SUSTAINABLE AGRICULTURAL DEVELOPMENT STRATEGY AND FOOD CRISIS RESPONSE PROGRAMME

Table of Content
1. Executive Summary.
2. Main Report.
3. Annex 1: Drivers of Agricultural Growth.
4. Attachment 1: List of Participants.
5. Attachment 2: Workshop Presentations.


EXECUTIVE SUMMARY REPORT
Agriculture in Nigeria is a key strategic sector for addressing the multiple challenges that keep the country from achieving broad based economic growth, increasing household incomes and employment, and reducing food/nutrition insecurity and poverty. Agriculture employs about two-thirds of the country’s total labour force; contributes 42% of the Gross Domestic Product (GDP) in 2007; and provides 88% of non-oil foreign exchange earnings. Growing the agricultural sector is important for Nigeria and the Government has set a target of 10% annual growth rate for the sector. In order to achieve this goal, the Federal Ministry of Agriculture and Water Resources (FMAWR) has solicited development assistance from development partners and has engaged them in dialogue to come up with appropriate policies and programmes for Nigeria’s agricultural development. In furtherance of this goal, FMAWR in collaboration with the World Bank and FAO organized a 2-day stakeholder’s forum on Sustainable Agricultural Development Strategy and Food Crisis Response Programme at the Transcorp Hilton Hotel, Abuja from 24th -25th of February, 2009.


The meeting brought together a broad cross section of over two hundred participants from the public sector, private sector, research agencies, academia, development practitioners, donor organizations, and producer and marketing associations. The overall objective of the Stakeholder forum was to assist FMAWR to define a long term strategy for sustainable agricultural development by providing inputs to strengthen the current National Food Security document of government. The specific objectives include assessing the performance of the agricultural sector in promoting non-oil growth in Nigeria, the potential impact of global food crisis on Nigeria and articulating ways to mitigate them, and proposing strategies to enhance productivity in agriculture and food security.

Keynote Address by the Hon. Minister of Agriculture and Water Resources
In opening the workshop, the Hon Minister of FMAWR delivered a keynote address challenging the participants to come up with actionable suggestions to achieve the twin objectives of the workshop which are (i) dealing with the impact of the global food crisis in Nigeria; and (ii) improving government’s strategy to enhance productivity in agriculture and food security. He also raised issues of concern to his Ministry that he wanted the workshop to tackle. These include:
a. branding and significant improvement in the value chain of agricultural production;
b. access to production inputs (particularly credit and land);
c. improvement in infrastructure;
d. cooperative approach to production and access to input;
e. enhancing public-private partnership;
f. increasing agricultural production based on Nigeria’s comparative advantage;
g. sustainability of on-going agricultural development programmes;
h. commercialization of Nigeria’s agriculture; and
i. climate changes and the availability of the water resources in the country.

The Hon Minister made deliberate efforts at explaining the rationale behind the development of the National Food Security Document, which is the plan of action or the Ministry’s road map for driving agricultural development in Nigeria. The document touches all the key areas, but there is need for improvement of the document and that is why a forum like this is inevitable. He emphasized that while deliberating on ways to improve the document, the participants should ensure that the government’s goals for the agriculture sector are embedded in the document. These include:

i. import substitution based on increased competitiveness;
ii. price support for critical farm operations such as land clearing by Federal and State Governments;
iii. improvement in storage facilities;
iv. market infrastructure development;
v. development of farmland to serve as collateral for farmers in accessing credit;
vi. yield management; and
vii research development.

The Hon Minister’s keynote address guided the forum’s proceedings. It was agreed that there is an urgent need to avert an impending food crisis given the current global economic down turn and financial meltdown. This should be supported by a sound

National Food Security Document – a strategy for agriculture development. The proceedings of the forum are divided into three sections: (A) Drivers of Agricultural
Growth; (B) Impact of Global Food Crisis in Nigeria; and (C) Improving the Agricultural Development Strategy (the National Food Security Document).

A. Drivers of Agricultural Growth. The forum identified and deliberated on six key drivers of agricultural sector growth in Nigeria namely: policy environment, rural infrastructure, and agricultural finance and expenditure, reducing vulnerability and enhancing food security, market access, and rural investment climate. Each driver of growth was examined for what needs to be changed, why the need for change, which institution should bear responsibility for implementing the change, the expected outcome of the change, and the proposed time frame for the change. It was proposed that the policy environment will need to be made more consistent if necessary through legislation. There is need for reformulation of fertilizer policy to reduce rent and leakage and increase access by intended beneficiaries. Pricing and marketing policies need to be designed in such a way as to provide needed incentives for farmers to expand investment in agriculture. Agricultural research policy should be designed to emphasize innovation systems approach in research formulation and implementation and the engagement local government councils as primary actors in a pluralistic extension delivery arrangement.
Under agricultural financing and expenditure, there is an urgent need for the maintenance of a minimum of 10% budgetary allocation to agriculture line with the Maputo declaration. The forum noted and commended the 2009 federal budget which allocated a
12% share to the agricultural sector, a clear indication of government shift of priority to agriculture. In addition, government should take immediate steps to restructure the Nigeria Agricultural Cooperative and Rural Development Bank (NACRDB) and provide with adequate funding so that it could better serve the agricultural sector.
Rural infrastructure, such as farm machineries, roads, electricity, water, storages facilities, transports, communication and processing facilities require immediate attention. The FMAWR is encouraged to work with other relevant arms of government to improve rural infrastructure for farmers. Improving the effectiveness of market access as a growth driver needs to focus on the establishment of effective market institutions, associations and unions, commodity exchange, revenue collectors, regulators, market information systems and the expansion of markets space. Reducing Vulnerability and Enhancing Food Security is an important growth driver in Nigeria because of the high level of poverty amongst the faming population. The key changes that need to be made include making weather forecast available and actually used by farmers, expansion of facilities for safety net and recovery mechanism (such as strategic grains reserve), improve women’s contribution and participation in the agricultural sector though better access to land, credit, processing and marketing facilities, land tenure system reform and land identification. Improving the rural investment climate is also considered to be a key driver to agricultural growth. Key areas where changes are needed were identified as follows: removal of disincentives in relation to high costs of doing business, multiple/high taxes and levies, access to credit in terms of ease, timelines and quantity; enhancement of security of lives and properties, and risk mitigation through the introduction of insurance schemes and early warning signal mechanisms to avert losses. For more on the drivers of agricultural growth, see Annex 3 of the main report.

