World Bank Documents

DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized Not For Public Use

PA15 Vol. 2 Public Disclosure Authorized AGRICULTURAL SECTOR SURVEY

NIGERIA

(in three volumes)

VOLUME II

ANNEXES 1 - 6 Public Disclosure Authorized

January 26, 1973 Public Disclosure Authorized

Agriculture Projects Division West:ern Africa Regional Office

This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. CURRENCY EQUIVALENTS

Currency Unit: Nigerian Pound (E)

Prior to December 20, 1971:

US$ 1 = N 0.357 NE13 = US$ 2.80 NE 1,OO,000 = Us$ 2,800,000

Since December 20,1971:

US$ 1 NE 0.329 NE 1= US$ 3.04 N! 1,000,000 US$ 3,040,000

Fiscal Year

April 1 - March 31

Weights and Measures

Unless otherwise stated, the ton used in this report is the long ton.

1 ton (t) = 2,240 lbs =.1.016 metric (m) tons 1 m ton = 2,205 lbs = 0.98 ton

1 acre (ac) = 0.405 hectares (ha) 1 ha = 2-.47 ac

Abbreviations

A list of abbreviations used in this report appears on the page following the Preface. NIGERIA

AGRICULTURAL SECTOR SURVEY

VOLUME II - ANNEXES 1-6

Table of Contents

ANNEX NO. Page No

1 LAND CLIMATE AND SOILS

Land and Population ...... 1 Climate ...... 2 Vegetation ...... 2 Soils ...... 3 Present Land Use ...... 6

2 DEMAND PROJECTIONS

Overview ...... 1 Rubber ...... 3 Oil Palm Produce ...... - 4 Cocoa ...... 5 Groundnuts ...... 6 Cot:ton ...... 7 Livestock ...... 8 Jut:e and Kenaf ...... 10 Food Crops ...... 11

3 ANNUAL CROPS

Production Zones and Farming Systems ...... 1 The Major Annual Crops ...... 2 Policies and Programs ...... 13 Research and Extension ...... 15 Input Supply, Marketing and Processing ...... 17 Investment and Preinvestment Activities ...... 20 Appendix 1 - Area and Production of Crops Appendix 2 - Returns to Labor Appendix 3 - Cotton Grades and Prices

4 TREE CROPS

A. Rubber ...... 1

The W4orld Situation ...... 1 Nigeria's Rubber Industry ...... 1 Program for Rubber ...... 6 The Nucleus Plantations Approach ...... 9 -2-

ANNEX NO. Page No.

B. Oil Palm ...... 14

The World Situation ...... 14 Nigeria's Oil Palm Industry ...... 15 Program Implications ...... 17

C. Cocoa ...... 23

Growing Conditions ...... 23 The Nigerian Cocoa Industry ...... 24 Future Production ...... 25 Appendix 1 - Outline of a Rubber Project Appendix 2 - Outline of an Oil Palm Project

5 FORESTRY

A. The Current Situation ...... 1

Forest Resources and Role in the Economy ...... 1 General Policy and Management ...... 2 Forest Industries ...... 3 Regeneration ...... 5 Marketing ...... 6 Forest Organization and Staff ...... 7

B. The Basic Problems of Forestry Development ...... 8

Implication for Forestry Development ...... 10 Implementation Policy ...... 11 Improving Utilization ...... 16 Research and Manpower ...... 17

C. Investment Opportunities ...... 20 Pulp Mills ...... 20 Integrated Industries ...... 21 Plantations ...... 21 Appendix 1 - Forest Estate of Nigeria Appendix 2 - Timber Exports by Product Classes Appendix 3 - Staff Numbers Appendix 4 - Forecast oE Total Wood Consumption Appendix 5 - Forecast of Total Wood Consumption in the Savanna Region

6 IRRIGATION PLANS AND PROSPECTS

A. Introduction ...... 1

Need for Irrigation ...... 1 Land and Water Resources for Irrigation ...... 1 -3-

ANIEX NO. Page No.

Existing Irrigation ...... 5 Development Plans ...... 6

B. Development Plans ...... 7

Irrigable Land Potentials ...... 7

C. Problems and Constraints ...... 16

Ongoing Schemes ...... 16 Future Projects ...... 17

D. Prospects for Irrigation ...... 19

Economic Possibilities for Irrigation ...... 19 Priorities and Scheduling ...... 20 Investrtents ...... 21 Studies ...... 21 Appendix 1 - Potential Irrigation Projects Appendix 2 - Existing Irrigation Projects Appendix 3 - Kano-Hadejia River Valley Studies

ANNEX 1 Page 1

NIGERIA

AGRICULTURAL SECTOR SURVEY

LAND, CLIMATE AND SOILS

Land and Population

1. The 12 states of Nigeria comprise 356,700 sq mi. The six northern states (North-Western, North-Central, North-Eastern, Kano, Benue-Plateati, and Kwara) cover 79% of total area, but, with the exception of Kano State, have relatively low population densities. The three eastern states (East-Central, South-Eastern and Rivers) account for 8% of total area, and in some locations have more than 1,000 persons per sq mi. The Western State, with 8% of total area, averaged 326 persons per sq mi in 1963, and Mid-Western State 170 persons.

Table 1: POPULATION AND POPULATION DENSITIES

Area Population/ % of '000 % of Per Sq Mi Total Persons Total Sq Mi

Northern States 281,782 79 29,809 54 106

North-Western 65,143 5,733 88 North-Central 27,108 4,098 158 North-Eastern 1n5,300 7,893 78 Kano 16,630 5,775 339 Benue-Plateau 38,929 4,009 95 Kwara 28,672 2,399 84

Western State 29,100 8 9,488 17 326

Mid-Western State 14,922 4 2,536 4 170

Lagos 1,381 (0.4) 1,443 3 1,045

Eastern States 29,484 8 12,395 22 420

East-Central 11,310 7,228 711 South-Eastern 11,166 3,623 263 Rivers 7,008 1,544 233

Nigeria 356,669 100 55,671 100 156

/1 1963 Census. Source: Federal Office of Statistics. ANNEX 1 Page 2

2. The land rises gradually from the low-lying coastal areas of the south as mangrove and freshwater swamps give way to tropical high forests and successive belts of savanna land. The Niger river, flowing from north- west in Dahomey, and the Benue, flowing from Cameroon on the east through this savanna, converge at Lokoja, and flow about 250 mi southward into the great Niger Delta and the Atlantic Ocean. North of these river valleys, the park-like savanna predominates into Sudan savanna over the northern border and into the Sahara desert. In the north-central part of the country, a great plateau rises as a steep escarpment from the riverain plains of the Niger-Benue to an average height of 2,000 ft above sea level, with ranges of hills 5,000-6,000 ft around Jos. There also are highlands in the east along the Cameroon border. The amount of highlands, however, is limited. More than 90% of total area is less than 2,000 ft above sea level; almost one-half is less than 800 ft.

Climate

3. Nigeria's climate is tropical -- humid tropical in the south and dry tropical in the north. Temperatures along the southern coastal area vary from 70° to 90°F, but in the north range more widely, reaching over 1000 F and sometimes dropping below 500F. Annual rainfall ranges from more than 160 in in the south-east to 20 in and lower in the north-east. There are two weather seasons: the rainy season, which usually lasts from April to November in the south and from May to October in the north, and the dry season during the rest of the year. The north has periods of up to seven months with less than one inch of rain (see Map of Ecological Zones, Volume I). During the dry months, north-east trade winds blow from the Sahara, bringing a dry, dustladen wind known as the harmattan. For a few days each year, the wind is felt as far south as the coast. In the wet months, a south-west monsoon blows from the Gulf of Guinea, bringing, rain.

Vegetation

4. Vegetation can be broadly divided into east-west parallel bands, ranging from mangrove and fresh-water swamp forest along the coast to closed high forest in the south and open thorn savanna in the north. There is some grassland on the Jos Plateau in the center of the country and some mountain forest and grassland on the Mambilla Plateaiu in the south-east along the Cameroon border. About 80% of the country is covered by savanna of different types. Table 2 below lists the vegetation zones and approximate areas of each, moving from mainly north to south, and see Map of Ecological Zones. ANNEX 1 Page 3

Table 2: VEGETATION ZONES

Approximate Range Approximate Zone of Annual Rainfall Area (in) ('000 sq mi) Savanna

Sahel less than 20-20 11 Sudan 20-40 90 Sub-Sudan 30-50 53 Northern Guinea 40-60 44 Southern Guinea 40-60 51 Derived savanna 50-80 49 Total Savanna 298

Forest 50-100 40

Freshwater swamp 60-160 6

Maggrove 60-160 7

Plateau 60-80 3

Montane 60-80 2

Total Nigeria 356

Source: Areas calculated from Map 2 in FAO Savanna Forestry Research Station Interim Report, 1970.

Soils

5. Although soil surveys have been underway for some time, no detailed, reliable soil map of the entire country is yet available. The FAO, however, prepared a Soil Map of Nigeria (on a scale of 1:5,000,000) based on the Soil Mtap of Africa prepared by the former CCTA and incorporating more recent field-soils data.

6. According to this map, the bulk of Nigerian soils are ferruginous tropical soils, which cover a large portion of the savanna zones and the forest zone of the western area. Ferrasols, the next largest group of soils, are in the forest zone and in the belt extending along the Niger and Benue Rivers. Lithosols occur in association with the ferruginous tropical soils in the plateau and montane zones and the parts of the northern Guinea, Sub- Sudan and Sudan savanna zones. Alluvial soils occur around Lake Chad, in the Niger and Benue River valleys, and in the Delta and along the coast (see Table 3). ANNEX 1 Page 4

Table 3: MAJOR SOILS GROUPS Area Class- if ied Soil Group Description Distribution Potential ('000 sq mi)

111.7 Ferruginous Sandy surface Savanna zone and Less suitable for mod- Tropical horizon overly- forest zone of ern agriculture than soils ing clay accum- Western area. finer textured ferra- ulation with sols because low water- weak, subangular, holding capacity ex- blocky struc- poses soils to droughts ture. and subsurface horizons may cause water logging. Very sensitive to erosion.

54.5 Ferrasols Deep, strongly Tropical raw Finer textured are weathered char- forest in south among soils with high- acterized by and in belt ex- est potential due to friable consis- tending along favorable physical tency, good Niger and Benue properties and resis- root penetra- Rivers. tance to erosion. tion. Range in Suitable for wide range color from red of crops. to yellow.

50.0 Lithosols Occur in associ- Very limited. ation with Fer- ruginous tropical soils plateau and montane zones, in central part of northern area and in east along Benue and Gongola Rivers.

32.0 Alluvial Do not show Around Lake Depends on physiochemi- (including marked profile Chad, in Niger cal characteristics of regosols) differentia- and Benue Val- sediments on which tion. leys and in the formed, and on texture Delta and along and salt content. Res- coast. pond well to irrigation and often require drainage works. ANNEX 1 Page 5

Area Class- ified Soil Group Description Distribution Potential ('000 sq mi)

12.6 Semiarid Characterized Northern part of Can be substantially brown and by accumulation country under improved with irriga- reddish- of organic mat- semiarid condition. brown soils ter in surface tions. horizon; underlying horizon brown to reddish-brown with subangular, blocky structure. Often calcareous.

4.2 Vertisols Heavy texture, Occur in depres- Main difficulty is low thick, dark- sional areas, workability due to colored surface mainly in North physical properties. horizon. East along Gongola and Benue Rivers.

2.3 Saline and Around Lake Severely limited. hydromorphic Chad.

268.1 - Total Area Classified

356.7 - Total Area of Country

7. The FAO also appraised Nigeria's soils on the basis of properties which most directly influence land-use and productivity -- effective soil depth, soil moisture, drainage, soil nutrients, aeration, workability, and erodibility. These were combined into a rating system with five levels of productivity. Using this system, the FAO measured 54 soil regions in Nigeria and classified their present productivity, then their potential productivity based upon responses to improvements, such as irrigation, drainage, stone removal, deep plouglhing, fertilizers, organic matter additions, erosion control, and land-clearing, if they were made where indicated. The results of these two appraisals are shown in Table 4. ANNEX 1 Page 6

Table 4: SOIL PRODUCTIVCTY

Productivity Present Potential (million (million ac) ac) %

1. Very high 0 0 7.7 3 2. High 12.5 5 102.5 46 3. Medium 71.5 32 68.4 30 4. Low 104.7 47 21.9 10 5. Very low 36.7 16 24.9 11 /1 Total area surveyed- 225.4 100 225.4 100

/1 Total area of Nigeria is 228.3 rnillion ac.

8. The FAO concludes that, given present conditions, about 37% of Nigerian soils, some 84 million ac, are of medium and high productivity and reasonably suitable for agriculture. This figure does not include areas that might be suitable for range. It also concludes that, by applying modern technology and making needed improvements, Nigeria could expand the area of very high, high and medium productivity to about 179 million ac. The potentials are discussed below in general terms (also see other Annexes related to various crops, irrigation, livestock, and forestry development).

Present Land Use

9. Data regarding present land use in Nigeria are conflicting. The FAO Production Yearbook for 1969 gives 53.9 million ac (1961), or 24% of total area, as arable land and land under permanent crops, including temporary fallow. An additional 78.1 million ac, 34% of total area, is classified as forest. Oyenuga, quoting the Federal Office of Statistics, gives 20.0 million ac, about 9% of total area, as being under farm and tree crops, not including fallow, and 20.8 million ac in forest reserves. A 1968 CNSRD survey estimated that about 28.9 million ac of arable and tree crops, 13% of total area, were harvested.

10. As the figures above suggest, land still is relatively abundant in Nigeria. Taking the FAO's figures of 84 million ac presently suitable for agriculture, the area cropped would occupy 25-35% of this land and only 11-16% of the 179 million ac judged potentially of very high, high and medium productivity. With traditional shifting cultivation practiced widely, much of the land farmed at any time is in bush fallow. There also are large areas which are not farmed at all.

11. Most of the country's agricultural production is concentrated in a relatively few areas -- mainly in the tree crop belts in the south and in the groundnut and cotton belts of the north. These areas also have the highest population densities. Itmmany, population pressures on agricultural land have ANNEX 1 Page 7

become serious. Fallow periods under shifting cultivation have become too short to restore fertility in the most densely settled areas of the southi- east and north. In addition, the extension of cultivation in the north has reduced the grazing area for nomadic herds, resulting in over-grazing and erosion.

12. In contrast, a whole middle belt extending east to west, lying mainly between 7° and 10°N, is relatively under-populated and under-farmed. Comprised largely of Southern Guinea and Derived Savanna Vegetation Zones, the soils are classified by FAO as potentially of good and medium productivity. Annual rainfall is in the 40-60 in range on the average, with a shorter dry season than farther north. Only five or six months have less than 4 in. Population densities are below 200 persons/sq mi and in much of the belt below 100. While it is not possible to estimate the area involved with any precision, it probably is in the neighborhood of 75 million ac.

13. Relatively little clearing would be needed to develop this savanna land. The prevalence, however, of tsetse fly is a major obstacle. Elimination of tsetse, now technically feasible, can be economic in the middle belt, provided the areas are settled and the land brought into continuous and intensive use.

14. According to FAO, the middle belt can become the mixed-farming area par excellence of Nigeria. North of the economic limit for tree crops, the region is ecologically suited to field crops. With relatively high rainfall and short dry season, it can grow a wide range of crops, including annual and perennial fodder. A system of permanent farming, which will maintain fertility and avoid erosion without falling back on traditional shifting cultivation and "bush" fallowing, would be required. Thus, livestock, for both manure and draft power, would be an essential element.

15. Unquestionably, the vast, underutilized middle belt offers great opportunity for future development. It could provide needed land and live- lihood for Nigeria's rapidly swelling agricultural population, relieving pressures on land in areas of concentration and helping stem the growing migration to urban centers. The middle belt also could produce much of the country's food and raw materials requirements, bringing badly needed animal proteins to the protein-deficit south as well as better supplying urban and semi-urban centers in the north.

16. Relatively little, however, has been done to date toward developing the middle belt. Nigeria has cleared some 26,000 sq mi of tsetse, and plans have been drawn up to clear an additional 63,000 sq mi over the next 15 years. Little of this area falls in the middle belt, though, and, in any case, no integrated plans have yet been developed providing for both eradi- cation, settlement, and land use. Given the likely high costs of eradica- tion_/ and settlement, it is essential that both the techniques of eradi- cation and maintenance from tsetse re-infestation as well as the various 1/ Estimated at US$500 per sq mi for the Sudan and Sub-Sudan Vegetation Zones rising to about US$2,000 per sq mi for the more densely foliated Guinea Savanna Zones (FA)). ANNEX 1 Page 8 anproaches to land settlement and land use be i:ried out in a pilot nroject or nrolects before embarking on a large-scale lprogram. nther areas of low nopulation are mainlv in the NTiRer Delta and south and east of the Cross river. The potential for settlement in these areas also should be investigated thorough lv.

17. In the meanwhile, it shoutld he possible to intensify present cultivation in manv areas hy reducing the period of fallow, using fertilizer, cron rotation, and other improved cultural Practices to preserve fertility and control erosion. PoDulation pressures in much of the south and in Kano State in the north alreadv have forced such a reduction in fallow. The original cropping cycle of 10-15 years in large segments of the tree-crop bel t has been reduced to five vears. In dense:Ly-populated areas, the average fallow period is down to two vears, or is eliminated altogether.

1q. Thus, there is a need to introduce settled or permanent systems of farming, aiming at continuous use of the land by the same individual and emnloving cultural practices to Dreserve fertility and control erosion in manv areas where nopulation pressures are high. The prospects for both extending ana intensifving cultivation through irriRation are discussed in Annex 6.

Land Tenure

10. Northern States. Land is owvned bv the State and all State -overnments have Lands Divisions which have prernared cadastral surveys of most large towns for the nurposes of town planning and allocating of building and industrial develonment plots. Riphts of usage of agricultural land are allocatel hv .LocalGovernment Authoritv (L(A) at the village area level (hv village heads) . Comnnlainants have recourse to district heads and LGA rotincil.ors for Land or, if still dissatisfied, District and Area Courts of Tas

TLnnd tenure is on the basis of customary usufruct. Where nonulation/farminR pressures are light, i.e. most rural areas except Kano State and narts of the high plateau in Benue P'Lateau (where tin mining has mnade the local peoole highlv conscious of land values), few land tenure nroblems arise between natives except at LGA and state boundaries. A problem which may become greater is, however, developing in parts of the north where margins of the traditional grazing land of the nomadic Fulani are being oc- cupied for settled agriculture. The Fulani have no land rights recognized bv lawq or custom and so have no redress from these encroachments.

?1. In Kano State and in areas fringing townships, land use rights are heing increasinglv sold (il legally), apparently with the knowledge of adrministrative officials. As the law stands at present, cash can change hands between present and notential land users onlv as comnensation for stand- i-ng crons and economic trees -- such as oil. palms, shea nut, dorowa (Locust B3ean) -- and for the estimTated value of annual. crops on a time basis. Dif- ferent rates anplv for u3land and fadama (rive-r flood plain).

comnensation rates are not universally applied, depending on nonulation nressures. and there Is at present no legal. extinguishment of customarv usage rights except on land taken over by the State. The State AINNEX 1 Page 9

can then lease land for 40 years to a non-native of the State or for 99 years to a native of the State on the basis of a Statutory Right of Occupancy. Chapter 59 in Volume II of the 1963 edition of the Laws of Northern Nigeria, which is still extant, reads thus:

'"No single right of occupancy shall be granted to a non- native (of the State in question) in respect of an area of land in excess of 1,200 acres if granted for agricultural purposes or 12,500 acres if granted for grazing purposes without the consent of the Governor in Council (Military Governor)."

23. Ministries of Natural Resources in the northern States are budgeting up to EN 20 per acre for compensation for land taken over for agricultural projects, such as Farm Institutes. These are usually located near to small towns. The land compensation factor should be borne in mind when considering proposals for agricultural developments such as plantations near existing centers of population, or on land with high populations of wild economic trees which are harvested by the local people, since compensation could be a heavy development cost. However, if proposed developments can be seen to be of potential benefit to present land users, compensation may be waived - given good public relations work by project proponents with the State Government and the LGA concerned.

24. If a LGA or State Government is the executing agency of a project it can issue Certificates of Occupancy on a time basis for land witlhin the project, applying any conditions it chooses to such certificates. It can then exercise full control of land use by its tenants. This system applies on many existing irrigation, fadama plowing, and soil conservation projects in the Northern Stal:es.

25. Southern States. Although the details of the system vary from one community to another, and there are, therefore, as many different land tenure patterns as there are ethnic groups, nevertheless, all land tenure systems in the coastal states of Nigeria derive from a tradition of communal rights to the use of a prescribed area of land, which belongs to a family, vast or small.

26. This traditional system is based upon a number of concepts which are common to most of tropical Africa. Four of the more important are:

(a) The land is regarded as the joint property of the community and there is no basic concept of individual rights of permanent owner,hip. A person therefore is not entitled to dispose of it to anyone outside of the community. Hle may, however, transfer his temporary rights in the land to any other member of the community, such as a relative, with the consent of the head of the community (chief);

(b) The right of an individual to obtain land for farming within the area to which the community lays claim is derived from ANNEX 1 Page 10

his membership in the landholding community, whether by birth or by adoption through marriage;

(c) For each land-owning group there is a single traditional custodian of the group's rights, who exercises control over the land of the group and allocates parcels of it to members in accordance with the traditional law and custom. However, this custodian (chief) does not have any superior rights in the land, compared with other members of the group; and

(d) Any individual rights which a member of the group may have over a particular piece of land only continue for as long as he actively cultivates the soil of the plot in question. As soon as cultivation ceases, and *the fallow period begins, the land reverts back to the community.

27. The traditional concepts regarding land usage evolved during the pre-cash-crop period when the cultivator's only requirements were in respect of land for the growing of annual food crops. Within the various land-owning groups, the customary rules of the allocation, inheritance, etc., have never been committed to writing, and the way in which they are applied depends on the memory of the person authorized to allocate land, and the group of elders who advise him. Consequently, the details of application of customary law are in a state of continuous modification. The rule of modification has been considerably accelerated, owing to the influence of various factors such as the adoption of a sedentary way of life by people who were formerly nomadic; the rapid growth of population, which has increased the demand for usable land as a source of both food and income; and the introduction of cash crop for export, which has led to an appreciation of the value of land as a source of wealth.

28. The introduction of permanent tree crops, such as cocoa, rubber, and cultivated oil palm, has raised certain complications. In the early stages of establishment of a tree crop, plantation food crops are interplanted between the rows of trees. However, food crop planting ceases when the trees have reached a certain size. According to traditional ideas, a tree is the property of the man who plants it, even when the land upon which it stands has reverted to the ownership of the group and, consequently, there has been and still is much obstruction from the side of the conservative allocators of land. Although this attitude has eased somewhat in the Western State, the resistance is still quite strong in the Midwest State.

29. Distribution of land among the adjoining communities has been, and is still, giving cause to intercommunity friction, with some of the more fortunate communities claiming large areas of unused land, considering these to have been trespassed on by members of less fortunate groups, who have inadequate land. ANNEX 1 Page 11

30. In some of the more over-populated areas of the southern states, fragmentation has become a serious problem, and it is becoming a major obstacle to improved land use, and more efficient farming practices. Though the seriousness of this matter is realized by all the states concerned, so far, no effective means of solving the problem have worked out, due to complete lack of cooperation on the part of the villages concerned.

31. The system of communal ownership is not suited to present-day requirements in respect of the production of cash crops. Until restricted individual rights of ownership and inheritance are formally recognized, the occupant of a piece of agricultural land has no real incentive to try to maintain or improve the fertility of the land on which he is working. Lack of spare land forced shifting cultivation to cease in many communities. Under the circumstances, de facto, individual permanent ownership of land is evolving, although in most cases it is not yet given de jure recognition.

32. A major obstacle to the substitutions of worn-out trees by new ones, as well as to the expansion of the existing area under oil palm ancl rubber, is the fact that in many cases the nominal owners of the trees, be they individuals or communities, take no active part in the harvesting of the crop and do not appear to be interested in establishing more trees on the land over which they claim the rights. In practically all cases, rubber is being harvested by migrant sharecroppers (mainly Ibo's), while oil palm groves are leased out to itinerant palm oil processors.

33. In connection with the foregoing problems, the states, realizing the need for consolidation and reallocation, are planning to set up pilot schemes as a means of "breaking through" the traditional pattern of landholding.

34. Land for large-scale plantings and plantations is acquired from the State Government, on condition that the State concerned, through its Agents (Agricultural Development Corporations) becomes a partner in the enterprise, as well as the payment for acquisitioning the land (varying from lEN 3 to EN 5 per acre), compensation for the crop to the owners of the land, at fixed rates, and at an annual rent. Leases are normally given for a period of 99 years. Although the management of the enterprise can remain :Ln the hands of the private company concerned, the fact that the government takes a 49% share tends to shy off potential foreign investors.

September 27, 1971

ANNEX 2 Page 1

NIGERIA

AGRICULTURAL SECTOR SURVEY

DEMAND PROJECTIONS

Overview

1. With Nigeria's population expanding at a high rate, urbanization increasing, and incomes projected to rise sharply, the demand for more, and higher quality, food and for raw products for industry will grow quickly. Also, agriculture will have to continue as a major earner of foreign exchange. The country cannot depend solely on its mineral resources, though these are large. Furthermore, oil earnings are expected to level off after the mid- 1970's and further needs of the economy for foreign exchange will have to be met from other sources - largely agriculture. In the context of Nigeria's economic goals, the existence of growing markets, both domestic and foreign, represents an essential ingredient for accelerating growth in agriculture and raising ruraL :Lncomes. It is important to consider, therefore, how rapidly these markets are likely to grow over the next decade and more.

2. Nigeria presently is the world's largest exporter of groundnuts and the second largest of cocoa. Until recently, it was the largest exporter of oil palm products. Rubber and cotton exports, though only a small part of world trade, are also important foreign exchange earners. In 1970 these five items accounted for 30% of Nigeria's total exports and 70% of non-oil exports.

3. Export demand for Nigeria's agricultural products is projected to continue rising over the next 10 to 15 years at a rate of about 2% to 3% annually for most commodities. However, prices are expected to decline due to increases in world supplies, and therefore, over the next several years, export volume will have to expand substantially if total earnings are not to decline. Moreover, given lower unit prices, unless productivity is improved and the margin betwieen export prices and producer prices is narrowed, the returns to producers - and incentives to greater output - will continue to fall.

