Lagos — The Federal Government on Thursday in Abuja took a bold step to revive and revitalise the nation's agricultural sector with the signing of a N160 billion Memorandum of Understanding (MOU) on rice farming and processing.

The MoU was signed by the Minister of Agriculture and Water Resources, Dr Sayyadi Ruma, on behalf of the Federal Government. Mr Sumil Vaswani, Chairman, Stallion Group of Thailand, signed on behalf of Popular Foods Ltd.

Speaking before signing the MoU, Ruma noted that the one million hectare Commercial Rice Development project meant the official launch of commercial agriculture in Nigeria.

According to him, the project would help reposition agriculture in the country.

He said that the project would not only help to make Nigeria self-sufficient in rice production, but would also make the country a net exporter of rice.

"Rice, which has emerged a major staple in Nigeria, can be produced in most parts of the country," he said, adding that the project had the capacity to generate two to three million jobs.

Ruma said that the project had the capacity to produce, by 2013, 1.5 million tones of rice per annum, adding that it would also help to stimulate local rice production through its out-growers scheme.

The minister stated that Nigeria had not been taking advantage of products where the country has comparative advantage, adding that the Federal Government would soon enter into MoU with some investors to produce cotton, tomatoes, sugar and wheat in commercial quantity.

He described land clearing as one of the major challenges facing the development of agriculture in the country.

In his address, Vaswani described the signing of the MoU as a privilege that would help jumpstart the agricultural sector in Nigeria and expressed appreciation to government for giving his company the privilege.

"The MoU imposes a huge obligation on the group," Vaswani said, adding that the project would benefit local farmers, through the transfer of technology, on the production and processing of rice.

In his goodwill message at the occasion, the Chief Economic Adviser to President Umaru Yar'Adua, Dr Tanimu Yakubu, said that Tuesday's signing of the 2009 budget by Yar'Adua meant the commencement of the implementation of the 7-point agenda.

"The signing of this MoU signpost the commencement of commercial farming in Nigeria," he said, adding that it represents a major milestone to achieving the 7-point agenda.

Yakubu said that Nigeria was blessed with enormous potentials in agriculture, but they had not been properly harnessed due to lack of legal and economic framework to develop the sector.