NIGERIA Food Security Update March 2007

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1 Nigeria s rich energy resources, land, dynamic markets and favorable agro ecological system have enabled the country to meet most of its food needs and allowed for generally food secure conditions nationwide. However, low productivity, triggered by the combined effects of extreme pressure on land from urbanization and population growth, soil infertility due to desertification and soil erosion, limited access to fertilizer, low farm income for smallholder farmers, high transportation costs and poor roads, has lowered production capacity in recent years. As yields decrease, farmers are increasing acreage in an effort to produce more. Moderate seasonal food insecurity during the normal lean season in July and August is a recurrent phenomenon nationwide, particularly among poor households, which have fewer resources and tend to face the most constraints to food security. Timely access to fertilizers and improved seeds is a major challenge for poor households in Nigeria, as the procurement of these inputs determines, to a significant extent, households capacity to produce a substantial amount of crops. In northern Nigeria, the late and insufficient distributions of fertilizers to farmers remain a major obstacle to productivity. The large supply of agricultural goods originating from Nigeria s bumper harvests in 2005 and 2006 and the country s dynamic market system have shifted the food security problem from one of poor access and availability to food to one of productivity, utilization, marketing and storage. This year, the persistence of low prices for major cereal and cash crops in the markets of northern Nigeria have reduced producer household incomes and lowered the profit margins for traders who sell these commodities on national and international markets. Continued low prices could shift 2007/08 production away from these commodities, triggering an increase in prices after the harvest. Seasonally food insecure populations in northern Nigeria Predominantly agricultural producers Middle income and poor households in northern Nigeria usually produce a substantial quantity of cash crops such as cowpea and groundnut, which they sell, using the cash to reinforce their food reserves (Figure 1). However, due to above average food availability and low prices for cereals, poor households were able to meet their basic food needs as of March without resorting to an extensive sale of their cash crop or coping strategies such as the sale of labor and/or livestock. That said, prices for cash crops are reportedly low in most northern markets, and if these low prices persist, they may threaten a significant income source for poor households, who will have to sell their cash crop at low prices after exhausting their food reserves in the coming months. Figure 1. Basic food sources for poor-, middle-income and better off households in the Fulani agro pastoral zones, Jere LGA, Gombe State. Source: FEWS NET FEWS NET Nigeria FEWS NET Washington Abuja 1717 H St NW Tel: (234) Washington DC ytahirou@fews.net info@fews.net FEWS NET is a USAID-funded activity. The authors views expressed in this publication do not necessarily reflect the view of the United States Agency for International Development or the United States Government.

2 In the northern states of Central Borno, parts of Yobe, Jigawa, Katsina, Sokoto and Kebbi, environmental factors (e.g. low rainfall, soil erosion) and consumption patterns cause poor households to rely heavily on drought resistant crops such as millet and sorghum, with limited access to cash crops, fruits and legumes. Such factors are responsible for the limited (four or five months) household food reserves in these areas of northern Nigeria, after which households turn to local markets for food, fertilizer and seed, in preparation for the next planting season. In order to access market goods to meet these basic needs, poor households sell their labor and/or livestock and collect and sell firewood and grass. Agro pastoralists For agro pastoral households in northern zones, especially in central Borno, parts of Gombe, Katsina, Jigawa, Sokoto and Kebbi states, sources of income, food and expenditure depend mainly on the sale of livestock and milk and the limited production of cereal. In March, a substantial amount of agro pastoral incomes are spent on animal feed, due to a normal reduction of fodder and water availability and the seasonal rise in fodder prices. Veterinary care and agricultural inputs constitute other significant expenditures for agro pastoral households at this time of year. Agro pastoral households also face limited grazing areas, due to urbanization, and the extension of farmlands area cultivated due in part to population increases. Therefore, the search for pastureland, which occurs four to five months after the harvest, sometimes requires travel over long distances to pasturelands in north, central and southern Nigeria, where herders risk conflict with farmers who are beginning their agricultural season. Agricultural inputs As the rainy season draws near, poor households are faced with new challenges arising from the need to purchase agricultural inputs. Inadequate supplies of fertilizer and improved seeds, and the time lag between their distribution and the planting season, represent major obstacles to productivity. The Government of Nigeria (GoN) is addressing this problem through subsidized agricultural input distribution programs for farmers, but distribution supplies are generally insufficient to meet needs. For example, the quantity of subsidized fertilizer sold to households, at the price of N1000/bag, can only cover one third to half of farmers needs, leaving them to resort to the market to buy the Figure 2. Proportion of annual expenditures for poor-, middle-income and better-off households in agro pastoral areas of Fulani, Gombe Sate, and Jere LGA. Source: FEWS NET rest at N2500/ bag. The combined high cost of fuel, pesticides and fertilizer contribute to the high cost of agricultural production and may act as a further disincentive to production, given current low market prices for cereals and cash crops (Figure 2). Markets and trade FEWS NET Nigeria studied 10 markets in northern Nigeria from mid January to the end of February During this period, markets were well supplied with cereals and cash crops, such as cowpea. Supplies for these commodities are reportedly higher this marketing season than the 2005/06 season, following a bumper cereal and cowpea harvest in 2005 and 2006 in Nigeria and many surrounding Sahelian countries. The high level of supplies of these commodities has caused a significant decrease in the demand and prices for these commodities. Demand for livestock continues to increase due to persistent demands from large markets in southern Nigeria. Many of the climatic conditions supporting Nigeria s bumper agricultural harvests, such as adequate rainfall and relatively fertile soils Famine Early Warning Systems Network 2

