Rice farmers across Nigeria are reducing cultivation plans for the 2026 planting season as falling paddy prices, rising production costs and weak demand continue to compress profitability and discourage expansion.
The decline in farm-gate prices has significantly altered the economics of rice production with many farmers now unable to recover input costs or generate sustainable returns, leading to a gradual withdrawal from large-scale cultivation.
At the same time, production expenses have continued to rise, driven by higher costs of fertiliser, labour, transportation and energy, creating a difficult operating environment for producers who rely heavily on manual processes and self-funded infrastructure.
This imbalance between declining prices and rising costs has forced farmers to reassess planting decisions, with many reducing acreage or shifting to alternative crops that offer better margins and faster returns.
The situation is further compounded by weakening demand in the local market, particularly from rice millers, many of whom are operating below capacity or have suspended operations due to cost pressures and limited competitiveness.
As milling activity slows, farmers are left with unsold inventory, reducing liquidity and limiting their ability to reinvest in the next production cycle, a development that is already affecting planting decisions for the upcoming season.
The structural challenges within the rice value chain have also intensified competition from imported rice, which continues to gain market share due to relatively lower prices and consistent quality, placing additional pressure on local producers.
Despite previous investments aimed at boosting domestic production, the cost structure of Nigeria’s rice industry remains significantly higher than that of major exporting countries, where integrated systems, scale advantages and government-supported infrastructure reduce overall production expenses.
This cost disparity has made it difficult for locally produced rice to compete effectively, particularly in an environment where consumers are increasingly price-sensitive.
In addition, ongoing border leakages and informal trade channels have continued to undermine policy efforts designed to protect domestic production, allowing cheaper foreign rice to enter the market and further depress local prices.
The pullback by farmers raises concerns about the country’s ability to sustain recent gains in rice production and meet growing domestic demand, especially as population growth continues to drive consumption.
A decline in cultivated area could lead to tighter supply conditions in the medium term, potentially reversing current price trends and increasing reliance on imports to bridge the gap.
From a policy perspective, the development highlights the need for a more comprehensive approach to supporting the agricultural sector, including targeted interventions to reduce production costs, improve access to financing and strengthen the competitiveness of local value chains.
Without structural adjustments, the current trend may persist, limiting growth in domestic rice production and weakening progress toward food security objectives.