B. The Potential Impact of Global Food Crisis in Nigeria. One of the major focus of discussion at the stakeholders forum is the issue of averting food crisis in Nigeria and putting in place a sustainable food crisis response programme. In Nigeria, the prices of staples started to rise in 2006 and soared in 2007. This was, in part, because of high oil prices which caused food prices to rise due to increased bio-fuel demand. In addition, the unfavorable weather changes also resulted in decline of agricultural productivity. For example, the food problem in Nigeria was in 2007 when the rain ended abruptly in September and resulted in substantial decline in yields. This seemed to be the first signals that Nigeria was on the path to a food crisis. The forum did not, however, reach a conclusive agreement on whether or not Nigeria is currently experiencing a food crisis. This is because in countries experiencing food crisis, masses of the population are faced with disequilibrium in the food market in which food becomes widely unavailable, inaccessible or unaffordable. Some of those countries experienced more than two production cycles during which there is deterioration in food insecurity or a decline in quality and quantity of food in-take. Such a situation did not exist in Nigeria. However, it was agreed that there is an urgent need to avert any potential food crisis given the current global economic down turn and financial meltdown. The Forum identified some key indicators of food crisis and recommended the measures that the government could take to avert a major food crisis in Nigeria. The identified indicators to watch out for include: food price inflation correlation between domestic and international agricultural commodity prices, food crop production variability, and Food demand-supply gap.

The recommended measures to avert food crisis are spelt out in considerable details in the main report and do include improving enabling environment for increasing agricultural growth, boosting food supply, consumption and nutrition, developing agricultural markets.

C. Improving the Agricultural Development Strategy (National Food Security Document). The Forum commended the government’s efforts in articulating its vision for agricultural development through the National Food Security Document. However, some critical gaps still exist such as lack of time frame for the achievement of objectives, lack of reflection of regional diversity in most of the programme objectives, lack of clarity on how many of the intervention projects will be implemented, monitored and evaluated, and the lack of articulation of clear strategies needed to give farmers the right kinds of market oriented economic incentives to increase investment in agriculture. It was also note that the current strategy lacks clear articulation on how to attract private sector investment in agribusiness and to enhance the flow of agricultural information. In addition, the adoption of a PPP arrangement which relies on subsidy to the private sector operators to facilitate project implementation is inefficient and will only expand opportunities for corruption. The forum deliberated on the process of improving upon the government’s sustainable agricultural development strategy (National Food Security Document). The discussions focused on: What to be done, the major constraints, how best to proceed, what outcomes to expect and what indicators to use for measurement of success, and how will progress be monitored and evaluated? Many useful ideas were generated in the various discussion sessions on this subject (see annex to the main report for details). It was recommended that the government should work closely with its development partners in updating its strategy.

Main Conclusions and Recommendations
The Stakeholder Forum came up with a number of important conclusions and recommendations which are captured in the main report, however, the key messages coming out from the Forum could be summed up as follows:
The Nigerian agricultural sector has performed well in the past five years with an average annual growth rate of 6% but the Government has set a target of an average annual growth rate of 10% in the next five years; Currently, there is no food crisis in Nigeria but evidence of increasing prices of food crops points to a looming problem of food crisis;
Even though the Government of Nigeria has taken some steps such as increased food importation, reduction of tariffs, release of strategic grains reserve and provision for more storage to counter potential food crisis, there is need for additional intervention in the area of domestic agricultural production and marketing; An Agricultural Development Strategy exists, however, the Forum identified some gaps that need to be addressed in order to improve the soundness of the strategy; and The Forum recommended that FMAWR works closely with its development partners to effect the needed changes in the current strategy document to make it more effective and sustainable.

MAIN REPORT
1.0 BACKGROUND
In line with the Millennium Development Goal (MDG) of halving poverty and hunger by
2015, Nigeria has identified agriculture as a key strategic sector for addressing the multiple challenges that keep the country from achieving broad based economic growth, increasing rural incomes and employment, and reducing of food/nutrition insecurity and poverty. The Government recognizes that for agriculture to perform the above roles, there is a need to create the necessary enabling policy environment that is conducive for agricultural growth and development. The Federal Government has made tremendous strides in reducing policy distortions facing agriculture that have led to a promising overall performance of the sector. Nigeria realized an annual economic growth of 6.9% and agricultural growth of 8.2% in 2006 (WDI 2007). The government budgetary allocation to agriculture as a percentage of the budget, has demonstrated an increase from 1.6% in 2002 to 3.3% in 2004.This allocation has been on the increase subsequently. However, the Government needs to do more if it were to achieve the MDG1 or its target of an average annual growth rate of 10% for agriculture in the next few years. Nigeria runs the risk of not achieving the MDG1. The economic growth attained so far has not yet improved the welfare of its population, in particular, the rural poor. Data indicate that poverty incidence is still high moving from 70% of the population estimated to earn less than US$1 a day in 2003 to 56% in 2005. Even though the percentage has dropped, the absolute numbers are still alarming. The majority of the poor depend on agriculture for their livelihoods and 64% of the people in the rural areas are not able to meet their basic needs. Of this, well over 50% of rural women still engage in subsistence agriculture for survival (WB 2004). As such, improved agricultural performance in Nigeria is critical to poverty reduction. In addition, the potential impact of the global food crisis poses a great challenge which has significant implications for the country’s ability to reduce hunger and malnutrition. In spite of several interventions over the years, Nigeria has remained vulnerable to the impact of global soaring food prices. The situation is worsened by increasing population growth, the global economic recession and decline in prices of crude oil. However, despite the perceived short term negative consequences, the food crisis presents a tremendous opportunity for Nigeria’s agriculture. The high food prices have the potential for increasing the value of agricultural assets and for stimulating private sector investment in agriculture, once the requisite enabling policy environment is in place.