4. For most products, the largest increases in demand will be for domestic consumption. Consumers demand, particularly for such products as sugar, animal products, fish, and paper products, is expected to grow quickly. But even modest rates of growth for staple foods will involve large quantities of produce. For two products, palm oil and cotton, large increases in local demand, coupled with constraints on expanding supply, can be expected to absorb the whole of local production before 1985, leaving little surplus for export (excepting by-products - palm kernels and cottonseed). At present price levels, Nigeria could well become a net importer of palm oil by that ANNEX 2 Page 2

time. Consumption of beef and dairy products is also rising faster than domestic production - the steady increase in consumption in the northern states, has resulted in less meat available for "export" to the south, where an upward pressure on prices has been marked.

5. The results of demand projections, discussed commodity by commodity below, are summarized in Table 1, grouped by anticipated percentage-growth over 1970-80 and 1970-85. Commodities for export (underlined) are groundnuts, cocoa, rubber, palm kernels, and cotton.

Table 1: Projected Growth in Demand for Agricultural Products

1970 - 1980

Less than 30% 30 to 70% 70% to 100% Over 100%

Cassava Maize Beef Poultry Yams Millet Goat meat Fish Cocoyams Sorghum Mutton Eggs Plantain Rice Pork Milk Vegetables Fruits Butter Palm kernels Groundnuts Cotton Wheat Cotton Cowpeas Centrifugal sugar Palm oil Cocoa Paper products Groundnut oil Rubber

Groundnuts

1970 - 1985

Less than 35% 35 to 70% 70 to 100% Over 100%

Cassava Maize Rice Wheat Yams Millet Vegetables Fruits Cocoyams Sorghum Palm oil Centrifugal sugar Plantain Cowpeas Groundnut oil Meats Groundnuts Poultry Palm kernels Fish Cotton Groundnuts Eggs Milk Butter Cotton Paper products Cocoa Rubber

Note: Commodities underlined are for export. Their growth in demand are percentage increase over 1965-70 average exports. ANNEX 2 Page 3

Rubber

6. Due to increased use of synthetic rubber, natural rubber's share of the world market has decreased to about 40% of the total (1968). The use of synthetic rubber in the past 20 years has grown largely as a result of unsatisfactory supply conditions of natural rubber in the fifties. Natural rubber has been able to retain a share of the market because in most end uses it is still competitive with the synthetic substitutes, and in addition, it has certain technical properties not possessed by the general- purpose synthetic styrene-butadiene rubber (SBR), which make it technically superior in some end-uses such as heavy duty truck tires and aircraft tires. It is considered that SBR and natural rubber are approaching an equilibrium position in their shares of the U.S., European and Japanese markets, and further large-scale substitution between these commodities is improbable at foreseeable price levels. However, it is expected that the share of the rubber market secured by natural rubber will be far more sensitive to the potential expansion of production of special synthetic rubbers with technical properties similar to natural rubber. Production capacity of these rubbers is now limited, but would be increased if there was a prospect of high natural rubber prices in the future. Export prospects for natural rubber therefore depend on whether market offerings will be sufficient to keep prices below the level which makes such investment in further polysoprene capacity attractive. Currently, this level seems to center around US420/lb, with the possibility that technological advances could lower the ceiling to about IJS$416.

7. Though growth in the supply of natural rubber was slow in the 1950's and 1960's, it is genereally expected that output from the industry will increase at a much faster rate in the 1970's and that natural rubber will maintain its current share of the market. The principal reasons for this are:

(a) Malaysian production will expand considerably as a result of the large scale replanting program of the 1960's;

(b) Indonesian production is beginning to recover as the result of estate rehabilitation; and

The International Rubber Study Group has forecast that the rate of growth of natural rubber supplies would be around 6 percent and this, if realized, could result in a notional excess supply of approximately 400,000 tons by 1975. However, if the price of natural rubber remains in the US4 16-20 per lb range, a large-scale expansion in polysoprene production may not materialize and this supply may easily be absorbed by the market without serious repercus- sions on the natural rubber price. On this assumption, the demand for natural rubber wouLd be about 3.9 million tons by 1975. ANNEX 2 Page 4

8. Nigeria is currently the main natural rubber producing country 1970, in Africa and in 1965 accounted for about 3% of world production. In is exports amounted to 58,000 tons and, because a decline in production to fall anticipated, Nigeria's share of the world market can be expected such a over the next five years. Because Nigeria's production represents on world small proportion of the world's total, it will have little effect times rubber prices: even if Nigeria's output was increased to, say, four insignificant. recent export levels, the effect on the world market would be at a rapid 9. Domestic demand for rubber products has been increasing of rate, particularly for tires and inner tubes. The value of imports 0, LN 2.2 rubber and rubber manufacturers in 1967, 1968 and 1969 was bN 2.0 value of and LN 3.5 million respectively. In the first half of 1970 the imports rose to an annual rate of LN 4.2 million. On the conservative by 1985 the assumption that consumption patterns remain at the 1970 level, LN 7.0 value of rubber manufacturers imports would be about LN 6.0 to Dunlop in million. Local consumption of natural rubber by Michelin and tons the local manufacture of some of these products could reach 18,000 rubber are per annum by 1979/80. Forecasts of possible output of Nigerian to fall in given in Annex 4. It is expected that production will continue of supply. the period through 1980, and total demand will be well in excess

Oil palm produce years, 10. Nigerian exports of palm oil have been dropping in recent in from a level of 180,000 tons in the mid-1950's to only 8,000 tons palm 1970, and it is anticipated that the domestic market will absorb all consumption oil production through 1985. Two estimates of future domestic rate are available. A CSNRD estimate 1/ based on a low population increase require of 2.6% per annum, indicates that by 1975 the domestic market would have expanded nearly 480,000 tons of palm oil - and that by 1985 this would Institute to a level of 630,000 tons. The other estimate, from the Nigerian in for Oil Palm Research (NIFOR), puts the average consumption per capita the 1980 at about 25 lb and the total consumption for all States, except is 97 four Hausa and Fulani States, at 830,000 tons. If the population million by 1985, domestic consumption would then be about 980,000 tons. of A mid-point of the two estimates indicates a domestic consumption have to expand around 800,000 tons by 1985. Present annual output would demand. by nearly 300,000 tons by 1985 for Nigeria to meet projected domestic demand 11. Palm kernels will continue to be exported if the increased is a for palm oil is met from domestic sources. Because palm kernel oil world high quality product the downward pressure on prices expected on the fats and oils market (a consequence of supply increases outstripping rises in demand) will be less and export earnings from this by-product should increase. In 1970 export earnings from palm kernels were LN 10.9 million: well by 1985 this could be in the order of E 15-20 million, a figure still below earnings of the mid 1960's.

1/ CSNRD 33, p. 86. ANNEX 2 Page 5

Cocoa

12. Nigeria is the world's second largest producer of cocoa after Ghana. Annual production during the decade 1960-70 averaged over 210,000 tons, and cocoa exports accounted for 18% of Nigeria's total foreign exchange earnings. In the 1970/71 season, excellent growing conditions resulted in a record crop of about 310,000 tons. Government cocoa policy is aimed at retaining Nigeria's share of the expanding world market through increased cocoa production in the traditional growing areas with Government assistance.

13. During the past two decades or so, growth in world supply/demand of cocoa averaged 3.7% yearly. Grindings averaged about 1.3 million m tons -per year during the three years 1967-69. However, production and prices have been subject to wide fluctuations. Throughout the 1950's, cocoa generally was in short supply so that prices were relatively high. 1/ These encouraged technical. improvements and new planting and led to significantly increased output, and the average price declined to US$0.26 per lb during 1960-65. Inspite of a 7% yearly rate of growth in grindings over 1960-65, ,zompared with 3.8% in 1954-59, stocks of cocoa beans reached a record high :Level at the end of 1965 and the average real price for that year fell to below US$20 per pound.

14. After the mid-sixties, due to a combination of unfavorable factors including political unrest in some major producing countries, the market situation began to move from surplus to deficit and, by 1969, a short supply situation was clearly evident. From 1966 to 1969, the yearly growth in output had decreased to 0.7%. The price (in real terms) recovered steadily averaging 34.6k in 1966-69 and the average 1969 price of 45.74 was higher than in any years of the previous 20, except for 1954 and 1958. These high prices resu:Lted in a severe curtailment in world demand and manufacturers' stocks were drawn down until at the end of 1969, stocks were at a record low level. In 1970 production again increased sharply, largely due to very good weather in West Africa, prices declined to about US429/lb, and stocks were built up.

15. Based on current information, world production of cocoa in 1975 may amount to 1.66 million m tons, rising to 1.97 million m tons in 1980, and 2.34 million m tons in 1985. This implies an annual growth in production of about 3.5%. Nigeria's share of world exports over 1966-68 was about 20%. If the country retains this share, exports would amount to about 320,000 long tons in 1975, 380,000 long tons in 1980, and 450,000 long tons in 1985.

16. According to projections by the IBRD's Economic Department, the long-term equilibrium price of cocoa by the 1980's may be in the range of 25-300/lb (spot New York in 1969 dollar terms) and a real price of USg27/lb may be regarded as a point estimate. These estimates make no allowance for possible drastic crop failure or bumper crops. Changes in weather may alter the level of output in any one year by as much as 25% from the previous years. In the year following the good or bad weather, output usually resumes its normal level for thal: year, but the changed stock situation may alter the medium-term outlook. 1/ In terms of 1969 US dollars, price per lb (Accra spot New York) during 1950-54 averaged US$.48 and during 1955-59, US$.41. ANNEX 2 Page 6

17. In Annex 4, it is suggested that with a vigorous effort and in a normal year Nigerian production could be expanded by about 23,000 tons by 1980 and by 60,000 tons by 1985. This is less than the demand potential implied in Nigeria retaining its share of the world market, and therefore demand is not expected to be a factor limiting the growth of Nigerian cocoa production.

Groundnuts

18. Because Nigeria is one of the large world exporters of groundnuts and groundnut oil, in oil equivalent, production programs must be related closely to estimated world demand. A significant market factor is that output of most of the competing edible vegetalbe oils will be expanding over the next 10-year period. Thus prices of grouncdnut products must be competitive due to the interchangeability of the edible oils in various food products.

19. World production of fats and oils grew at an average of about 3% annually from the mid 1950's and to the late 1960's, while exports grew at a slightly higher rate, 3.7% annually. The expansion in trade was achieved at declining world market prices. World consumption projections to 1975 for fats and oils indicate an annual rate of growth of approximately 2.5% from the 1965/67 level at 1967/69 prices. On the other hand, export availabilities are expected to rise at a rate of 3.8% yearly from 1967/69. Thus, world prices are expected to decline during the first half of the 1970's, if the potential export surplus is to be absorbed.

20. Since groundnut oil, coconut oil and sunflowerseed oil are considered technically more desirable than many other oils from the processors' point of view, prices of these oils are assumed to settle at about their 1962 and 1968 levels by 1975.

21. From 1950 to 1970 world exports of groundnuts and groundnut oil (in oil equivalent) increased at 3.5% yearly compared with only 1.4% yearly in the last 10 years (1960 to 1970). Provided groundnut oil prices are competitive with other edible vegetable oiL prices, world exports may increase at 2-3% yearly over the next 10-year period.

22. Over the past 20 years, Nigeria's share of world exports of groundnuts and groundnut oil (in oil equivalent) averaged 30%. However, except for 1970, its share has been over 30% since 1960, reaching 39% in 1969. Assuming a 30% market-share and a 45% oLl extraction rate, and a total world export increase of 3% annually, Nigeria might achieve exports of more than one million tons of shelled groundnuts in 1985. On the basis of a 40% market share, 1985 exports of around 1.4 million tons of shelled groundnuts might be expected. Current domestic consumption is not known, but fragmentary evidence 1/ suggests a requirement for food (whole nuts and oil), and seed in 1970 between 150,000 and 300,000 tons: probably about a quarter million tons. By 1985 this demand could be in the range of 400,000-600,000 tons. The combined demand for Nigerian groundnuts by 1985 may therefore be 1.4-2.0 million of shelled nuts. 1/ NADC: Report of the study group on groundauts. Federal Department of Agriculture. Lagos, June 1971. ANNEX 2 Page 7

23. There are considerable uncertainties in this prediction. One uncertain element is the high potential substitution between different oils ancl fats on the world market. Because of this the fat and oils market tends to reach quickly to supply changes in any of its components. Another uncertainty is the reaction of the market to aflatoxin in groundnuts, and the success with which Nigeria can control the fungus infection to acceptable levels. The projection for domestic consumption is based on poor information on current consumption levels of nuts and oil in the Northern and Southern parts of Nigeria, and rather more authoritative estimates of seed require- merit, and allows for expected population increases. No account has been taken of income effects or possible substitution on the domestic market between different oils.

Cot:ton.

24. In contrast to groundnuts, cotton production in Nigeria is related most closely to domestic demand through the rapidly developing home- based textile industry. The major determinants of internal textile consumpt- ionL are population and income. Base on the experience of other countries at similar levels of income and with similar climatic conditions, a 1.3 income elasticity of demand over the next 15 years may be assumed for Nigeria. Taking the low population growth rate of 2.6% per annum, and a per capita real income increase of 2.4% per annum, annual textile consumption would increase at about 5.7%. If there is some substitution of cotton (currently 75% of the market) for other textiles, the annual rate may be as high as 6% per year. This implies a more than four-fold increase in internal demand, to 445,000 tons of seed cotton, 158,000 tons of lint, and 1,050 million sq yd of cotton piece goods.

25. Any excess supply of cotton should be able to be exported. World demand for cotton is expanding at about 1% annually. Nigeria's share in world exports of raw cotton was about 0.4% over 1965-68. If this share remiained constant, Nigeria would have an export market of about 24,000 tons of lint by 1985. It can be assumed that Nigeria is facing an unlimited market for its cotton exports, although at prices expected to decline 10-15% by 1985.

26. Cottonseed is a separate aspect of demand for cotton products. With the exception of issues for planting and limited sales as stockfeed, all Nigerian cottonseed is exported, or wasted. No local crushing is done. Mean annual export value between 1965 and 1970 was E 1.6 million, from an average of 60,000 tons. USDA estimates world cottonseed oil production is increasing at an ongoing rate of 2.8% a year, and world cotoonseed meal production at 2.3% per annum; the importance of cottonseed oil is declining, compared with vegetable oils and fats in general.

27. Exports of cottonseed (oil equivalent) can be expected to increase at 3% per annum from 1967-69 to 1975, versus 3.8% for all oils and fats. Nigeria's share in 1967-69 was around 4.2% of world exports, and changes ANNEX 2 Page 8

in its production will not have a big impact on world markets. Assuming an annual increase in cottonseed exports of about 3%, export in 1985 would be around 100,000 tons. After deduction of seed requirements this amount would leave about 200,000 tons of cottonseed available for local crushing or exports if markets prove more receptive.

Livestock

28. The vast majority of the livestock population is in the six northern states. A considerable amount is exported to the southern states. An annual slaughter offtake of about 793,000 head of cattle, or 9.6% of the national herd, has been estimated for 1970 (by CDC). A further 280,000 head were imported, mainly from Niger (90%) and Chad (10%), to give a total consumption of 1,073,000 head of cattle, or 154,000 tons of carcasses. FAO estimates of average annual cattle are considerably higher. Small stock provide the source of 50-60% of Nigeria's meat supply, and this proportion can be expected to increase (see Annex 7).

29. The Nigerian cattle industry currently is facing a shortfall in supply relative to a potential increase in demand for beef. Beef prices have been under pressure for a variety of reasons. Consumption has steadily increased in the supply areas, the northern states. Increased demand has come from population and per capita income growth, creation of a large army with regular meat rations, increasing urbanization, and the banning of stock fish imports, but these influences will have been modified by some substitution of goat and mutton for beef, and a temporarily reduced demand from the war ravaged areas of East Central State. The relative strengths of these various factors will be of major influence in predicting future demand for beef.

30. The major influences on the aggregate demand for beef will be price, population growth, income per capita and urbanization. The Nigerian population is expected to grow by at least 2.6-2.8% per annum over the next 10-15 years, and incomes are expected to increase at an average rate of 2.2-4.4% per annum in real terms. No estimates for average income elasticity of demand for beef in Nigeria are available; the elasticity may, however, be expected to be about 1.1-1.4 at the average income level, but will differ between urban (probably 1.3-1.5) and rural (0.9-1.1) and among regions of the country generally. Per capita meat consumption is currently higher in the north than in the south, and greater in urban areas than rural districts. Rates of population increase are probably higher in the south than north, and there is a relative shift of population into towns, which is more marked in the southern states than the northern. The net effect of these regional differences cannot be predicted with any precision, but the following assumptions have been made: 1970 Demand Population Income Income Annual Increase (head of Growth Growth Elasticity in Demand cattle) (%) (%) _ (%)

North 642,000 2.5 2.2 1.2 5.1

South 431,000 3.1 2.5 1.3 6.5 ANNEX 2 Page 9

31. The weighted average increase is 5.7% p.a. and appears to he the most likely level within the 5.0 to 9.0% range implied by the broader figures. The implication of these rates of increase is that, at present prices, annual demand will double in 12 years, come close to 1.9 million head by 1980 and 2.5 million head by 1985. This would indicate 271,000 tons of beef carcasses in 1980, assuming an average carcass weight of 325 lb. Using a different approach, CDC predicted 1.5 million head, or 218,000 tons for 1980 on the basis of population increases alone, and 1.7 million head, or 247,000 tons, if planned income targets were met.

32. The crucial questions on prices are how far supply will keep up with this potential demand, the extent to which increases in price from any shortfall in supply differ from general price rises, and the price elasticity of demand for beef in Nigeria, given the potential for substitution of other sources of protein. Between 25% and 30% of Nigeria's annual beef consumption is imported. With increasing beef shortages in Dahomey, Togo, Ghana, and Ivory Coast, and increasing internal demand in Niger and Chad, it seems unlikely that Nigeria will be able to increase imports above recent levels of 280-300,000 head per annum. The total increase will therefore have to be drawn from the Nigerian herd which, at current rates of offtake, would have to double in size by 1980, to between 16 and 17 million head. This is not feasible and the potential demand will therefore be modified by price increases.

33. The imponderables affecting the future supply of Nigerian beef are such that no authoritative figures of quantities and price reactions can be developed. The following table sets out the implications of different levels of success in meeting the demand postulated by an annual increase of 5.7% and assuming that any general increase in price level will be additional to the increases shown here for beef. Table 2: IMPLICATIONS OF DEMAND PROJECTIONS

Proportion of Demand Implied Implied Increase which can be Annual Supply Total Supply /1 Price Increa es Met by 1980 Increase Anticipated 2 (%) (%) (Tons)

50 2.8 203,000 3.2

60 3.4 216,000 2.6 70 4.0 228,000 1.9 80 4.6 242,000 1.2 90 5.2 256,000 0.5 100 5.7 271,000 nil

/1 About 40,000 tons are assumed imported. /2 A price elasticity of -0.9 has been assumed. ANNEX 2 Page 10

34. The tabulation suggests that an increase in beef supply of about 4.0% a year would result in an annual increase in beef prices of about 2% and that with this, supply and demand would be in equilibrium in 1980 at about 228,000 tons. At the more likely level of about 3% annual increase in supply, prices would also rise about 3% a year and supply in 1980 would be little over 200,000 tons. This of course assumes that, on the one hand, there is no supply response to the increase in price and, on the other hand, that there is no cross elasticity in supply from small stock or fish, and no possibility of *reducing costs of production and marketing. These assumptions are not realistic, but in effect would tend to cancel out. These reactions are ignored here, and would not be sufficient to alter the argu- ment that potential demand will exceed possible supply over the next decade.

Jute and Kenaf

35. The consumption of jute and kenaf has been greatly stimulated by the establishment of two bag factories: in 1966, the Nigeria Fibre Industry Co. Ltd., was started in Badagri, with a capacity for 10 million bags per annum; and in 1967, the Northern Nigeria Fibre P'roducts Ltd. began operating in Jos with an annual capacity of 10-12 million bags. For the Jos factory, an expansion to 20 million bags has been planned. Consumption estimates have to be based on the use of bags for agricultural purposes. The potential consumption increase is as follows:

1970 28,000 tons

1975 30-35,000 tons

1980 32-40,000 tons

1985 35-40,000 tons 1/ The 1970 estimates are somewhat lower than a projection made by the FA0 . Two factors are relevant. In the first place, the trade in agricultural products will probably not increase at the rate assumed by FAQ, and in the second place the price of plastic bags is of great importance, as are the price and availability of jute from the traditional supplier-countries.

36. Jute cannot be grown successfully in Nigeria, and projections of demand for local new material therefore refer to kenaf. Projections of demand for kenaf are complicated by probable advances in technology leading to increased usage of synthetic materials for bag manufacture, for which kenaf is used at present, and also to possible changes in methods of crop handling, storage and production. Local production of kenaf has been attempted on plantations and by smallholders. Both approaches have been

1/ P. Tommy-Martin, Prospects for Jute, Kenaf and Allied Fibers in African Countries, FAO - August 1, 1968. ANNEX 2 Page 11

unsuccessful to date due largely to labor problems on the plantation and the inability of kenaf to compete with food crops as a production alternative. These factors form the basis of the projection of demand for kenaf approaching 40,000 tons in the early 1980's. Projections are based on present levels of conversion, at which one ton of dry fiber is processed to about 1,000 produce bags.

Food Crops

37. In the past, Nigeria has been nearly self-sufficient in the supply of food. Total imports of food products average only E 22.3 million over the 1965-1970 period, or under Sh 7/00 per head, of which the most important products were wheat, sugar and milk. Wheat and sugar are, however, among the products for which total demand will increase at a fast rate.

38. The main determinants of food consumption over time relate to population size and growth, per capita income and its growth, and the income-elasticities for the different commodities. These data have been taken into account in projecting Nigeria's local consumption in 1975, 1980 and 1985. Changes in age composition, distribution of income, dietary habits, relative prices, and the progressive rate of urbanization have not specifically been a]lowed for.

39. Population growth will be the main influence on demand for food. Population estimates for Nigeria are based on the 1963 Census, at which time total population was put at 55.7 million, of whom 54% lived in the Northern part of the country. The official estimate of mid-1970 population is 66 million, applying a growth rate of 2.5% per annum. Other estimates are as much as 10 million lower, but for projection purposes, the 66 million figure for 1970 has been accepted as the base. The best current estimates of population growth settle within a range extending from around 2.6% to 3% or even slightly over. A difficulty is that population growth rates inter- act with estimates cf income growth, to give the required per capita growth. Estimates of the growth potential over the next few years, considering the increase in mineral oil production and continued recovery from the civil wqar, suggest that 7% growth rate for CDP is a reasonable figure. Over the medium term, a 5% rate might be a reasonable estimate. To illustrate the difference on income growth, pairing a 2.6% population growth with 7% growth of GDP, the per capita growth would be 4.4%; pairing a 3% population growth with 5%, per capita income growth is reduced to 1.9% -- a sharp contrast. In looking to 1980 and 1985, in particular, it seems reasonable to use a 2.8% population rate (the middle of the range) with a 5% rate for GDP -- giving an estimated per capita increase of 2.2% per year. Table 3: POPULATION PROJECTIONS Year 2.6% rate 2.8% rate 3.0% rate mid-1970 66 66 66 mid-1975 75 76 77 mid-1980 85 87 89 mid-1985 97 100 103

Source: Federal Office of Statistics and Mission-Estimates. ANNEX 2 Page 12

40. Consumer budget studies have been conducted by the Federal Office to be of Statistics, covering rural and urban areas. While leaving much for desired, the surveys were used in the FAO-Commodity Balance Worksheets Nigeria, on which the FAO based the Food Supply' Analysis for 1975, 1980 and 1986. They provide the best available base for estimates for income- elasticities, given in Table 4. It should be remembered that these are very broad indications, and do not take into consideration possible changes over time, regional differences, or adequacy diet. Projections for the main commodities, based on the above considerat:ions, are discussed below. Projections for 1975, 1980 and 1985 are presented in a Summary Table (Table 5). Only 1980 figures are quoted in the text. Table 4: INCOME ELASTICITIES AND PER CAPITA DEMAND FOR FOOD PRODUCTS (1969) Income Per Capita Demand Commodity Elasticil-y (lb/year) Cereals Wheat (unmilled) 1.5 6.8 Rice (paddy) 0.9 11.3 Coarse Grains

Maize (grain) 0.3 33.6 Maize (green) 0.6 9.8 Sorghum 0.4 101.4 Millet 0.4 81.3

Starchy Roots Sweet potatoes - 0.2 5.3 Cassava - 0.2 254.3 Yams - 0.2 241.9 Cocoyams 0.1 25.2 Plantains - 0.3 25.6 Sugar Sugar (centrifuged) 1.5 3.2 Sugar (noncentrifuged) 0.8 0.7 Pulses, Nuts, Seeds, Oils Cowpeas 0.5 26.7 Egusimelon 0.6 1.9 Benniseed 0.6 0.4 Groundnuts 0.5 5.1 Groundnuts Oil 0.6 1.0 Groundnut Cake 0.6 1.1 Palm Oil 0.1 17.5 Vegetables Tomatoes 0.6 6.4 Onions 0.6 2.6 ANNEX 2 Page 13

41. Cereals. Sorghum, millet and maize are the most important staple grains in Nigeria. Total production is consumed within the country and it appears that this picture is unlikely to change by 1985. Only very small quantities of these crops go for stockfeed, but these may increase as a result of developments in the livestock industry, and the possibility of grain production at substantially lower relative cost than at present. A specific projection of stockfeed demand is not practicable at this stage, but the potential for stockfeed should be kept in mind. Overall, sorghum demand may increase from 3.4 million tons to a level of 4.4 million tons by 1980; maize demand rise from 1.2 to 1.8 million tons; and millet demand reach 3.5 million tons from current levels estimated at 2.5 million tons.

42. Rice and wheat are the other major grain crops. Total production is consumed within the country and quantities of wheat are imported. It is likely that demand for both these crops will increase at a higher rate than for sorghum, millet and maize. Rice demand, currently about 350,000 tons of paddy, may reach 550,000 tons by 1980 and wheat may reach 375,000 tons of unmilled gra:Ln, a 50% increase over 1970 demand.

43. Root Crops. Demand for root crops is expected to increase at a lower rate than for grains, since dietary preference in main consuming areas i:n the south of the country will tend to swing in favor of maize, rice and wheat. However, substantial increase in cassava and cocoyams are projected. Yams may increase from about 7 million tons in 1970 to 9.1 million tons in 1980, cassava from about 7.4 million tons to 9.6 million tons, cocoyams from 730,000 tons to 1 million tons, and plantain to over 900,000 tons from an estimated 740,000 tons in 1970.

