Renewed rice smuggling threatens local production

The renewed illegal importation of rice is threatening local production of the commodity in the country, thus placing the massive investment by the federal government and other stakeholders on edge, Daily Trust investigation revealed.  Our correspondents gathered that smugglers have stockpiled tons of rice in neighbouring Benin and Niger republics, some of which have found […]

The renewed illegal importation of rice is threatening local production of the commodity in the country, thus placing the massive investment by the federal government and other stakeholders on edge, Daily Trust investigation revealed. 

Our correspondents gathered that smugglers have stockpiled tons of rice in neighbouring Benin and Niger republics, some of which have found their way to the Nigerian markets. 

Former President Muhammadu Buhari had closed many of Nigeria’s official borders, a development that drastically reduced importation of some commodities including foreign rice. 

Even though some experts had faulted how the border closure was handled, domestic production and backward integration investments by several rice processing enterprises amounting to millions of dollars increased. 

This had led to an increase in paddy production from 2.8 million tons in 2010 to 8 million tons now, with processed rice quantities averaging 5.3 million tons. 

This feat, however, leaves between 1.5 and 2 million ton demand shortfall even as average yield had also increased from 1.5 to 3.5 tons per hectare. 

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The federal government had at the twilight of the Buhari administration reopened some of the closed borders, with sources saying foreign rice is now finding its way into the country apart from what is being brought in through hundreds of illegal entry points. 

In Nigeria, the average annual consumption of rice is estimated to be between 6.7 and 7 million metric tons per annum even as local production stands at 5.3 million tons. This leaves a gap of over 1.7 million tons. 

Apart from stopping smuggling, experts said this gap can be easily closed by reducing the nearly 2 million tons of post-harvest losses incurred by smallholder farmers as well as by supporting traditional processors to meet rising urban demand. 

Efforts to talk to the presidency to know its policy direction on land borders and rice importation through such channels were not successful. 

 

Illegal importation on the rise 

However, records from the past six months showed a rise in the import of rice from Thailand and other countries into neighbouring Benin and Niger for onward delivery to Nigeria, which is the largest consumer. 

Processors and farmers told Daily Trust that if this keeps happening, the Nigerian rice economy will once again be in danger. 

Since 2017, approximately 68 medium and large-scale rice mills have been built around the country, along with thousands of small-scale mills located in Kano, Kebbi, Kaduna, Katsina, Jigawa, Taraba, Benue, Nasarawa, Anambra, Ebonyi and in other states. 

The revelation of increased imports into Benin, which primarily targeted the Nigerian market, raises concerns among farmers and processors in the region. 

For instance, data revealed that a combined 1.1 million tons of rice were exported from Thailand and India to the Benin Republic between January and December 2022. 

About 594,439 tons of parboiled rice had already been shipped from India to Cotonou in the Benin Republic as of June 10, 2023. The overall quantity of rice loaded for the Benin Republic from Thailand and India from January to June 2023 is much more than the total amount loaded for the entire year 2022. 

Statistics from the website of the Thai Rice Exporters Association shows that Nigeria was the greatest (number 1) market for Thai rice between 2012 and 2014. However, as Nigeria pushed its policy of backward integration, it fell to position 49 by 2017 and Benin overtook Nigeria as the most popular destination. 

Nigeria further slipped to 111th place by 2022 when it closed its borders to safeguard investments and boost domestic rice production. 

It was learnt that most of the smuggled rice from Benin, Cameroon, and Niger came through Mubi (Adamawa State),  Jibiya (Katsina), Bacakka  and Kamba (Kebbi-Niger), Wasimi (Oyo -Benin), Babana, Chikanda & Sekobounkperou (Benin Rep and Kwara State), Idiroko (Ogun) and Seme  (Lagos). 

Our correspondents in the affected states said there are heightened smuggling activities going on and the impact is already visible in the markets. People in Katsina said the smugglers usually work for their masters by conveying the prohibited goods from Niger Republic through secret routes. 

