Nigeria’s rice milling industry is facing mounting pressure as cheaper imported rice gains ground in the market, with millers warning that high operating costs and limited government support are making local production increasingly difficult.
National Chairman of the Rice Millers Association of Nigeria, Peter Dama, said the reduction in the price of imported rice had brought some relief to consumers but was putting local businesses under severe strain.
Dama said consumers in Lagos were among those benefiting from the lower prices, with some able to purchase rice for between ₦48,000 and ₦49,000. He, however, maintained that the apparent benefit to consumers was coming at the expense of domestic producers.
According to him, the fundamental problem is the wide difference between the cost of producing rice in Nigeria and the cost of bringing subsidised rice from countries where governments provide substantial support to farmers.
He cited India, China, Malaysia and Japan as examples of countries that support their rice industries through agricultural subsidies. Such assistance, he said, enables farmers in those countries to produce larger quantities and maintain surpluses that can subsequently be exported.
Dama argued that Nigerian producers are unable to compete on equal terms because similar support is not reaching farmers and millers on the ground.
He illustrated the situation by comparing production costs with selling prices, saying a producer who spends ₦10 to produce a commodity but can only sell it for ₦3 would inevitably suffer losses.
The millers’ difficulties, he added, extend beyond the cost of paddy. Labour, transportation, electricity and other processing expenses have all risen, making it increasingly expensive to take rice from the farm through the milling process and into the market.
Dama said the cost of hiring workers had become particularly burdensome. Workers involved in activities such as drying, washing and handling paddy can now demand about ₦5,000 for a day’s work, adding another significant expense to production.
The cost of handling finished rice has also increased sharply. Dama said loading bags onto trucks had previously cost millers only a small amount per bag, but the charge had risen to about ₦500 per bag in some cases.
For a truck carrying roughly 600 bags, he explained, such charges represent a substantial additional cost before the consignment even reaches its destination.
The combination of these expenses, according to the association chairman, is pushing some operators out of the industry. He said several millers had already suspended operations because locally processed rice could no longer compete effectively with imported alternatives.
Electricity costs are another major concern. Dama said reliance on public electricity supplies and alternative sources of power had made milling operations expensive, leaving businesses with little room to maintain profitability.
The latest concerns come against the backdrop of the Federal Government’s efforts to reduce food prices through changes to import policy.
In July 2024, the government approved a 150 day duty free import window covering selected food commodities, including husked brown rice, maize, wheat and beans. The initiative was introduced as a temporary measure to increase food supply and ease pressure on consumers amid rising food inflation.
The Nigeria Customs Service later issued guidelines providing for zero import duty and related levies on the specified commodities for eligible importers.
The policy has since moved beyond the original temporary waiver. Under broader fiscal and tariff reforms introduced in 2026, duties on several agricultural commodities, including rice, were reduced rather than completely removed.
Despite the change in policy, farmers’ groups have continued to raise concerns over imported rice. The All Farmers Association of Nigeria has, in recent comments, described the continued inflow as a renewal of the import waiver and warned about its implications for domestic producers.
