Rice policy alarmists: Friends or foes?

By Angela Okisor

Akinwumi Adesina Agric Minister

Within weeks after the new rice policy of backward integration put together by the Federal Government came out, some groups in the industry have come out with false information and allegations aimed at halting or if possible reversing the project that seeks to make Nigeria self-sufficient in rice production in the shortest possible time of two years

And although the protesters claim to be genuinely worried about the project derailing over one defect or another of the implementation instrument, truth of the matter is that the traducers are driven byinsatiable greed and poisonous disregard for constituted authorities.

Undeniably, the rice policy is the creation of government and not at the behest of players in the industry. The Federal Government decided to use fiscal policy to help businesses already engaged in and others interested in growing, milling and packaging rice locally and end the perennial importationof the commodity. Government set the parameters – the best possible completion time frame, the incentives and who best could be wooed with the assurance that they would perform.

Mr. Tunji Owoeye, President, Rice Investors Group led the association members to addressed journalists in Abuja, at midweek to evaluate the new initiative, revealed these and stated that the views being bandied by some stakeholders are false and unfair to government officials who haveworked hard to midwife the policy.

“Most Nigerians are unaware that time was when we depended entirely on imported rice. Governmentexamined past efforts to restore self-sufficiency in rice production that failed before coming out with the new revolutionary policy.

“The critical thing is protecting local investors to the point they can reasonably stand on their feet. The government developed the new rice policy based on what is produced presently against the shortfalls which were factored to further encourage local investors against those whose core interest is importing and selling locally without the mind of contributing to the national dream of self-sufficiency,” he declared.

According to Owoeye, the Ministry of Agriculture and Rural Development as the project coordinator invited stakeholders principally to share with them the dream and seriousness government attached to the policy but not to determine the basics such as the volume of rice that would enjoy import waivers and quota allocation qualifications.

Stating that the quota allocations based on the supply gap of import grade rice of 1.5 million metric tonnes, Owoeye said they were made to both existing rice millers and new investors in equity.

“Existing millers and others with expressed interests submitted Domestic Rice Production Plan, DRPP, and based on the submissions, a total of 1.3 million metric tonnes of rice import quotas was issued to 25 qualifying millers at the preferential levy of 20 per cent and duty of 10 per cent. The remainder 0.2 million metric tonnes of rice imports will be at the higher levy of 60 per cent and duty of 10 per cent,” Owoeye stated.

He said that stakeholders did not know why government asked rice investors to give their DRPP. Thereafter, a committee went round to verify the claims in terms of farm holdings, et cetera, and did not inform the stakeholders that they were coming to investigate. In some cases, the committee got tothe sites and called the concerned party that the inspectors were at their premises.

“We believe the market is big enough for all genuine investors in the rice market so that there is no point dissipating energy on frivolities and wild allegations,” Owoeye noted, wondering why anyone can sincerely allege that some quota beneficiaries are “already trading it to interested buyers at between 60 to 80 per cent levy having got the same at 20 per cent levy.”

The group said the allegation implies that the 60 percent levy is lower than what is charged as penalty for otherwise, why would anyone pay above that to buy from those who got the waiver?

“Rice smuggling into Nigeria is not contentious because it is common knowledge but to allude anycomplexity of the policy is subversive and clear indication that some interests are trying to persecuteothers and would stop at nothing to achieve the unholy objective.

Owoeye said outcries over giving businesses that expressed interests in investing in rice productionwaivers as those who have made substantial investments are not well founded.

“Considered on the surface, the government could be faulted but on close review, it is certaingovernment wants to recruit and expand the investors’ base and was not whimsical,” Owoeye noted.

“President Goodluck Jonathan approved the backward integration policy on rice in May and the implementation is starting just this December. I can say authoritatively that government did not only ask interested parties to submit their DRPP but demanded also their production plans including establishing staple crop processing zones (SCPZs) that are intended to encourage the clustering of food processing industries in proximity to raw materials and end markets,” he said.

