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N38bn investment in rice plantations threatened - Investigation Inconsistency in the execution of the Federal Government's Rice Development Initiative, introduced by former President Olusegun Obasanjo's administration, has put the estimated N3Sbn investments in rice plantations across the country in jeopardy. LAYI ADELOYE reports
ASIDE
from other massive investments in rice milling operations across the country, investments in rice plantations,
estimated at N3Bbn, are wasting away, with the operators bemoaning the massive importation of the commodity. According to investigation by
Exchange Rates
First Bank (January 25, 2011) Buying
Seiling
150,SO 235.00 199.00
153.50 239.00 203.00
CBN (January 25,2011) Euro WAUA $ Swiss £ CFA
Buying
Selling
203.7816 231.5776 149.40 157.828 235.9026 0.2899
205.1456 233.1277 150.40 158.8844 237.4816 0.3099
NSE All-Share Index as at Thursday, Janual'Y 27, 2011
Opening Ctosing Oil prices OPEC Basket Natural Gas ICE Brent Nymex
- 27.769.52 - 27.568.96 (January 28, 2011) $93.42 +$0.84 $9.90 +$0.02 $99 42 -$2.03 $89.34 -$3.70
29f!£l1GtE!1&HE&II!S!E lEW£!!
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our correspondent, about N19.5bn invested by local rice millers between 2002 and 2010 has remained stagnant due to lack of access to the Federal Government's NlObn Rice Fund, set up under the initiative.
The Fund was expected to provide 40 per cent of the indigenous millers' investment. Specifically, the Fund, managed by the Bank of Industry, was meant to empower the millers in the area of working capital and purchase of equipment. A document on rice development
prepared by BOI put the minimum value of an average rice mill at
N1.4bn. By implication, over N24.8bn is currently tied down in planting processes by the 17 firms involved in local rice production with no chance of breaking even or
fulfilling the mandate of raising the volume of production. The value of landed property and other charges is put at N13.2bn. By BOl's valuation, not less than N3Bbn investments are on their way to being wasted. h&&m
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. - ------AirNlgerla------------·-' Los-Abj: 07.15, 11.40,1400. 16.30. 17.00, 17:20, 1B.30 (MonFri/Sat/Sun). B.OO; 12.40; B: 10; 20:00 (Fri) Abj-Los: 0700, 1J9.30. 10.30, 11.15.16.15.19:15; 19;25; 19,35; (Mon-FriiSat/Sun): 14.55: 15.15; 20.45 (Fri); 19:45 (Sun); 11.25. 13:35; 16:25 (Man) Abj-Kano: 1B.40 (Mon-Fri)/Sun Kano -Abj: 08.35 (Mon-Fri)/Sat Abj-Sok: 09:35 (Man); 10:10 (Fri); 11.20 (Wed/Sun) Sok-Abj: 11:35 (Man); 12.00 (Fri); 13:20 (Wed/Sun) Los-Owr: 12: 15 (Tue-FrilSun); 12.40 (Mon/Sat) Owr-Los: 14.25 (Tue-FrilSun); 14.50 (Mon/Sat) AeroContractors Los-Abj: 06.50; 13.30; 16.30; 19.45 (Mon-Fri/Sat/Sun); 12.30 (Sun) 16:45 (Sat). Abj-Los: 07:30; 13.00; 19:00 (Mon- FriiSat)·, 10.30, 14:30, 19:30 (Sun. 18:30 (Sat) Los-Ben: 07.45; 11.00; 15.30(MonFrVSaVSun) 12:30 (Sun, 15:30 (Sat) Ben-Los: 09.15; 12:30; 17.00 (MonFri/SaVSun) 17: (sat): 14JJO(Sun). Overland Airways Los-lIr: 07:15 (Mon-Fri); LOS-MNA 07:15 (Man, Wed, Fri)
Los-lba:07:15(Mon-Fri);IBA-ABU 08:00 (Mon-Fri) Iba-Los 17:00 (Mon-Fri); ILR-ABU 09:00 (Mon-Fri) IIr-Los: 16:30 (Mon-Fri); ILR-MNA 09:00 (Mon-Fri) Mna-Abu 09:20 (Mon, Wed, Fri); MNA-ILR 15:20 (Mon, Wed, Fri) Mna-Los 15:20 (Mon, Wed, Fri); ABU-ILR 15:00 (Mon-Fri) Abu-Iba: 15:00 (Mon-Fri) Dana Airlines Los-Abj: 07:02, OB.10, 12.06, . 15.30, 17.10, (Mon-Fri/Sat/Sun) Abj-Lo~: 07.20, 09.36. 13.05, 14.40,17.40 (Mon-Fri) 13.05; 18.00 (Sat/Sun) Los-Kano: OB.lO, Kano-Los: 11.25(Mon-Fri/Sat/Sun) Abuja-Kano: 10:08(Mon-FrilSaliSun) Kano-Abuja: 1l:25(Mon-FrilSaVSun) Lagos-Uyo: 09:45 (Mon-FrilSaVSun) Uyo-Los: 15:00 (Mon-Fri/Sat/Sun) Uyo-Abuja: 11.25, Abuja-Uyo: 13.15 (Mon-FrilSaVSun) IRS Airlines Los-Abj: 9:45, 11,45, 2:45 (MonFri); 9:30,12:45 (Sat & Sun). Abj-Los: 11.30,3:45,4.45 (MonFri); 12:00. 14:30 (Sat & Sun). Los-Kano: 6:15 (Mon-Fri); 16:30 (Sat & Sun) Kano-Los: 07:30 (Mon-Fri); 10:30· (Sat & Sun)
Rice farmers and stakeholders revealed the sorry state of affairs during an industry survey that took our correspondent to some rice
plantations and mills in Ogun State last week. Although some of the farmers, especially the plantation owners, did not want to make formal comments,
official
documents
from the BOI put figures to the estimates. In view of the popularity of rice
Typical initial challenges faced, including lack of access to improved technologies, high costs of energy for parboiling, lower output quality and limited government incentives, were being managed, according to
operators. but for the new opendoor policy on rice importation.
