Sunday, December 1, 2013

Price of rice goes up, scarcity looms as poor quality floods market

Price of rice has hit the roof and low quality brand has flooded the
market just as farmers have threatened to stop rice cultivation
according to Tunji Owoeye, Chairman of RIMIDAN (Rice Millers Importers
Association of Nigeria).
He said that farmers have threatened to stop production of rice as the
Millers/ Processors are no longer buying from them. The Processors
stopped buying because they could not compete with the smuggled
imported rice. The price of rice is soaring at a very alarming rate.
Presently, a good brand costs N13, 000 and above. The fear is that
prices of rice will further go up as Christmas and New Year
festivities approach. While smuggled imported rice cost about N10, 000
in the open market locally produced rice cost as much as N13, 000. The
quality of the smuggled rice is of low grade.
According to Financial Vanguard market survey since the imported rice
in the market do not go through official channels like the Customs and
Standard Organisation of Nigeria (SON), all imaginable types are now
smuggled in. It is a situation of "anything goes"that is available in
the markets place now; most of them are re-bagged in Nigeria and of
very low quality standards. A lady, Mrs. Toyin Adegbenro, who does her
shopping at Agege market axis, complained that rice in the market has
become tasteless, no matter how well the stew or soup is prepared. The
fall out of current policy on rice policy therefore is an influx of
sub standard rice into the Nigerian market and this is very dangerous
to the health and well being of the Nigerian consumers.
FG to rethink policy
THERE is however strong indication that the Federal Government may
have a rethink about the high tariff on rice. This indication was
given by the Chairman, Presidential Committee on Trade Malpractice,
Alhaji Dahiru Ado-Kurawa, who said Government would soon review tariff
on rice, to tackle smuggling and revenue loss.
Ado-Kurawa said in Lagos that the planned downward review was aimed at
reducing the level of smuggling of the commodity from Benin Republic.
He observed that the Federal Government introduced the rice policy of
110 per cent duty and levy in January, to boost local rice production.
"The Federal Government will likely adjust the policy because it has
escalated the influx of smuggled rice from neighbouring countries.
Benin Republic is one of the highest importers of parboiled rice, the
country that ordinarily imports about 230,000 tonnes per annum now
imports about 2 million tonnes. The two-million-tonne parboiled rice
imported by Benin is all smuggled into Nigeria," the chairman said.
He recalled that the stakeholders met recently in Abuja and advised
the Federal Government to review the rice policy and sift out the grey
areas. This, he said, was to ensure that the government's quest to
halt rice import was achieved. Ado-Kurawa lamented that Nigeria lost
over N2 billion to smugglers through land borders.
According to him, Nigeria that used to be the highest rice importer,
had suddenly relinquished the position to Benin Republic.
Rice farmers say smuggling will hinder success of rice importation policy
Meanwhile Chairman, Rice Farmers Association of Nigeria (RIFAN),
South-West zone, Mr Olusegun Atho, has said that unless smuggling is
tackled, the current policy on imported rice will yield no result. He
identified smuggling as the major factor that would hinder any ban on
the imported commodity, just as it had adverse effect on local rice
According to him, "Government needs to come out and deal with the
issue of smuggling, in order to encourage local growers.''
The RIFAN chairman also advised the government to provide adequate
funding by way of grants or loans to farmers. "These factors are very
important and must be put into consideration, before the proposed ban.
If these things are not in place, the ban cannot be realistic. Until
when government begins to do something about it, that is when we can
see the seriousness."
Atho also appealed to government to construct more dams and provide
mini-pumping machines for farmers to prepare them for irrigation
farming as well as introduce modern rice production technology. "If
government can provide all these to farmers, that is when government
can boast of self-sustainability."
Local rice farmers to be given incentive
Meanwhile, the Federal Ministry of Agriculture and Rural Development
also said that local rice farmers would be given incentives for
increased rice production.
Dr Kayode Oyeleye, a Special Assistant to the Minister; Dr Akinwumi
Adesina, said that the gesture was to make the price of locally
produced rice competitive to the imported variety. Oyeleye said that
the tariff on imported rice remained high because the Federal
Government was encouraging the consumption of locally produced one.
The special assistant also said that this would also strengthen the
economy of the country as importation of rice would reduce.
Nigerians applaud policy but
Much as Nigerians applaud the efforts of the Minister and other
Officials of the agric ministry, in their attempt to boost and
encourage local production; they deplore the hasty introduction of the
high import tariff when a thorough analysis of the situation on ground
has not been done. They argued that it is dangerous to play politics
or score cheap political points with issues that affect the masses
It will be recalled that Vanguard on October 7, 2013 did a report on
the situation of rice business in Nigeria. The report highlighted the
fact that importers have stopped bringing in rice through the Nigerian
sea ports because of the high import tariff regime and that all brands
of rice in the Nigerian market are smuggled in through the Nigeria –
Benin land borders, even though import through the land route is
officially prohibited. The report also predicted that the situation
will result in scarcity of rice during the "Ember months" as smugglers
and local producers will not be able to cope with demand since rice
has become Nigeria's most staple food.
The local production that the tariff was meant to protect is also
affected by the smugglers activities. The gainers are the smugglers
and the Customs officials who will have to be settled at the various
border points If the current tariff is to work, the Customs Department
must put a stop to the activities of smugglers. This appears to be a
Herculean task for them to perform. If the customs are unable to
perform, the land border should be open to all so that the government
can earn duties, instead of allowing a few unscrupulous elements to
make a gain from the situation.
In the interim, stakeholders say that government can reverse the
import tariff back to its previous position, so that importers can
start bringing in rice. This will discourage the activities of the
smugglers as it will not be profitable for them to bring in rice
through Benin, as the tariffs will now be almost at par with what
obtains at the ports.
Way forward
At present local production is not strong enough to have any impact on
rice importation, the quantity produced is not significant in
percentage terms. Mr. Tunji Owoeye, suggested that the government
should form a body of key stake holders he termed" Chain Drivers."
They are to work together with key government departments to set a
realistic time table for local production. There should be a
monitoring team to determine the true position of local production and
the actual quantity of local rice that is going into the markets. When
Vanguard visited the markets in October, it did not find any local
brand of rice on display for sale.
It is clear that there is a great disparity between what is being
quoted as local production/importation and the reality on ground.
Right now, the market is in crisis; how does the common man get rice
to eat this December? The government should immediately set machinery
in motion to facilitate urgent importation at an encouraging tariff
rate to importers. This will serve as an ad-hoc measure for sufficient
rice to be available in the market during the season. After the
season, the Minister can assemble a committee of all stakeholders in
the rice business to fashion out a way forward.

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