Dangote, President of Dangote Group

Dangote Rice, a subsidiary of Dangote Group would launch it’s multi-million naira 25,000 hectares of rice outgrower scheme in Sokoto with a prospect of employment opportunities for the rural communities inhabitants.

According to a release by the Africa Press Organisation (APO) issued on behalf of Dangote Group, President of the Group, Aliko Dangote disclosed at the weekend that the Company would flag off a pilot project of 500 ha by Gonroyo dam, in Goronyo local government of Sokoto state on Wednesday. The dam is the second largest in the country, after Kainji.

To be performed by the governor of the state, Aminu Tambuwal, activities at the flag off will include distribution of seedlings to the primary local farmers who in turn would plant the seeds after which Dangote Rice company would purchase the rice from them for milling and processing.

It added that Sokoto was second after Jigawa out of the 14 states spread across the country where Dangote Rice plans to operate outgrower scheme to not only empower local farmers and create job opportunities for community dwellers as well as reduce migration to the cities but also help in 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 Metric Tonnes (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 four percent of the total market demand within one 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 five years,” the statement said.

It noted that due to the current economic crisis, domestic prices for agro-commodities had risen dramatically over the last 12 months, making local agriculture an attractive investment. “Dangote Rice Limited (DRL) seeks to take advantage of this economic trend and the favourable policies laid out in the FMARD’s Agricultural Transformation Agenda,” adding that “Dangote Rice has a mandate to produce locally high-quality milled, parboiled rice for the Nigeria market. This goal will be achieved by sourcing the raw material (paddy) required from the Dangote Rice Outgrower Scheme.

“The Dangote Rice Outgrower Scheme would partner with 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,” it explained.

The statement further explained that 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 would have 25,000 Ha under rice cultivation across three 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). “The 25,000 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.”

It added that in addition to the outgrowers, an additional ~260 jobs would be created by the end of 2017 and the employees would serve as agronomists, credit officers as well as staff of the centralized mill.

The project has a plan to produce one million MT of rice from 150,000 Ha in the next 5 years over 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 the 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.

By Abdallah el-Kurebe