How to Become a Millionaire doing Rice Farming in Nigeria
According to statistics, Nigeria currently consumes about 7.9million metric tons of Rice annually while production is currently at 5.8million metric tons. Before the boarder closure, Nigeria spends over N356 million annually on the importation of rice to make up for the shortfall in production. Rice is cultivated on about 3.7 million hectares of land, representing approximately 10.6% of the 35 million hectares of land under cultivation, out of a total arable land area of 70 million hectares in Nigeria. Powerful statistics, isn’t it? Do these figures tell you anything about the power of rice farming to make you stinkingly rich? If you are yet to start connecting the dots, follow along and let me expatiate.
Obviously, local production cannot meet Nigeria’s large demand for rice and that is the reason the country spends the massive amounts to import rice on an annual basis. This large size of the rice market in Nigeria as well as the high duties and costs associated with importing the commodity, makes local production a fundamentally attractive industry. For its significant and proven profitability, a writer actually postulates rice farming as an alternative to MMM, a Ponzi Scheme which attracted gullible investors with a promise of 30% interest on invested funds within one month. This is because, most rice farmers make higher ROI in rice farming and the effect of the wealth generated from their various rice farms are easily notable when you interacted with those farmers – they are rich!
A live and worthy case study
Kebbi State in Nigeria is well known for rice farming because of the presence of large expanse of wetland. Recently, the Central Bank of Nigeria through its Anchor Borrowers scheme gave some loans to Kebbi Rice Farmers. CBN loaned each rice farmer a sum N210,000 and each of them was expected to cultivate a minimum of one hectare of rice farm with that amount of money which came in form of inputs like seeds, fertilizers, pesticides and water pump, and so on.
One of the rice farmers in Argungu town in Kebbi State took the N210,000 CBN loan and cultivated one hectare of rice with that loan and guess what? Mallam Alli’s one hectare of rice yielded 100 bags of rice. Mallam Alli like other rice Farmers who took the CBN loan sold the 100 bags of rice to an off taker for N10,000 each, making a total sale of N1million. He became a Millionaire within few months of planting rice. Similarly, all the rice farmers who took the CBN loan or used their own funds became emergency Millionaires within months. Rice Farmers all over the country are making fortunes from their investments in rice farming. Why did I tell you that story? Because I want to let you see how easy it is to make a lot of money and become a millionaire by doing rice farming in Nigeria. I can assure you dear readers that rice farming is what anybody can do to sustain their family and to build a solid wealth base.
Ways to make money from rice value chain
There are 3 major ways I know that people make money from the rice value chain. Either way, you will make money – and if you have what it takes and good funding, you can actually take care of both aspects in the rice value chain, thereby making even bigger profits. So, I’ll quickly break down the three sides of the money-spinning game so you can make your pick which side of the playing card you want to go with. The first two options below are the two sides of the same coin:
- Direct farming
The first way to make money is through direct farming, just like we have been discussing. To become a rice farmer, there are number of steps to take and things to do. The most important counsel I’ll give here is to learn hands on from a successful rice farmer who will take you through the nuances of rice farming. That’s my best counsel. I am not going to say much about the procedures involved in rice farming in this article, but I am sure that you have seen from the story of Mallam Alli in my case study above that rice farming is a very lucrative business. Mr. Alli obviously sold his unprocessed rice at N10,000 per bag and he still made almost N800,000 profit from the entire venture in a single farm cycle and only on one hectare of land. You can do the mathematics yourself and think about how much money can be made if you invest more money, farmland and labour. Having said that, I want you to also imagine how much money can be made if you decide to process you own rice and sell it at the actual market price of N28,000 per bag.
- Become a processor
Another way to make money is to be a processor. You don’t have to be a farmer to be a processor, all you have to do is to reach out to farmers who are willing to sell their rice, buy from them and go on to process it yourself, package it and sell for profit. Many people are doing this and are making good money from it because paddy rice is not ready for consumption until it is processed. If you don’t have rice milling machine, you can take your paddy rice to those who have and pay some fee – about N30 per kilo, or so – and get your rice cleaned up for a more valued sale. Meanwhile, if you can get your own milling machine either as a direct farmer or as a processor, it will be easy and you will be able to make bigger profits that way.
Many farmers are able to sell their rice before it is harvested as traders (largely processors) come to the farms to negotiate prices and buy as off takers. The rice is then taken away and parboiled to soften the husk, before it is milled and marketed. The parboiling is carried out in huge oil drums. After the rice has been parboiled, it is laid out on tarpaulins to dry. It is at this stage that there is a danger of small stones getting mixed up with the rice grains, reducing its marketability. Nigerian rice faces competition from imported rice which is favoured in the market because its grains are long, white and without stones. Eliminating stones from Nigerian rice, by using a destoner or building designated threshing and drying floors would allow Nigerian rice to compete favourably with imported rice.
Meanwhile, many people who understand the business actually prefer to be rice processors than direct farmers because they tend to do less work and make higher profits and the ROI seems to come in faster for them than it does for direct farmers. An off taker or processor can make about 150% profit where a direct farmer makes just a 100% on the same quantity of rice.
- Invest in rice farming
The third interesting way I have found that people make money from the rice value chain is by investing in a rice farm. There are AgriTech companies nowadays that help farmers raise money through their platforms and investors are paid back their investments plus ROI at the end of the farm cycle. From what I have seen, investments in rice farms are some of those with highest ROIs compared to investments in the other types of crops. In a rice farm cycle which usually 12 months, a rice farm investment can pay up 25% ROI or even more. This means if you invest N100,000 for instance, at the end of the farm cycle, you will receive a total sum of N125,000 (your initial investment of N100,000 and a profit of N25,000 on your investment). This is a very good return on your money compared to what you get for keeping it in the bank or investing it in some of the popular investments of today.
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