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Nigeria takes drastic measures to ensure local rice production
Nigeria has taken drastic measures to develop its local rice production, riding on the coattails of Mali, Senegal and Côte d’Ivoire.
Some 300bn CFA francs for Côte d’Ivoire, around 190bn for Senegal and about 163bn for Cameroon: these are the amounts the three countries spend annually on rice imports to make up for their production shortfall.
In recent years, however, they have undertaken (like every state in the region, beginning with Nigeria) to attain self-sufficiency as rapidly as possible. In Dakar, this goal was slated to be reached in 2017, but ultimately Senegal came up short. Abuja is aiming for 2022, Niamey 2021 and Abidjan has set 2025 as its target date. Governments are grappling with food security and national sovereignty questions.
In West Africa, rice, more than any other grain, is strategic. Due to the convergence of multiple factors, including demographic growth, urbanisation and increased individual needs, rice consumption has quadrupled in 30 years, according to the French Agricultural Research Centre for International Development (CIRAD).
COVID-19 raises the stakes of food self-sufficiency
“Despite progress made in increasing local production, particularly through the expansion of rice growing fields, the region has to import the equivalent of 45% of its total rice consumption, compared to 40% at the beginning of the 2010s and only 20% in the 1960s and 70s,” says Patricio Méndez del Villar, a senior researcher specialising in rice at CIRAD.
As a result, the region’s rice imports – primarily coming from Asia – have skyrocketed, tripling between 1990 and 2018 to represent around one-fourth of the world’s rice imports, according to CIRAD.
Although countries made efforts to counter this trend by aiding production and imposing import barriers, the 2008 financial crisis broke their momentum: faced with surging rice prices, they abandoned protectionist measures in an effort to prevent shortages and rioting.
Since that time, public and private initiatives have been multiplying as the COVID-19 pandemic brings back the risk of supply problems and raises the stakes of food self-sufficiency.
Drastic measures in Nigeria
In the race to attain self-sufficiency, Nigeria stands apart. Since 2015, under the leadership of President Muhammadu Buhari, the country has taken significant steps to reduce its reliance on food imports, with a focus on rice.
After implementing a steep tax increase on imported grains, Buhari blocked food importers’ requests for foreign currency to prevent them from being able to pay for imports. Later, in August 2019, he decided to close his nation’s borders to prevent rice from being smuggled into the country, most of which comes from Benin.
The controversial policy seems to be paying off: Nigeria is the only country out of three African nations ranked amongst the top 20 rice producers in the world (alongside Côte d’Ivoire and Senegal) to have reduced its imports between 2013 and 2019, according to the Geneva-based trader Alliance Commodities, even though prices ended up spiking as a result of the measure.
In parallel, Abuja has provided support to the private sector through a series of measures (a guaranteed minimum price, input supply, farm loans, tax exemptions for rice plants, etc.). Such measures have helped to boost the productivity of small-scale farmers (who make up 80% of the sector) and encourage large companies (which account for just 20% of producers) to make investments, including domestic leaders such as Dangote, Coscharis and BUA, as well as foreign players like Olam and Stallion (a conglomerate owned by the Indian national Sunil Vaswani and headquartered in Dubai).
Singapore’s Olam also has plans to produce 240,000 metric tons of rice in the upcoming farming season, while Aliko Dangote’s company invested $1bn in 2017 to increase cultivation of rice to 150,000 hectares and set up 10 plants with the ambition of reaching an annual 1 million metric tons by 2022.
Mali, virtually autonomous
In the French-speaking world, although results have been modest, three players stand out from the pack. Mali, a landlocked country with a longstanding tradition of rice farming, constitutes a historical exception since it has largely been able to maintain its self-sufficiency (it produced more than 3 million metric tons of rice in 2018, according to the United Nations’ Food and Agricultural Organization [FAO]).
“Mali has enough rice to export to neighbouring countries,” says Pierre Ricau, a market analyst at Nitidæ. More recently, Senegal, in 2010, and Côte d’Ivoire, in 2012, developed a national rice strategy.
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In Senegal, the government expansively subsidised inputs to boost production (in the Senegal River Valley and in Casamance) and also benefitted from €13.3m in aid from the French Development Agency (AFD) between 2010 and 2015. The initiative paid off: the country’s import/domestic production ratio went from 80%-20% to a more balanced 55%-45% in 2018. However, the COVID-19 crisis has put the financing of such policies in jeopardy.
In Côte d’Ivoire, the Rice Sector Development Agency (ADERIZ) has focused on industrialisation. In 2018, Eximbank of India granted the agency a $30m loan to build 30 processing facilities in the country’s 10 most high-potential rice growing regions.
The project, carried out by the Indian company Lucky Exports, has nevertheless experienced major delays (the plants were slated to be completed at the end of 2018), while domestic production has been slow to rise, forcing the country to maintain a significant volume of imports (2.1 million metric tons produced and 1.5 million metric tons imported in 2018).
Asia, the impossible competitor
Indeed, many obstacles remain. Besides climatic changes and limited agricultural research, which impedes the ability to improve rice varieties, countries are faced with the impossible task of keeping pace with rising consumption. This is the case for Nigeria: although its production increased by 41% between 2013 and 2018, according to FAO, it continues to be outpaced by demand (6 million metric tons produced, compared to 7 million metric tons consumed in 2018) and, above all, consumption is growing at a faster rate than supply. This observation is also true of the country’s neighbours.
Aside from these data, there is another hurdle: West African rice is unable to compete with Asian rice which, mass produced and processed, is imported on the continent at an unbeatable price. “While prices on the global market have been low for the past five years, Asian rice is sold at between $350 and $400 per metric tonne, when it should be sold for at least $500 per metric tonne to give African producers a fair chance,” says Ricau.
Ricau also thinks that the sector’s development raises a conundrum more political in nature: countries have no other choice but to arbitrate between the aspirations of rural regions looking to sell their rice at a decent price and urban consumers seeking the cheapest rice possible. The latter category generally wins out, allowing importers to take advantage of the situation.
The necessity of regional solutions
Several potential solutions to these problems have been put forward. “Not only is more investment necessary, but it also needs to be better coordinated across the entire value chain to bring down the cost of producing West African rice,” says Kathiresan Arumugam, a consultant for the Alliance for a Green Revolution in Africa.
For his part, Méndez del Villar champions the idea of establishing more flexible contracts between local rice sellers (producers) and buyers (government agencies or private investors) to prevent supply disruptions or significant price fluctuations, a weak spot of domestic production in comparison with imports.
Ricau suggests maintaining the price of imported rice high by imposing taxes, which would provide a means for West African governments to recover funds to finance local production: “What it comes down to is that the West African rice problem will not be solved without a regional solution.”