100122 A g r i c u lt u r e G l o b a l P r a c t i c e N o t e 06 Niger Agricultural Sector Risk Assessment El Hadj Adama Toure, Vikas Choudhary, Amadou Ba, Garry Christienson, and Henri Josserand Niger, owing to its climatic, institutional, livelihood, economic, and environmental context, is one of the most vulnerable countries in the world. Poverty is pervasive in Niger and it ranks low on almost all the human development indicators. Agriculture is the most important sector of Niger’s economy and accounts for over 40 percent of national gross domestic product (GDP) and is the principal source of livelihood for over 80 percent of the country’s population. The performance of the agricultural sector is very volatile, however, due to its high exposure to risks. Niger has experienced multiple shocks, largely induced by agricultural risks over the past 30 years, which impose high welfare cost in terms of food availability, food affordability, and malnutrition. It also adversely affects household incomes, performance of the agricultural sector, the government’s fiscal balance, and the growth rate of Niger’s economy (see figure 1). Figure 1: Annual GDP growth (percent) and GDP per capita (percent), 1984–2010 Percent Year Sources: World Development Indicators Database, 2012; and Authors’ calculations. *1992 political instability (transitional government November 1991–April 1993) and 1999 political instability (assassination of President Ibrahim Baré Mainassare). AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 MEthodology determine. The impact of some of these events on crop production for the period 1980–2011 is indicated in figure Recognizing the need to explicitly and comprehensively 2 below, using indices of agricultural production. address agricultural risks, the Government of Niger, through 3N high commissioner, requested the World Bank Drought is the principal risk in Niger and the country to conduct an agricultural sector risk assessment of Niger. has experienced seven droughts between 1980–2010, This risk assessment enriches the existing knowledge with adverse impact on national agricultural production. base of the agricultural sector in Niger and provides the Over the past 12 years, Niger has witnessed four years following contributions: (1) systematically analyzes a whole (2001, 2005, 2010, and 2012) of severe food insecurity that range of agricultural risks and impact over a longer time resulted in appeal for international humanitarian assistance period (1980–2012); (2) helps situate drought in the context and food relief. Drought is also the principle trigger for of other agricultural risks; (3) prioritizes the most important spikes in food prices and conflicts over pasture and water; agricultural risks for the country based on objective criteria; it is highly correlated with some crop pests and diseases, (4) provides a framework of mitigation-transfer-coping to and it aggravates mortality and morbidity due to livestock manage priority risks; and (5) offers a filtering mechanism diseases. to select high-return interventions for agricultural risk Locust outbreak is another high-frequency, high-severity management. risk in Niger. Almost one-third of losses during the 2004–05 crises were due to locusts, with adverse impact, on both PRODUCTION Risks the crop and livestock sectors. Considering the significance Drought, locusts, livestock diseases, crop pests and of livestock for Niger’s economy, livestock diseases, diseases, floods, windstorms and bushfires are the main especially pasteurellose, anthrax, peste de petits ruminants, sources of production risk. Farmers also complain of the and Newcastle disease (for poultry), are another principal risks to crop production from livestock herds, although risk for the country. the incidence and severity of these events is difficult to Figure 2: Major shocks to crop and livestock production Production index (2004–2006 = 100) Year Source: Authors’ calculations. 2 | AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 Photo credit: Stevie Mann / International Livestock Research Institute Flood incidences are increasing in Niger; however, they do in 2009 and 2010. There is a strong association between not pose a serious risk to the broader agricultural sector, seasonal price movements and the incidence of drought due to localized nature of flooding. Furthermore, most of and other adverse events. The hardship endured during the flood years are usually associated with bumper harvest these periods of adversity seem to confirm the growing because of higher than average rainfall at an aggregate consensus that reduced access to food (high prices), level for the country. along with reduced food availability, may be the most critical impact of drought and locust attacks in Niger. Crop pests and diseases, like striga and fungal diseases, are High seasonal price spikes appear to be more closely and a perennial problem among most crops; however, overall systematically associated with these events than inter- losses from a majority of these pests and diseases, barring annual changes in production or prices. the exception of grasshoppers, grain eating bird, and millet borer, are frequent but relatively low. Due to Niger’s heavy reliance on trade with Nigeria, adverse movements in the West African CFA Franc (FCFA)/ Bush fire is often a problem for pastoral areas and naira exchange rate could also be a potential source of risk. windstorms damage young plants at the beginning of However, market data shows that the FCFA/naira exchange copping season. Nonetheless, the overall impact of these rate is relatively stable, with low adjusted coefficients of two risks on the agricultural sector is negligible. variation (.06–0.08) for monthly exchange rates for the period January 2003 to October 2011. Market Risks Food price volatility is a big concern for consumers and Enabling Environment Risks major spikes in nominal prices occurred in 1998, 2001, Political instability is a major risk in Niger, which has had 2002, 2005, 2009, and 2010. These spikes are also observed a tumultuous political history with four coups d’état since for real prices, although they were much less pronounced independence (1974, 1996, 1999, 2010). Niger has witnessed AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 | 3 Figure 3: Expected average losses for adverse crop production events Indicative loss $US m Frequency Source: Authors’ calculations. Figure 4: Risk prioritization Frequency of occurrence Severity of impact Source: Author’s calculations. 