44. Cowpeas. lDemand for cowpeas and other grain legumes is difficult to project because of lack of data. There is a substantial unsatisfied demand for cheap protein, particularly in the south of the country, and it may be that grain legumes other than cowpeas, which grow best in northern areas, will be developed and substitute partially for cowpeas in southern diets. Tota:L production of cowpeas is consumed locally and there are no imlports. It is unlikely that this picture will change by 1985. Projected demand is expected to increase from 750,000 tons in 1970 to 1.2 million tons in 1980.

45. Sugar. Demand for refined sugar is expected to rise from its 1970 level of about 100,000 tons to about 200,000 tons by 1980 (about 175,000 tons of centrifuged and 25,000 tons of noncentrifuged). This relatively large increase in demand is attributed to present low consumption levels and a high income elasticity of demand. Recent figures show per capita consumption in Nigeria to be one of the lowest in Agrica - comparative data, available for 1967, show Nigerian consumption at 3.3 lbs, compared with for example, 13.4 in Tanzania, 18.9 in Ghana and over 28 lbs per head in Uganda. ANNEX 2 Page 1.4

Table 5: PROJECTIONS OF DOMESTIC DEMAND FOR MAJOR FOOD COMMODITIES

Assuming: 2.8% population growth 5% growth of GDP Population in 1970 of 66 million Income elasticities as given in Table 4

Per Capita Total Consumption Consumption Commodity Av: 1967-69 Av. 1967-69 1975 1980 - L, lb/yr ('000 tons) ------('000 tons)------Cereals Wheat (unmilled) 6.8 196S' 280 376 505 Rice (paddy) 11.3 328 435 549 6914 Coarse Grains Maize (grain) 33.6 1,260-i 1,560 1,865 2,221. Maize (green) 9.8 285 363 443 5h9 Sorghum 101.4 2,9414W 3,659 4,387 5,261 Millet 81.3 2,359 2,934 3,518 4,21'? Starchy Roots Sweet potatoes 5.3 155 179 201 227 Cassava (old, new) 254.3 7,379 8,507 9,578 10,784 Yams 241.9 7,020 8,093 9,112 10,260 Cocoyams 25.2 731 873 1,012 1,173 1 Plantains 25.6 74 843 935 1,017 Sugar cJ Sugar (centrifuged) 3.2 92 131 176 237 Sugar (noncentrifuged) 0.7 16 21 26 33 Pulses, Nuts, Seeds, Oils Cowpeas 26.7 900_W 975 1,196 1,142' Egusi melon 1.9 54e/ 69 84 103 Benniseed / 0.4 12 15 19 23 Groundnuts 5.1 149 187 227 290 Groundnut oil 1.0 30 38 47 57 Groundnut cake 1.1 31&v 39 48 59 Palm oil 17.5 500W 607 703 815 Vegetables Tomatoes 6.4 186 237 289 354 Onions 2.6 75 95 117 143

/ Mission estimate of 1969 consumption, consisting of 189,000 tons of imports anc! 7,000 tons of local production. / Figure includes 2,000 tons for feed. J Excluding limited amounts of sugarcane grown in small plots for chewing throughout the country. C As no consumption data were available, figure is derived from production figures for 1967/68 and 1969/70 from FAO-Production Yearbook 1969. e Including part which is processed into oil and cake. f/ Exports of benniseed over the years 1967/69 were around 14,000 tons p.a. Taking a projected export growth of 3% p.a., 1975 exports could be estimated. at 17,000 tons, 1980 exports at 19,00r tons and 1985 exports at 22,000 tons. v Figure includes 3,000 tons for feed. hJ Mission-estimated consumption figure 1967-69 on the basis of 17% extraction-rate. Figure includes 62,000 tons of palm oil for soap production.

Source: FAO-Commodity Balance for Nigeria. Mission estimates. ANNEX 3 Page 1

NIGERIA

AGRICULTURAL SECTOR SURVEY

ANNUAL CROPS

P'roduction Zones and Farming Systems

1. Production Zones. The ecology of Nigeria (see map at end of Volume I) divides the country into reasonably distinct zones on the basis of soil, climate, and natural vegetation. The ecological zones are closely related to four major patterns of crop production, designated on the basis of the predominant cash crop: the Groundnut Belt, the Cotton Belt, the Food Crops Belt, and the Tree Crops Belt.

2. The Groundnut Belt stretches from the northern border southwards to about latitude 11°N. It comprises the Sahel, Sudan, and the western part of the Subsudan ecological zones. Millet, sorghum, and cowpeas are the staple foods. Food production is normally in balance with population, but with a surplus of cowpeas which is shipped to the south of Nigeria mainly for urban consumption.

3. The Cotton Belt comprises the eastern part of the Subsudan and all the Northern Guinea ecological zones. In the north of the area, groundnuts are substituted for cotton according to shifts in producer prices. The main f-ood crops are sorghum, millet, and cowpeas: production of cereals approxi- mates subsistence needs, but, as with the Groundnut Belt, there is normally a surrlus of cowneas which goes to southern Nigeria.

4. The Food Crop Relt -- i.e., the area producing most of the marketed cereals and root crops -- covers all the Southern Guinea and most of the D)erived Savannah ecological zones. Yams, cassava, maize and rice are the predominant cash crops, although there are also localized concentrations of henniseed (sesame) and soybeans in the northeast which are sold for export. These surplus food crops are moved southwards to urban centers in the south of the countrv.

'i. The Tree Crop Belt comprises the Forest zone which supports present production of cocoa, rubber, oil palms and timber products (Annexes 4 and 5). tor purposes of this Annex, the important consideration is the relationship of the Tree Crop Belt to the main food crop zones. The Tree Crop Belt con- tains the main urban centers of population and is the major food deficit area in Nigeria. Main subsistence crops grown in this Tree Crop Belt are vams, cassava, cocoyams, maize, and rice. ANNEX 3 Page 2

There are two other distinctive zones. The Montane ecological zone in the extreme east of the country supports large cattle populations and nroduces a small, amount of arabica coffee. The Freshwater Swamp zone is largelv unutilized for agriculture but produces some rice and fish.

7. Farming Svstems. Crop production in Nigeria is almost entirely by neasant farmers using hand tools and some ox-drawn implements. Holdings are mostly between 1 and 7 ac hut average size varies widely between regions (see Annex 12, Table 1.5), and the overall average area of arable land and permanent crops per family is probably about 9 ac. Most crops are grown interplanted, a practice related to a low level of technology and low yields. Land is held by right of customary usage, and fertility is maintained by bush fallowing (except in areas of dense settlement, mainly in the south of the country and in Kano State). Manuring is confined to fields near com- rounds, and is most commonly practiced in the Groundnut Belt using household sweepings. In the Groundnut and Cotton Belts, a reciprocal arrangement exists between nomadic pastoralists and farmers by which cattle are kraaled on farms after harvest and farmers receive manure in return for crop residues.

The Major Annual Crops

P. Production data for the major annual crops are collected by the Pederal nffice of Statistics (FOq) in its Rural Survey Program. These are inaccurate due to inadenuate coverage in sample surveys. An overview of the annual crop situation is given in Table 1, which shows estimates of average vields and production. It should be noted that the common practice of intercropping leads to wide variations in yield and double-counting of areas cronned. Estimates of the distribution of production between states are civen in Appendix 1 to this Annex. ANNEX 3 Page 3

Table 1 TT-E MAJOR ANNTAL CROPS--

Classification (7ro,n Area Yield of Production Production Mn('fffac) (lb/ac) ('000 t) rroundnuts 3,5nn 670 Kernels/2 1,100 Cotton 1,500 26n Seed cotton 175 sorghum 14,nn0 550 Threshed grain 3,400 Millet 12,no0 470 Threshed grain 2,500 Maize 3,70n 75n Shelled grain 1,200 Rice 70n 1,100 Paddy/3 350 Wheat 12 1,300 Threshed grain 7 Yams 3,0nn Q,onn Tubers 12,000 rassava 1,4n0 11,00n Tubers 7,000 Cocoyam 680 4,500 Tubers 1,300 Cowpeas 10,000 200 Threshed peas 900

/1 Most crops are interplanted to varying degrees.

/2 Estimates of shelling percentage vary between 55% and 70%. In main producing areas It is probably about 67%.

/3 Estimates of milling outturn vary between 65% and 70%.

Source: Mission estimates.

0. Groundnuts. Some 3.5-4 million ac are cropped annually with qroundnuts, under rainfed conditions, on plots of 1-2 ac, and usually in mixtures with sorghum, millet, and cowpeas. Cultivation is mainly by hand hoe, but small numbers of farmers plough, ridge, and weed using ox-drawn enuinment. Average yields range between 500 and 700 lb of shelled nuts per ac. vields are limited first of all bv late planting, due to the priority given bv farmers to subsistence food crops, but other factors are poor qualitv seed, excessivelY wide spacing, the degree of interplanting, disease, and the low nutrient status of soils.

1n. Nigeria produces about 10% of the world's groundnuts and is the largest expiorter, with 30% of the world trade. The Northern States Marketing Roard (NSMR) is the sole buyer of the export crop. Mean annual purchases in 1965-69 were about 8nO,non t of kernels. Most of the crop is grown for oil, but about 35,0nn t of Hand Picked Selected (HPS) nuts, graded out of the commercial crops, are exported annually for confectionary use.

11. The marketing procedure is as follows. The nuts are decorticated bv farmers before sale. The crop is graded before purchase by state inspection staff (under Ministries of Natural Resources) at gazetted buying points, ANNEX 3 Page 4

Clean- on the basis of broken and mouldy kernels and mineral matter content. ing is not a maior problem because the crop is grown usually on light, sandy are purchased soils and harvested at the end of the rainy season. Groundnuts selects from farmers bv Licensed Buving Agents (LBA) of the NSMB. The Board business T,RAs on the basis of geographic location in relation to production, traders, experience, and financial solvency. While most LBAs are local licensing of Cooperative 11nions is encouraged in order to promote competition Official and hreak trading rings which are a common feature in the countrv. producing buving points, to which LBAs are assigned, are declared in main areas and farmers bring their nuts to them for saLle. LBAs receive buying to NSMB de- advances, produce sacks, and allowances to cover transport costs NSNB nots. Kernels are stored in pvramids of sacks under tarpaulins at for ex- denots pending movement to local mills for processing or to ports nort. about 50% 12. Transport is a major item of marketing cost, averaging areas, and of the total. Reasons are the very poor feeder roads in producing the generally high level of road and rail freight: rates. of 13. Groundnut processing -- oil and cake --- is mainly in the hands from the Lehanese community in Kano. Two mills have been partially financed (NNDC). the nublic sector through the New Nigerian Development Corporation t an- nrocessing capacity has been expanded in recent vears to about 450,000 50% of the nuallv, on the basis of one shift daily, which is equal to about Europe N'T¢¶'s purchases. Millers buy groundnuts from the NSMB at the CIF market price, less transport and handling costs back to Kano. The domestic a is thus tied to the world price, except that domestic millers receive local proundnut crushing allowance of EN 5It of kernels aimed at encouraging the nrocessing. Kernels yield about 457 oil and 55% cake, which is about Acid world average for the crop. Nigerian groundnut oil has a Free Fatty (rrA) content of less than 37 and, with cake quoted at about 54% protein, oil qualitv is satisfactorv. Millers are interested in nuts with a high has a content, low rPA levels, and no aflatoxin 1/. This market demand bearin-, on the nlant breeding programs of the Institute for Agricultural a higher 7esearch (TAR), Samaru, since millers mav resist nuts that have nrotein content at the expense of oil.

1L. 1!orld market demand for groundnuts will be adversely influenced beginning bv large increases in supplies of palm oil, a substitute commodity, t of in the mid-1n7n's. An exnort demand for Nigerian nuts of 1-1.4 million Nigerian kernels has been assumed for 1985 (Annex 2). The home market for a Rroundnuts is prolected to increase from its present level of about demand auarter-million t of kernels to about a half-million t by 1985. Total bv 1985. is nroiected to be within a range of 1.4-2.0 million t of kernels

is 11 Aflatoxin is a carcinogen that has been proven in animals and sus- pected in humans. It is produced by a common mould, Aspergillus flavus, wJhich grows on damp groundnuts after lifting. There is an acute awareness of the dangers of aflatoxin. in the major European countries, which are Nigeria's main markets for groundnuts. ANNEX 3 Page 5

19. There are sseveral ways bv which production can be tailored to meet Drolected market needs. Table 2 gives possible ways by which projected demand levels could be reached. Three levels are given. The high figure could be achieved ancl is considered the most likely.

Table 2: PROJECTInNS OF GROUNDNTUT PRODUCTION

Annual Annual Percentage Percentage /1 Increase /2 Increase Projected Area- (over 1970) Yield- (over 1970) Production ('nOn ac) (x) (lb/ac in (X) ('0oo t of kernels) kernels)

1')70 - Estimated 3,500 - 670 - 1,000 1985 - Low Level 4,000 0.9 775 1.0 1,400 - Medium Level 4,250 1.3 970 2.5 1,850 - High Level 4,5n0 1.7 1,000 2.7 2,000

/1 Estimated area concentrated in Groundnut Belt.

/2 Assumes light intensity of intercropping and 67% shelling outturn.

I: maY be that producers will turn towards increased production of cowpeas for southern markets. Demand for meat and the possibility of low-cost sor- qhum production as stockfeed may also offer comparatively attractive alternatives to groundnut production as a source of cash income. Estimates of return to labor for major annual crops in 1970 are given in Appendix 3 to this Annex.

16. Cotton. Cotton is second to groundnuts in crop value in the northern states. About 1.5 million ac were planted in 1969/70, 90% in the belt that stretches through the eastern part of North Western State and the middle of North Central and North East States. Cotton production is highly sensitive to climate, producer prices, and the relative price of rroundnuts (where thev are in competition). Output in two contrasting seasons illustrates the importance of climate and price. The 1967/68 season wa,s noor climatically and, with producer prices at 4.5 pence per lb for r.rade I seed cotton, purchases amounted to 77,000 t. In 1969/70, the fairmers were told before the planting season that prices were raised to 6 pence per lb for Grade I seed cotton, and the rains extended into October. That year, there was a substantial increase in area planted and 271,000 t of seed cotton were bought by NSMB, the sole purchaser of the crop.

1?. Cotton is grown on plots of 1-3 ac commonly as an opening crop. Ox-drawn implements are widely used in cotton cultivation, but particularly so in North East State where good growing conditions and an ample supply of ANNEX 3 Page 6

land have allowed larger holdings. Intercropping is less common than with Proundnuts, but mixtures with cereals and cowpeas are found In some areas, narticularTv in North Western State. Low average vields of 220-300 lb/ac are due mainly to late planting. Planting is delayed because cotton has to compete with food crops for labor and, when planted at the technically ontimal time, clashes in mid-June and early July with work on food crops, which receive priority.

19. ,farketing procedures are similar to the arrangements for groundnuts. Seed cotton is purchased from farmers by Licensed Buying Agents (LBA) of the NSMR. The cotton markets, which operate from December through Feb- ruarv, usually have at least two LBAs, so that farmers have a choice of huvers. The markets range in scope from about iO t to 1,000 t of seed cotton handled per year. Inspection staff are post:ed at these markets to grade the seed cotton before sale. Three grades are recognized, based on visual examination of trash content, fiber color and brightness. (For price dif- ferentials, see Appendix 2.) The British Cotton Growers Association (BCGA) is the NSMB's sole ginning agent. BCGA has a network of ginneries in main production areas and is also responsible to the Board for lint classification.

10. A continuous breeding program is operated by the Cotton Research CorDoration at TAR. It is related closely to the needs of the developing Nigerian textile industry and two varietal categories, based on staple length, are given priority: varieties with over 1-1/32" staple for planting in the eastern part of the Cotton Belt, and higher yielding varieties with about t" staDle for planting elsewhere. A seed multiplication and distribution scheme is operated jointlv by TAR, the BCGA, and the Ministries of Natural Resources (MNR) for North Central and North East States. Free seed is issued to farmers for planting. Most seed is now treated against Bac- terial Blight, and comnlete seed treatment is likely by 1972.

20. The relative importance of domestic and export markets is changing. Lint cotton has maintained fourth position as an agricultural export, accounting for about 2% of total export value over 1965-70. Exports go mainly to the lW and Europe. Values have ranged from EN 4.2 million to EN 8.7 million annually. However, demand for lint by the Nigerian textile industry increased from 2n,000 t to 36,000 t between 1966 and 1970. The value of imPorted cotton textiles has fallen from EN 23 million in 1960 to EN 14 million in 1Q69, and import of rayon piece-goods declined from EN 8.6 million to EN 0.? million over the same period. Most cotton seed is exported, the local demand being limited to issues for planting and small sales to MNRs as stock feed. Mean annual value between 1q65 and 1970 was EN 1.6 million, from an average of 60,nnO t exported. A number of proposals for the establish ment of processing plants are under consideration by State Ministries of Trade and Industry. ANNEX 3 Page 7

"1. T)omestic demand will become more important in the future. There could be a four-fold increase or more in internal demand over the next 15 vears, representing at least 158,0nO tons of lint. Within the bounds of nroduction possibilities, Nigeria will face an unlimited market for cotton exnorts, although at lower prices than in recent years. Any excess supply over domestic needs wdill probably find a ready market overseas at these lower prices. The baisis for these projections is set out in Annex 2.

2?. Domestic requirements could be met by an average yearly increase in yield of about 59 and an annual increase in area planted by about 1.q7. This presumes that cotton will continue to be concentrated in present main production areas and that prices will retain their present level relative to groundnuts.

?1. Cereals. Sorghum, millet, and maize are the most important staple erains in Nigeria. The single most important is sorghum, with about 14 million ac planted annuallv. Most of the crop is produced under rainfed conditions in the SiX northern states, between latitudes 12° and 9°N. Sorghum is usually grown in simple or complex mixtures with millet, cowpeas, groundnuts, and cotton, yielding 500-800 lb of threshed grain per acre according to season and degree of intercropping. Annual production is probably over 1 million t of threshed grain. A range of improved varieties, suitable for different climatic areas, has been produced at TAR. Varieties produced in the early 10 6 0 's, based on local material, have yleld potentials of about 2,000nn lb of threshed grain per ac under sole cropping conditions. More re- centlv, considerable success has attended hybridization and selection programs utilizing exotic material. These new varieties have yield potentials of ahout IL,,on lb/ac in nure stand. Reorientation of research, to produce varieties hetter suited to local farming svstems, is under active consideration.

Thie second most important cereal crop, bulrush millet, is confined mainlv to the Croundnut Belt and the northern part of the Cotton Belt, with a1bout 12 million ac planted each year. Production is usually in simple or complex mixtures of sorghum, groundnuts, cowpeas and, occasionally, cotton. 'ields of threshed grain are in the range of 400-600 lb/ac, depending on rainfall. Output is about 2.5 million t per annum. Some yield increases are nossihle from improved selections of local strains. The use of fertilizer on local millets is marginally economic and is not recommended. The potential of suitably adapted imported varieties is currently under investi- gtation.

;'5. The third most important cereal crop, maize, is grown on about 1.7 million ac each year. Although widely distributed, the crop is mostly produced in the center-south of the country, between latitudes 6° and 9°N. 'here is a wide range of local varieties which fall into two groups according to time of nlanting. Probably about two-thirds of production comes from the crop Planted with the first rains and harvested from May through June. The 'Later crop is planted in the middle of the rains for harvest in November, stored, and consumed through the dry season and early rains. The early varieties tend to have softer grains and higher yields. Farmers' yields ANNEX 3 Page 8 ran2e frorm about 1,10n lb of green maize per acre for the early crop to about Ann ib of shelled grain ner acre for the late season types. Maize is cormonlv interplanted with yams, cassava, and other minor crops, and is also nlanted before rice on fadamas 1/. Annual production is probably about 1.2 million tons of shelled maize, but production estimates are difficult because most of the earlv crop is eaten green. Maize research has been going on in Nigeria continuously for more than 20 years; until 1968 the emphasis was on introducing disease resistance (to Corn Blight and Rust) into local varieties nreferred by consumers. The net result is a range of varieties with good resistance to disease but with low yield potential. More recently research has been reoriented towards new varieties. Recent field trials have demonstrated the possibility of extending maize cultivation northwards to Kano using new varieties with a yield potential of 7,0nO to 8,000 lb per ac. By comparison, established improved varieties offer a 4,00n lb per ac yield potential limited to the southern part of the country. These new varieties wqill only perform satisfactorily with high dressings of fertilizer and other good husbandry practices. Major disease problems remain to be solved, however, such as the massive susceptibility of the high-yielding variety Com- nosite 3 to Corn Blight, which decimated it in 1Q70. 'Rice and wheat are the other important grain crops. Rice is grown in all states, but with concentrations in North Western, Benue Plateau, East Central Rivers, Wrestern and Mid West States. About 700,000 ac are planted annuallv, producing about 35n0n,0 t of paddy. The indigenous brown rice, nrvza glaberrima, is still the commonest type grown. Research has established that a number of varieties yield better under shallow and deep flood conditions, but the problem is to produce acceptable varieties with resistance to Blast disease (Piricularia) or lelminthosporium, which are endemic. 4lso, little Progress has been made in the economic control of stem borers or nematodes, particularly in unland rice situations. Rice yields are gen- the erallv low and variahle -- n00-1 ,4no lb of paddy per ac -- because of low potential of local varieties, availability of soil nutrients, poor w7ater control, nests and disease. Yield responses to nitrogenous fertilizer are about 4n0'on the most widely planted recommended shallow water variety, C70, and at subsidized prices there is heavy usage of sulphate of ammonia at 1 cwt/ac: vields of 1,10n-1,700 lb of paddy per ac are achieved. The continued use of this fertilizer, particularly in the southern parts of Benue Plateau and North Western States, is cause for concern because of its acidi- fving action on fadama soils. Rice processing is in the hands of many small operators in the main areas of production. The quality of milled rice is generally poor, with high levels of broken grains and mineral matter. Rice millers largely control trade in the crop.

1/ Fadama is the Nigerian term given to alluvial areas flanking rivers which are subjected to seasonal flooding and silt deposition. Crops are nlanted on these areas on both rising and falling floods. ANNEX 3 Page 9

-7. It is also unlikely that Nigeria will be in a position to meet prolected demand for rice over the medium term. It is impossible to estimate ½ncreased acreages under irrigation or controlled flood conditions until ad- d!itional nreinvestment surveys have been carried out. About 1 million ac have been tentativelv identified as suitable for rice production, but it is I'mprobable t'hat more than 75,Ono ac could be developed economically by 1985. 1'f this target is achieved and double cropping is possible, new rice areas mav be nroducing about 225,on0 t of paddy bv 1985. Production from other areas is unlikely to exceed 400,000 t of paddv, assuming that acreages increase from 350,000 ac in 1970 to about 450,000 ac and yields increase from a 1s7n level of about 1,000 lb to 2,00n lb of paddy per acre by 1985. Over the longer t:erm, completion of detailed survevs to assess soil and water resources, advances in rice production technology, and the development of local expertise in the design, construction, and operation of rice projects should enable self-sufficiency in rice production to be attained by the turn of the centurv.

?8. Cultivation of wheat is confined to the Groundnut Belt, where about 12,000 ac were grown under irrigation in 1969/70. About 70% of this area was on irrigation projects designed for wheat production and constructed bv the Government of Northern Nigeria in the mid-1960's. The remaining area was grown on small plots irrigated by shaduf. Average yields range from About AOO lb/ac using traditional irrigation methods to about 1,700 lb/ac on the wheat irrigation schemes. Wheat can only be grown successfully north of latitude 11N because it requires a period of several weeks with low temneratures for flowering and grain formation. These conditions only occur in the drv season, between December and February, in the northern part of the countrv. TWheat development has been promoted in an attempt to reduce foreign exchange costs arising from growing imports to meet domestic demand -- 1PQ,n00 t of wheat were imported in 1Qh6. This aim has not been achieved to date because of shortage of data on possible sites for further expansion and lack of executive capacity to design, construct, and operate additional wheat irrigation Dro:iects.

29. For the cereals as a group, total production is consumed within the countrv, and it appears that this picture is unlikely to change by 1985. T)emand nrojections as-e given in Annex 2. Major increases in grain output would take nlace 1.n t:he Food Belt. There may be some surpluses of grain in t'he Groundnut and Cotton Belts, and these will either move southwards to urban centers for human consumption or be used as stockfeed. It is unlikely t'hat N,7igeria could ever meet projected demand for wheat, due to its comparative disadvantages relative to other areas.

30n . Root Crops. The predominant staple root crop is yams (Dioscorea spp.). Abouit 3 million ac are planted each year, usually in mixtures with cereals and vegetables, and mainly in the Food Crop and Tree Crop Belts. Yields are abotut 4 t per acre and total production averages about 12 million t of tuber annually, of which 25-30% is required for seed. Field size rarely exceeds I ac because yams yield best as an opening crop after bush ANNEX 3 Page 10

or heaping. have a high labor requirement for clearing, ridging, fallow, and Nigerian crop has not reflected its importance to the Pesearch on the vam and also to is due mainlv to concentration of export crops, economv. This by the absence that breeding for varietal improvement is complicated the fact Recommendations on techniques for promoting sexual reproduction. of simnle and fertilizer ap- husbandrv practices, such as spacing, staking imnroved of the northern are available: and, in the main producing areas nlication, usage in response to states, there has been a recent upsurge in fertilizer from southern consumers who onrice increases brought about by strong demand renresent the main market for the crop. 1.4 million ac planted each 31. Second to yams is cassava, with about tuber. Distribution is widespread, vear and producing about seven million t of in the south, particularly in W4estern and Lagos but there are concentrations quan- centers of population throughout Nigeria. Limited States, and around most of the cassava are exported from northern areas, but tities of processed main areas of involve comparatively short hauls within the trade movements years, particu- Cassava has increased in popularity in recent consumption. their off peak labor southern states, because farmers can utilize larlv in the on poor land. and harvesting and because it will produce a crop in Planting then left in sole stand is commonly interplanted through cereals and The crop newly estab- have been harvested. It is also grown under after intercroDs effort has been tree crops such as oil palms and rubber. Research lished with resistance on the production of high yielding varieties concentrated yield potential Mosaic disease. Manv hybrids with double the to the virus of improved planting of unimtroved types have been evolved, but distribution if it has made a significant material has been limited and it is doubtful imnact on overall production. spp.), is confined mainly 1'. A minor root crop, cocovam (Colocasia are planted annually, producing to the Tree Crop Belt where about 680,000 ac interplanted with maize and over one million t of tubers. They are commonly and under newly established cassava in small Plots close to farm compounds, tree crops such as cocoa and oil palms. expected to increase at a 33. For root crops as a group, demand is in main consuming areas rate than for grains, since dietary preference lowqer iLn favor of maize, rice, and the south of the countrv will tend to swing in for yams, cassava and ITowever, substantial increases in demand wheat. in 1970 to 15 million t are Projected: for yams, from 12 million t cocovams from seven million t in in 1Q85 (including seed requirements); for cassava, from one million t in 1970 to 10-11 million t in 1985: for cocoyams, 1o7n crops can be expected to 1.5 million t in 1985. Adequate increases in root from the Food Crop Belt. cheapest and widely used source 34. Grain Legumes. The most important, This crop also provides a good of nlant protein in the diet is the cowpea. the haulms and husks of source of carbohvdrate, minerals and vitamins, and ANNEX 3 Page 11

decorticated plants are valuable livestock feed. About 10 million ac are nlanted annuallv in simnle and complex mixtures with cereals and groundnuts, mainlv in the Groundnut and Cotton Belts. Yields average 150-300 lb of threshed grain per ac, depending on the degree of interplanting, and total production is about 9nn,nn0 t yearly. Research programs, mainly by IAR, have made little impact on production to date. There is a substantial unsatisfied demand for cheap protein, particularly in the south of the countrv, and it maY be that grain legumes other than cowpeas, which grow best in northern areas, wilL he developed and substitute partiallv for cowpeas in southern diets. Total production of cowDeas is consumed locally and there are no imports. It is unlikely that this picture will change bv 1985. De- mand is projected to increase from 900,000 t in 1970 to 1.4 million t in 1Q85. Cowpea surpluses in the Groundnut and Cotton Belts are likely to increase above present relative levels, but they should also find ready markets in the south of the country.

