Rice Transformation Project Proposal

EXECUTIVE SUM M ARY

Alt hough rice grow s well in all the six geo-polit ical zones of Nigeria, t he demand for polished long grain,
stone free and odorless rice by the urban dwellers has fueled the demand for import ed rice. Total
demand for rice in Nigeria is put at about 5million M T a year out which about 3.2 million M T are
produced locally. The high cost of import at ion in recent years has highlighted the desire by the
government to encourage import substit ut ion by encouraging increased local production.

Locally produced rice at present is uncompet itive in the market because it s value chain is fragmented
and cannot offer a standard. It is fraught w it h poor quality- presence of extraneous mat erials such as
stones and debris. Secondly because all operat ions are manual, cost of product ion is also high.

Earlier att empts to be self sufficient in rice production w ere part ly frust rat ed by foreign large mills w ho
t ook advant age of policy lapses to focus on brow n rice importat ion rather than encourage paddy
product ion by farmers. Rice also suffers from another fact or which is t hat it is not a raw mat erial for any
indust ry. The brew eries drive sorghum, t extiles drive cot t on and the pharmaceut icals drive cassava.

The goal of the present rice transformat ion agenda of President Goodluck Jonat han being implemented
by the Honorable M inist er of Agricult ure, Dr. Akinw unmi Adesina, is self sufficiency in rice product ion
and complet e substit ut ion of import ed rice by year 2014.

The Rice Transformation Agenda int ends to adopt the value chain approach to form a nucleus estat e
around t he exist ing rice mills. Clusters of rice production w ill be ident ified and the farmers therein w ill
be organized in a w ay that t hey can readily access input s such as improved seeds, fert ilizer,
agrochemicals and modern met hods of rice production from ext ension services. Each cluster w ill use
improved seeds of recommended rice variet ies and supply paddy to the mill. Using the modern methods
list ed above, paddy yield per hectare is expect ed t o double by year 2014 and raise milled rice product ion
t o 5.7 million M T per year.

Rice product ion under rainfed low land and irrigated low land w ill be the main priorit y, but at tent ion w ill
be paid t o rainfed upland rice in some key Stat es. Fift een States which produce mainly low land rice have
been selected for t his exercise. They are: Kebbi, Sokoto, Kano, Niger, Kaduna, Taraba, Adamawa, Kwara,
Ebonyi, Cross River, Bayelsa, Borno, Enugu, Ekit i and Ogun.

The Stat e government s and their Ext ension Services will be involved in the formation of t he clust ers and
t he enumeration of t he farmers.

The FG should enact a policy w hich w ill encourage Input Suppliers, Agro-dealers, M ills and Rice
M erchants t o contribut e to the cost of Extension Services. The FG should also revist the the tarrif
structure t o make it 30% flat on both brown and milled rice.

Through price arrangement s and guaranteed minimum price, cont inuous paddy supply to mills is
expect ed. The demand for paddy by the mills is expect ed t o drive paddy product ion. While paddy

1
product ion is expected to rise to 1,500,000 M T by year 2015.Total milling capacit y of the recent ly
procured mills is 500,000. M ore mills and storage facilit ies w ill be needed.

Expect ed impact s include conservation of foreign exchange, food securit y and creation of about 500,000
jobs.

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Project Profile:

Title: ACTION PLAN FOR RICE TRANSFORM ATION AGENDA

Goal. Self sufficiency in rice product ion and complet e substit ut ion of import ed rice by year 2014

Specific Object ives:

1. Develop a vibrant rice value chain t hat w ill at tract invest ments for locally produced rice.
2. Raise rice product ion level from current 3.3 million M T t o 6 million M T per year t o remove
t he shortfall bet w een demand and product ion by year 2014.
3. Raise t he quality of locally produced rice to int ernational st andards.
4. Build a net work of paddy producers around rice mills t o ensure regular supply of paddy.

Justificat ion

Nigeria is t he world’s second largest importer of rice, spending about N356 billion for about 2 million M T
of milled rice. The w orld’s rice market is highly volatile. Nigeria’s largest supplier, Thailand is poised to
increase price of rice by over 50%. Rice grow s all across Nigeria; hence self sufficiency is highly possible.

Strategy

1. Ident ify clust ers of low land and irrigated low land rice ecologies in t he select ed Stat es.
2. Organize the farmers into clust er groups to aggregat e them for access to improved technology
– seeds and ot her inputs- as w ell as market. This aggregat ion is a step tow ards reduct ion in
product ion and transact ion cost s.
3. Increase in paddy production w ill be anchored on yield improvement per unit area
(int ensificat ion) raising average yield per hectare from 1.5 t o 6.5 mt per hect are.
4. Link farmers to credit sources and to t he benefit s derivable from act ivities of NIRSAL in the
purchase of farm equipment and machinery.
5. Rehabilit at e exist ing irrigat ion schemes to full capacit y for paddy product ion.

Expected Output

1. A viable rice value chain capable of meeting the count ry’s rice demand put in place
2. Conservat ion of foreign exchange earnings resulting from eliminat ion of rice imports.
3. Diversificat ion of Nigerian economy.
4. Food security result ing from doubling of rice production from 3 M T/ ha t o 6.0 M T / ha.
5. Income grow t h and poverty reduction for rice farmers.
6. Generat ion of addit ional 500,000 jobs in t he rural area.

Time – line: November 2011 – December 2014

Budget summary:N114,699.7

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1.0 INTRODUCTION

Several decades has w it nessed considerable depletion of t he nation’s foreign exchange by food import.
Just recent ly, t he Hon. M inister of Agricult ure, Dr. Akinwumi Adesina put t he food import bet w een 2007
and 2010 (a period of 3 years) at N98 t rillion or US$628 billion. This is in spite of t he fact that Nigeria has
very favorable ecologies for rain fed low land, irrigat ed low land as w ell as upland rice product ion. Total
potent ial land for irrigat ed rice product ion is est imat ed at 1.6 million hectares out of w hich only 47,
798ha is available.

Since 2003, the Federal Government has been desirous t o make Nigeria self sufficient in rice production.
It has pursued t his goal by review ing all t he previous effort s in rice production and putt ing in place a
project t he Presidential Initiat ive on Rice that w ill produce 15 million t on of paddy or 9 million ton of
milled rice at the end of the project life in 2008. In producing t he blue print for achieving this goal, it w as
observed t hat low land as well as irrigated low land w ill play a pivotal role and all exist ing irrigat ion
schemes in Nigeria, most of which had been abandoned should be rehabilitated and made available for
rice cult ivation.

Est imated nat ional demand for rice is put at 5.2 million ton per annum. Production is est imat ed at 3.3
million t on leaving a demand gap of 1.9 million tons w hich is imported w it h the at tendant drain on
foreign reserve. This gap has cont inued t o increase relat ive t o demand. The Nat ional Rice Development
St rat egy produced in 2010 put nat ional paddy production in 2007 at 3.4 million tons and a project ion of
13.27 million t ons for 2018.

The Nigerian rice sector is plagued w ith t he follow ing difficult ies:

 The rice value chain is highly fragment ed from product ion t o marketing;
 It lacks an indust rial demand to drive t he chain e.g. brew eries for sorghum, pharmaceuticals for
cassava and text iles for cot ton. The big m ills w hich w ere supposed to drive the value chain w ere
run by rice merchant s who t ook advantage of Nigeria’s inconsistent policy t o focus on brown
rice import at ion to the det riment of locally produced paddy;
 High product ion cost ;
 Poor qualit y of t he product , hence poor competit iveness w ith import ed rice.

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 1.1 Overview of the Rice Sub Sector

Production ecology

Rice is grown in all t he States of the federat ion and F.C.T though product ion varies from state t o stat e.
Prevalent t ypes of rice product ion syst ems in Nigeria include rainfed upland, rainfed low land ), irrigated
low land, deep water float ing and mangrove swamp. Table 1 show s major features of Nigerian rice
product ion systems. Over 80% of our nat ional product ion comes from rainfed low land and irrigated
low land and also average yield is higher in both ecologies. It is therefore easier t o increase national
output by target ing both ecologies.

Table 1: M ajor features of Niger ian Rice Production Syst em s

Production M ajor States Covered Estim ated Average yield Share of rice
Syst em share of (Ton/ ha) production
National rice (%)
area

Rainfed Ogun, Ondo, Abia, Imo, Osun, Ekit i, Oyo, Edo, Delta, 30% 1.9 28
Upland Niger, Kwara, Kogi, Sokoto, Kebbi, Kaduna, FCT and
Benue Stat es.

Rainfed Adam awa, Ondo, Ebonyi, Ekit i, Delta, Edo, Rivers, 52% 2.2 43
Low land Bayelsa, Cross River, Akwa Ibon, Lagos, all M ajor river
valleys, e.g shallow swam ps, of Niger basin, Kaduna
basin, and inland of Abakaliki and Ogoja areas.

Irrigat ed Adam awa, Niger , Sokoto, Kebbi, Borno, Benue, Kogi, 16% 3.7 29
Adam awa, Enugu, Ebonyi and Cross River, Kano,
Lagos, Kwara, Akwa Ibom , Ogun Stat e.

M angrove Ondo, Delta, Edo, Rivers, Bayelsa, Cross River, Akwa 1% 2.0 1
swam p Ibom , Lagos.

