Presentation by Saweda Liverpool-Tasie (Michigan State University) given during the SWAC Seminar on 18 June 2018 at the OECD. The session was moderated by Jonas Gbian, Commissioner, Department of Agriculture, Water Resources and the Environment, UEMOA.

1. Food systems transformation in Nigeria
SAWEDA LIVERPOOL-TASIE, THOMAS REARDON
MICHIGAN STATE UNIVERSITY
JUNE 18, 2018
OECD Seminar: Urbanization, Food Economy, Employment, and Women

2. Food system transformation in Nigeria: What we
now know and what does it mean?
 Food markets are rapidly expanding in Nigeria
Urbanization of consumption (Nigeria urbanization rate from 25% in 1970’s to 50% now)
Actually roughly 70% of food consumption comes from urban consumers
Diets increasingly diversified
Animal protein- 20% of food budget share, fruits and vegetables -10%, nuts and oils-
15%
Volume of maize for feed increased 600% in 12 years (300 thousand - 1.8 million tons)
The rapid transformation is not restricted to urban areas
~75% food purchased in rural areas and 65% of purchased is processed

3. How is this growing demand being met?
Domestic share of volume of products sold in a week by retail outlet type
Kaduna Ibadan
Palm oil Maize Fruit juices
(liquid)
Palm Oil Maize Fruit juices
(liquid)
Stalls in markets 1.00 0.83 0.99 1.00 0.67 0.98
Grocery stores 1.00 0.86 0.97 1.00 0.64 0.96
Small non service
stores
1.00 0.82 0.97 1.00 0.57 0.95
Independent
supermarkets
1.00 0.51 0.73 1.00 0.55 0.71
Rapid growth in small and medium enterprises producing and selling processed and packaged foods

4. Chicken
Farmers
Chickenconsumers
ChickenFeedMaize
Chicken
Traders
Feed
mills
Maize
farmers
Feed
Traders
Urban
Maize
traders
What we studied and how?
~580
~1630
~150
Rural
Maize
traders
~1400~120
~580
Stacked survey approach
~5000 households
The Maize feed chicken system: 3 sets of product value chains
Projections of demand for chicken and many types of fish (income elasticities >1)

5. Chicken
Farmers
Chickenconsumers
ChickenFeedMaize
Chicken
Traders
Feed
mills
Maize
farmers Feed
Traders
Lateral services captured
Urban
Maize
traders
Rural
Maize
traders
Services ( e.g. transportation, storage facilities and information)

6. Lesson 1: The rise of the Nigerian farmer
entrepreneur
The rise of the Nigerian farmer entrepreneur: Chicken farms are
small and medium scale Enterprises
75% of chicken farmers buy chicken feed & 97% use antibiotics
(90% of the smallest farmers) – investments in the business
35% of chicken farmers getting training - Most from private (80% )
83% of eggs produced are sold & 80% of broilers produced are sold
(70% among smallest farms) – highly commercialized
Implication: several linked business and employment opportunities

7. Lesson 2a: The hidden middle in maize supply-
Traders
A North-north and North-south maize supply chain
80% of maize for southern traders comes from north
Maize supply chain partially dis-intermediated
Traders often buy directly from farmers (over 50%)
Average trader in north grosses about $320,000 dollars a year
Traders typically specialized in trading and wholesale
No farming in South and 40% in North, but small share of sales
(10%)
70% of volumes sold is through possession not brokering
 Extremely minimal wastage/loss (< 1%)
Still largely spot exchanges (contracts only about 5% of exchanges)
Millions of maize consumers
Millions of maize farmers
Thousands of maize traders
This hidden middle-largely missing in research & Policy debate but is crucial for maize supply

8. Lesson 2b: The hidden middle in maize supply-
service & logistics
Traders highly dependent on third party logistics services
Only 4% of traders own trucks
Approximately 75% of maize traded is done by third party logistics
50% picked up by buyer through transporters
50% is delivered through third party logistics
There is active warehouse rental and third party services for maize storage
50% of rural traders store and 25% of urban store
Of those urban who store, less than 5% own in the south and 10% in the North.
Others either rent or depend on services/warehouses of other wholesalers
Implication: Need to better understand these 3rd party logistic services and
how they can be supported

9. Summary of Key points:
Food markets expanding and diets changing in Nigeria
Domestic entrepreneurs are responding (upstream and midstream)
These enterprises stimulate the rise of additional services enterprises
These enterprises create entrepreneurial and employment opportunities
“This hidden middle” in the Nigerian food supply chain is crucial for the
entire food system
Needs to be better recognized, understood and supported.
They need to be part of the research and policy debate

10. Thank you!
We appreciate the financial support of The Commercial
Agriculture Development Project (CADP) of the Federal
Ministry of Agriculture (FMARD),
Feed the Future Policy Innovation Lab
&
Feed the Future Nigeria Agricultural Policy Project
Source: Aisha Ibrahim