Impact of Trade on Domestic Rice
Production and the challenge of Selfsufficiency in Nigeria
Chuma Ezedinma
Integrated Cassava Project
International Institute of Tropical Agriculture
Introduction
• Nigeria is the largest rice producing country in the West African region.
• By 2002, the country accounted for 57 % of the total rice producing area in
West Africa.
• Potential land area for rice production in Nigeria is between 4.6 million and
4.9 million ha.
• Out of this, only about 35 percent of available land area is cropped to rice.
• Rice yields are however low even by West African Standards
Rice Paddy Production (Mt)' by Proportion
Nigeria
Benin
Burkina Faso
Cameroon
Chad
Cote d' Ivoire
The Gambia
Ghana
Guinea
Guinea-Bissua
Liberia
Mali
Mauritania
Niger
Senegal
Sierra Leone
Togo
Total
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
51.5
0.2
0.6
0.6
1.9
10.5
0.3
2.4
8.0
2.0
1.6
7.3
0.7
1.2
2.7
8.0
0.6
100
52.2
0.2
0.7
0.8
1.7
10.6
0.3
2.1
8.2
2.0
1.8
6.6
0.8
1.1
2.8
7.7
0.4
100
50.8
0.2
0.9
0.5
0.4
11.2
0.2
2.6
8.8
2.1
1.1
7.1
1.1
1.2
3.2
8.1
0.6
100
44.7
0.3
1.1
0.7
1.7
12.9
0.4
3.0
10.0
2.4
0.9
8.6
0.8
1.1
3.0
7.5
0.9
100
48.0
0.3
1.4
0.6
1.3
12.6
0.3
3.3
10.4
2.2
0.9
7.8
0.9
0.8
2.6
5.8
0.8
100
44.5
0.3
1.6
0.5
1.4
16.2
0.3
3.1
9.6
1.7
1.3
8.9
1.0
0.7
2.1
5.6
1.1
100
44.1
0.4
1.2
0.5
1.5
17.4
0.2
2.7
9.7
1.4
2.3
7.8
1.1
0.8
2.3
5.6
1.2
100
43.9
0.5
1.2
0.7
1.6
16.0
0.3
2.6
10.2
1.2
2.8
9.6
1.4
0.8
1.7
4.4
1.2
100
43.3
0.4
1.2
0.9
1.8
16.0
0.4
2.8
10.8
1.1
2.6
9.6
0.7
0.8
3.2
3.3
1.1
100
44.0
0.7
1.4
0.8
1.2
16.4
0.5
3.3
9.9
1.4
2.4
9.9
1.0
0.8
2.7
2.7
0.8
100
38.0
0.8
1.5
0.9
1.5
16.7
0.4
3.8
10.9
1.2
2.0
12.9
0.9
1.1
3.4
3.2
0.9
100
43.6
0.9
1.2
0.8
1.6
11.2
0.3
3.8
11.5
1.1
2.6
12.7
0.9
1.0
2.4
3.4
0.9
100
The Paradox
 Nigeria is the largest importer of rice in the world
 The annual demand for rice in the country is estimated at 5 million tons
 Domestic production accounts for 3 million tons
 Imports account for about 2 million tons
 Between 1990 and 2002, Nigeria imported 5,132,616 tons of rice
 In 2002 alone, the country imported 1.882 million tons of rice.
Value of rice imports ('000US$)
450,000
400,000
350,000
250,000
200,000
150,000
100,000
50,000
-
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
US$
300,000
Year
Objectives
 Describe the effect of rice trade (imports) on domestic rice
production and marketing
 Assess the competitiveness of domestic rice relative to
imported rice in Nigeria
 Assess the effect of policy inconsistency on rice production
 Determine the optimal efficiency of local rice mills
Methodology
Primary sources:
Field level survey involving small scale
mills, rural and urban markets in north and
south of Nigeria
Secondary sources:
IITA and other Libraries, internet
Rice Production Systems
In Nigeria, cultivable land to rice is spread over five ecologies, namely:

