Nigeria's Rice Sector Faces Collapse as Importation Threatens 90 Mills

The Nigerian rice sector, which has seen considerable local and foreign investment, is reportedly nearing a complete breakdown. This crisis is attributed to a renewed increase in rice importation and smuggling, coupled with volatile pricing. According to the Director-General of the Rice Processors Association of Nigeria, Dr. Andy Ekwelem, approximately 90 out of more than 150 rice mills operating nationwide have ceased their operations. The few mills still functioning are running at between 30 and 70 percent of their installed capacity.

Reports indicate that the primary difficulties faced by Nigerian farmers and rice processors include the high volume of rice imported into the country and the illegal smuggling of the product. These factors have collectively driven down prices, negatively impacting local businesses.

Data from various sources suggests that Nigeria imported between 2.4 million and 3.2 million metric tons of rice in 2025. A substantial portion of these imports occurred during a period when duty-free waivers were temporarily in place, aimed at reducing food costs. This influx of foreign rice has created an oversupply in the market since last year.

Statistics from Vestance, an agricultural consulting firm, estimate that rice imports for the 2024/25 market year reached 2.4 million tons, marking a 60 percent increase from the April 2024 estimate of 1.5 million tons. This figure does not account for the volume of rice smuggled into the country.

Despite a decline in local production, these imports, valued at approximately N1 trillion, have led to a surplus. Consequently, the National Agribusiness Policy Mechanism (NAPM) has urged the government to halt further imports to safeguard local farmers.

Kolawale Oye, the Managing Director/CEO of Infinera Agribusiness Ltd, noted via LinkedIn that Nigeria recorded a rice surplus of about 1.1 million tonnes by December 2025, according to the government's own national food balance data. However, he clarified that this surplus was not a result of successful local farming and milling but was primarily driven by imports.

Further evidence of the strain on the economy comes from the National Bureau of Statistics (NBS) 2025 data, which shows Nigeria's food import bill soaring from N3.83 trillion in 2023 to N7.65 trillion in 2025.

Many farmers have identified the federal government's waiver on import duties for rice and other goods, which was in effect from July 2024 to December 2025, as a key driver behind the increased import quantities.

Conversely, during a stakeholder engagement meeting in Abuja, the Minister of Agriculture and Food Security, Senator Abubakar Kyari, stated that only 250,000 metric tons were imported during that waiver period. He argued this volume was insignificant compared to Nigeria's local demand, which stands at approximately 11 million tons.

However, speaking at a meeting with the Rice Processors Association of Nigeria (RIPAN) in Abuja last Monday, the Minister of State for Industry, Senator John Owan Enoh, acknowledged the severity of the issue. He admitted that when imported or smuggled rice is sold at prices significantly lower than locally processed rice, it jeopardizes domestic production and discourages investment in the sector. He assured that the government would implement necessary policy actions to protect local industries and preserve Nigeria's rice value chain.

Senator Enoh recognized that the increasing availability of cheap foreign rice in the Nigerian market represents a substantial threat to domestic producers and undermines the progress made by previous administrations.

Under the administration of former President Muhammadu Buhari, the importation of rice through land borders was prohibited. This policy fostered growth in domestic production and encouraged processing companies to invest heavily in backward integration.

As a result of that policy, paddy rice production increased from 2.8 million tons in 2010 to 8 million tons in 2021, which was a high-yield year, partly boosted by the Anchor Borrowers' Programme. Milled rice output averaged 5.3 million tons annually during this period.

The situation led to a reduction in the demand gap, and the average yield per hectare more than doubled, rising from 1.5 to 3.5 tons.

According to data from the Central Bank of Nigeria (CBN) in 2022, key rice- producing states included Kebbi (3.5 million tons), Jigawa (2.1 million tons), Kano (1.6 million tons), and Ebonyi (1.5 million tons).

Since 2017, approximately 68 medium and large-scale rice mills have been established across Nigeria, particularly in the northern regions. Additionally, thousands of smaller-scale mills are located in states such as Kano, Kebbi, Kaduna, Katsina, Jigawa, Taraba, Benue, Nasarawa, and Anambra.

Senator Owan Enoh stated that many of these persistent issues have been discussed extensively over the years. He emphasized that the current administration's priority is not ongoing discussions but the practical implementation of solutions that yield tangible results for Nigerians.

The minister stressed the strategic importance of a robust rice sector for Nigeria's stability, given that rice is a primary staple food for the population.

Nigeria's annual rice consumption is estimated at 32–33 kg per person, totaling between 6.7 and 7 million metric tons (milled rice) per year.

"A strong rice sector is vital for food security, job creation, and economic growth," the minister added.

Smuggling Pain

Dr. Andy Ekwelem, the DG of RIPAN, highlighted that rice entering Nigeria illegally through land borders bypasses official duties and levies, making it substantially cheaper than locally processed rice. This creates a significant competitive disadvantage for domestic producers.