In December 2010, the Nigerian Customs Service put the value of rice imports into Nigeria at N6.5bn monthly, underscoring the country's
that those whose funds were ready did not come for them. "Ouf of the 10 pre-qualified companies, five have requested for disbursement in line with the guidelines, while five hdve yet to request for disbursement," the
bank said. But the farmers disagreed with this position.
"As I talk to you today, no rice miller or farmer has received a
rising penchant for imported rice to
dime from the Bank of Industry
as a staple food in Nigeria and the heavy bill of between N4bn and N5bn expended on rice importation monthly as at 2002. the Obasanjo administration decided to promote local cultivation and milling of the product by adopting new hybrid
the detriment of local production. Going by stakeholders' complaints, the unbridled
Apart from this, the government's poor attitude to rice importation, especially its waiver to some interest groups to bring in as much
varieties
quandary.
to
boost
production through the Rice Development Initiative. The government's aim was to have three million hectares under
cultivation by 2007. According to the initiative, using small operators as its plank. by 2006. Nigeria would have attained five million metric tonnes
of rice production; and by 2007 and 200B, the local rice farmers involved should have started exporting the commodity to West African countries.
The initiative. also projected that by 2012, Nigeria would have become the largest producer and
importation of rice, especially under the current administration, appeared to have put investments and investors in the sector in a For instance, a visit by our
correspondent to the $12m (N1.Bbn) Veetee Ofada Rice plantation, revealed a shadow of a once bustling farm. Although efforts to get the Group Managing Director of Veetee, Dr. Devinder Mehane, to comment proved abortive, the enviroment
and equipment in the plantation, with capacity to produce over BOO
According to stakeholders in the sector, policy inconsistency with regard to cultivation and importation, is to blame for the dwindling fortune of investors in rice production.
They said the trend constituted
Farmers Association of Nigeria, Dr.
made forays into rice cultivation in
in basic processing technology. especially in the aspects of parboiling and milling.
who pleaded anonymity. told our correspondent on Tuesday.
2002. Stallion Group, spearheaded by the Church gate Group, also five states between 2002 and 2010; but with a similar story to tell. However, the BOI, in a document
Within six years, apart from the foray into cultivation, rice milling in Nigeria witnessed a steady progress
ex-manager at Church gate Group,
a serious threat to the government's initiative on rice, which was designed to support local farmers and processors.
the total domestic rice demand
In all, 17 firms expressed interest in taking up the challenge. Out of these, only 10 were prequalified in 2009 for the N10bn facility.
ensured that the reason behind the Rice Development Initiative had died, even before it took off," an
metric tonnes of rice per season, showed evidence of disuse. Veetee was not the only firm that went into local rice cultivation in
exporter of rice in Africa. Till date, is estimated at five million metric tonnes per annum.
as 500,000 metric tones in one swoop, among other problems, has
on rice development in Nigeria, a
copy of which was obtained by our correspondent, attempted to place the problems at the door steps of the operators.
The bank blamed the apparent lack of access to the NlObn facility on the firms. In the document. the bank said it was either the firms failed to meet the requirements or
The National President, Rice Abubakar Wudi, recently described the policy of waiver offering on rice importation as retrogressive. He said that the economic interest of the nation was being sacrificed for political interest.
Similarly, the President. Rice Importers, Millers, Distributors and DealersAssociation of Nigeria, Chief Mufutalo Gbadamosi, in a recent address to journalists in Lagos. said
there was no justification for the policy somersault, especially the waiver.