35. nther Crops. Small plots of sugarcane are grown throughout the countrv for chewing:: nroduction for processing into sugar is confined to a 1n,onn ac plantation at Bacita in Kwara State. The plantation is part Gov- ernment owned and is operated bv Bookers, who are the Government's technical nartners. Production of processed sugar was about 33,000 t (30% of Nigerian requirements) from 9,300 ac in 196Q/70. The crop is grown under irrigation and cane vields of about 36 t/ac give an extraction rate of about 1 t of Drocessed sugar per 10 t of cane. The plantation is expected to produce about 40,000 t of sugar at full development in 1972. Demand for refined sugar is exDected to rise very rapidly from its 1970 level of about 100,000 t to about 250,n00 t by 19R5. It is assumed that future production will be concentrated mainly in irrigated plantations. It is probable that yields of cane will be about 40 t per acre, and that conversion rates, from cane to orocessed sugar, will be 1:° by 1985. These assumptions imply the need for development of about: 6n,000 ac of irrigated sugar plantations by 1985 if "figeria is to achievre self-sufficiency. A number of preinvestment surveys are underwav or proposed for additional sugar plantations, and there is no doubt that sultable sites could be identified up to the projected area required. The most suitable Icications for development of sugar production are on the alluvial soils of the mid and lower Niger and Benue Valleys, which have vear-round water supplies and a dry season of no more than about five months. tf sugar production is given a high priority in development programs, Nigeria could become self-sufficient by 1985, but achievement of this goal would nrobahly mean some sacrifice of other Drojected irrigation development.

36. The production of kenaf (Hibiscus cannabinis), a fiber plant grown For local rope making, has been encouraged by its possibilities as an import substitute for lute used in the local manufacture of produce bags (required mainly bv the marketing boards for export crops). Factories were established in the late 196n's, at Badagri in W4estern State and at Jos in Benue Plateau State, with a joint annual capacitv of 22 million bags. Total requirements in 197n were 2R million bags: Nigerian factories produced about 3 million bags and remaining needs were imported. Local production of kenaf fiber was ANNEX 3 Page 12

about 2,000 t of jute fiber about Rnn t (enough for O.R million bags) and 1970. More substantial were imnorted for subsequent bag manufacture in plantations and by small- local nroduction of kenaf has been attempted on to date due largely to holders. Both anproaches have been unsuccessful kenaf to give small- orohlems on the nlantation and the inability of labor to yams or maize holders a return to labor, at present prices, comparable savings can be obtained by with which it competes (see Appendix 2). Labor the fiber and not retting producing kenaf ribbon, i.e., stripping and drying involved, the lower but hecause of the additional processing exnense it, Prospects for kenaf Drices for rihbon give no higher return per man-day. of synthetic materials for bag are comnlicated by probable increased usage methods of crop handling and manufacture, and also to possible changes in the equivalent of about 28,000 t storage. flemand for kenaf may increase from that this demand could be in 1q70 to 35,000-4n,n0n t by 1985. It is posslble close proximity to the met. There are areas in Western State in relatively grown. Similarly, in Benue Radagri sack factory where the crop could be grow successfully within Plateau and North Central States, raw material will present prices and yield, 1nn miles of the Jos sack factory. However, at technical and economic kenaf cannot compete with other crops and further potential can be assessed with investPcations are needed before Production anv accuracv. Farmers grow Several other crops are of local importance. ,7. market garden in compound gardens for home consumption and in vegetables They are major rainfed and under irrigation, to meet urban demand. olots, vegetables include of vitamins and minerals in local diets. Common sources Research has pro- onions, carrots, okra, eggplants, and spinach. tomatoes, little impact on imoroved varieties of these vegetables but has made vided and extension oroduction due to inadequate seed multiplication facilities and soybeans, are of sunnort. Two other minor crops, benniseed (sesame) of the Food Crop Belt, localized economic significance in the eastern half The NSMB purchased about xwhere soils and climate favor their cultivation. in 1969/70, from about 17,nnn t of benniseed and about 11,000 t of soybeans 2n0,000 and 70,00n ac, respectively. meeting projected demand 3i. Summarv of Situation. The prospects for 3. IJneertainties on the for the major annual crops are summarized in Table output should equal do- demand side dominate the Rroundnut picture. Cotton Prospects for the major mestic demand with perhaps some surplus for export. the exception of wheat, stanle foods are of considerable interest. With expected to meet and sugar, local production of major staples can be rice population and demand, with acreages increasing more slowly than nrolected increased yields. A imnroved technology contribtuting the difference through to sole cropping key factor involved will be the extent to which a shift surpluses of grain in takes place. It is probable that there may be some southwards to urban Groundnut and Cotton Belts which will either move the Cowpea surpluses in centers for human consumption or be used as stockfeed. increase above present relative the Crotndntut and Cotton Relts are likely to ANNEX 3 Page 13 levels, but thev should also find ready markets in the south of the countrv. "'aior increases in both grain and root crops from the Food Crop Belt will necessitate improved and expanded feeder road networks and trading channels in this area. Local production of wheat will not meet projected demand for the cron and the large shortfall which is anticipated must be met by increased imports.

Table 31 SUTMARY OF PRODTTCTION POTENTIALS FOR MAJOR ANNITAL CROPS

Estimated Projected Projected Achieved by Production Demand Production Increase Increase r'ron 1970 1985 1985 in Area in Yield …'000______--ven t…------_-__t__

Groundnuts 1,n0n 2,000-+ 2,000 1.7 2.7 Cotton 170 560 560 2.5 4.2 Sorghum 3.1M0 5,40n 5,400 2.0 2.3 rqillet 2,900 4,400 4,400 2.0 1.5 Maize 1,500 2,900 2,900 2.5 2.7 Pice /2 350 700 625 - - -heat72 7 525 ? ? ? Yams 12,1000 16,000 16,000 1.0 1.0 Cassava 7,500 10,300 10,300 1.8 0.5 Cocovam 1,000 1,600 1,600 2.0 1.5 fcwpeas 900 1,500 1,500 0 3.5 Sugar 33 250 200 - 0 Kenaf /3 1 37 ? ? ?

/1 Rates of increase in area below projected population increases will arise because of the likely move towards sole cropping. Present acreage data are based on the conmon practice of intercropping.

/2. It is impossihle to calculate likely percentage increases in area and vields of rice and wheat because of lack of knowledge of the rate of devel.opment of irrigation works.

/3, It is imnossihle to prolect increases in kenaf production at this stage.

Policies and Programs

3$l. Strategy. Projected increases in domestic and export demand for agricultural products can best be met by a development strategy aimed at promoting farming systems and lines of production which are those best suited tco the ecol.ogical conditions in each main area of the country regardless of State boundaries. This means a strategy of regional specialization. The regions at issue are well defined (paras 1-6). Such a strategy implies, first of all., interdenendence between the states involved. Secondly, the ANNEX 3 Page 14

rationale of specialization must be understood by Federal and State authorities. That is, when funds are being allocated for development purposes, the fact that a particular area may not produce large quantities of foreign exchange earning materials should not he a decidlng factor. By reason of its particular production potential, the area in question may be providing other areas with the opportunitv to specialize in activities which earn or save foreign exchange, and it is therefore performing a valuable development function.

An. Regional specialization should be intensified particularly in respect to the Food Crop and Tree Crop Belts. This raises fundamental issues in Ntigeria. The events of recent years ---the civil war and the creation of states -- have influenced decislon makers to favor policies that twould foster economic independence for each state, particularly regarding food production, thus the strategy of regional specialization involves the broad issue of the future structure of the Nigerian Federation and associated questions concerning the powers to be distributed between the Central Covernment and component State Governments. These issues can onlv be finally resolved at a future constitutional conference. However- since Nligeria's future long-term prosperity depends on optimizing the agricultural development potential, an early realization of the need for specialization should be one of the foundation stones upon which a new constitution is huilt.

41. Additional and less fundamental policy changes essential to successful implementation of the proposed strategy concern specific institutional and policv constraints -- the role of marketing boards, the role of the State Mfinistries of Natural Resources, and broadly the provision of suonlies and services. 42. The critical aspect of marketinghboard policy relates to their role as provider of general revenue. The 1970/74 Development Plan calls for a major contribution to general development programs through export duties T and produce sales taxes. lowever, projected trends of world prices for groundnuts and cotton are such that it is improbable that surpluses be t.Till generated at present levels of producer prices in Nigeria. It is verv unlikely that desired production increases could be obtained if producer prices were to be reduced. For this reason, revenue from marketing boards should no longer be channelled into general development funds. The need for exnort dutv on export crops and the produce sales tax should be reviewed in the light of projected oil revenues and anticipated declines in world prices for export crops. The intention should be to return a higher proportion of export value to farmers, directly as increased producer prices and in- directly in production programs for all crops, in order to stimulate production and obtain the most economic utilization of land and other inputs. ANNEX 3 Page 15

The second malor policv issue related to strategy concerns the suDplv of imnortant agricultural inputs such as fertilizer and other agricultural chemicals. The present policy, whereby individual states procure and distribute agricultural chemicals through MNRs, is inefficient and ex- Pensive in money and manpower terms. These organizations are unsuited to commercial operations and scarce manpower is being diverted from important technical functions in consequence of present policy. Thus it is recommended that responsibility for procurement and distribution of agricultural supplies should be moved from the MN'Rs. It is unlikely that private commercial organizations would be willing to provide these services except at a verv hinh cost. An alternative would be to create an Agricultural Supply Corporation (ASC) operating on a national basis with State depots. The ASC should onerate along commercial lines, aiming to break even after a pioneer period during which sales were built up. It should be financed by the Federal and State Governments, but provision should also be made for equity participation bv organizations such as Cooperative Utnions, which should continue to develop their networks of distribution as agents of the ASC. Con- sideration should be given to the use of external loan finance for the ASC. The agency would require competent expatriate senior management initially, nending the training of Nigerian replacements. This might be provided on the basis of a management agency contract or appointment with the agreement of the source of external finance.

Research and Extension

44. Institutional constraints to achieving production targets exist in the fields of research and extension. Research in Nigeria is carried out by a varietv of agencies with coordination of an ad hoc nature. This system leads to some duplication of effort and to the distortion of research priorities. The low priority accorded to agroeconomic research on the problems facing most farmers is a good example. Agronomic research has generally been of a high order, but it has been based largely on achieving technical optima without regard to farming systems forced on producers by economic constraints. Research coverage is inadequate in the Food Crop Belt, with the result that recommendations of improved practices for the major crops of this area are basedl on research carried out under different soil and climatic conditions. Liaison is also a problem -- the translation of research findings into recommended practices and the feedback of field problems to research workers. A start has been made by the Extension Research Liaison Tlnit (ERLTJ) in the northern states but the unit is inadequate to meet the demands placed upon it, and elsewhere there is little or no provision for work of this kind.

45. A change in the institutional framework for research has been pro- nosed with the creation of the Agricultural Research Council (ARC), which is to formulate agricultural research policy and allocate Government funds for its implementation. The ARC has a unique opportunity to shape programs for ANNEX 3 Page 16

by the different organ- obtaining closer coordination of research activities is needed most urgently izations concerned than is the case at present. This crops, and grain legumes. in resDect of food crops such as maize, rice, root University organiza- Pesearch on these crops is handled by Federal, State, of Tropical Agri- tions and an external agencv, the International Institute ARC should also ensure culture (ITTA), with some duplication of effort. The and millet, for which that research programs for groundnuts, cotton, sorghum the needs of the re- TAR is responsible, continue to be directed towards gional belts. research programs 46. Tn addition to obtaining the coordination of direction of these between institutions, the ARC should ensure that the of the farming programs is oriented to meet the agroeconomic requirements in each of the production belts. Results of many research populations practical value have been, and in many cases still are, of little programs considera- because they have been geared mainly to the technical to farmers as shortage of production. The basic economic limitations, such tions of produc- kev periods in the cropping year, are a key factor in the labor at economic A limited number of studies to establish and quantify tion svstems. out, but agroeconomic constraints in annual cropping systems has been carried guidance for reorienta- data of this kind are inadequate to provide complete -- of the type car- tion of technical research programs. Additional studies at TAR -- rate a high out bv the Rural Economic Research IUnit (RT.RJ) ried centers. prioritv in the orograms of all agricultural research is adequate in all 47. feographical coverage by research institutions additional research except the eastern part of the Food Crop Belt. An areas State at a should he located in the southern part o"F Benue Plateau center surveys currently to he decided, following completion of lan.i capability site legume pro- The center should concentrate on foo(d crop and grain underwav. and economic as- duction problems and should also investigate the technical nects of animal production in the Food Crop Belt. MNRs and is carried out on AR. Extension is the responsibility of the can be provided from state basis, utilizing such research information as a other functions different agencies involved. N1NRs have a number of the MNR extension res- which tend to obtrude on extension activities and, though clearly defined, better ponsibilities should continue, they should be more the case at organized and afforded a higher priority than is generally between the farmer present. The solution to the problem of communications institutions. A the research worker lies in strengthening existing and the MANR, extension research liaison section should be created in national collaboration units located at major research centers to work in close with in the crops with research and extension workers. Staff should specialize The greatest and cropping systems of each belt of specialized production. are short in all need is in the Food Crop and Tree Cron Belts, but staff and research agen- areas. TThile some deplovments mav be possible from MNRs for periods it *ill be necessary to recruit expatriates on contract cies, on the job training of uin to five vears to meet staffing needs and provide for inexnerienced Nigerians. ANNEX 3 Page 17

49. Development of extension services, under the MNRs, should concentrate on the package demonstration approach, whereby recommended practices are applied to the crop and their effects compared with an equal area grown in the traditional manner. Techniques and organization of extension developed in the northern states should be adopted with appropriate modifications to meet local needs in the south of the country. Removal of responsibility for input procurement should result in the release of staff for extension work, which should be the prime function of MNRs.

:Input Supply, Market:ing and Processing

50. Seed and Chemicals. Increased yields required to achieved production targets can only be obtained if farmers have access to essential inputs such as improved seed, fertilizers, and insecticides. With the exception of cotton, and groundnuts in Kano State, arrangements for the multiplication and distribution of improved seeds are totally inadequate. The Federal De- velopment Plan proposes establishment of a National Seed Multiplication Scheme handling sorghum, maize, rice, pulses and cassava to be operated by 14ANR. USAID has suggested an integrated program for groundnuts and cereals -- a seed multiplication and distribution scheme -- which would operate nainly in the Groundnut Belt. It is difficult to see how either measure could work effectively within the constraints of technical manpower requirements, particularly at the senior and intermediate level, since MANR is vir- tuallv unstaffed at this level and the state MNRs are, with few exceptions, already heavilv coTmnitted to existing programs.

51. The proposed development strategy cannot be implemented without malor improvements in arrangements for the multiplication and distribution of planting material of high yielding varieties. They should be geared to the needs of each of the major crop production belts, with appropriate multiplication, processing, and distribution facilities located in each belt. Seed multiplication policy should be determined by UANR in consultation with the MNRs concerned in each area. For an initial period, external assistance should be sought to finance and operate the component projects of a national seeds program, until Nigerian staff have been trained as replacements for expatriate managerial and senior technical staff.

52. Credit. Most farmers require credit with which to purchase supplies of inputs needed to increase production. Existing credit needs are met imperfectly through traditional channels such as LBAs and other traders at unknown but allegedly high rates of interest. Cooperatives provide limited production and marketing credit in some areas, and a number of MNRs have schemes for medium-term credit (four to five years) to enable farmers to purchase ox-draw,n implements. The medium-term credit schemes have proved ineffective to date due to bad debts and poor administration. It is probable that at least EN 5 million of additional production credit would be required if 207 of Nigeria's annual crop producers followed existing recommended practices for major crops at present subsidized input prices. This figure could well be quadrupled by 1985. ANNEX 3 Page 18

credit. It 53. There is no ready solution to the problem of supplying he that a reorganization of marketing board purchasing arrangements, may credits wherebv farmers receive part payment in the form of non-negotiable would not for inputs, could be of value. Such a scheme, if practicable, for preinvestment have anplication in the Food Crop Belt, however. The need surveys on credit is considered in more detail later.

Marketing. Marketing is generally a relatively minor constraint 54. problems. increasing nroduction. However, there are El number of practical on prices for Complaints that farmers are not made aware of official producer and middlemen, groundnuts and cotton, and are consequently cheated by LBAs feeder are too numerous to disregard. Insufficient and near impassable of buyers for roads lead to high transport costs and a relative scarcity Inadequate produce in many areas, but particularly the Food Crop Belt. to a tendency on-farm storage, for produce such as cowpeas and rice, leads of cowpeas) for seasonal gluts and excessive'storage losses (particularly due to insect pests. as Solutions to marketing problems for controlled crops such 55. of mar- and cotton should be sought by increasing the efficiency groundnuts and overheads, and keting board operation. Reduction of marketing expenses farmers obtain a the dissemination of producer Drices, should ensure that crops enter price for controlled crops. As increasing volumes of other fair in the trading channels, the deve'lopment of free markets -- particularly additions to road Food Crop Belt -- can best be achieved by improvements and be reduced by networks. Freight rates, and hence marketing costs, would crops. It is this means to the benefit of producers and consumers of all to construct the unlikely that traders will need special credit facilities and concentration additional storage needs required by the increased volume facilities of production. Rowever, the need for improved on-farm storage be quantified. for grain and cowpeas is an aspect of marketing which should groundnut 56. Processing. Taking important commodities in turn, and the processing is marked by differences of opinion between millers that they NSMB as to the equity of pricing arrangements. The contention considering be discouraging expansion of local crushing is questionable, may in supply the current and proposed installation of new plant. Irregularity This is due to of nuts to millers appears to be a more genuine constraint. Company (NPMC), forward selling policy of the Nigerian Produce Marketing the by the which is responsible for the export sales of groundnuts purchased NSMB and local NSMB. Certainlv, closer cooperation is neededl between NPMC, NPMC's policy millers to ensure a regular supply of kernels for crushing. milling demands. of forward selling should be reviewed in the 1ight of local five years, Millers claim that thev could double processing capacity within is underutilized, given sufficient incentive by Government. Present capacity could re- however. Tmproved supplies of nuts, with beti:er mill management, investment in sult in significant increases in local processing -- without additional processing plant or major changes in pricing arrangements. ANNEX 3 Page 19

57. Local processing of groundnuts should be encouraged to retain maximum value added witlhin Nigeria, and to minimize marketing problems due to aflatoxin. This requires close coordination between NPMC, NSMB, and groundnut crushers regarding supplies of kernels and pricing arrangements. In- stallation of additLonal plant should be left to the initiative of the private sector which, however, requires guidance as to future processing policy. Any investment proposals involving the use of public funds should be coordinated at the federal level to avoid creation of excess capacity.

5S. Concerning cotton, there appear to be few problems facing the 'Nigerian textile inrlustry other than ensuring a regular supply of raw material of the desired quality at acceptable prices. Production programs appear likely to accomplish this objective. lowever, to ensure regular supplies, 'NPMC should retain adequate buffer stocks between seasons.

59. For rice, the need for more efficient processing channels is the main issue. The large modern rice mill at Abakaliki in East Central State, which was completely destroyed in the civil war, has not been rebuilt; it turned out milled riLce with less processing loss than the 10% suffered by the small rice mills, and with a low proportion of broken grains. It sold packaged rice, made poultry feed, extracted bran oil and utilized the hulls as fuel; also, situated in the middle of an important production area, it was able to keep mi'Lling prices low because of greater efficiency of operation. Looking to the future, there will likely be an increased demand in urban areas for bett:er quality milled rice than is now the norm. A number of proposals for large-scale processing projects, some of which also propose plantation production, are under consideration by State Governments. Such proposals should be encouraged in principle. But as a first priority, a survey of the present situation should be carried out to establish present and projected market demand for volume and quality needs. The problem of servicing the small producers will need to be considered.

60. The production of starch is of especial concern to the textile industry. A number of production and processing schemes, based primarily on cassava, are under consideration and one, near Ilorin in Kwara State, has 'heen started. This proposes an initial plantation of 3,000 ac, with expansion up to about 10,000 ac, for cassava and maize starch production. Agricultural management of the project appears inadequate. The State Ministry of Trade and Industrv, which has invested 40% of the equity capital of ]EN 500,000, would be well advised to insist on additional competent agricultural staff with experience of plantation-type operations. There is need for coordination bv the Federal Government of proposed State Governments funding of cassava starch production projects to avoid the sinking of Government funds into an excessive number of prolects proposed, not infrequently, by suppliers of processing equipment. ANNEX 3 Page 20

Investment and Preinvestment Activities

61. This Annex has concentrated on the broad aspects of policy and strategy that seem crucial at the present juncture of Nigeria's development. The need for a variety of specific preinvestment studies can be identified.

62. It is likely that major public sector investment would be required in the fields of input supplies, seed multiplication and distribution, credit, transportation, and research. Combined public and private sector financing would be needed for development of sugar production and processing. The private sector should provide finance for possible expansion of groundnut and rice processing facilities. It is likely that there will be a large credit element in the field of input supplies, seeds and on-farm storage. Subsidies may be required initially to get these programs underway. They should be avoided but, if this is impossible, funds for subsidies should be obtained from producers via marketing boards by manipulation of producer prices.

63. Implementation of the oroposed development strategy for annual crops demands promot initiation of preinvestment surveys to quantify problems and suggest detailed solutions which take account of technical and economic aspects. Brief stmmaries of 10 possible preinvestment studies are given below:

(i) to assess present and projected demand for fertilizers, agricultural chemicals and other materials and to suggest the means whereby these materials can be procured and distributed to farmers of minimum costs to the economy. The feasibility of creating an Agricultural Supply Cor- poration (para 43) should be examined and compared with other alternatives;

(ii) to assess present and projected demand for improved planting materials and to suggest an organization and program for their imultiplication, processing and distribution in the four major agricultural belts of the countrv:

(iii) to assess the prospects and suggest a program for the rapid development of improved on-farm storage facilities and practices, with particular reference to rice and cowpeas:

(iv) to assess the present and projected market demand for processed rice, particularly in urban centers, with reference to quality preferences related to price and to suggest the size and type of processing plant best suited to meet this demand in the light of probable continuation of smaliholder production" ANNEX 3 Page 21

(v) to investigate the technical and economic feasibility of production of fibers in Nigeria on plantations and smallholdings to meet estimated demand for bag manufacture, taking account of location of factories, and the possible utilization of other, synthetic materials;

(vi) to investigate and compare the merits of different sites proposed for plantation production of sugar cane, with particular reference to those at Lafiagi in Kwara State, Baro in North Western State, Numan in North East State, and the Anambra Valley north of Onitsha in East Central State:

(vii) to investigate the technical and economic feasibility of expansion of wheat production in Nigeria and to recommend a production policy for the crop in the light of projected demand and the possibility of continued large-scale imports;

(viii) to investigate and recommend a site for an agricultural research center to serve the Food Crop Belt, with particular reference to its eastern sector;

(ix) to recommend the organizational framework, scope and size of a national extension research liaison unit to meet the needs of present and proposed research centers and the exctension activities of MNRs; and

(x) to examine world market prospects for Nigerian groundnuts and groundnut products and recommend a detailed policy for local processing of the crop.

64. These proposed preinvestment studies should take account of surveys and investigations whlich are already underway. Most are suitable for execu- tion by a multinational agency such as ITNDP.

November 8, 1971

ANNEX 3 Appendix 1

NIGERIA

AGRICULTURAL SECTOR SURVEY

ESTIMATED PERCENTAGE DISTRIBUJTION OF AREA AND PRODUCTION MAJOR ANNUAL CROPS

Ground- Coco- Cow- State nuts Cotton Sorghum Millet Maize Rice Yams Cassava yam peas

North Western 21 28 22 23 5 20 5 3 - 28

Kwara 1 1 4 3 9 9 .16 3 1 5

North Central 10 33 18 14 3 4 1 1 - 11

Kano 40 3 20 20 4 1 - 1 - 22

Benue Plateau 4 3 10 10 10 20 29 8 3 5

North East 22 31 22 27 5 10 6 1 - 26

Western - - - - 34 15 18 33 20 2

Lagos - - - - 12 2 1 22 10 -

Mid West - - - - 7 6 10 9 15 -

South East - - - - 5 2 4 6 17 -

Rivers - - - - 2 3 3 4 16 -

East Central - - - - 4 8 7 9 17 -

Note: Dash signifies less than 1% of area and production.

Source: Mission estimates.

