* Growth in consumption makes meeting demand tougher
* Imported rice more scarce but still available
* Prices spike following border closure
* 'No sign of compliance' from neighbours - Buhari spokesman
By Libby George
MAKURDI, Nigeria, Jan 23 (Reuters) - Thomas Tyavwva Maji is
planting rice on more of his land in Nigeria's Benue State than
ever to take advantage of a surge in prices since the country
shut its land borders in August.
But he says he cannot go much further. With no machinery or
irrigation, limited manual labour and no spare cash for
fertilizers, the 45-year-old is not expecting any dramatic
change in his fortunes.
"We work until we get exhausted, manually we get exhausted,"
said Maji, as a woman nearby beat hand-harvested stalks on the
ground to separate the grains from the chaff.
The constraints Maji faces have bedevilled many rice farmers
and millers across Nigeria for years. Despite government
measures designed to spur production, farmers in Nigeria get far
less from their land than other major rice growers and the West
African country is only marginally less reliant on imports.
That's a problem for a government that wants to grow all of
its own food and boost the country's agriculture, a sector that
accounts for nearly a third of gross domestic product in
Africa's biggest economy.
When he came to power in 2015, Nigerian President Muhammadu
Buhari pledged to help the nation become self-sufficient in rice
– once a luxury but now a staple for millions of Nigerians.
In 2015, Nigeria's central bank banned the use of its
foreign exchange to pay for rice imports and has backed loans of
at least 40 billion naira ($130 million) to help small-holders
boost output. It also banned rice imports across land borders
and kept hefty 70% tariffs on imports coming through ports.
In August last year, Nigeria went a step further and closed
its land borders altogether to stamp out smuggling, often from
neighbouring Benin, with rice being one of the main targets.
Buhari's spokesman, Garba Shehu, said the measures boosted
rice production to 9.2 million tonnes last year from 7.2 million
in 2015, making Nigeria more or less self-sufficient, though
traders can import rice through ports if they pay the tariffs.
Agricultural data specialist Gro Intelligence, however, put
Nigeria's rice output at 4.9 million tonnes in 2019, up 60% from
2013 but well below local consumption of 7 million tonnes.
The U.S. Department of Agriculture, meanwhile, expects
Nigeria's 2020 rice imports to rise 9% to 2.4 million tonnes, in
part due to the high cost of unprocessed Nigerian paddy rice and
elevated operating costs at mills.
In Lagos, Nigeria's biggest city, supermarket shelves remain
stocked with a plethora of imported rice brands.
In the markets where most Nigerians buy their food, sacks of
Nigerian rice are piled high but imported rice is still
available, even though some traders keep the foreign grain under
wraps to prevent it being confiscated by customs agents.
LOW YIELDS
Small-scale farmers such as Maji account for 80% of
Nigeria's rice production with a handful of large companies,
such as Coscharis Group, Dangote and Olam OLAM.SI , growing the
rest, according to the U.N.'s Food and Agriculture Organization
(FAO).
In Benue state, virtually every aspect of Maji's farming
manual, from planting to harvesting to levelling out roads to
take the crop to market.
It's a similar story on many Nigerian farms, leaving the
average yield per hectare at just over 2 tonnes - half the
global average and a fraction of Egypt's 9.5 tonnes a hectare,
according to U.N. data.
Experts say there is little hope of improvement without
significant investment in irrigation, mechanisation, roads and
storage. More than 12% of rice is also wasted due to poor roads
and inefficient harvesting, milling and storage, consultants
KPMG said in a review of the Nigeria's rice industry.
In a good year, Maji makes about 1.5 million naira ($4,900)
– nowhere close to the 5 million, at least, a tractor would
cost. Without irrigation, a goal so remote he doesn't even know
the cost, he can only plant one crop a year.
"At this scale, we will not even be able to fetch a tractor.
Talk less of fertilizer and other chemicals," Maji said.
According to the FAO, less than 1% of Nigeria's farmland is
irrigated, compared with a global average of more than 20%.
Small- and medium-scale rice millers, who account for more
than 80 percent of the local market, also say they're struggling
to meet increased demand without proper equipment.
At Wurukum Rice Mill in Makurdi, Iveren Asan works alongside
her sister, using a loud diesel-powered generator to drive
machinery processing paddy grains into consumable rice.
Nearby, rice grains that have been parboiled in vats heated
by firewood dry on tarps. She said new buyers from across the
country had surfaced since the border closures - but producing
more would require significant investment in new machines and
the higher prices were not enough on their own.
"We can't meet the demand. We are doing the process manually,
so we cannot meet the demand," she said.
'INCREDIBLY DISRUPTIVE'
More broadly, experts warned that extreme measures, such as
border closures, taken in the name of food security were hurting
Nigerians, stunting the development of other industries and
holding back foreign investment.
"The border closure has been incredibly disruptive," said
John Ashbourne, an economist at Capital Economics. "It stops
industries from getting the imports they need, and it pushes up
prices."
The border closure is set for review Jan. 31 but the
presidency's Shehu said land frontiers would remain shut until
Nigeria's neighbours stopped smuggling on their side - and there
was "no sign of compliance yet".
Ashbourne said even some farming has taken a hit from
government policies.
After glass was added to a central bank list of items
importers cannot buy with foreign exchange, some tomato paste
plants shut because they couldn't source the jars they needed.
On another farm in Benue State, Abraham Hon, 51, weaves
through rows of melons and corn before reaching his rice, the
crop that generates the most money.
"The prices look pretty good," he said, as men cut stalks of
rice by hand and laid them in piles on the ground. "We expect
more money in the pocket this year."
But while he and Asan are happy with their increased income,
they worry about the impact of higher prices on consumers.
A 50 kg bag of rice can cost as much as 24,000 naira in
Lagos - nearly double the price in July before the borders were
shut and not far below the monthly minimum wage of 30,000 naira.
And consumers, who already spend more than half their income
on food according to the World Bank, are feeling the squeeze.
"We will reach a point where people who are buying rice
can't afford to buy rice. They will look at other alternatives
to get energy and get food on their table," Hon said.
"That in the long term is not in the interest of we, the
farmers."
($1 = 305.9000 naira)
Rice Imports from Thailand https://tmsnrt.rs/2R0LCtc
Nigerian Rice Production and Consumption https://tmsnrt.rs/3anOqZ8
Nigeria Lags in Rice Yield https://tmsnrt.rs/377lW3u
Nigeria's Incoming Foreign Direct Investment Slides https://tmsnrt.rs/2R9Tnge
Border Closure Boosts Nigeria's Inflation https://tmsnrt.rs/2NHA0sW
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(Editing by David Clarke)