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HOW IMPORT WAIVERS ARE CRIPPLING LOCAL RICE MILLS
Rice millers have raised concerns over the federal government’s import duty waiver on rice, maize and sorghum, saying it is hurting their businesses.
This is just as the Nigeria Customs Service (NCS) said the waiver has caused food prices to drop.
The government had, last year, approved a 150-day waiver for the importation of rice, maize, sorghum and other food commodities to mitigate the worsening food crisis.
The policy, which was to run from July 15 to December 31, 2024, was intended to waive import duties on essential food items such as maize, rice, wheat and cowpeas.
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Millers say they are having a lot of trouble competing with imported goods in the open market due to other production factors.
Policy reduced prices of food items – Customs
Statistics from the NCS, which imposed the exclusions on imports of staple foods like sorghum, rice and maize, demonstrate the scope of the waiver.
The NCS’ Comptroller-General, Bashir Adewale Adeniyi, in a statement two weeks ago, said: “The Q1 2025 waivers on maize (N45.3 billion FOB value), rice (N751.6 million), and sorghum (N2.3 billion) also contributed to lowering prices by 12-18% this year.
“At the same time, the larger exemptions from 2024 on rice (N45.9 billion FOB) and wheat (N2.8 billion) are now showing their full effect after taking time to work through the supply chain.
“The NCS’s duty exemptions on food imports have contributed to recent food price reductions, with effects seen both immediately and over time.”
trucks waiting to depart the warehouse
trucks waiting to depart the warehouse
We’re being pushed out of business – Millers
Speaking to Daily Trust, the General Manager of Labana Rice Mill in Kebbi State, Malam Alhassan Yusuf, said the present administration felt “that the only way to bring down the price of food is to allow importation.
“They didn’t do this directly; they gave licences to two rice mills, Imota Rice Mills in Lagos and BUA Rice Mill in Kano, to import brown rice from India and process.
“There is a rice glut in India that resulted in the storage of rice for a very long period of time. The imported rice might have expired, and a lot of others might be chemically preserved to retain their form and nutrients. This is the rice they are now bringing into the country at a cheaper price. It is discouraging to the rice value chain from the farmers down to the workers, millers, trailer owners and drivers that are affected by the infiltration of rice that no one is sure of its quality,” he said.
Another local miller at Goru area of the state, Abubakar Idris, said he was forced to close down his rice mills when he could not continue to operate under the current situation.
“There was a drop in the price of rice and we cannot compete with the foreign rice that now circulates everywhere. We tried to remain in business, but we had to shut down when it was obvious that we could no longer operate under the present situation.
“It was an unfortunate decision because we had to lay our workers off and shut the factory. It is our hope that the federal government will go back to the drawing board and see how we can get out of the present situation.
“They should try and build on former President Muhammadu Buhari’s effort at encouraging the local industries to thrive. It was a good period for us, and they can still do that to ensure local rice mills survive and flourish,” he said.
Also, Alhaji Abubakar Bawa, a rice miller at Kamba area of Kebbi, told our correspondent that his rice mill had stopped operating.
“We can’t simply continue against these challenges in the industry. I suffered losses, we tried to continue operating, but we were overwhelmed by the everyday challenge.
“The Buhari period was a good time for us and others in the rice chain. But the current position of the government and the infiltration of foreign rice is killing the rice industry. We want government intervention because many rice mills have been shut and more will still be shut due to the challenges we are facing now,” he said.
‘They’re architect of their problems’
A merchant in Kano, Abdullahi Usman said while the rice millers have every reason to complain, they also have to share the blame of their misfortune.
“The truth is that the federal government during the Buhari administration pampered the rice millers. They were given loans, grants and all sorts of waivers.
“The intention was that they should reciprocate and bring down the price of rice, but they refused. They continue to make scandalous profit at the detriment of the poor. People could not afford to buy rice, a staple food.
“So, in its wisdom, the federal government granted waiver to importers so that the cost of rice will come down,” he said.
Daily Trust tried to no avail to get a reaction from the Federal Ministry of Agriculture.
The Director of Information in the ministry, Dr Joel Oruche, neither answered calls nor replied to a text message sent to him by one of our correspondents.