Production Pat tern

Production is dominat ed by smallholder farmers who use rudimentary, t radit ional, manual and drudgery
fraught method in producing over 80% of our national product ion. On t he average, t hese farmers
cultivate bet w een 0.5 and 1.5ha of land. Land preparat ion is done w ith hand implements t hus limit ing
area cult ivable by farm families as the method is tedious, t ime consuming and drudgery laden.

Irrigat ion schemes locat ed in 26 st at es w it h a total area of 47,000 ha previously developed for irrigated
rice and wheat production remained abandoned and need rehabilit at ion. The President ial Initiative on
Rice Product ion launched in 2005, projected that by the end of t he project in 2008, a t otal of 3.0 million
ha of land w ould have been put under rice cult ivat ion. How ever, t his project never really t ook off

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despit e t he fact that huge sums of money had been accumulat ed under t he Rice-Levy Account , a 10%
surcharge on rice import , meant for t he development of the sub-sect or.

Policy Issues relating t o Rice Sub-sect or:

The nat ional agricultural policy w hich emphasizes self sufficiency in food product ion, including rice,
moved a st ep forward under t he Presidential Init iat ive on Rice to emphasize national securit y and
sufficiency as w ell as export of t he commodit y. This is because it was obvious that Nigeria is nat urally
endow ed t o produce the commodity.

The vision behind the set t ing up of t he Rice Development Levy was to provide funds for rice
development outside the usual budgetary/ appropriat ion from t he National Treasury. This fund w as t o
t ake care of irrigat ion development, mechanizat ion, processing, input supply, et c in a value chain.
Despit e pressure from United Stat es, Thailand, Indonesia, etc the project imposed a 100% levy on rice
import which suffered a lot of policy summersault that significantly reduced the levy to t he current 20%
t ax and 20% surcharge. In 2010, some major stakeholders w ere even allow ed to bring in rice on dut y
w aiver basis thereby put ting the rice sub-sector in jeopardy.

There is also the need to carry the Federal M inistry of Finance along so that such policy reversal
w hich adversely affected local product ion, demand and market ing should not again jeopardize the
development of the sub-sector.

2.0 CONSTRAINTS TO RICE SUB-SECTOR DEVELOPM ENT

2.1 Problems t hat milit at e against rice sub-sect or development in Nigeria include:

2.1.1 Issues of inappropriate t echnology:

i. Research Instit ut es w it h the mandat e to develop new rice varieties are not sufficient ly mobilized
t o play t his role. Consequently, there is delay in both breeding process and official release of
new ly developed varieties;
ii. There is lit tle linkage bet w een research and what is delivered to t he field for farmers and ot her
stakeholders;
iii. There is need t o link research and development t o privat e sector needs including soil test ing and
diagnost ic services;
iv. There is limit ed awareness of the use of improved seed, coupled w it h poor dist ribut ion
channels, poor seed qualit y and adulteration of seed;
v. Lack of access to fund by seed companies to adequately produce improved rice variet ies. There
is need to provide funds for NCRI, Africa Rice, NASC and SEEDAN to facilit at e their mandates.

2.2 Input supply to t he Sub-Sect or:

i. There is low privat e sector part icipat ion in the fert ilizer issues;
ii. Fert ilizer import is done lat e leading to late arrival on t he farmers fields;

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 iii. Qualit y of fert ilizer import ed into t he count ry is low leading low crop yield;
iv. There is need t o liberalize fert ilizer procurement and dist ribution market s t o bring in the privat e
sect or;
v. There is need t o develop specific fert ilizer base for agro-ecological zones; and
vi. Similar problems exist w it h other input supply including agrochemicals, seed, and farm
implement s.

2.3 Inadequat e Infrast ruct ure for Rice Product ion:

i. Irrigat ion facilities are inadequat e, poorly maintained and virt ually abandoned. Definit e
at t ent ion must be paid t o irrigat ion t o achieve the goals of the rice sub-sector;
ii. Rural Development Depart ment is not sufficient ly mobilized to build and maintain rural
needs. State and local government s are not doing enough eit her; and
iii. Standard market infrastructure is also poorly developed.

2.4 Inadequate and irregular supply of inputs including credit , improved seed, fertilizers, agro-
chemicals and farm implement s.
2.5 Inadequate farm pow er including animal traction and t ract orization.
2.6 Inadequat e st orage and price stabilizat ion:

i. There is need t o expand the exist ing grain silos capacit y;

ii. Private sector part icipation in silo and st orage programme is very minimal;
iii. There is need t o build t he national capacit y for agricult ural commodity exchange including:
o M arket Informat ion Syst em
o Farm level st orage capacit y;
o Uniform grade and standard syst em for staple crops; and
o Organize farmers groups that can produce and trade in large volumes and assure regular
supplies especially to int egrated mills.

2.7 Poor farmer organizat ion and cooperatives t o facilit at e delivery of assistance to farmers and other
stakeholders.

2.8 Environment al Const raints:

- Poor maint enance of already developed swamps;

- Drought and insufficient rain for upland rice leading t o persist ent crop failures; and

- Persist ent over flooding of rice fields.

2.9 The Land Use Act of 1979 did not :

- allow for market liberalizat ion to enable market forces to drive future land use;
- did not streamline and make t ransparent , t he process of obtaining land t itles;
- Did not allow t it ling as a collat eral for agricultural lending by commercial lenders; and
- Did not allow for land acquisition by medium and large scale farmers for commercial agriculture.

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3.0 FARM SUPPORT STRATEGY

3.1 Farm M echanization:

There is a grow ing private sector led initiative on tractorization. Land preparat ion should capitalize on
t he emerging nat ional Tractor Owners and Operators Association of Nigeria (TOOAN). The project
should build upon PrOpCom init iat ive of helping TOOAN members t o acquire more t ract ors. PrOpCom’s
strat egy for tractor int ervention focuses on developing a privat e sales channel t hat w ill equip privat e
t ractor service providers w it h new , funct ional t ractors via risk sharing. This sales m odel – linking privat e
sellers to private buyers – aims to provided an alternat ive t o present public schemes upon which t ract or
service providers and farmers have come t o depend. This program w ill t herefore fit nicely into the
financing act ivit ies of the Nigeria Incent ive-based Risk Sharing for Agricult ural Lending (NISRAL). Other
services such as harvesters and t hreshers should fall under similar PPP arrangements.

3.2 Agricultural Input Supply:

Agricultural input w ill be supplied t o farmers at 50% subsidy. How ever, more intense supervision
w ill be on t he cat egory I. Seed, agro-chemicals, fertilizers, credit , farm t ools, etc w ill be provided for
farmers. Farmers groups should also be involved in input procurement and dist ribution.

SEEDAN, NOTORE, and agro-chemical companies w ill supply seed, fert ilizers and chemicals
directly t o farmers t o ensure that input s are delivered promptly at the farm gat e. The farmers w ill pay
50% cash while t he government s pay t he other 50% as subsidy to input providers. This w ill be under PPP
arrangement through authenticated and monit orable voucher system supervised by government
agencies.

3.3 Irrigat ion Facilit ies:

There is Water Users Association in most FADAM A III sit es. Farmers w ill pay 50% of the cost wat er
supplied to their plots while the government pays the balance of 50% to relevant service providers. This
w ill facilitate prompt and regular supply of w at er t o farmers. Government should encourage the privat e
sect or t o lease t he irrigat ion schemes under PPP arrangement . This w ill ensure more efficient
management and provision of services to farmers.

3.4 Extension Service Delivery:

The FADAM A III component IV has provision for Ext ension Service delivery. The project w ill collaborat e
w ith FADAM A III in ext ension service delivery t o farmers involved in category I. USAID w ill be involved in
t his project as they have a farmer t raining programme that w ill benefit rice farmers. Also input providers
w ill be encouraged t o t rain farmers in use of their input s.

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4.0 PROJECT PROPOSAL

4.1 This project is designed t o exploit all the available pot ent ials t o enable Nigeria att ain self
sufficiency in rice and become a rice exporting nat ion by t he end of the project life in 2015. This means
expansion into the high potent ial areas, especially the low land valley bot toms and alluvial low land along
major river basins and elaborate invest ment in irrigation infrastructure, part icularly low-cost , small-scale
diversion schemes in low land valleys. Invest ment in fadama areas as w ell as enhancement of
product ivit y through int ense use of agricultural input s, t echnology and ext ension service delivery w ill be
t he approach. The project w ill be implement ed over 4 years (2012-2015) in the first inst ance.

4.2.1 Aim of t he Project

The aim of t he project is to att ain self sufficiency in local rice product ion by 2014.

