The Big Success Of Lake Rice

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Just before Christmas last year, Governors Akinwunmi Ambode of Lagos and Atiku Bagudu of Kebbi States together launched Lake Rice to the public. “Lake” was coined from the names of the two states. The occasion culminated a Memorandum of Understanding (MoU) signed by the two states in Lagos on March 23, 2016 on production and distribution of rice.

Lake Rice

At the MoU’s signing, Governor Bagudu said, “Nigeria cannot afford to continually depend on imported rice. What we are doing is to pioneer a collaboration that will bring other states on board later as we believe that our potentials are enormous and we must have pacesetters to start that process of joint collaboration for our collective good.” Ambode on his part said Lagos State “is the largest consumer of food commodities in the country by virtue of its large population. The state has the market with the required purchasing power. The state has an estimated consumption of 798,000 metric tons of milled rice per year which is equivalent to 15.96 million of 50 kilogram bags with a value of N135 billion per annum. We have the economic prowess to produce rice locally. The era of imported rice is gone. The reality is for all of us to embrace the consumption of local food and commodities. Lagos State presently consumes 6,000 heads of cattle daily which may increase to 8,000 in the next five years.”

Kebbi State has 1.2 million hectares for rice cultivation but only 600,000 were used to cultivate rice last season. In Katsina State last December, when Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele launched the CBN Anchor Borrowers Program and 2016/2017 Dry Season Farming, he said the top four imported food items including rice and wheat consume over N1 trillion in foreign exchange annually. CBN’s Anchor Borrower and the Federal Government’s provision of credit scheme to farmer have resulted in improved rice production, though the system is yet to be completely settled.

Normally, this initiative should have been left in the hands of the private sector. However, government had the foresight to see that blanket trust in the private sector could harm its import substitution policy, especially where rice is concerned. For example, left to millers, who are the anchors, they would have sponsored or funded the number of farmers that their capacity and funds could accommodate, leaving the country with a huge gap in rice supply. CBN therefore stepped in and provided commercial banks with 50% of the funds and guaranteed the same. However, the risk-averse commercial banks were not comfortable with the 50% guaranteed. They now want farmers to contribute 10%, millers 20% and banks would give the remaining 20%.

Lake Rice

The Bank of Agriculture (BOA) which is owned by CBN and Federal Ministry of Agriculture and Rural Development then waded in. BOA has suffered neglect over the years and operates more like a parastatal under the Ministry of Agriculture than a bank. We therefore call for an arrangement where commercial banks’ demands could be accommodated because they have the capacity to handle the program’s requirements. The future of local rice production should be private sector driven. We also urge stakeholders to apply the lessons learned from last season. For example, the program almost ran into glitches in some parts of the country due to issues of late take-off and recovery of loans from farmers.

We are glad that other states are now borrowing a leaf from the success stories of Lagos, Kebbi and Ebonyi. Katsina for example has launched its dry season Anchor Borrower Program and has dedicated N8 billion which is 9% of the state’s 2017 budget to agriculture. Niger State, which used to be the largest producer of rain-fed rice in the country, has also earmarked six irrigation centers to be rehabilitated in 2017. Other states should be encouraged to enter into similar partnership not only in rice production but in other products as well where they have comparative advantage. Congratulations, Lagos and Kebbi for setting the pace.