Yield below target

High

Severe

The dominant risk. Break-even yield for raw paddy is 3.52 t/ha against a national average of 2.0 and a plan of 5.0. Mitigated by irrigation, certified seed, correct fertiliser rates and full-time agronomist supervision; residual risk stays high in the first two seasons and the first-harvest trigger at 4.0 t/ha is the earliest signal

Concessional finance unavailable

Medium

Severe

At commercial rates the equity return falls to 14.7% and Year 3 cover to 0.99x — below one. There is no operational mitigation. Written approval is a condition precedent in Section 14, not an objective

Paddy and rice price weakness

High

High

Prices fell 51% in a year. Mitigated by integration, a cost per tonne of ₦247 200 against a market price of ₦350 800, by-product revenue, and a break-even selling price of ₦34 830 per 50 kg bag against a plan of ₦46 000

Smuggling and cheap imports

High

High

Cited as a principal cause of the 2026 price collapse and of mill closures. No internal mitigation exists; the response is cost discipline and a shift toward institutional contracts where price is negotiated

Input cost inflation

High

High

Fertiliser is 24.5% of production cost and urea moved from about ₦35 000 to ₦50 000 a bag. Mitigated by bulk purchase ahead of season and by never reducing application rates to save cash

Insecurity and farmer-herder conflict

Medium

Severe

Materially affects production in several Nigerian states. Mitigated by site selection, perimeter security, documented community agreements and NAIC index crop insurance; residual risk cannot be eliminated

Water availability in the dry season

Medium

Severe

The second crop is half the revenue and depends on it entirely. Mitigated by borehole backup and storage; must be independently verified before land development begins, not after

Outgrower side-selling

High

Medium

Mill utilisation falls from 62% to 38% without purchased paddy. Mitigated by payment within seven days of delivery, fair grading and a genuine price-uplift mechanism rather than contractual remedy

Milling recovery below plan

Medium

Medium

A three-point shortfall costs ₦55 364 374 of Year 3 EBITDA, slightly more than a 20% rise in the bought-in paddy price. Mitigated by drying to 14% moisture, operator training and commissioning acceptance at 62%

Power supply failure

High

Medium

Grid supply is unreliable. Generator and solar capacity are included in capital expenditure at ₦34 000 000 and diesel cost is carried in the operating model

Post-harvest loss and storage

Medium

Medium

Poor drying and storage discount much Nigerian paddy. Mitigated by a platform dryer, moisture testing at intake and a 1 200 tonne warehouse

Policy reversal on rice imports

Medium

Medium

Border and tariff policy has changed repeatedly. The plan assumes no tightening and does not depend on it

Naira volatility

Medium

Medium

Affects imported inputs, spares and fertiliser feedstock. Partially hedged by selling into a naira market