NIGERIA: PROGRESS REPORT ON THE GLOBAL FOOD SECURITY

UNCLAS ABUJA 000029

SIPDIS

STATE FOR AFR, EEB PASS TO MARISA PLOWEDEN (C),GARY CLEMENTS AND
GEOFFREY SPENCER (EEB/TPP/ABT)
DEPT PASS TO USAID AFR/AA, AFR/SD, DCHA/PPM
USAID FOR DATWOOD AFR/SD, JHILL AFR/SD/EGEA, SBRADLEY OFDA
FAS/USDA FOR KIM SVEC OFSO, PATRICIA SHEIKH OCBD

E.O. 12958: N/A
TAGS: ECON EAGR EFIN ETRD NI IZ
SUBJECT: NIGERIA: PROGRESS REPORT ON THE GLOBAL FOOD SECURITY
RESPONSE

SUBJECT: NIGERIA FOOD SECURITY PROGRAM

REF: STATE 124059


1. (U) SUMMARY: In response to President Obama's Global Hunger and
Food Security Initiative and G-8 members pledge of $20 billion for a
worldwide initiative to address food security, the USG has prepared
a two-year $32.75 million FY 2010 Global Hunger and Food Security
Initiative entitled, "The Agriculture Transformation Program (ATP)
for Nigeria." The ATP is phase one of a four year Global Hunger and
Food Security (GHFS) program. ATP expands USAID's FY 2009 Global
Food Security Response Program and supports the Government of
Nigeria (GON) to implement the Comprehensive African Agriculture
Development Program (CAADP). END SUMMARY.


2. (U) The ATP's Goals and Key Results are:

INCREASE AGRICULTURE PRODUCTIVITY and incomes of 2,200,000
additional poor farmers achieve $350 million sales (at least 35
percent women) by
--Expanding market supply of essential foods by 900,000 tons per
year;
--Creating 250,000 new jobs;
--Increasing yields of rice, sorghum, cowpeas, cassava, maize, and
aquaculture by 50-75 percent;
--Leveraging $150 million public and private funds for agriculture.

REDUCE TRADE AND TRANSPORTATION BARRIERS by
--Improving the trade policy environment;
--Increasing trade along improved roads;
--Improving trade corridor operations;
--rehabilitating and/or building 1,200 kms of rural roads with other
partners.


IMPROVE SOUND MARKET BASED PRINCIPLES by
--Improving the GON policy environment and build capacity for
agricultural development and trade in the framework of CAADP;
--Training 1,000 GON officials in a USG private sector model;
--Revising the agriculture strategy under CAADP;
--Promoting data collection and analysis to support policy
decisions.

ACCELERATE THE PARTICIPATION OF THE VERY POOR AND IMPROVE NUTRITION
by
--Developing a program to address the very poor;
--Designing a nutrition program for two states.


3. (U) ATP will assist Nigeria to reach the Millennium Development
Goal goals of a) Accelerating the GON's efforts to eradicate extreme
poverty and hunger; b) Increasing agriculture-driven growth by 10
percent, leading to 30 percent higher incomes by 2013; and c)
increasing the benefits to, and income of, women. It will also help
the GON to establish a sound enabling environment; develop a
bankable CAADP investment plan; be able to implement a larger USG
program; and allocate at least 10 percent of the federal budget to
agriculture.


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COUNTRY-LED PLANNING
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5. (U) ATP fully supports country-led plans for agriculture,
supports strategic coordination within the USG, and fosters
collaboration with partners such as the World Bank, AfDB, the UK
Department for International Development (DFID),other donors, and
regional organizations.


6. (U) The GON priorities are the 7 Point Agenda and Vision 20:2020,
which includes a "Sustainable Agricultural Development and Market
Access program." The Ministry of Agriculture and Water Resources'
(MAWR) 5-Point Plan to improve agricultural investments are:
--Reform of Agricultural Policy and Regulatory Systems;
--Agriculture Commodity Exchange Market (ACCOMEX) to establish an
agricultural commodity exchange market;
--Raise Agricultural Income with Sustainable Environment (RAISE)
Q--Raise Agricultural Income with Sustainable Environment (RAISE)
commencing with 400 sites;
--Maximize Agricultural Revenue in Key Enterprises to improve
competitiveness of value-added products, leading to increased market
share through private-sector led and market driven growth; and
--Water, Aquaculture, and Environment Resource Management to
intensify aquaculture.