Kano
In Kano State, our correspondent reports that rice production and processing is now in limbo.
From 2015 to 2020, no fewer than 230 micro, small, medium and large-scale rice mills were established and many existing ones in the state have been upgrading their capacities in terms of production.
The Chief Operating Officer (COO) of Silvex International, Abubakar Garba Ibrahim, said several investors had committed huge amounts of money to establish rice mills in Nigeria and that the waiver on rice importation, which was supposed to be for only 150 days, was threatening these investments.
The miller stated that the quantum of finished rice being imported was affecting the rice mill business in Nigeria to the extent that some were closing down because they could not compete in the market.
Another small-scale miller, Alhaji Bello Abdu, said the negative impact of the waiver had started to manifest on mega and small-scale rice mills in the state.
Abdu said many mills had halted production as the price of paddy in the market had dropped by about 25 per cent.
“Many of the millers bought paddy at about N65, 000 to N71, 000 and now the paddy is between N30,000 and N35,000 in the open market. This is because the waiver given to some marketers to import finished rice from India led to flooding of the market, causing a forceful exit of some millers from the business,” he said.
workers at the umza international rice mill in kano
workers at the umza international rice mill in kano
Taraba
Our correspondent in Taraba reports that the local rice millers now stay for two to three days without processing paddy to process, while demand for locally processed rice has fallen.
Aliyu Sarkin Noma, the owner of Gamzaki rice processing company in Jalingo, said local millers are facing low patronage, a development, which according to him, is putting many of them out of business.
He said they used to receive orders for locally processed rice from different parts of the country, but now they are not receiving any orders because foreign rice has flooded the markets.
Dr Jugulde, owner of Jugulde Rice in Jalingo, who owns a small-scale rice milling plant said he used to process between 150 to 200 kg bags of paddy rice daily, but now, people no longer bring rice for processing.
He said farming of rice and maize would decline this cropping season because of the fall in the price of paddy rice and maize.
He said prices of farm inputs like fertiliser, chemicals, labour and tractor hiring had gone up three times, while the prices of paddy rice and locally processed rice have gone down drastically.
In Wukari, Tella, Donga, Didango, Mutumbiyu and Karim_Lamido towns, hundreds of small and big rice mills are affected because buyers of locally processed rice are no longer visiting in their numbers to purchase the commodity.
‘Rice farmers quitting’
According to the Rice Farmers Association of Nigeria (RIFAN), several farmers have resolved not to farm rice again because there is no gain in it.
The Kano State’s treasurer of the association, Alhaji Hussaini Shu’aibu, said the waiver was forcing a lot of farmers to quit farming, especially rice.
Another rice farmer, Alhaji Farouk Umar, said: ‘I hired over 150 people to work on my rice farm last year’s dry season and we sold the paddy at N71,000 per bag. When we noticed the recent changes in the agricultural sector due to the federal government waiver, I decided to backpedal.
“I only cultivated 10 hectares as against the over 100 and I used six workers as against the over 150. As I speak with you, I am currently processing a China visa, because the trend has changed in the farming sector and I am going to try my luck elsewhere, but definitely not farming,” he said.
What govt should do?
A miller, Alhaji Isah Ibrahim, said there is need for the government to provide a sustainable solution to the issue of national food security.
He said that the waiver is a temporary solution that wouldn’t solve anything but creates a serious issue that will affect the nation’s economy, adding that the waiver is setting the country backwards and killing the agricultural sector.
For Dr Hamza Bello, a Jigawa State-based farmer and rice miller, the government should encourage the maintenance of a strong and viable backward integration by millers to be able to create a sustainable and stable raw materials’ supply for the mills.
He also highlighted the importance of encouraging and supporting farmers to expand their production through zero-interest interventions.
An agriculture expert, Dr Isa Musa, called on the government to look into ways of mopping up what farmers have for the strategic reserves at a price profitable for them to go back to production.
“A situation where the prices of inputs have remained so high but the prices of the grains are down does not create a balance in the system. It puts the farmer at risk, and many will avoid farming. Where a farmer buys a bag of fertiliser at N60,000 and sells maize at N40,000 is a serious problem that the government needs to look into,” he said.