4 | AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 two transitional governments that were associated Macroeconomic shocks in Nigeria, as the largest trading with rapid deterioration of the economy (figure 1) and partner of Niger, can have potentially serious repercussions a sharp decline in GDP growth rates. The impact on the on the agricultural sector; however, so far, past impacts agricultural sector, however, was much less pronounced of such shocks have been moderate and short-lived. The and more indirect and might include: (1) reduced access assessment team analyzed downside deviation from the to particular regions, which means that rural markets are trend and correlated them with adverse events to calculate more restricted, food prices rise, and aid can’t get through; frequency and indicative losses from major production (2) reduced public and private investment in response risks for crops. Figure 3 highlights the result of that analysis. to higher levels of uncertainty; (3) the diversion of public A combination of qualitative and quantitative measures, expenditure to military purposes to the detriment of other based on the assessment team’s evaluation, was used public services; and (4) loss of donor support. Political to prioritize major risks for the entire agricultural sector, instability may have a bigger impact on the agricultural both livestock and crops (figure 4). This analysis highlights sector when it coincides with other shocks like drought, six priority risks, namely 1) drought (crop), 2) drought such as in 1995–1997. Political instability induces changes (livestock), 3) locust outbreaks, 4) consumer price risk, 5) in government priorities and contributes to volatility in livestock diseases and 6) political instability. agricultural sector funding. Rising pressure on common property resources, or on Potential solutions resources used within the bounds of customary law, have To address the priority risks, the assessment deployed led to frequent, but localized, conflicts affecting herders a holistic agricultural risk management framework, and farmers. Insecurity has always been an issue for comprised of mitigation (action taken to reduce the herders practicing transhumance, but of late, the situation likelihood of events, exposure, and/or potential losses), has deteriorated, especially in the border areas of Mali, transfer (risk transfer to a willing party, at a fee or premium), Libya, and Nigeria (Chad is an endemic problem). Despite and coping (activities geared to help cope with losses) their significance for herders in some locations, from a solutions to identify a list of potential interventions. macroperspective, the impact of insecurity and conflict on Risk transfer solutions (insurance and hedging), owing the broader agricultural sector is relatively small. to Niger’s specific context, have limited applicability Table 1: Decision filters and intervention classification Source: Authors. Note: M is Mitigation, C is coping, and T is Transfer. AGRICULTURE GLOBAL PRACTICE NOTE —OCTOBER 2015 | 5 and will be quite challenging to implement. Coping solutions (social safety net programs) are required and quite important in Niger; however, they do not address fundamental risk issues in the agricultural sector and have limited applicability as a long-term solution. Risk mitigation is perhaps the most required, but much ignored, with Photo credit: Fatoumata Diabate/Oxfam the highest returns in addressing short- and long-term issues in Niger’s agricultural sector. It is important to highlight that most of these potential interventions are complementary in nature and most of them are required to effectively address agricultural risks in Niger. Nonetheless, considering the resource-constrained environment of Niger, decision filters (table 1) were used to These half-moon structures on barren soil are a risk mitigation tool designed to preserve water when it rains, refilling the water table and help prioritize the interventions. encouraging the regrowth of vegetation. Using these filters, the following types of interventions could contribute to improved nutrition, access to were recommended with the potential to generate sizable diversified food, and improved household income, risk management benefits: thereby reducing food affordability issues and im- • Drought-tolerant, high-yielding crop varieties. De- proving household food security. spite its importance, less than six percent of farming • Continuous support to early detection and households in Niger have access to drought-tolerant eradication of desert locusts. Ex-ante preventive cereal varieties. Early warning about the impending action reliant on monitoring of seasonal reproduc- weather season coupled with ready availability of tive areas, localization, and destruction of first locust drought-tolerant varieties could help mitigate the populations has been effective so far by success- risk of crop failure. This will necessitate development fully controlling a potential locust outbreak in 2009, of a “sustainable seed system,” consisting of seed largely through use of biopesticides. Therefore, this research, seed multiplication, and seed delivery on a approach should be supported and strengthened. large scale. • Supporting community-level interventions for • Soil and water conservation; natural resource food and fodder banks. To ensure availability of management (NRM) techniques. Effective soil food and fodder at the local level, support for com- and water conservation techniques in Niger have munity food and fodder banks, on an as-needed successfully contributed to (1) conserving rain basis, should be provided in areas known to be water, (2) increasing its infi ltration, and (3) enhanc- suffering, or are likely to, suffer from food shortages ing plant growth, which improves the resilience or food price spikes. Targeting could be based on of crops during water stress and serves as a useful indicators of food access and food availability, using drought mitigation intervention. Further expansion price data. The aim should be to intervene earlier and consolidation of water conservation and NRM in the seasonal cycle, well before