In response to these challenges, the Federal Government of Nigeria, under the leadership of President Umaru Yar’Adua, has identified seven core areas of focus which define the government strategic vision for growth and development2. Agricultural sector is central to this agenda since four of the core areas identified aim to revitalize the agricultural sector in order to attain food security, increase production and productivity, generate employment, expand the export base and reduce food imports. Recognizing the importance of agriculture, as well as the challenges manifested by weak economic linkages and a disconnect among stakeholders, weak policy environment and poor service delivery, the Minister of Agriculture and Water Resources (FMAWR), Dr. Sayyadi Abba Ruma has also embarked on improving FMAWR comprehensive agricultural evelopment strategy that aims to transform the agricultural sector and achieve its targets and policy objectives. This process will lay a solid foundation for a long term response to achieving high agricultural growth and food security in the country.

The above concerns and the need to work closely with Nigeria’s development partners form the basis for organizing this forum whose goal is to review government current agricultural development strategy and develop measures for achieving the desired growth rates in the sector. The overall objective of the Stakeholder forum is to define a long term pattern for sustainable agricultural development.

The specific objectives are:
(i)                 to review the performance of the agricultural sector in promoting non-oil
growth in Nigeria;
(ii)       to assess the impact of the global food crisis in Nigeria and articulate
strategies to mitigate potential impact; and,
(ii)              to articulate strategies to enhance productivity in agriculture and enhance
food security.

2.0 REVIEW OF PERFORMANCE OF AGRICULTURAL SECTOR
Agriculture employs about two-thirds of the country’s total labour force; contributed 42% of the Gross Domestic Product (GDP) in 2007; and provides 88% of non-oil foreign exchange earnings. Crop production in Nigeria is dominated by cereal, and root and tuber crops. In fact, Nigeria is the largest producer cassava, yam and cowpea in the world and has a comparative advantage of exporting processed cassava. However since labour constitutes a larger percentage of production cost (75%), competitiveness can be improved by labor saving technologies. Also increasing cassava yield above 15 tons/ha and value addition through processing will increase competitiveness. Similarly, Nigeria has comparative advantage in rice export if yield is above 2.4 tons/ha. Productivity and incomes can be enhanced by improving farm management practices such as land and irrigation management practices which vary substantially across agro-ecological zones. Furthermore, increasing area under irrigation will expand output since crop yield under the irrigation system is much higher than under rain-fed system (with the exception of cassava, yams and leafy vegetables). The performance of the agricultural sector has been uneven in the past. Its average annual growth rate ranges from about 3.3% in 1990s to an average of 6% in the past 5 years.

President Yar’Adua’s seven point agenda include:
i)    Food Security, ii) Wealth Creation, iii) Transport Sector, Iv) Power and Energy, v) Land Reforms, vi) Education, vii) Security.

Most of the current growth rate has been attributed more to expansion in cultivated land area rather than increase in productivity. Most of the various programmes and policies enunciated over the years and supported by Donor/Development partners did not achieve their development objectives or desired impacts due to policy inconsistencies, absence of thoroughness in planning, lack of coordination and poor formulation and implementation. Federal Government funding of agriculture from 2000 to 2007 never exceeded 2% of the total budget of the country and this is far below the Maputo declaration of 10% share of total country budget for agriculture, an indication of the poor priority previous government had placed on agriculture. However, state level agricultural expenditure share were observed to be relatively higher compared to the federal, while those of the local government councils were highly erratic. Overall, it was observed that Nigeria also falls far behind in agricultural expenditure by international standards even when accounting for its level of income. Despite the low budget allocation and release to agriculture, expenditure on fertilizer alone was over 50% of the budget. It was generally agreed that even though the Nigerian agricultural sector has made some impressive stride in the past decade, these gains may not be sustained if some of the following malignant characteristics of the sector are not addressed. These include: low public investment in the sector and focusing its resources more on fertilizer and other inputs rather than research, extension, and infrastructural development of agricultural spending; a very high budget concentration, neglect of important productivity enhancing activities, inadequate planning and targeting, inadequate data generation and reporting systems in the agricultural sector, poor monitoring end evaluation of agricultural sector projects, lack of clarity in the roles of the three tiers of government in agricultural spending and policy-making, policy inconsistency, pervading presence of ambiguities of roles within the framework of the governance structure of agricultural management, which engenders overlapping and duplication of functions. The current Federal Government is committed to reverse the past trends. It is wants to grow the agricultural sector and has set a target of 10% annual growth rate for the sector. To achieve this goal, it plans to put in place an enabling environment that is conducive for high agriculture growth and enhancing private sector investments in agriculture.

