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Success Story
USAID in partnership to
increase rice production
in Nigeria
Rice Farmers: Making Money, Feeding The Country
Photo: Jide Adeniyi-Jones
Farmers working on USAID’s Model Rice
Farm, Agasha, Benue state, northern
Nigeria.
The first year of the USAID/
Olam partnership provided
more than 10,000 farmers with
secure markets where they
could sell their rice, access
to commercial finance, and
technical assistance to produce
high quality rice. This resulted
in productivity increases of
almost 260% and farmer net
income more than doubled.
Nigerians consume about 5.4 million metric tons of rice annually,
while local production only amounts to about 2.3 million metric tons
per year. The remaining 3.1 million metric tons is imported, making
Nigeria the second largest importer of rice in the world.
Nigerian rice farmers weren’t able to produce enough rice to feed
the country because they lack some key resources available to
farmers in more developed nations. Limited access to fertilizers and
credit lead to an inability to meet quality standards and a lower rate
of production. In an attempt to reverse this trend, the government of
Nigeria developed farmer-friendly policies.
Taking advantage of the new government policy of high import tariffs
on milled rice, Olam Nigeria Limited, a major rice importer, decided
to test a new business approach by investing in local production of
high-quality rice for Nigeria’s domestic market. In 2005, Olam began
processing locally produced rice from a government-leased mill
located in Makurdi, Benue state. However, Olam was faced with the
challenge of an insufficient supply of high-quality paddy rice to meet
their capacity.
In 2006, USAID, entered into a partnership with Olam. The goal of
the partnership was to promote Nigerian rice production to meet the
demand by encouraging the use of improved technologies, farmer
capacity building, commercial linkages to credible market outlets
(such as mills) and strategic public-private partnerships. The first
year of the USAID/Olam partnership provided more than 10,000
farmers with secure markets where they could sell their rice, access
to commercial finance, and technical assistance to produce high
quality rice. This resulted in productivity increases of almost 260%.
More importantly, farmer net income more than doubled. The
success of the program encouraged First Bank, a Nigerian
commercial bank, to become a major stakeholder with a smallholder
farmer commercial credit program, providing $2.5 million in credit to
more than 8,000 farmers.
Because of the success of this partnership, Olam Nigeria
Limited was one of ten winners of the 2008 World Business and
Development Awards (WBDA). Sponsored by the United Nations
Development Program (UNDP), the International Chamber of
Commerce, and the International Business Leaders Forum, the
award is given to companies whose work demonstrates that
“business can both make a significant contribution to development
and be commercially successful at the same time.”
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