INVESTMENT OPPORTUNITIES IN THE
RICE VALUE CHAIN
BY
PROF. GERALDINE E. UGWUONAH
REMIF REMS NIGERIA LTD (REMS)
22/23 ISUOBA LANE, TRANS-EKULU
ENUGU, ENUGU STATE
PHONE NO 08033491228
Email: geraldine.Ugwuonah@unn.Edu.Ng
geraldine.Ugwuonah@unn.Edu.Ng
Introduction
 Nigerian rice production was characterized by low yield, poor quality of
paddy and high cost of production.
 Average yield of rice farm was between 1 and 1.5 metric tons per hectare.
 Low productivity did not support any meaningful investment in the sector
 Poor quality of paddy resulted to poor rice grains which were mixed with
impurities and stones, had non uniform grain size and colour,
 Local rice was unattractive to an average.

Urban dweller preferred foreign rice to local rice varieties .
Production constraints include:





Lack of knowledge of improved package of agronomic
practices.
Lack of technical assistance in the form of extension
services.
Unavailability of easy to use and handy farming
equipment.
High cost of input.
Very rudimentary production methods which was
labour intensive.
Processing constraints include:

Low capacity and age of mills that required
substantial upgrading or replacement with more
modern equipment.

Poor Harvest and post-harvest processes.

Inefficient milling technique and unavailability of
De-stoning machine

Poor marketing systems and standards especially
in terms of packaging, grading, sorting and
polishing.
Environmental Constrains

Inconsistent government policies on rice importation.

Rent-seeking attitude of government officials in the
distribution of fertilizers and other inputs (including
improved seed).

Challenges with importation of machinery into Nigeria

The state of infrastructure.

Insufficient power supply to both the farmers and
processors.
Gains from Intervention Activities.
Productivity has increased from 1.5 t0 4.00Mt/Ha.
 Farmers are not only aware but now cultivate good quality
and high yielding rice varieties like Faro 44, Faro 54, FARO
57.
 Extensive value addition activities are being carried out
by agro processors.
 More de-stoning machines are now available and more
modern mills have been built in some states.
 More people are involved with production and processing.
 Farmers are better organized to take collective actions
and responsibilities.

Rice Value Chain – A huge investment Window
Cottage
Miller
Paddy
Production
Farm
Gate
Buyer
Local
Paddy
Buyer
Regional
Paddy
Buyer
Domestic
Rice Market
Local
Agent
Buyer
Commer
cial
Mills
Imported
Rice
Classification of Investment Opportunities
in the Rice Value Chain
Investment opportunities in the rice value chain can be classified in two
dimensions, namely:
Production-related
opportunities
Processing-related opportunities.
Production-Related Opportunities
Direct production

Revamping already old irrigations that are bad. The can enter into
relationship with government on public private partnership bases.

Developing private irrigation schemes for rice (Several lands in the
Niger Delta are swampy and near natural water sources this type of
soil supports rice cultivation).

Cultivate and/or lease developed land to individual farmers and outgrowers for a fee.

With this controlled environment for rice, yields can get up to 7 t/ha
or more.
Production-Related Opportunities:
Seed Production

Direct cultivation of breeder and certified seeds.

Seed cleaning, packaging and distribution.

To fully take advantage of this, care must be taken to ensure
the viability of the seeds in order to retain farmers’ loyalty.

A good marketing system that take into consideration socioeconomic characteristics and location of farmers needs to be in
place.
Production-Related Opportunities:
Input Supply

Supply of the needed input has remained a source of
concern the farmers.

The market for input is far from being saturated.

Input distribution channels need to be explored and
developed.

At the present, there is the lack of efficient input
distribution system in the rice value chain.

Some input dealers locate outlets far away from farmers.

Engage in promotional activities aimed at sensitizing the
farmers on the use of input.

Procure genuine and good quality input.
Production-Related Opportunities:
Sale/Renting of Farming Equipment

Investment opportunities on the sale of farming
equipment are enormous and can be tapped through the
procurement and sales of handy, cheap and easy to use
equipment to rural rice farmers.

There is presently unmet demand for Direct Paddy Seeder
(DPS), hand held reaper/harvesters, winnowing machines,
threshers and UDP applicator
Simple and Easy to Use Farming Machines
Rice Farm Planted in Row
Production-Related Opportunities:
Fertilizer Production & Distribution

Fertilizer is high demand by rice farmers.

Any investment on fertilizer production would also
require the development of distribution channel which
will either be fully owned, partly owned or outsourced.

USG pelleting machine can also be sold or rented to
individual farmers and cooperative groups.
Processing related opportunities.
Investment in direct processing of paddy:

Investment in direct processing of paddy.

A reasonable number of investors are taking
advantage of this window.

Other processing opportunities exist which will
require further processing of rice to get to other
product types like rice flakes, rice flour etc.
Processing related opportunities
Marketing of Paddy

Marketing of paddy is one of the most urgently needed investment
opportunity in Nigeria.

Marketers are required to bridge the gap between farmers and
processors in the value chain as it provides place and time utility by:

Paddy from the farm gate need to be cleaned, graded and bulked.

Providing logistic and physical distribution facilities needed to supply
large quantity of paddy to big processors.

At the moment, there are no strong paddy marketing companies and
individuals in the this aspect of rice value chain within the Niger
delta region.
Processing related opportunities.
Marketing of Processed Rice

This will require grading, pricing and packaging of milled
rice.

Promotional activities like advertising, sales promotion,
publicity, internet marketing, web based marketing are
also needed.

Physical Distribution of Milled Rice: This aspect of
marketing has to do with storage, transportation and
supply chain management.

Each or a combination of these activities represent an
investment opportunity.
Conclusion
Today, it is clear to everybody that Agriculture
cannot continue to be neglected.
 Private sector involvement is strongly needed to
move the rice sector forward.
 The people of Niger-Delta are being called upon
to take advantage of these opportunities in the
rice value chain.
 Niger-Delta is endowed with rich soil that
supports rice cultivation.

Investment in the rice
value chain is one of the
major ways to get our
teeming youths engaged
in productive ventures as
will drastically minimize
the restiveness and
violence being
experienced all over the
country.
THANK YOU FOR LISTENING