Wednesday, 28 February, 2024

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Reversing restriction on rice import ‘ll harm local industry – Maduka, Coscharis Chairman


When the Coscharis Group ventured into rice farming and milling through its Coscharis Farms division in 2014, not a few wondered why the sharp departure from the usual vehicle parts, automobile and related kinds of investments the conglomerate is known for. But, the founder and Chairman of the Group,  

Dr.  Cosmas Maduka, explained that it was the fulfillment of a dream that had defied many decades: “I’ve always known that the farm is where I would retire.”   

In this interview, Maduka gives an update on developments at the 3, 000 hectare-farm in Anaku, Anambra state. He is confident that though Coscharis has invested a total of N17 billion in the project, and lost about N2. 5 billion in the past five years, the farm will soon move from the red zone to profitability.  

He also comments on President Muhammadu Buhari administration’s policy on rice {especially the restriction on importation in order to encourage local production}; rising prices; Gov. Willy Obiano’s emphasis on agriculture in Anambra;  and the fear of possible policy summersault when a new regime comes in, among other issues.

Coscharis Farms  

We are making tremendous progress, year in year out. Last year was our first year of doing two-season farming, because we spent N3.5 billion to do irrigation covering 27 kilometres. We built eight pump stations connecting water from Oji River that is supplied by Anambra River, and we take water across 27 kilometres into the farm. So, this year, we did our first dry season farming. That is why to do rice farming at the level we are doing it is a huge task. The Managing Director of Access Bank through which we accessed about N7 billion facility from the Central Bank, went to visit the farm with helicopter and marvelled. Don’t say anything until you visit our farm. The Governor of the Central Bank, Godwin Emefiele, has come twice. The former Minister of Agriculture and the current one have been there. Audu Ogbeh came with the then governor of Kebbi State and the CBN governor. And when he came, he said ‘we have been seeing farms, but today, we have seen a big one.’ I wanted to take them farther into the farm, but when they drove like 50 kilometres, they said ‘it’s enough,’ and they wanted to go back. The total road network is over 200 kilometres. People ask if it is not true, and I always hear them ask: ‘Where do you get that kind of land in Anamba?’ It is a village in the riverine area of Anaku. You won’t believe it exists. It is the power of vision. This land was acquired over 30 years ago from three major sources: Life Breweries of Onitsha, Bravo, Rojenny and the villagers. Different land put together.

It was when the late Emeka Omerua was the Military Administrator of Anambra State, that he signed the certificate of occupancy for this land, while Gen. Momah recently signed the guarantee. I have always known that this is where I would one day retire. It is a well articulated plan. To cut and move trees out of the land cost over a billion naira, because it was a virgin forest that had never been habited in life.

To level the ground is one of the most difficult preparations of the farm. You have to build roads so that vehicles will come in and be able to discharge the proceeds to move them to the mill. We haven’t seen any model of that farm before My consultants are from Australia who came and did all these plans and we moved into action. Coscharis is known for excellence. We don’t rush into things. When we went intto automobile business, we said we were going to set a standard by which other automobile companies in Nigeria would be judged. If I show you the equipment we have, you will wonder if we are into road construction. No contractor has the level of equipment that we have in the farm: Eight escavators, many bulldozers, and graders, and many others, are there, because we are building roads, cutting hills and leveling them, putting them in the right shape and also moving tons of sand from one place to the other, so as to level the ground.

Rice is a crop that grows on mud. So, you make the ground muddy with water and plant the rice on it, it will grow and give you everything that is requires. Rice is such that 120 days subject to the grain you are planting; you can harvest and plant another. So you can do three seasons. We were doing only rainy season farming from 2015 to 2017, depending on the weather. In the last three years, we have constantly had flood damaging our crop. Even though we have a dyke that is 25 metres, the water level went above the dyke and it overflowed. We are going to raise the dyke to about 30 metres round the farm. Problem is that because we have had flooding for three consecutive years, I am not sure any insurance company will be willing to insure us again. It is clear to us that irrigation is key. In the northern part of this country, 90 per cent of the irrigation that were done were sponsored by the government or non-governmental organisations, but we at Coscharis organisation spent over N3.5 billion to do the irrigation in our farm.