3 have also allowed for the good development and maintenance of pasturelands and better sale prices for cattle. Thanks to the overall availability of cereals and generally favorable market trends for pastoralists, there is currently no indication of distress sales of livestock. Strong trade networks exist between the markets in Nigeria and those in Niger, Chad and Cameroon. Trade flows are principally characterized by the flow of millet and maize from Nigeria to these countries and the flow of cowpea and livestock from these countries to Nigeria. These networks and trade flows are significant for regional food security, as they facilitate the movement of goods between deficit and surplus production areas. Trade flows within the country are also significant, as much of sorghum, cowpea, maize and livestock are supplied from the main marketing hubs in northern Nigeria to large consumption markets in the southern part of the country. Figure 3. Trends in the price of maize, sorghum, millet and cowpea in Dawanau market from March 2004 to March Source: MISTOWA Price trends Millet Millet prices have fallen considerably since last year (Figure 3), with one metric ton of millet now selling at between N25,000 and 29,000, compared to between N90,000 and N100, 000 in the 2005/06 marketing season. This downward trend is particularly evident in Kebbi state, due to above average production of millet in this area and in nearby border areas of Niger (Gaya). In other markets, such as Potiskum and Funtua, millet presently costs N30,000/MT. Millet currently costs N28,000/MT in Dawanau market. Cowpea Retail prices for cowpea, including new harvest cowpea in select urban markets, are generally below prices for the commodity at this time last year (Figure 3). For example, a 36 percent reduction in the price of cowpea was reported in Maigateri, a border market in Jigawa state, where cowpea that sold for N40, 000 to 60,000/MT during the 2005/06 season now sells at N32,000. Demand for newly harvested cowpea is relatively high, because traders and consumers prefer the taste and consistency of the fresh product to the old one. Prices for cowpea harvested last year remain low, resulting in the continued storage of thousands of tons of the older commodity, especially in Dawanau market in Kano. In Gombe, a major cowpea producing zone and market in northeastern Nigeria, a ton of old cowpea now sells at N30, 000, almost half of its normal price. Famine Early Warning Systems Network 3

4 Maize The price of maize remains low compared to last year at this time (Figure 3), despite the large quantities purchased by breweries and food processing companies in northern and southern Nigeria. According to maize traders, they sell about 60 percent of their maize to breweries, confectionery and feed companies within Nigeria. Yet, in Saminaka, a major maize producing zone and market in northern Nigeria, the price of a ton of maize dropped from N60,000 in 2005 to N27,000 in 2006 and to N18,000 in Traders indicated that the 2006 avian flu outbreak contributed to this fall in maize prices, as many poultry farms, which use maize in their poultry feed, closed. Maize sales to poultry and feed industries have not yet reverted to their pre avian flu era levels. Livestock and poultry Prices for livestock remain high due to persistent demand from large markets in southern Nigeria. In addition to these favorable market trends, good availability of fodder has significantly reduced reports of distress sales among pastoralists. Localized decreases in cattle availability were reported, when compared to 2005/06, in localized areas such as Gombe and Maiduguri, due to land issues between herders and farmers in the boundary communities between Chad and Nigeria. Massive poultry deaths during the November to February cold season were reported in Gujungu, in Taura Local Government Area (LGA) of Jigawa state, in Dodoru, in Gwandu LGA of Kebbi State and in Gombe, Saminaka and Kaduna states. These deaths were due to excessive low temperatures, normal flu viruses and other pathological conditions such as Newcastle disease. While losses this year were high compared to previous years, traders and community members did not attribute the poultry deaths to highly pathogenic avian influenza. Key challenges and recommendations Price stabilization The GoN and its partners need to work closely with the private sector to ensure stabilization of cereal and tubers prices, as continually low prices may constitute a disincentive to future production of some of these crops. There are indications that the GoN is not buying sufficient cereals to stabilize prices, and more efforts need be made to explore export opportunities through regional market integration and other initiatives. Information and early warning systems Market information systems in Nigeria are rudimentary, and strengthening these systems is important for regional integration, export promotion and maximizing in country market opportunities. It is noteworthy that the Nigeria Agricultural Market Information System (NAMIS) is testing a regional price information system it developed with a Nigerian telecommunications company. Under this system, producers and traders can ascertain current commodity prices through telephone requests. This, hopefully, will afford traders and other stakeholders in the region instant market price information for select commodities in Nigeria. Establishing an effective Livestock Early Warning Systems might also help to prevent massive deaths of birds and other animals, as such associated losses have significant impacts on food security, particularly for poor households. Market improvement initiatives Storage facilities in markets are generally limited, though substantial capacities exist at Dawanau market in Kano State, Gombe market in Gombe state and Saminaka market in Kaduna state. Traders could be motivated to store more crops for future sale and consumption if affordable storage facilities were available. Boosting market operations through the provision of credit facilities and infrastructures such as banking services, water, drainage, animal care and other amenities is also essential for improving marketing and trade conditions. Given the Famine Early Warning Systems Network 4

5 prevalence of civil insecurity on some major Nigerian highways, ensuring a suitable banking system that is well adapted to the commercial operations of traders and that will encourage traders to travel with less money might improve commercial transactions and the movement of goods from one area of the country to another. Strengthening of market associations for the improvement of market operations, including combating issues of multiple taxes confronting traders and transporters is also recommended. Strong market associations can also influence the GoN to utilize the revenue it generates from the market to improve market related infrastructures. There is the need to undertake a complementary study of major consumption markets in southern Nigeria to fully understand the trade flows and dynamics within Nigeria and the impact of these on integration of regional markets. Famine Early Warning Systems Network 5