. ABP evolved from the consultations with stakeholders comprising federal ministry of agriculture and rural development, state governors, millers of agricultural produce, and smallholder farmers to boost agricultural production. Goronyo said under the ABP, RIFAN in the next 24 months would commence rice importation to West African countries as the necessary arrangements had been put in place. “For self sufficiency, adequate and enough paddy for production ABP, which started in Kebbi state has been extended to 26 states. “As a step further, RIFAN is in collaboration with some agencies to replicate the CBN APB programme in some states to increase production,’’ he said. He said that RIFAN had moved a step ahead not to be caught in the web as production was being complemented by adequate provision of farm implements and inputs.
  • Stallion Farms Targets 1.5 Million Tonnes Rice Production yearly

  • . . . Bags Outstanding Rice Value Chain Award by CHIKA IZUORA, Lagos Stallion integrated rice value chain approach has been bequeathed with the Feed Nigeria Summit “Agro Processor of the Year Award” at the just ended Nigeria Agriculture Awards. The award, which is its second, after the IBCA-“Outstanding Projects and Business Leaders of the Year Award” recently bestowed on the company in March was in recognition of Stallion Popular Farms and Mills Limited concerted efforts at integrating rice value chain in Nigeria agrarian economy as well as its dogged resolves to humanize farmed rice and self-sustainability in food production. “We owe this accomplishment to President Muhammadu Buhari’s leadership aptitudes and his agrarian-business agenda, Stallion Popular farms and Mills Group Director Hapreet Singh remarked.” He said the farm is leveraging on the policy impetus of the Federal Government’s Agricultural Transformation Agenda to bring sustainable and scalable growth to farmers. The farm’s effort to increase cultivated rice yield began in 2007 and has since been at the forefront of paddy agronomists in the country, working tirelessly to enhance rice production through scientific agricultural practices. Singh, while receiving the award, on behalf of the farm at the occasion in Lagos, said it hopes to increase locally farmed rice to 1.5million tonnes yearly from 450, 000 metric tonnes. He said the farm has already deployed enhanced milling activities and set up more milling facilities through structured farming techniques. “Our vision has always been to preserve and enhance rice production in Nigeria by ensuring genetic integrity of seeds, encouraging scientific agricultural practices and promoting world-class processing techniques to emerge as industry benchmark for product quality,” Singh said.
  • Why Nigeria-produced rice is more expensive than imported ones – Agri Minister

  • Bags of rice The Minister of Agriculture, Audu Ogbeh, on Tuesday gave reasons why imported rice is still cheaper than locally produced rice, despite government efforts. Mr. Ogbeh, while responding to questions at a Town Hall meeting in Abuja, said one of the major reasons was that most of the imported rice was subsided by the foreign governments. He said most of the imported rice are from Vietnam, India and Thailand. Thailand subsidises the export of rice, the minister said. He explained that the imported rice arrive at about 9,000 per bag, and are then sold at about N13,000 per bag to consumers unlike the local rice sold at about N16,000 per bag. Mr. Ogbeh also lamented the interest rates for farming loans. “Our interest rates in this country is higher that the interest rate in most parts of the world,” he said. Another reason for the high cost of local rice, the minister said, is the price of diesel to run generators in the farms. “Diesel went from N180 per litre to N300,” he said. The minister said the federal government was very concerned about the high cost of local rice and he would be having a meeting with Acting President Yemi Osinbajo and Finance Minister Kemi Adeosun to discuss rice prices among other matters. The federal government through its Anchor Borrowers Programme has invested billions of naira in assisting mainly local rice farmers, with rice being the country’s most consumed food. “In the next one month, you’ll have Nigerian rice in the shop at the best price we’ve ever had,” the minister said.
  • World Bank boosts Abakaliki rice with financial aid

  • To further boost food production in Nigeria, the World Bank, under its Growth and Employment (GEM) scheme, has provided business support for the production of Abakaliki rice.

    Under the arrangement, the World Bank is providing financial support to Ainotrans Energy, producers of Abakaliki rice, to enable it engage the services of vendors that will aid in carrying out its marketing drive. The World Bank GEM project is one of the economic empowerment initiatives of the present administration.

    According to the CEO, Ainotrans Energy, Innocent Mbey, “Abakaliki rice is high quality rice at affordable price. Abakaliki rice is purely natural, 100 per cent local, with very high nutritional value, and 100 per cent stone and husk free. Our rice is produced using the very best practices available and the World Bank support will even help us provide quality food to Nigeria’s teeming population.”

    The World Bank said that a mechanism to ensure full implementation of objectives contained in the selected proposals was already in place while a comprehensive monitoring and evaluation work plan had been designed.

    The idea behind the GEM programme, the World Bank noted, “is to further support the presidency’s drive to celebrate and empower the most promising and highly scalable indigenous technology start-ups that are providing innovative solutions to local challenge.

