Ex-minister lauds govt on rice provision in 2012 budget

FORMER Minister of Commerce and Industry, Charles Ugwuh, has commended government's plan to encourage local production of rice in the 2012 budget, saying President Goodluck Jonathan took the right step.In a chat with The Guardian over the weekend, the Ugwuh, a former president of the Manufacturers Association of Nigeria (MAN) stressed that the fiscal measure with which government intends to manage rice importation is good in principle and demonstrates government's will towards encouraging the growth of local capacity for rice production and processing.He, however, noted the new measure still presents a differential between tariff on brown rice (30 per cent) and finished rice (50 per cent), thus leaving room for manipulation.A flat tariff, he said, would have been preferred. He noted, '50 per cent tariff on finished rice represents a fair protection for local rice investments. However, if government and its relevant agencies do not demonstrate enough will to implement the new tariff, this could lead to sharp practices capable of driving rice prices upward.'This fear becomes more real when it is realised that India merchants are still in control of the rice market. Given their current emerging position, local investors are at the moment ill equipped to engage these merchants in a price war.'Ugwuh, a local rice producer added, 'overall, it is better at this point to use fiscal measures (tariff) to manage the Rice Value Chain and encourage local production rather than outright ban, which is really counterproductive.
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