Rice millers under the aegis of Rice Millers, Importers and Distributors Association of Nigeria (RIMIDAN) have commended Federal Government for reviewing this year’s rice import allocation into the country saying the slashing of 200,000 metric tonnes of rice would enhance increase in local rice production.
Citing the controversy that marred last year’s approved rice allocation formula, Rice Millers, Importers & Distributors Association of Nigeria (RIMIDAN) have lauded the Federal Government’s decision to reduce rice importation into the country by 200,000 metric tonnes from 1.5 million MT to 1.3 million MT for 2015, saying this would bring increase in local rice production.
The cut in rice importation was part of official strategy to gradually eliminate import dependence and enhance self sufficiency in local rice production in line with a blueprint designed for the sector.
A member of RIMIDAN and Managing Director Semek Farm Limited, Chief Michael Balogun, told The Union that local rice millers in the country are happy with the move, stating that it was time for the country to believe in self sufficiency in local rice production as the only way to encourage local rice millers to do more in rice output.
He berated what happened in the industry where some foreign rice millers had imported rice into the country beyond their quota and even refused to pay the necessary tariff to government.
Balogun stressed that President Goodluck Jonathan’s administration has really brought sanity to the country’s rice industry which was marred with high level corruption as foreign rice companies always violated government regulation through continuous rice import and use of waivers to escape appropriate tariff payment.
According to him, the association would abide with government’s approved rice allocation for its members and ensure that members play their own part according to the rule since government has given all stakeholder level playing ground.
“Our association is grateful to this government for what it has done to improve local rice production and discourage importation of rice into the country for the sake of local rice market. We were not happy with the ongoing controversy in the rice industry where some companies are found to have imported rice into the country beyond their quota and failed to pay government revenue instead they were lobbying for waivers from government for them to avoid tariff payment”.
He continued, “This reduction in rice importation into the country would go a long way to strengthen the country’s local rice market as there is now hope that government is really serious to discourage rice import which is the bane to the emergent of local rice production,” he added.
Federal Government reviewed its rice import allocations for 2015 by 200,000 metric tonnes (MT) to 1.3 million MT from 1.5 million in 2014, to be supplied by 22 approved companies.
According to a letter from the Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina to the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, one million MT of this quota has been set aside as allocations to existing rice millers, importers and new investors with approved Domestic Rice Production Plans (DRPP), at a preferential levy of 20 per cent and duty of 10 per cent.
“This year’s supply gap is 200,000 MT lower than 2014, as rice importers with no DRPP will account for the remaining 0.3 million MT at the higher levy of 60 per cent and duty of 10 per cent,” the letter confirmed.
In 2014, rice importers and new investors were required to post a Domestic Rice Production Performance Bond from a qualifying bank to clearly demonstrate their commitment to domestic investment plans in rice production and processing. Under this year’s import quota, Ministry of Agriculture and Rural Development identified 22 companies that will receive quota allocations for 2015 out of the number that was approved last year.
In the letter titled “Approved List of Companies Allocated Rice Import quota for April 2015- March 2016 period”, it was stated that certain criteria informed the trimming down of the number of companies from last year’s figure to what obtained this year.
The letter to the coordinating Minister of the Economy reads in part: “In line with the Federal Government’s policy (“the Policy”) to ensure self-sufficiency in rice by 2014, domestic rice production and milling operations continue to rise, which has resulted in a reduction in rice requirements of the country.
“As was the practice in 2014 and in line with the Policy, the allocation of import quotas continues to be made along the explicit criteria set for encouraging domestic production and domestic milling of rice, to lead to self-sufficiency. These criteria are based on the extent of existing domestic milling capacity as well as along four (4) specific items that assess each company’s ongoing investment outlay into domestic rice production and milling.
“These include the following: Domestic Rice Production Plan (DRPP): demonstrate evidence of current or planned investment in domestic rice production over a 3-year period, size of investment, proof of land acquisition and establishment of rice fields and paddy production, paddy purchase outlook from Paddy Aggregation Centres (PAC): Demonstrate a clear plan of purchase of paddy from PACs, should include location of PACs, volumes of paddy to be purchased among others.
The letter noted that paddy purchase outlook from out-grower farmers and farmer cooperatives should include location of farms, volumes of paddy to be purchased, among others. Ownership of Integrated Rice Milling Facility (with par boilers and dehuskers): size of planned installed capacity (score relative to the largest sized facility), evidence of acquisition of integrated rice milling equipment, also in addition to existing millers and new investors, only the re-applying companies who submitted bonds in 2014 were allocated quotas in the current 2015-2016 round.
Companies that failed to present the Federal Ministry of Agriculture and Rural Development with a Bond have not been given quotas for the full year April 2015 to March 2016. Consequently, import quota allocations to 22 approved companies with a total allocation of 961,000 MT were issued.
Already, the Ministry has sent letters to all the 22 approved companies and copied Dr. Okonjo-Iweala as well as the Comptroller-General of Nigeria Customs Service. The letter extensively informed the companies of their approved quotas, which qualified for 10 per cent duty or 20 per cent levy as the case might be. The Comptroller General of Customs was mandated to facilitate enforcement of the approved allocations.