Nigeria’s inconsistent rice import policy, catalyst for smuggling –Olam

Mr. Ade Adefeko

The Federal Government has in the last four years changed parboiled rice rice import policy more than three times thereby making investors in the sub sector and other stakeholders to feel that such a fiscal regime is doing more harm to the economy than good. Head Corporate and Government Relations, Olam Nigeria Limited, largest operator in the nation’s rice value chain, Mr. Ade Adefeko, in this interview with FRANCIS EZEM, says frequent changes of the commodity’s import policy is one of the factors aiding rice smuggling into the country, among other issues.


Late last year the Nigeria Customs reversed the policy on rice imports through the borders. How does this impact on your business and investment projections on the commodity?
The Land borders are very porous. Monitoring all the imports through Land Border is a very uphill task. As per industry reports, the quantity of rice that was discharged in the neighboring ports were much higher than what was declared as imported through land borders. It is not economically viable for Rice to be imported into Benin republic and Niger and pay duties and taxes there and then pay the duty again in Nigeria the transportation cost is also very high as it involves multiple borders.

Yet, we can see that rice from Cotonou/ Niger routes is coming into Nigeria and so it is not difficult to draw the obvious conclusion about the extent of tariff payment on rice imported through land border into Nigeria.

As an expert and a major player, what is your advice to government on how to boost local rice production?
The frequent changes in policy are adversely affecting the industry. It is encouraging smuggling from the neighbouring countries which undermines various investments in rice value chain within Nigeria. There is a substantial gap between production and consumption of rice in Nigeria, which was fulfilled being met through legitimate imports earlier and now the same supply gap is being met by smuggled rice from across the borders.

I am aware you have large rice production farm in Benue State. What is your annual production capacity in terms of tonnage?
Olam has a 10, 000 hectares of farm land in Rukubi Village, Doma Local Government Area in Nassarawa State. We are currently cultivating 4,400 hectares. Presently, we have a state- of- the- art mill with a capacity to mill 105,000 metric tonnes of paddy rice per annum. We have the requisite infrastructure to double this capacity to 210,000 metric tonnes. This is the largest integrated rice farming and milling project in Africa.

Generally, it is believed that your brand of locally produced rice is not sold in Nigeria because you hardly see them in the market. How do you react to this?
Our local rice brand is very much sold in Nigeria. It is called MAMA’S PRIDE. It is available in all leading markets in Abuja, Lokoja, Makurdi, Lafia, Aba, Onitsha, Benin City and others. We sell the rice as close to the farm as possible as there are challenges related to transportation, especially in terms of cost and availability. The rice is available in some markets in Lagos as well.

What are the major challenges posed to rice production locally and what do you think government should do to address these challenges?
There are several challenges and multiple issues to address. One of such challenges in associated with poor yield. Yield has continued to be a major issue in Nigeria because of this, the farmers are not gaining value and hence the acreage under production is not growing.

Another issue is the lack of quality seeds and other agro inputs, which inhibit productivity. There is also problem of non availability of basic infrastructure including roads. This makes the movement of goods from the production sites to the final consumers, as transport cost eats deep into the profit. This is not encouraging. We are also grappling with the challenge associated with the nutrition of the soil, which invariably affects yield and thus profitability.

Also is the lack of irrigation facilities. The Federal Government has to seriously and urgently look into all these aspects of the value chain in the country including those ones that we could not mention in the course of this interview.

 I learnt that there were some farmer cooperative associations under your company, how far have you impacted on them, especially in terms of growing their businesses? We have an out grower of over 4,000 farmers with our company. These farmers been impacted positively in all aspects of farming and increasing productivity by being associated with us.

 We also put in place a mechanism through which we buy their produce at market prices and supply them with inputs. We also aid them in the areas of supplying relevant information that they require in growing their businesses in addition to organising training and enlightenment programmes for them, among several other assistance we render to them.

Do you think Nigeria should be importing rice at this time, given the vast resources that could enhance massive local rice production?
Over the years, experience all over the world suggests that it is hard to legislate on consumer taste and preference. The reality is that Nigeria needs approximately 2.5 million metric tonnes of rice to cover the gap between demand consumption and supply production. To add to this, the consumption is increasing year on year, given the annual increase in the population of the country. So it would take quite a while for the country to produce the quantity of rice to meet local demand.

What is the price range of the brand of rice your company produces locally?
The price of our locally produced brand is dictated by the market. In the last few months the price has been in the range of between N7, 500 to N8, 500 per bag of 50 kilogramme.

It is believe that Nigerians have appetite for Thailand rice. Do you think that Thailand variety and quality of rice can be produced in Nigeria?
Nigeria produces better quality of rice than that imported from Thailand. This is a well known fact.

The Multinational rice importers in the country including Olam have been accused of abusing waiver and quotas, through which the government loses huge sums of money annually. What is your take on this?
There is a misunderstanding and misrepresentation of facts about this issue. We have approached the courts to put things in order on the matter and so we cannot comment on it.