The rice palaver: putting the horse before the cart by Alex Agbo

The Federal government of Nigeria in August 2019, banned importation of goods using the land borders. One of the reasons given is that the exercise would help the country to develop its local industries.

According to the government, the ban would spur the local people to produce their own rice, cloth and other essential products. The exercise, which is abrupt, downplayed the critical questions. Let us take the rice industry for example.

Some salient questions include;

1. Why was foreign rice preferred to the locally produced one?

2. What made local rice more expensive than the imported competition?

The correct answers to these questions would provide the framework for a properly thought out policy on rice abundance in Nigeria.

To answer question 1, we talk about quality. There have been complaints across board that the locally produced rice has not shed its stony nature. Apart from this, there is the report that it is not economical. This means that if you boil a cup of it, you would get a cup exactly. Meanwhile the general consensus is that the imported rice gives more value for money.

There is also a question of taste. Consumers agree that you need a higher quantity of ingredients to make the locally produced rice edible than you would need for the same quantity of the imported rice.

These issues are obviously issues of species. The foreign rice is gotten from improved species and seedlings. The milling is with high tech facilities that reduce impurities to the barest minimum.

The second question relates to cost of production. Our farmers do not have access to the equipment that the foreign farmers have. First of all, governments give subsidies to the producers in other countries. This makes their cost of production cheaper than that of our local producers. On the other hand, our local producers struggle with raising capital through usury, selling personal property, high interest loans etc…

By the end of production, the cost of the local output is almost triple the landing cost of the foreign competition.

There is also the problem of infrastructure which adds to the costs of production in no small measure. After such painstaking production process, shipping the output from factory to the market constitutes a very high financial involvement. Local businessmen therefore prefer to import rather than produce locally.

These are just a few of the key factors militating against the viability of our local industries.

What should the government have done first?

1. Make available seedlings to farmers, and I mean improved varieties with higher yields and easy to process.

2. Help farmers with easy loans targeted at improving rice production.

3. If the government can subsidize petroleum products which not all citizens use, why not subsidize rice which almost everyone eats?

4. Develop infrastructure and increase access roads. The current death traps and rivers we call roads are just a turn off for investment.

5. This alone would create a value chain that would put money in the hands of the people who are the eventual consumers of the rice.

About Alex Agbo

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