Abbas Yahaya, a resident of Kofar Guga in the Katsina metropolis, said, “When the customs put up effective surveillance, especially if they smell something fishy, the smugglers employ the services of women and physically challenged to transport the contraband.” 

Another resident, who resides along Natsinta Barracks Road in Katsina and preferred to be anonymous, said smuggling in foreign rice, Spaghetti, Macaroni and cooking oil resurfaced due to lack of jobs and high cost of living in Nigeria. 

“Many youths involved in these activities are jobless and have nothing to fall on in these hard times. They mostly move in the night with their headlamps and rear lights off to avoid being spotted by the security agents,” he said. 

He said with the recent influx, a bag of foreign rice now costs N35, 000 in Katsina. 

Alhaji Mustapha Beto, the General Manager, Beto Rice, a local processing factory in Katsina, said the smugglers were taking advantage of the supply gap in the market. 

“Paddy rice is now acutely scarce on the market as banditry has chased many farmers out of their farms. 

“Disease and insufficient rainfall affected some of the rice farms last year. A ton of paddy rice is now N360, 000 instead of the N115, 000 we were buying in the last two years. This, with the epileptic power supply and high cost of diesel is making our production less profitable,” he said. 

When contacted, the customs Public Relations Officer, Katsina Area Command, Tahir Y. Balarabe, said he could not respond on the issue as he had to seek the consent of his superior officers and there was not enough time. 

In Lagos, most stores visited by our correspondent have foreign rice adorning every corner of the shops. 

From Ketu, Mile 2, to Sunday-Sunday Market at Ojodu and Aboru Market, Iyana Ipaja, foreign rice is visible everywhere with a few bags of local rice in most of the stores. 

A store owner, Destiny Okoro at Jimoh Balogun Ojodu, Lagos, said, “I don’t sell local rice here as you can see. All the bags you see here are foreign. To me, local rice is too expensive and people don’t demand for it here. The last time I sold local rice was in September, 2022. So a lot of people prefer foreign rice, which comes in two types- long grain and short grain.” 

The long grain costs 40,000 while the short grain costs 35,000 in his shop. Ogbonna Amos who also has a big store at Aladelola, Ikosi-Ketu, Lagos said while he sells both foreign and local rice, he deals more with the foreign rice based on demand. 

In Kano, a source at the famous Singa Commodity Market said that the foreign rice smuggling, which had reduced drastically over the years, has now resumed with vigour. 

According to the source, the smugglers have adopted new phenomena of using women who smuggled the rice bit by bit and the marketers thereafter transfer the rice into 50kg bags for sale. 

The price of foreign rice has dropped from N43, 000 to N36, 000, a difference of not more than N3, 000 with the locally milled rice. 

Alhaji Usman Garba Badawa, a small scale rice mill operator said his business was about to crumble because foreign rice is selling almost at the same price as the locally milled one. 

Similarly, Alhaji Shehu Dorawa, a rice farmer in the state said even though he and his colleagues benefitted a lot in recent years, they are now skeptical on rice production. 

“Let me be honest with you, many rice farmers will not cultivate this rainy season because the market will soon be unfavourable to rice due to smuggling,” he said. 

 

It’s dangerous, millers warn 

The Managing Director of one of the biggest indigenous rice mills in Nigeria, Gerawa Rice Mill, Alhaji Muhammed Isyaku, said the influx of foreign rice into the Nigerian market legally or illegally is not a good idea for the nation’s economic development. 

“If this development is allowed to continue, companies like ours that have thousands of employees and others along the value chain and the farmers will run out of business because the indigenous companies cannot compete with the imported foreign rice,” he said. 

Gerawa Rice Mill had recently announced that the company’s additional ultra-modern state of the art rice mill with the capacity to process560 metric tons of rice per day will soon be commissioned in addition to the existing 400 metric tons per day under the company’s bid of becoming the third largest rice mill in West Africa. 

