High Costs and Policy Shifts Force Northern Rice Mills to Shut Down Amid Rising Food Prices
Rice mills in northern Nigeria are shutting down due to soaring production costs, including skyrocketing diesel prices and high electricity tariffs. The stoppage of government support, particularly intervention financing that had improved the sector between 2015 and 2020, has left rice millers struggling. Farmers like Retson Tedheke and Sadiq Abubakr report that operational expenses have made rice milling not profitable, with some opting to sell off their equipment or cease operations altogether.
The challenges extend beyond production costs. A scarcity of rice paddy, partly caused by the floods of 2022 and increased middleman activity, has forced millers to seek supplies even as far as Cameroon. The high cost of lending, worsened by the Central Bank of Nigeria’s recent interest rate hikes, has further discouraged investment, with rates reaching as high as 37% for agricultural loans. Though the government has approved limited grain importation, delays in implementing these policies have yet to relieve millers’ burdens.
With inflation driving up food prices, the price of rice has surged over 140% in the past year, placing it beyond reach for many Nigerians. Industry leaders, including Dr. Augustine Maduka of COMAFAS, are calling for subsidized inputs and increased dry-season farming to support local production. However, recent economic reforms, including the removal of fuel subsidies, are likely to perpetuate difficulties for the sector until more robust support measures are introduced.