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PARTNERSHIP PLAN AND COORDINATION

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7. (U) The USG program will support GON linkages to the Global Donor
Partnership for Agriculture Food Security and leverage GON,
multilateral partners, and private sector resources. ATP will expand
public-private partnerships, and collaborate closely with the GON's
federal and state investments in agriculture. USAID collaborates
with the Embassy Economic (ECON) section, Foreign Agriculture
Service (FAS) Lagos, Foreign Commercial Service (FCS) Lagos, USAID
West Africa, and Post's PEPFAR team. The US Department of
Agriculture (USDA) will receive ATP funds for key programs in
government-to-government capacity building in policy and
institutional development. USAID will seek to expand the role of US
federal agencies as appropriate. The U.S. Embassy ECON, FAS, and FCS
will play a key role in policy dialogue on trade policy, including
support for the Trade and Investment Framework Agreement. The U.S.
Mission will underscore significant milestones in this food security
program with high-profile or ceremonial public events, wherein the
Ambassador or a senior designee will play a central role. The
Embassy's Public Affairs Section will support such programs with
appropriate publicity in coordination with USAID.

8. (U) USAID is coordinating the ATP design with the MAWR, Commerce
and Industry (MCI),Transportation (MOT),and Finance (MOF, which
oversees the National Customs Service). The USG team is aligning its
program with the CAADP compact, and the new MAWR 5-Point Plan. USAID
will support a CAADP secretariat to foster communication and
coordination.

9. (U) USAID reactivated and is chairing the Agricultural Donor
Working Group (ADWG) to increase policy dialogue with the GON, and
foster collaboration. By agreeing to a single joint framework
internationally (CAADP) and at the country level, partners will
strengthen development effectiveness. Partners include the African
Union New Economic Partnership for Africa's Development Nigeria,
Food and Agriculture Organization, other U.N. institutions, and the
European Union.

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CORE INVESTMENT AREAS
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10. (U) ATP consists of four projects: 1) Increase Agricultural
Productivity, 2) Reduce Trade and Transportation Barriers, 3)
Improve Sound Market-Based Principles for Agriculture Growth, and 4)
Accelerate the Participation of the Very Poor in Economic
Activities.

Increase Agricultural Productivity


11. (U) Increasing agricultural productivity will be achieved
through investments in private sector value chain development,
deployment of technology, significant expansion of the value-added
agro-processing businesses, and expanded lending to agriculture by
Nigerian banks and financial investors. Agro-processors are central
to the value chain and sector development. Agro-processors guarantee
farmers a market for their produce. Financial institutions are more
willing to provide credit to farmers to purchase inputs when the
farmers have a commercial relationship with an agro processor.


12. (U) ATP will assist 750,000 farmers to improve the quantity and
quality of staple commodities (rice, sorghum, cowpea, cassava,
maize, aquaculture, and sesame) in the market and substitute
domestically grown produce for imported produce. ATP will expand on
Qdomestically grown produce for imported produce. ATP will expand on
the highly successful work through the USAID Maximizing Agriculture
Revenues in Key Enterprises in Targeted Sites (MARKETS) Program,
which doubled the income of nearly 350,000 participant farmers.


13. (U) Key sub components of this project include a) increase
Access to Agricultural Inputs and Farm Equipment to improve private
sector distribution, and formation of major seed and fertilizer
alliances will increase the supply of quality seed, fertilizer, and
other inputs to millions of small-holder farmers and stimulate
productivity increases, b) expand Private Sector Agro-processing
Capacity by assisting agribusinesses to expand and diversify their
final product and supply chains, increase private sector business
growth, and establish private sector and government standards for
quality control and grading. ATP will cooperate with the Foreign
Commercial Service to expand business-to-business linkages with U.S.
companies.


