Will Nigeria’s rice output rise from recent lows?

Guardian Nigeria

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00:00Our data from the United States Department of Agriculture shows

00:03Niger's rice production is down 7% in the 2024-25 season to 5.23 million metric tons due to high

00:11production costs. Now this marks one of the lowest the country has recorded since the year 2020.

00:17Kolam Asha, the Chief Executive Officer of Babangana, joins me now for more developments

00:22in the grains market, incentives as well needed to drive food production and counter rising

00:28inflation. Mr. Asha, thanks a lot for joining us on the show today. Now this is a worrisome trend

00:32we are seeing here manifest. Away from this recent decline, we had seen some improved trajectory

00:40in the volume of paddy rice, for example. Take the highlights of the Buhari administration and

00:46even prior to then, but now we are recording a dip. For you, what is this big elephant in the

00:52room, the high production costs? How should Nigeria be targeting this and do you think at

00:57any moment near term, we might rise from these new lows? Well I think, so let's begin by

01:05kind of diagnosing the root cause. So fundamentally I think there are a few major shifts that happened

01:12in the 2024-2025 season. The first was a dramatic increase in cost of production driven by the

01:19large amount of inflation that I think we've all seen. And rice in particular is already

01:27one of the, it's a high input requirement crop, so it already costs farmers a lot to grow.

01:33So as inflation went up, those costs went up significantly. And then since there was limited

01:40access to financing, so farmers could actually now get loans to buy the inputs, I think what

01:48you saw was farmers actually shifted to lower input intensity crops that didn't require quite

01:55as much capital to invest in. And that shift is what you saw. Now in addition to that, I think we

02:02saw in the previous administration some protection of the market with limiting imports, which I think

02:10what you typically find in most economies is that nascent industries are provided some sort of

02:15protection while at the same time helping them increase their productivity so they don't just

02:20get that protection forever. But I think that removal of that protection also I think had a

02:27negative effect as well. An element exacerbating this pressure when we take a look at climate

02:32changed the competition we have from cheaper foreign varieties as well. Now insecurity,

02:37that's also a big one. But one of the biggest blows farmers at this moment have also had is

02:42the suspension of the anchor borrowers program, which is also targeted at supporting rice farmers.

02:48So at this moment, there's literally no incentive. Demand from millers has also declined. Do you

02:53think we can move away from the doldrum we are in right now? Well, I think, you know, from what I,

03:00you know, follow in the industry, my understanding is that the government is looking at ways to

03:06implement effective financing mechanisms by partnering with different development finance

03:13institutions and other partners to stimulate lending into the sector. I think at the end of

03:17the day, that's going to be key. And so with that stimulation of lending, now farmers will have the

03:24purchasing power to buy the quantity and quality of inputs they need to get productivity up. And

03:30what that will actually do is you'll see farmers now shifting into these, these crops like rice,

03:36like maize, like other crops that tend to provide farmers a good return on investment,

03:42but are required pretty significant upfront investment. And looking at Nigeria also targeting

03:48this year about 750,000 hectares of land for maize rice farming. These are definitely staples. And,

03:54you know, we've also had this robust conversation over time as to what the picture looks like

04:00targeting all year round farming. For you, is this visible for this year? Do you think we can

04:05achieve that? And when we have the likes of houses like FX also predicting price stabilization for

04:11grains like rice, maize, soybeans, do you also share the optimism here? Well, I think there's a

04:18lot of variables around the prices of things. And so I'm a little bit concerned around being able to

04:26put a stake in the ground around price stabilization. But I think that at the,

04:31at the end of the day, there's, if that we're going to see the impact we need, you've got

04:37about three months to ensure that you're able to get the adequate financing out to farmers.

04:43I think oftentimes, and it's not just this administration, I think

04:48quite frequently administrations tend to focus on targeting hectares of production.

04:55The reality is, you know, there are significant number of farmers today that are growing these

05:00crops. How can you create the right structures to enable those farmers to increase, those existing

05:09farmers to increase their productivity? I think that is the, that's going to where, that's going

05:13to be where you'll see the biggest, the biggest impact in the shortest period. Well, Mr. Masha,

05:19we'll have to leave the conversation here for now. Thank you so much for your time on the show today.

05:22That was Kola Masha, the Chief Executive Officer of Bunguners speaking.

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