A new vision for Nigerian rice
Nigerians eat five billion kilograms of rice each year — roughly 28 kilograms per person. Despite Nigeria being a rice producer, most rice sold in the country is not locally produced.
Nigeria imports about three billion kilograms of rice each year, largely from Thailand, India, Brazil and China. This costs the economy approximately $1.9 billion annually and denies a livelihood from rice sales to about three million rice farmers in northern Nigeria, one of the poorest parts of the country.
Until recently, Nigerian rice was of much lower quality than imported rice. Broken grains, the presence of stones, inconsistency of flavour and other deficiencies meant that local rice was sold at low margins and eaten largely by the rural poor, while better off, mostly urban dwellers preferred to buy imported rice.
In recent years, however, the Nigerian government has invested in improving the quality of rice, and the investment has led to better rice production. Consumers, however, have not switched to local rice, and many distributors have responded to the availability of quality Nigerian rice by selling it in packaging that labels the rice as foreign.
Continuing to improve the quality of local rice and increasing its attractiveness to consumers could help hundreds of thousands of smallholder farmers escape poverty. With this in mind, the UK government funded and Coffey managed GEMS4 project is taking steps to increase the demand for local rice.
First, GEMS4 is helping UMZA, a large, modern rice mill in northern Nigeria, to deepen its local supply chain. The plan is for UMZA to increase the purchase of local rice paddy from 40% to 100% a year. So far 1771 farmers 24 rice paddy aggregators have been mobilized to meet UMZA’s local supply. In this way, more rice from local farms will be processed and sold at prices commensurate with the better quality.
At the same time, GEMS4 is working to change consumer perceptions and preferences. The project is supporting the UMZA mill to use mass media to raise awareness of the improved quality of local rice among consumers in urban areas. It is also informing other rice millers about the viability of branding local rice more clearly as a Nigerian product.
GEMS4 is also helping rice millers understand consumer preferences and is influencing them to package rice in volumes that meet purchasing patterns of urban customers. It is also offering millers assistance in how to improve branding and packaging.
Finally, the project is developing the distribution networks from mills to consumer markets, helping quality rice flow from the north to large urban markets in the south.
Once all this activity bears fruit, millers will be able to sell quality Nigerian rice at higher margins in new urban markets, with benefits for farmers, wholesalers, retailers, and distributors.
“We are confident that smallholder rice farmers will increase production and drive the achievement of the nation’s rice sufficiency goals,” explained Busuyi Okeowo, GEMS4 Group Intervention Manager, and Susan Essein, Business Development Coordinator on the Rice Initiatives.
Smallholder farmers will respond to the surge in demand by increasing paddy production and creating on-farm jobs for growing and harvesting rice paddy. The surge in demand should impact on 300,000 smallholder farmers and1.5 million farm laborers. New jobs will also be created at the mills through technology upgrades, as well as through new positions in warehousing and packaging.
Additionally, higher demand will increase sales and incomes for the UMZA mill, as well as for wholesalers and retailers of UMZA rice, as the rice will be sold in higher-value market segments. This should raise incentives among other large, modern mills to invest in the production and processing of local rice and lead to higher incomes further down the value chain, including small-scale farmers.
GEMS4 is a UK-government funded project focused on the wholesale and retail sector. It will run until 2017.
This blog post was written four years ago by Enene Ejembi, then Knowledge Management and Communications Specialist at GEMS4, and Jonathan Mitchell, Head of the Economic Growth Practice at Coffey in Europe.
