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Essential non‐essentials: COVID‐19 policy missteps in Nigeria rooted in persistent myths about African food supply chains

Food supply chains are extremely important for food access and livelihoods across Africa, but their role is often overlooked and underappreciated. Under normal conditions, the gap between myth and reality can result in the design of policies and programs with limited or negative impacts on food security and welfare. The shock of COVID‐19 has heightened this disconnect, with potentially dire consequences for food security.

Aligning macroeconomic policies for agricultural transformation in Africa

This chapter discusses how accounting for macroeconomic perspectives when establishing agricultural policies can help African governments ensure that their agricultural sectors become productive, competitive, and lucrative across agricultural value chains. It presents the two-way linkages between agriculture-led growth strategies and macroeconomic policies by focusing on price, fiscal, monetary, exchange rate, and trade policies.

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by Aminou Arouna, Guillaume Soullier, Patricio Mendez del Villar, Matty Demo, and Sara Gustafson

Photo by World Bank

Introduction

Around the world, governments and populations continue to grapple with the effects of the COVID-19 pandemic. Of particular concern are the potential impacts of the pandemic and related lockdown measures on food security. While global food supply chains have been generally untouched by COVID-19 and AMIS forecasts strong trade in 2020 for major food commodities, local and regional food value chains may not fare so well, particularly in developing countries. A new paper published in Global Food Security examines the potential impacts of COVID-19 on rice value chains in West Africa and identifies several policy options to help prevent increases in food insecurity in the region.

 

West Africa continues to face high levels of food insecurity, with almost 56 million people undernourished in 2018. As a staple in regional diets, rice has a substantial role to play in West Africa’s food security, and regional policymakers have ramped up investments in domestic rice value chains since 2008. However, rice consumption continues to outpace domestic production, and many consumers favor imported rice over lower quality domestically produced rice. This leaves the region reliant on rice imports — and vulnerable to supply disruptions and price spikes.

Policy options for mitigating impacts of COVID-19

The new study finds that global rice prices saw a steep rise between December 2019 — the initial outbreak of COVID-19 — and March 2020. While rice prices stabilized in May, it is not yet clear how rice prices will respond to a potential second wave of the pandemic.

 

The study also examines several channels through which COVID-19 could affect West Africa’s domestic rice value chains. It finds that the pandemic could significantly  negatively impact paddy procurement, financing, human resources and labor, and marketing and sale of rice in the region. Value chain logistics and rice processing, on the other hand, should not experience marked effects.

 

Farmers are the main suppliers of paddy rice in West Africa, so impacts at the farm level could be important for overall value chain functioning as well. According to the authors, farmers’ access to crucial inputs like fertilizers, seeds, credit, and improved technologies and training could be diminished by the COVID-19 pandemic. At the same time, farmers may also have a harder time selling their paddy because of lockdown restrictions preventing access to open air markets and a lack of digital marketing capabilities.

 

To address these varied risks to domestic rice value chains, policymakers in West Africa should take several steps. In the short term, they should provide financial support for rice millers, both traditional and modern, in order to help improve coordination between farmers and millers, maintain continuity of milling operations, and assist in paddy procurement. This support could take the form of interest-free loans and should include safeguards to prevent speculation. In addition, movement of food should continue to be unrestricted in the region, and lockdown measures on millers should be avoided through strict sanitation requirements. Governments can also buy local milled rice to use in national and regional food stocks in order to bolster food security for vulnerable populations.

 

In the medium term, governments should focus on creating an enabling environment that fosters both domestic and foreign direct investment in modernized rice value chains. They should also build a regulatory framework for contract farming in order to reduce reliance on informal markets and make value chains more resilient to shocks like COVID-19.

Upgrading West Africa’s rice value chain

A more in-depth look at the state of upgrading West Africa’s rice value chains will be presented at an upcoming webinar, co-hosted by the CGIAR Research Program on Policies, Institutions and Markets and IFPRI’s Food Security Portal. The webinar will be held on October 27 at 10:00 EST. 

 

About Authors/Citations

Sara Gustafson is a freelance writer.

Citation: Arouna, A., Soullier, G., Del Villar, P. M., & Demont, M. (2020). Policy options for mitigating impacts of COVID-19 on domestic rice value chains and food security in West Africa. Global Food Security, 26(2020) 100405.

 

 

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by Nhuong Tran, Kelvin Mashisia Shikuku, and Sara Gustafson

Photo by World Bank

Introduction

Although food safety is an important pillar of food and nutrition security, it is often overlooked, particularly in developing country contexts. In 2010, foodborne illnesses caused 420,000 deaths and 33 million disability-adjusted life years (DALYs) worldwide, with Africa suffering most. Fish and seafood safety poses a particular concern. Consumption of these highly nutritious but highly perishable foods has increased in Africa in recent years, as have public and private interventions to address fish and seafood safety. As aquaculture grows to meet increasing demand, associated health risks due to chemical (specifically antibiotic contamination) and biological hazards have also increased.