4.2.2 Specific Object ives include:

i. To increase national rice output from 2.3 million ton in 2010 to 6.4 million t on in 2015.
ii. To increase t otal land area under rice cult ivation from 2.1 million ha in 2010 to 3.4 million ha in
2015;
iii. To increase average yield from 1.5 ton/ ha in 2010 t o 6.5 ton/ ha in 2015;
iv. To ensure adequat e supply of inputs including improved seed, fertilizer, agro chemicals,
t ractorizat ion, credit , technology, ext ension services processing facilit ies, etc t o st akeholders.
Inputs w ill be supplied direct ly t o farmers by input providers under a voucher syst em
administ ered by privet sect or and overseen by Government.
v. Rehabilit at ion of existing but abandoned 73,115ha of irrigated land in 17 st at es.
vi. Promotion of extension service delivery syst em and st rengthening REFILS t o enhance diffusion
of improved met hods of managing rice product ion and processing among beneficiaries.
vii. Facilitation of credit t hrough BOA, RUFIN and other credit inst itutions under the CBN, NIRSAL
arrangement .
viii. Promot ion of farm power t hrough the exist ing Animal Traction and Hand Tools as well as the
Tractorizat ion programmes of t he M inist ry.
ix. Fabricat ion of rice processing / equipment s for supply t o beneficiaries at 50% cost under
grow t h enhanced support while encouraging privet sect or investors to est ablish modern
int egrat ed processing mills.
x. Creat ion of awareness in product ion, processing, and marketing of rice in collaboration w it h
NAERLS and privat e service providers.
xi. Support to NCRI and Africa Rice in production of breeder and Foundat ion Seed I, support in the
product ion of Foundat ion Seed II and for supervision of cert ified seed product ion by SEEDAN
and outgrowers.
xii. Promot ion of the development of public/ privat e part nership (PPP) arrangement in product ion
input supply, processing and market ing of rice in and out side Nigeria.

4.3 Project justificat ion

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4.3.1 The project is fully aligned w ith vision 20:20 in the follow ing areas:

i. Enhancing product ion and productivit y is a primary object ive of the project to meet national
demand and achieve food security.
ii. The nation’s effect ive irrigat ed land shall be increased from the current less t han 1% of arable
land to about 10% by 2015 t hrough rehabilit at ion of exist ing schemes.
iii. The fert ilizer sector w ill be approached t hrough voucher system of administ ration under a PPP
arrangement w it h st rong Government supervision.
iv. Agricultural Research Inst itutions including NCRI and Africa Rice Cent re w ill be encouraged to
int ensify research t o develop high yielding, disease resist ant planting mat erials.
v. M echanization including land preparat ions and int egrat ed processing mills w ill be promot ed t o
ensure qualit y of processed rice under PPP arrangement .
vi. Agricultural Ext ension delivery syst em w ill be enhanced t o facilit at e enlight enment of
(st akeholders) and to achieve mass adopt ion of improved t echnology. M ore extension officers
w ill be involved and training provided t o enhance t heir capacit y.
vii. Through improved processing and storage, post harvest losses w ill be minimized. The project
w ill at t ract investors into t he sector under PPP arrangement.
viii. The project is designed to creat e a new generat ion of high input – high output farms t hat w ill
drive t he product ivity machinery of the sub-sector through applicat ion of modern cultural
practices and t echnology along the value chain.

4.3.2 Apart from Instit ut ional development, the project w ill;

i. Increase rice product ion to meet domest ic short falls in demand

ii. Cont ribute t owards povert y reduct ion/ alleviat ion
iii. Generat e employment
iv. Conserve Foreign exchange
v. Diversify t he economy
vi. Improve farmers economic w ell being
vii. Improve standard of living of t he st akeholders in product ion, processing and marketing
viii. Reduce rural urban migrat ion
ix. Increase the product ion of other crops especially w heat as a result of the provision of input s and
irrigat ion facilit ies

Overall Strat egy

The three main product ion ecologies for rice in Nigeria are low land rice, upland rice and irrigat ed rice.
Amongst t hese, low land rice has t he highest priorit y for reduced product ion cost s – being the ecology
t hat represent s the largest share of rice area and rice production (Table 2). Furthermore, t he social
opport unit y costs of producing rice in low lands t end t o be limited in view of the limit ed viable
alt ernat ives. The upland and irrigated rice ecology have an approximat ely equal share in overall
product ion. St ill, irrigated rice should be second in priorit y as it represents an easier t o target area –
being smaller and less diffuse and having had past land development invest ment s – w it h pot entially high

10
spillovers from ot her regions. Within irrigated rice, immediate focus should be targeted t o exist ing
schemes (i.e. w here the irrigat ion invest ment is a sunk cost) – not to the construction of new schemes.
Kebbeh et al. (2003) reported in his survey of challenges and opportunities for improving irrigated rice
product ivit y in Nigeria t hat in addit ion to problems w it h maint enance and operat ion of the northern
irrigat ion, there is w idespread underutilizat ion of irrigat ion infrastructure at all schemes visit ed in the
nort h. This under ut ilizat ion can be readily t aken care of by rehabilit at ions. Upland rice should be third
priorit y. The mangrove ecology is mainly of local import ance in the delta w it h only a minor cont ribut ion
t o the nat ional rice subsector and does not merit att ent ion w it hin the cont ext of t his plan. For each rice
ecology, tw o main opt ions exist to increase the price competit iveness of Nigerian rice: increasing yields
and reducing production costs. The relat ive pot ent ial of each depends on t he ecology.

Table 2. Relat ive cont ribut ion of main rice ecologies to t he rice sub-sector

Ecology Area (000ha) Area share Yield/ ha Product ion

Share
(mt/ ha) Rice (000 mt )
Upland 493 30% 1.9 562 28%
Low land 854 52% 1.7 871 43%
Irrigat ed 263 16% 3.7 583 29%
M angrove 16 1% 2.0 20 1%
Overall 1642 2.1 2036

5.0 STRATEGY FOR DRIVING THE RICE TRANSFORM ATION PROJECT.

5.1 Stat e Participation:

This project w ill be implement ed in 20 major rice producing States in the first instance. The States are
Niger, Kwara, Kebbi, Kano, Kaduna, Taraba, Adamawa, Borno, Benue, Anambra, Ebonyi, Ekiti, Nasarawa,
Ogun, Enugu, Baylesa, Cross River, Sokoto and Rivers Stat es and FCT. Gradually, it w ill be expanded t o
cover all the st at es.

Farmers w ill be enumerated and regist ered w it h the aim to:

Incent ivize t he formation of clusters of farmers around small and large scale processing factories
and disseminate t o t hem improved production packages t o increase product ivity. Ensure
farmers a market for t heir rice paddy via a direct access t o existing processing fact ories. Also,
establish a guarant eed minimum price scheme w it h government as buyers of last resort .

In year 2012, farmers’ part icipat ion w ill be in tw o cat egories:

5.2 Category 1 is farmers in locat ions ident ified w ith rice or clusters of rice farmers/ outgrow ers.
These w ill be organized and biometrically registered t o aggregat e them for access to improved
t echnology, seeds and ot her input s as w ell as markets. Credit, training and all kinds of support provided
by the project w ill be channeled to them. Such farmer should have 0.5ha of land and above and ready to

11
apply all the improved cultural pract ices as st ipulat ed by t he project. They w ill be monitored
aggressively all through the project life. Farmers in this cat egory w ill produce grade A paddy from
varieties preferred by millers and consumers suitable for large mills currently being installed in the
selected Stat es. They w ill have measurable and quant ifiable target s. It is project ed that 20% of farmers
w ill fall into t his category in 2012, another 25% in 2013 and 2014 respect ively and the rest of the
farmers w ill be covered by 2015.

st
5.3 Category II: These are farmers who do not belong t o the 1 cat egory probably because t heir
farms are isolated. Such farmers w ill be reached through the RIFAN in t heir st at es. Inputs w ill be given t o
t hem also as grant enhancement but t hey may not come under the intensive supervision, and
st
monit oring as the 1 cat egory.

5.4 Intensifiaction . Yield improvement per unit area is a fast option for increasing domestic supply
in the Nigerian rice market . It involves using all t he modern technologies – improved seeds, correct and
t imely fert ilizer application, good plant population, use of herbicides t o cont rol w eeds and harvest ing at
optimum t ime. Rice experts agree that current yield level can be doubled by the ut ilizat ion of the best
rice crop management techniques. The Transformat ion Team w ill link up farmers w ith suppliers of
inputs (fert ilizer, Agro-chemicals; improved seeds, Premier Seeds and others, and various t ractor
operators’ Associations for t imely land preparation)

It is expect ed t hat between 2012 and 2015 yield per hectare w ill increase as follow s for the regist ered
farmer’s clusters; Table 3.

Table 3: Expected Incremental Average paddy yield (ton/ ha) 2011 t o 2015.

Regist ered Farmers 2012 2013 2014 2015

Rainfed low land (paddy ton/ ha) 3.5 4.5 5.5 6.0

Irrigat ed low land (paddy t on/ ha) 4.0 5.0 6.0 7.0

Non Regist ered Rice farmers (paddy ton/ ha 2.5 3.0 3.5 4.0

5.5 Variet ies t o be promot ed:

The follow ing varieties w ill be emphasized across the rice belt.

FARO 44 early maturing (100-115) days (SIPPI), low land,

FARO 51 CISADANE, low land,

FARO 52 medium maturing (120 -135) days, low land

FARO 57 medium mat uring (120 -135) days, low land

NERICAs 19, 34 and 49 new low land variet ies from Africa Rice Cent er

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 WAB 189-B-B-8- HB (upland – NERICA), upland.

FARO 56 & 55 upland. NERICAs 7 and 8 for immediat e release.