3.0 DRIVERS OF AGRICULTURAL GROWTH IN NIGERIA
The quest for a sustainable agricultural development strategy vis-à-vis a responsive food crisis programme can only be realized if the key issues that drive the growth process in the agricultural sector are identified. Apart from identifying these factors, there is also the need to focus attention on them and make pragmatic efforts at promoting them. In the course of the two-day stakeholders’ forum, the following key drivers of agricultural growth in Nigeria were identified. These include: Policy and Institutional Environment, Agricultural Financing and Expenditure, Rural Infrastructure, Market Access, Reducing Vulnerability, Enhancing Food Security and Improving Rural Investment Climate. The syndicate groups at the forum were formed along the identified drivers. Each group prepared its report and they are attached as annexes. The details of the key issues, actors, expectations and deadlines with respect to each of the drivers are presented in annex 1 but the highlight of the group discussions on each of the key drivers are presented as follows:

3.1 Policy Environment
The policy environment is considered to be the most important of all the drivers of agricultural growth. The important thing to note here is that, if the policy environment is not right, all other drivers cannot work. However, the policy environment in Nigeria was observed to be plagued with three main problems: Policy discontinuity, Policy Lawlessness, Policy Indiscipline. In other to better stimulate agricultural productivity, there is the need to focus more attention on some critical issues such as:
·        Reducing the overbearing influence of the Federal Government on States and the Local Governments with regards to control over the sector.
·        Appropriate delineation of roles among the actors in the agricultural sector.
·        Significant involvement of the Federal Ministry of Agriculture and Water Resources in the formulation of macroeconomic policies.
·        Reformulation of the nations fertilizer policy to ensure effectiveness and efficiency
·        Creation of an agricultural information system which will enhance the flow of agricultural information at a low cost.
·        Revitalization of Farmers’ Associations to enhance their bargaining power
·        Community Driven Development (CDD) approach should be employed in policy formulation

3.2 Agricultural Financing and Expenditure
This is another agricultural growth driver that is considered to be very important.
In order to enhance productivity and stimulate agricultural growth certain issues are considered important. These include:
·        Formulation of agricultural financing policy
·        Identification of alternative sources of funding agriculture
·        Maintenance of a minimum of 10% budgetary allocation to agriculture n line with the Maputo declaration.
·        Adequate funding of the Nigeria Agricultural Cooperative and Rural Development Bank (NACRDB)
·        Adoption of appropriate interest rate policy that does not penalize agriculture.

3.3 Rural Infrastructure and Market Access
The provision of rural infrastructure is considered to be of high priority if the agricultural growth process is to be fast-tracked. Three types of infrastructures were identified and these include: physical, social, and economic

Physical Infrastructure
The physical infrastructures that require immediate attention are as follows:
Machineries (tractors and farm tools/implements), Roads, Electricity, (alternative power sources, coal, fuel dumps etc), Water (irrigation, pipe born water), Storages facilities (silos, warehouses, cold rooms), Transports (Trucks, canoes, boats), Communication (phone, radios, TV, computers), Processing facilities (cold rooms). The major problems associated with these infrastructures are non-availability in some cases and poor/lack of maintenance culture among others.

Social Infrastructures
The workshop identified the following social infrastructures as very crucial:
Cooperatives societies, farmers organizations, commodity associations, research and extension agencies, training institutions, recreational facilities, schools, hospitals, and religious institution. These social infrastructures are expected to provide the enabling environment for improved agricultural productivity as well as improving their competitiveness.

Economic Infrastructures
Lack of access to credit especially in the rural areas and farmers’ empowerment to adopt innovations and increase area under cultivation were identified as major constraints to agricultural growth. Furthermore, the need to reduce risks associated with agricultural production, provision of subsidy to enable farmers to assess inputs and making agriculture competitive were also considered to be germane. As such some economic infrastructures were considered as lubricants to the engine of agricultural growth. These include, but not limited to, the following: Financial institutions (banks, micro finance agencies and credit agencies), Insurance agencies, Price support systems (GMP), Subsidy support systems, Policy support systems etc.

3.4 Market Access
The imperative of market development in the agricultural growth process was outlined.
Emphasis was on lack of markets, poor market infrastructure, marginalization of farmers in the markets and low farmers’ share of the consumer prices. The importance of market access as a key driver of agricultural growth will be enhanced if the following issues are properly addressed: Markets space (Stalls, warehouses, etc), Market institutions (brokers, commission agents, assemblers, packagers and re-packagers), Associations and unions, Commodity exchange, Revenue collectors, Regulators, Market information systems etc.

3.5 Reducing Vulnerability and Enhancing Food Security
The vulnerability of agricultural production and farm households to vagaries of production are considered to be very crucial to agricultural growth. It is imperative to note that since most households are poor, they are more vulnerable to production variability. As a result, for agricultural growth to be achieved on a sustainable basis, reducing vulnerability of the resource poor farm households is imperative. The key issues considered by the workshop to be addressed while attempting to reduce vulnerability include the following:

i. Weather and climate change
Need to make weather forecast available and actually used by farmers;
Promote irrigation for all-year round farming.

ii Price support mechanism for agricultural produce:
Expand Guaranteed Minimum Price regime to cover a wider variety of products grown by the majority, i.e. Expand GMP outside Cassava;
Formulate trade policy regime that will protect Nigerian farmers

iii. Price support mechanism for inputs (subsidies):
Provide smart subsidies for major inputs (seeds, fertilizers, tractors and other farming tools);
Expand the National Seed Service to include more States and LGAs

iv. Economic recession
Expand access to credit through the formation of cooperatives;
Create a conducive environment to attract outsiders and Nigerians into agriculture (tax incentives etc.)

v. Pest, disease and natural disaster
Improve crop protection through increased manpower and budget provision to the
Pest and Control Services at Federal and state level;
Put in place safety nets and recovery mechanism (strategic grains reserve, set-up favorable pricing policies, etc.)

