NIGERIA: FAVORABLE RAINY SEASON INCREASES GRAIN YIELDS

UNCLAS SECTION 01 OF 02 ABUJA 002126

SENSITIVE
SIPDIS

DEPARTMENT FOR EE/TPP/ABT/ATP SPECK
DEPT PASS TO USTR-AGAMA
TREASURY FOR PETERS AND HALL
DOC FOR 3317/ITA/OA/KBURRESS AND 3130/USFC/OIO/ ANESA/DHARRIS
USDA/FAS FOR MAURICE HOUSE, DOROTHY ADAMS

E.O. 12958: N/A
TAGS: EAGR ECON ETRD EAID EFIN PREL NI
SUBJECT: NIGERIA: FAVORABLE RAINY SEASON INCREASES GRAIN YIELDS


1. (U) Summary: Foreign Agriculture Service Attach (FASOff) and
EconOff visited Nigerian's grain belt from October 13-17. It was
noted that Nigeria's grain production in 2008 is up sharply from the
poor harvest of 2007, especially for corn, because farmers planted
larger areas and rainfall patterns were consistent and well
distributed during the growing season. Larger harvests have led to
a drop in grain prices in recent weeks. A good harvest season is a
positive for farmers; however they face problems with storing crops.
Due to a lack of storage facilities and processing capabilities,
farmers are forced to sell crops when supplies are high and prices
low. Many farmers are forming cooperatives to improve access to
fertilizers and storage containers. The good harvest should allay
fears of possible food supply shortages in 2008 and early 2009. End
Summary.


2. (U) EconOff and FASOff visited Nigeria's grain belt (Nassarawa,
Plateau, Kano, Katsina and Kaduna States) October 13-17 to meet
local officials, and assess the harvest. Grain production in 2008
is up sharply from the poor 2007 harvest, with large increases in
corn, sorghum, millet, soybeans, rice and cowpea. These more
bountiful harvests were a result of two major factors: beneficial
rain fall patterns and expanded planted area. However, growth was
limited somewhat in 2008 due to the poor availability of fertilizer
(Septel).

Beneficial Rainfall Patterns
--------------


3. (U) In 2007 rainfall patterns in the key growing areas of
northern Nigeria were erratic. The rains ended suddenly at the end
of in September-early for Nigeria--and the late-season dryness
negatively impacted yields.


4. (U) Rainfall has been nearly optimal for key crops during the
2008 growing season. Although rainfall amounts were down from 2007,
there were more rainy days (58 compared to 50 in 2007) and the rain
was evenly distributed throughout the growing season. Also, in 2008
rain in the north extended longer than usual, and as of October 17
rain was still falling in Kano. This late rain will boost yields in
late-maturing sorghum.

Expanded Planted Areas
--------------


5. (U) Because grain prices were very high in 2007, farmers planted
larger areas, including new land and switched to more grain crops in
2008, which also has led to increased harvests. Some farmers have
continued to shift from cotton planting to grains because demand for
cotton is down as a result of the textile industry's collapse. Corn
planting areas have continued to expand farther north into
traditional sorghum areas due to use of new early maturing corn
varieties. Moreover, returns and yields for corn were significantly
higher than for sorghum.

Prices Begin to Fall
--------------


6. (U) Bountiful harvests have caused prices to fall from the very
high 2007 levels. All major crops (with the exception of cotton)
significantly increased production in 2008, with corn up 25%, and
millet, sorghum, soybean and rice up more than 10%. In the past few
weeks prices for soybeans have fallen 20% while those of other
grains have fallen by nearly 30%. Traders at the Dawanau
International Grains Market in Kano (the largest grain market in
West Africa) told EconOff and FASOff that prices are expected to
continue falling in coming weeks as new crop supplies hit the
market.

Storage and Processing Capabilities
--------------


7. (SBU) EconOff and FASOff visited the Plateau State Ministry of
Agriculture and Natural Resources on October 13. The state
commissioner reported the harvest was one of the best due to good
rains and the absence of flooding. However, there is a problem in
handling the post harvest crops because farmers do not have
processing capabilities--a problem for most farmers in Nigeria.
According to the Commissioner, Plateau State produces nearly all of
the potatoes in the country but has no capability to process
potatoes into chips. The state will partner with an Israeli
agricultural company and set up three farm training centers for
diary, vegetables, and other crops.

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8. (U) Farmers and local officials lamented that insufficient
storage facilities and the lack of processing are major problems
nationwide. To better cope some farmers are forming cooperatives to
find storage facilities. Several state governments are buying crops
from farmers and storing them in state owned silos. The lack of
storage facilities results in farmers being forced to sell all their
crops at the worst possible time - at the end of the harvest, when
supply is large and price low. Concurrently, local and state
governments buy the crops from the farmers when prices are low, and
resell them in the market when prices increase.


9. (U) This message was coordinated with ConGen Lagos.

SANDERS