- NCRI and Africa Rice w ill be funded t o provide Breeder seed for t he project .
- The product ion of Foundat ion Seed by t he Nat ional Agricultural Seed Council (NASC) w ill be funded
under the programme.
- Cert ified Seed w ill be provided by regist ered seed companies under a cooperat ion agreement w it h
SEEDAN. Financial support w ill be given t o the Seed Companies t o facilitate product ion.

5.6 Area Expansion

Prospects for rice expansion in the lowland are feasible. Currently, only about 20% of inland valleys are
being exploited.

Irrigated rice is considered as one of the most promising rice-based systems. It produces the highest yield
per ha of all the systems and in addition offers the chance for two crops per year. The potential to expand
is large especially as we look beyond the lowlands and explore nearly level plateaus that are situated near
perennial sources of water (as the case in Lade, Patigi LGA in Kwara State).

For the Project, land area expansion under irrigation will focus on rehabilitation of existing irrigation
schemes that are currently abandoned. A t ot al of 73,155ha of land w ill be rehabilit at ed bet w een 2011 and
2013, Table 4.

Table 4: Rehabilitation of Existing Irrigation Projects in Nigeria (2011-2013) (ha)

Zones 2011 (Ha) 2012 (Ha) 2013 (Ha) 2014 2015 Total (Ha)

North West 6,000 7,700 12,400 - - 26,100

North East 800 3,270 750 - - 4,820

North Cent ral 1208 625 2,010 - - 3,843

South West 930 1,050 400 - - 2,380

South East 2,658 1,353 1,330 - - 5,341

South Sout h 14,548 16,063 60 - - 30,671

Tot al 26,144 30,061 16,950 - - 73,155

Source: Federal Ministry of Water Resources.

Increase in Area Under Cultivat ion (expansion) can be further achieved through:
- Enhanced wat er management practices part icularly flood control measures in flood plains
- Expansion of FADAM A III act ivities to include rice product ion;

13
 - Expansion of land under upland rice cultivat ion. Land expansion under this option will be
confronted with environmental challenges especially where soil replenishment depends mostly of
fallow.

5.7. Planting Target and Production:

A proport ion of agricult ural lands are already under cult ivat ion but under low input and low output
(yield) environment. The project w ill change this scenario by providing services that w ill raise t he out put
from t he current 1.5 t on/ ha to 6.5 ton/ ha by 2015. The plant ing programme and product ion is
summarized in Table 5A and 5B:

i. Category 1 farmers

These are farmers t hat w ill be registered as project farmers. They w ill receive all kinds of support at
subsidy and w ill be int ensively support ed.

Table 5A: Targets for Area, Paddy and milled rice output

2012 2013 2014 2015

Planting Target (ha) 250,000 450,000 700,000 1,000,000

Output paddy in m t 875,000 2,025,000 3,850,000 6,500,000

Output m illed r ice in m t 525,000 1,215,000 2,310,000 3,900,000

(60% paddy)

ii Category II Farmers:

These are a mixt ure of rainfed upland and rainfed lowland farmers operat ing at relat ively low input/ low
output environment across the part icipat ing stat es. They w ill be accessed through t he RIFAN at bot h
National, Stat e and FCT levels. Some of these farmers are already int o rice cult ivat ion but w ill be
supplied w it h inputs through RIFAN under grow t h enhanced scheme.

Table 5B: Target for Area, Paddy and M illed Rice Output

2012 2013 2014 2015

Planting Target (ha) 200,000 300,000 400,000 500,000

Output paddy (m t) 500,000 900,000 1,400,000 2,000,000

Output m illed r ice (m t) 300,000 540,000 840,000 1,200,000

(60% paddy)

Projected Total M illed Rice Production (mt) 825,000 1,755,000 3,150,000 5,100,000

14
 By 2015, t otal production under the project w ill be 5.1 million mt of milled rice. This when
added to about 1.3 million mt being produced by farmers who did not join the project , puts the total
national product ion of milled rice at 6.4 million mt per annum.

5.8 Low hanging fruits’ to raise demand for locally produced rice.

1. Tackling the problem of poor qualit y in rice

The main reason why locally produced rice is not at tractive to urban dw ellers is t he admixt ure
w ith ext raneous materials like st ones and other debris. Over 80% of locally produced paddy is
processed and milled by small mills. Intervent ion such as increasing the access of small mills t o
destoners and color sorters, and parboilers t o modern parboiling equipment w ill immediately
t ake away the const raint t o accept ability to acceptability by urban dw ellers.

2. Eliminat ion of interstat e taxes on paddy movement across borders.

One of the complaints of the millers is high cost of paddy especially w hen sought from
neighboring Stat es. A government intervent ion t hat w ill eliminat e interstat e road t axes on
paddy movement across State borders w ill significantly reduce cost of t ransaction, energize the
millers t o vigorously search for and increase demand for paddy.

3. Guarant eed minimum price for paddy

A guarant eed minimum price that offers farmers a fair price for paddy and a mechanism t hat
gets the paddy t o the mills at a cost t hat gives the mills a good margin of profit w ill enhance
demand for paddy by the mills and st rengt hen the synergy betw een t he farmers and the millers.

5.9 Seed Requirement

The national seed requirement for 2012 is put at 30,600 tons of Certified Seeds. Total Cert ified Seed
presently available locally in the count ry is est imat ed t o be about 14,000 M T. The shortfall of 16,000 M T
w ill be sourced from neighboring African count ries – WITA 4 (FARO 52) from Cot e D’Ivoire, Low land
NERICA 19 from M ali and Low land NERICA 49 from Niger Republic.

Projected seed requirement s t ill 2015 are show n in Table 6 below .

Table 6: SEED REQUIREM ENT TARGET (2012 – 2015)

ANNUAL TOTAL (Nm)
SEED(TONS) COST OF SEED (mN)
YEAR CS FS BS CS FS BS
2012 30,600 510 8.5 6,120.0 153.0 4.55 6,277.55
2013 51,000 833.33 13.9 10,200.0 249.990 7.0 10456.99
2014 76,500 1200 21.3 16,720.0 446.250 12.78 17,179.03
2015 102,000 1700 28.3 22,440.0 595.000 16.98 23,051.99
TOTAL 55,480.0 1,444.24 41,310 56,965.55

15
 i. N 200/ Kg for CS in the 1st t w o years; N 220 / kg in t he next tw o years
st
ii. N300 / kg for FS in the 1 tw o years; N350/ Kg FS in the next 2 years.
iii. N 500/ Kg for BS in the 1st t w o years; N 600/ Kg BS in t he next tw o years.

The seed sector faces some challenges that need to be addressed immediat ely:
1. Lack of operat ional cost.
2. Need t o introduce technology for hybrid rice product ion.
3. Lack of adequate seed processing plant s w ith drying and st orage facilit ies.
4. Need t o rehabilit at e exist ing seed processing plant s.
5. Need for effective monit oring of all t he sectors in t he seed value chain to ensure maint enance of
lim it ed generation cycle.
6. Inadequat e number of breeders, seed t echnologist s and seed analyst s.
7. Inadequat e seed t est ing laboratories.

5.10 Fert ilizer Requirem ent

Alt hough rice responds sharply t o fertilizers application, fertilizer use in rice is st ill minimal due to high
cost and errat ic availability. The recommended fert ilizer rat e for rice is 300 kg NPK plus 200 kg urea per
hect are. The project w ill deal directly w it h fert ilizer companies so t hat t hey can supply fertilizers directly
t o the farmers at 50% cost under a voucher arrangement w hile Federal and State governments pay 25%
each t o fertilizer companies under grow th enhancement scheme.

5.11 Agro-Chemical Requirement for 2012-2015

Use of agro-chemical in rice product ion is quit e minimal in Nigeria due t o farmers inability t o afford the
chemicals. Consequent ly, t hey depend on manual w eeding method (rouging). Even in the event of pest
and disease they still remain handicapped in taking control measures and in most cases they may not
have t he fund to purchase the chemicals. The total cost of agro-chemicals w ill rise from 2.25 billion t o
3.86 billion in 2015. The Chemicals w ill be supplied at stat e level through service providers who w ill
supply directly to farmers at 50% cost while the Government pays t he balance of 50% as grow t h
enhancement. Table 7 show s t he agrochemical requirement for t he project from 2011 t o 2015.