 Governments and the private sector in the global south have recognized the need to regulate aquaculture activities to ensure a supply of safe, high-quality fish products. In response to the need for a greater understanding of farmed fish value chains and the growing demand for seafood safety, a new study, Demand for seafood safety and environmental sustainability certification standards in sub-Saharan Africa: The case of Nigeria, was undertaken by WorldFish. The study used a bidding experiment involving fish consumers at points of purchase in four divisions of Lagos state, Nigeria to assess their willingness to pay (WTP) for food safety; value chain performance and governance assessment; and a randomized control trial (RCT) to assess farmers’ participation in food safety certification schemes and its potential impacts.

Willingness to pay for food safety

Results of the bidding experiment showed that consumers are willing to pay 416 Naira for 500g of uncertified live catfish. This increased marginally (≈3.4%) to 430 Naira for 500g of safety certified live catfish. Consumers’ WTP for 1000g of live catfish increased from 594 Naira for uncertified fish to 619 Naira for certified fish, corresponding to a 4.2% increase in WTP. For smoked fish, consumers were willing to pay 852 Naira for 250g of uncertified fish, 5.3% lower than the same amount paid for safety certified smoked fish. Consumers’ WTP was highest for 500g of certified smoked catfish: 1,505 Naira compared to 1,258 for uncertified fish, representing 19.6% increase in WTP. These results show consumers’ overall WTP for certified fish.

There also appears to be asymmetry in consumers’ valuation of fish safety. Consumers paid higher premiums for larger fish than smaller fish and for smoked than live fish. Figure 1 presents bid distributions for the eight fish products studied. The bid distribution for certified fish stochastically dominates that of uncertified fish across all sizes and forms of fish products.

Figure 1. Distribution of consumer bids for safety certified and uncertified fish products Notes: NLM=Uncertified, live, 500g catfish; NLL=Uncertified, live, 1kg catfish; NSM=Uncertified, smoked, 500g catfish; NSL=Uncertified, smoked, 1kg catfish; CLM=Certified, live, 500g catfish; CLL=Certified, live, 1kg catfish; CSM=Certified, smoked, 500g catfish; CSL=Certified, smoked, 1kg catfish.

Value chain performance and government assessment

Results from the value chain performance and governance survey showed that Nigeria’s fish value chains are economically viable, with over 80% of post-farmgate value chain actors making a profit. Analysis of cost composition shows that labor and transport account for about 65% of the total variable costs along the post-farmgate segments of farmed fish value chains. This suggests substantial employment creation along the value chains.

At the production stage, aquaculture operation in Nigeria is male-dominated. However, women’s participation in aquaculture activities increases considerably at post-farmgate stages of the value chain. At the retailer level, women substantially dominate men in terms of employment across all age categories. A similar pattern is observed at the processor level, although the differences are not as wide as those observed at the retailer level. However, at the wholesale stage, more men than women are employed across different age groups, except for 36-45 years old; in this age group, the proportion of women employed in wholesale is four times that of men.

 

Can premiums from domestic markets be transferred to producers for fish quality and safety improvement?

Descriptive evidence from key informant interviews and producer household surveys revealed farmers’ willingness to participate in fish food safety certification schemes In Nigeria. More than 70% of the 648 producers interviewed indicated they would be interested in participating in a certification scheme if one were to be established. The most important perceived benefits of aquaculture certification, from a producer’s perspective, include higher price and higher demand for fish. Among the major perceived barriers to participation in certification are high costs, lack of trust in the certifying agents, and difficulty satisfying certification requirements. An RCT is currently ongoing to assess the feasibility of fish food safety certification among aquaculture producers in Nigeria and to evaluate the potential welfare impacts of participation.

Calling for stakeholder actions to improve fish food safety in Nigeria

Several actions are needed to drive forward improvements in fish food safety in Nigeria. These include:

• upgrading and aligning fish value chains to communicate willingness to pay signal from consumers to producers;
• building capacity and improving coordination for implementing fish safety certification; and • improving certification scheme design and implementation (e.g., paying attention to asymmetry of certification schemes).

About Authors/Citations

Nhuong Tran (n.tran@cgiar.org) and Kelvin Mashisia Shikuku (k.shikuku@cgiar.org), scientists with WorldFish are principle investigator and co-investigator on “Demand for seafood safety and sustainable certification standards in sub-Saharan Africa: the case of Nigeria” project, funded by CGIAR Research Program on Policies, Institutions and Markets (PIM), Fish Agri-food Systems (FISH), and Swedish University of Agricultural Sciences (SLU).

 Sara Gustafson is a freelance writer.

Citation: Shikuku, K. M., Tran, N., Pincus, L., Hoffmann, V., Lagerkvist, C. J., Akintola, S. L., ... & Muliro, J. (2020). Experimental and survey-based data on willingness to pay for seafood safety and environmental sustainability certification in Nigeria. Data in Brief, 105540.

 

 

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