LAKE Rice goes under as border policy flops production MoU

LAKE Rice, a brand of locally cultivated and processed rice by Lagos and Kebbi states, has gone under, The Guardian has reliably gathered. Though Lagos residents have got used to the subsidised brand since 2013, they will probably not have access to the rice ad infinitum. If and when it comes back through the Lagos rice mills, it won’t be LAKE rice, and residents might have to pay unsubsidised prices.

The contract appears to have come to a close and its production dead based on two factors adduced for the stoppage. One has been affirmed by officials of the Lagos State Ministry of Agriculture, while the other factor revolves around the compelling forces of demand and supply following the Central Bank of Nigeria’s rice import policy and the Federal Government’s decision on land borders, which have been closed since August 2019.

Lagos integrated rice mill

The Lagos State integrated rice mill at Imota is near completion, according the state officials, hence, the Memorandum of Understanding binding LAKE Rice production has become redundant. Officials of the ministry in Lagos said it is more economical to concentrate resources and efforts on completion of the rice mill, than continuing the partnership.

The mill, it is projected, would employ over 250,000 direct and indirect job opportunities through paddy out-grower schemes, transportation of raw materials and finished products, marketing and other ancillary industries.

A senior official in the ministry, who craved anonymity in a telephone interview with The Guardian, said the Imota integrated rice mill was almost ready, a reason probably for the discontinuity of LAKE Rice.

He said he was ready to conduct The Guardian round the rice mill premises to showcase the level of completion. A former Commissioner for Agriculture, Mr Gbolahan Lawal, in an interview with The Guardian in late January this year, had said: “The construction period is supposed to be 18 and 24 months, and as of today, the completion rate is at 50 per cent and I want to assure Lagosians and all well-meaning Nigerians that we are working seriously to ensure that the mill will be commissioned between September and October 2020.”

The integrated 32-tonne-capacity mill, started in 2018 and having about 16 silos of 4,000-tonne capacity each and warehouses, would need no fewer than 50,000 to 51,000 hectares of land to supply rice paddies.

Competition for Kebbi paddies

The untold factor responsible for scarcity or complete absence of LAKE Rice is the stronger demand for locally produced paddies by indigenous and foreign rice mills

The closure of land borders with neighbouring countries in August 2019 has significantly shifted demand from imported rice to locally produced/processed one. As of now, prices of imported brands of rice range from N27,000 per 50kg bag to N32,000. Prices of local brands of rice range from N23,000 to N26,000.

Increases in prices are results of the Import Substitution Industrialisation (ISI) policy of the Federal Government, with the aim of decelerating pressure on the naira-dollar exchange rate and inflation, creating jobs and diversifying the economy.

Unwittingly, the policy has dealt a devastating blow to the Lagos-Kebbi rice production agreement, as demand for rice paddies in Kebbi has become highly competitive, with forces of demand and supply dictating who gets what.

To Lagos, it is no longer economical to subsidise expensive products in the face of gross infrastructural deficits and rising cost of governance, except on political grounds. And it has to stop!  

The ex-Commissioner Gholahan had said in an interview with The Guardian that: “Considering the challenges of this period when we have the border closed, a lot of people now patronise the same partner. We have other people in the southeast and south-south also going to the same source, thereby reducing the quantity available to Lagos State. That is, as they are servicing Lagos, they are equally servicing other states.” 

He had added that the border closure and policy on rice was yielding fruits, saying, “Before now, the state ministry of agriculture had a 2.5 metric tonne capacity rice mill and we were buying from Niger and Kebbi states. That was Eko Rice in 2013.”

A source in Kebbi State, who preferred anonymity, said subsidized rice from Kebbi was reasonable when there was low demand for local rice, but now that demand is huge and other processors, governments and individuals are competing for the same product in Kebbi State, it is no longer mutually economical for the state and Lagos except Lagos wants to part with more money for the same quantity as dictated by economic forces.

Assistant Director, Public Affairs, Lagos Ministry of Agriculture, Office of the commissioner, Mr Jide Lawal, also affirmed that efforts are concentrated on the completion of the state’s rice mill, giving no other reason.

The state Acting Commissioner for Agriculture, Ms Abisola Olusanya, and his predecessor, Lawal, had said, on different occasions, that the integrated mill would become productive by December 2020. Lagos residents are eagerly awaiting.