prices reach their interventions will contribute to greater integration of seasonal peak. Besides ensuring food and fodder the agriculture-livestock sector, yield improvements, availability for vulnerable populations, such inter- and drought risk management. ventions will also help stabilize food and fodder • Irrigation. Expansion of irrigation facilities can serve prices for wider populations and can help respond as an important drought risk management tool, to local-level market failures without creating major considering that uneven rainfall distribution is one of distortions. the principal causes of crop failure in Niger. Despite • Livestock vaccination. Vaccination is perhaps one the desert conditions, there is considerable potential of the most significant measures to reduce the risk to increase the area under irrigation in Niger, which of livestock diseases. With limited resources, the 6 | AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 government of Niger could focus on preventive vac- cination campaigns against the biggest threats and respond to some of the worst outbreaks. Niger is a case of living perpetually with risk, thus more emphasis on long-term structural solutions, rather than short-term quick fixes, is required to improve the resilience of the agricultural sector. Designing and implementing a comprehensive agricultural risk management strategy will require sustained and substantial financial investments, shifting the focus from short-term crisis response to long-term risk management, streamlining disparate donor investments and isolated interventions toward the core problem, supporting decentralized community- and farm-level decision making, integrating agricultural risk management into the existing development frameworks, Photo credit: Mercy Corps prioritizing agricultural risks into government and donor strategies, and focusing on implementation. Operationalzing Risk Management Commission Initiative, Nigeriens Nourish Nigeriens, the The World Bank conducted the risk assessment in Niger food security and agriculture development strategy together with government officials from the 3N High championed by President Mahamadou Issoufou. The Table 2: Plan of Action for Agriculture Risk Management (PAGRA) AGRICULTURE GLOBAL PRACTICE NOTE —OCTOBER 2015 | 7 collaboration raised awareness of agricultural risk among PAGRA emerged from this interactive process containing local stakeholders, built local capacity to formulate short-, medium- and long-term goals for building risk management strategies, and created a platform resilience in the agricultural sector. The plan aims to for discussing and highlighting the agriculture risk minimize the financial and economic losses caused by management agenda. Niger’s experience integrating shocks and emergency response spending, to build and operationalizing risk management could help inform capacity of sector stakeholders to manage risks, and to efforts in other countries. target opportunities for sustainable development. PAGRA was officially launched in collaboration with the New Plan of Action for Agriculture Risk Partnership for Africa’s Development, the International Management (PAGRA) Fund for Agricultural Development, and the Platform for Agricultural Risk Management, and will be implemented Due to the close collaboration between the World Bank through three components (table 2). Agriculture Risk Management Team and the 3N High Commission, findings from the risk assessment were Integrating risk management in World Bank integrated into the Plan of Action for Agriculture Risk operations Management in Niger 2014–2023. PAGRA is the result of a multi-stakeholder consultative process that included The analytical work carried out by ARMT led to refinement representatives from government, civil society, the of the World Bank’s Niger Country Partnership Strategy private sector, research institutions, and the World Bank. (CPS) 2013–2017. The refined strategy specifically In order to create a risk management action plan for recognizes the importance of ending the poverty trap of Niger and make it compatible with the 3N investment extreme vulernability to weather shocks, and the need to plan, stakeholders gathered to deepen the solutions address short-term concerns while maintaining long-term recommended by the risk assessment, prioritize risk focus on risk managment. management interventions, and to define specific targets In addition to the activities implemented under for high-priority interventions. PAGRA, the World Bank structured a new $US 111 The multi-stakeholder consultative process kicked off million lending operation in Niger based on ARMT’s in January 2013 with a national workshop to examine recommendations to the 3N High Commission. The Niger agricultural risks in Niger. This workshop brought Climate Smart Agriculture Support Project is designed together over 100 stakeholders to discuss and validate to increase agricultural productivity by enhancing the PAGRA and initiate the process of moving from design to drought resilience of agro-pastoral systems in targeted implementation. Subsequently, the 3N Initiative organized communities. The project will support other agricultural seven thematic working group to discuss different types productivity enhancing measures, including: support of risk management actions. Each group considered the to seed value chains, provision of small-scale irrigation actions required to scale-up implementation of specific infrastructure, and on-farm NRM for environmental risk management interventions, identifying the need for sustainability. targeted investments, technical assistance, and policy and regulatory changes. This Note was based on the World Bank publication: Choudhary, Vikas; D’Alessandro, Stephen; Ba, Amadou. 2013. Agricultural sector risk assessment in Niger : moving from crisis response to long-term risk management - technical assistance. Washington D.C. : The Worldbank. This work was funded by the World Bank and a Multi-Donor Trust Fund on Agricultural Risk Management financed by the Ministry of Foreign Affairs of the Government of the Netherlands and by the State Secretariat for Economic Affairs (SECO) of the Government of Switzerland, and was conducted by the World Bank’s Agricultural Risk Management Team. Internet: www.worldbank.org/agriculture, Twitter: wb_agriculture