vi. Externalities as constraints
Relax constraints relating to unfavorable agric pricing and marketing policies, inadequate research, manpower and the use of traditional farming tools;
Increase funding for research institutes and agricultural training colleges and universities.

vii. Land availability and soil fertility
Land tenure system reform
Land consolidation

viii. Extension gap
Increase the number of extension agents in order to reach the (acceptable ratio of extension to farmers)
Better contracting arrangements to retain the extension agents, eg putting the extension staff on pensionable appointment.

ix. Gender
Improve women’s contribution to and participation in the agricultural sector, including better access to land, credit, processing and marketing facilities

3.6 Improving Rural Investment Climate
Improving the rural investment climate is considered not only to be a key driver of agricultural growth, but a major contributor to reduction in unemployment and drudgery.
The group noted that for any meaningful strategy aimed at enhancing food security and that ensures agricultural growth, the rural investment climate is crucial and adequate attention must be focused on it.

The key issues discussed for improving rural investment climate include the following:
Infrastructure: Road, Water and Rail Transportation; Electricity, ICT, Land, in terms of
availability, ownership, tenure system, etc, Labour, in terms of Availability, Cost and Quality, Provision of water and irrigation facilities, Removal of disincentives in relation to Multiple/high taxes and levies, inadequate access to credit, etc., Enhancing of security of lives and properties as well as investments, Risk Mitigation and prevention through the introduction of insurance schemes and early warning signal mechanisms to avert losses.
Generally, all the drivers of agricultural growth entail cross-cutting issues, which may not be achieved in isolation. It is important that the evolving strategy be holistic and should be designed to address all the key issues raised simultaneously.

4.0 FOOD SECURITY STATUS
Food security refers to physical availability, economic affordability and functional usability of food and associated products on a year round basis in a sustainable manner. Available statistics supports the fact that Nigeria is yet to achieve food self-sufficiency. For example, Nigeria spends $3 billion annually on the importation of staple food such as wheat, rice, sugar, and fish.

4.1 History of food security policies and programmes in Nigeria
In an attempt to achieve food security for her people, The Nigerian Government has, in the past 7 decades, executed a number of measures aimed at relaxing the supply side constraints to the food availability problem. These include: establishment of cooperatives (1935 to Date); commodity Boards (1947 to 1986); Agricultural Research Institutes (1964 to Date); National Accelerated Food Production Project (early 1970s); Nigerian Agricultural Cooperative Bank (1973 to Date); Agricultural Development Projects (1975 to Date); Operation Feed the Nation (1976 to 1979); River Basin Development Authorities (1977 to Date); Directorate of Foods; Roads and Rural Infrastructure (1986 to 1993); National Agricultural Land Development Authority (1991 to 1999); and Presidential Initiatives on Cocoa, Cassava, Rice, Livestock, Fisheries and Vegetables (1999 to 2007).

These programmes have, however, failed to achieve their full potentials due to the following identified weaknesses: Policy inconsistency and administrative dislocations; Instability of Research Institutes and lack of funding; Lack of political support; Non provision of counterpart funds in the case of ADPs; Lack of qualified manpower to provide effective leadership; Lack of continuity and shift in approaches by successive governments; and Lack of institutional arrangements for implementation

2.2 Key Challenges facing food security in Nigeria.
The following were identified as the key challenges militating against food security in Nigeria.
i. The food sector consist mostly of subsistence small farmer plots which are not
collateralizable .
ii. There is limited supply of new improved seed and low yield per hectare for most staples
iii. The nation’s soil resources consist of a large variety of soil type with unascertained nutrient status
iv. 99% of food production is rain-fed and 1% of cultivated land area(say about
200,000 Ha or less than) is irrigated
v. Inconsistent agricultural policies
vi. There is a dearth of reliable planning statistics and poor research uptake
vii. Extension service network is poorly resourced with low morale of staff.
viii Food crop farmers are aging with most farmers above the age of 45 years;
ix The food production sector is characterized by inadequate access to credit and poor credit management
x. Poor rural infrastructure
xi. Livestock are characterized by poor breed attributes and low milk yield
xii. Livestock production is characterized by limited artificial insemination (AI), and limited sources for top quality chicks;
xiii. Limited irrigation facilities

4.3 The Food Crisis in Nigeria
A major focus of discussion at the stakeholder’s forum on food security is the issue of averting food crisis in Nigeria and putting in place a sustainable food crisis response
programme. In Nigeria, the prices of staples started to rise in 2006 and soared in 2007. A major reason was the rising oil prices which resulted in rising food prices due the increase in biofuel demand. Another related reason was the unfavorable weather climatic changes which resulted decline in agricultural productivity. For example, the food problem in Nigeria was in 2007 when the rain ended abruptly in September and resulted in substantial decline in yields. This seemed to be the first signals that Nigeria was on the path to a food crisis. The forum did not, however, reach a conclusive agreement on whether or not Nigeria is currently experiencing a food crisis. This is because in countries experiencing food crisis, masses of the population are faced with disequilibrium in the food market in which food becomes widely unavailable, inaccessible or unaffordable. Some of those countries experienced more than two production cycles during which there is deterioration in food insecurity or a decline in quality and quantity of food in-take. Such a situation did not exist in Nigeria. However, it was agreed that there is an urgent need to avert any potential food crisis given the current global economic down turn and financial meltdown. The Forum identified some key indicators of food crisis and recommended the measures that the government could take to avert a major food crisis in Nigeria. The identified indicators to watch out for include:

 food price inflation,
 correlation between domestic and international agricultural commodity prices,
 food crop production variability, and
 Food demand-supply gap.

