Rice mills in northern Nigeria are shutting down due to skyrocketing operational costs and lack of government intervention. High energy costs, borrowing costs, and scarcity of rice paddy have forced mills to halt production. The price of rice has surged by 140% in the last year, reaching N100,000 per 50kg bag.
Farmers and millers cite the removal of fuel subsidies, unification of the forex market, and high interest rates as major challenges. The Central Bank of Nigeria’s (CBN) 850 basis points interest rate hike has made borrowing nearly impossible. Industry experts urge the government to provide low-cost financing and subsidies to revive the rice mills.
Retson Tedheke, a farmer in Nasarawa state, spends N1 million on diesel for his operations due to irregular electricity supply. “I run a 300KVA diesel generation,” he explained. The high cost of diesel, which has more than doubled in the last 18 months, has pushed energy costs for businesses to unsustainable levels.
The scarcity of rice paddy is another significant challenge. Mr. Sadiq Abubakr notes that middlemen have hijacked the process, making it costly for millers to source paddy. The Lagos state government’s massive rice processing plant has seen minimal activity due to the absence of rice paddy.
Industry experts warn that the shutdowns will exacerbate food insecurity and inflation. Dr. Augustine Maduka, President of the Community Allied Farmers Association of Nigeria (COMAFAS), advises the government to subsidize inputs for rice millers and support dry season farming to increase rice paddy supply.