Dangote launches scheme for smallholder and contract rice farmers

13 Feb 2017
Financial Nigeria


Dangote Rice is set to launch the multi-million naira rice outgrower scheme in Sokoto State.

Aliko Dangote, President/Chief Executive, Dangote Group

Dangote Rice – a subsidiary of the Dangote Group – is set to launch a multi-million naira rice outgrower scheme in Sokoto State, according to a statement released on Monday. Aliko Dangote, President/Chief Executive of the Dangote Group, said that Dangote Rice will flag off the cultivation of up to 500 hectares of land beside the Goronyo Dam, in the Goronyo Local Government Area of the state.

The flagging off will be performed on Wednesday by Aminu Tambuwal, Governor of Sokoto State, who will witness seedlings being distributed to the primary local farmers participating in the outgrower scheme. Dangote Rice said Sokoto State is the second state after Jigawa State, where the rice outgrower scheme will be launched. The company said it plans to roll out the project in 14 states across the country in order to empower local farmers and create job opportunities for community dwellers and reduce migration to the cities.

The Dangote Rice Outgrower Scheme (DRL) partners outgrowers (smallholder and contract rice farmers) to cultivate and grow rice paddy. Under the scheme, DRL provides 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.

Dangote Rice said 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.

By end of 2017, Dangote Rice said it will have up to 25,000 hectares of rice under cultivation across three sites in northern Nigeria, including Sokoto State (10,000 hectares), Zamfara State (10,000 hectares), and Jigawa State (5,000 hectares). With its rice under cultivation, the company said it plans to produce 225,000 metric tonnes of parboiled, milled white rice by the end of this year.

The entire 25,000 hectares of land will be farmed by nearly 50,000 outgrowers in the selected site areas, the company said. These outgrowers are already organized into cooperative associations, will register and sign contracts with each farmer. In addition to the outgrowers, Dangote Rice said about 260 jobs will be created by the end of this year for people serving as agronomists, credit officers and staff of the rice mill.

Upon harvest, Dangote Rice said it will offtake the rice paddy and transport it for processing. One centralized mill will process the stored paddy rice from all three sites. The company said it plans to produce one million metric tonnes of rice from 150,000 hectares of land in the next five years as the outgrower model is extended across more states and communities. The company said it will also establish and manage a high-quality seed development farm at Numan in Adamawa State to reduce the costs of seeds.

As part of the rollout of its rice outgrower scheme, Dangote Rice said it will establish raw material reception, drying, hulling, parboiling units and silos in strategic areas throughout the country near outgrower communities.

According to  the Federal Ministry of Agriculture and Rural Development, rice demand in Nigeria reached 6.3 million metric tonnes in 2015, with only 2.3 million metric tonnes of that demand satisfied by local production. As a result, the ministry said up to 4 million metric tonnes of rice demand is currently being met through importation and illegal imports over land borders.

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