4.3.1 Key Drivers of Food Prices in Nigeria
The key drivers of food prices increase in Nigeria were identified as:
i. bourgeoning food deficit due to rising population and compounded by the competition between growing human consumption, animal feed production, and industrial usage for cereals and grains, consequent upon import restrictions as well as local content guideline for industries and export promotion of all commodities,
ii. Critical supply shortages implicated by lack of significant expansion in land area under cultivation and low level of use of modern inputs, inadequate credit, labour shortages, low technology and policy failure with respect to inputs like fertilizers and credit,
iii. Production variability has also been reported, indicating instability in the input and output market. By and large, supply-side constraints are more strongly pinpointed in the price hike than other factors,
iv. High cost of production and of doing business in general and agribusiness in
particular,
v. Market imperfections leading to poor performance of essential marketing functions and high transactions. There are unfair practices which continue to restrict market entry in some parts of the country. These include imposition of levies, taxes and other restrictions in the market places and
vi. Climate change, natural disasters and conflicts which have in the past couple of years aggravated the food supply shortages in some parts of the country.
vii. High international food prices transmitted to domestic markets
viii. Naira depreciation: rise in price of imported food and household items

4.3.2 Vulnerability within the context of a Food crisis situation
A number of socioeconomic groupings were identified as most vulnerable to food crisis situation in Nigeria. These include:
i. Resource poor subsistence farmers: have low production capacity, limited off farm income, high dependence on markets for 6 to 7 months/year
ii. Landless households: have limited resources, low resilience
iii. Family headed by women: have difficulty with access to land, loans, etc.
iv. Pastoral Households: (small livestock breeder) are affected by high food prices/low livestock price, unstable lifestyle
v. Urban poor: are net consumers, highly dependent on imported food, vulnerable to domestic/global economic down slow;

4.3.3 Impact of Global Food Crisis in Nigeria
A recent study on the short term impact and policy implications of the global food crisis in Nigeria revealed the following:
i. All crops recorded positive growth rates between 2007 and 2008. Output of yam, cassava, rice, sorghum, maize, millet, cowpeas, cocoyam increased by 26.84, 7.18, 19.38, 65.24, 20.87, 2.03, 27.06 and zero percent respectively.
ii. Between 2007 and 2008, area cultivated to yam, rice, sorghum, cowpeas and millet increased by 31.9%, 8.71%, 9.29%, 13.98%, 1.18% respectively , while that of cassava, maize, and cocoyam declined by 17.3%, 6.6%,and 2.15% respectively.
iii. Labour utilization between planting and harvesting increased substantially during the period. Specifically, labour utilization in land clearing, tilling, planting, weeding, and harvesting increased by 8.64, 23.02, 34.04, 19.91 and 9.82 percent respectively.
iv. The usage of farm inputs increased significantly during the one year period under consideration. Seed use increased by 56.8%, fertilizer by 15.38%, insecticide by 60.12%, traction by 44.33% and credit by 40.89%.
v. Farm gate prices increased for yam (34.55%), cassava (33.77%), maize (7.54%), cowpeas (6.57%), cocoyam (30%) but declined for rice (-0.28%) and maize (- 5.09%).
vi. The food production sector also experienced growth in profitability during the period. Specifically, Gross margin/ha increased for yam (17.4%), Cassava (89.84%), Rice (9%), sorghum (276%), maize (37%), and cocoyam (55%), but declined for Millet (-31.2%) and cowpeas (-44.6%).
vii. Producer prices were less than 50% of the final price of food crops implying that most farmers do not benefit from the observed rise in food prices.
viii. Increases in food prices could be associated more with inefficiencies in market conduct, such as high transportation costs, poor storage and processing facilities, poor access to business capital, high levies and taxes by LGAs and unions; dominance of large buyers (industrial users especially for maize, cassava)
From the foregoing, the sharp increases in food prices observed between 2007 and 2008 may be due more to demand side rather than supply side factors.

However, a number of issues would need to be addressed by a strategic food crisis response plan. These would include:
i. How can farmers’ benefit from the crops value chain being enhanced?
ii. How can rural marketing functions be revived to generate employment and income?
iii. How can the high rural-urban transportation costs be moderated?
iv. How can small marketers gain access to more capital so as to reduce unit cost of marketing functions and high prices, inter alia?

4.4 The National Food Security Programme
The Federal Ministry of Agriculture and Water Resources, as part of its quest to achieving the objectives of the present administration’s 7 Point agenda, has developed a National Food Security Programme. The vision of the programme is to ensure sustainable access, availability and affordability of quality food to all Nigerians and for Nigeria to become a significant net exporter of food to the global community. The major objectives of policy are to: achieve substantial import substitution, achieve sustainable food security, and attain gainful employment, promotion of modern agricultural practices, and natural resources conservation and management. The goals of the National Food Security Programme are, in the short term, to significantly improve Nigeria’s agricultural productivity, medium term - expand and improve large-scale production, improve storage/ processing capacity as well as required infrastructure to achieve food stability and in the long term - derive over 50% of the nation’s foreign exchange through agricultural exports.

In achieving the objectives of agricultural policy stated above, the government of
Nigeria has put in place certain initiatives. These Initiatives include intervention measures that are aimed at addressing supply-side constraints, agricultural market development, storage and price stabilization, livestock development, and fisheries development. However, these measures are yet to be tested and Government should implement them with care to ensure both financial and technical sustainability.

