In 2011, Nigerian President Goodluck Jonathan launched the Transformation Agenda. This agenda was based on how his administration would, using the coordination of the National Planning Commission, deliver projects, programmes and key priority policies between 2011 to 2015. In other words, one could also say it represented a temporal vehicle for harnessing Nigeria’s human and material capital with the hope of keeping the country on course to be one of the top twenty world economies by the year 2020.
While the Transformation Agenda may have its short-comings, one may argue that its somewhat on the right track going by some of the recent trends in the country’s economy. In 2014, with a newly rebased gross domestic product (GDP) of about $432 billion, Nigeria emerged as Africa’s largest economy. Recently also, the U.S Secretary of Commerce, Ms. Penny Pritzker announced that the country now topped the list of the choicest investment destinations for American investors given its unique position in the African continent.
As 2015 draws desperately near, it is essential to weigh in on the progress of the transformation agenda, with the aim of understanding areas where it may be falling short, as well as exploring probable solutions to such challenges. It would be impossible to give a holistic assessment of the entire transformation agenda in a short article, thus, this assessment would be exclusively restricted to the Agricultural Transformation Agenda (ATA).
Under the ATA, the government has invested in cassava, sorghum, cotton, cocoa and rice. Among the above mentioned crops, the federal government took special interest in rice production. This is largely due to two reasons. The first was to curtail the money spent on rice imports from Thailand and India that cost the country around N365 billion annually. Secondly, the policy was intended to drive up employment as massive labour would be required for production.
According to the Minister for Agriculture, Dr Adesina, the country now has the largest rice farm in Africa as a result of bringing to Nigeria the American rice firm – Dominion Farms. And having invested $40million on a 30,000 hectare area in Taraba state, the country looks set to produce about 15 percent of the rice it would normally import into the country.
Current Challenges of Rice Production:
Under the current ATA, the production of rice was projected to create a significant decrease in rice imports, as local production grows to meet domestic demand. In reality however, the signs aren’t looking too good. Rice milling is very labour intensive, particularly with respect to moving stocks of raw materials, intermediary and finished products, and local farmers haven’t been able to cope with paying the high cost of labour.
Also automation, and bulk handling is hampered by capital constraints and a weak technological base. It is no wonder why three years into the ATA, our production capacity totals 800,000 tons per year, and nowhere near matching local demand. Instead, as recent reports suggests, our rice imports in 2013-2014 are estimated to reach around 3 million tonnes – which represents a 3.4 percent increase from the 2.9 million tonnes of rice imports between 2012-2013.
It is worth noting that a well-cultivated hectare of rice can yield about 2.5 tonnes of rice, which is about 100 bags of 50 kilos each. One bag is sold for N7, 000; which implies that about N700, 000 can be realised as revenue on just one hectare. The challenge however tend to be that most farmers are under-funded, and some are unable to afford the expenses that are often incurred by cultivating or weeding the hectares. Despite government efforts, most farmers lack working capital and many can afford only one or two hectares for cultivation when they can easily manage five to fifteen hectares.
Furthermore, there is a complete reliance on rain for cultivation by local farmers, which results in single cropping per year by farmers. Clearly, the lack of investment in more sophisticated farming mechanisms appears to be a contributing factor to low levels of rice production.
Moving Forward: Towards a Rice Revolution?
Moving forward, there’s a need to address current challenges facing rice production in Nigeria. First, it is important to understand why massive investment and planning in the rice industry hasn’t being matched by the required or projected level of progress? Is the ATA too vast? Does the fact that it simultaneously invests in other crops such as cocoa, sorghum, cassava make it impossible for the rice industry to receive adequate funding? Should the federal government consider a deepening approach as opposed to a widening one?
Presumably, there are strong reasons why the federal government (FG) should opt for a deepening approach: that is concentrate their investment on rice as opposed to splitting investment with other cash crops.. The FG, it appears do not seem to have any robust policy for the production of the other mentioned crops. For example, despite massive financial investment in cassava, there’s been very little to show for it. Clearly, while it was intended that production of cassava flour would save the country some N254 billion annually from the N635 billion spent on the importation of wheat, none of that is looking remotely possible.
Suffice to say, this has been despite over a $200 million investment from China Exim Bank for the procurement and installation of 18 large scale industrial cassava flour processing Plants. On the other hand, to establish a 25,000 – 30,000 ton capacity rice mill based on Indian or Chinese equipment would cost only about $6m. To keep the mill constantly supplied with paddy would require a further $12m per year. It may well be more economically sensible for the FG to concentrate investment squarely on rice production.
Furthermore, nothing reveals the level of hopelessness in the cassava flour policy than a recent PUNCH Newspaper finding. According to the research, a number of interviewed bakers in Lagos confessed that they were yet to see cassava flour in the market, while many others expressed doubts about the desirability of cassava baked products given its strong odour when allowed to ferment.
Nigeria is well-positioned to embark on a rice revolution that would not only make it achieve sufficient levels of production to meet domestic needs, but equally achieve export status. While Thailand uses only 9.2 million hectares to produce the quantity of rice it supplies to the rest of the world, Nigeria has about 84 million hectares of arable land. This shows that not only do we have 10 times the required amount of land; we equally have an abundant labour force to achieve record levels of rice production.
A significant number of leading global institutions like the World Bank, International Fund for Agricultural Development (IFAD), and African Development Bank are currently offering enormous financial support to the ATA and look set to continue doing so.
At this crucial point, a new national rice policy is worth considering. This national rice policy should however be spearheaded primarily by the FG and carried out in such a way that it promotes private sector investment in rice production, gets more farmers on board and works with financial institutions to get farmers the working capital that they need. Most importantly, instead of focusing the sector’s meagre funds on several crops, the government needs to consider a more targeted approach of focusing on rice first and others later, so that the country can truly march towards a rice revolution.