rain fed upland

rain fed lowland or shallow swamp

irrigated rice

deepwater or floating rice and
3%

1%
17%
tidal mangrove swamp
Rained Upland
Rained Lowland
Irrigated
Deep Water Floating
Mangrove Swamp
27%
52%
Rice production features and systems in Nigeria
In geopolitical terms rice is produced mainly in the central region of Nigeria
Rice Output in Nigeria by Zones (2000)
5%
Major Rice producing
States:
10%
23%
Northwest
Northeast
Kaduna - 22 %,
Niger - 16%
Benue - 10%
Taraba - 7%
Northcentral
Southeast
15%
47%
Southwest
Effect of rice trade (imports) on domestic rice production and marketing
Table: Market share of foreign rice to local rice in selected urban markets.
Urban
Local
rice
market
volume (tons)
2270.00
Enugu
Umuahia
417.00
Owerri
1786.90
Uyo
290.70
Port Harcourt 442.90
Onitsha
4284.90
Calabar
321.00
Aba
847.97
Source: Field survey, 2001.
Foreign rice
volume (tons)
5935.80
14202.90
15493.40
887.00
26306.50
157600.00
790.10
23177.10
Total volume
(tons)
8205.80
14619.90
17280.30
1177.70
26749.40
161884.90
1111.10
24025.07
Percent of
foreign rice
72.33
97.14
89.60
75.53
98.34
97.35
71.11
96.47
The proportion of local rice available in Nigerian markets is far less than that
of imported rice
Effect of rice trade (imports) on domestic rice production and marketing
Capacity utilisation in selected rice processing mills
Location
Abakiliki
Afikpo
Adani
Omor
Ogoja
Bende
Capacity utilisation (%)
7.06
40.27
20.46
60.36
8.89
5.41
Three types of rice
processing mills
Traditional/hand
Small rice mills
Large rice mills
• The small rice processing mills are the most dominant in Nigeria
• Low effective capacity utilisation in small rice mills
Effect of rice trade (imports) on domestic rice production and marketing
Afikpo
30%
15%
Nassarawa
30%
Taraba
Abakaliki
20%
15%
Benue
15%
20%
30%
Gombe
Adani
Figure External sources of paddy rice to Abakaliki, Adani and Afikpo rice mills.
Loss of rural farm labour to urban migration
Rise in intra regional trade
Effect of rice imports on domestic production
• The growth in domestic rice output declined with
growth being negative in 1995
• The growth rate in domestic rice production is still
negative to date
G ro wth ra te o f R ic e P ro d u c tio n in Nig e ria
400000
300000
200000
100000
-200000
-300000
-400000
-500000
98
19
92
19
86
19
80
19
68
74
19
19
-100000
19
62
0
How competitive is local rice ?
Table: Comparing price competitiveness for domestic and imported rice from selected rice mills
Mills
Millers
Additional
Marketing
Estimated
Price
of Percentage
price
processing
margin
Urban
imported
Difference
N/25kg
cost (25%)
N/25kg
market price rice N/25kg
N/25kg
N/25kg
Abakaliki
900.00
225.00
613.00
1738.00
1575.00
10.30
Adani
1018.75
254.68
431.00
1704.55
1575.00
8.23
Omor
1068.75
267.18
531.00
1866.93
1575.00
18.53
Bende
1137.5
284.37
461.00
1882.87
1575.00
19.50
Source: Field survey, 2001.
On the average an extra cost of 25 percent is needed to process domestic rice to the
quality and standards of imported rice
Improving the standards of local rice is feasible and desirable, but it may not be
competitive for local rice mills
Compounded by the issue of grading and uniform rice varieties from local farmers
How competitive is local rice ?
Table International rice prices relative to domestic rice prices in Nigeria 1993 to 2001
International Domestic Domestic Prices (milled rice)
at 2002 exchange
rice
rice
rice price
rate (N120.96 =
(Milled)
(Paddy)
($/ton)*
US$1.00)
$/ton
$/ton
150.88
739.76
429.27
160.29**
24.67
1993
180.88
994.55
544.09
186.12
22.00
1994
246.94
393.44
188.09
268.50
75.92
1995
374.34
566.00
323.0
234.06
80.00
1996
400.63
596.43
311.14
214.02
81.25
1997
405.91
593.35
386.1
215.16
82.75
1998
365.00
479.47
293.55
191.46
92.08
1999
362.85
436.28
265.00
142.96
100.6
2000
493.05
532.36
334.55
135.38
2001**** 112.03
*Based on international prices for White broken rice, Thai A1 super f.o.b Bangkok
**Source http://apps2.fao.org/servlet/org.fao.waicent.ciwp.CIWPQueryServlet
***Source: PCU data Average annual market prices, 1993 t0 2000
****Source RUSEP website: www.rusep.org
Year
Exchange
rate (N)
The table compares the domestic prices of paddy and milled rice in Nigeria with the
international prices of the worst grade rice (white broken rice, Thai A1 super, f.o.b
Bangkok). If we assume that exchange rates in Nigeria reflect market forces (which is
unlikely especially in 1993), then Nigerian domestic rice is expensive to produce
(compare paddy prices) and expensive to process (milled rice) and so cannot compete
in the international market.
Optimal distribution in domestic rice trade

Domestic rice markets are
UYO
shrinking due to rice imports
OWERRI
0.7%
 The closer the demand market
0.3
%
to the supply zone, the less
11.1
%
optimal it becomes with
29.1
%
increase in transport cost
 The marginal cost of non-
7.9
%
ABAKALI
KI
8.5%
optimal supply of rice from
1.6%
small processing mills
increases with increase in
transport cost
18.5
%
5.7
%
5.8
%
UMUAHI
A
80%
BEND
E
ABA
OBOLL
O
ENUGU
NSUKK
A
BENIN
ONITSH
A
IKOM
OKIGWE
EKWULOBI
A
PORTHARCO
UT
16.9
%
45%
ADAN
I
36.9
%
7.9
%
90%
69.9
%
20%
OMO
R
AFIKP
O
OGOJ
A
Effect of policy Inconsistency on domestic rice production
• Pre ban period: 1960 – 1976
• Period of crisis (import license, etc) 1976 – 1985
• Period of outright ban 1986 – 1994
• Period of tariff 1995 – 2005
PRE-BAN
CRISIS
BAN
TARRIFF
120
100
80
60
40
20
97
95
93
91
89
87
85
99
19
19
19
19
19
19
19
83
Year
19
79
77
75
73
71
69
67
65
63
81
19
19
19
19
19
19
19
19
19
19
19
61
0
19
Self sufficiency in rice
production is still a major
challenge for Nigeria to
date
Self sufficiency trend
Percentage
Domestic self sufficiency
in Nigerian rice production
was adversely affected
during the crisis years of
1977 – 1985
Conclusions
 The demand for local rice in Nigeria is far less than the
demand for imported rice
 Local rice production costs are high and uncompetitive
 Improving the post harvest quality of domestic rice is
critical but can only be achieved if production costs are
low
 Local transport costs for rice output are sticky
downwards at least in nominal terms
Policy Interventions
 Intensify rice production and increase on-farm yield to
reduce production costs
 Improve quality and standard of rice and reduce post
harvest losses
 Facilitate rural enterprises and businesses especially in
small mills to sustain productivity, incomes and
employment
 Strengthen human and institutional capacities to produce,
process and market rice competitively in Nigeria
Thank you