 

Anchor Borrower won’t be scrapped – Agric fund 

It was learnt that many of those who invested in the rice value chain obtained loans to achieve the feats and there could be problems in repayment of the facilities. 

 But officials of the Anchor Borrowers’ Programme (ABP) have told the Daily Trust that despite recorded defaults, the programme will not be scrapped.

Recall that President Buhari launched the programme on November 17, 2015, in Kebbi State, to increase domestic rice production by providing millions of smallholder farmers with credit facilities and inputs. 

The programme was domiciled in the Central Bank of Nigeria (CBN). 

By March 2023, the embattled former CBN governor, Godwin Emefiele, told journalists during one of his monthly MPC meeting, that the apex bank had disbursed a total of N1.09 trillion under the ABP since the launch of the scheme, which also covered other crops. 

Emefiele said a total of 4.6 million smallholder farmers across 21 agricultural commodities so far benefitted from the scheme. 

He was however silent on how much was repaid by the farmers. 

Experts and sources within the Federal Ministry of Agriculture and the CBN said a large number of those that benefitted were yet to repay the loan. 

Mr. Toyin Ajayi, a public affairs analyst, said it would be very difficult to retrieve those monies because most of them were given to what he called “political farmers.” 

The President of All Farmers Association of Nigeria (AFAN), Arch Kabiru Ibrahim, had also expressed concern that most people that benefited from the loan “are briefcase farmers” and stressed the need for real farmers to be carried along then. 

But speaking with Daily Trust in Abuja, the Executive Secretary, National Agricultural Development Fund, Dr. Garzali Abubakar Mohammad, said the ABP is one of the interventions that would be sustained along with more interventions designed to boost the productivity of farmers particularly in rural communities in line with the new government target. 

On its part, the agric ministry, while reacting to the threat posed by the influx of foreign rice into the country, said since 2015, federal government’s interventions on rice had been with the CBN through the (ABP).

A director in the ministry, who craved anonymity because he was not authorised to speak on the issue, said while it was obvious that smuggling will affect the gains recorded so far, the issue relating to border and loan access to rice farmers are being handled by the Customs and the CBN and not the ministry. 

It would be recalled that since 2015, the agric ministry had been raising concerns over the non-domestication of the ABP in the ministry for sustainability. 

Former agric ministers like Chief Audu Ogbeh, Sabo Nanono including the former Senate Committee Chairman on Agriculture, Senator Abdullahi Adamu, had made several appeals to domesticate the scheme in the ministry of agric but failed as it was solely a CBN implemented programme. 

 

Presidency mum 

Daily Trust had made efforts to speak to the Special Adviser to President Tinubu on Special Duties, Communications and Strategy, Dele Alake without success as he did not pick his call or respond to text message. 

However, during his visit to the Villa yesterday, a former governor of Zamfara State, Ahmed Sani Yarima said among other things, he was there to congratulate the president for reopening the borders. 

He said the opening of borders was a policy of the federal government to allow free flow of goods and services in Nigeria.

Yerima said: “Having taken over the reign of affairs of our country, he came up with three quick decisions that I believe as an economist will help this country to achieve development. 

“First, he removed the fuel subsidy, which former leaders could not do. And look at the decision he has taken on exchange rate disparity to bring it together. It will help the import and export system of this country. And finally, he opened the border for goods and services to flow in Nigeria freely. I think these three decisions are taken in the interests of Nigeria and with patience, Nigerians will see the advantages of taking these decisions. 

When asked if the president actually confirmed the opening of borders during his interaction with him, having commended the decision despite the fact that there had been no categorical statement from the federal government that the remaining borders had been opened, the former governor said: “Not only confirmed, he announced it before I even came today. And all Nigerians are aware through the media that the federal government has directed the opening of borders.”

This claim could not be verified.

 

By Hussein Yahaya, Vincent A. Yusuf, Muideen Olaniyi (Abuja), Abdullateef Aliyu (Lagos), Idris Mahmud (Katsina) & Ibrahim M. Giginyu (Kano)