November 8, 1971

ANNEX 3 Appendix 2 Page 1

NIGERIA

AGRICULTURAL SECTOR SURVEY

ESTIMATES OF COST OF PRODUCTION AND RETURNS TO LABOR FROM MAJOR CROPS IN 1970

1 2 3 4 5 6 7 Return Gross /1 Gross to Margin Crop Labor Inputs - Production Price Return Labor per Man-day (Man- (';hil- (lb/ac) (Pence/ (Shillings/ac) (Shillings) days/ac) lings/ac) lb) (3x4) (5-2) (6-1)

Groundnuts 50 19 670 3.6 201 182 3.6 Cotton 42 7 260 5.5 119 112 2.7 Sorghum 40 10 550 3.5 160 150 3.8 Millet 30 4 470 3.5 137 133 4.4 Maize 30 11 750 4.0 250 239 8.0 Rice 75 26 1,100 7.5 688 662 8.8 Yams 85 294 9,000 1.5 1,125 831 9.8 Cassava 35 8 9,000 0.7 525 517 14.8 Cowpeas 20 8 170 4.5 64 56 2.8 Kenaf 90 76 960 8.4 672 596 6.7

/1 Seed and others, paid out cost (see note 2 below).

Notes:

1. Labor inputs are mission estimates derived from sources in Nigeria, including the planning unit of the Northern Nigeria Ministry of Agri- culture. An allowance has been made for intercropping.

2. Paid out costs were derived as shown below: ANNEX 3 Appendix 2 Page 2

Seed Seed Traditional Total Paid Crop Rate Price Cost Rents & Dues out Costs (lb/ac) (pence/lb) Shillings/ac … 19 Groundnuts 35 3.6 10.5 8.5 Cotton Seed issued free 7.0 7 Sorghum 20 3.5 6.0 4.0 10 Millet 5 3.5 1.5 2.5 4 Maize 21 4.0 7.0 4.0 11 Rice 41 5.0 17.0 9.0 26 Yamfs 2,240 1.5 280.0 14.0 294 Cassava Stem cuttings 3.0 5.0 8 Cowpeas 15 4.5 5.5 2.5 8

3. Prices are based on NSMB producer prices for groundnuts and cotton. Prices for other crops were derived from raw data collected by the mission covering September/October 1970. The price of rice for seed is taken as 67% of the primary market price for milled rice.

4. It is assumed that no fertilizers or agricultural chemicals were used.

5. All data used in this computation are open to question.

November 8, 1971 ANNEX 3 Appendix 3

NIGERIA

AGRICULTURAL SECTOR SURVEY

SEED COTTON GRADES AND PRODUCER PRICES, 1965/66 TO 1969/70

/1 Grade-- (mean %) 1965/66 1966/67 1967/68 1968/69 1969/70 (producer price in pence per lb)

Northern NAl - (91.4) 4.9 (90.6) 4.5 (93.5) 6.0 (94.1) 6.0 (79.4)

NA2 - (5.6) 4.3 (6.5) 4.0 (4.4) 5.0 (4.1) 5.0 (13.0)

NA3 - (3.0) 3.8 (2.9) 3.5 (2.1) 4.5 (1.8) 4.5 (7.6)

Southern 1 - (-) 7.0 (-) - (-) - (-) 9.0 (-)

2 - (-) 4.5 (-) - (-) - (-) 6.0 (-)

3 ( ) 3.5 (-) ( ) (-) (-)

/1 Grade is determined by visual examination as to trash content, color and brightness of the fiber. Grade NAl is equivalent to the Universal Stan- dard Strict Middling, Grade NA2 is Strict Middling, and Grade NA3 lies between Strict low Middling and Middling. No information is available on the equivalent grades in the Southern States.

/2 A dash indicates data not available.

Source: National Agricultural Development Committee, Report of the Ad Hoc Committee on Cotton and Other Fibers.

November 8, 1971

ANNEX 4 Page 1

NIGERIA

AGRICULTURAL SECTOR SURVEY

TREE CROPS

A. Rubber

The World Situation-

1. Natural rubber's share of the world rubber market was about 40% of the total in 1968. Production capacity of special synthetic rubbers which can match technical properties of natural rubber required for some end-uses is now limited, but: would increase if natural rubber industry does not maintain a supply posit:ion sufficient to keep prices below the level which makes such investment att:ractive. Though growth in the supply of natural rubber was slow in the 1950's and 1960's -- about 2.5% annually -- output is expected to increase at a faster rate in the 1970's and the supply situation suggests that natural rubber should be able to maintain its share of the total market. This implies a demand for natural rubber of about 3.9 million tons by 1975.

Ngeria's Rubber Industry

2. Nigeria is the main natural rubber producing country in Africa. In 1965 Nigeria accounted for 2.9% of world production but by 1968 its share had fallen to 2.0%, partly due to the civil war. If the 1965/66 level of approximately 3% is to be maintained, given a projected world production level for natural rubber of 3.9 million tons by 1975, Nigeria's production would have to rise to a level of 117,000 tons per annum (Table 1). However, considering that exports amounted to only 58,000 tons in 1970, and as there will be a decline before there is any expansion of production, Nigeria's share of the world market can be expected to fall over the next five years.

Table 1: PRODUCTION OF NATURAL RUBBER ('000)

t1/ , Nigerian World- Nigeria % of World

1965 2,311 68 2.9 1966 2,377 70 2.9 1967 2,443 48 2.0 1968 2,591 52 / 2.0 Projected 1975 3,900 (117)- 3.0

/1 Source: IRSG & IBRD projections. /2 Illustrative: i.e. assuming 3% share of market.

ANNEX 4 Page 3

replanting. There had been no replanting up to 1965/66 due to lack of funds, and as a result of the civil war little has been achieved since. In the 1970-74 plan perlod, a total of 6,000 acres is scheduled for replanting, the aim being to build up to a total of 15,000 acres by 1975/76. At this rate of less than 3,000 acres per year, it would take well over 100 years to rehabilitate the 350,000-400,000 acres of unimproved smallholder rubber in the Mid-West State. Clearly, if Nigeria's rubber smallholder industry is to survive, a rehabilitation program with considerably larger annual targets will need to be established.

8. The Government and private estates branch of the industry has about 140,000 acres of land scheduled for rubber planting. In 1966/67, about 80,000 acres were planted, of which about 30,000 acres were in production in 1966; those acres accounted for approximately 20% of Nigeria's exports in that year 1/. Many of the Government estates in the Eastern part of Nigeria were severe.ly affected by the civil war, and it is extremely difficult to assess the effect that this will have on the production potential of the rubber industry. A report on the scope for rehabilitation of the estates run by the Agricultural Development Corporations of Rivers and South East State is being prepared for these governments by the Commonwealth Development Corporation and financed by IBRD. In the absence of more specific data, some very broad assumptions are necessary as to the possible output from estates over the next five to 10 years. If it is assumed that by 1975:

(a) the 30,000 acres in production in 1966 will produce 15,000 tons per annum;

(b) 50% of the remaining acres planted by 1966/67 will produce 8,000 tons per annum; and

production from the estates branch of the industry could reach about 29,000 tons per year.

9. A third branch of the industry exists in the form of farm settlements. The condition of the rubber plantings in many of these areas seems to have deteriorated considerably since FAO made its estimates in 1964/65. In addition, the planned planting programs in these farm settlements have not been achieved. The total annual production from farm settlements was estimated by FAO to reach 3,200 tons in 1973/74 and 5,700 tons by 1979/80. If these areas achieve two-thirds of the targets, the production from farm settlements in 1975 could possibly amount to 2,500 tons, and to 3,800 tons in 1980.

10. In summary, a global estimate of probable Nigerian production over the present decade is of the order of 78,500 tons in 1975 and falling to 71,800 tons in 1980 (Table 2).

1/ R. C. Saylor, A Study of Obstacles to Investment in Oil Palm and Rubber Plantations, CNSRD, 1968. ANNEX 4 Page 4

Table 2: ESTIMATE OF FUTURE RUBBER PRODIJCTION IN NIGERIA ('000 tons)

1975 1980

Large Plantations 29,000 35,000 Farm Settlements 2,500 3,800 Smallholders Unimproved Rubber/_ 47,000 33,000

Total Production 78,500 71,800

/1 Mid-West State accounts for about 86% of smallholder production.

11. The production expected in 1975 is thus some 39,000 tons below the level that could be exported, assuming that Nigeria maintained its share of the market. From that figure, it is possible to estimate the cost to the economy of an underproductive rubber industry. In rough terms, it would have required around 75,000 acres to produce the extra tonnage, and a reasonable range of establishment costs and export values can be estimated 1/. The planting would have had to be done in the early to mid-1960's, of course, and whether this could have been achieved or not is not an issue. But if the smallholdings that will go out of tapping 'y 1975 had been replanted in the 1960's, the capital expenditure in the establishment phase would have been about EN 9-9.5 million, spread over a period of seven to eight years, and this would have generated annual foreign exchange earnings of around EN 4-4.5 million after about 10 years and provided full-time employment for about 10,000 tappers apart from the employment generated in the establishment period.

12. However, the 75,000 acres in the above analysis understate the problem that now faces Nigeria's rubber industry. It is estimated that, by the mid-1970's, approximately 50% of the unimproved smallholdings will be out of tapping, and that to rehabilitate these areas would involve replanting between 200,000 and 300,000 acres.

13. In addition to the need for raising the low yields of Nigeria's unimproved smallholdings, attention must be given to quality and marketing factors. Initial assembly and primary processing facilities are not adequate, for instance. And the small size of many holdings and poor road communications are problems that require urgent attention. Some indication of the quality can be gleaned from the export figures by type (Table 3). But the real point is that Nigeria is years behind other producers, but primarily Malaysia, in modern rubber technology such as crumb rubber.

1/ Establishment costs based on FAO figures of man-days required and daily wage rates (a range of 4/- to 6/3); yields assumed to be 1,000 lb per acre; 1975 export prices are taken in a range of EN 102 to 140 for the FOB price/ton. ANNEX 4 Page 5

Table 3: NIGERIAN RUBBER EXPORTS 1961-70 BY TYPE ('000 tons)

High-Grade Low-Grade Blanket Sheet Sheet Crepe Total

1960 17.2 15.5 24.5 57.2 1961 19.7 11.2 24.0 55.1 1962 20.1 7.0 32.0 59.6 1963 22.2 4.4 36.1 63.2 1964 26.6 3.2 41.6 72.1 1965 31.0 2.8 33.5 67.9 1966 29.2 0.8 40.0 70.3 1967 17.9 0.1 29.8 47.9 1968 15.3 1.1 35.4 52.0 1969 16.4 2.2 37.3 56.4 1970 N/A N/A N/A 58.0

14. Rubber can be grown successfully in West Africa, with yield potentials similar to those being achieved in the Far East, providing that husbandry standards and processing technology can be efficiently organized. The issue therefore becomes essentially a matter of raising the levels of efficiency at all stages of the industry. Nigeria's rubber industry, effectively organized, i'3 potentially in a stronger competitive position vis-a- vis the world export market than is its oil palm industry. The latter suf- fers a distinct disadvantage in relation to Far East (particularly Malaysia producers because of climatological conditions (particularly in respect to sunlight and rainfall distribution).

15. As anothe-r reason for high priority attention to rubber, the industry provides employment for a large number of Nigerians. The smallholder sector is the largest component, directly employing about 150,000 people. Assuming that each worker has a family of six to seven a total number of about 1 million persons are either fully or partly dependent on rubber as a source of income. I]f the unimproved rubber in these areas is allowed to go out of production, then some form of alternative employment must be found for these people.

16. It would be desirable to know whether alternative crops could be grown in these areas and, second, whether such crops could produce as high a level of income for the farmers as improved rubber. At present there are insufficient data available to make a realistic assessment of alternatives. It has been suggested by CSNRD 1/ that studies be made of "the relative profitability of producing hybrid oil palm as compared with rubber under improved technology, improved tapping techniques, high-yielding clones and iLmproved processing". While an approach such as this would be ideal, these studies would probably require at least seven or eight years, particularly i.f systematic studies of the yield potential from oil palms in these rubber growing areas are to be made. Given this time factor it would seem that a

1/ CSNRD 33, p. 79. ANNEX 4 Page 6 calculated risk has to be taken. The risk would be reduced, however, by feasibility studies that should precede a development program. Also, due consideration should be given to the fact that the farmers in the expansion areas have some experience in rubber cultivation albeit at a somewhat low level of technical skill. It would not be a case of introducing a completely new agricultural system, but more a question of improving standards in production, processing and marketing.

17. FAO concluded in 1964/65 that Nigerian farmers should be able to grow rubber profitably even if producer prices were as low as 10 d per lb, provided that average yields of 1,000 lb/acre were achieved. By using material selected for Nigerian growing conditions and applying proven husbandry practices, such yields should be attainable by Nigerian smallholders. It could well be that, as a result of developments in the use of stimulants such as Ethrel, even higher yields could be achieved over the next five to 10 years.

18. The prospects for a revitalized rubber industry are enhanced by rising domestic consumption of rubber manufactures, particularly tires and inner tubes. The value of imports of rubber and rubber manufacturers in 1967, 1968 and 1969 was EN 2.0 0, EN 2.2 and EN 3.5 million respectively. In the first half of 1970 the value of imports rose to an annual rate of EN 4.2 million. On the conservative assumption that consumption patterns remain at the 1970 level, by 1985 the value of rubber manufacturers imports would be about EN 6.0 to EN 7.0 million. Some of these products could be manufac- tured locally, thus providing additional outlets for domestic rubber. FAO estimated that local consumption of natural nrbber by Michelin and Dunlop would reach 18,000 tons per annum by 1979/80. If population expands at a faster rate than has been assumed, this could well be a conservative estimate.

Program for Rubber

19. The FAO recommended an expansion program for rubber aimed at producing 120,000 tons by 1973/74 and 220,000 tonts by 1979/80. These targets are now clearly beyond achievement; however, if a program for rehabilitation of the Mid-West State's unimproved rubber smaLlholdings were to be undertaken, this would involve from 200,000 to 300,000 acres. To complete a program of this size over a 10-12-year period (i.e., by 1981/82) would mean replanting 20,000 to. 30,000 acres per annum, compared with the 3,000 acres per annum scheduled in the Mid-West States 1970-74 plan.

20. It is clear that a rehabilitation program for rubber should concentrate on the needs of smallholders. However, the benefits from improved research programs and processing and marketing systems would also be passed on to the large plantation sector. Private sector investment could well be encouraged to participate in the development of the industry, particularly in the sphere of processing and the establishment of managing agencies.

21. In the short termL, emphasis should be given to carrying out feasibility studies for rehabilitating the unimproved smallholder areas. The Rubber Research Station (RRS) at Iyanomo, near Benin City, should expand its ANNEX 4 Page 7

research and training activities. The first step in improving the structure of the industry would be to establish collective centers at the initial assembly, primary processing, and first buyer stage.

22. I]n the medium/long term, the smallholdings should be replanted/new planted with high-yielding clones suited to Nigerian conditions. Improved husbandry standards should be developed through specialized extension services and where app.licable -- such as on large plantations -- through the establishment of efEicient supervision. Developments in Malaysia in the past few years show that future processing of natural rubber will be geared to the production of technically classified crumb rubber. The basis for technical classification will be the Standard Malayan Rubber System developed by the Rubber Research Institute of Malaysia. For these reasons, developments in processing systems in Nigeria should probably be oriented towards the production of crumb rubber.

23. Modern central processing facilities would put Nigeria into a position to off'er high quality, technically classified produce on world markets. They would pass baclc the benefits of modern technology to the producer and, by providing centra:L focal points, would facilitate better organization of the marketing system; if large enough, the central factories could produce both latex concentrate and crumb rubber. They could also process lower grades (tree and cup-lump) into higher grade produce than that of the traditional remilling operators.

24. The ultimate objective for improving the processing and marketing of smallholder rubber should be to have a vertically integrated organization covering initial assembly, central processing and marketing. For efficient operation, large-scale central factories require a large and continuous flow of rubber -- either in the form of coagulum and/or latex. The first step towards achieving such an objective would seem to be to develop collective action by the smallholders at initial assembly points through the establishment of low-cost Group Processing Centers. Such centers would eventually 'become the collecting points for coagulum or latex when the large central factories have been established. In the interim period, these Group Process- ing Centers should enable the producers to derive higher returns by improving the quality of t:he sheet produced and through the adoption of bulk selling methods.

:25. Expansion of the research and training activities of RRS should aim at providing the information required to offer advice on planting, tapping, and processing techniques. There is little available at present in Nigeria and hence the necessity to rely mainly on techniques developed in South East Asia. While most of the fundamental research carried out in Malaysia is useful in Nigeria, there is an urgent need for establishing applied research to make recommendations for improvements in production techniques and institutional facilities geared to the Nigerian environment. The areas of activity needing early attention are: ANNEX 4 Page 8

(a) nursery practices;

(b) maintenance in the immature and mature stages;

(d) fertilizer requirements;

(e) pest and disease control -- particularly in regard to fomes lignosis and armellaria;

(f) tapping systems and the use of stimulants: and

(g) processing technology and the organization of processing and marketing facilities. be- 26. The potential for increasing yields is of particular interest cause of the proved results from the use of stimulants, particularly when on applied to renewed bark (panels C & D). In Malaysia the use of Ethrel the clone PB86 has resulted in yields being doubled in later years -- and PB86 is a clone that does well under Nigerian conditions. A further charac- teristic that Ethrel possesses is it allows use of relatively lower tapping intensities. This could help reduce tapping costs, which account for about 50% of production costs. Though of no great importance to the smallholder who has little opportunity for alternative use of his labor, it could be significant where there are such opportunities -- such as for food crop cultivation. Ethrel could also be useful to the smallholder during the replanting phase through its capacity to increase yields from small areas, thus helping to maintain family income while the balance of the holding is being replanted. most 27. In addition to its research program, RRS would seem to be the suitable institution to set up a training program for extension/supervision staff at both the middle and junior staff level. In order to have sufficient field staff available to implement the program developed from the feasibility studies, it is important that a staff training program should run concurrently with these studies. In view of the major expansion that such a program of work would entail, both in terms of staff and equipment, there is a strong case for making RRS a Federal Government responsibility. there 28. In view of the size of the rehabilit:ation program envisaged, appears to be a good case for establishing a Federal Rubber Development Authority. By giving such an organization a Federal orientation, development to planning could be rationalized on a "rubber industry" basis as opposed ra- the present individual state orientation. In addition to facilitating tionalized planning and development, by concentrating on one or possibly two main crops (oil palm might also be included within the same Authority), advantages of specialization should be achieved -- particularly in relation fi- to program planning, financial control, and a(dministration. If external type nancing were required, a Federal Authority would be the more appropriate of organization to handle the arrangements. ANNEX 4 Page 9

The Nucleus Plantations Approach

29. The approach to smallholder development should ultimately evolve from the findings of feasibility studies. However, at this juncture, the main issue seems to be whether the replanting program would be similar in form to those proposed in the past, based on central processing factories operating as separate entities (financed and run either by a quasigovernment authority or by private companies). The alternative approach would be to have a nucleus plantation with a central factory and outgrowers. To provide some perspective on this issue -- and to test the economic case for an expanded rubber industry -- a prototype project has been put together from various sources. The investment project assumes that 30,000 acres would be replanted/new planted over a seven-year period. The complex would consist of a 10,000-acre nucleus plantation with 20,000 acres of replanted smallholdings concentrated within a radius of six to eight miles. Details are outlined in Appendix 1.

30. Rates of return were calculated using several values of the key variables: product price, wage rates, and tapping costs. Yield assumptions (Table 4) are based on projects submitted to Nigerian Joint Agencies Ltd. in late 1970 and reLate to the clones GTI and PB 5/51. They take into account variations in tapping systems (including the use of stimulants). Sensitivity analysis was not undertaken to test the effect of marginal changes in these yield schedules, but such an exercise should be carried out in connection w:Lth particular project features involved in feasibility studies.

TabLe 4: YIELD ASSUMPTIONS FOR RUBBER

Nucleus Plantation Smallholders Year of Year of Tapping Lb/acre Tapping Lb/acre

1 550 1 250 2 750 2 450 3 1,000 3 700 4 1,100 4 1,000 5 1,250 5 1,100 6 1,350 6/13 1,200 7 1,450 14/15 1,100 8 1,500 16/17 1,050 9 1,600 18/20 1,000 10/12 1,650 22 950 13/14 1,600 22/23 850 15/16 1,550 24 800 17/23 1,500 Average over 24 24 1,400 years of tapping 988 lb/acre Average over 24 years of tapping 1,362 lb/acre ANNEX 4 Page 10

which is 31. The base price is taken as USJ16.5/lb CIF New York, to price, equivalent to an FOB price of EN 121.6/ton. To test sensitivity are used in a range of 2.5j/lb was taken on each side. Thus, three prices the rates of return analysis:

USW14/lb (equivalent to EN 101.6/ton FOB) US416.5/lb (equivalent to EN 121.6/ton FOB) USM19/lb (equivalent to EN 141.6/ton FOB)

wage rate and 32. Cost assumptions are more complicated, since both wage rate be- tapping costs are involved. Tapping costs are related to the Wage rates for cause of the time-rate method of calculating tapping costs. of 8 sh/day. plantation labor were taken to be the. actual financial rate case, thus giv- The comparison smallholder rate was held to 5 sh/day in each return. ing 8 sh-5 sh and 5 sh-5 sh combinations for use in the rates of with the partial These might be termed "full" and "partial" shadow rates, but there rates approximating the financial rate. For tapping and collection, coagulum -- to are competitive systems -- the conventional and the polybag by commer- be considered. Estimates of tapping and collection costs given lb for conventional tap- cial plantations range from 3 .5d per lb to 5 .0d per costs ping systems. On the basis of these figures, tapping and collection the Cameroon are running at around 4d per lb. Trials being carried out by system (with Development Corporation using the polybag coagulum collection in tapping and rain shields for the wet season) indicate savings of 40-50% costs were collection costs. For analysis purposes conventional system on lower or higher wage taken to be either 3d or 4.5d per lb, depending lb. For smallholders, rates. Comparable polybag costs are 1 .8d and 2 .7 d per applied at the cost of tapping and delivery to latex/coag,ulum centers was Rates of 3d/lb for conventional tapping and 1.8d/lb for polybag coagulum. but test cal- return are presented only for the conventional system costs, using the poly- culations were also made to determine the economic effect of bag system. The cost assumptions are summarized in Table 5.

Table 5: COST ASSIMPTIONS FOR RUIBBER PROJECT /1

Full Shadow Partial Shadow Cost Rates Cost Rate

Plantation Wage Rate -- sh/day 5.0 8.0 4.5 Plantation Tapping Cost -- d/lb 3.0 5.0 Smallholder Wage Rate -- sh/day 5.0 3.0 Smallholder Tapping Cost -- d/lb 3.0

/1 See text for explanation. at the 33. On these assumptions, the rates of -return on investment 10.6% at the most likely price level, USM16.5/lb CIF New York, work out to There is partial shadow cost rates, and 12.67 at the full shadow rate. So it close to a 3-point improvement in these rates at US£19/lb price. at a appears that investment in rubber would be a reasonable proposition more doubtful CIF price of US/16 or more. Investment would rapidly become a ANNEX 4 Page 11

economic proposition at prices below US016/lb -- at US014/lb CIF, the economic rate of return falls to around 9% or less. The use of a polybag collection system would improve the rates of return at all prices, with the proportional effect increasing at lower prices and decreasing at higher prices because of the arithmetic differences. The improvement would be on the order of 10-15% at USe14/lb and 5% or less at the higher prices. The improvement appears significant, but not a decisive factor in the investment decision. In any case,, the evidence suggests that further feasibility studies are justified on economic grounds. But the presumption must be the development of an efficient industry.

Table 6: RATES OF RETURN ON INVESTMENT IN RUBBER

(AT ALTERNATIVE COST AND PRICE ASSUMPTIONS)

Cost Levels At: CIF Full Shadow Partial Shadow Prices Cost Rates Cost Rates

USP14 9.1 6.8 US'16.5 12.6 10.6 US019 15.3 13.5

34. Shadow pricing elements in the rate of return calculations call for comment, since an element of judgment is involved. The Government may wish to explore the matter further. For instance, if the opportunity cost For smallholder labor is lower than 5 sh, say 3 sh per day (equal to approx- Lmately 40% of the standard wage), the rate of return at USe16/lb CIF would increase from 10.6% to approximately 12% -- a more attractive proposition. On the other hand, if investment at the standard wage rates fails to attract private capital, assuming that opportunity costs of labor are lower, the adverse effect that this will have on investment and therefore employment in the rubber industry must be taken into account by the Government. Another factor that should be recognized is the effect that the world system of pegged exchange rates can have on returns on investment. If, for example, the Nigerian pound were placed at a significantly lower value than its official exchange rate, the increase in the converted price for rubber (in EN) would more than offset the increase in foreign exchange costs, and result in Et substantial increase in the rates of return to investment.

35. For comparison purposes, rates of return were calculated for a project featuring a central factory and replanted smallholdings, again assuming an area of 30,000 acres. Assuming a 5 sh labor rate as before, and the same product price range, the plantationless project would offer better rates of return at each product price (Table 7) and a more satisfactory return at the low price US014/lb. At US016.5/lb, the advantage would be 14.2% vs. 12.6%. The difference would be even greater against a nucleus plantation paying actual wage rates, but these returns would not be strictly comparable. The lower rate of return for a nucleus plantation project reflects the higher overheads carried by the plantation, but the differential loss should be assessed taking into account the advantages accruing to the plantation strategy. ANNEX 4 Page 12

Table 7: COMPARATIVE RATES OF RETURN, RUBBER

Nucleus Plantation Central Processing CIF Price and Outgrowers and Smallholders

US414.0/lb 9.1 10.9 US416.5/lb 12.6 14.2 US419.0/lb 15.3 16.7

Note: If a central factory were dependent on smallholders only, it would have to be in a position to cater for wider fluctuations in throughput and this would clearly affect its operating efficiency. In the comparison of the rate of ret:urn to investment between the "nucleus plantation plus outgrowers" and "replanted smallholdings usiTlg a central factory", the same cost per lb of throughput was applied to both systems. If a higher processing cost were ap- lied to the latter system, the differential in the rates of return to investment would be reduced.

36. The linking of a nucleus plantation with surrounding smallholdings offers advantages in the spheres of employment, supervision and extension, and large-scale central processing. In the project example, a ratio of 10,000 acres of nucleus plantation to 20,000 acres of surrounding smallholdings was taken on.the assumption that:

(a) a 10,000-acre plantation would provide full-time employment for approximately 1,400 laborers -- 1,200 tappers and 200 other workers;

(b) if the replanting/new planting program were aimed at establishing smallholdings of eight acres each, i.e., two tapping tasks, the 20,000 acres would involve approximately 2,500 families. (It should be pointed out that to achieve an average eight-acre holding would involve introducing a policy of land consolidation and/or new planting); and

(c) given an average of two man-work units per family, one member could be employed on the nucleus plantation (this could be divided into two 5,000-acre divisions utilizing a central factory) and the other member could operate the smallholding.

