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RETURN OF PYRAMIDS: How a controversial policy helped Nigeria become Africa’s largest rice producer

RETURN OF PYRAMIDS: How a controversial policy helped Nigeria become Africa’s largest rice producer
May 12
07:10 2021

Under sweltering conditions in Birnin Kebbi, Kebbi state capital, President Muhammadu Buhari on November 17, 2015, launched the Anchor Borrowers’ Programme (ABP). The Central Bank of Nigeria (CBN) initiative was a fallout of the nation’s over-reliance on crude oil earnings, which is susceptible to a downturn in the oil market. Over the years, this has undermined the ability of the apex bank to attain macroeconomic stability due to recurring pressures on the local currency in periods of low oil prices.

According to Godwin Emefiele, governor of the CBN, imports of rice, fish, wheat, and sugar consumed about N1.3 trillion worth of foreign exchange from the bank when he assumed office in 2014.

Rice, a major commodity under the ABP, is the third-most consumed staple food in Nigeria — after maize and cassava — and has become a food security crop due to its increased significance in the country. The consumption far exceeds production with a yearly average deficit of about 2.4 million tonnes recorded between 2007 and 2018.

According to a KPMG report, three million tonnes of rice were imported into Nigeria in 2018, via its shipping ports as well as informal cross-border channels. Nigeria imports most of its rice from Thailand, India, and the USA, incurring a bill of about $5 million daily.


Gro Intelligence, an agricultural data platform, puts Nigeria’s rice output at 4.9 million tonnes in 2019, up 60 percent from 2013 — but well below local consumption of 7 million tonnes. With increased local production capacity, Nigeria is currently the largest producer of rice in Africa.

Under the ABP, farm inputs are provided in cash and kind to smallholder farmers (SHF), thus guaranteeing input supply to agro-processors. During harvest, the farmer supplies produce to the agro-processors (anchors) who then pay the cash equivalent to the farmer.

Rice Pyramid in Zauro, Kebbi state

The launch of ABP was largely greeted with criticism from economists and financial experts who felt that the apex bank should focus more on its monetary policies rather than intervene in crop cultivation. 


However, like the biblical rejected stone that became the cornerstone, the programme, although not without some gaps and learning points, has changed the fortunes of thousands of farmers. It has created jobs for the youth, economically empowered women, and raised their social class, particularly rice farmers who were interviewed by TheCable’s FIKAYO OWOEYE in Kebbi, Nasarawa, and Benue states. The climax was the recent unveiling of harvested 13 rice pyramids which housed 50kg bags of rice numbering 200,000 in Kebbi and Gombe states, reminiscence of the Kano groundnut pyramid of the ’60s.


The fishing town of Argungu, some 41 kilometers from Birnin Kebbi, is blessed with a good irrigation system from the Argungu river.

Ibrahim Argungu, a rice farmer, said the ABP has been of immense “blessing” to his farm. He said yield per hectare has improved; one hectare now gives an average yield of 90 bags of rice paddy on optimally performing land. The least was about 75 bags.


He said: “With Anchor, farmers are provided with six bags of fertiliser per hectare, water pumping machine, and herbicide, then cash support.

“Almost everyone in Kebbi is now a farmer, even civil servants are now tapping into the opportunity provided by the programme. This programme has helped and everyone is now into rice cultivation and it has employed a lot of youth in Argungu. For labour work, they are paid N1,500 daily.”

Speaking on the challenges of the programme, Ibrahim noted that repayment of loans is problematic.


He said: “If most farmers have repaid the loans, by now they should be able to walk into the Bank of Agriculture or Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL). Since they have the records, map of your farms, hectares of your farm, they can just apply since the banks already have their creditworthiness records.”

Ibrahim also said the sale of produce has become a challenge as government and anchor companies saddled with the responsibility of buying no longer purchase in large quantities from farmers, leaving them with the option of selling their farm produce directly to wholesale sellers in the market or other interested parties.


He also commended the Green Agriculture West Africa Ltd (GAWAL), an agro-processing company, for coming to their aid.

“Before, the government used to buy all our rice, but not now, we have a partnership with GAWAL. They purchase our rice from us and even provide us with seedlings, extension services. They just want us to follow good agronomical practices so that our yield can be better.”


Women in Argungu are also counting their blessings with the programme impacting positively on their small businesses thereby empowering them economically.

Zainab Abubakar, a mother of four who sells local delicacy called fura, noted that she now sells more snacks daily to farmers working on rice farms.


It was a mixed story at Jega, a town in Jega LGA, as some farmers complained to TheCable that they were being sidelined because they belong to the opposition party in the state, despite filling the forms for enlistment into the programme.

The All Progressives Congress (APC) is the ruling party in the state while the Peoples Democratic Party (PDP) is the major opposition.

Azika Jega lamented that the operators of the programme often come to give them forms without providing the loans.

“They came two years ago to my farm, promising me that they would come back to supply inputs for my rice farm for the rainy season planting, but till today, I have not seen them,” he said.

Azika, a rice farmer in Jega

Riding through his rice farm along the plain of Jega river on a motorcycle, Azika noted that some of his colleagues who have benefitted from the programme often tell him to join their political party to be a beneficiary.

“Imagine if I have access to the inputs from Anchor, my farm would have been bigger than this, and I would have made more money; even become a millionaire,” he said.

Azika, however, acknowledged that farmers who have benefitted from the scheme are enjoying improved yield, noting that Jega is now home to several “rice millionaires”.

Some kilometres from Azika’s farm was Yusuf Gambo who was found levelling the soil in preparation for transplanting his rice. “I have made a lot of success, and millions out of rice farming,” the civil servant said gleefully.