4.4.1 Measures to Address Supply-Side Constraints
i. Establishment of Agricultural Seed Centres (ASC) Capacity Building. All the out-growers involved in the ASCs will be trained on improved seed production practices for maize, rice, sorghum, millet, cowpea and soybean Establishment of Agric Seed Centres.
ii. Procurement of 500,000 MT of fertilizers for the 2009 production season to be sold at 25% subsidy amounting to about N15 billion. Fertilizers are expected to be distributed between March and May, 2009.
iii. Tractor Service Delivery Programme. This involves provision of 10,000 units of 55-75 HP tractors and implements within three years under PPP arrangement

4.4.2 Measures to Agricultural Market Development
i. Establishment of 200 Cottage Cassava Processing Plants in 22 states and FCT through PPP with FG contributing 40% as grant to the private investor who will contribute 60% of the total cost of the project. Each will cost N16.2 million.
ii. Establishment of export crop handling, preservation and conditioning centres, at the airports, for hygienic packaging of fresh produce for domestic and export markets to be implemented through PPP arrangement using Design, Build, Finance and Operate (DBFO) delivery (turnkey) model.
iii. Establishment of 25 rice processing mills in 13 states in partnership with private investors. Total cost of the project is N25 billion.
iv. Development of market infrastructure for fruits and vegetables. The project is to be implemented through PPP arrangement.

4.4.3 Storage and Price Stabilization Measures
i. Strategic Grains Reserve (5%) and Buffer Stock (10%).
ii. Construct Comty Warehouses in 23 States
iii. Construction of Commercial Warehouses as a way of promoting commercial storage as a business. Sixty (60) warehouses are to be constructed in 13 states under PPP arrangement with BO model.
iv. Guaranteed Minimum Price. This is a predetermined minimum price the farmer will get for a given unit of produce in a season. The key participants are farmers, LBAs, Commodity Development and Marketing Companies, ASCE, cooperative organizations, NFRA, State and local governments and commercial banks.
v. Suspension of import duty (100%) and levy on rice for 6 months.

4.4.4 Assessment of the Livestock Development Programmes
i. Disease Control Programme
ii. Grazing Reserve and Pasture Development
iii. National Pest Control Programme
iv. Livestock Market Development
v. Abattoir Development
vi. Livestock Breeding and Multiplication Centres

4.4.5 Assessment of the Fisheries Development Programmes
i. Establishment of Integrated Fish Farm Estates
ii. Cage and Pen Fish Culture Development Programme
iii. Fish Farm Certification and Standardization Programme
iv. Sustainable Aquaculture Programmes
v. Coastal Industrial Fisheries

4.5 Recommended food crisis response program
The following measures are recommended responses needed to avert a major food crisis in Nigeria. The measures are grouped into short, medium and long term measures.

4.5.1 Short term measures
4.5.1.1 Measures to boost food supply
 Effective fertilizer distribution.
 25% Federal subsidy on fertilizer.
 Establish Tractor hiring Services Scheme
 Establishment of crop processing companies through PPP.
 Infrastructure development projects.
 Restructure, commercialize and recapitalize NACRDB.
 Privatize and completely depoliticize the distribution of fertilizer
 Promote commercial agriculture through appropriate CF models
 Develop livestock fattening programmes
 Promote development of aquaculture
 Effective use of meteorological information and forecasts from NIMET
 Promote formation of fishing cooperatives
 Capacity building for all stakeholders in crop, livestock and fisheries value chains

4.5.1.2 Agricultural Market Development Measures
Support contract farming models for value added agriculture
Develop marketing infrastructure
Set up Commodity Boards
 Finance for agricultural marketing functions through the NACRDB.
 Develop market information for crops, livestock and fisheries

4.5.1.3 Food Consumption and Nutrition Measures
 Promote Healthy Eating Habitat through NOA
 School feeding/lunch programme

4.5.1.4 Macroeconomic Policy Measures
 Reduced interest rate for agricultural loans to smallholders

4.5.2 Medium term measures
4.5.2.1 Measures to Boost Food Supply
 Establish medium-scale fertilizer production plants through PPP
 Conversion of wastes into organic fertilizer
 Redefine the mandate of Agricultural Research Institutes to ensure that the
technologies being developed are relevant, appropriate and reflect contemporary
development priorities in respect of the particular commodity.
 Adopt value chain approach in crop and livestock development interventions with
specific commodity focus
 Complete withdrawal of government from fertilizer procurement and distribution
 Promote mechanization of artisanal fisheries

4.5.2.2 Agricultural Market Development Measures
 Establishment of community warehousing scheme to promote crop storage across
the country
 Establishment of conditioning centres for the storage of perishable commodities
 Development of livestock and fish markets

4.5.2.3 Macroeconomic Policy Measures
 Reduced interest rate on credit/loan for agriculture

4.5.3 Long term measures
4.5.3.1 Measures to Boost Food Supply
 Establish more tractor assembly plants through PPP
 Commercialization of prototypes of improved technologies developed in various
research institutes.
 Development of cattle ranch
 Fish canning
 Development of commercial land market
 Remove hoe and cutlass as basis for small-scale agriculture in Nigeria
 Sedantarize nomadic herders and commercial large ruminant production

4.5.3.2 Agricultural Market Development Measures
 Development of conditioning centres for livestock products
 Agricultural export market development

