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January 26, 2009

Nigeria consortium to invest $35 billion in rice production

A consortium led by a top Nigerian business conglomerate, Stallion Group, plans to invest about $35 billion in local rice production and milling, it said recently. Nigeria is the world's third biggest importer of parboiled rice, mainly from Thailand and India, with annual shipments of 1.6 million tonnes in 2007, according to the U.S. Department of Agriculture.

Stallion, one of Nigeria's biggest rice importers, said the investment, which will include fertilizer production, will make Africa's top oil producer an exporter of the staple to neighbouring West African countries.The investment would see the privately-owned firm producing 1.5 million tonnes of rice in the next two years, Stallion Chairman, Sunil Vaswani said at a meeting with Nigeria's Agriculture Minister Sayyadi Abba Ruma in the capital Abuja.

"Part of the strategy for achieving the goal is the adoption of commercial farming methods using modern mechanised implements, improved irrigation methods, hybrid seeds, fertilizers and other inputs," Vaswani said in a statement from the farm ministry.

Stallion is a Nigerian firm owned by an Indian family with interests in automobiles, real estate, agriculture, textiles and heavy industry. Its sales revenue is in excess of $1 billion. It did not say how it would raise the $35 billion to invest in Nigeria's rice production and processing.

Nigeria launched an ambitious programme in 2003 to raise local rice production to six million tonnes by the end of 2007, but the government failed to achieve the target due to frequent changes in farm policies.

Last year Nigeria suspended a 50 percent custom duty on rice shipments for six months to boost the import of 500,000 tonnes by the private sector worth 80 billion naira ($549 million) to cushion the effect of rising prices.The government had also said it would disburse 10 billion naira as loans to local rice processors at a 4 percent interest rate with a repayment period of 15 years and a 5-year moratorium, to boost domestic production.

Reuters

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