Yusuf Gambo working on his rice farm in Jega

For the dry season, Gambo has already cultivated 50 hectares, strictly for seeds, while the remaining 100 hectares would be used to produce grains.

Alhaji Argungu, the Sarkin Norma and head of Rice Farmers Association (RIFAN) in Kebbi, said since the inception of the programme in 2015, a total of 150,000 farmers have been enlisted in the state.

“The living standard and farming practice of our people has improved. Farmers were getting 2-3 tonnes per hectare in the past, but now they can get 9 tonnes per hectare. We have also seen local rice mills springing up in the state thereby creating employment for the youth,” he said.


Ga’ate Gold Rice Farm in Nasarawa state

The Nigerian Farmers Group Cooperative Farming Society (NFG-CS) has also enjoyed the intervention of the apex bank. The farm, located in Ga’ate, a community in Kokona LGA of Nasarawa state, has raised the living standard of the community with its modern farm “RUGA” settlement.

Speaking to TheCable, Retson Tedheke, coordinator of the farm, said the idea was conceived after he led the ‘Occupy National Assembly’ protest in 2016 to demand better welfare for Nigeria’s young population. Retson said he later realised that one of the best ways to improve the living standard of youths is empowerment through farming.

Retson Tedheke, coordinator of Nigerian Farmers Group Cooperative Society

“If you empower Nigerians, then you give them the ability to have a voice, a political voice, a social voice, and an infrastructural voice, and the easiest way to do that was to go into farming,” he said.

Retson said the farm recently got about N734 million from the CBN under its commercial agric credit scheme at a 5 percent interest rate, noting that the loan facility has helped the farm automate its rice processing and expand into other agribusiness value chain.

“We had manual processing of rice before and now we are automating the entire rice processing. First to 30 tonnes per day, then to 120 tonnes per day, that is 1,200 tonnes in 10 days; 3,600 tones in a month. The CBN is helping us to move from 10,000 bags in a month to about 72,000 bags,” he said.

New rice milling plant

Retson, however, lamented the demand for “unreasonable” collateral by banks and urged the CBN to target the real farmers in the rural areas, and not political farmers.

“Rural Nigeria needs support where there is real productivity across the country this will make insecurity, unemployment reduce,” he said.

“If you value my farm at N2 billion, you should be able to give me a loan of N5 billion instead of telling me to go look for someone as collateral in Abuja or Lagos.”


A rice farm on the bank of River Benue

Benue is dubbed the food basket of the nation, however, the recent spate of insecurity in the state has forced farmers to abandon their farms with many of them now in internally displaced persons (IDP) camps following the invasion of farmlands by bandits.

A visit by TheCable to some rice farms in the state showed vast farmlands deserted due to insecurity.

Fidelis Akosu, president of the Rice Farmers Association of Nigeria (RIFAN) in Benue state, said the lack of irrigation facilities has prevented farmers from planting during the dry season.

Fidelis Akosu, president of the rice farmers association of Nigeria (RIFAN) Benue state

He lamented the non-functional state of the lower Benue Dam facilities and appealed to the federal government to help revive various irrigation schemes in Makurdi and Katsina-Alla for farmers to participate in dry season farming as it yields higher than the wet season.

Akosu said the inability of farmers to gain access to their farms had worsened the loan repayment in the state, adding that some farmers view the loan as “political money”.

He said: “Politicians among the farmers tried to mislead them and told them not to pay. But now, we are on a mass campaign and processes to recover the loans.”


Data from the 2020 fourth quarter economic report of the CBN shows that N492 billion has been disbursed to 2.5 million farmers under the programme as of November 2020. Out of the disbursed fund, only N114 billion has been repaid, while 76 percent of the loan at N378.5 billion is still outstanding.

Boboye Olaolu, an economist with CSL Stockbrokers, said the apex bank must put in place a well spelled out loan repayment plan.

“There is a need to have metrics that track performances and increase in yield of farmers so as to better measure the success of the programme.”

Speaking with TheCable, Osita Nwanisobi, CBN’s director of corporate communications, said reconciliation of various accounts is ongoing and issues regarding repayment will be resolved once it is concluded.

“We’ve made it known to the farmers that this is not a grant, but a loan,” he said.

Gbolahan Ologuro, an equity analyst at Cordros Capital, noted that considering that fiscal actions towards stimulating the agriculture sector have been slow, this has compelled the apex bank to intervene.

“Certainly, one would expect that the ministry of agriculture would be in a better position to administer and manage such interventions given their technical know-how. Hence, I think collaboration with the ministry is a more viable option of getting far-reaching and sustainable results,” he said.


While loan repayment serves as a major obstacle to the sustainability of the ABP, the desired effect of making Nigerian rice available in markets is being actualised.

A market survey by TheCable showed that rice produced under the programme can be found in several markets in the southern parts of the country, including Lagos and Oyo states.

Aliyu Yusuf, a rice trader at the popular Oyingbo market, said he and his colleagues purchase rice from Kebbi on a regular basis. “Alhaji from Bunza (an LGA in Kebbi state) supplies my rice and my customers love it,” he told TheCable.

The story is the same at the popular Bodija Market in Ibadan with traders saying rice from northern farms is safer to trade, given that officials of the Nigeria Customs Service (NCS) often carry out raids to seize imported rice.

“We used to have some imported too but customs people have been disturbing us. They came some weeks ago to break shops and seized some foreign rice,” says Yusuf Akintunde, a trader at Bodija.

This is a special investigative project by Cable Newspaper Journalism Foundation (CNJF) in partnership with TheCable, supported by the MacArthur Foundation. Published materials are not views of the MacArthur Foundation.


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