Rice production is a huge industry, employing thousands of people. The United States (US) Department of Agriculture says Africa’s rice demand this year may hit 15.7 million tonnes. Lagos State is strengthening the rice sector by helping to add to the supply chain, with key interventions at the farming, milling and distribution stages, writes DANIEL ESSIET.
Rice is the most popular staple food for more than half the world’s population. In Africa alone, the United States (US) Department of Agriculture estimated that rice demand this year stands at 15. 7 million tonnes. Nigeria is a top market for rice.
KPMG’s Rice Industry Review last October stated that only 57 per cent of the 6.7 million metric tonnes of rice consumed in Nigeria yearly is locally produced, leading to a supply deficit of about three million metric tonnes.
In addition, the report stated that with rapid growth in the country’s population, estimated to exceed 200 million, it is expected that the demand for rice would be sustained and increased in the future.
In Nigeria, Lagos is one of the largest markets for rice. The presence of a large consumer base has helped to create a fertile ground for agro businesses selling grains and there are significant opportunities for them.
The large population, however, makes possible the heavy reliant on the external supply of certain food produce, including rice. Worse still, is the scarcity of land for their cultivation. However, the rice production capacity still needs to be developed. The state’s experience with distributing rice brought from North and other places in recent times has been an eye opener. COVID-19 restriction created unexpected opportunities for domestic rice market, but exposed supply and demand imbalances.
For analysts, a revolution in staple food value chains in Lagos would always have heavy impact on the food economy of the rest of Nigeria.
This has led to efforts to upgrade the food value chains in the Centre of Excelence to increase growth.
One of such is construction of the 33-tonne multibillion Imota Rice Mill, Ikorodu, one of biggest public investments in the sector and largest in Sub-Sahara Africa, which the government is hastening its completion and inauguration billed for the end of year.
The bigger picture
With 250,000 jobs projection, the mill is expected to lead to a robust performance in future.The state Acting Commissioner for Agriculture, Ms. Abisola Olusanya, noted that opportunities would be created along the entire value chains in addition to the ripple effects of the project on the locality, among others.“This mill is going to be a job generator and a wealth generator. We believe that with the partnership of everyone in this locality and the state at large, we will start reaching our food security status goal of making sure that no Lagosian is hungry, zero poverty and also to ensure that there is gender equality and everyone is happy,” Ms. Olusanya added.
Reason for the mill
Demand for sale, nutritious and high quality rice is rising in the country.Analysts said Lagos consumes one million metric tonnes of rice yearly.For analysts, the viability of the nation’s rice industry depends greatly, not only on infrastructure such as irrigation systems and input, but also on quality production and milling outcome.Lagos is ready to guarantee this by ensuring that the rice milling plant produces quality milled rice, thanks to state-of-the-art technologies.The facility provides an integrated paddy separator and rice whitening machinery.Besides, the future, the commissioner added, was also about explosion in the number of farmers, traders, millers, cold storage facility managers, and modern and traditional retailers.The facility is expected to bring about the cultivation of 32,000 hectares of farm land for rice paddy.
Supply of Paddy
Most analysts reason that there is limited scope for more extensive cultivation of rice in Lagos, with the state heavily populated. But rice farmers in the state would not agree. Some of them maintained that with large pieces of land in Epe and Badagry, and given incentives, Lagos farmers are capable of making huge volume to the rice output.One of them is the National Deputy President, Rice Farmers’ Association of Nigeria, and (RIFAN), Segun Atho. What they want from the Lagos government is empowerment to enable them adopt better rice farming practices, expand market share for the state’s agriculture, increase the sector’s profitability and improve farmers’ livelihoods, he said. To achieve this however, he added, would require massive investment in complementary infrastructure and extension services.The commissioner shares their views and is backing them to vie for a larger pie of the state’s rice market, which has seen demand surge almost yearly.