    The GEM project requested for submission of business proposals from eligible applicants of the AVDD 2016 programme of which 289 applicants were screened before the final 81 were eventually picked after a rigorous process of vetting.

  • Forces against Nigeria’s rice revolution

    Efforts to foster sustainable rice production gain traction

  • Nigeria has long relied on imports to help supply its significant rice demand; however, efforts to support small-scale famers through training and improved access to credit are expected to boost domestic production and the overall performance of the agriculture industry. To help meet national demand of around 5.2m tonnes in 2016, Nigeria imported 2.3m tonnes of rice last year, according to the UN’s Food and Agricultural Organisation (FAO). This heavy reliance on external sources has seen Nigeria – currently the world’s second-largest importer of the grain after China – import around 17m tonnes of rice in the last five years, with the country spending an average of $5m per day on shipments of the grain, Audu Ogbeh, minister of agriculture and rural development, told international media earlier this year.  In order to reduce the country’s trade bill and improve self-sufficiency, the government has been working to roll out new training programmes and cultivation techniques to improve yields, as well as lowering the costs of access to credit and equipment.

    Sustaining the nation

    The most recent move came in late March, when the FAO started training 300 farmers across Nigeria in paddy production technology and seed production.  The scheme is being conducted under the Partnership for Sustainable Rice Systems Development in Sub-Saharan Africa – an initiative being pursued by both the FAO and the Côte d’Ivoire-based research organisation the Africa Rice Centre.  The states of Ekiti, Edo, Anambra, Abia, Nasarawa and Jigawa have been chosen for the project, with 50 farmers from each region to benefit from demonstration plots that will be established to model best practices in rice farming. 

    External support 

    To reduce associated costs in rice farming the World Bank also announced earlier this month that it would be establishing equipment-hire centres for rice and tomato farmers in Plateau State, with farmers only required to pay for 35% of the cost of the hire.  The plan will be part of the bank’s third national FADAMA project, a broader programme aimed at reducing poverty and increasing sustainability among farmers. The FADAMA programme has already helped rice producers in Plateau State, providing N99m ($321,000) worth of funding to 11 rain-fed rice production clusters. The World Bank’s International Development Agency also confirmed further support for the sector in March, when it announced it would be extending a $200m loan with a maturity of 25 years to Nigeria. The credit aims to tackle limited access to supply chains among the nation’s farmers, as well as low levels of productivity and technology uptake.

    Cheap government loans yield success

    Another way the government is trying to reduce its high import bill is through the Anchor Borrower’s Programme (ABP), a scheme created by the Central Bank of Nigeria (CBN) that aims to improve the commercial sustainability of smallholder rice and wheat farmers. Introduced as a pilot initiative in late 2015, the ABP encourages domestic production by facilitating access to financing and supplies such as tractors and fertilisers, while also improving links between smallholder producers and anchor companies involved in processing.  Under the scheme, farmers with at least 1 ha of land qualify for loans at 9%, well below the benchmark interest rate of 14%. The CBN is funding the programme using N40bn ($130m) allocated from its N220bn ($720m) Micro, Small and Medium Enterprise Development Fund.  The ABP has shown initial signs of success, with total unmilled rice output growing 17.4% between 2014 and 2016 to 7.85m tonnes, according to the National Bureau of Statistics (NBS).  “Government policies are rightfully targeting self-sufficiency; and the recent strong improvements may indicate that, with steadfast efforts, Nigeria would be well on its way to be able to provide for itself,” Mukul Mathur, country head for Olam Nigeria, told OBG. 

    The price of importation

    Substantial demand for locally produced rice already exists and could grow further as imported rice prices have continued to rise at a rapid pace in recent years.  Since the CBN implemented restrictions in 2015 on the amount of foreign capital that can be spent on certain imports, of which rice is one, the price of the grain has more than doubled.  According to the NBS, the average price of 1 kg of high-quality imported rice in March stood at N268.64 ($0.87), representing a month-on-month increase of 1.98% and year-on-year growth of 55%. Coupled with the managed float of the naira and its related depreciation, this has fed into a broader rise in the food sub-index, which as of March stood at 18.4%, up from 12.7% in March 2016 and 9.4% the year before.
  • Metro Nigeria Customs Bans Rice Imports Through Free Trade Zones

  • The Nigeria Customs Service (NCS) has placed a ban on the importation of rice into the country through free trade zones. Customs PRO Mr. Joseph Attah, said the ban was needed as some people were taking undue advantage of the trade zone, which allows them to import some quantity of rice. “So, if we block the land borders and allow operators of free trade zone to bring in rice through the seaports, then our efforts at the land borders will be in vain,” he said. He added that the service is improving its anti-smuggling operationss.
  • Rice farming in Nigeria – 10 tips to start it