Currently 16 major investors have farms and or established milling plants with cumulative capacity ofabout 1 million metric tonnes by 2016 while the rice policy estimates additional 2.7 million metric tonnes produced locally by 2016. It was obvious to the government that more and reliable investors must be recruited with secure commitments to attain set targets.

“To ensure government is not giving cheap money to opportunistic businesses, the waiver requires that 30 percent of the quota fee be paid into a participating bank. In the event the beneficiary fails to meet the terms, the Ministry of Agriculture will call on the bond fee, which means that government would take it over and use it to develop and advance the policy to the logical conclusion.

“What government has been doing in the last two to three years is to get across the value chain to get an investment plan in the rice industry and inspections were concluded based on the claims.Government has given six months to those who expressed interests to start tangible and serious work.The process is tamper proof and measurable. It is the first time government is doing something right in the rice sector,” the investors’ team noted.

Imploring persons who feel displeased not to mar the policy with internal squabbles, the group gave assurance that all issues will be addressed since the policy is in the early stage.

“To a large extent, government gave allocations to encourage big investors who are putting down substantial amounts of money. There is nowhere on earth that major investors are not wooed and that is what the government has done but I can tell anyone who cares to listen that government also took adequate precautions in case of anyone defaulting,” Owoeye insisted.

He enjoined the stakeholders to worry over the 1.2 million metric tonnes lost between the government’s estimated 1.5 million metric tonnes imports and what can safely be assumed allotted theillegally operators.

Owoeye told journalists that the investors who feel bitter that others who have not much on ground received high allocations know for sure that the in-coming players plan to exceed the current investors.

“They need not hide their fear of being overtaken by the new-comers but should join hands with other stakeholders to ensure rice smugglers are put out of business because until illegal traders are caught and caged, honest investors are in danger.

“The reason is simple and applies to all industries: until Nigerian growers and millers reach maturity and efficiency levels, the international traditional growers still hold the ace and can sink us unless we are fairly protected.”

Nigeria’s 166 million people constitute the largest market in Africa and in the consumer and commodity markets, the stakes are high. To dominate the largest market south of the Equator is serious and sometimes brutal business.

Owoeye said that government wants the Nigerian rice industry to explode similar to what happened inthe telephone industry in recent years, noting that the potential has been there for decades but the reality has just dawned.

“Anyone capable of investing huge has immense business opportunity and government is saying everyone is welcome on board. Investors who have made some input should not cry blue murder when there is none. The Nigerian rice market (local productions) can accommodate all serious investors and that is enough guarantees.”

The former Minister of Justice and Attorney General of the Federation, and Secretary, Rice Processors Association of Nigeria (RIPAN), Michael Aondoakaa (SAN), emphasised that prior to the emergence of President Goodluck Jonathan’s administration, nobody had ever wondered who gets what quota.

“The truth is that many have had witnessed the old system where some highly connected people influenced the rice quota allocation. This administration made sure it went to rice farmers with visible investments,” said Aondoakaa.

The president of the Nigerian Rice Investors Group and managing director of Elephant Group, TunjiOwoeye, said that the rice policy of the present administration is visible for all to see.

“If you travel through Zamfara, Niger, Benue, Sokoto and many other states in the country, you will see vast plantations of rice in the last two year. We have also seen some of our members who were traders make huge investments in local rice production. We have seen increase in employment and value creation in the rice sector, said Owoeye.

He further stated that the federal government has provided rice investors with improved seedling and that is the reason rice production is getting better.

On his part, the president of Rice Millers, Importers and Distributors’ Association of Nigeria, Abubakar Mohammed, noted that five years ago, there was only one processing mill in Nigeria but the number grew to 24 by 2014. He said that before President Goodluck Jonathan’s administration, rice paddy produced from Nigeria was one of the worst in the world, noting that this has changed.

“We process 800,000 tonnes of paddy rice annually and the government is putting measures in place to produce additional 360000 tonne. All these happened with the help of President Goodluck Jonathan and the minister of agriculture and rural development, Dr Akinwunmi Adesina,” said Abubakar.

 

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