Ms Olusanya explained that rice farmers are getting the needed support of the government to ensure that they have a hitch-free planting season to ensure a steady and sustained supply of paddy for the mill.“We kicked off the rice farmers’ sensitisation, training and empowerment programme for over 800 rice farmers in Lagos State. That is just a kick-off as a back up to the Imota Rice Mill Project.“The reason is even if we are going to source for paddy from other localities, we should start from our own Lagos farmers, our Eko rice farmers, which is why we are giving them the support and Governor Babajide Sanwo-Olu is committed to ensure that this mill runs sustainably,” she said.The Permanent Secretary, the state Ministry of Agriculture, Dr Shakirudeen Olayiwole Onasanya, said the government is working with researchers to supply farmers with improved rice varieties. He said the performance of rice in Lagos was important. This, according to him, justifies the focus on the domestic market as the rice value chain’s end point.He said the goal of the Lagos government is to raise many rice farmers that would be trained in farming techniques that would lead to higher productivity. For maximum impact, he said Lagos has identified farmers with interest in efficient and productive rice supply and is ready to work with them to deliver reach, inclusion, and impact.
Chairman, the state House of Assembly Committee on Agriculture, Hon. Kehinde Joseph, stressed that to unlock the potential of rice production and overcome the threats, stakeholders must collaborate to find innovative solutions that would sustain the sector and transform.Joseph wants production to kick off at the mill to help curtail the rising price domestic of rice.According to him, recent challenges to the self-sufficiency of the rice industry have highlighted the need for innovative solutions.She pointed out that a good operating model has been put in place to ensure that the mill is efficiently and effectively managed to ensure the sustainability of the mill upon completion.”Also, one of the issues that they have raised is around the management of this mill to ensure that tax payers’ money does not go down the drain which is why from the very onset of this administration, we had employed the services of one of the World’s leading Consultancy Firms, Ernst& Young (E.Y), to ensure that we get the right operating model in place. We do not want issues around the sustainability of this mill.“We do not want it to be another white elephant project. This is why we have taken our time to develop the adequate business and management models, not leaving out the financial analysis around how and how soon we can recoup our investment back.“As a result, we have come up with a standard operating model that we believe looking at the terrain globally of what is tenable in other countries and in other milling operations to get what will make this mill sustainable.“I want to assure Lagosians that Mr. Governor is doing all he can to ensure that this project is successful,” she said.
Connecting the mill
As it is movement to the mill from Ikorodu axis is not smooth. While transporters cannot complain about congested space, there are various reasons for traffic delays, which is not unconnected to bad direct access road to the mill. For analysts, rail and inland ferry link to the mill will make a very credible business opportunity for freight forwarders as the plant is poised to support small and big businesses. But the plant’s infrastructure, and environment have incentives that will make it an attractive site for new developments. Apart from installing milling machines and milled rice storage, farmers want road improvements. Ms Olusanya explained that already her ministry is working with the Ministry of Works and Infrastructure as well as its Physical Planning and Urban Development counterpart to ease traffic movement, among others.“We have in this axis, the Imota Rice Mill, the Imota Regional Market and at the Agbowa axis, the Housing Development Scheme coming up around here; therefore, a triangulation is being done to see if another access road can be constructed to ensure that we do not impede the flow and movement of people on the roads that we have already.“We will also explore the waterways as well as ensure that going forward, we do not put so much pressure on our roads. A lot also is being done by the Ministry of Water Front Infrastructure on how we can increase the use of our waterways,” the Acting Commissioner said.
Agro industrial zones
The sprawling facility will host agro industrial zones. The primary purpose is to draw investments in agriculture to the area. Earlier, a Staple Crop Processing Zone (SCPZ) for rice processing is proposed for the area. The Lagos government is working with the African Development Bank (AfDB) on building agro industrial parks to support agric processing growth. For analysts, there is a huge potential for growth in various sectors of food processing. These include dairy, fruit and vegetables, meat and poultry. Ms Olusanya said there are opportunities for value-addition and that the processing industry is of significance to the state’s development because of the synergies that it promotes between industry and agriculture. According to her, promoting agro industrialisation is predicated upon infrastructure, policy support and technology. This, she added, would be achieved through the parks, including road, transport, electricity and digital facilities.
Lagos is a powerhouse across numerous industries. The state boasts of fertile land and ample water resources. Against this backdrop, opportunities are available for the state to change the trajectory of its agricultural sector using the Imota Rice project. For analysts, businesses have many reasons to pitch tent near the mill. The area has a favourable climate, competitively priced land. Being a future logistics hub, it will attract hundreds of small and mid-size logistics firms that are responsive to market and demand shifts. Given these strengths, Imota is well-positioned for success.
Raising the bar in rice production in Lagos
02 September 2020