Innovation Opportunities in the Rice Value Chain in Nigeria

2018 | D. Phillip | O. O. Jayeoba | Y. Ndirpaya | F. Oluwole

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Published as: Dayo Phillip, Olumuyiwa O. Jayeoba, Yarma Ndirpaya and Fatunbi Oluwole (2018) Innovation Opportunities in the Rice Value Chain in Nigeria. FARA Research Results Vol2(3)

Summary

As a cereal grain, Rice is the most widely consumed staple food for a large part of the world’s human population. To the average Nigerian, rice needs no introduction because it has become one of the most important foods in the country, consumed by both the wealthy and the poor. Massive importation of the commodity from countries like India, China, and Thailand therefore, occur largely because of the estimated amount of rice milled locally is placed at 1.8 million tons.

Most rice farmers in Nigeria are smallholders (90 percent of total), applying a low-input strategy to agriculture, with minimum input requirements and low output. Nigeria rice productivity is among the lowest within neighbouring countries, with average yields of 1.51 tonne/ha. Nigeria is the largest rice producing country in West Africa but is also the second largest importer of rice in the World. Rice is cultivated on about 3.7 million hectares of land in Nigeria, representing approximately 10.6 percent of the 35 million hectares of land under cultivation, out of a total arable land area of 70 million hectares in Nigeria Out of the 3,7 million hectares under rice cultivation, 77 percent of the farmed area is rain-fed rice, of which 47 percent is lowland and 30 percent upland. Rice is the third most important cereal grown and consumed globally after wheat and maize. In Nigeria, rice is cultivated in almost all ecological belts available in the country as they all provide favourable environments to support the crop.

Cultivated rice is generally considered a semiaquatic annual grass, although in the tropics it can survive as perennial, producing new tillers from nodes after harvest (ratooning). At maturity, the rice plant has a main stem and several tillers. Each productive tiller bears a terminal flowering head or panicle. Rice is cultivated in virtually all the agro-ecological zones in Nigeria, therefore successful cultivation of rice starts with choice of right rice variety suitable for the site. Because fields differ in their soil quality, the risk of flooding, or the risk of drought, a suitable variety must be selected for each field. Using suitable varieties minimizes the risk of crop loss or failure and ensures good yields. A suitable variety should give good yields, taste good, have a high market price, and many things more.

Paddy fields can be prepared under either dry or wetland conditions; the choice depends on time of operation, soil properties and implements to be used. In either case, the field should be disc ploughed immediately after harvest in November/December to expose the rhizomes of perennial weeds to scorching action of the sun. For direct seeded rice, the field is harrowed just before the first rain, and the crop is seeded. For wet or transplanted rice, the field is flooded with the first rains. In the absence of ploughs, make heaps at the onset of first rains for weed control. Farmers’ yields range between 1,200 and 3,000kg ha-1 for swamp rice and 1,000 – 1,500kg ha-1 for upland rice. With improved practices yields of up to 5,000 – 6,000kg and 2,500 – 3,000kg ha-1 of paddy are possible for swamp and upland rice, respectively. Rice should be stored in cool, dry rodent-proof conditions. Infested paddy should be fumigated with phostoxin in air-tight containers at the rate of one tablet/jute bag (100 kg paddy) or 10–15 tablets/t paddy.

Rice is the primary source of carbohydrates and protein besides, rice also contains small quantities of fat, ash, fibre and moisture. Vitamins and mineral are present largely in bran and germ. Its by-products form important components of poultry and dairy feed. The byproducts which we get from paddy milling are rice bran and husk. Rice plants produce approximately 50% rough rice and another 50% straw on weight basis. The rough rice, on milling, produces brown rice, milled rice, germ, bran, broken and husk. Each of these components has unique properties and can be used in a number of ways. The utilization pattern of these components directly or as derivatives decides the extent of value addition in rice. Potential availability of rice husk in the country as a by-product of milling industry is about 24 million tons annually. As a renewable resource, its proper utilization would add enough value to the rice crop. The two major components like carbon and silica present in the rice husk make it possible to develop several value added products.

Since rice is abundant in carbohydrates, it acts as fuel for the body and aids in the normal functioning of the brain. Carbohydrates are essential to be metabolized by the body and turned into functional, usable energy. The vitamins, minerals, and various organic components increase the functioning and metabolic activity of all your organ systems, which further increases energy levels. Eating rice is extremely beneficial for your health, simply because it does not contain harmful fats, cholesterol or sodium. Rice is low in sodium, so it is considered one of the best foods for those suffering from high blood pressure and hypertension. Whole grain rice like brown rice is rich in insoluble fiber that can protect against many types of cancer. Many scientists and researchers believe that such insoluble fibers are vital for protecting the body against the development and metastasis of cancerous cells. Medical experts say that powdered rice can be applied topically to cure certain skin ailments. On the Indian subcontinent, rice water is readily prescribed by ayurvedic practitioners as an effective ointment to cool off inflamed skin surfaces. The phenolic compounds that are found in it, particularly in brown or wild rice, have anti-inflammatory properties, so they are also good for soothing irritation and redness.

