Peter Dama says cheaper imported rice is easing pressure on consumers but leaving Nigerian millers unable to compete amid high production costs

The National Chairman of the Rice Millers Association of Nigeria, Peter Dama, has warned that the Federal Government’s rice import policy is putting local millers under severe financial pressure, even as cheaper imported rice offers some relief to consumers.

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Dama told Sunday PUNCH that the policy had created a difficult trade-off for Nigeria’s rice industry, with consumers in markets such as Lagos benefiting from lower prices while domestic millers struggle to remain competitive amid high production and processing costs.

“This importation, Lagosians are saying that they are happy because of the waiver. They can now buy rice for N48,000 and N49,000, and they are happy because the waiver is working for them,” Dama said.

“The waiver is working for them but killing the industry in Nigeria. So you see, that is an issue, that is a problem.”

His warning comes as Nigeria continues to balance two competing objectives: making food more affordable for households in the short term while developing a domestic agricultural sector capable of producing enough food competitively.

The Federal Government first introduced a 150-day duty-free import window in July 2024 for selected food commodities, including husked brown rice, maize, wheat and beans, as part of an emergency response to soaring food inflation.

The Nigeria Customs Service subsequently issued implementation guidelines providing qualified importers with zero per cent import duty and associated levies on the affected commodities.

The temporary intervention was intended to increase food availability and ease prices at a time when households were facing severe pressure from rising food costs.

The policy landscape has since changed. Rather than maintaining the 2024 blanket zero-duty arrangement, the Federal Government introduced broader tariff reforms in 2026 that reduced duties on several agricultural products, including rice.

The new regime therefore provides lower tariffs rather than the complete removal of import duties that characterised the earlier waiver.

The continued arrival of imported rice has nevertheless kept the debate alive. The All Farmers Association of Nigeria has referred to a “renewal of the import waiver” when discussing the impact of imported rice on local producers.

For Dama, the central problem is not simply the existence of imports but the unequal production environment facing Nigerian farmers and millers.

He argued that major rice-producing countries support their farmers through extensive agricultural subsidies, allowing producers to achieve economies of scale and export surplus rice at competitive prices.

“India subsidized their farmers. China subsidized its farmers. Malaysia subsidized their rice farmers. Japan subsidized its rice farmers,” Dama said.

He argued that Nigerian producers did not enjoy comparable support.

“Nigeria is not subsidising anything. It’s not subsidising agriculture. It’s only through word of mouth that we hear that agriculture is being subsidised. But the fact of the matter is that the subsidies are not there,” he said.

The cost disparity, according to Dama, leaves domestic millers in an increasingly difficult position. Local operators must pay for paddy, labour, electricity, transportation, processing and other inputs before their finished rice reaches consumers.

“So for example, you use N10 to produce your rice, and then at the end of the day you go and sell your rice for N3. Is that a gain or are you just completely collapsing?” he asked.

Labour costs have become another significant pressure point.

Dama said rice processors increasingly have to pay higher rates for workers involved in drying, washing, loading and offloading rice, adding to the cost of every bag produced.

He gave the example of loading rice onto trucks for transportation to major markets such as Lagos and Kano.

“Before, they were loading for you at N15 per bag. Today, a bag, they load for N500,” he said.

With a truck carrying as many as 600 bags, he argued, the cost of loading alone can add a substantial amount to the final price of the consignment.

These expenses become particularly difficult for millers to absorb when imported rice enters the market at a lower price.

Dama said the pressure had already forced a number of millers to suspend operations.

“And a lot of millers have closed shop. They are just watching because the imported one is cheaper than even the local producers,” he said.

Energy costs are another obstacle. Dama said local millers often depend on electricity from the national grid or alternative power sources, neither of which provides a consistently cheap route to processing rice.

“If you are producing locally, you want to depend on NEPA. You can’t break even. It’s not cheap at all,” he said.

The predicament illustrates the tension between consumer welfare and industrial protection in Nigeria’s food policy.

For households, lower rice prices can provide immediate relief at a time when food remains a major component of household expenditure. For millers and farmers, however, competition from cheaper imports can weaken demand for locally produced rice and reduce incentives to invest in domestic production.

The challenge is particularly significant because rice is one of Nigeria’s most important staple foods and a major source of income for farmers, processors, transporters and traders.

Nigeria has invested heavily in increasing domestic rice production over the past decade, with successive administrations using restrictions, financing programmes and other measures to encourage local cultivation and processing.

The Central Bank of Nigeria’s Anchor Borrowers’ Programme, launched in 2015, was one of the most prominent interventions, providing financing and inputs to smallholder farmers producing commodities including rice.

The programme was designed to strengthen agricultural production and reduce Nigeria’s dependence on food imports.

However, the domestic rice value chain continues to face structural challenges, including high energy costs, inadequate irrigation, poor rural roads, limited access to affordable finance, expensive logistics and fluctuations in the price of paddy.

Those challenges make tariff policy particularly consequential.

A high import duty can protect local producers from cheaper foreign competition but risks increasing food prices for consumers. Conversely, lower import duties can help reduce retail prices but may leave domestic producers exposed if their production costs remain substantially higher.

Dama’s warning suggests that the current balance may be tilting too heavily towards short-term consumer relief at the expense of the domestic processing industry.

The rice millers’ position is that cheaper imports should not become a substitute for investment in domestic production.

Instead, they want government support that enables Nigerian farmers and processors to compete on more equal terms with producers in countries where agriculture benefits from significant state assistance.

For consumers, the immediate attraction of cheaper rice is clear.

But if domestic millers continue to close and farmers lose reliable markets for their paddy, the longer-term consequences could include reduced local production, lost jobs and renewed dependence on imports.

The debate therefore extends beyond the price of a bag of rice. It touches on Nigeria’s broader struggle to build a food system that can deliver affordable staples today while creating a productive and resilient agricultural industry for tomorrow.

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For Dama and the rice milling industry, the warning is that without meaningful support for local production, an import policy designed to ease food prices could produce an unintended and damaging result: cheaper rice for consumers in the short term, but a weaker domestic industry in the years ahead.