How to start rice farming in Nigeria

The season for Rice Farming in Nigeria is here again. The rain has started in major parts of the country where there is suitable soil for Rice Farming. If you live within areas that has plenty of swampy lands, then you are in for good business this season. I have seen plenty of swamps even in Lagos that I think will be very good for rice production. Why not try it? Investments is about taking chances and grabbing opportunity. Rice farming is one of the viable investment any serious investor must not look down on. This is because of the potential for productivity and profits.

One of the very good thing about rice farming is that it take less that four months between planting and harvesting. Therefore, whatever amount you invested now, you’re sure of your return within the next four months, guaranteeing the possibility for quick loan repayments if you take loan to invest in rice farming.

As part of the government’s efforts to ensure adequate food supply to her citizens, Rice farming is also one of those farm investments government is willing to support by borrowing money and logistics to any farmer who is willing to  embark on it, which is a very great advantage for a would be Rice Farmer.

Rice farming is straight forward and requires not much expertise, anyone can cultivate and harvest rice, irrespective of your experience and background in rice business. Rice is a very high yield crop, one Acre of rice farm is capable of producing over 100 bags of rice.

A report from fao.org shows that Nigeria is not just the largest consumer of rice on the African continent, but is also one of the largest rice producers on the continent, and still, is one of the largest importers of rice in the world. Data from statista shows that Nigeria imports about 1.9 million tonnes of rice yearly, making it the third largest importer of rice worldwide.

This import statistics sends a crucial message to the agricultural industry in Nigeria, that there’s still so much more to go around for new and existing rice farmers in the country.

The FAO’s report shows that rice generates more income for Nigerian farmers than any other cash crop in the country, with small scale farmers accounting for the largest volume by selling 80% of their crops and consuming 20% of what’s left.

What Is Rice Farming Business About?

  • Rice farming is the cultivation of the rice plant for human consumption. It is grown from the seed of the grass species Oryza sativa (Asian rice) or Oryza glaberrima (African rice), and is the most widely consumed staple food in the entire world.
  • While rice farming is mostly only possible in certain countries or regions, rice can practically be grown anywhere if a highly efficient water-control mechanism is in place.
  • Facts And Benefits Of Rice Farming
  • Rice is the world’s most popular source of food.
  • Rice is a complex carbohydrate that does not have sodium or cholesterol and barely any fat.
  • Rice is the second highest worldwide produced cereal crop after maize (corn).
  • Rice is a symbol of life and fertility, which is why rice was traditionally thrown at weddings in several parts of the world.
  • There are more than 40,000 varieties of rice that grow across every continent except on Antarctica.
  • Asia alone produces and consumes almost 90% of the world’s rice.
  • Rice is rich in carbohydrates, which are needed for the brain to function properly, and for all kinds of physical activity.
  • Rice is the oldest known food that is still widely consumed today, dating as far back as 5,000 BC.
  • Rice is used in the production of liquor.
  • Rice farming business is a great source of employment.
  • An average of 7 to 8 tonnes of rice can be yielded per hectare. But in some cases, you can yield up to 12 tonnes per hectare, and in some exceptionally rare cases, you can yield up to 22.4 tonnes per hectare.

Business Opportunities In Rice Farming Around The World

1). Source Of Food:

Rice is undoubtedly the most consumed staple meal in the world. It is also the oldest known food that is consumed worldwide. This extraordinary demand for the cash crop makes it highly lucrative for any farmer in Nigeria, Africa, or around the world to venture into, especially as it is also one of the most lucrative farming businesses in Nigeria.

2). Production Of Beer/Liquor:

Liquor, an alcoholic drink, especially distilled spirit, can be made from rice. The liquor that’s processed from rice is widely called Rice Wine, and it can be made at home or in a processing facility from the fermentation of rice starch that has been converted to sugar. It is widely consumed in Asia, and has an average alcohol content of 18% to 25%.

3). Production Of Rice Flour:

Rice flour is made from grounding raw rice. It can be purchased in flour form or ground using a blender, grain mills or some traditional pounding techniques. It is usually used as a glutten-free alternative to wheat. Some products that are made from rice flour are rice flour cake, rice noodles, and edible rice paper.

How to Start a Rice Farming Business in Nigeria

Choose healthy rice seeds

The healthier your seeds are, the greater your chances are of ensuring the highest possible yield is achieved. You should choose an improved variety and select the right seeds based on the cultivation environment. Do not plant seeds in an indiscriminate manner and go for only the best variety seeds. You need to choose the seeds manually for a good rice production.

I would advise that you buy your seeds from a company that is licensed and registered with The National Agricultural Seeds Council (NASC) who are responsible for regulating the Seed Industry in Nigeria. This will ensure that your seeds have been produced and distributed to a high quality, therefore increasing your chances of a high yield.

Selecting good quality seed will help to:

1. Improve yield by 5 – 20%
2. Improve germination by more than 80%
3. Increase resistance to disease and pest attacks
4. Produce consistent plant size
5. Decrease weed problems

Produce rice seedlings in a nursery

Prepare your seedbed and plant seeds there to be raised in a nursery. Cover the soil with a transparent polythene sheet so that the environment maintains its temperature whilst avoiding soil borne diseases. Your yield can be significantly decreased if transplanted rice is attacked by nematodes and soil borne pathogens.

Choice of Land

The land itself is the most essential capital asset for nay rice farming business in Nigeria, and its worth tends to vary on the basis of the drainage facilities, type of soil and location. Rice is generally the crop of a small farmer and the average holding size is around 6 acres. You need a large space to set your project up and dry the paddy rice prior to harvesting.