"Smuggled rice enters the Nigerian market at prices that local producers simply cannot compete with," Dr. Ekwelem stated. "This unfair competition has had devastating consequences for the industry."

He described the impact on rice processors across the country as severe.

Alhaji Usman Garba Badawa, a medium-scale miller in Kano, shared with Weekend Trust that the rice milling business is on the verge of collapse. He explained that they cannot compete with the market prices of foreign rice, which are often lower or similar to locally milled products, and are preferred by consumers.

He also mentioned that imported rice frequently enters the Kano market freely through the Babura border in Jigawa State and other borders in Katsina State.

"The recent influx of foreign rice is indeed a bad omen for us. The federal government's border closure policy previously led to the establishment of over 200 rice mills in Kano State alone, creating thousands of jobs along the rice value chain. However, the current situation poses a looming threat of total closure for these mills, leading to widespread unemployment. At this critical economic juncture, this development would be detrimental to Nigerians," he warned.

'We're on Edge'

Dr. Ekwelem further elaborated that farmers and processors are currently grappling with rising production costs, security issues in farming areas, and inadequate infrastructure.

"Many farmers are forced to sell their produce at a loss due to the pressure created by the influx of cheaper smuggled rice," he noted, adding that "this situation is making it increasingly difficult for local millers to remain viable."

He clarified that the recent decrease in rice prices in some markets should not be misconstrued as a sign of increased domestic production. He countered the Minister of Agriculture and Food Security, Senator Kyari's suggestion that it was a response to price crashes, arguing instead that it was driven by smuggling.

"The drop in prices is largely driven by the activities of organised smuggling networks moving large volumes of rice through illegal channels across Nigeria’s borders," he asserted.

In Kano, many rice mills have either suspended production or are operating at half capacity.

The usually busy Zaria-Kano road, where some of these mills are located, is now noticeably quieter.

A source from one of the major rice mills reported that they have suspended operations for nearly three months. Several other large rice mills in the state have also halted production, while a few are operating with minimal services.

In Benue State, many rice millers reportedly shut down operations last year following the price drop, according to Weekend Trust.

An entrepreneur, Ichor Michael Tersoo, who manages the Wadata rice mill in Makurdi, stated that his business is currently on hold because he was operating at a loss.

"I have closed down my business due to these difficulties. While paddy rice prices have started to increase after last year's crash, selling between N50,000 and N55,000 compared to N35,000-N40,000 previously, I am not yet ready to resume operations. Furthermore, forecasts suggest an early start and early end to the rains this year, which could negatively affect production," he explained.

Adayi Joseph Unogwu, whose mill is located in Makurdi, lamented the price crash of rice, stating he could no longer optimize his mill's capacity. Unogwu has since shut down the Makurdi plant.

He expressed that the situation for millers in Benue State mirrors that across the country. "Many of us (millers) are not milling at our desired capacity due to the current rice price. Some are not milling at all. This is because importation has completely destabilized the price of paddy, making it difficult for those who milled at a higher cost to sell. There are no incentives for new milling due to the unsustainable current rice prices. Essentially, rice importation has driven prices below what millers and sellers can charge. We now have many non-functional rice mills. Some individuals are selling off their mills, while others mill below capacity.

"Many farms are also being abandoned, and farmers have reduced production levels due to the high cost of inputs and low rice prices. Consequently, we anticipate mills shutting down or operating below capacity in the coming months."

Meanwhile, Governor Hyacinth Alia has recently announced plans to revive the sector.

"Today (Tuesday), I inspected equipment procured for the revival of the Benue State Rice Mill in Wadata, Makurdi, a facility abandoned for years but now set to become productive again," the governor stated.

"This initiative will create opportunities for our women, strengthen small businesses, and boost local rice production in Benue," he added.

Big Mills in Taraba Shut Down

In Taraba State, all major rice companies have reportedly ceased operations, with only a few small milling businesses remaining active, according to Weekend Trust.

Reports from Jalingo indicate that companies like Gamzaki Rice Mill, Nabinu Rice Mill, Rahama and Aminci Rice Mill have closed due to a lack of patronage.

Alhaji Aliyu Sarkin Noma, owner of Gamzaki rice mill in Jalingo, confirmed the closure of his company, attributing it to insufficient patronage.

He explained that following the lifting of the ban on foreign rice importation, local rice milling companies began experiencing a decline in demand.

He cited the high cost of diesel, electricity bills, and other operational expenses as making rice milling unprofitable. He eventually had to reduce his workforce and ultimately close down the company due to the absence of a market for locally parboiled rice.

Border Reopening Escalated Smuggling

Millers further noted that the reopening of Nigeria's borders exacerbated the problem.

"While people might assume border reopening helps us, it is actually harming local production more than it benefits it. Local rice offers superior nutrients and taste compared to imported varieties, but the influx of foreign rice significantly reduces our output," one miller commented.

The processors indicated that the path forward for the rice industry remains uncertain without proactive government measures. Farmers are calling for affordable access to agricultural inputs, while millers are advocating for policies that protect local production.