37. The employment opportunities on the nucleus plantation would provide a regular source of income for one member of the family during the period of replanting the smallholding. This would help to compensate for the loss of income-earning capacity during the replanting -- frequently a major constraint in getting smallholders to cut down their old rubber. Employment on the plantation would also provide an additional source of income to families in the surrounding villages. The technical experience gained by the member of the family working on the plantation -- under well supervised ANNEX 4 Page 13

conditions -- should serve as a valuable extension factor in the smallholding replanting sector of the program, and the central nurseries of the nucleus plantation would be responsible for providing the planting material required for the smallholder replantings.

38. The processing facilities at the nucleus plantation would not only offer the same advantages as the other type of central facility -- modern processing techniques and economies of scale -- but it would also ensure the availability of a large and continuous flow of rubber, a necessity for a crumb rubber operation. With a nucleus plantation, large variations in supply arising from fluctuations in the output from smallholdings (not under direct supervision) should be considerably reduced.

39. The nucleus plantation approach could be carried out in several locations simultaneously, provided funds and staff were available for implementing the programs. An advantage of concentrating on selected localities is that it provides an opportunity to utilize staff more effectively. Con- sideration might also be given to applying the same principle to the plantations being developed by the Agricultural Development Corporations in the southern states. A study of these state-operated plantations should be made in order to assess the extent to which smallholders could be integrated into the scheme -- particularly with regard to the provision of planting material, employment in any future expansion of the plantations, and participation in central processing facilities.

40. With regard to the management of nucleus plantations, consideration should be given to the appointment of managing agents. who would be responsible for running this part of the program. These managing agents could be either private sector plantation companies or organizations such as the existing bilateral/raultilateral development institutions. As an incentive to effective operation, the managing agents might be expected to become fi- nancially involved in the programs by putting up some, or all, of the capital for the processing factories.

41. The income to producers may be considered differently, as the return to family labor and investment is a residue after paid out costs have been met. In Table 8, indicative gross margins per acre under different assumptions of CIF price are shown. From these sums any loan repayments and fixed cost expenditures would have to be met. The table indicates that gross margins would increase from EN 5-9 per acre in the first year of production (7 years from planting) to EN 28-46 per acre at the forecast yields of 1,200 lb/acre in year 6. At an average figure of about 1,000 lb/ acre, and at a CIF price of US016.5/lb, the gross margin would be slightly over EN 30 per acre. (If the export duty on rubber were lifted the figure would rise to EN 39 per acre, and at full bearing a range of EN 36 to 58 could be expected under the given cost and price assumptions.) ANNEX 4 Page 14

Table 8: SMALLHOLDER INCOME FROM RUBBER

Year of Yield of Gross margin per acre/ at CIF price of Production Dry Rubber US414/lb tUS016.5/lb US419/lb lb/acre ------EN------

1 250 5.1 6.9 8.9 2 450 9.9 13.3 16.7 3 700 16.0 21.2 26.5 4 1,000 23.3 30.8 38.3 5 1,100 25.7 33.9 42.2 6 1,200 28.1 37.1 46.1

/1 Without loan repaynents and interest charges. Allows for EN 1 per acre for replacement and maiLntenance of equipment, plus 4.7 d/lb (USd40/lb) for collection, processing and delivery charges. 15% export duty ont the FOB price has been deducted and charges FOB to CIF are assumed to be 1.5 d/lb (USd1 .3/lb).

42. Unless the smallholder development i; to be financed from a grant, farmers' paid-out capital investment costs and accumulated interest prior to the rubber coming into bearing would be considerable. At 8% interest a capital sum of nearly EN 90 per acre would be due by the 10th year from planting (i.e. production year 3) and equal repayments over the succeeding 10 years would require deductions of EN 13 per acre per annum, from the gross margin figures in Table 8. This is, however, little over 40% of the average gross margin figure expected from yields of 1,000 lb/acre at a CIF price of USJ16.5/lb. It leaves farmers with a net income of EN 15-33 per acre in the final years of repayment when yields of 1,200 lb/acre are expected, and suggests that a 20-year loan scheme for the establishment of smallholder rubber would be worthy of further investigation.

B. Oil Palm

The World Situation

43. In the present decade, substantial increases in the supply of palm oil can be expected as a result of the heavy planting programs in Malaysia and parts of West Africa during the 1960's. Total world production of palm oil is expected to reach about 3 million t in 1975, compared with 1.3 million t in 1968. A high proportion of this increased production will enter the export market. Whereas in 1966-68, the 550,000 exported accounted for only 5.4% of the total fats and oils market, by 1975 oil palm is expected to have increased its share to about 12,%. To accompl:Lsh this increase, since the demand for fats and oils is growing slowly, there is likely to be some price erosion. It is difficult to assess the level at which equilibrium would occur, but it could well be at around US$160 per ton (metric) CIF Europe for oil and US$147 for kernel. ANNEX 4 Page 15

Nigeria's Oil Palm Industry

44. The oil palm industry of Nigeria is essentially smallholder, with approximately 90% of production coming from semi-wild oil palm groves. These groves are estimated to cover over 3 million acres, producing around 1 t of fruit bunches per acre, and yielding about 180 lb of palm oil and 120 lb of kernels. The typical smallholding is 1-5 acres, on which the farm family grows food crops (mainly for subsistence purposes) together with palm oil and kernels for cash sale. There are a few larger units in the 10-20 acre range operated on an "extended family" basis frequently with the help of hired labor. As in the case of rubber, the large plantations play a minor role in the industry and mainly consist of plantations owned by the States and run by agricultural development corporations. In the Western State, the Governmenit also has three plantations that are run by managing agents.

45. There are no reliable data on total production of Nigerian palm production, but in 1966, with exports at 143,000 t and domestic consumption at 390,000 t, total production of palm oil was about 540,000 t and kernels about 428,000 t. Since 1966, comparatively little rehabilitation of smallholdings has taken place and many of the operated plantations in the eastern part of the country were adversely affected by the civil war. Preliminary FAO estimates put 1970 output at 482,000 t of oil and 295,000 t of kernels.

46. In terms of export performance, Nigeria has suffered setbacks that began in the early 1960's. Exports of palm oil averaged 180,000 t per annum between 1955 and 1960, dropped to 143,000 t by 1966, and amounted to only 8,000 to in 1970. Palm kernel exports during 1955-65 remained fairly steady at around 400,000, but by 1970 had fallen to 182,000 t. From a level of LN 40.0 mil:Lion in 1965 the value of palm produce exports had fallen to LN 11.5 million by 1970 (of which LN 10.9 million was for palm kernels). 1/

47. Expo-ts are being displaced by a large and growing domestic market for palm oil. Low estimates of 1985 domestic consumption place it at about 630,000 t, and high estimates nlace it at about 980,000 t. Taking a mid-point, 1985 domestic consumption would be around 800,000 t. From the present level of production, an expansion of nearly 300,000 t per annum would be required by 1985, if Nigeria :Ls to avoid becoming a net importer. Assuming an average yield of 3 t of fresh fruit per acre for a smallholding, with an extraction rate of 21%, about 450,000 acres would be the potential shortfall, based on the midpoint estimate (the lower estimate would involve approximately 150,000 acres, the higher est:imate 675,000 acres).

48. On these grounds alone, and excluding the anticipated expansion of the export market, there is a strong case for replanting/new planting a substantial acreage of oil palm in Nigeria. Further, the production from wild groves can be expected to decline gradually as the palms grow taller and become more difficult to harvest. In the absence of a vigorous replanting

1/ Sources: Federal Office of Statistics - Lagos; CSNRD-33, Fig. 111.1. ANNEX 4 Page 16 program to be established in the near future, the fall off in wild grove production could well result in a drop in total production.

49. A development program of the scale envisaged to meet the domestic requirements for palm oil would involve adopting several course of action:

(a) Carrying out feasibility studies to establish a program for replanting/new planting in the 1970's and early 1980's;

(b) expanding the research and training facilities at NIFOR;

(c) examining existing price policies adopted by the Government, particularly with regard to export taxes levied on palm produce; and

(d) establishing a Federal development authority to be responsible for establishing policy in relation to this subsector of the agricultural industry.

50. Development Schemes. There have been two previous rehabilitation schemes. In the early to mid 1960's, oil palm farmers had rehabilitated some 50,000 acres of wild groves and planted them with improved hybrid material (Dura x Pisifera). This material had been developed by the West African Institute for Oil Palm Research (WAIFOR). The scheme was known as the Oil Palm Rehabilitation scheme and was introduced by the former Eastern Region Government. It was launched in 1962 in an attempt to get smallholders to replant their wild palm groves with the improved material. Farmers were offered a subsidy of LN 18 per acre on condition that they replant a minimum five acre plot and adopted the husbandry practices laid down -- land clearing, fertilizing, regular weeding, etc. The subsidy was given in the form of planting material, fertilizers, etc., together with cash to pay for hired labor at the clearing stage.

51. The civil war interrupted the program. Since the war, the East Central, Rivers, and South East States have reintroduced the scheme, but on a limited scale because of fund and staff shortages. During the past four to five years, many of the rehabilitated palm groves have been neglected. It will require considerable- effort by the smallholders to bring them up to a reasonable standard. In Rivers and East Central States, attention is being given to this problem but again staff and funds are a major constraint.

52. In 1966, the World Bank prepared a Fproject for rehabilitating 130,000 acres of wild palm, but this was also held up by civil disturbances. There seems to be a good case for reassessing this project in the near future, and at the same time, examining the feasibility of establishing nucleus plantations with outgrowers. Advantages similar to those outlined for rubber would also pertain to oil palm. The basic approach to rehabilitation proposed by the World Bank still holds, but with the possible addition of processing by a modern central mill. ANNEX 4 Page 17

Program Implications

53. The minimum size of a program to meet Nigeria's needs is for about 400,000 to 500,000 acres of wild palm groves to be replanted in the next 10 to 12 years.. The replanting program would be smallholder oriented, but consideration should be given to utilizing nucleus plantations with modern central processing facilities and smallholder outgrowers. The outline of a project based on such a pattern has been drawn up by the mission (details in Appendix 2). It is based on information from various sources, including appraisal reports of similar projects. Rates of return were calculated to assess roughly whether or not oil palm production in Nigeria would be an economic propositioni. The general results suggest that the Government should push ahead with the suggested plan of action.

54. Ihe World Bank project preparation mission for the Eastern Nigeria Oil Palm Rehabilitation Project (ENOPRP) pointed out that the palm belt of Eastern Nigeria tends to be intersected with good main roads. The gently undulating ground and permeable soils permit wide motorable tracks to be constructed fairly easily. Given such conditions, the concept of central processing in modern mills should offer good possibilities. Feasibility studies aimed at set:ting up a large replanting/new planting program in the 1970's would be a good candidate for external financing, and appropriate channels should be activated as soon as possible.

55. The economics of a central processing facility depend largely on the rate of extraction. Using a hand hydraulic press, oil extraction rate that could be achieved in practice would be unlikely to exceed 15% of bunch weight. When this is compared with the 21-22% obtained by modern mills using screw-presses, the differential in yield of oil per acre becomes significant. The strongest case for establishing modern central mills would be where production areas are fairly concentrated (say 30,000 acres within a radius of six to eight miles). The capital requirements and benefits of such a set up are included in the overall rate of return calculations 4iscussed below. A separate rough calculation indicates that the incre- mental investment, i.e. the costs of the central facility above that for hand presse-s, would be returned in seven to eight years from proceeds of the higher yield. 1/ Furthermore, the quality of the oil produced under modern

1/ At three tons output (FFB) per acre, collection and processing costs would be EN 6.6 for a central mill versus about EN 5.25 for hard presses (based on FAO estimates). At a producer price of EN 40 for palm oil and EN 33.5 for kernel, the net value of the produce would be EN 23.60 from central processing, EN 17.75 from hand presses -- a difference of EN 7.80 per acre. The estimated cost of a central mill would be about EN 40 per acre. Assuming that a hand hydraulic press is capable of handling the produce from 500 acres of smallholdings, and a cost per press of EN 500, the expenditure per acre would amount to EN 1. The differential in capital cost per acre would be approximately EN 9. General Sources': FAO, op. cit., p. 125 (figures increased by about 15%). C.W.S. Hartley - The Oil Palm - 1967, pp. 643-4. 71artley applies an extraction rate of 13.7% oil to bunch weight. ANNEX 4 Page 18 large-scale central milling conditions would tend to be superior with respect to free fatty acid content, dirt, moisture and bleachability.

56. Aside from processing extraction rates, the return on investment in an oil palm project of the type outlined would depend on many variables. But three are of special interest from an economic point of view (assuming investment and operation costs as given): product price, yield of fruit per acre, and the wage levels that are assumed to be most relevant to Nigeria's economy. An element of special interest from a financial point of view is the effect of taxes as now levied on the industry.

57. As for product price, the point of departure is the world price situation, and whether the analysis is on an export basis (FOB Nigeria port) or an import-substitution basis (CIF Nigeria pcrt). As a reasonable FOB basis, the forecast Europe prices (USS16O and US$147, respectively), have been reduced by US$30 per ton for oil and US$22 per ton for kernels -- giving FOB/Nigeria prices of LN 47.4 for oil and LN 44.8 for kernels. On an import substitution basis, it is assumed that oil palm could be procured at CIF prices of about 15% below the FOB price: or, from the standpoint of production, the difference between FOB/Nigeria and CIF/Nigeria would mean an increase of 15%' in the economic price that could be paid producers. The corresponding CIF/Nigeria producer price would be LN 54.5 for oil, LN 51.5 for kernels. Since these differences are important, they are tabulated below:

Oil Kernels

FOB/Nigeria 47.4 51.5 CIF/Nigeria 54.5 38.1

The 15%' difference is arbitrary, but it is not unrealistic and it is convenient for analytical purposes.

58. The treatment of wages in the economic analysis of investment is controversial from a theoretical as well as practical standpoint. In the case of Nigerian oil palm, 5 sh per man-day has been taken as the base rate for smallholders, on the assumption that foodstuff production, as an alternative to oil palm, would have an economic value of at least this amount. For plantation labor, alternative rates of 5 sh and S sh have been used to indicate the significance of the labor bill. In this context, "higher wage" rates refer to 8 sh per day for plantations and 5 sh per day for smallholdings: "lower wage" rates refer to 5 sh per day for both types of enterprise. Ilowever, it is emphasized that a smallholders' wage cost is assumed for purposes of economic analysis only; otherwise, the return to farm family labor can be regarded as a part of the smallholders' income, rather than an input cost.

59. Yield estimates are based primarily on data for the oil palm rehabilitation project in Eastern Nigeria. It is assumed that 12 wild palm would be left standing per acre, and that harvesting would begin in Year 4 following replanting. Yield assumptions are piven in Table 9. ANNEX 4 Page 19

Table 9: YIELD ASSUMPTIONS, NEW OIL PALM

A. For Nucleus Plantations 16- Year of on- Harvesting 1 2 3 4 5 6 7 8/12 13 14 15 ward

Tons FFB per acre 0.5 1.5 3.0 4.0 4.5 5.0 5.5 6.0 5.5 5.0 4.5 4 % Oil: 14 16 18 21 21 21 21 21 21 21 21 21 % Kernels: 4 4.5 5 5 5 5 5 5 5 5 5 5

Average tonnage of 'FBI/acre over production period: 4.5 tons.

B. For Smallholdings

16- Year of on- Harvesting 1 2 3 4 5 6 7 8/12 13 14&15 ward

Tons FFB per acre 0.5 1.0 2.0 2.5 3.0 3.5 3.8 4.0 3.8 3.5 3.0 % Oil: 14 16 18 20 21 21 21 21 21 21 21 % Kernels: 4 4.5 5 5 5 5 5 5 5 5 5

Average tonnage of FFB/acre over production period: 3 tons.

60. The rates of return on investment, as given in Table 10, indicate that a large replanting/new planting program would be worthwhile from an economic standpoint, if the main assumptions are borne out. It is emphasized that the project out:line is very tentative and indicative at best. The range of rates based on different prices, yields and wages suggest that return on investment: in oil palm is quite sensitive to product price, and are also sensitive t:o yield and wage rate assumptions. To repeat, the rates of return relate to the establishment of a 10,000 acre nucleus plantation with 20,000 acres of smallholder outgrowers (within a radius of six to eight miles), with central. processing.

61. The response to price changes, particularly as related to FOB/ Nigeria and CIF/Nigeria prices, should be noted. At the projected FOB/Nigeria price (Table 10, Row, 2) and at the project yield levels assumed, the economic rates of return for the two wage levels are 8.9% and 7.9%, respectively. In the case of rubber, with wages at 5 sh for both the nucleus plantation and smallholdings, the rate of return was 12.6% (CIF price at USS16.5/lb). Hlow- ever, when considering the Nigerian oil plam industry from the standpoint of self-sufficiency with respect to its very large domestic market, the appropriate price level to apply is 11S$153 (LN 54.5) per long ton (Row 1). The economic rates of return at the forecast yields would be 12% and 11%, respectively, depending on the wage levels applied. These rates compare closely with those for rubber. ANNEX 4 Page 20

Table 10: RATES OF RETURN ON INVESTMTNT IN OIL PA/1 (At Different Prices, Wage Rates, and Yields)

Lower Wage Rates/ Higher Wage Rates- and Yields as: and Yields as: +10% -10% Product Price/Nigeria Projected +10% -10o% Projected ------

12.5 9.5 1. $153/ton 12.0 13.4 10.3 11.0 6.2 Plus Taxes 8.9 10.3 7.2 7.0 9.4 9.5 6.3 2. $133/ton 14 8.9 10.4 7.3 7.9 2.0 Plus Taxes 5.0 6.5 3.2 3.8 5.5 5.6 2.1 3. S113/ton /5 5.1 6.6 3.3 3.9 Plus Taxes -0.9 1.0 -3.4 -2.5 -0.4 -5.5

Appendix 2. /1 With central processing and assumptions as given in text and /2 5 sh per man-day, on both the nucleus plantation and smallholdings. /3 8 sh per man-day for nucleus plantation and 5 sh on smallholdings. /4 15% below (1). /5 15% below (2). the effect of 62. The rates of return before and after taxes indicates i.e. from the existing export and purchase tax policy on investment returns, is close a financial point of view. The reduction in returns to investment It would to 50% or, in terms of the actual rates, 3-4 percentage points. improved seem, therefore, that returns to the industry could be substantially must be by reducing the export and purchase taxes. The focus of attention effect of the the effect on production incentives for the home market. The concern. At current tax levels on the smallholders' income is of special net income per the mean yield level of approximately 3t (FFB) per acre, the rates; at acre is reduced by some LN 6.5 when taxes are levied at existing The absolute a yield of 4 t, the tax bite would be close to LN 9 per acre. 3 t yield, net returns to the smallholder are also of interest. 1/ At the returns producer income per acre could be approximateLy LN 26.75, including (CIF/Nigeria). to labor but without taxes, and on an income-substitution basis in the At higher yields, say the 4 t level which is projected to be attained per acre, eight harvest year, net producer incomes would approach LN 36-37 would without taxes. On an export price basis (FOB/Nigeria), net incomes reduced to be LN 21.35 per acre, without taxes, and this figure would be the smallholder LN 14.75 per acre by taxes. Thus the tax effect on income to is substantial.

delivery 1/ Operating costs are assumed to be EN 2.2 per ton (FFB) for 11.3 and processing, distribution costs of EN 7.5 for fruit and EN per for kernels (3 t FFB), and an amortization allowance of EN 2.1 acre. ANNEX 4 Page 21

63. A comparison of the rates of return with higher and lower wage levels demonstrates the importance of wage rate considerations. Taking the import-displacement price, and the yield levels projected, the effect of increasing wage levels on the nucleus plantations from 5 sh to 8 sh is to reduce the returns to investment from 12% to 11%, a rather small decrease. A test calculation at 8 sh and 7 sh, respectively, for plantations and smallholders showed the rate of return dropping to 9.3% on a CIF/Nigeria basis, and to 6.2% on a FOB/Nigeria basis. On the other hand, if the lowest rates considered are still high in terms of the real opportunity cost of labor in rural areas, the possibility that investment in the oil palm industry would be correspondingly more economic, and hence emnloyment greater, should be recognized by the Government. As noted in the discussion of rubber, the significance of financial versus economic rates for private investments should also be noted by Government.

64. With regard to yield sensitivity, it appears that a 10% increase in yield produces an increase of about 1.5 points in the rate of return to investment; a fall of 10% reduces the returns about 1.5 points (Table 10). The importance of attaining higher standards in plant breeding and crop husbandry should t:herefore be recognized. In the Ivory Coast, the breeding selection work done by the Institute de Recherches pour les Huiles et Oleagineus (IRHO) has produced material of Dura x Pisifera origin that is yielding 7.2 tons of FFB per acre, giving 1.48 tons of oil. IRHO maintains that yields of 1.6 tons of oil should gradually be reached and even exceeded. With this kind of planting material, and good husbandry practices, there is every reason to expect that similar results could be achieved in Nigeria.

65. Research and Training. A replanting/new planting program of the size envisaged would necessitate a major expansion of the applied research and training activities carried out at NIFOR. In recent years the research programs at this station have suffered due to staff limitations. The shortage of staff is, to some extent, being rectified through technical assistance undertaken under bilateral aid programs; nevertheless, if an expanded program of work is to be uindertaken, more professional staff will be required. If young Nigerian graduates are to be in a position to receive further training -- in many cases, overseas, but also in conjunction with an ongoing research program -- it would be highly desirable to have a cadre of experienced expatriate staff during the next five to six years. This approach should facilitate a gradual reduction in the need for expatriate staff in the middle to late 1970's. A request has been submitted to the UNDP/SF for an allocation to implement a West African regional agro-industrial training and equipment development center for palm cultivation and processing. The response to this proposal is, as yet, unknown. It should receive priority attention from the organizations concerned. NIFOR should he provided with facilities for training in field management and extension work at the middle and lower levels. If sufficient well-trained field staff are to be available to implement the programs that evolve from the feasibility studies -- as is also recommended for rubber -- the training programs will need to run concurrently with those studlies. ANNEX 4 Page 22

66. The areas of research requiring early attention can be broadly summarized as follows:

(a) Breeding and selection - to include the introduction of proven material from other West African areas;

(b) Seed production, germination, and dispatch;

(d) Maintenance in the mature and immature stages;

(e) Fertilizer requirements, including the use of foliar analysis;

(f) Pest and disease control;

(g) Harvesting and collection system, particularly the potentials for containerization in smallholder production areas; and

(h) Processing technology and the organization of processing and marketino.

67. A study of the type and scope of an expansion program for NIFOR could again be a suitable candidate for external financing, either through bilateral or multilateral sources. Whatever the means, the study has high priority.

68. Export Duties and Taxes. If a well supported and successful rehabilitation program for oil palm is to develop, there is a need to examine the scope for reducing and eventually eliminat:ing the export duties and purchase tax levied on palm produce. Part of these taxes could be replaced with a replanting cess which would build uD ftnds for a continuing program of rehabilitation of the oil palm industry. If, in the future, the main emphasis of the industry is to be on self-sufficiency in palm oil, the export duty would no longer be a source of revenue. Furthermore, with government revenue from mineral oils increasing at the rate they are, the reliance on agricultural export crops as a source of revenue is no longer as essential as it was in the past. The response from smallholders to any replanting program will be largely dependent on the producer price incentives that exist at the time when the decision to replant is made. If produce prices are kept down by continuation of the current taxation policies, then the Government faces the prospects of a poor response to replanting and hence a trend towards increasing underemployment and/or unemployment in the oil palm areas - particularly those of the eastern states of southern Nigeria.

69. Federal Development Authority. As i,n the case of rubber, there appear to be good grounds for establishing a F'ederal development authority to organize the oil palm replanting operation. Such an authority would be ANNEX 4 Page 23

in a position to rationalize the development planning on an industry basis, as opposed to the individual state orientation that applies now. The advantages of this approach were discussed earlier with respect to rubber, and they apply equally to oil palm.

C. Cocoa

Growing Conditions

70. Cocoa requires a hot wet climate with temperatures between 20°C, and a rainfall of between 50 to 70 inches a year, evenly distributed through the year, except for a dry sunny period which is desirable to limit fungal diseases and to increase photosynthesis. Cocoa is grown most successfully in tropical rainfall areas when it is planted under virgin or old secondary forest, where it benefits from accumulated soil fertility, and.the more even micro-climate of the forest. Soils should be free-draining and permit adequate root development.

71. In primary and secondary forest, the forest must be selectively thinned to ensure that sufficient sunlight reaches the cocoa trees, and to allow air currents to pass through the farm. On cleared land, or land that has been recently used for shifting cultivation, temporary ground cover and shade must be established before cocoa is planted. Cocoyams, pigeon pea, cassava and plantains are commonly used for this purpose. In the traditional system, cocoa is planted either as beans at stake or as bare root seedlings; bult with the introduction of improved varieties, seedlings are now raised in polythene pots in nurseries and transplanted after four to six months.

72. In Nigeria the traditional variety of cocoa, Amelonado, usually produces two crops each year. A main harvest of three months beginning at the end of the wet season in September and a second minor harvest during the first months, June and July, of the following wet season. Ripe pods can be left on the tree for up to two weeks but unharvested pods are liable to Black Pod disease and germination of beans within the pod, and farmers should pick pods every three weeks. After picking, the pods are taken to a central collection point where the beans are extracted, fermented, and sun dried. The dry beans are then bagged and sold.

73. The three important pests and diseases of cocoa in Nigeria are Capsids, Black Pod and Swollen Shoot Virus Disease (SSVD). The most damaging is the Capsid. Capsids (more correctly Mirids) feed by injecting cell - destroying enzymes into young tissues of the tree, twigs or pods, and sucking out the resulting fluids. The feeding points are sites of secondary infection by the fungus Calonectria, which ultimately kills the affected portion of the tree. A Benzene Hexachloride formulation is effective against capsids, and widespread spraying has been carried out since 1957. Black pod is a fungal disease, Phytopthora palmivora, which attacks ripening cocoa pods. The fungal spores require conditions of high humidity before they germinate and therefore losses from this disease occur at the ANNEX 4 Page 24 height of the wet season. In the eastern fringes of the 'cocoa belt', Black Pod becomes the limiting factor in expanding cocoa plantings. The disease can be partly controlled by good farm sanitation, which includes the removal of diseased pods and by allowing w:ind to pass through the farm to reduce humidity. Chemical control is obtained by spraying cocoa pods with copper compounds. Spraying must be carried out at three-weekly intervals during the pod ripening period. Swollen Shoot Virus Disease (SSVD) is endemic in the 'cocoa belt' and although yields are reduced and 'killer' trees die slowly, the virus strains present are not the virulent cutting strains found in Ghana. In Nigeria, control has been achieved by measure, out diseased trees, but cutting out is accepted only as a temporary and the true answer to the problem is in breeding cocoa varieties that are resistant or highly tolerant to the different cocoa virus strains.

