Africa’s richest man, Aliko Dangote is set to Launch Wednesday a new subsidiary Dangote Rice, which will massively plant rice on 25,000 Hectares in Sokoto, Jigawa and Zamfara states, in north west Nigeria. The rice will be available by the end of this year, possibly before Christmas.
The large scale rice farming has the prospect of providing hundreds of
thousands of employment opportunities for the rural inhabitants under an
outgrower scheme. President of the Group, Aliko Dangote disclosed at the
weekend that the Company will flag off with a pilot project of 500 ha by
Gonroyo Dam, in Goronyo community in Sokoto state on Wednesday. Gonroyo dam is
the second largest in the country, after Kainji.
The flag off ceremony which will be performed by the governor of the state,
Alhaji Aminu Tambuwal will witness seedlings being distributed to the primary
local farmers who will in turn plant the seed after which Dangote Rice company
will purchase from them for milling and final processing. Sokoto state is the second
after Jigawa out of the 14 states spread across the state where Dangote Rice
plans to operate outgrower scheme to empower local farmers and create job
opportunities for community dwellers and reduce migration to the cities.
Dangote Rice projects in the 14 states, when, operational, will generate a
significant number of jobs and increase take-home income for smallholder
farmers, all while diversifying Nigeria’s economy and reducing the nation’s
food import bill.
Statistics from the Federal Ministry of Agriculture and Rural
Development (FMARD) estimates that rice demand in Nigeria reached 6.3 million
MT in 2015, with only 2.3 million MT of that demand satisfied by local
production. This local production shortfall leaves a gap of 4.0 million MT that
is currently being filled through formal importation of rice or illegal imports
over land borders. By year-end 2017, Dangote Rice plans to produce 225,000 MT
of parboiled, milled white rice. This will allow us to satisfy 4% of the total
market demand within 1 year.
Our model can then be successfully scaled to
produce 1,000,000 MT of milled rice in order to satisfy 16% of the domestic
market demand for rice over the next 5 years. Due to the current economic
crisis, domestic prices for agro-commodities have risen dramatically over the
last 12 months, making local agriculture an attractive investment. Dangote Rice
Limited seeks to take advantage of this economic trend and the favourable
policies laid out in the FMARD’s Agricultural Transformation Agenda. Dangote Rice
has a mandate to locally produce high-quality milled, parboiled rice for the
Nigerian market. This goal will be achieved by sourcing the raw material
(paddy) required from the Dangote Rice Outgrower Scheme.
Through the Dangote
Rice Outgrower Scheme, DRL will partner with outgrowers (smallholder and
contract rice farmers) to cultivate and grow rice paddy. Specifically, DRL will
provide inputs, technical assistance, extension services and land preparation
services and equipment directly to farmers. At harvest, DRL will recoup the
costs of inputs and services in-kind and will act as a guaranteed offtaker for
paddy that meets certain pre-agreed quality standards. Smallholder farmers will
provide land and labour.
The centralized outgrower model enables a high level
of control over product quality and quantity. The purchasing price given to
farmers will reflect each season’s market price and will be set after an
extensive market price survey and consultation with all stakeholders. In the
short-term, Dangote Rice will be responsible for importing all of the inputs
needed for cultivation and making them available to the outgrowers.
By end of
2017, Dangote Rice will have 25,000 Ha under rice cultivation across 3 sites in
Northern Nigeria having identified rice-growing communities in Jigawa State
(5,000 Ha), Sokoto State (10,000 Ha) and Zamfara State (10,000 Ha).
Ha will be farmed by nearly 50,000 outgrowers in the selected site areas. These
outgrowers are already organized into cooperative associations. We will engage
with these organizations to register and sign contracts with each farmer. In
addition to the outgrowers, an additional ~260 jobs will be created by year-end
These individuals will serve as agronomists, credit officers and staff of
the mill. Upon harvest, Dangote Rice will offtake rice paddy and transport the
paddy to be processed. One centralized mill will mill the stored paddy rice
from all 3 sites. Dangote Rice plans to produce one million MT of rice from
150,000 Ha in the next 5 years over.
They intend to accomplish this by scaling
the business model described above to more sites and rice growing communities.
These communities have been identified and relationship building and
sensitization has already begun.
In addition to scaling the above model, DRL
will establish and manage a high-quality seed development farm at Numan in
Adamawa to reduce the costs of seeds. Dangote Rice will establish raw material
reception, drying, hulling, parboiling units and silos in strategic areas
throughout the country near our additional outgrower communities. Each site
will store dried, hulled, parboiled bran rice. DRL will then transport this
bran rice to a mill, where finished rice will be produced.