Yazid Adamu stated, "The best course of action for the government would have been to reduce the cost of farm inputs. If farming is capital-intensive and market prices continue to fall, individuals will abandon it. A time will come when the demand for paddy will be high and supply will be extremely low because no one engages in farming to incur losses."

Abandoned Fields

Across the country, it has been observed that many farmers did not invest in irrigation farming this season due to high costs and insufficient price incentives.

In Kano State, rice farmers expressed that the prohibitive cost of agricultural inputs and limited government support have made rice farming highly unattractive, leading many to contemplate quitting the sector.

Alhaji Abba Ibraheem Kallah, a rice farmer, shared that he incurred significant losses during the last rainy season despite substantial investment in cultivation. He explained that the high cost of agricultural inputs and the subsequent price crash have plunged many farmers into debt, which is why many are not participating in the dry season farming.

The state chairman of the Rice Farmers Association of Nigeria (RIFAN), Alhaji Abubakar Haruna Aliyu, revealed that over 50% of rice farmers are exiting the sector.

He noted that since the discontinuation of the Anchor Borrower Scheme in the state, rice farmers have been left to fend for themselves. He described this situation as deeply concerning, considering the crucial role indigenous rice farmers have played in national food security.

"We are optimistic that with a little support, our members are eager to contribute to national food security. However, with the current trajectory, it will be challenging to convince them to continue. All forms of intervention have ceased. Farmers are willing, but the system is not conducive. The entire situation has been complicated by open borders and increased importation, while local production is being silently undermined," he stated.

In Nasarawa, farmers who took out loans are facing difficulties repaying them with earnings from other crops.

Farmers who previously engaged in dry season farming along riverbanks and other suitable areas have abandoned these fields.

Reports from Kano also describe a similar scenario in the Kadawa irrigation valley in Kura Local Government, an area that was once vibrant with irrigation activities.

Implication for Nigeria

An Agricultural Economist, Mamun Mallam, attributed the current crisis to inconsistent agricultural policies at the federal level.

He warned that the nation's food security would be significantly affected by the continued food imports.

According to Mallam's projections, Nigeria's paddy rice production is expected to decrease from 10 million metric tons in 2018 to 4 million metric tons in 2026. He further predicted a decline due to factors such as floods, insecurity, and a lack of farmer incentives.

He added that these impacts would further affect processing activities and place additional pressure on the Naira, as importations incur foreign exchange costs.

"Rice processing mills are closing down due to the erratic policy implementation that characterizes our approach. This won't stop at just processing mills; even paddy rice production will plummet this year, largely due to policy inconsistencies under the current administration. Similar to the hasty implementation of petroleum subsidy removal, the government is intervening haphazardly in food importation without considering the implications. Granting import waivers to businesses disincentivizes domestic production and empowers foreign farmers who already benefit from government support like export subsidies. Our local producers, however, lack such support and are being squeezed out of business by their own government.

"During the Buhari administration, from 2016 to 2018, Nigeria produced over 10 million metric tons of paddy annually. This figure decreased to 8 million metric tons from 2019 to 2022 due to insecurity and floods. Paddy production could fall to around 4 million metric tons in 2025 and potentially lower in 2026 because production incentives are absent. This will subsequently affect processing and increase pressure on the Naira.

"It is illogical for the government to intervene in the output side of the rice value chain while expecting the input side to manage itself. Such an approach only further distorts the market.

"While there's a document called the National Rice Development Strategy 2020-2030, it will be ineffective unless rice production is incentivized through fair pricing that rewards farmers' efforts. Incentivizing production is crucial because, contrary to popular belief, farming households operate as economic entities making rational decisions aimed at profit maximization," he concluded.

'Swift Action Required'

A recent report from the National Agribusiness Policy Mechanism (NAPM), a presidential advisory committee, has called for urgent action on this matter.

The report indicated that approximately 3,500 rice farmers are either reducing their operations or exiting rice cultivation altogether due to substantial losses, estimated at N93 billion, incurred during the 2025 wet farming season.

The survey, which covered 33,507 farmers across 13 pilot states, found that 10.6 percent of rice farmers plan to scale back their production in the 2025/2026 dry season.

The committee's report also noted a 7.9 percent decline in rice production during last year's wet season. This decrease is attributed to farmers increasingly shifting towards cash crops like soybeans, ginger, and sesame, which currently offer higher profit margins and require lower input costs.

Many rice farmers interviewed by correspondents confirmed their decision to cease rice cultivation.

Alhaji Shehu Garun Malam, who has been involved in rice production for decades, stated he is completely abandoning rice farming.

"The rice output last wet season was not encouraging at all, and the price also crashed despite significant spending on agro-inputs. Many of us incurred losses. To worsen matters, the government granted waivers for rice importation. That is why we are planning to switch to other cash crops to remain in the agricultural sector. We've observed that, unlike rice, soybean production increased significantly in 2025, with farmers earning substantially more per hectare than from rice," he said.