74. The original introductions of cocoa into Nigeria were of the Amelonado type and this became the traditional planting material of the country. The 1944 introduction into Nigeria and Ghana of varieties collected in the Amazon Valley of South America has resulted, however, in the production of hybrid cocoa. The majority of Amazon hybrids are higher yielding than Amelonado, come into bearing earlier, and are more easily established. A few have shown themselves significantly tolerant to the strains of SSVD found in Nigeria.

75. lHybrids, however, do have some disadvantages. They tend to be more susceptible to Black Pod, and Stem Canker fungal diseases; the crop is produced over a much longer period of the year than Amelonado, and since farmers may be disinclined to harvest the very early and late pods, the risk of Black Pod fungus disease spreading from ripe to unripe pods is increased. Nevertheless, while existing Amazon hybrids are not the tultimate in cocoa breeding, work is proceeding at CRIN on breeding for both virus tolerance/ resistance and Black Pod disease resistance. Improved material is unlikely to be available for commercial use, however, ior another 15-20 years.

76. Trials have shown that fertilizers stimulate the growth and early production of young cocoa trees, increase the yield of mature trees, and give economic responses under conditions of good management. Fertilizer application recommendations can be made for different ecological areas of the cocoa belt. Yield increases have been variable, but an average yield increase of about 32% from mature cocoa has been obtained from applying 27 lbs P2 05 and 143 lbs N per ac.

The Ni&erlan Cocoa Industry

77. After Ghana, Nigeria is the world's largest cocoa producer and exporter. Annual output during 1960-70 averaged 212,000 long tons yearly, about 17% of world production. Cocoa is one of Nigeria's most important exports, its value in 1970 being second only to oil. During 1959/60 - 1968/69, cocoa on the average accounted for about 1lg'Sof total export earnings each year. ANNEX 4 Page 25

78. About 95% of Nigeria's cocoa is grown in the forest zone of the Western State. In the state, there are approximately 1.2 million ac of cocoa lands, mostly smallholdings averaging 3.5 ac. Another 300,000 ac - again mainly smallholdings - are estimated to be under cocoa in the other states. Since cocoa does not require sophisticated equipment for primary processing, large capital investment in centralized processing facilities is not required.

79. Cocoa development was rapid in the 1950's when relatively high prices encouraged farmers to expand acreagesi and the government initiated spraying subsidies and other measures for pest and disease control. The FAO estimates that about 40,000 ac annually were planted during 1950-59. The bulk of these areas, however, were planted with unselected seedlings with an average yield potential of about 500 lb per ac. Output rose steadily from 110,000 t in 1950-51 to 294,000 t in 1964-65. Beginning in 1961, when the producer price was reduced to EN 112/t prices were too low to encourage sufficient new planting and replanting to expand productive acreage. Any planting done only offset old cocoa going out of production. Consequently, an estimated 70% of the Western State's cocoa is over 30 years old, and many areas have been abandones as yields decreased with age.

Future Production

80. Recent rises in the producer price (to EN 150/t for 1970-71) should encourage farmers to continue cropping existing low-yield areas. With rising labor costs and growing inflationary pressures, however, the existing price level probably will not induce new planting or replanting on a wide scale. Thus, without a government-assisted program, or other incentives, Nigeria's cocoa industry is not likely to expand sufficiently during the next 10 to 15 years to exploit anticipated market openings.

81. Market Prospects. World supply and consumption is expected to grow by 3.4-3.5% yearly, rising to 2.0 million long tons by 1980, and 2.3 million t by 1985 (see Annex 2). To retain its (17%') share of world supply, Nigeria would have to expand current production of about 200,000 long tons to about 340,000 t by 1980 and 390,000 t by 1985. Assuming a mean yield of 850 lb per ac (allowing for the higher yields of new planting materials), approximately 500,000 ac would have-to be planted/replanted by 1980 in order to expand output by 190,000 t in 1985. Although futuire world prices probably will be in the neighborhood of IJS$0.25 per lb., compared with an average yearly price (New York spot Accra) of US$0.35 in 1966-69, new investments in Nigerian production, still should be able to compete at the lower price level. (The IBRD Western State Cocoa Project estimates a 17% return to the economy for new planting at a price of US$0.25 per lb and 15% return at a price 10% lower.) The scope for increasing Nigeria's cocoa production is therefore large.

82. Prospects for Expansion. A number of factors favor considerable expansion of Nigeria's cocoa production. First, there are sizeable areas of both virgin and presently-planted cocoa lands suitable for new planting or replanting. One sulvey classifies about one million ac as good or fairly ANNEX 4 Page 26

340,000 ac of good cocoa land, and the FAO estimates that approximately figures do present cocoa land. should be available for replanting. These Eastern states. not include additional smaller areas in the Mid-Western and larger progam, The Bank's current project, the first phase of an anticipated old cocoa aims at planting 16,500 ac of new and replantirLg 27,000 ac of for the over the next five years. Provision is also made in the project an inventory identification of additional areas for future development through cocoal of vacant land suitable for cocoa and a sample survey of existing be drawn up. land. Based on these surveys, a detailed investment plan is to cocoa with new 83. Second, satisfactory techniques for replanting old is large. high-yielding varieties are available. Present yield variation an average Amelonado yields vary from 100 lb/ac to 1,000 :Lb/ac, with production potential yield of 800 lb/ac but an estimated average actual of hybrids of 360 lb. While little data is available concerning the yields of over 2,000 under small scale farming conditions, trials have given yields be ancipitated. lb, and a considerable improvement on existing yields can obtain the The Western State Cocoa Project estimates that farmers could following average yields:

Year from planting 1 2 3 4 5 6 7 8 9

550 700 850 New Planting: lb/ac - - - 100 200 350 650 750 Replanting: lb/ac - - - 100 200 350 500 however, if A very high level of supervision and farm inputs is required, these yield levels are to be obtained over large areas. average yields 84. Third, in the future it should be possible to raise Institute through continued research (particularly at the Cocoa Research required inputs. of Nigeria) and by supplying farmers with new techniques and and black- Finally, as research develops new varieties resistant to drought wet or too dry - pod disease, many new areas now considered as marginal - too will become available for cocoa production. be in the present 85. Any major expansion in the immediate future will of the belt, cocoa belt, principally in the Western State. To the north higher rainfall, rainfall is inadequate. In the states to the east, with blackpod disease limits production. While new drought and disease-resistant such develop- varieties once developed can allow cultivation to be extended, other cocoa pro- ment will take time. By 1980, then, it is un:Likely that the or replant more ducing states (Mid-West, South-East, and Rivers) will plant than 40-50,000 ac. is preparing plans 86. Government Plans. The Western State Government of more than for planting or replanting 500,000 ac by 1980, an average expansion, it is 50,000 ac yearly. Although there is potential for major 1980 given: unlikely that the 500,000 ac program could be carried out by ANNEX 4 Page 27

- the time required to identify suitable. areas and prepare investment plans and projects;

- the need to build up an adequate supply of suitable seed (a shortage of such seed already is a problem in the present project);

- the difficulty of identifying creditworthy farmers and providing sufficient credit to them; and

- the whole problem of organization and management, including inadequate numbers of qualified personnel.

87. In view of the magnitude of these constraints, a more realistic rate of development probably would be 15-20,000 ac per annum. Assuming that it is possible to develop an average of 15,000 ac per annum, 150,000 ac would be planted or replanted during 1971-80. Stepping up the rate of development to an average of 25-30,000 yearly between 1980-85 would cover an additional 125-150,000 ac. On this basis, over the next fourteen or 15 years, Nigeria would plant/replant 275-300,000 ac of cocoa. On the basis of yields assumed for the Western State cocoa project this modified planting and replanting program could increase production by about 20,000 tons by 1980, 55,000 tons by 1985, and 100,000 tons by 1990 when all cocoa would be in full bearing. This is rather less than the production required for Nigeria to retain its share of world exports.

88. Even a program of this size would be highly ambitious and require vigotous efforts t,o:

(a) expand improved seed production and distribution;

(b) improve existing organizational arrangements;

(d) provide sufficient investment and operating funds.

R9. Expanding production and distribution of improved planting materials - Amazon/Amelonado hybrids and a series of CRIN "Elite" varieties are available - would require establishing seed gardens and central nusrseries in oroject areas. Hand pollinators would have to be trained. Seedlings could be raised in polythene bags in the central nurseries.

90. A project unit in the WJestern State Government's Ministry of Agri- culture handles the present Phase I Project. For a large-scale program, however, it will be essential to create an organization outside of the regular ministry. Such an organization would need to be commercially- oriented and have greater flexibility in its management, including hiring personnel, than is possible under the present arrangements. Toward this end, serious consideration should be given to creating an autonomous development authority which would be responsible for cocoa development in all states. Adequate control by the Federal Government and the states concerned could ANNEX 4 Page 28 be accomplished through appropriate representation of the governments on the managing board of such an authority, which would operate within policy guidelines set by the governments. Fields operations in each project could follow the pattern established in the Western State Cocoa Project in which villages included in the scheme are selected from Cocoa Survey records, which contain details of farm age and size and which facilitate the grouping of project farmers into localized groups, each containing about 25 farmers, and farmers in selected villages apply for participation in the project. Each applicant and his family is individually appraised by project officers before approval.

91. Credit could be supplied to qualified farmers by the National Agri- cultural Credit Bank through cooperatives (e.g. the Cooperative Bank and the Cooperative Investment and Trust Society) but both their structure and operations probably would need to be strengthe!ned. Credit cash payments to farmers would be made only after successful completion of various stages of planting and maintenance and would be dependent upon satisfactory progress reports from the field staff (see Annex 10).

92. The on-farm cash costs of establishing smallholder cocoa in Nigeria are estimated to be NE 60-70 per ac up to four years from planting when recurrent costs can be met from sales. This figure includes planting material, fertilizer and other chemicals, and hired labor, but excludes farmers' labor. The 150,000 ac program would therefore involve direct investments of about NE 10 million by 1985 and a total investment about NE 20 million in 20 years for the full 275-300,000 ac. In addition, staff and organizational costs of up to a further N1J 10 million could be anticipated.

93. A key problem facing attempts to det:ermine a national policy for Nigerian cocoa development is the lack of accurate data on the potential prodtuction of existing cocoa. Only with such information available can sound decisions be made on the best mix of new planting, replanting, and the intensification of production on existing acreage. It could be that the most economic approach to increased production in the short and medium term would be a fertilizer program and/or an intensified capsid control program: am)d long-term requirements may then be met by much smaller planting programs than those considered above. It is therefore important that the whole cocoa area be covered in a detailed study. Such a survey will be expensive, but could attract finance from the UNDP special fund.

November 8, 1971 ANNEX 4 APPENDIX 1 Page 1

OUTLINE OF A RUBBER PROJECT

1. The schedule of establishment involves a nucleus plantation, in two stages of 5,000 acres over eight years and 20,000 acres of smallholdings replanted in stages over 11 years. The main assumptions as to yields, costs, and product price are given in the text. Total expenditures by year, and cost per acre to maturity, are given in Appendix Table 4.1.1. Factory costs would be in addition: just under EN 10 per acre for nucleus plantation and smallholding, versus LN 12 per acre for a central factory serving smallholders only.

Input Assumptions for Nucleus Rubber Plantation

2. For Year 0:

(a) Land acquisition at IN 5.0 per acre;

(b) Rent at 3/per acre throughout life of project;

(d) Underbrushing at 7 man-days per acre;

(e) Felling at 15 man-days per acre;

(f) Planting material at EN 14.25 per acre; EN 10 per acre in Year 0 - balance in Year 1;

(g) Roads and bridges at EN 5.0 per acre spread over the first four years of the project; and

(h) Estate operation and administration - charged at EN 4.5 per acre.

3. For Year 1:

(a) Planting material - balance of EN 4.25 per acre;

(b) Burning at 1 man-day per acre;

(d) Lining, holing and planting at 9 man-days per acre;

(e) Establishment of covers: Labor at 2 man-days per acre; Materials at 5 lb at 1/6' per lb; ANNEX 4 APPENDIX 1 Page 2

(f) Fertilizing: Labor at 1 man-day per acre; Materials - 6 oz rock phosphate/hole 9 at EN 15/t = Sh /ac; - 8 oz NPK per seeding = Sh 20 per ac; (g) Maintenance (including 7/- per acre for tools): Weeding at 8 man-days per acre;

(h) Pest and Disease Control: Estimated at EN 3.4 per acre for years 1-7 (at 8 sh per day wage rate);

(i) Estate operation and administration: Estimated at EN 9.0 per acre throughout project life; and

(j) Buildings and services: Staff quarters - EN 35,000 over Years 1, 2 and 3;

Workers' quarters - EN 30,000 over Years 1 and 2. 1/

Nonresidential - EN 30,000 over Years 1 and 2;

Water supply and electricity - Estimated at EN 4.0 per acre over Years 1, 2 and 3 of project and replaced after 10 years at similar cost; and

Estate vehicles - Estimated at EN 1.0 per acre throughout life of project.

4. For Years 2-9:

(a) Maintenance. Estimated at approximately EN 6.85 per acre per annum (includes labor in fertilizer application) at a wage rate of 8 sh per man-day; and

(b) Fertilizers: Year 2 - 16 oz/point at 180 = EN 3.0 per acre; Year 3 - 20 oz/point at 160 = EN 3.6 per acre; Year 4 - 20 oz/point at 150 = EN 3.35 per acre.

5. For Year 10 and onwards:

(a) Maintenance estimated at EN 5.7 per acre per annum at 8 sh per day wages.

Input Assumptions for Replanting Smallholdings

6. For Year 0: 1/ It is assumed that the nucleus plantation labor force is derived mainly from surrounding villages, and hence workers' quarters are confined to 200 units at E 150 per unit. ANiNEX 4 APPENDIX 1 Page 3

(a) Underbrushing and felling at 30 man-days per acre;

(b) Plantirng material at EN 14.25 per acre; EN 10 per acre in Year 0 - balance in Year 1; and

7. For Year 1:

(a) Planting material - balance of EN 4.25 per acre;

(b) Burning, clearing, stacking and reburning at 15 man-days per acre;

(d) Fertilizing: Labor at 1 man-day per acre; Materials at EN 1.45 per acre;

(e) Weeding - at 5 man-days per acre: (Confined to rows only - it is assumed that intercropping would be carried out in avenues during Years 1 and 2; hence the absence of a cover cover establishment cost) and

(f) Pest and disease control: Estimated at the same rate as for nucleus estate, i.e. EN 2.5 per acre at 5 sh per day wage rate.

8. For Year 2:

(a) Weeding at 5 man-days per acre;

(b) Fertilizing: Labor at 1 man-day per acre; Materials at EN 3.0 per acre; and

9. For Year 3:

(a) Weeding at 7 man-days per acre. Assumes that intercropping has stopped and therefore weeding increased to cater for avenues;

(b) Fertilizing: Labor at 1 man-day per acre; Materials at EN 3.6 per acre; and

10. For Year 4:

(a) Weeding as in Year 3;

(b) Fertilizing: Labor at 1 man-day per acre; Materials at lEN 3.35 per acre; amd

11. For Years 5 and 6:

(a) Weeding as in Year 3; and

(b) Pest and disease control as in Year 3.

12. For Year 7:

(a) Weeding as in Year 3;

(b) Pest and disease control as in Year 3; and

13. For Years 8 and 9:

(a) Weeding estimated at 5 man-days per acre.

14. For Year 10 and Onwards:

(a) Weeding estimated at 3 man-days per acre.

Yield Assumptions (lbs/acre) Smallholdings

Year of Tapping Lbs/acre

1 250 2 450 3 700 4 1,000 5 1,100 6/13 1,200 14/15 1,100 16/17 1,050 18/20 1,000 21/22 950 23 850 24 800

Average over 24 years of tapping - 988 lbs/acre. ANNEX 4 APPENDIX 1 Page 5 Smallholdings Tapping Costs

15. For analysis purposes the cost of tapping and delivery to latex/ coagulum centers was applied at the following rates:

Conventional Tapping atd3 per lb and 4d per lb. Polybag coagulum at 1.8 per lb and 2.5 per lb.

Smallholdings Latex/Coagulum Collection/Transport to Central Factory

16. Estimated at EN 5.0 per ton.

Schedule of Factory Requirements and Expenditure for the Nucleus Estate Smallholdings Cropl

17. The requirements based on the total crop assuming that:

(a) The nucleus plantation is planted in two stages of 5,000 acres each, i.e., in Years 1 and 2 of the program; and

(b) The smallholdings are replanted at a rate of 2,000 acres per annum in Years 1 and 2 and at 4,000 acres per annum in Years 3, 4, 5, and 6.

18. Factory capacity is determined on the basis that in the peak production period the crop is 33-1/3% higher than the annual daily average.

Year of Program Capacity Requirement Capital Expenditure (tons/day) (EN '000)

6 - 55 7 10 70 8 20 15 9 20 15 10 30 30 11 40 30 12 50 30 13 60 30 14 70 15

Total 290

19. Direct dmanufacturing costs and distribution to port are estimated at 1.2 per lb for direct costs and distribution to port at 0.5d per lb.

20. When estimating the factory requirements for the smallholdings, only the total capacity requirements were calculated to reach 45 tons/day by Year 15. The capital expenditure (allowing for staff quarters, etc.) ANNEX 4 APPENDIX 1 Page 6 was estimated at EN 235,000 over the period Years 5 through 14. For analysis purposes, when calculating the returns to investment for the program involving smallholdings using a central factory, the cost per lb for direct manufacture was retained at 1.2d per lb (a somewhat conservative estimate).

Estimated Staff Requirements/Expenditure for Supervision of the Smallholdings Replanting Program

21. It was assumed that additional supervisory staff would be required during Years 1 to 6 of replanting. At maturity, it was assumed that the normal extension services would be applied to the replanted areas and hence no further change was made to t:he program. Staff and costs are listed in Appendix Table 4.1.2.

November 8, 1971 TABLE 4- .1 TOTAL AND PER ACRE COSTS, RUBBER PROJECT

A. Total Expenditure

'Years 0 1 2 3 4 5 6 7 Totala/

Nucleus at 5 sh/day 108 275 283 255 216 186 169 189 1,681 Nucleus at 8 sh/day 12)4 319 328 280 241 211 i9h 214 1,91

Years 0 1 2 3 4 5 6 7 8 9 10 11 Total b

Smallholdings at 5sh/day 49 88 148 213 260 304 270 213 196 154 110 103 2,108

B. Cost per Acre to M4aturity (end of Year 6 from planting) c/

Nucleus Plantation, at 5 sh per man-day ...... EN 156 per acre

Nucleus Plantation, at 8 sh per man-day ...... N 177 per acre

Smallholding, at 5 sh per man-day ...... EN 72 per acre a/ Includes one year of maintenance in mature rubber Stage I. b/ Includes five years of maintenance in mature rubber State I; four years in State 2; three years in Stage 3; two in Stage 4; and one year in Stage 5. c/ Includes an allowance of MN h per acre for tapping utensils. TABLE 4.1.2: SUPERVISORY COSTS, RUBBER PROJECT

e/ Number of A.I.'s Y A.A.'s c/ A.A.S.'s d/ A.D.'s Annual Total Year of Replanted Annual Annual Annual NO Cost Cost Program Holdings N° Cost No Cost NO Cost (EN'OOO) 7 (fl 00) - O (LN-'-) (LN'OOO) 15.0 1 400 14 7.0 2 1.4 1 1.5 1 3.0 3.0 20.0 2 400 28 14.0 3 2.1 1 1.5 1 3.0 35.0 3 800 56 28.0 4 4.2 1 1.5 1 1 3.0 50.0 4 800 80 40.0 8 5.6 2 3.0 1 3.0 70.0 5 800 110 55.0 11 7.7 2 4.0 3.0 90.0 6 800 140 70.0 14 9.8 3 4.5 1 1 3.0 75.0 7 - 120 60.0 12 8.4 3 4.5 3.0 1 3.0 70.0 8 - 110 55.0 11 7.7 2 3.0 50.0 9 - 80 40.0 8 5.6 2 3.0 1 1.5 1 3#0 35.0 10 - 56 28.0 6 4.2 1 3.0 20.0 11 - 28 14.0 3 2.1 1 1.5 1 a/ Average size of replanting unit taken as five acres for calculating staff requirements. in order to provide for As pointed out in the Annex text,. a arit size of eight acres would be desirable two tapping tasks of four acres each per family. b/ A.I. Agricultural Instructor - Total Annual Cost - EN 500 c/ A.A. = Agricultural Assistant - Total Annual Cost - EN 700 d/ A.A.S. = Assistant Agricultural Supt. - Total Annual Cost - EN 1,500 e/ A.0. = Agricultural Officer (senior) - Total Annual Cost - EN 3,000 T/ Rounded up to nearest EN 5,000.

03i r IV r\3 ANNEX 4 APPENDIX 2 Page 1

OUTLINE OF AN OIL PALM PROJECT

1. The main assumptions regarding a possible approach to oil palm development are discussed in the text. The purpose of this appendix is to fill in some of the details, as they relate to the rate of return analysis.

The Smallholder RepLanting Program

2. Basic assumptions are as follows:

(a) Replanting of 20,000 acres, carried out at a rate of 5,000 acres per annum over a four-year period;

(b) The nucleuis estate purchases Fresh Fruit Bunches (FFB) from the 20,000 acres of surrounding smallholdings commencing in Year 4 of the program; and

(c) Estimates of the crop produced from replanted palms plus the wild palms left standing in the groves (12 per acre) are based on a combination of:

(i) Eastern Nigeria Oil Palm Rehabilitation Project (ENOE'RP) (IBRD) 1966; and

(ii) Yield estimates for replanted palms as given in the t:ext.

3. Mill processing facilities are introduced in Year 4 of the program and therefore the yield from the residual wild palms left standing in the replanted areas was not included in the rate of return analysis tntil Year 4 of the replanting program.

4. Replanting costs for smallholdings are, in general, based on the IBRD data relating to labor and fertilizer inputs (Annex 2 of ENOPRP - 1966). During the first three years of the smallholder replanting program, the allowance for man-days in harvesting has been excluded from the rate Of return analysis until Year 4 of the replanting program. Fertilizers are costed at EN 0.30 per ton (including transport from port to farm) throughout the life of the program.

5. Other inputs applied to the smallholder section of the program are as follows:

(a) Planting material at EN 12.0 per acre (including transportation to collecting points for smallholders). The planting material would be produced in a central nursery on the nucleus estate; ANNEX 4 APPENDIX 2 Page 2 (b) Feeder roads and bridges are charged at an average rate of EN 0.3 per acre replanted and spread over Years 1, 2 and 3 of the replanting program.

(c) Administration and nonfarm costs are assumed to be 20% of the requirements estimated for the ENOPRP - 1966, but raised by a factor of 15% to allow for cost increases since 1966 and contingencies. On this basis the cost of administration and nonfarmi elements has been estimated as follows (EN '000):

Year 1 2 3 4 5 6 7 8 9

88 95 100 102 59 59 51 43 17

(d) Fruit delivery to the mill is estimated at EN 0.75 per ton FFB 1/;

(e) Wire collars for palm seedlings at planting, estimated at EN 4.5 per acre; and

(f) Assumptions as to basic on-farm inputs are given in Appendix Table 4.2.1.

In the FAO report, "Agricultural Development in Nigeria - 1965-1980" (p. 136), it is estimated that cutting and stripping fruit bunches cost approximately EN 0.6 per ton of fruit bunch. These figures were based on an average daily wage rate of EN 0.15 and therefore at a daily rate of f 0.25 this would currently cost about EN 0.85 per ton of fruit bunch. ANNEX 4 APPENDIX 2 Page 3

Appendix Table 4.2.1: BASIC ON-FARM INPUTS FOR SMALLHOLDERS LABOR INPUT

Year .1 2 3 4 5 6 7 8 9- onwards LABOR (man-days/ac)

Land Clearing 20.0 3.0

Lining and Pegging 1.0

Planting 2.0

Fertilizing 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Maintaining 12.0 9.0 8.0 7.0 6.0 6.0 6.0 5.0 4.0

Harvesting - _ - 5.0 3.0 6.0 8.0 9.0 9.0

Total 35.5 9.5 8.5 12.5 12.5 12.5 14.5 14.5 13.5

FERTILIZER (lb/acre) 16 90 1?0 210 90 90 90 90 90

Input Assumptions for Nucleus Oil Palm Plantation

6. For Ye.ar 0:

(a) Land acquisition at EN 5.0 per acre;

(b) Rent at 3 sh per acre throughout life of project;

(c) Surveying, underbrushing, felling, etc. at EN 10 per acre at daily wage of 5 sh - proportional increase for 8 sh daily wage;

(d) Planting material at EN 9.0 per acre;

(e) Roads and bridges at EN 6 per acre over the first 7 years; and

(f) Estate operation and administration - charged at EN 4.5 per acre.

7. For Year 1:

(a) Lining and pegging at 1 man-day per acre + 1 sh.per acre for pegs; ANNEX 4 APPENDIX 2 Page 4

(b) Cover crop establishment at 2 man-days per acre - materials at 5 lb at 1/6d per lb;

(d) Planting seedlings - including carrying to planting hole, 3 man-days per acre;

(e) Fixing wire collars at 1 man-day per acre + EN 4.5 per wire;

(g) Weeding, spraying and fertilizer application (including removal of noxious growths) at 13 man-days per acre;

(h) Removal of noxious growths at 4 man--days per acre;

(i) Fertilizers at 60 lb sulphate of amnonia; 50 lb muriate of potash at EN 30 per ton = EN 1.5; and

(j) Estate administration at EN 9 per acre throughout life of the project.

8. For building and services:

(a) Nonresidential buildings at EN 45,000 spread over Years 1-6 of project (EN 4.5 per acre);

(b) Staff quarters - EN 55,000 spread over Years 1, 2, and 3;

(d) Water and electricity EN 120,000 spread over Years 1-5 - replaced after 10 years; and

(e) Estate vehicles at EN 1.0 per acre over the life of the project.