TABLE 7 INPUT REQUIREM ENTS FOR 2011 TO 2015

Act ivit y Quant it y Costs (Nm ) Tot al (Nm )

2012 2013 2014 2015 2012 2013 2014 2015

Agrochem icals 1,967.2 2,340.55 2,867.96 3,448.85 10,624.56

a. Herbicides

- Pre-Em ergence 100,500 120,600 150,200 190,100 251.25 300.0 375.0 475.0 1,401.25
(lt s)

- Post -Em ergency

(lt s) 120,100 130,100 175,000 225,000 300.0 325.0 437.5 562.5 1,625.00

b. Insect icides (lt s) 51,500 58,200 65,250 70,400 77.25 87.3 97.88 105.0 367.43

16
c. Rodent icides (m t ) 120,100 138,400 175,500 225,100 180.0 207.6 263.25 337.65 988.50

d. Fungicides (lts) 51,500 58,200 65,250 70,400 77.25 85.30 97.88 105.6 366.03

e. St orage (lts) 54,300 56,900 64,300 75,400 81.45 85.35 96.45 113.1 376.35

f. Sprayers 40,000 50,000 60,000 70,000 1,000.0 1,250.0 1,500.0 1,750.0 5,500.00

g. Fertilizers: 285.28 327.86 365.45 414.51 1,393.10

- NPK (20:20:20) 52,000 60,000 65,000 72,000 208.0 240.0 260.0 288.0 996.00

- Urea 22,000 25,000 30,000 36,000 77.0 87.5 105.0 126.0 395.50

- M icro Nut rient s 35.0 45.0 56.0 64.0 0.28 0.36 0.45 0.512 1.60

TOTAL 2,252.48 2668.41 3,233.41 3,863.36 12,017.66

5.12 Publicity and Sensitizat ion for 2012 t o 2015

NAERLS, Samaru has t he mandat e for agricultural extension in Nigeria. The project w ill collaborate w it h
t he Inst itutes to produce post ers, hand bills and other advertorials which w ill be used in product ion,
processing and marketing of local rice. NCRI as well as FDA w ill be fully involved in product ion and
distribut ion of ext ension manuals. Radio, TV and new paper advert isement w ill be employed in handling
procurement processes and other advert s. Table x show s the various activit ies designed to promot e
publicity and linkages in the project . The cost of these activit ies amount to N1,268.0 million over the
four (4) years of the project life, 2012-2015.

TABLE 8: PUBLICITY, SENSITIZATION AND M ARKETING FOR 2011 TO 2015

Activit y Quant it y Unit Cost (Nm ) Tot al Cost

Coat (Nm )
(‘000N)

2012 2013 2014 2015 2012 2013 2014 2015

Print M edia - - - - Lum p 40.0 40.0 40.0 40.0 160.00

Television - - - - Lum p 45.0 45.0 45.0 45.0 180.00

Radio - - - - Lum p 48.0 48.0 48.0 48.0 192.00

Extension Guides - - - - Lum p 64.0 64.0 64.0 64.0 256.00

Post ers and Hand Bills - - - - Lum p 50.0 50.0 50.0 50.0 200.00

Sem inars and w orkshops 4 4 4 4 Lum p 70.0 70.0 70.0 70.0 280.00

TOTAL 317.00 317.00 317.00 317.00 1,268.00

M arket ing - - - - Lum p 15.0 15.0 15.0 15.0 60.0

17
 5.13 Training Requirements

The Nigerian farmers need adequate t raining in relevant areas of Agriculture. There w ill be regular
t raining courses on product ion processing and market ing of rice t o bring Nigerian rice t o international
standards. Training w ill be conduct ed on geo-political zones, (Table 9)

Table 9: Training Requirements for 2012 to 2015

Activities No of Training Schedules Cost of Training (Nm) TOTAL

(Nm )
2012 2013 2014 2015 2012 2013 2014 2015

Zone, North East 3 3 3 3 50 50 50 50 200

Zone, North West 3 3 3 3 50 50 50 50 200

Zone, North Central 3 3 3 3 50 50 50 50 200

Zone, South East 3 3 3 3 50 50 50 50 200

Zone, South West 3 3 3 3 50 50 50 50 200

Zone, South South 3 3 3 3 50 50 50 50 200

TOTAL 18 18 18 18 300 300 300 300 1,200

6.0 IRRIGATION AND LAND DEVELOPM ENT

Only about 16% of t he t otal land area available for rice cult ivat ion is irrigat ed. How ever, this accounts
for as much as 29% of national production. With t he uncert aint ies associat ed w ith w eather, sole
dependence on rain fed condit ions as a means t o boosting product ion in Nigeria cannot be assured. It is
imperat ive t hat irrigat ed rice product ion play a significant role. Federal M inistry of Agriculture should
collaborat e w it h M inistry of Wat er Resources t o provide resources for rehabilit at ion of existing schemes
across the federat ion.

Nigeria has high pot entials for irrigated rice development w it h vast but unt apped pot ent ials in
t he flood planes of river Niger, Benue, Cross River, Kaduna-Karadawa Sokoto-River, Hadejia-Jama’are,
Gongola, Chad Basin, Ogun, Osun, Imo, Anambra and Benin-Ow ena River Basins tot aling about 1.4
million hetares.

Details of rehabilit at ion programme of t he exist ing irrigation schemes in the count ry have been
developed by t he M inist ry of Water Resources. A t otal of 73,155ha of land w ill be rehabilitated
betw een 2011 and 2013. Details are shown in Table 10.

18
 Table 10: Rehabilitation of Existing Irrigation Projects in Nigeria (2011-2013) (ha)

Zones 2011 (Ha) 2012 (Ha) 2013 (Ha) 2014 2015 Total (Ha)

North West 6,000 7,700 12,400 - - 26,100

North East 800 3,270 750 - - 4,820

North Cent ral 1208 625 2,010 - - 3,843

South West 930 1,050 400 - - 2,380

South East 2,658 1,353 1,330 - - 5,341

South Sout h 14,548 16,063 60 - - 30,671

Tot al 26,144 30,061 16,950 - - 73,155

7.0 FARM POW ER REQUIREM ENTS

The provision of adequate farm pow er is cent ral t o increasing rice product ion to reduce drudgery and
ensure t imely field operations.

Table 11 show s the distribut ion of farm equipment s for t he registered farmers in 20 stat es of the
federation.

For the non-regist ered farms, the farm pow er requirement in the form of t ract ors and implement w ill be
as follow s:

400 in year 2012

300 in year 2013

200 in year 2014

200 in year 2015.

These tractors and implement w ill be st at ioned at strat egic locat ions for t ractor hiring services under
PPP arrangement . Farmers w ill also be encouraged t o buy tract ors as cooperat ives under the
t ractorizat ion programme of the M inistry. Tract ors w ill be sold at 50% subsidy. They w ill be owned and
operat ed by owner of large mills that w ill adjoin the clust er farms or service providers.

19
 Table 11: Farm Power and Processing Requirements Equipment for 2012 – 2015

YEAR 2012 2013 2014 2015

Planted Area for M achine/ Equipm ent provision 450,000 1,820,750 2,080,750 2,340,750

1. Land Preparation

i. 75 No Tractor with im plem ents (Plough, Harrow) 740 740 740 740

ii. Pow er Tiller w ith rotavator 370 370 370 370

2. PLANTING:

i. Seed Drill 72 72 72 72

ii. Transplanter 72 72 72 72

3. CROP PROTECTION:

i. Knapsack Sprayer 300 300 300 300

ii. Boom Sprayer 74 74 74 74

4. HARVESTING:

i. Rice Reaper (0.5 tonne/ hr) 180 180 180 180

ii. Thresher (0.75 tonne/ batch) 180 180 180 180

iii. Combine Harvester

a. 1 tonne/ hour 370 370 370 370

b. 5 tonnes/ hour 37 37 37 37

5. PROCESSING:

i. Parboiler 370 407 407 444

ii. Dryer 370 407 407 444

iii. M echanical Dryer 370 407 407 444

iv. Probe M oisture Test er 370 407 407 444

v. Rice M ill 1000 tonne/ yr 37 37 74 74

vi. Rice M ill 50,000 tonnes/ yr 4 5 5 6

vii. Destoner 100 100 142 142

viii. Packagin equipm ent (Bag, sewing and hot sealing 105 105 142
m achines)

20
8.0 PROCE SSING SUB-SE CTOR

8.1 The quality of the local rice is a major concern for the future of the Nigerian rice sector. The
processing Sub-sector is highly fragmented and offers no standard for quality of product. While part of the
issue relates to the biophysical properties of the varieties locally produced, the major problem is the
appearance and the cleanliness of the rice delivered to the market. While the milling technology has a great
incidence on the technical performance, it is recognized that these attributes are greatly affected by the
attention given to pre-milling and post-milling operations. These operations include winnowing paddy,
drying, parboiling, destoning, and eventually packing. Parboiling paddy is the most important processing
operation besides milling. It consists of soaking paddy in hot or cold water in a drum, followed by a rapid
exposure of the soaked paddy to steam and a gradual drying for at least one day. The purpose of the
operation is to respond to consumer preferences while it also has a positive effect on the grain milling
properties (high recovery ratio) and on its nutritious properties. In Nigeria, all paddy processed is parboiled.
Rice farmers, millers and specialized operators providing the service to producers or traders can equally take
care of parboiling operation. It is recognized that the quality of the parboiling operation has a great influence
on the technical performance of milling and therefore on the quality of rice. Accordingly, miller-traders
generally prefer to parboil the purchased paddy themselves, while millers-only generally do not parboil
themselves.

The goal is to ensure that paddy rice going for processing conforms to the following international
specifications:

Paddy shall:-

a) be the dried mature grains (with husk) of Oryza sativa L.;

b) have uniform size, shape and colour;

c) be hard, clean, wholesome and free from moulds, weevils, obnoxious smell, discolouration, admixture of
deleterious substances and all other impurities except to the extent indicated in the under special
characteristics;

d) be in sound merchantable condition; and

e) not have moisture exceeding 14 percent.