But the good thing is that we are going to start planting season this year {2020} in late November. The farm was flooded this year, but the water is receding fast. We are sure that by middle of November, the water level would have found the ground. Then we will hit 12 cylinders and put all those machines on duty and we start planting by end of November and first week of December.

Harvesting  

By March, towards April, 2021, we will be harvesting, and planting another one. May, June, July, August, we will start harvesting again. By the end of August, we will leave the field and start maintenance and people can go on vacation. We have had this flooding consistently between late September, October, November in the last three years. And we want to avoid rainy season farming, because we are not in control of what we are doing. It is either the rain comes late or flood comes very late, so we want to avoid it. We want to focus on two seasons; take our destiny into our hands and make sure we are able to harvest whatever we plant until we see another three consecutive years without flood before we move into three seasons again. This year, we said we only do 400 hectares for rainy season. It was a big debate within the board on whether we should go ahead or not. We have lost over 2,000 hectares to flood in three consecutive years. We are not willing to do that again. The heat of the sun will give the grain water with all the pumping sections.

Today, we have developed over 500 hard growers. People we have sponsored with money and grains to plant and we are taking delivery of all they have. We encourage them because we don’t own all the land. People have their own land. During the Anambra Basin Development Authority, the Japanese built another 3,000 hectares of rice field in Anaku there. Individuals are planting in it even with irrigation. So we are teaching them how to grow rice and get maximum result. We are giving them high-yielding seeds and sign agreements that whatever they plant we take. Last year, our mill operated round the year under 40 percent capacity. But I am telling you that in the month of September, October and November, this year, we are operating an average of 85 percent capacity. The mill is working 24 hours. Every day now, we are getting over 15 trucks of paddy coming into the farm and we are producing at maximum capacity. The idea is to end the year at 90 percent capacity so there won’t be scarcity. We want to keep four months stock, because by April, we will be feeding the mill from our farm. By August again, we will be feeding the mill from our farm, but we have a buffer stock, so that our customers will never have a season without supply. There were seasons where we had N300 million to N400 million paid for two months and one month, and we could not supply any product to them because there were no paddy.

Many farmers are beginning to find out that there is money in paddy{harvested, but not yet milled rice}, because paddy went from 110,000 per tonne to 250,000 per tonne. Many farmers who are into other crops are shifting towards rice. The paddy price is dropping, but not significantly because the demand is still there. There are so many mills. Many people never invested in full blown agriculture like we did. We are doing backward integration; from farming to harvesting to milling. Very many focused their investments in milling. Lagos State has built the highest mill in Nigeria – about 32,000 tonnes, but the problem is where do they get paddy to feed it, even to put it in test is a tall order. The correct thing is to make the paddy available. But many are going in farming, unlike yam farming, people are paying you money in advance. So, the border closure is the support that government is providing. Yes. Let our farmers make money. The more money they make they will invest it in the business and when the supply is greater, the price will continue to drop. It is about the natural force of supply and demand.  If we don’t want to give President Muhammadu Buhari credit for anything at all, please let’s give him credit for his agricultural policies. It is a winning formula. In another five years, Nigerians will be amazed with the price of food in the country. Then you can open up, and let the importers come and compete with the local people.

Availability  

I will give you addresses and phone numbers where you can buy our rice in Lagos. I am speaking publicly now. There is this particular guy who moves an average of two trailers on a weekly basis, that is about 1, 200 bags.  There is no time that he runs out of stock. He is one of our major distributors. There are so many others. My wife also has a little supermarket and she supplies rice there in Ikoyi, in addition to supplying trailer loads, as well from 10kg to 20kg and 50kg. When people say they don’t see Coscharis rice, I begin to wonder why. But, at least, you cannot say the rice is not available. It is available there. Our rice is also available in Lagos, Onitsha, Awka, Nnewi and other places.