Brown rice is said to contain high levels of nutrients that stimulate the growth and activity of neurotransmitters, subsequently helping to prevent Alzheimer’s disease to a considerable extent. The husk part of rice is considered to be an effective medicine to treat dysentery, and some people say that a three month old rice plant’s husks are said to have diuretic properties. Chinese people believe that rice considerably increases appetite, cures stomach ailments and reduces all digestive problems. Rice bran oil is known to have antioxidant properties that promote cardiovascular strength by reducing cholesterol levels in the body.

In the Nigerian context, some identifiable production constraints include but are not limited to;

Bottlenecks in the land tenure system and policy which limits accessibility to and availability of land.

Dearth of viable seed for rice farming.

▪ Resistance and reluctance to frontier technology and farming system.

▪ Weak fertilizer distribution system for timely resource availability.

Lack of financial resources to acquire agro-chemical such as herbicides, pesticides etc by farmers.

▪ The relatively high and rising agrochemical prices in the economy

Innovation system is a network of organization, enterprise, and individuals focused on bringing new products, new processes and new forms of organizations into social and economic use, together with the institutions and policy that affect their behaviour and performance. Rice innovation system embraces the totality of the component actors, and their interaction and the policy environment. It tends to go beyond the creation of knowledge to encompass the factors affecting demand for and use of knowledge in useful ways. Innovative performance depends not only on how the individual actors perform in isolation, but also on how they interact with each other as element of a collective system of knowledge creation and use.

To reduce the dependence on imported rice as well as develop the local rice industry and enhance the adoption process of high yielding varieties and also increase the production level of rice, Nigeria adopted several development innovations, some of which include the African Rice Initiative (ARI) which was established in 2002 to promote the dissemination of high yielding varieties (NERICA) in SSA. The Federal Government of Nigeria launched the Presidential Initiative on Accelerated Rice Production in 2003. Government also banned milled rice imports and put a 50 percent duty on parboiled rice. In addition, a levy of ten percent was imposed on rice imports to create a dedicated fund for the development of the local rice industry, including processing and marketing. Notwithstanding the various policy measures, domestic rice production has not increased sufficiently to meet the increased demand. The existing rice production potential has not yet been realized, as smallholder (small-scale, subsistence and Fadama farmers) output is inadequate and paddy processing is substandard. To meet this shortfall, government recognizes the potential of irrigated agriculture, using improved technologies and wishes to promote further expansion of rice production.

Access to improved varieties, good quality seed and availability of good quality seed have been reported as the principal constraints in rice production. The rate of utilization of certified seed is 5-15 percent, 10-20 percent, and 30 percent among producers at Badeggi, Bende and Kano areas respectively. Use of poor quality seed contributes to low yields in irrigated rice production. In recent years, improved seed is being extended in both rain-fed upland areas (mainly NERICA) and rain-fed lowland areas (FARO varieties). Rice, like most other agricultural commodities, uses such inputs as land, fertilizer, seeds, labour and agro-chemicals. Labour comes from family and hiring. Efforts have been made to get fertilizers, improved seeds (varieties) and agro-chemicals to farmers through diverse sources. Most of the farmers in our study (61.2%) own their rice farmlands.

Improvement of agricultural productivity depends on the adoption of a package of improved technologies. In our study 85.8% of our sample of rice farmers indicates the use of one improved technology or another; nearly 70% of the farmers indicate improved rice varieties as the main technology adopted. The average area under all varieties of rice (traditional and improved) was 2.78 ha (n=202) while the average area under improved varieties was 2.09 ha (n=209), giving an adoption rate of 75.2%. The public sector still dominates the input distribution market, with government extension and research agencies jointly accounting for 77.3% of all input sources. The average utilization of inputs at smallholder level in rice production is 1.53ha for farm size, 40.6 man-days/ha for labour, 345 kg/ha for fertilizer, and 11.85 litres /ha for agro-chemicals.

Only 19.1% of the farmers in our sample indicate processing own rice produce. Thus, rice is largely sold in paddy form among the farmers. Nearly 94% of the farmers still market their rice as individuals rather than through groups. Group marketing is known to benefit smallholders in the form of cost sharing, risk sharing, and better access to credit and inputs. The top four channels of marketing rice among the farmers are on-farm to wholesalers (27.1%), sale at the local/village market (25.9%), sale to agro-processors (16.3%) and sale at urban markets within the state (15.1%). We noted that some farmers (12%) are able to sell directly to consumers, which ultimately should improve their marketing margin and efficiency.

A persistent problem in smallholder agricultural production is the inability of farmers to process own raw outputs. This has always led to sales at poor prices, and leaving most of the gains to those who buy, process and sell to others within the value chain. Farmers gain (loose) an average of N5, 795.96 on every 100 kg of rice grain processed (not processed). This is a significant value when viewed across millions of metric tonnes of harvested rice per season. Indeed, the difference between the farm-gate price of unprocessed rice (N11,091.18/100kg) and retail price of processed price (N22,748.35/100kg) is disturbingly high (N11,657.17/100kg), and underscore the enormity of value losses by farmers for not processing rice before selling. Labour cost accounted for most of the cost of producing rice (49%). Jointly, labour and fertilizer accounted for more than 70% of the total cost of producing rice. On the average, the gross margin per hectare for rice is N 1,054,554.22. The return per Naira spend is 8.56, underscoring great opportunities for a profitable smallholder rice production, even with seemingly inflationary situation with input prices.