Government of Nigeria, IFAD, OLAM to inject US$329m to enhance country’s rice value chain

NIGERIA — The Federal government of Nigeria in partnership with the global food and agribusiness giant, Olam and the International Fund for Agricultural Development (IFAD) have budgeted US$329 million (N118.44 billion) for the Value Chain Development Programme (VCDP) in the country.

The VCDP programme was launched in 2014 with the aim of generating wealth for smallholder farmers, thereby improving their livelihoods, while also enhancing food security in the country.

The initiative provides inputs and training to smallholder rice farmers with guaranteed buy-back of between 80 to 90 per cent of the rice paddy produced at competitive market prices while the rest is reserved by the farmers for personal consumption, reports Nigerian Tribune.

In the budgeted project fund, IFAD will contribute about US$250m while Olam and the FG will contribute the difference i.e. US$79m.

IFAD Nigeria Country Representative, Nadine Gbossa said, “Before the IFAD, OLAM and VCDP partnership, many of the smallholder farmers were involved in subsistence farming. However, they are now able to market their produce because a firm like Olam purchases over 90 per cent of paddy rice.

“Data show that the smallholder farmers have increased their income by 79 per cent. The number of children attending secondary schools for VCDP households has increased by 17 per cent, so it means that more of the farmers are able to send their children to secondary schools, when the norm then was just sending them to primary schools.”

The Olam/IFAD VCDP initiative kicked off in 2015 in Benue State with 475 farmers. As of 2020, the programme has been extended to Taraba State with a total of 18,646 registered smallholder farmers.

Since its inception, Olam has purchased rice paddy worth N3 billion (US$7.8m) from smallholder farmers in Benue.

Olam Nigeria also has rice out grower initiative programmes apart from its VCDP partnership where it has engaged a total of 14,868 smallholder farmers.

A breakdown of this figure shows that the company has registered 5,000 smallholder farmers in Nasarawa State, 1,200 smallholder farmers in Kebbi State and 8,668 smallholder farmers in Plateau states.

Olam Nigeria Vice President, Farming Initiatives, Reji George, said, “About 50 per cent of the total capacity of Olam’s rice mill in Rukubi, Nasarawa State, is obtained through the direct buy-back from these programmes from different states.

“What is significant to us is that this programme has helped us to meet up with the requirement rice paddy for the rice mills in Rukubi in Nasarawa State and Amarava Mill in Kano State.”

He added that the smallholder farmers had increased their yields from two metric tonnes per hectare when the VCDP project kicked off in 2015, to an average of four metric tonnes per hectare.

Nigeria is gearing up efforts in making the country to become self-sufficient in rice production. Last month, the country’s Agro Processing, Productivity Enhancement and Livelihood Improvement Support (APPEALS) project commenced the free distribution of agro-allied incentives worth N633m (US$1.6m) to rice farmers in Kogi State aimed to boost production.

APPEALS is a six-year project developed by the Federal Ministry of Agriculture and Rural Development (FMARD) in collaboration with the World Bank and other stakeholders.

The N633 (US$1.6m) grant channelled through the Value Chain Investment Plan (VCIP) targets 697 rice farmers who are spread over 1780 hectares of land across the state.

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