What happened initially was that Coscharis rice was, and still is, so good that dubious trader swould take it and re-bag it and sell as imported rice.  We have arrested quite a number of people and there are court cases. That is one of the reasons people say they are not seeing it. They re-bag Coscharis rice as imported brands, and this is because you cannot see sand in our rice and the polishing is also second to none. So, you can see why they sell it as foreign rice. It is equally long grain and our price is also affordable. Our price is good because we sell at premium. That is why the price cannot remain the same.

People who have mills in Kebbi buy paddy cheaper, but by the time they bring the rice to Lagos, the price goes up because of transportation. That is why we are planning to put mills in Cross River, Rivers, and Ebonyi. It may be only 30 to 40 tons capacity, but we can mop up the paddy in those locations and keep the mills busy instead of running one gigantic mill in one location that cannot have the raw materials readily available. It has a lot of disadvantages. It is like the same thing that Dangote did with cement; producing cement in Benue, Alaja and Port Harcourt. To cut the cost of transportation, there are places you need go to, but take markets captive by being close to them. There is a very big disadvantage in building a gigantic mill in a place where you do not have paddy to support it.

Quality  

It is very simple. This is because if you decide to build a mill in an area, you need to also engage the local farmers if you don’t have your farm with the hard growers arrangement. What it means is that you give the local hard growers your own seeds to achieve the same quality. I can show you a clip where we are having meeting with our hard growers and the arrangement that has been put in place to be able to support this. It goes with a big chain of logistics.

Rising cost of rice to between N25, 000 and N30,000  

People are still looking at ‘historical’ price of rice. I have tried to address this issue by saying look at the prices of vehicles, and I gave you an example with the Ford Ranger pick-up which we sold at N3.5 million in 2015, and is about N14.5 million today. People should also address the situation by also looking at the cost of raw materials, and everything else. The price of rice when the US dollar exchanged for N165, was N8, 500. Imported rice was coming in. A tonne of paddy was about N75, 000. So, you could produce rice and sell at N8, 500. Exchange rate has long moved to over N300 and to over N400 {about N500 today}. Vehicles we sold before at N3. 4 million are now sold at N14. 5 million today. Raw materials have also moved up by the same rate of inflation. So, even, if you open the borders today, the price of rice will not be N8, 500 anymore. Paddy price has also moved because of the law of supply and demand. When paddy price got to N110, 000 per ton, we were selling a bag at N13, 500. Today, paddy is at N250 a ton.

Even people who signed contract with us to deliver from Kebbi will like to buy and sell at Kebbi. Everybody wants to keep his mill busy. And the heavy flooding that hit us for three consecutive years also damaged quite a number of farmers’ crops that have not been harvested. When we heard that Cameroon had opened its borders, we started harvesting some of the crops that were not yet mature just to salvage whatever we can that needed another 25 days or 30 days to mature. We harvested them and that is where you get broken rice because they were not strong enough. There are people also who buy those broken ones. But we had to harvest them, because if we don’t didn’t, we would have lost everything to the flood. We lost over a thousand hectares to flood this year. We were able to harvest about 1,200 hectares before the flood came. But over 1000 hectares were under the flood. We are also making arrangements to get additional land from Anambra state government outside what we bought. The 3,000 hectare we own, we paid for and we have certificate of occupancy for it. This time, we are not going to buy land. We think government should provide us with land. They are negotiating with the villagers to provide us with additional 3,000 hectares. If we have 6,000 hectares and farm two seasons in a year, our mill will be self-sufficient using paddy from our farm only. Then we can build a secondary mill. Remember our mill can handle120,000 tonnes, but it is only 42 metric tons that are in use now. However, we have the capacity to expand it, but that is when paddy becomes available; otherwise, we will be spending money without being able to have products to support it.

