INVESTMENT OPPORTUNITIES IN THE RICE VALUE CHAINBY

PROF. GERALDINE E. UGWUONAHREMIF REMS NIGERIA LTD (REMS)22/23 ISUOBA LANE, TRANS-EKULUENUGU, ENUGU STATEPHONE NO 08033491228Email: geraldine.Ugwuonah@unn.Edu.Ng geraldine.Ugwuonah@unn.Edu.Ng

Introduction

Nigerian rice production was characterized by low yield, poor quality of paddy and high cost of production.

Average yield of rice farm was between 1 and 1.5 metric tons per hectare.

Low productivity did not support any meaningful investment in the sector

Poor quality of paddy resulted to poor rice grains which were mixed with impurities and stones, had non uniform grain size and colour,

Local rice was unattractive to an average.

Urban dweller preferred foreign rice to local rice varieties .

Production constraints include:

Lack of knowledge of improved package of agronomic practices.

Lack of technical assistance in the form of extension services.

Unavailability of easy to use and handy farming equipment.

High cost of input. Very rudimentary production methods which was

labour intensive.

Processing constraints include:

Low capacity and age of mills that required substantial upgrading or replacement with more modern equipment.

Poor Harvest and post-harvest processes. Inefficient milling technique and

unavailability of De-stoning machine Poor marketing systems and standards

especially in terms of packaging, grading, sorting and polishing.

Environmental Constrains

 

Inconsistent government policies on rice importation.  Rent-seeking attitude of government officials in the distribution

of fertilizers and other inputs (including improved seed). Challenges with importation of machinery into Nigeria The state of infrastructure.   Insufficient power supply to both the farmers and processors.. Shortages of agricultural labour as a result of Rural-Urban

Migration  

Gains from Intervention Activities.

Productivity has increased from 1.5 t0 4.00Mt/Ha. Farmers are not only aware but now cultivate good

quality and high yielding rice varieties like Faro 44, Faro 54, FARO 57.

Extensive value addition activities are being carried out by agro processors.

More de-stoning machines are now available and more modern mills have been built in some states.

More people are involved with production and processing. Farmers are better organized to take collective actions

and responsibilities. 

Rice Value Chain – A huge investment Window

Regional Paddy Buyer

PaddyProduction

Local Agent Buyer

Domestic Rice

Market

Cottage

Miller

Local Paddy Buyer

Farm Gate Buyer

Commercial Mills Imported

Rice

Classification of Investment Opportunities in the Rice Value Chain

Investment opportunities in the rice value chain can be classified in two dimensions, namely:

Production-related opportunities

Processing-related opportunities.

 

Production-Related OpportunitiesDirect production

Revamping already old irrigations that are bad. The can enter into relationship with government on public private partnership bases.

Developing private irrigation schemes for rice (Several lands in the Niger Delta are swampy and near natural water sources this type of soil supports rice cultivation).

Cultivate and/or lease developed land to individual farmers and out-growers for a fee.

With this controlled environment for rice, yields can get up to 7 t/ha or more.

Production-Related Opportunities:Seed Production

Direct cultivation of breeder and certified seeds.

Seed cleaning, packaging and distribution.

To fully take advantage of this, care must be taken to ensure the viability of the seeds in order to retain farmers’ loyalty.

A good marketing system that take into consideration socio-economic characteristics and location of farmers needs to be in place.

Production-Related Opportunities:Input Supply

Supply of the needed input has remained a source of concern the farmers.

The market for input is far from being saturated. Input distribution channels need to be explored and

developed. At the present, there is the lack of efficient input

distribution system in the rice value chain. Some input dealers locate outlets far away from

farmers. Engage in promotional activities aimed at

sensitizing the farmers on the use of input. Procure genuine and good quality input.

Production-Related Opportunities:Sale/Renting of Farming Equipment

Investment opportunities on the sale of farming equipment are enormous and can be tapped through the procurement and sales of handy, cheap and easy to use equipment to rural rice farmers.

There is presently unmet demand for Direct Paddy Seeder (DPS), hand held reaper/harvesters, winnowing machines, threshers and UDP applicator

 

Simple and Easy to Use Farming Machines

Rice Farm Planted in Row

Production-Related Opportunities:Fertilizer Production & Distribution Fertilizer is high demand by rice farmers.

Any investment on fertilizer production would also require the development of distribution channel which will either be fully owned, partly owned or outsourced.

USG pelleting machine can also be sold or rented to individual farmers and cooperative groups.

Processing related opportunities. Investment in direct processing of paddy:

Investment in direct processing of paddy.

A reasonable number of investors are taking advantage of this window.

Other processing opportunities exist which will require further processing of rice to get to other product types like rice flakes, rice flour etc.

Processing related opportunitiesMarketing of Paddy

Marketing of paddy is one of the most urgently needed investment opportunity in Nigeria.

Marketers are required to bridge the gap between farmers and processors in the value chain as it provides place and time utility by:

Paddy from the farm gate need to be cleaned, graded and bulked.

Providing logistic and physical distribution facilities needed to supply large quantity of paddy to big processors.

At the moment, there are no strong paddy marketing companies and individuals in the this aspect of rice value chain within the Niger delta region.

Processing related opportunities. Marketing of Processed Rice

This will require grading, pricing and packaging of milled rice.

Promotional activities like advertising, sales promotion, publicity, internet marketing, web based marketing are also needed.

Physical Distribution of Milled Rice: This aspect of marketing has to do with storage, transportation and supply chain management.

Each or a combination of these activities represent an investment opportunity.

 

 

Conclusion

Today, it is clear to everybody that Agriculture cannot continue to be neglected.

Private sector involvement is strongly needed to move the rice sector forward.

The people of Niger-Delta are being called upon to take advantage of these opportunities in the rice value chain.

Niger-Delta is endowed with rich soil that supports rice cultivation.

Investment in the rice value chain is one of the major ways to get our teeming youths engaged in productive ventures as will drastically minimize the restiveness and violence being experienced all over the country.

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