Nigeria’s Rice Crisis: Government Reveals Production Cost Has Hit ₦2.3m Per Hectare

The Federal Government has opened fresh discussions with farmers, millers, processors and government agencies as it looks for ways to bring down the cost of rice and strengthen Nigeria’s domestic rice industry.

The technical consultation focused on the pressures affecting the rice value chain, including production expenses, access to finance, infrastructure, market conditions and the price ultimately paid by consumers.

The engagement forms part of efforts to implement President Bola Ahmed Tinubu’s directive to improve food security, increase local production, support farmers and attract greater private-sector investment while making food more affordable.

Rice production costs exceed ₦2 million per hectare

One of the key issues raised during the consultation was the high cost of producing rice in Nigeria.

Stakeholders said production currently costs between ₦2.2 million and ₦2.3 million per hectare, with fertiliser alone accounting for about 35% of the total cost.

Other expenses identified included energy, irrigation, financing, storage, transportation and losses after harvesting.

Participants said these pressures continue to affect the competitiveness of farmers, millers and processors and can ultimately influence the price consumers pay for rice.

Farmers seek more investment in irrigation

Stakeholders called for greater investment in irrigation infrastructure to allow farmers to produce rice throughout the year rather than relying heavily on seasonal rainfall.

Solar-powered water systems were among the solutions proposed during the discussions, with participants arguing that improved irrigation could help farmers maintain production and reduce some of the pressures associated with seasonal farming.

Better infrastructure, they said, would also create more consistent production cycles across the rice value chain.

Financing remains a major challenge for mills and processors

Limited access to affordable, long-term financing was also highlighted as a major obstacle.

Participants advocated stronger financing and refinancing mechanisms for viable rice mills and processing businesses, particularly those seeking to expand their operations.

Improved access to capital could help processors invest in equipment, storage facilities and other infrastructure needed to reduce operating costs and improve efficiency.

Storage gaps contribute to losses and higher costs

Inadequate storage and aggregation infrastructure was another concern raised during the consultation.

Stakeholders said additional investment in storage could reduce post-harvest losses while helping farmers and processors manage their products more efficiently.

They also called for better aggregation systems to reduce production and logistics costs across the supply chain.

Government seeks better data on rice production and prices

The Federal Government said reliable market information would be essential to improving decision-making in the sector.

It highlighted the need for an integrated food-market data framework covering domestic production, available stocks, imports, consumption and prices.

Such information, the government said, would allow policymakers and other stakeholders to respond more effectively to changes in supply and demand.

Trade policies discussed amid smuggling concerns

Participants also examined the impact of trade and import policies on domestic rice producers.

Stakeholders stressed the importance of predictable policies that take Nigeria’s domestic production cycles into consideration.

They warned that substantial differences between domestic and imported rice prices could create incentives for smuggling, making policy coordination particularly important for the sector.

Government pushes stronger food-safety standards

The consultation also considered measures aimed at improving the quality and competitiveness of Nigerian rice.

The Federal Government called for stronger food-safety, traceability, certification and testing systems.

According to the government, these measures could help protect consumers, strengthen confidence in locally produced rice and improve the industry’s competitiveness.

RIFAN welcomes continued engagement

Mohammed Auwalu, Vice President of the Rice Farmers Association of Nigeria (RIFAN), welcomed the government’s continued engagement with stakeholders across the rice value chain.

The participation of farmers and other industry players was viewed as important to identifying practical challenges affecting production and ensuring that policy discussions reflect conditions on the ground.

Technical report to guide next steps

The consultation brought together discussions on Nigeria’s wider food balance, including domestic production, strategic reserves, imports, exports, market conditions, investment and consumer demand.

The Federal Government said the meeting would lead to a consolidated technical report setting out the current condition of Nigeria’s rice value chain and identifying priority measures for strengthening the sector.

For producers and processors, the focus is on reducing costs through improved financing, irrigation, storage and market information. For consumers, the broader objective is to ensure that increased domestic production contributes to greater availability and affordability.

The consultation is part of the Federal Government’s wider food-system strategy, combining efforts to expand domestic agricultural production with measures aimed at addressing the cost of food across the value chain.