Impact of CBN’s support programmes for local rice industry  

They are having the desired effect, but people need to be a little bit patient. The problem is that we always want to solve a problem like an event or magic. Problems are not solved like that; rather, problems are solved through a process. There are more paddies delivered year in year out now. The supply is growing to meet up the demand. The Anchor Borrowers Programme is supportive to farmers and it is yielding results. But, it cannot solve all the problems overnight. This is because if you access the money this year, subject to when you access it, you will start buying fertilizer, start planting, you start waiting to harvest and put it in the market. You may also make some mistakes that you need to correct by the second year.

So, there is a clear programme to work it out, and it is going to take one or two more years to fully mature. But, it is working. There are serious cooperative efforts going on that were not there before. On the part of Coscharis, we are gathering people together. We are also giving people money to get them committed to producing for us and they are getting more money which is encouraging them to continue to go back to the farm. There will be a time when supply will be higher than demand, and price will start crashing and stabilise. It is natural. What is important is to be consistent. But, if government out of panic, ever makes the mistake of breaking this successful chain by opening the borders and says ‘let’s some food come in,’ they will spoil the whole thing. Whatever gain you made will be lost and the local rice industry will be taken back by many years. So, government needs to have the will to be consistent. We are on the right track and we will come out of this in no distant time.

Rice import: Restricted or banned?  

Rice is not banned in Nigeria. What government did was to impose a100 percent duty on its importation. What this merans in effect is that if you import and pay 100 percent duty on it, you cannot sell, because the price will be too high.It is only a business of smuggling. That is why 90 percent of imported rice comes through the borders. If you check the figures, you will see that there was a time Cotonou {Benin Republic}was the number one rice importer in the world. But, actually it was Nigeria that was importing it indirectly, because Cotonou was only a transit point through which the rice was coming to Nigeria, and they were not willing to cooperate with Nigeria to stop it. That was why the Nigerian government closed the borders. So, it is all about smuggling business. The smuggling of rice still goes on a small scale, but it is now an exception, rather than the rule, because even when the Customs men intercept the smugglers, they extort a lot of money from them in such a way that the business is no longer very profitable. Some of them are beginning to think that it is not worth it anymore. So, opportunity is being created for local production. T hat is why I insist it is about the will. If government wants to make a policy, and pursue the policy, it will surely work.

My recommendation is for government to maintain this policy, so that we grow what we eat and eat what we grow. That is the way out. We have the zeal, we have the capacity, and we have the market. I will be totally frank with you. We have not made money on this rice project. Moses, believe me, on my honour, between 2015 and now, we have lost over N2.5 billion on our rice project. It is not something you venture into and expect to start making money overnight. We are hoping to start breaking even this year, and as time goes on, we will start recouping to turn this loss by 2023, then the situation will change because for now, we are in the red. All these years, we have been servicing loans. We have some expatriates we pay in foreign currency. Do you know that in my farm, we consume 33, 000 litres of diesel on weekly basis? All those big equipment, are not powered by solar energy. I spend between N11 and N15 million on diesel every week…

It takes pain to succeed in the rice industry. But, we are determined. People like me are supposed to get additional national honour for helping to solve this food problem for the government. Ultimately, I am creating wealth as we succeed. People have different feelings about the rice project: Some think I am making money, some think I am foolish.  But, I am an entrepreneur, and I know you will never reap without sowing. The risk I am undertaking is because of my love for my nation. Some people will rather put the money in a fixed deposit and go to Dubai to relax.

Why do I go through all these troubles? It is because I believe I was born for a reason. I am here on an assignment by God, and I have to contribute to my nation and society. I am an influencer – influencing young people. For example, the investment I brought to Anambra has attracted more investments.  I was the first to make the move, but I can show you how many other investors that have followed. I am providing leadership. Government should always  take people like us into consideration

Despite your explanations, people will still wonder why prices remain high  

You did not mention Olams in the examples you cited. They are doing well too, if one must be sincere. They too are doing well. They invested about $150 million dollars in this rice business in the northern part of the country.