15. (U) Additional key elements are: c) Improve Water Management and
Natural Resources: ATP will rehabilitate several key irrigation
systems, and train thousands of farmers in improved water in
collaboration with the GON, the World Bank, and other donors, d)
Improve Post-Harvest Storage of Cereals in which USDA will assist
the GON to design and manage silos and warehouses to store surplus
agriculture grains following harvest, based on private sector

management practices, e) Increase Access to Financing: ATP will
ensure that women farmers and agro-processors gain greater access to
finance. ATP will improve commercial banks' knowledge about
agricultural investment opportunities, increase their use of
existing loan guarantees, and assist banks to provide more
information to borrowers about their financial instruments. The
U.S. Embassy in partnership with the Bank of Industry is encouraging
increased lending by private Nigerian banks to the agricultural
sector and will work with USG institutions to expand this
partnership.


18. (U) Extension service and cooperatives: USDA will develop the
public sector agricultural extension services while USAID will work
with private companies. USDA will assist the GON to expand the
number of, and improve the capabilities of, agricultural
cooperatives.


Reduce Trade and Transportation Barriers


19. (U) ATP will assist the GON to develop and use cost recovery
mechanisms to ensure sustainable road maintenance. Critical partners
include federal and state governments, the World Bank, the AfDB, and
the private sector. A major focus will be to remove trade
bottlenecks at the Port of Lagos and improve transportation corridor
management along the Lagos-Maradi, Republic of Niger and
Lagos-Cotonou, Benin roads. In 2010, USAID will explore establishing
a trust fund with the World Bank and the AfDB to accelerate the
implementation of their loans to the GON that will rehabilitate or
construct farm-to-market feeder roads.


20. (U) ATP will work with the Nigeria Customs Service (NCS),and
support the Economic Community of West African States (ECOWAS)
regional integration agenda, in line with efforts to implement joint
border posts and single windows for trade facilitation. USAID will
assist the GON to complete, disseminate, and implement new policy
standards, and build capacity of the NCS to implement modern customs
techniques.


21. (U) USAID will build the capacity of the MCI and MOF and private
think tanks/universities to address trade policies, including
expanding on the draft GON trade and industrial policy that provides
for a better enabling environment for investors. Trade policy reform
programs are coordinated with new European Commission, DfID, and
USAID West Africa programs with ECOWAS.

IMPROVE SOUND MARKET-BASED PRINCIPLES


22. (U) USAID will finance the International Food Policy Research
Institute (IFPRI) to help Nigeria set priorities for spending on
agriculture and rural development for poverty alleviation. IFPRI
will build the capacity of the MAWR to undertake agricultural policy
research and support the Strategic Analysis Knowledge Support System
(SAKSS) process in Nigeria. USAID will fund a CAADP secretariat to
promote information exchange and CAADP implementation.



23. (U) The USG will build the capacity of MAWR to establish a
strong monitoring and evaluation system, undertake a national
agricultural census, strengthen information systems, and conduct
short-term action research on agricultural policy. USDA will improve
agricultural statistics and information systems and promote use of
biotechnology, food safety, and other agricultural policy
formulation.

Accelerate the Participation of the Very Poor in Economic
Activities


24. (U) ATP will examine ways to: 1) assist the very poor to move
Q24. (U) ATP will examine ways to: 1) assist the very poor to move
from subsistence agriculture to more commercial links to the market;
2) improve incomes of women, who are weakly integrated into the
mainstream economy; 3) identify means to reduce malnutrition in the
rural poor, particularly in northern Nigeria; and 4) assist the GON
to identify means for Nigerian farmers to adapt to climate change.


26. (U) Assist the Very Poor: USAID will form a partnership with the
GON-World Bank Fadama III Program (Fadama) to reach a greater
percentage of the very poor and expand efforts in MARKETS II to
integrate the poor into key value chains. USAID plans to undertake
activities with Fadama in Bauchi and Sokoto, which are USAID focus
states for health, education, and democracy.


