Reducing rice imports helps smallholder farmers in Nigeria

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Reducing rice imports helps smallholder farmers in Nigeria

Peter Okonkwo, who has doubled his rice yield and started to crop twice a year. ©IFAD/Gabriel Ogolo

18 July 2017 - An IFAD-supported programme in Nigeria is helping to reduce dependence on imported rice and strengthening the access of smallholder farmers to local markets.

Every year, Africa spends some US$35 billion on food imports, undermining the sustainability of its own agriculture sector. This overreliance on food imports is partly due to the inferior quality of much local produce. In Nigeria, Popular Farms & Mills Ltd, a subsidiary of Stallion Group Nigeria, and Olam International, a major player in the rice industry, typically receive paddies with more than 30 per cent impurity from local farmers. This can increase processing costs, leading to low prices for farmers.

Through the IFAD-supported Value Chain Development Programme in Taraba and Benue states in Nigeria, the Fund has helped forge alliances between key actors, including government, large firms, banks, suppliers, smallholder farmers and off-takers, such as Olam and Popular Farms & Mills Ltd – investors who provide cash up front in return for a share of the harvest.

The programme has had a positive impact along the value chain – from increasing private-sector participation in agriculture, to enhancing access of smallholders to services and resolving farmer-buyer conflict through the introduction of standard weights and measures.
Through the alliance, off-takers place orders for rice based on farmers’ capacity, consumer preferences, collection logistics and the quality of paddies. For their part, farmers identify their need for fertilizers and agrochemicals, preferred mode of delivery and planned quantities for sale. Together, the parties work out mutual obligations, including a fixed price for the rice.

As part of the agreement, Popular Farms & Mills Ltd and Olam set up collection centres not more than 25 kilometres from farmers’ fields, which reduced farmers’ transportation costs. Olam engaged extension workers to help farmers enhance productivity, and advisers to guide them in making sound decisions about paddy sales.

By November 2016, the programme had linked more than 20,000 farmers to off-takers. Among these was Peter Okonkwo, a young farmer from Anambra State. Four months after training in best practices, he had doubled his yield. “I have even started to crop twice a year because of the teaching,” he says. “This means that I will double my income by the end of 2016.”

This story was originally published in IFAD’s 2016 Annual Report.