The cost of processing represents an increasing share of the production cost for local rice. Of this cost,
parboiling makes up 75% of the processing cost, with milling contributing 17% and other operations
accounting for the remaining 8%. This has obvious implication for cost effectiveness since there are very
few integrated large milling plants that can handle the parboiling process in the country. Even these plants
have often failed due to problems of operating efficiently for such reasons as low capacity utilization and
idleness during off – peak season.
Secondly, the high cost of parboiling rice –75% of total processing costs - is due to the energy required, even
where fuel wood is utilized. There is a need to adopt energy-efficient parboiling technologies.
Thirdly, the market price instability for finished rice often results in loss of profits to those women who, as
front-line processors, bear the risk of holding the grains procured from the farm gate for parboiling, until
they are presented to the open market after milling. These women should be empowered to enhance their
performance in this economic function. It is important that the large millers begin to invest in large storage
facilities to stockpile both paddy and grains, in order to obviate the problems arising from large unutilized
capacities in the mills during off-peak season and from market price instability.

21
Fourthly, there is a need for investment in storage facilities, bore holes (and other clean water sources), good
roads for evacuation of paddy or even the rice at the point of processing.
Finally, processing for value-added must take into account the full recovery of all rice byproducts
as most of them easily find use in the production of other goods. This way profitability is further enhanced.
For example, rice bran is a valuable commodity for livestock feed, domestic fuel and organic manure. The oil
from bran is used for cooking, soap making, and anti-corrosive and rust resistant oils. The rice straw is used
in the manufacture of straw board, thatching, making hats and mats as well as fodder for cattle.

8.2 Challenges in Rice Processing and Marketing

 Challenges of harvesting/ mechanization

 Challenges of equipment for harvesting and primary processing for small and medium scale
processors
 Poor agronomic practices and post harvest handling.
 Unavailability of appropriate technology on Parboiling and Drying equipment
 Challenges of parboiling for small scale industry
 Dearth of Proper Out-growers Scheme and inadequate quantity of certified seeds.
 Unavailability of adaptable equipment
 Challenges of Pricing for both paddy and milled rice
 Lack of infrastructural Development like access roads, power and water.
 Lack of Standardized weight and measures making pricing difficult.
 Challenges associated with Inventory Management and storage facilities
 Underdeveloped paddy market
 Lack of proper access to credit. Reluctance of Banks to lend due to inadequate solution.
 Underdeveloped quality control.
 Lack of availability of homogenous paddy.
 Manpower capacity development problem for farmers on Paddy Post –harvest handling and milling
operators.

8.3 Rice Processing Requirements

8.3.1 Small Scale Processing M ill

Rice processing is a major challenge facing the rice sub-sector of the Nigerian economy. Poor processing
met hod relate t o harvest ing, threshing, drying, parboiling and milling. Some of the large int egrated
milling machines have broken down and need urgent repairs. In addit ion most of t he small processing
machines lack accessories such as destoners, rice graders, drying slabs, batch dryers and parboiling
t anks. These should be made available to rice millers t o improve the quality of processed rice.

NCRI, Badeggi has developed some efficient processing equipment. Also a lot of w ork has been
done by Nat ional Cent re for Agricult ural M echanizat ion (NCAM ), Ilorin as w ell as the Nigerian M achine
Tools (NM T) Oshogbo. The fabricat ion of rice processing equipment w ill be undertaken under this
project and distribut ed t o farm ers at 50% subsidy. Tot al cost of mill accessories is N19,320.0m while the
t ot al cost of new milling machines is N2,496.0m, (Table 12).

22
 TABLE 12: NEW M ILLING M ACHINES AND ACCESSORIES REQUIREM ENT FOR 2011 TO 2015

Num ber Required Cost/ un Cost (Nm) Total Cost

it (Nm )

(N )

Activit y Capacity 2012 2013 2014 2015 2012 2013 2014 2015

M ill Accessories

Dest oners 300kg/ day 1,000 1,000 1,000 1,000 5,000,000 500.0 500.0 500.0 500.0 2,000.0

Rice Graders 300kg/ day 1,000 1,000 1,000 1,000 5,000,000 500.0 500.0 500.0 500.0 2,000.0

Rice parboiling m achine 300kg/ day 1,000 1,000 1,000 1,000 2,000,000 500.0 500.0 500.0 500.0 8,000.0

Rice Tem poring Dryers 300kg/ day 1,000 1,000 1,000 1,000 1,500,0 500.0 500.0 500.0 500.0 6,000.0

300kg/ day
Wet Cleaners 1,000 1,000 1,000 1,000 80,000 500.0 500.0 500.0 500.0 320.0

300kg/ day
Pneunat ic cleaners 1,000 1,000 1,000 1,000 250,000 500.0 500.0 500.0 500.0 1,000.0

TOTAL 4,830.0 4,830.0 4,830.0 4,830.0 19,320.0

New M illing M achines

Nort h Cent ral 300kg/ day 20 20 20 20 5,200,000 104.0 104.0 104.0 104.0 416.0

Nort h West 300kg/ day 20 20 20 20 5,200,000 104.0 104.0 104.0 104.0 416.0

Nort h East 300kg/ day 20 20 20 20 5,200,000 104.0 104.0 104.0 104.0 416.0

Sout h West 300kg/ day 20 20 20 20 5,200,000 104.0 104.0 104.0 104.0 416.0

300kg/ day
Sout h East 20 20 20 20 5,200,000 104.0 104.0 104.0 104.0 416.0

300kg/ day
Sout h Sout h 20 20 20 20 5,200,000 104.0 104.0 104.0 104.0 416.0

TOTAL 60 60 60 60 624.0 624.0 624.0 624.0 2,496.0

GRAND TOTAL 5,454.0 5,454.0 5,454.0 5,454.0 21,816

M ill Component s Rubber Roller at N1,700,000/ unit

Per boiled at N1,800,000/ unit
Dryer at N1,300,000/ unit
Cleaner at N300,000/ unit
Weighing scale at N200,000/ unit
Bagging machine at N80,000/ unit
Total N5,200,000/ unit

23
 8.3 Establishment of seventeen (17) integrated large scale Rice Processing Plants by NFRA.
The Federal Executive Council approved the est ablishment of 17 integrat ed large scale rice processing
mills in 12 stat es of t he federat ion. The approved schedule is as indicat ed below :

S/ N COM PANY NAM E STATE TO SITE LOCATION NUM BER OF UNIT COST TOTAL COST 40% CREDIT
OPERATE PROCESSING AM OUNT
PLANTS RECOM M ENDED

1 OLAM NIGERIA LTD KWARA Pat egi 3 N1.4 Billion N4.2 Billion N1.680 Billion

ADAM AWA Yola

BENUE M akurdi

2 DEANSM ANGER NIGER Wuya 2 N1.4 Billion N2.8 Billion N1.120 Billion
PROJECTLTD
Bida

3 ISYAKU RABIU & SONS KANO Sharada 2 N1.4 Billion N2.8 Billion N1.120 Billion
LTD

4 TARA-AGRO TARABA Wukari 1 N1.4 Billion N1.4 Billion N560 M illion

INDUSTRIES LTD

5 LABANA GLOBAL KEBBI Brinin Kebbi 2 N1.4 Billion N2.8 Billion N1.120 Billion
VENTURES LTD

6 ADA RICE PRODUTION ENUGU Adani 2 N1.4 Billion N2.8 Billion N1.120 Billion
NIG LTD

7 BAYELSA FARM BAYELSA Yenogoa 2 N1.4 Billion N2.8 Billion N1.120 Billion
COM PANY LTD

8 EBONY AGRO EBONYI Ikw o 1 N1.4 Billion N1.4 Billion N560 M illion
INDUSTRIES LTD

9 STINE INDUSTRIES LTD ANAM BRA Am ichi 1 N1.4 Billion N1.4 Billion N560 M illion

10 OFADA VEETEE RICE OGUN It ori 1 N1.4 Billion N1.4 Billion N560 M illion
NIG. LTD

TOTAL 17 N23.8 Billion N9.52 Billion

The purpose of this approval is to utilize t he sum of N10billion from the rice levy account for a credit
scheme to support local rice processing capacit y expansion through procurement , installat ion and
set ting up of 17 large scale rice processing mills in 12 major rice producing areas.

The programme is to be implemented through Public Private Partnership (PPP) Concept of design, Build,
Operat e and Own (DBOO) model, w it h 40% credit from the Federal Government and 60% Invest ors
share arrangement .

24
The 40% Federal Government credit is to be disbursed t hrough the Bank of Industry in collaborat ion
w ith UBA, ZENITH Bank, Access Bank, Int erCont inental Bank, Bank PHB, Fidelit y Bank, Unit y Bank, Fin
Bank and FCM B.

The Central Bank of Nigeria, CBN, shall monit or the participat ing banks and t he beneficiaries’
performances and appropriate sanct ions where necessary.

The Federal Government’s 40% credit at t ract s 4% interest rat e, 25 year payback period and 5 year
moratorium.

th
The signing of tripart it e agreement s by t he parties concerned was carried out on 30 July, 2009.

th th
Sit e inspection and selection for the project w ere undert aken from 11 – 15 August , 2009.

At present , w ork has st arted on only 7 of t he integrat ed mills and none has been complet ed. None
readiness of the mills might constit ut e some challenge at 2012 harvest .