But, the problem is that you expect Nigeria to grow its rice need valued at about $3billion dollar within just one year or two. It is not correct. We were almost at ground zero. Before now, we were not producing 10 percent of what the country needed, because of import. And now that you have blocked import, we are ramping up. It cannot happen in one year. So, we have to be patient. As I keep saying, it is a process, not an event. It was only once that God created a man-child. Since then, every child has to be born through the no rman process, being born to gradually grow. What was wrong before was that nothing was done, and to do nothing is the worst thing a nation can do to itself. But, for the first time, we are not paying lip service to agriculture. There are things on ground in the area of food production. If there is nothing on the ground in any other palce,I will tell you there is in the area of agriculture.

Even Gov. Willy Obiano {of Anambra State} is doing well in this regard. We may not give him credit in other areas, but I will give him credit in agriculture. I will tell you that he has attracted investments in agriculture in Anambra State that are visible. Close to my farm is a poultry farm producing many tonnes of eggs on daily basis. These privately-owned investments in poultry are doing so well that, if you visit there, you will think you are in the United States of America. They have installed cold rooms, producing thousands of chickens, slaughtering, freezing and packaging them for business. It has created jobs for the people. Such economic activities have provided employment for the people. The governor called some of us the investors and shared his vision with us, explaining that agriculture is one of the seven pillars of his administration. He even helped my farm to negotiate and settle some issues with the villagers over the land, and he told them, “If you are fighting Coscharis, you are fighting Obiano.” Coscharis has invested over N10 billion of its own money, and borrowed about N7 billion from the banks. We create jobs for the local communities there. The farm is operating. The mill is operating. You see activities going on there. There is another mill that has also been located close to mine there. There are visible investments in agriculture in Anambra State.

That is what leadership is all about and other states should emulate the Anambra government. You create jobs for the people of the area. They start earning money and their lives will improve. I know people in those communities that are working for my farm that own good cars.  Their lives are changing. The governor’s wealth coming back home {Aku Lue Uno} drive is working. If the young people come out in the morning and have gainful employment, they won’t engage in crime. Human capacity is like flood: When you build channels for it, it will follow the channel you built for it. If you don’t, it can sweep away even a 10-story building.

Fear of policy summersault when Pres. Buhari and Gov. Obiano leave office.  

I don’t know about other sectors. May be President Buhari and Gov. Obiano could do better in other sectors. But, what I am saying is that in agriculture, I can testify, based on what I have seen and experienced, that there is a clear sense of direction by this government in the agriculture. If it is applied in other sectors, Nigeria will be better for it.

On policy summersault, of course, everybody is nervous. Even till today, we are nervous, because we are conscious of what will happen to our huge investments, if tomorrow they tell you they have opened the borders and rice can start flooding in. We have seen this happen several times. In our previous interview, didn’t I share our experience in the automobile industry with you {investing billions of naira in building a Ford plant in Lagos that is producing very few units due to poor auto policy implementation}?

If President Goodluck Jonathan had remained in office, what is happening now in the auto industry wouldn’t be happening, because his government had a clear goal. The government made it clear that they would not buy any vehicle that was not produced in Nigeria, and they actually matched their words with action by patronising vehicles made in Nigeria, in order to help the industry. But, it is not same with this administration, because they didn’t continue with that philosophy, and the industry is dying.

That is why I have always been emphasizing on consistency: A new government coming in and looking at an existing policy and running with it, which is where the First World countries are better than us. You can’t see a newly elected US president saying ‘no, this is my predecessor’s policy.’

But, let me say it again; that if what is happening in the rice industry in Nigeria is taken to other sectors, give us five years, and you will see that the acceleration of development in this country will be great, and will create a middle class. As an entrepreneur, I have implicit confidence in the potentials of the huge population of this country, which I consider a big asset. All you need is the right man to harness them.

Credit: The Sun

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