Rice Millers Say N58,000 Is Their Floor as FG Pushes for N55,000 to N57,000 per 50kg Bag

Rice millers say they cannot sell a 50kg bag of locally produced rice below N58,000 because of high paddy, electricity, diesel and other operating costs. The federal government wants that price cut to between N55,000 and N57,000, and puts the average production cost of a bag at N49,389.23.

Locally milled rice currently sells for between N60,000 and N67,000 per 50kg bag, according to a Daily Trust report. That gap between what millers say they need and what the government says is fair is now the centre of a running disagreement between processors and the Ministry of Agriculture.

Why millers say N58,000 is the floor

The General Manager of Labana Rice Mills, Alhassan Yusuf, said the price of milled rice largely depends on the cost of paddy, the raw material processors buy. He said the company must also cover workers' salaries, electricity bills and other essential expenses before selling its finished product.

"At the current price we are buying paddy, the lowest we can sell our finished product, if we must pay salaries, electricity bills and other essential costs, is N58,000," Yusuf said.

He added that selling below that level would expose the company to losses. Yusuf urged the federal government to consider tax waivers and other incentives so processors can cut prices without undermining their operations.

Energy is a major part of the problem. The managing director of Umza Rice Mills disclosed that his company spends about N100 million monthly on electricity, with diesel expenses potentially bringing the combined cost close to N200 million.

What the government is proposing

At a meeting with rice processors and farmers on October 6, 2026, the Minister of Agriculture and Food Security, Abubakar Kyari, and the Minister of State for Agriculture and Food Security, Aliyu Sabi Abdullahi, said the government's assessment put the average production cost of a 50kg bag at N49,389.23.

Based on that analysis, the government proposed a selling price of between N55,000 and N57,000 per bag, arguing the prevailing market price was too high. The processors disputed the position, pointing to expensive paddy, energy costs and other operational challenges.

Rice processors say lower prices only become achievable if production costs come down. They have called for tax relief, improved electricity supply and stronger support for farmers. Farmers and industry representatives also identified insecurity, expensive agricultural inputs and inadequate paddy supply as challenges affecting production.

What it means for consumers

Economist Ibraheem Maigari advised the government to address these underlying costs rather than impose direct price controls, warning that excessive restrictions could discourage investment and create supply problems.

For Nigerian households and traders, the disagreement leaves one question open: whether rice prices can fall to the government's proposed range without making local production financially unsustainable.