8.4 M arket fluctuations and flows

a) Seasonalit y and st orage

Paddy production is seasonal as all agricult ural production – whereas double-cropping is limited
in Nigerian rice product ion syst ems. Paddy and rice st orage t herefore offer a means t o
smoot hen rice supply to consumers. Rice producers, t raders or consumers, can perform t his
function at any stage of the commodit y chain. For millers a smoot her supply of paddy
t hroughout t he year also permit s a more rational and bet ter use of t he equipment. W hile
millers-only are entirely dependent upon t heir customers’ marketing plan, and can st ore paddy
t o smoothen the act ivity. The share of miller-t raders st oring rice is higher for the largest size of
mill, w hich corresponds to higher financial and physical st orage capacit y.

In fact, miller-t raders st ore paddy t o facilit at e milling operat ion rather than to speculat e on
market changes betw een peak and lean periods.

8.5 Storage Capacity

 Government should expedit e t he completion of all silos and w arehouses under

construct ion and set aside about 25% - 40% of t hese storage space for t he procurement
of paddy from farmers to be released t o Processors w hen the need arises.

 Open warehousing should also be encouraged.

 Commodity stock exchange and w arehousing receipt f inancing should also be adopt ed.

9.0 GOVERNM ENT POLICY ON EXTENSION, FARM INPUT AND STORAGE

Exist ing agricultural policies w ere review ed and recommendations were made as follow s:

25
9.1 Extension:

 Training of extension agent s on rice production, processing and market ing activit ies in the rice
Recommendat ions:

 Increased funding of public extension syst em in order t o revamp the ext ension system and t o
value chain;

 Forging a strong collaboration bet w een the stat e and local government s in providing extension
remobilize ext ension agent s for more effective ext ension w ork.

 Exploring and encouraging the capacit y of privat e sect or to render incremental extension
services to farmers in rice producing areas.

services, w it h part icular reference t o main actors in the rice value chain; namely: Product ion

 Adopt ing t he Cooperative Ext ension System for rice t o Institutionalize rice extension service in
(agro-dealers); Storage and Processing (Rice mills); M arket ing (rice merchant s).

relevant areas, w hereby the three tiers of government act in unison t o sustain a line item vot e in

 St reamlining the role of the ADPs to be sharply focussed on rice extension w ork in relevant
t heir respect ive budgets for focused and integrat ed ext ension work.

states.


9.2 Farm inputs:
The current policy (2001, 2006) that discourages government in procurement and


distribut ion of fert ilizer should be observed.
The role of government should be restrict ed to provision of fert ilizer subsidy (25%)
t hrough the technology-enhanced voucher scheme, and the regulat ion of the fertilizer


market including qualit y cont rol.
Provision of 50 % price subsidy on rice seed at the output end of rice seed product ion
(seed companies), for t he gradual replacement of farmers’ seed st ock w it h improved


rice seed w it hin four years.
St rengthening NASC for act ive work t owards seed replacement for rice, regarding the
different aspect s of it s mandate as indicated in t he current policy document ; namely:
rice research and development, Varietal Registrat ion and Release, Seed Product ion and
M arketing, Seed quality cont rol and cert ification, rice Seed Im port and Export, Seed
Processing/ Condit ioning, Seed Ext ension and Promot ion; Seed Pricing; Private sector


development; Human capacity development .
Exploring the West African Regions to source additional certified rice seed varieties
under the ECOWAS prot ocol in the short term towards meet ing the seed demand for


t he rice t ransformat ion init iative.
Promotion of agro-dealer net w orks for increased access of rice farmers t o pest icides
and other relevant agro-chemicals.


9.3 STORAGE POLICY


Revitalizat ion of st rategic reserve for rice at the national level


Increased storage facilit ies for maint aining buffer stocks at st at e level;


Farmer support for increased on-farm st orage of rice at local level
Part icipat ion in WFP t hrough t he nat ional rice reserve

26
10.0 M ARKETING/ TRADE
10.1 Tariff structure
The group identified t he prevailing t ariff structure as unfavourable t o the present int ention of
government to stimulat e large increment al rice product ion in the count ry. This is based on WTO rules
and ECOWAS prot ocol to t he effect t hat 5% is charged on brown rice and 10% on milled rice, subject t o
imposition of a variable levy of 20% on milled rice.

 Provide a flat levy of 30% on both brown and milled rice in favour of rice farmers and t o
Recommendat ion:

eliminat e the sharp pract ice in rice trade as a result of discriminatory tariff structure bet w een

 Avoiding midstream changes in tariff st ructure except in t imes of emergencies based on

brown rice (duty 5%) and milled rice (duty 10% plus 20% levy).

 St ipulates a maximum period of t hree years of storage for import ed rice.

established instances of nat ural disast ers or other sources of price crisis in the rice market.

10.2 M arketing Institution

There is a felt need for privat e sector-led market ing arrangement and establishment of a central
marketing instit ut ion for rice in the country. In t his regard, it w as observed that t he exist ing
inst itutional arrangement for rice market ing (w ith reference to the Arable Crops Development and
M arketing Companies) has failed to perform it s mandat e, and that establishing a market ing
inst itution around individual crops w ill be unw ieldy and not cost -effective. Also the group observed
that , even though the defunct commodit y board arrangement w ill not apply in the present
circumstances, t he wholesale scrapping of the old system in 1986 w it hout recognizing its desirable
features w as unnecessary. .

 That t he Abuja Securit ies and Commodity Exchange (ASCE) be sensit ized t owards increased
Recommendat ions:

 That t he exist ing market ing arrangement be examined t o ret ain the desirable futures of the
trade in rice on its floor.

Arable Crops Development and M arket ing Company and do away w it h it s debilit at ing

 Establishment of a central market ing instit ut ion around rice and related commodit ies, to act
features.

as buyer of last resort and operat e a guaranteed minimum price and such other regulatory

 Est ablishment of market informat ion syst em ut ilizing ICT

functions in the rice value chain, driven by privat e sect or.

11.0 SUPPORT W ILL BE PROVIDED FOR VARIOUS INSTITUTES AND AGENCIES ON YEARLY BASIS AS
FOLLOW S:

11.1 National Cereals Research Inst itute (NCRI), Badeggi:

The project w ill support NCRI in its rice related research effort in the follow ing areas:

- Breeding programme t o develop yet bet t er breeder stock - N200.0

- Breeder seed production effort - N500.0

27
- Vehicles, Research mat erials - N80.0

- Foundat ion I seed product ion - N500.0

TOTAL - N1,280.0

11.2 Africa Rice

Africa Rice has developed upland NERICA variety and it s low land NERICA 2 in undergoing variet al t est ing
in the field. The follow ing areas w ill be given support by t he project .

Activit ies Cost (Nm)

Breeding efforts - N50.0

Production of NERICA , Breeder seed - N100.0

Production of Foundat ion I of NERICA 1 - N50.0

Field Testing of NERICA II (low land rice) - N50.0

Total - N200.0

11.3 National Agricult ural Ext ension Research Liaison Services (NAERLS),
Samaru, Zaria. Support w ill be in t he follow ing area:

i. Production of rice publicity materials - N200.0

ii. Training of Stakeholders - N200.0
iii. Training relating to rice value chain implementat ion - N200.0
iv. Building capacity of farmers/ st akeholders in adapt ive t echnology- N200.0
TOTAL - N800.0

11.4 National Agricultural Seeds Council (NASC)

Support w ill be given in the follow ing areas:

i. Seed certificat ion and quality cont rol effort s - N200.0

ii. Seed law enforcement - N300.0
iii. Production and distribut ion of foundat ion seed - N200.0
iv. Joint monitoring of breeder seed and varietals maint enance plot s
w it h Research Inst itutes - N200.0

v. Supervision of out grow er programme - N200.0

TOTAL - N1,100.0

11.5 Support to RIFAN to st rengthen its st at e level branches for effect ive
input delivery - N200.0

28
12.0 PROJECT ORGANISATION AND M ANAGEM ENT

12.1 A National Rice Development Commit t ee w ill be est ablished at t he federal level t o oversee the
implementat ion of the rice development programme in t he federation. With t he Hon. M inist er of
Agriculture and Rural Development as the Chairman. The Hon. M inister of Wat er Resources shall be the
Vice Chairman.

12.2 A Stat e Rice Development Commit t ee shall also be set up similar to t hat at the Federal level w it h
t he Stat e Deput y Governor as the Chairman and the Stat e Hon. Commissioner for Agriculture and
st
Natural Resources as t he 1 Vice Chairman and the St at e Chairman of t he Rice Farmers Associat ion of
nd
Nigeria as 2 Vice Chairman. The Stat e Desk Officer for Rice Value Chain Development Programme w ill
serve as member/ Secret ary.

13.0 M ONITORING AND EVALUATION

There is need to set up a st ructure that is capable of generat ing data on the rice sub-sector from the
project. There is obvious leak of data for planning such programmes. The follow ing act ivities w ill be
undertaken by the project monit oring and evaluation unit.

