Analysis: Slowing Nigerian grain trade threatens Sahel food security

Northern Nigeria's grain trade, which supplies almost half of the Sahel's cereals, has slowed severely, while abnormally high prices of staple grains across the Sahel are causing serious food security concerns in this chronically vulnerable region.

The areas most at risk are southeastern and central Niger, which are highly dependent on Nigerian grain flows, as well as northern Nigeria and northern Benin. Chad is somewhat protected from the dynamic, as it produced a healthy harvest in 2012, says FEWS NET.

World Food Programme (WFP) market analysts report that grain supply is low in many of the main markets across the region, and that fewer traders from Niger and elsewhere are crossing the border to re-supply in Nigeria. Cross-border trade is significantly down in Nigeria's Maigatari market (near Zinder in Niger), Illela (near Tahoua), Jibya (near Maradi) and Damassack (near Diffa), according to WFP.

In highly import-dependent Niger, "this situation must raise a red flag," said WFP market analyst Jean-Martin Bauer, referring to poor trade conditions that spurred Niger's 2005 and to some extent the 2010 food crises. "If trade slows down from Nigeria to Niger, it's a huge issue for all countries depending on Nigeria," he said.

In the worst-affected areas, staple grain prices are higher than in 2012 when the region experienced a widespread food crisis. A 100kg bag of maize in Kano, the region's largest grains market, cost 7,400 Nigerian naira (US$47) in March 2013, compared to 6,000 naira ($38) the same time last year; while a 100kg bag of millet cost 8,000 naira ($51) in March 2013, versus 7,500 naira ($47) last year.

The poorest families in the Sahel are entirely dependent on markets for foods and may spend 80 percent of their household income on food, according to ECHO. "High prices lock these people out of the market," said European Union aid body ECHO's Sahel coordinator Hélène Berton.

Why deficits?

The problem is multi-faceted but in northern Nigeria, local deficits - because of widespread flooding last year are being compounded by insecurity, according to FEWS NET markets and trade adviser Sonja Melissa Perakis.

Further, many producers of millet and tubers in Nigeria turned to cash crops last year, causing a deficit in these staple grains, points out a May 2013 FEWS NET report. Millet production in northern Nigeria, for instance, declined by 13 percent in 2012, as compared to the five-year average.

The Boko Haram insurgency forced many farmers southwards away from their fields this planting season, said Aminu Mohammed, secretary of the Dawanau Grain Traders Association in Kano, an umbrella union comprising the largest cereals market in West Africa. At the same time, ongoing fighting and outright conflict between Boko Haram and Nigerian security forces has kept traders lying low in recent months. Many transporters are too scared to cross borders.

Nigerian's emergency agency NEMA estimates 65 percent of farmers in northeastern Nigeria's fertile Lake Chad basin have fled southwards to escape Boko Haram-related violence.

FEWS NET and WFP are currently assessing the drivers of the dynamic and will produce a report soon.

In many Sahelian countries, millet and maize production was up in 2012. However, a 6 percent decline in Nigerian production of these grains (as well as yams and cassava) in 2012 offset three-quarters of the gain seen elsewhere - because of the size of the Nigerian market, according to FEWS NET.

"Economic engine" broken down

Farmers, herders and traders from other countries rely on Nigeria, with its population of 162.5 million and its economic might, as the most important market for their products. Severely depleted demand in Nigeria for cash crops such as sesame, and for livestock, is driving down prices. "Nigeria is the economic engine of West Africa - if it breaks down, there's trouble," said Bauer.

Typically a pastoralist from Niger can trade a goat for 100kg of millet with a Nigerian trader, but in April 2013 a goat fetched just 93kg, according to WFP's market information system in Niger's Abalak market in Tahoua Region.

Another result of the situation is abnormal trade flows, with maize and millet being exported to Nigeria from Benin, Burkina Faso, Mali and Niger rather than the other way round, according to FEWS NET.

"Don't waste time"

Aid efforts need to be scaled up, said ECHO's Berton, as the few humanitarian agencies present in northern Nigeria "are overstretched".

"The food crisis that is presently looming in Nigeria needs more resources… It could have serious repercussions in neighbouring countries," she said.

ECHO, one of the principal humanitarian donors to the Sahel, gave 9.8 million euros to Nigeria to fund nutrition, cash transfers, livelihoods and other projects, mainly in the north and to flood-affected areas; this is relatively little compared to the 55 million euros given for emergency response to both Chad and Niger.

WFP gives families in Niger 32,500 CFA ($65) per month, up from 25,000 ($50) two years ago. The amount might need to be raised further, given the falling value of the cash due to high prices. "We could at least compensate for that," he added.

This could work where food is available, said FEWS NET's market adviser in Mali, Louali Ibrahim. In other areas emergency food aid will be needed. "There is no one-size-fits-all solution to this problem."

Thanks to the resilience debate, the Sahel is still on the map this year following last year's food crisis, said Bauer, but severe funding shortfalls remain. WFP needs $312 million in food and cash to fund its Sahel response from May to December 2013, he added.

The Sahel funding appeal was only 28 percent funded as of 24 May, despite the lean season being fully under way.

National response

In most countries national governments are constrained by depleted national emergency stocks, having exhausted them in the 2012 Sahel crisis response, according to Ibrahim. Most national stocks are under 50 percent replenished, says FEWS NET.

To get out of the current mess, governments and traders must not restrict regional trade flows, warned Bauer. "Markets in the Sahel support food security. When they do not operate well, we see problems at the household level," he said. "We saw that in 2005; we saw it in 2010… We need fluidity of trade."

While no official trade barriers have been put in place, it is impossible to say what happens unofficially, said Ibrahim. Governments must try to reduce customs duty and hassle for transporters to the degree that they can. "Otherwise we'll just see a bad situation get worse."

But tensions are mounting in the marketplace, according to Mohammed of the Dawanau Grain Traders Association. The combination of low supply and high demand from Niger is putting a serious strain on the local market in the north, where grain stockpiles are severely depleted, he said. "Nigerien traders are mopping up whatever grains they can lay their hands on," he said. Many traders pay cash in advance, he said, giving them an edge over local consumers.

"We sometimes go to villages to glean [buy] whatever we find at local markets to avoid completely running out of stock."

He anticipates things will get worse during Ramadan in July, when demand for millet is predicted to soar. The price of millet has risen month-on-month since February, he said.