4.5.3.3 Macroeconomic Policy Measures
 Competitive agricultural finance market

5.0 Nigeria Agricultural Development Strategy
5.1 Analysis of Gaps in The Current Agricultural Development Strategy
Currently, The Nigerian agricultural development strategy is defined in terms of the National food security programme of the Federal Ministry of Agriculture. Even though the programme contains commendable intervention measures, certain gaps have been identified that are likely to make the implementation of the strategy less effective. These gaps would need to be filled in updating the current agricultural development strategy. Some of the observed gaps can be summarized as follows:
i. The objectives of policy are generally acceptable but have no clear time frame. It
is suggested that a period of 3 years be specified for achievement of objectives
ii. Most of the programme objectives do not reflect any form of regional diversity. It is suggested that a sustainable strategy document must incorporate regional diversity issues into its formulation
iii. Even though inadequate storage is acceptable as a challenge, the current strategy which emphasizes subsidy does not have a sustainable way of creating the needed additional capacity.
iv. The current strategy document places the PPP arrangement as a major means of facilitating the implementation process. Even though the principle of PPP as a major strategy for success is acceptable, it is argued that the PPP arrangement as stated in the document emphasizes some degree of subsidy and this is likely to give room for corruption. The level of subsidization of the private operators should be calibrated to minimize abuse.
v. The current strategy does not emphasis giving farmers the right incentives to produce. Given the right incentives, farmers will intensify production. So finding strategies that provide appropriate incentives, including increasing farm gate price may be a way to go since it will encourage farmers to adopt improved technologies of production.
vi. There is need for a clear strategy to attract private sector investment in agribusiness. As shown in the NISER presentation (see annexes), “higher returns to investment in agriculture can only be realized if farmers have easy and ready access to inputs, information and markets and if they have the right incentives”. So agricultural strategy must have a clear blue print on how to achieve this.
vii. The current strategy document does not have specific intervention for agricultural information. A liberalized and cheap agricultural information market is very important for the realization of increased productivity and profitability along the value chain.

5.2 The Building Blocks for updating the current Agricultural Development
Strategy
The forum deliberated on how best to improve the current agricultural development strategy for Nigeria. In order to produce a sound agricultural development document for
Nigeria, it is important to identify the following: What needs to be done, the major constraints, how best to proceed, what outcomes to expect, what indicators to use for measurement of success, and how will progress be monitored and evaluated? Many useful ideas were generated in the various discussion sessions on this subject which are included in the annexes, including the following steps.

The first is an overview of the basic macro messages about the role of agriculture in Nigeria. This would involve the characterization of the sector including competitiveness; recent performance and determining factors; sectoral linkages and contribution to growth and poverty reduction.

Secondly there should be a clear statement of objectives of strategy formulation process.
This would involve a clear statement of what needs to be done or put in place or changed.
This would require a review of past policies to isolate gaps. Under the statement of objectives, it is important to have a clear statement of Vision, short term objective, long term objective, and policy thrust.

The vision of sustainable agricultural development and food security in Nigeria would be to ensure sustainable access, availability and affordability of quality food to all Nigerians and be a net provider of food to global community. The short term objective would be to significantly improve Nigeria’s agricultural production, while the long term objective would be to improve productivity and expand large scale production. Policy thrust should be import substitution, food security, modern agricultural practices, and resource conservation. Major factors that need to be focused on in defining the objectives statement are: Competitiveness/potential opportunities, Spatial/regional differences, and Regional complementarities.

Third, the strategy formulation process must involve the identification of constraints to the achievement of the objectives of Policy. These identified constraints must not be generic but have particular relevance to the existing local conditions in the country at the time of strategy formulation. These constraints can be grouped under the following categories: policy and institutional environment, Agricultural financing and Expenditure priorities, rural infrastructure, Market environment, technology, extension, and vulnerability.

Fourth is the assessment of the Investment climate and private sector development. It is important that the principle of private public partnership feature prominently in the design of development strategy. Issues relating to agribusiness climate, and legal and institutional reforms must be adequately addressed.

Fifth is the action plan. Here the strategy document will focus on addressing the question
“How to do what needs to be done”. It will address how the identified constraints would be overcome. This would require the review of experiences with past action plans to identify the reasons for successes and failures, which will guide the formulation of a new action plan. Careful evaluation of past public sector initiatives such as agricultural research and development, extension, market information system, irrigation infrastructure, transport infrastructure and other interventions such as labor saving technologies to identify what works and what does not would be needful. The sixth building block of a good agricultural strategy is Governance. Issues relating to public expenditure priorities and financing of the sector as well a policy consistency would need to be addressed. The strategy would need to address issues relating to public expenditure in the sector, estimates of resources requirements, and potential sources at different levels. It would have to critically assess the reasons for policy inconsistency in Nigeria and consider whether or not to legislate policies to address the problem. Efforts to link agricultural spending to oil revenues are welcome, but smoothing out expenditure is important. It is also important to build political support for agriculture, taking  advantage of the Comprehensive Africa Agricultural Development Project (CAADP).

Finally, it is important in the strategy formulation process to specify as accurately as possible how to keep track of implementation. This would include the setting of realistic targets to be met at specified time interval, the identification of indicators for measurement of progress, the setting up of a monitoring and evaluation plan which should include strategy for effective data gathering.

6.0 CONCLUSIONS and KEY MESSAGES.
The Forum discussed the next steps to be taken to achieve an action plan for National
Food Crisis Response Program and for the preparation of a strategy document for Sustainable Agricultural Development in Nigeria. The process, including the next steps and timeframe, would be coordinated by the Government in partnership with interested donors. The Stakeholder Forum came up with a number of important conclusions as discussed above and the details contained in the annexes but key messages coming out from the Forum could be summed up as follows:

The Nigerian agricultural sector has performed well in the past five years with an average annual growth rate of 6% but the Government has set a target of an average annual growth rate of 10% in the next five years; Currently, there is no food crisis in Nigeria but evidence of increasing prices of food crops points to a looming problem of food crisis;
Even though the Government of Nigeria has taken some steps such as increased food importation, reduction of tariffs, release of strategic grains reserve and provision for more storage to counter potential food crisis, there is need for additional intervention in the area of domestic agricultural production and marketing;

An Agricultural Development Strategy exists, however, the Forum identified some gaps that need to be addressed in order to improve the soundness of the strategy; and
The Forum recommended that FMAWR works closely with its development partners to effect the needed changes in the current strategy document to make it more effective and sustainable.
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