 Base line study should be carried out in the part icipat ing stat es. This w ill form the basis for


future assessment of project performance.
A mid term review w ould be carried out at the end of 2013 to review processes and procedures


of implementation and t o make necessary adjust ments,
Each part icipating st at e w ill prepare progress report w hich w ill reflect physical project


achievement s against t arget s.
Cont inuous process of data build up on product ion, processing and market ing should continue
t hroughout t he project life so as to be able to assess the socio economic impact of the project


on t he beneficiaries.
Research studies t o find alt ernative uses of rice w ill be undertaken so as to creat e room for


expansion of t he programme and more crit ically address the issue of food securit y.
Regular market surveys for rice and production input s, processing and marketing w ill continue in
quarterly basis in order t o generate informat ion for offering advisory services to the
management especially on prices of services provided by service provider. Also M inimum
Guarant ee Prices w ill be based on such survey report s.

14.0 ELIGIBILITY CRITERIA

State participation

St at e part icipation w ill be dependent on the follow ing

Submission of names of identified clusters of rice farmers w ho are w illing t o part icipat e in t he project .

i. Biometric registrat ion of farmers w it hin the clust er for part icipat ion in t he project.
ii. Opening a rice development Account in t he M inist ry of Agricult ure & Natural Resources.
iii. Est ablishment of a funct ional rice desk office in t he M inistry of Agricult ure.

29
 iv. Regular holding of qualit y St at e Rice Development Commit tee meeting.

15.0 PROJECT BENEIFTS, IM PACT AND SUSTAINABILITY

Project int ervent ion in the rice sub-sector w ill at t ract t he follow ing benefit s t o t he country.

15.1 Production increase

The project w ill bring 1,500,000 ha of land under supervision for rice product ion inputs, extension
services; t raining, technology et c w ill be made available to the farmers w it h consequent increase in
output per unit area of land.

15.2 Farm pow er and processing equipment w ill also be made available in the areas of land
preparat ion, spraying, harvest ing threshing and all aspect of improved processing methods. This w ill
reflect in t he total land area cropped performance fairly as drudgery is reduced and also improved
quality of processed rice.

15.3 Yield w ill increase from the present 1.5mt / ha to about 7.5mt / ha w ith the consequent increase
in national out put .

15.4 Total national out put w ill increase from the current 3.1 million mt of milled rice t o about 8.7
million mt by 2015. This w ill solve the problem of rice import into Nigeria and set t he stage for rice
export .

15.5 Over t he period 2011 to 2015, a t ot al of 327,723ha will be brought under irrigation in addit ion
t o t he exist ing facilities. 73,155ha w ill be realized t hrough rehabilit at ion of exist ing schemes while
754,568 w ill be realized through expansion of exist ing schemes. This w ill t o some ext ent address the
t arget set in the vision 20:2020 for which for nat ional economic t ransformation.

15.6 Sustainabilit y is built into this project from the beginning t o the very end as it has been designed
t o be largely dependent on the private sector. The sect or w ill provide mot of t he services including
input, land preparation and processing. Even w it h a change in government administrat ion, w it h
consequent shift in nat ional emphasis, the project w ill cont inue w ith just minimum government
supports.

15.7 Int angible benefits from the project include:

- Employment opportunit ies as more Nigerians w ill be engaged in the expanded rice sub-sect or
act ivit ies.

- Povert y reduct ion through import substit ut ion.

- Conservat ion of scarce foreign exchange is achieved and this is ploughed into other sectors of
our socio-economic life.

30
- Reduct ion in rural urban migrat ion as more people get engaged in farming, input supply and
processing of rice in the rural areas. Life in t he rural area w ill become more meaningful as it w ill
compare w it h the comfort s of urban cities.

15.8 All t hese benefits are in perfect agreement w ith vision 20:2020 for nat ional socio-economic
t ransformat ion.

16.0 PRODUCTS
Unlike sorghum (brew eries), cassava (pharmaceut icals) and cot ton (t extiles), rice does not have a strong
indust rial base out side being a st aple food. Nonetheless, three product s are popular:

 Parboiled, milled, polished and stone free rice t hat is competit ive in international
markets
 Unparboiled, milled and polished white rice of int ernat ional standard t hat is cheaper
t han parboiled rice.
 Unparboiled broken rice t hat can be a source of calorie for t he low income group.

Some by-products from rice product ion and milling have found some commercial applications.

1. Rice straw : The st raw contains fiber, carbohydrat e, protein and t races of vitamins. It
can e used as livestock feed, fert ilizer, mushroom product ion, fuel for cooking, pulp
and paper and as raw material for product ion of alcohol.
2. Rice hull and husks: Constit ut e 20% of the grain w eight and can be used as a
component of livestock feed, processed as fibre board or used as fuel/ energy
source.
3. The rice bran: It consist s of 12 – 16% prot ein, 16 – 20% fat, 8 – 12% fibre and 7 – 10%
ash. It can be processed int o lubricat ing oil.

17.0 EXPECTED IM PACT

A viable rice value chain capable of meet ing t he country’s rice demand put in place
Conservat ion of foreign exchange earnings result ing from elimination of rice import s.
Diversification of Nigerian economy.
Food securit y resulting from doubling of rice product ion from 3 M T/ ha to 6.0 M T / ha.
Generat ion of additional 500,000 jobs in the rural area.

31
18.0 LOG FRAM E

Expect ed output Intervention logic Objectively verifiable Assumpt ions

indicators of
achievement s
Baseline study of Select ion of a reput ed Report show ing details Consist ent policies
clust er areas organizat ion like NISER of each cluster’s favorable t o all st ake-
to carry out st udies. challenges. holders. Funds w ill be
available t o prosecut e
all sect ors of the
t ransformation
program.
Improved seeds of rice Fund for local Quantit y of seeds in M T There w ill be no unrest
varieties for 2012 have multiplication of on hand and ready for in t he country t hat w ill
been commissioned cert ified seeds or for dist ribution to farmers restrict movement
imports from in t he clust ers
neighboring count ries.
Identificat ion of Collaborat ion of State Biomet ric det ails of all
famers’ clust ers around Extension Services farmers in each cluster.
mills and registrat ion
Improved input supply Establishment of sales Number of out lets
system out let s in rural areas est ablished in rural
area.
Increase paddy Guarant eed minimum Unint errupt ed supply of
product ion t o feed t he price already paddy t o the mills
mills established
Branded locally Number of brands
produced rice in the available in the market .
market
Number of privately CBN working t hrough
ow ned t ractors and NIRSAL
farm equipment w ill
have visibly increased.

32
19. 0 TIM E- LINE OF RICE TRANSFORM ATION AGENDA

Activit ies 2011 2012

N D J F M A M J J A S O N D
HM A sensitizes Dep.
Govs
Stat e t eams are
formed
Identificat ion of rice
grow ing clusters and
enumeration of
farmers
Base line survey of
clust ers
Linkage of cluster
farmers w ith t he mills
in a field day
Credit dispensat ion
arrangement s
Subsidy/ loans/ NIRSAL
Support for
equipment – t ractors,
t hreshers and mills
Input delivery
structure In place -
Seeds, Fert . &
herbicides plus
t raining on use

Land preparat ion

Planting
Harvesting/ t hreshing/
drying of paddy
Processing
M onit oring and
evaluation
Rehabilit at ion of
irrigat ion schemes
Advocacy for Nigerian
rice
Research and
Development

33
 20.0 SUMMARY PROJECT COSTS
Project Cost (Nm) Total Cost

2012 2013 2014 2015 (N m)

Certified Seed 6,120.0 10,200.0 16,720 22,440 55,480.0

AgroChemicals 1,967.2 2,253.0 2,869.96 3,448.5 12,017.66

Fertilizers 1,480.0 327.86 365.45 414.51 1,393.10

Tractorization 1,480.0 1,480.0 1,480.0 1,480 5,920.0

Publicity and Senitization 317.0 317.0 317.0 317.0 1,268.0

Mill Accessories 4,830.0 4,830.0 4,830.0 4,830.0 19,320.0

New Mill macines 624.0 624.0 624.0 624.0 2,496.0

Training 300.0 300.0 300.0 300.0 1,200

Rehablitation of Existing irrigation schemes 8.17 8.53 7.37 - 24.07

Support to collaborating agencies

Support to NCRI 1,280.0 1,280.0 1,280.0 1,280.0 5,120.0

Support to Africa Rice 200.0 200.0 200.0 200.0 800.0

Support to NAERLS 800.0 800.0 800.0 800.0 800.0

Support to NASC 1,100.0 1,100.0 1,100.0 1,100.0 4,400.0

Support to RIFAN 200.0 200.0 200.0 200.0 800.0

Project Management and Administration

Investment Cost

Headquarters 57.6 - - - 57.6

States 158.0 39.5 39.5 55.3 292.3

Field Offices 142.0 35.0 35.0 49.0 259.0

Recurrent Cost

Headquarters 200.0 200.0 200.0 200.0 800.0

States 400.0 500.0 600.0 720.0 3,220.0

Field Offices 200.0 250.0 300.0 370.0 1,120.0

Monitoring and Evaluation 342.0 378.0 448.0 533.0 1,710.0

Total 21,009.25 25,331.85 32,716.28 39361.31 120,897.7

17 New Integrated Mills (NFRA) 23,800 23,800

Total 114,699.7

Year 1 – 19 States + FCT, Year 2 – 25 States, Year 3 – 30 States, Year 4 – 36 States +

FCT.

34
35