27. (U) Increase Women's Income: Under ATP, USAID will expand work
that started under USAID MARKETS to reach 66,000 women and increase
the number of women participating in MARKETS II. ATP will expand its
focus to create more off-farm employment for landless women, and for

those living on small plots of marginal lands.


28. (U) Reduce Malnutrition: Over 10 million rural poor are faced
with malnourishment. ATP will address the root causes of hunger and
malnourishment by linking rural families to Nigeria's economy and by
providing the means to purchase better food. In FY 2010, the USG
team will develop a nutrition program that can be implemented with
anticipated FY 2011 resources.


29. (U) Adapt to Climate Change: ATP will build the capacity of the
GON to develop adaptive measures to respond to climate change in
data gathering; modeling; remote sensing and analysis; and adaptive
research on cropping systems, integrated resource management,
policy, and water resource management.

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CAPACITY BUILDING
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30. (U) USAID will build the capacity of the GON, the private
sector, and civil society to implement a scaled-up food security
program. The Capacity Building Plan will strengthen skills of 50-100
individuals to support CAADP. The USG will expand its current
capacity building of key GON organizations, e.g., MAWR, the
Ministries of Commerce and Industry; Transportation (MOT); and the
Nigerian Customs Service. Capacity of MAWR will focus on strategic
and investment planning, market development, rural road
construction, and agricultural census. Assistance for the MOT will
improve transportation corridor management, and port administration
in Lagos.



31. (U) Private sector strengthening will expand to assist agro
processor, small- and medium-scale farmers (particularly women),
associations, cooperatives, shippers, transporters, and banks.

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MANAGEMENT PLAN
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34. (U) The USAID Mission Director will provide overall management
of the GHFS Initiative in Nigeria. The Director will convene
quarterly meetings of a USG GHFS Working Group to share information
about the overall USG, GON, and donor policy and programming.
Participants will include the U.S. Embassy ECON, FAS Lagos, FCS
Lagos, USAID West Africa, and the PEPFAR team. The USG GHFS Working
Group will brief the Ambassador, the Consul General, Lagos, and
stakeholders.


35. (U) Monitoring and evaluation are an integral part of GHFS
Initiative. Scaling up in 2011 will be influenced by performance
data and other analytical information collected from FY 2009 and FY

2010. ATP will use standard harmonized indicators with other donors
under CAADP. Mission management will periodically review progress
through formal Annual Performance Plan and Reports, and special
reporting required for GHFS.


36. (U) Staffing Requirements: The new staffing level is an estimate
of needs if the FY 2011 budget is increased significantly. These
requirements will be reviewed in conjunction with a mission wide
review of overall staffing needs.

Current staff
--Office Director USDH (OE funded rotation 2010)
--Deputy Director USDH
--Senior Agricultural Specialist (FSN)
--Senior Agriculture Specialist (FSN)
--Agriculture Business Specialist (FSN)
--Trade and Investment Advisor (PASA)
--EGE Office manager (FSN).

New Core Staffing
--Senior Agriculture Specialist (TBD)
--Agriculture CAADP Coordinator (TBD)
--Agriculture Finance Specialist (FSN)
--Rural Road Infrastructure Engineer (FSN).

New support staff
QNew support staff
--EGE Program assistant (FSN)
--Program officer (FSN)
--Acquisition and assistance specialist (FSN)
--Financial analyst (FSN)
--Voucher examiner (FSN).


37. (U) Budget and Obligation Plan

Budget Allocation of $32.75 million FY 2010 to Core Investment Areas


Core Areas Total GHFS

Increasing Agriculture
Productivity $21.75 m* $20.25 m
Reducing Trade &
Transportation Barriers $ 5.25 m** $ 3.0 m
Improving Sound Market-Based
Principles $ 5.0 m $ 5.0 m
Accelerating the Participation
Of the Very Poor $ 0.75 m $ 0.75 m
*includes $1.5 million Micro Enterprise earmark
**Total includes $2.25 m trade initiative funds
A budget against Foreign Assistance Framework is available as
needed.

SANDERS