Nigerian News from Leadership News

Rice Growers Step Up Production, As Local Demand Increases

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If there were still doubts about the fact that there has been a significant increase in the volume of rice produced in the country in recent years, the  impressive number of bags of Made-in-Nigeria rice that were in the market during the festive season would certainly have dispelled them.

Indeed, during the yuletide, a lot of corporate bodies, especially banks, gave out Made-in-Nigeria rice as gifts instead of the usual imported varieties.

Findings show that the rising volume of local rice production is due to increased demand for the commodity by Nigerians.  The demand is said to be fuelled by growing awareness among Nigerians that locally-produced rice is much more nutritious than the imported variety especially given that many of the country’s leading rice millers now process Paddy rice as proficiently as their foreign counterparts.

Analysts have said that another factor driving local demand of locally-made rice is the campaign by the federal government, through the Central Bank of Nigeria (CBN), as well as the state governments, to encourage local production in the face of dwindling oil revenue.

For instance, the minister of Agriculture, Chief Audu Ogbeh, was so impressed during a visit to a rice farm in the eastern part of the country that he predicted that Nigeria could end rice importation in the next one year thereby drastically reducing its annual food importation bill which currently stands at between $2 and $3 billion.

However, analysts point out that the surge in Nigeria’s local rice production has been primarily due to the massive investment in the production of the staple food   by leading agri-business firm, Olam Nigeria Limited.

According to analysts, although there are several companies now involved in rice production in the country, there is no doubt that Olam’s pioneering role in this aspect of the agric sector is responsible for the impressive volume of rice currently produced in Nigeria.

Specifically, the company set up a multi-million dollar integrated rice mill in Nasarawa State, North-central Nigeria, fitted with the capacity to produce 65,000 metric tonnes of milled rice per annum.

Speaking during the commissioning of the facility in 2013 by former President Goodluck Jonathan, Olam’s managing director for Africa and Middle East, VenkataramaniSrivathsan, said 3,000 hectares of land was already under cultivation on the 6,000 hectares of mechanised paddy farm where the rice mill is located.

Srivathsan said Olam planned to increase acreage in Nasarawa to 10,000 hectares. “This will bring Olam’s total investment in the integrated farm and milling facility to over $111 million,” he said.

He also noted that the mill demonstrates how large-scale commercial farms can work hand in hand with smallholders to boost Nigeria’s agric sector, generating rural prosperity through local processing.

Also in his remarks, Olam Nigeria country head, Mukul Mathur expressed the company’s pride to have been part of Nigeria’s development of its export chains, noting that the Singapore-headquartered firm was the first to export sesame from Nigeria.

“We hope that the success of our rice model will kick-start domestic production in a similar manner, unlocking the opportunity for businesses and smallholders alike, and reducing Nigeria’s need to import 1.9 million tonnes of rice each year,” said Mathur.

Olam, which in the last 10 years has been the largest non-oil exporter in the country- a feat that has won it several awards both locally and internationally- started in Nigeria 27 years ago and employs more than 2,500 direct workers and over 6,000 workers on contract.

The company which was one of the few big global players that saw the promise of the Nigerian rice market developed an innovative approach to rice production. Its model combines a commercial farm with a programme that works with nearby farmers, called out-growers, allowing Olam greater control over its product while still leaving room to foster and train local small-scale farmers in rice production.

With the use of aircraft to plant rice, apply fertiliser, insecticides, herbicides and bird control, together with nine giant tractors for land preparation and eleven(11)combined harvesters for harvesting and threshing rice, the company is currently  developing a 10,000-hectare, fully-mechanised and irrigated paddy farm at Rukubi, Doma Local Government Area of Nasarawa State. The farm is expected to yield 10 metric tonnes per hectare (average yield of local farmers is 2 – 4MT) in two annual crop cycles, based on four varieties of high-yield rice tested with the West African Rice Development Association, which are FARO 44, FARO 52, L34 and L19, all developed and released by Africa Rice. 4,400 hectares are already under cultivation, with a further 2,000 hectares on target for 2018, recording, for now, six tonnes per hectare. Up to 1,000 workers are employed on the farm depending on the season.

Significantly, at the heart of the rice farm is a 105,000MT-capacity rice milling facility which incorporates Satake milling technology and Italian par boiling technology. This is expected to provide 105,000 metric tonnes (MT) of milled rice per annum to the domestic market. Almost 1,000 workers are employed at the mill during peak seasons.

According to the plant manager, MrJayane Jagtap, the mill is designed to process paddies into finest rice comparable with best brands around the world.  Speaking to a team of journalists who visited the facility, he explained that paddies are fed through the feeder (intake unit of the mill), conveyed into the cleaner where paddies are cleaned and de-stoned, conveyed into a dryer where moisture content is reduced from 22 per cent to about 12 per cent, and to another cleaner, from where paddies are conveyed into parboiling tanks, where paddies are watered and parboiled at 60 degree centigrade.  The paddies are  then conveyed from parboiling tanks into coolers and into the drying tanks, from where they are transferred to the larger silos, which feed the mills where husks are separated from rice.

After further polishing and grading, the rice is packaged into five, 25 and 50KG bags and moved unto the store, all within the farm.

The company’s ‘nucleus’ model combines the quality control of a large scale commercial farm with the cost and scalability benefits of smallholder ‘out-grower’ networks. Over 3,000 surrounding rice-growing farmers are supported by Olam with training, pre-finance and inputs in order to improve their own paddy yields. The 3,000 farmers, who produce about 4,000 metric tonnes of paddies per annum, are currently engaged in the programme, with a target of 16,000 by 2018, ultimately moving up to 20,000 and supplying 30-40 per cent of the mill’s capacity.

Interestingly, the company attributes its success to its commitment to developing Nigeria’s agric sector as well as delivering value to farmers and customers. As it put it in a statement, “Success has been based on delivering value to both customers and farmers through first class operational capabilities and a long term commitment to develop Nigeria’s agricultural supply chains.

“With offices and operational units across all geopolitical zones of the Nigerian Federation, Olam Nigeria has a wide and growing network of farmers, suppliers, wholesalers, Local Buying Agents (LBAs), customers and service providers. Today, these networks encompass approximately 500,000 farmers and have created tens of thousands of jobs in direct employment.”


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