NIGERIA – The controversy that has trailed the rice import allocations for 2014 notwithstanding, the federal government at the weekend went ahead to review downwards, its import target for the commodity to 1.3 million metric tonnes (MT).
According to a letter signed by the Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, addressed to the Co-ordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, a domestic supply gap of 1.3 million MT was determined for the 2015, down from 1.5 million in 2014.
Meanwhile, one million MT of this quota has been set aside as allocations to existing rice millers, importers and new investors with approved Domestic Rice Production Plans (DRPP), at a preferential levy of 20 per cent and duty of 10 per cent.
This year’s supply gap was fixed at 200,000 MT lower than that of 2014, as rice importers with no DRPP will probably account for the remaining 300,000 MT at the higher levy of 60 per cent and duty of 10 per cent.
In 2014, rice importers and new investors were required to post a Domestic Rice Production Performance Bond from a qualifying bank to clearly demonstrate their commitment to domestic investment plans in rice production and processing.
Under this year’s import quota, the Federal Ministry of Agriculture and Rural Development has identified 22 companies that will receive quota allocations for 2015 out of the number that was approved last year.
In the letter titled “Approved List of Companies Allocated Rice Import quota for April 2015- March 2016 period”, it was explicitly made clear that certain criteria informed the trimming down of the number of companies from last year’s figure.
The letter to the Coordinating Minister of the Economy read in part: “In line with the federal government’s policy (“the Policy”) to ensure self-sufficiency in rice by 2014, domestic rice production and milling operations continue to rise, which has resulted in a reduction in rice requirements of the country.”
As was the practice in 2014 and in line with the policy, the allocation of import quotas continues to be made along the explicit criteria set for encouraging domestic production and domestic milling of rice, to lead to self-sufficiency. These criteria are based on the extent of existing domestic milling capacity as well as along four specific items that assess each company’s ongoing investment outlay into domestic rice production and milling.
“These include the following: Domestic Rice Production Plan (DRPP): demonstrate evidence of current or planned investment in domestic rice production over a 3-year period, size of Investment, proof of land acquisition and establishment of rice fields and paddy production, Paddy purchase outlook from Paddy Aggregation Centres (PAC): Demonstrate a clear plan of purchase of paddy from PACs, should include location of PACs, volumes of paddy to be purchased among others.
Paddy purchase outlook from outgrower farmers and farmer cooperatives: should include location of farms, volumes of paddy to be purchased, among others.
Ownership of Integrated Rice Milling Facility (with par boilers and dehuskers): size of planned installed capacity (score relative to the largest sized facility, evidence of acquisition of integrated rice milling equipment, amongst others.
“In addition to existing millers and new investors, only the re-applying companies who submitted bonds in 2014 were allocated quotas in the current 2015-2016 round. Companies that failed to present the Federal Ministry of Agriculture and Rural Development with a bond have not been given quotas for the full year April 2015 to March 2016.
Consequently, import quota allocations to 22 approved companies with a total allocation of 961,000 MT were issued.
Already, the Ministry has sent letters to all the 22 approved companies and copied Dr. Okonjo-Iweala as well as the Comptroller-General of Nigeria Customs Service.
The letter extensively informed the companies of their approved quotas, which qualified for 10 per cent duty or 20 per cent levy as the case might be, the Comptroller General of Customs was mandated to facilitate enforcement of the approved allocations.
Meanwhile, members of the Nigeria Rice Investors Group have since thrown their weight behind the Minister over the current furore on allocations of import quotas for rice importers.
The officials of the group indicated that they are working in tandem with the federal government in order to improve and boost domestic and local rice production in the country.
It could be recalled that the House of Representatives had summoned the Minister of Agriculture, Dr Akinwumi Adesina to appear before its Ad hoc Committee over alleged evasion of payment of rice import duties and levies by importers and investors.
Similarly, the Chairman, Rice Processors Association of Nigeria, (RPAN), Muhammed Abubakar, said rice importers who were fighting hard to remain in business had severally attempted to frustrate Nigeria’s fortune in rice production.
He explained further: “Processing cost is high, there is no electricity and cost of transportation makes our production cost a little bit higher, however, the goods that you see in the market, especially the rice that you feel is cheaper than ours, I assure you they are smuggled rice bags that come through Cotonou, but if they bring the commodity through the proper channel and pay the normal duty, it cannot be cheaper than local production, maybe they will be at par.
“Without this minister, all these developments wouldn’t have been possible, whatever we are able to achieve in Rice production in the country even in the next 50 years, Adesina initiated it and we will be grateful to him, the process put in place by the federal ministry of agriculture should be continued,” he said.