HOW TO START A RICE PRODUCTION BUSINESS | COSTS, IMPLICATIONS AND REQUIREMENTS
How To Start A Rice Production Business | Costs, Implications And Requirements
Rice is the second most common cereal next to maize. Oryza sativa; it’s botanical name, is both very nutritious and a rich food choice anytime for many Nigerians. Rice is Nigeria’s most consumed staple foods. And this has led to an increased demand for the food and currently stands at an annual growth rate of 5 percent. Nigerians consume around 5.5 million tonnes of rice annually, and of these only 3.6 is produced locally. Meaning that we are unable to meet the demands for rice consumption in Nigeria. As a result, the country spends roughly N365 billion per annum to import the remaining percentage. Given this figures, Nigeria is said to be the world’s largest importer of rice.
With all these figures and stats your decision to explore this business opportunity in Nigeria can never go wrong.
Varieties of locally grown rice
Following are some varieties of rice grown in Nigeria.
- Fadama rice
- Upland rice
- Lowland rice
Profitability of rice production business
The rate of your profitability depends on the size of your business, that is; if for instance you invest say N3 million into a rice production business, you can end up with a 30-35 percent returns on investment. If however you are producing on a large scale and invest around N42 million, there will be 42-50 percent internal rate of return on your investment.
Rice farming, just like most other agro-businesses is pretty capital intensive. There has to be a large land space for it to be successful. For your rice production business, the start-up expenses will include, land, supplies, basic equipment, packaging, storage, transportation, operating costs, labor and many other outlays.
Rice milling will generally require effective manpower, machinery, and equipment to start.
Reasons you should go into rice production business in Nigeria
Rice production in Nigeria is a sure way to not only enrich yourself but also empowering and employing others.
Check out why rice production is a viable business option in Nigeria;
- High returns on investment: You can generate millions of naira annually from rice production business. In a single planting season, you can make up to N1 million from just a single acre of land.
- Matures fast: The planting cycle involved in rice production doesn’t cover more than a 6 month period. Once mature, the crop turns from green to light brown.
- High demand: Rice is a staple diet in Nigeria and is being consumed every day by almost everybody in the country. This level of consumption has made the demand for rice very high in Nigeria.
- High yield: Rice farming has a very high yield. With good farming practices, you can harvest more than 100 bags of rice from a single acre of land.
Challenges facing rice production business in Nigeria
In spite of the huge potential for profitability in this business, there are however a number of prevalent challenges facing rice production business in Nigeria. Following are a few of them;
- Capital requirements: Rice production business requires huge capital involvements. This means that huge capital outlays is required to set up and manage a rice production business.
- High importation: Despite the government’s efforts to halt rice importation into the country, it still continues to pose a threat to local producers as it sometimes sells at cheaper rates than the locally produced ones.
- Crop pests and diseases: Crop pests like birds continues to be a challenge for optimum yield during rice farming.
Process of rice production
The process involved in rice cultivation depends on the geographical and ecological factors at work. This means that the different rice varieties thrive in different geographical and ecological regions of Nigeria. Generally, though the process of rice cultivation involves the following;
- Choice of land: The most favorable soil type for rice cultivation is clayey soils. It should be fertile with a moderately high water-holding capacity.
Next, you have to prepare the land for planting following these techniques:
- The field should be disc plowed immediately after harvest season in November/December to expose the rhizomes of perennial weeds to the scorching of the sun.
- The field should be harrowed just before the first rain ( for wet or transplanted rice, the field should be allowed to flood with the first rains).
- Construct bunds and have the paddy field covered completely with water to prevent nitrogen loss through denitrification.
- Choose healthy seeds: Ensure that you select the right rice seeds so as to increase yield. The healthier your seeds are, the greater your chances of ensuring the highest possible yield. That is why it is better to hand-picked your seeds. When buying seeds, do so from a company that is licensed and registered with The National Agricultural Seeds Council (NASC).
- Time of planting: The ideal time for planting rice is May/June when the rains have fully started. This should be done in flood-prone and water-logged areas.
- Nursery raising: You first start out by planting in a nursery before finally transplanting. Follow these steps for nursery raising;
- Soak the seeds in water for 24 hours.
- Spread them on the floor and incubate it for 48 hours by covering with a plastic or polythene bag.
- Spread the sprouted seeds uniformly on a puddled nursery field.
- Drain out excess water from the field for a week.
- Ensure that the seed beds are raised in high rainfall areas.
- Ensure that seedlings are prevented from bird damage during germination by introducing scarecrows.
- Apply FuradanTM(carbofuran) at 1kg/ha in nursery beds a week before transplanting.
- Transplanting: The seedlings are to be transplanted from the nursery after a 21-day period. This is done by uprooting the seedlings. And then you transplant 2-3 seedlings per hill. Your spacing technique should involve a 20cm between rows and between 15-20cm between plants. Transplant early maturing varieties 15cm apart and transplant medium and late maturing varieties 20cm apart.
- Application of fertilizer: For Improved Non-lodging Varieties. Follow these techniques
- First Application: Apply 200kg/ha of NPK 15:15:15, followed by another 100kg/ha of Urea broadcast at 30 days after transplanting
- Second Application: Broadcast 100kg/ha of Urea at ear initiation.
- Harvesting: Your crops should be ready for harvesting after about 5 months, in this period the rice must have fully matured. At maturity, rice will change from a green color to a light brown color.
This is the production stage that involves drying, hulling, packaging etc.
The paddy should be sun-dried to a moisture level of 13-14 percent. Sun-dry slowly for a 2-3 day period to reduce breakage during milling
Soak paddy in hot water maintaining a temperature of 70°c for 5-6 hours. Then you remove all the empty floating grains. Next, parboil rice by steaming soaked paddy in a huge bag for 10-16 minutes by suspending the bag over steaming water in a drum. When the rice husks begin to split open, you can discontinue parboiling.
This is the process of separating the edible part of the rice from the hull and is done using a hulling machine.
Package your rice in a dry and clean bag. This is how you will present them for selling. Have your farm name, product name, logo etc boldly inscribed on the bag
Store your products in a cool, dry, rodent-free place.
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Serial Entrepreneur - International Business Planning Consultant - Speaker - Trainer - Author - Blogger - Network Marketing professional.
- 2018 SME Business Trainer and Coaching Advisor at GIZ for SME Loop.
- 2018 YALI RLC Online Cohort 9
- 2017 Fellow, Inspire Africa Train-the-Trainer Entrepreneurship programme sponsored by US Consulate Lagos and the Dickey Center, U.S.A.
- 2016 Fellow, Tony Elumelu Foundation Entrepreneurship Programme
- 2015 Top 50 Innovative Entrepreneurs, BET5 by Diamond Bank and EDC, PAU.
He is an alumnus of Enterprise Development Centre (EDC) of the Lagos Business School (LBS), Pan-Atlantic University (PAU). Through his training, mentoring, speaking and coaching programmes, he has empowered many young people over the years to start and grow their own business, build wealth, create multiple streams of income and achieve financial independence.
- He is a Certified Trainer in Design Thinking by the U.S Consulate, Lagos and the inspire Africa Entrepreneurship Institute.
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