…farmers struggle to sell

…2026 rice output seen shrinking

Nigerian rice farmers are scaling back their plans for the 2026 planting season as paddy price slumps, high production costs, and a struggling milling industry squeeze their margins.

The price of a ton of paddy has slumped 51 percent to N350,800 from a peak of N720,000 in 2025, weighed down by a surge in cheap imports and smuggling, leaving farmers struggling to break even.

The slowdown in rice production poses a challenge for President Bola Tinubu’s push to boost food production and achieve food security in Africa’s most populous nation, where the grain is the most consumed staple by households.

Less than 30 percent of the over 500,000 rice farmers in Kebbi cultivated the grain in the 2026 dry season that just ended, said Muhammed Augie, former state chairman, Rice Farmers Association, Kebbi chapter.

“They are pulling back now for the upcoming wet season,” Augie said, referring to the 30 percent of farmers who grew the crop during the just concluded dry season.

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This is worrisome as Kebbi is the top grower of the grain, accounting for over 70 percent of Nigeria’s total rice production, according to estimates from documents found on the Kebbi State Government website.

He explained that most of them are still stuck with the harvest from the dry season, as the local market for the grain has thinned out owing to the near collapse of the milling industry.

“They are diversifying into the production of other crops that are profitable, such as sorghum, soybean and sesame, among others,” he noted.

Also, a March 2026 grain report by the United States Department of Agriculture (USDA) projected the country’s rice production area to decrease by seven percent to 4.2 million hectares in the 2026/2027 season from 4.5 million hectares in the 2025/2026 season.

The report attributed the decline to low prices, high production costs and worsening insecurity in some growing regions.

“Low rice prices continue to discourage farmers from expanding production, even amid expected increases in rice consumption,” the report said.

Musa Idris, a rice farmer in Jigawa State, said that he usually cultivates between 40 and 50 hectares of rice, but now cultivates only five hectares, owing to high production costs and low demand.

“It is getting costlier to cultivate rice locally and sell at a rate that is profitable,” he said

“I cultivated rice on 50 hectares before because I have mills, I usually supply, and the prices were attractive and profitable then,” he said.

“But now, both mills I supply have shut down since 2024, and cultivating paddy is no longer profitable. So, I have reduced my cultivation area for rice to five hectares,” he added.

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Local rice can’t compete

Despite gains in rice productivity per unit area under the Buhari administration and the expansion of milling capacity, Nigeria’s local rice remains uncompetitive with imports due to persistently high production costs.

India and Thailand – two top growers accounting for bulk of Nigeria’s imports – rice industry operates with economies of scale that most Nigerian operators can scarcely imagine.

Production costs are streamlined through massive integration and highly efficient systems. By contrast, many rice millers in the country continue to operate in a market where price volatility is simply part of everyday reality.

Peter Dama, national chairman of Rice Millers Association of Nigeria (RIMAN), said millers cannot compete with cheaper imports owing to high production costs.

“We generate our own power, water, road and security just to operate while our counterparts in India, Thailand and Vietnam, their government provides all this for them at no cost,” he said.

“Then how can we favourably compete with them?” he asked, noting that until locally produced rice can compete with imported varieties, the country cannot fully develop its rice industry.

According to him, over 60 rice mills have shut down operations as they are unable to compete favourably with cheaper imports.

Renewed import, smuggling surge

The country’s rice industry, which has attracted significant investment, is on the verge of collapse due to a renewed surge in importation and smuggling.

Nigeria imported 60,735 metric tons of rice from Thailand in the first five months of 2025, according to data from the Thai Rice Exporters Association.

The figure represents the country’s highest rice imports from Thailand since 2016, when the country commences its rice revolution initiative. The surge is an indication that imports are rising again.

BusinessDay surveyed key rice markets across Lagos and found that more foreign parboiled varieties were on traders’ shelves than local brands.

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Experts attributed the return of foreign parboiled rice to cheaper costs, high preference for foreign varieties fuelled by quality concerns, porous borders and the introduction of a 150-day duty-free window last year for essential imports, including rice to cushion pressure on food prices.

Also, the country still has a production shortfall in the production of the grain. While exact figures are difficult to track, estimates suggest that the country needs 7 million metric tons of milled rice to meet demand, with production at 4.6 million metric tons.

Nigeria recently slashed import duties on bulk rice to 47.5 percent, down from 70 percent, while broken rice has been reduced to 30 percent in its 2026 fiscal policy measures.

Development experts say it will further drive the influx of cheaper imported rice to the country. “Rice importation will further surge with the new fiscal policy measures,” Dama said.