Will Nigeria’s rice output rise from recent lows?

Nigeria's rice production has taken a hit in the 2024-2025 season, dropping by 7 percent to 5.23 million metric tons, according to data from the United States Department of Agriculture. This decrease can be attributed to high production costs, marking one of the lowest levels the country has seen since 2020. Kola Masha, CEO of Babban Gona, shared insights on CNBC Africa regarding the factors influencing this decline and the potential strategies to address the challenges in the grains market. Masha identified several key factors contributing to the decline in rice production in Nigeria. He noted a significant increase in production costs driven by inflation, making it more expensive for farmers to cultivate rice, which is already a high-input crop. The limited access to financing further hampered farmers' ability to purchase necessary inputs, leading some to shift to lower input crops. Additionally, the removal of market protection and competition from cheaper foreign varieties compounded the challenges faced by Nigerian rice farmers. The suspension of the anchor borrowers program, aimed at supporting rice farmers, further weakened incentives for production. Amidst these challenges, Masha highlighted the importance of effective financing mechanisms to stimulate lending in the agricultural sector. By partnering with development finance institutions and other stakeholders, the government aims to empower farmers with the purchasing power to invest in quality inputs and enhance productivity. This, in turn, could encourage farmers to return to crops like rice and maize, which offer significant returns but require upfront investments. The government's plan to allocate 750,000 hectares of land for maize and rice farming demonstrates a commitment to revitalizing the sector. When discussing the prospects of year-round farming and price stabilization for grains like rice and maize, Masha emphasized the need to focus on improving existing farmers' productivity rather than just expanding production hectares. Creating enabling structures to support farmers in increasing their yields could lead to tangible impacts in a shorter timeframe. While acknowledging the complexity of price dynamics, Masha underscored the urgency of providing adequate financing to farmers within a three-month window to drive positive outcomes in the sector. In light of these insights, Nigeria faces the dual challenge of addressing production cost issues and enhancing farmer support to revitalize its rice sector. By implementing targeted financing initiatives, market protection mechanisms, and strategies to boost productivity among existing farmers, Nigeria could potentially overcome the current downturn in rice output and work towards a more sustainable and competitive agricultural landscape.