Company plans to have 25,000 hectares planted by end of 2017, and produce 225,000 tonnes of rice.
It will begin with a 500-hectare pilot project near Gonroyo dam, the second largest dam in the country. A flag off ceremony will be done by the governor of the state, Alhaji Aminu Tambuwa. Seedlings will be distributed to local farmers, who will plant it. Dangote Rice will purchase the rice from the farmers for milling and final processing.
Sokoto is the second of 14 states where Dangote Rice plans to launch the rice cultivation program. Its goal is to empower local farmers, create job opportunities for the communities and reduce migration to the cities, Dangote Rice said.
By the end of this year, Dangote Rice plans to have the 25,000 hectares under cultivation across three sites in northern Nigeria: 5,000 hectares in Jigawa, 10,000 hectares in Sokoto and 10,000 hectares in Zamfara.
The project is expected to generate jobs and increase take-home income for smallholder farmers, while diversifying Nigeria’s economy and reducing the nation’s food imports. The hectares will be farmed by 50,000 outgrowers who already have been organized into cooperative associations. An additional 260 jobs will be created by the end of the year for positions that include agronomists, credit officers and mill staff.
Dangote Rice will provide inputs, technical assistance, extension services and land preparation services and equipment directly to farmers. At harvest, the company will recover the cost of inputs and services in-kind, and will act as a guaranteed buyer for paddy that meets certain pre-agreed quality standards. The farmers will provide the land and labor.
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.
The paddy from the three initial sites will be transported by Dangote Rice to one centralized mill.
Dangote Rice will establish raw material reception, drying, hulling, parboiling units and silos in strategic areas throughout the country near the growing communities. Each site will store dried, hulled, parboiled bran rice, which will then be transported to a mill.
Rice demand in Nigeria reached 6.3 million tonnes in 2015, with only 2.3 million tonnes supplied by local production, according to statistics from the Federal Ministry of Agriculture and Rural Development. The shortfall is filled through importation of rice or illegal imports over land borders.
Dangote Rice plans to produce 225,000 tonnes of parboiled, milled white rice by the end of 2017, satisfying 4% of the total market demand. Within the next five years, production may be scaled up to 1 million tonnes, satisfying 16% of domestic demand.
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 said.