1. Select a site in ecological zones where rice is grown traditionally
2. Choose fertile land with good water retention capacity (contain some clay and/or organic matter i.e. loamy soil).
3. If you have to grow rice for one or more consecutive years on the same land, get the advice of a reputable soil-testing agency.
4. Grow legumes after rice, and plough rice residues into the soil as organic matter and fertilizer.

Swampy land

In rice farming you have the option of planting rice in lowlands and uplands, and also in irrigated or swampy conditions. You can significantly reduce capital, and the hassles of irrigation by choosing swampy land for rice farming. The most common technique is to get swampy land and have it fully cleared. Use tractors to till the soil in a proper manner until the soil is prepared for actually transplanting your rice seedling.

However, it has been found that rice production is most productive on irrigated soil of lowland swamps. But this type of environment comes at a higher cost.

Manage the Soil Nutrients and Weeds

For a couple of months after transplanting the rice seedlings, you will need to remove weeds from the rice farm, and then implement a herbicide application regime to destroy any emerging weeds. Some people tend to apply herbicide twice prior to harvesting.

To boost the growth of rice seedlings, fertilizer is often applied. You should carry out extensive soil tests with specialists before any fertilizer is applied. Always aim to use an organic fertilizer and spray it in right amounts that have been specified. This will vary depending on soil, environment and the type of rice you are harvesting.

Each growth stage of the rice plant has a different nutrient need. Keeping this in mind, farmers must ensure that the rice plant gets the proper nutrients at the right time.

Harvest Your Crop

5 OBSTACLES FOR HARVEST

Within 4 months of the plantation, you will have your crop prepared for harvest. When the rice is matured, its color will change to light brown from green. You will then know that your crop is prepared for harvest.

Cost

The capital required for a rice farming business tends to vary based on its nature. You obviously need a sufficient amount of land for rice farming. Rice milling generally demands adequate workforce, equipment and machinery. Retailing and dealership of rice requiresthe lowest amount of capital investment. For a rice business, the initial expenses consist of supplies, basic equipment, delivery, packaging, transportation, operating costs and various other outlays.

It is equally important to factor in the storage costs to keep the products in a healthy condition. You can raise capital for rice business in various ways. Due to the land required, rice farming will require significant capital to launch. But costs can be reduced if you own land, or if you can go in to partnership with someone who owns land.

Due to the technical knowledge required to start and maintain a rice farm, detailed business planning, and research should be carried out before you start.

Potential Profits

In rice farming, the projected income also depends on the capital that is invested. The bigger the capital investment, the bigger the profits will be. If you start with huge capital, the returns on investment will be bigger, and faster due to having more efficient and effective machinery, storage and processes that can help you take advantage of opportunities, and high demand.

Despite this, due to Nigeria’s agricultural transformation agenda there is a rapid growth and competitive edge that is emerging in smaller mills. This can be linked to the increase in the amount of rice paddies being produced. Nigerian entrepreneurs and rice farmers are no longer in doubt that rice farming is a profitable business.

The big rice market in Nigeria, and the high costs and duties related with importing rice, make local production highly attractive. The Nigerian government has also introduced favorable incentives in order to promote local production. This has benefited local areas, for example, In Ekiti State, the small millers are starting operations with improved small scale equipment, growing at an estimated rate of about 10 to 15 new small mills per annum and mostly targeting the niche market of Ofada and Igbemo local rice.

Investment in Rice Farming Business in Nigeria

You know this area has huge potential when the richest man in Africa, Alioke Dangote, states that he plans to invest $1 billion in modern integrated rice mills and commercial rice farming in Nigeria. He has already acquired about 150,000 hectares of farming land in five of the states of Nigeria.

On a large scale, if you invest around $14 million in Nigeria today on an integrated rice mill, there will be 42 – 50% internal rate of return on your investment. You will need exactly a couple of years to return this investment amount.

As a wholesaler or distributor, you can obtain a bag of rice for ₦8,000 – ₦8,100 or possibly at a lower rate from your suppliers. A 110-pound (50 kg) bag of rice sells for any between ₦10,000 to ₦12,000 in Nigeria today. If you supply 50 rice bags in a single day at this rate, you will make a profit of 4000 X 50 = ₦200,000. Due to the instability of market price, the price can be higher or lower at any time

Challenges Of Rice Farming Business

Some of the challenges of rice farming in Nigeria and many parts of Africa include:

1). Lack of experience

2). Growing rice is largely region specific

3). Financial Constraints:

  • High interest rates.
  • Inaccessible credit due to tough conditions.
  • Expensive for manually irrigated and controlled environment.

4). Storage Constraints:

  • Poor storage methods.
  • Lack of post-harvesting preservation skills.
  • Theft.

5). Farm Inputs Constraints:

  • High prices of farm inputs.
  • Choice of variety to use.

6). Infrastructural Constraints:

  • Inaccessible roads.
  • Poor market facilities.

7). Marketing Constraints:

  • Price fluctuation.
  • Presence of middlemen.
  • Competition.

Conclusion

Like several other agribusinesses that have great potentials for both scale and profitability, starting a rice farming business in Nigeria or across Africa is a great agribusiness to start up if executed at the right scale.

Fao.org has also shown that rice farming in Nigeria is one of the most profitable agribusiness to venture into, and as such, investing in this agribusiness is a smart decision to make, especially with its local demand and very high export potentials.

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