9. For Year 2:

(a) Weeding at 11 man-days per acre;

(b) Fertilizer application at 1 man-day per acre;

(d) Removal of noxious growths at 2 man-days per acre;

(e) Spraying at 1 man-day per acre; ANNEX 4 APPENDIX 2 Page 5 (f) Fertilizer at EN 2.2 per acre; and

(g) Spraying materials at EN 0.35 per acre.

10. For Year 3:

(a) Weeding (including noxious growths), fertilizer application, spraying, etc. at 12 man-days per acre;

(b) Fertilizer at EN 3.0 per acre; and

11. For Year 4 and onwards: maintenance is estimated at fN 6.0 per acre.

12. Harvesting and Collection Costs- (Estimated Man-day Requirements/Acre):

Year of Harvesting Man-days

1 7.0 2 7.5 3 7.5 4 10.0 5 - onwards 11.0

/1 Source: Feasibility Study East Cameroons - Oil Palm, 1967.

For analysis purposes it has been assumed that labor requirements for harvesting and collection to roadside platforms would be 10 man-days throughout: the production period.

13. Applying daily wage rates of 5 sh and 8 sh, the cost of harvesting is estimated at EN 2.5 and EN 4.0 per acre respectively.

14. Fruit delivery to the Mill. Estimated at EN 0.35 per ton.

15. Milling. Estimated at EN 1.44 per ton (includes an allowance for general overheads), based on a combination of Camdev and Sodepalm figures. 16. Phasing of Capital Expenditures for Replantings. Total expenditure would be EN 1.2 million or the equivalent of EN 40.0 per acre. The phasing would be as follows: Year of Project 2 3 4 5 6 7 *8 9 10 11

Expenditure 0.35 0.40 - 0.075 0.075 0.075 0.075 - 0.075 0.075 ANNEX 4 APPENDIX 2 Page 6

17. Field Establishment Costs for a Nucleus Plantation (10,000 acres) and Replanting 20,000 Acres of Surrounding Oil Palm Smallholdings. The schedule of establishment being:

(a) Nucleus Plantations - in four stages of 2,500 acres over 7 years; and

(b) 20,000 acres of smallholdings replanted in stages over 7 years.

18. Cost per acre to maturity (end of Year 3 from planting):

Nucleus Plantation at 5 sh per man-day EN 121 Nucleus Plantation at 8 sh per man-day EN 138 Smallholding at 5 sh per man-day/ ]EN 70

/1 Includes an allowance for administration at EN 31.

The Central Mill

19. The mill would be capable of handling the crop from the 10,000- acre nucleus plantation and 20,000 acres of replanted smallholdings. For estimating mill capacity requirements at the peak crop stage, it is assumed that 12.5% of the annual crop is produced in the peak month and that the maximum operating hours per month are from 500 to 550 hours. The year-by-year figures are as follows:

Year of Project 4 5 6 7 8 9 10 11 12 13 14

Crop from Plantation and Smallholders ('000 tons) 10 18 32 55 70 90 107 120 130 136 140

Capacity Required /1 /2 (tons/hour) 9-- 9 9-m 18 18 27 27 27 36 36 36

/1 Working for 1 shift. /2 Working for 3 shifts. ANNEX 4 APPENDIX 2 Page 7 20. A mill built on a turn-key basis at nine-ton-per hour capacity and later expanded to 36 tons per hour is estimated to cost:

Capacity/Hour Phasing of Expenditure

9 tons EN 0.75 million

18 tons EN 0.15 million additional

.27 tons EN 0.15 million additional

36 tons EN 0.15 million additional

The above figures include an allowance for mill staff quarters. Capital expenditure for the first phase of mill development is committed in the two years preceding the year in which the mill is required. Subsequent increases in capacity involve capital being committed two years previous to requirement.

Distribution and Collection Costs

21. These are set out in Appendix Table 4.2.2 The total for palm oil would be EN 7.5 per ton and for kernels EN 11.3 per ton, excluding taxes and duties. ANNEX 4 APPENDIX 2 Page 8

Appendix Table 4.2.2.: DISTRIBUTION COSTS: PALM OIL AND KERNELS (EN per ton)

Oil Kernels Shipping and Selling 1.0 2.1 Transport (100 miles)/1 3.0 4.0 Buying allowance/2 - Bags Handling and Storage - - Weight Loss Allowances 0.3 0.6 Produce Inspection 0.8 0.8 Bulking/3 1.0 - Research Contributions 0.4 0.4 Administration Expenses 0.5 0.5 Contingencies 0.5 0.5 7.5 11.3

Excludes:

Export duty at 10% (EN 4.7) (EN 4.5) Purchase Tax EN 4 per ton (Oil) EN 2 per ton (Kernels)

/1 Estimated at 7.2 per ton per mile for oil, and 9.6 for kernels. /2 Assumes that the nucleus plantation is given the status of a Licensed Buying Agent and that no charge is made for "initial produce assembly function" - fruit collection costs having already been built into the program of operation. /3 Oil assumed to be in a suitable form for immediate bulk storage - not requiring treatment 1:o remove moisture and dirt.

November 8, 1971 ANNEX 5 Page 1

NICERIA

AGRICLTLTTRAL SECTOR STIRVEY

FORESTRY

A. The Current Situation

Forest Resources and Role in the Economy mi 1. Of Nigeria's total land area of 356,669 sq mi, about 139,000 sq or 39 nercent are classed as forest land. Nearly 45,000 sq mi, representing 12.6 percent of the total land area, form the current forest estate (forest and game reserves). This forest estate comprises less than 100 sq mi of total mangrove forest and about 7,500 sq mi of high forest (2.1 percent of The land area): the remainder consists of savanna of one type or another. distribution of the forests is shown in Table 1, and the forest estate by States is given in Appendix 1.

Table 1: THE FOREST ESTATE

Annual Major % of Type RRain State Area Total Value (in) (sq mi)

High Forest

Dry Forest 6n W4estern ) ) High ) ) Semideciduous 60-80 Western ) ) High ) 5,000 ) 16.8 Benin Forest 7n-go Mid-West) ) High, Mahoganies ) High Rainfall gn S. East 2,500 ) Poor

Savanna 20-40 Northern States 37,n00 83.0 Firewood

Poles Mangrove Forest qo-2no Coast 100 0.2 Firewood, ANNEX 5 Page 2

2. The most valuable area is the high forest, nearly all of which lies in the Western, Mid-Western and South-Eastern States, and which supplies 757 of production on a cutting cycle of 50 years. Of the component parts, the dry and semideciduous forests are in general the richest in well known commercially valuable timber species, though the well drained areas of the Benin forests are famous for their mahoganies; the high rainfall forests are very poor in traditional commercial timbers. The savanna areas contain very few tree species of commercial timber value, the trees in general being of short bole length and small in girth. The main use to which these forests are put is for the supply of firewood. There are nearly 600 species of trees which reach a height of at least 4n ft or a girth at breast height of 2 ft, though only about 30 of the more than 100 usable tree species are utilized in any appreciable quantities.

3. Resources outside the high forest estate are expected to be exhausted within the next two decades. WIithin the high forest estate, at the Dresent rate of exploitation sustained, all natural forest will have been logged over shortly after the turn of the century; exploitation, however, is selective and unit output could be more than doubled through the utilization of more species and increased intensity in use of existing species.

4. During 1960-66, timber exports realized an average of E 7.7 million a year, but this has since dropped to E 4-5 million. Minor forest oroducts, including wood carvings, gum arabic, spices, shea nuts, kapok, raphia, tannin, wild animals, and animal trophies have also brought in foreign exchange earnings. The value of the industrial wood consumed locallv is estimated at between E 15-20 million annually during 1955 to 1P64. It is difficult to place a value on the fuel and poles consumed.

5. More than 10,000 persons are directly engaged in logging, extraction, and sawmilling. Government staff, excluding the daily paid labor force, amounts to over 1,000. The permanent labor force of the Forest Denartments in 1966 was estimated at about 9,000.

General Policv and Management

6. Forest administration is based on a national forest policy formulated in 1946 and modified by the three former Regional Governments. The policy recognizes the need to dedicate adequate land to permanent forestrv, to meet local demands for timber and sustain an export market as well as to conserve water supplies, maintain soil stability, provide for recreation and conserve wildlife, to direct the management of the forests to obtain maximum sustained yield, and to establish plantations to orovide fuel and poles where the need exists. The northern States also recognize the necessity to perpetuate and maintain, within the savanna, areas for grazing. Reservation is essentially complete except perhlians in the Cuinea Savanna zone and in the saline and freshwater swamp areas of the Wiger Delta. ANNEX 5 Page 3

7. The State Forest Departments are responsible for the management of the forest estate. Working Plans, where they exist, are frequently out of date. Yield control of the high forest is by area based on minimum felling girths and a 50-year felling cycle, reduced recently from 100 years. Logging is organized by granting timber licenses for exclusive cutting rights over specified areas for specific periods. Fees and royalties are fixed for each species, with the forest owners receiving the royalties and St:ate Government the fees. Fees are paid on the basis of either standing t:ree or volume outturn, except in Mid-Western State where graded fees are now charged by area.

The Government is aware of the need for an up-to-date forest inventory. Most of the Nigerian high forests are systematically enumerated in a sample census (1%) during the early 1930's, and a summary of the data exists in the Department of Forestry, University of Ibadan. An area of 1,6n0 sq mi in South-Eastern State, comprising the Uwet-Odot, Ekinta River and Oban Reserves, were enumerated by a Canadian team immediately prior to the recent civil war, and copies of the report exist at Calabar and Thadan; this enumeration included the total wood volume of all species. The extensive mangrove and freshwater forests of the Niger Delta were being enumerated in the mid-1960's but the work was interrupted by the civil war. To up-date the current position in the important high forest areas of Western, Mid-Western and Kwara States, the Federal Government has asked T1NDP to implement a forest invenotry of the high forest and derived savanna areas south and west of the Niger and, on the basis of this and market studies, to drain up a plan for development. This project is likely to become operational during 1971/72.

Funding for departmental activities has suffered under the present budgetary system, which is characterized by annual allocations which are not known until the beginning of each financial year. This presents serious problems in regard to carrying out an annual planting orogram: the sequence of planning, raising seedlings, site preparation and nlanting requires a guaranteed supply of funds over more than one year, as well as the timely release of funds within each financial year. Western State realized the need to guarantee funds well in advance if a planting program is to be carried out and in 1970 created a "Forestry Trust Vund" into which it was agreed to vote E 250,000 annually. However, in 1069/70 and 1970171, only a proportion of the full amount voted was released and this too late for it all to be spent. The Mid-Western State Government recently agreed that 20% of the forestry revenue will be paid into a regeneration fund, but the decision remains to be implemented.

Forest Industries

10. The need for close integration between timber production and forest industries to achieve rational development has become increasingly recognized by hoth sides during the past decade. But coordination is ANNEX 5 Page 4

difficult because responsibility for the two facets of development is placed in separate ministries, and it is further complicated by virtue of a Federal constitution. The development of forest industries has been infLuenced strongly by the fact that there has been, and still is, an excellent overseas market for a restricted comaponent of the resource, in particular for log exports.

11. Sawmilling. Pit-sawing has been prevalent in Nigeria, but during recent years the value of mechanization on a small scale has begun to be better appreciated; as a result numerous smal:L sawmills have come into existence to join the few big and largely foreign-owned enterprises. Un- fortunately, the small sawmills are inefficient and general produce poorly sawn, air-dried timber of lower than export quality; as an offset, the quality of logs accepted by the small mills is of lower average quality. The number and distribution of sawmills by location in 1970 was as follows: 1/

East Central 4 Kwara 2 Lagos 32 Mid-Western 15 Rivers 4 South-Eastern 2 Western 38

Total 97

12. Sawmills are concentrated in Western, Lagos and Mid-Western States and are absent in most of the northern states., Only 16 mills have a production of over 100,000 cu ft, no more than 10 are producing export- grade sawn wood, and only two produce kiln-dried timber. These data exclude the large numbers of very small sawmills or sawbenches, which scarcely qualify as primary forest industry (these are particularly prevalent in Western and Lagos States, and a few exist in some of the northern States).

13. Plywood and Veneer. There are at present three mills in Nigeria: at Epe, 40 miles east of Lagos; at Sapele, 30 miles south of Benin; and Calabar. Two other mills are at an advanced state of starting operations: at Ologbo, 20 miles south of Benin, and at Oshogbo, 50 miles northeast of Ibadan. Preliminary negotiations are taking place for setting up large integrated wood industries, comprising sawmill, plywood, chipboard and veneer plants, and furniture and woodworking sections at Ondo in Western State and in the eastern part of South-Western State. There is at present no local production of particle board and fiberboard.

1/ Draft report of National Forestry Development Subcommittee for the "Development of Industries, including Economics and Finance." ANNEX 5 Page 5

14. PulT and Paper. At present there is one paper mill at Jebba, nearly 3nn miles from Lagos, with an annual capacity of 12,000 t. It is entirely dependent upon imported pulp, and there are some doubts whether raw material can be economically grown in the near vicinity. Research into possible species for producing long-fiber and short-fiber material is being actively pursued by C7overnment.

15. A recent 17A0 report (1968) made several suggestions for gradually increasing the domestic paper industry to reduce foreign exchange: the establishment in two stages of a 70,000 t/year sulphate pulp and paper mill in the vicinity of Calabar or Port Xarcourt, the expansion of the paper mill at Jebba, and the construction of a 30,000 t a year newsprint mill at Lagos or near Epe. Currently, preliminary steps are being taken for twm feasibility studies. One in W4estern State is concerned with a tmelina pulp--wood plantation and pulp mill project at Ajebandele, 30 miles east of Epe, for the manufacture of industrial papers. The other is a wider inquiry into pulp and paper developments in Nigeria. In view of the country's rapidly increasing imports of paper, these studies are of high priority -- unnecessary delays in establishing plantations will he costly for the economy.

16. Secondary Industries. Nigeria has numerous furniture factories, of all sizes, which are most commonly found in Lagos and Western States. There are also three match factories, which initially used imported raw material. The largest, the United 'tatch Co. of Nigeria Ltd. at Ilorin, is now using a high proportion of local timber (Pterygota Macrocarpa and Triplochiton Scleroxylo ). Prefabricated houses are being produced at Sapele by the African Timber and Plywood Co. Ltd., but a strong prejudice still exists against them, and they are not cheap relative to cement structures.

17. The importance of secondary wood industries is rightly emphasized in the Federal and State Development Plans. The Federal Plan specifically mentions two factories for the manufacture of wooden furniture for export. It also refers to the exploration of ways whereby lesser known species can he accepted for industrial purposes, to the increase in efficiency of the existing forest industries, and to the commercial utilization of forestry waste.

Regeneration

18. Development of future forest resources is traditionally a government responsiblity in Nigeria. Systematic natural regeneration of the high forest has not proved a success. The alternatives are treatment of regeneration areas and/or plantation methods. Clearance poisoning and lumber cutting may increase the regeneration yield--by about five merchantable trees per acre on a cutting cycle of 50 years--and the cost ner acre of such treatment has been relatively low in Nigeria. This ANNEX 5 Page 6 anproach to regeneration was followed until about 1965, by which time nearlv 300 sq mi had been treated. Small plantations for fuel and poles have long been established in the savanna areas and close to some major markets in the high forest zone; and for many years plantations for timber tmder the taungya 1/ system and more recently through direct departmental clearin:g and land preparation nave been intensively pursued. In the early 1960's, a decision was taken by States to concentrate on plantations in high forest areas.

1n. Plantation data (given in Appendix 1) are not particularly accurate in detail, but the figures do show a vast increase of planting over the past decade or so: from 1,000 ac in 1958 to nearly 12,000 ac In 1n68. In Western States, the commonest species planted were Tectona grandis and rqmelina arborea; in Mid-Western State, of a total of 43,735 ac, a MaucleaMTeliaceae mixture accounted for 38X, with the rest more or less equally divided between Terminalia ivorensis, Nauclea diderrichil, Cmelina arborea, and Tectona grandis. In the other States, Gmelina arborea forms a high percentage of the plantations in South Eastern, East Central and Kwara States; whereas; Eucalyptus species and Asadirachta indica predomilnate in the northern States, other than in rorth Central, where there is high proportion of Tectona grandis.

2n. The private sector also plays a role in forest regeneration. There are a few very small privately and company-owned forest plantations growm for fuel and building poles. Individual farmers in parts of the country are planting a few trees, especially teak, on community land they have acquired for farming; the trees prolong their holding of the land after traditional farming activities have ceased. In Benue-Plateau State, on the plateau, wqhere fuel and poles are in very short supply, individuals and small communities have started to plant Eucalyptus camaldulensis, and the Government is encouraging this by annual free distribution of 500 seedlings of this species to each person who requests it. Plantations for pulp using Gmelina arborea are proposed on coppice rotations of five to ten years.

Mfarketing

21. There is no centrally organized system for marketing and grading forest products. Exports of logs and sawqn timber are marketed in general to established customers, and a membership association-the Nigerian Timber Association, which has its own limited inspection service--has proved a satisfactory guarantee of product. Limited export by smaller

I! A system of combining controlled shifting cultivation with the establishment of a tree crop to mutual advantage. The farmer clears the land and plants annual food crops, the forester plants tree seedlings among the farm crops. ANNEX 5 Page 7 and transitory operators, or by nonmembers of the Association, have not presented a major problem. A formal grading system for export timber would raise the cost of timber, and is not necessary at the present juncture. Exports of logs, sawnwood and plywood veneers for 10 years are shown in Appendix 2. i2. On the internal market, there is undoubtedly a need for considerably improvement in the overall quality of sawn timber, and some rationalization in use of different sizes, lower grades of timber, and of species. There is not a good case for a full-scale grading system, however, nor for a Timber Marketing 'Board--such an approach has not Droved a success in Ghana and, moreover, Nigerians are currently dis- enchanted with marketing hoards in the field of agriculture. It is recommended, however, that government establish timber depots at a few important market centers where seasoned, treated, and graded timber of a large range of species can be bought at a slight and, if necessary, subsidized premium. These depots would be initially part of a Government extension service, but thev should be available for sale to private operators as and if the opportunity arises.

Forest Organization and Staff

23* Each of the 12 States has its own Forest Department under a Chief Conservator of Forests and generally located in the Ministry of Agriculture and Natural Resources. In addition there is a long established rederal Department of Forest Research (FDFR); a Federal Department of lrorestry (VDF) was created in 1970; and a Forestry faculty is part of the lTniversity of Ibadan. A National Forestry Development Committee has recently heen established, with representatives from each State Forest Service and the IJniversity of Thadan's Department of Forestry; the chairman is the Director of the Federal Department of Forestry. This committee created seven subcommittees to report on future development over a 15-year period--to 1985--for discussion at national level in 1971. It would be highly desirable for the committee to add representation from the industrv side of forests development.

24. The Federal Department of Forestry is at present based at Thadan, sharing accommodations with the forestry research unit. Its final location has yet to be decided. While it was supposed to be located in Lagos--to be close to the Federal Ministry of Agriculture and Natural Resources-there are undoubtedly strong grounds for it to be located in Thadan, which is the center of other Federal forestry organizations and of the Western State where forestry is important. If it remains in Ibadan, a permanent office would be located in Lagos, and the Director himself would he'present in that office regularlv on a fixed schedule. The Denartment will. have three Divisions: ANNEX 5 Page 8

(a) Forest Management;

(b) Forest Education and Trainingz and

Of the senior staff establishment 1/, the Director, Chief Forestry Planning Officer and one Assistant Conservator position have been filled. They are assisted bv a recently appointed FAO planning adviser.

o'5. The FDFR, which will shortly achieve institute status, includes a well-equipped timber Research Laboratory. There is a Savanna Forestry research Station at Samuru and until the civil war there was a substation at Enugu in the east and a field station at Sapoba south of Benin. There are approaching 150 professional research and teaching staff, of whom about 20% are expatriates; the latter are in the Forest Services of the Northern States, in research or teaching (Appendix 3). Most of the States and, in Particular, the northern States, are deficient in professional staff, and many of the present staff are relatively young and inexperienced. There is also a similar deficiency in the technical staff.

B. The Basic Problems of Forestry Development

?6. Domestic consumption of forestry products is growing very ravidly in Nigeria. The major components of this demand are fuel wood, sawnwood, poles and paper, with additional minor requirements for panel products and matchwood. Fuelwood is by far the most important category, accounting for perhaps 957 of domestic needs for forestry products. How- ever, from a forestry development standpoint, sawnwood and paper are of greater interest.

97. There are substantial differences in available estimates of demand for sawnwood. One base for projecting sawnwood consumption is provided by various estimates which put domestic consumption in 1966--including exports--at about 16-18 million cu ft. Working from this base, Enahor calculated the roundwood voluime equivalent at 30 million cu ft 2/.

1/ Comprising a Director, a Chief Forestry Planning Officer, two Principal Conservators of Forests, three Senior Assistant Conservators of Forests, 12 Assistant Conservators of Forests, 13 Forest Superintendents of varying grades, a Principal Game Officer, a Senior Came Officer, six Came Officers, and five Game Wardens of varying grades.

2/ F.F. Enahor: "Estimating Potential Consumption Requirements for Nigerian rorest Products", paper presented at Forestry Assn. of Nigeria conference, October 1970, Ibadan. ANNEX 5 Page 9

Ile projected that the local consumption for 1985 would be nearly double and by the year 2000 would be nearly 100 million cu ft (Appendix 4). The subcommittee for the Development of Plantations 1970-85, working from a different base, assumed a level of consumption of sawnwood for 1970 of 40 million cu ft, roundwood equivalent: it forecast a demand of over 100 million cu ft (roundwood equivalent), by as early as 1985. FAO forecasts tend to support the more conservative figure: A total sawnwood consumption in the savanna region, for the year 2000, is projected at 61 million cu ft which agrees in magnitude with Enabor's projections taking into account the lower population increase assumed (see Appendix 5). At conservative estimates, therefore, the domestic demand of industrial wood only 30 years hence is expected to be at least double t:he present total production. A comparison of the projections is given in Table 2. The FAO view on paper is as follows:

"The consumption of paper and paperboard products increased (in Nigeria) from 28,000 tons from 1961 to 48,000 tons in 1965, and is expected to reach 123,000 tons by 1975 and 22n0,000 by 1980" and "may reach 400,000 by 1990." 1/

These data appear realistic. Enahor's estimate of 50 million cu ft of roundwood for 1985 has been taken for assessment of plantation needs.

Table 2: ESTIMATES OF CONSUMPTION IN 1985 TmiTlion cu ft-round equivalent)

N.F. Development Committee Enabor

Fuelwood 2,400 2,300

Sawrvr-ood 100 60

Panel products 3 1

Paper and paper products 30 50

Poles 70 1.5

Matchwood 0.5 _

Total 2,600 2,400

1/ Indicative !T'orld plan. ANNEX 5 Page 10

very 2P. The outlook for exports of forestry products is not a result promising over the short term. Exports droppetd considerably as relative of the civil war. In 1969 the export duty on logs was increased to to semiprocessed or processed timber products, which was designed current reduced encourage local processing and gain attendant benefits. The market, and volume in exports is being absorbed by the expanding domestic against a Droduction is steady. Rising production costs are operating raoid increased volume of exports. However, Nigeria is strategically demands for well placed on the West African coast to supply West European wood-base quality timber products of tropical hardwoods. in particular after panels, and on a longer term basis probably even short fiber pulp placed to domestic requirements are satisfied. The country is also well of supply a subregional demand, which could contribute to development In the industries on an economic scale, particularly for pulp and paper. of year 2000, it is assumed that exports would absorb about 20 million exports the Inn million cu ft recuired to meet demand, although by then should have greater earning power because of value added in processing.

Implication for Forestry Development cut on saw logs is 29. It has been estimated that half the present sup- obtained from outside the permanent forest estate. These "outside" the year plies can he expected to dwxindle very rapidly, howqever. By supply o0o0, when double the present demand is forecast, the entire can be seen nrobably wqill have to come from permanent forests. The trend annual quite clearly in Western State; during 1963-65, about 80% of the cu ft--was production of industrial wood--roughly 12 million of 16 million only from the forest estate; a proportion of about 50:50 was typical area five years previously. In South Eastern State, the annual felling of of high forest estate currently amounts to about 1,000 square miles relatively poor forest. Furthermore, many of the existing plantations in have been planted with species which will not. grow to timber size northern less than 50 years and some of the acreage--especially in the states--is being growm for fuel and poles. F[owever, a great proportion exploita- of future requirements will undoubtedly be forthcoming from the natural tion of natural forest, or of untreated logged-over forest. The though forests today in general only yield about 300-500 cu ft per acre, vields of 1,nnn cu,ft per acre are sometimes obtained. Double the both Dresent yields could be achieved by the turn of this century--from and the untreated logged-over forest on a felling cycle of 50 years, increased poorer natural forest that remains unlogged--as a result of an intensitv of utilization.

3n. Assuming the logged-over and unexp'Loited forest will yield half compensa- the needed volume of timber during the 25-year period 1990-2015, of torv niantations are required for the balance of 50 million cu ft of timber (including yields required for export). Species with rotations an less than 5n years must be used. On the basis of 30-year rotation, ANNEX 5 Page 11

would be annual felling area of approximately 30,noo ac of plantations per acre. Of required, giving a final yield of approximately 1,500 cu ft rate in this, about 25,000 ac would be for timber. The annual planting the rate that Nigeria has never exceeded 15,000 acres, which is only half enhanced is called for. It is clear that early attention for a greatly plantation, program is needed. on a 31. Plantations for pulp, fuel and poles can be harvested short cutting cycle. Fuel and pole wood can be produced in relatively can five to fifteen years, but by no means all fuel and pole requirements rotation of be Drovided by induced regeneration or plantations. For pulp, seven years should be possible with Gmelina arborea and certain Eucalyptus per on good sites; assuming an annual growth rate of 350 cu ft species acres is acre and a useful yield of 2,000 cu ft a total area of 30,000 will require needed by 1985 when the estimated annual consumption of pulp location of these 50 million cu ft roundwood (Table 2). The precise pulp mills. nlantations depends upon the current feasibility studies on

32. For the sawnwood program, the direct labor cost of planting amount to 30,000 acres a year--at an average cost of EN 40 per acre--will about EVT '.1 million per year.

Implementation Policy main 33. One of the main worries of the Forest Services of the estate which timber States has been to regenerate the area of the forest exists in has been logged over. A large backlog of such exploited areas it hoth the WTestern and Mid-Western States. As a policy goal, however, the future, is the economic production of a certain volume of timber for is, within an integrated land use context that should be the goal--that best future forest estate need not necessarily be located where the the policy natural forest has occurred in the past. This is an important Southern issue, because research indicates that the derived Savanna and of Ouinea zones should be able to contribute greatly to the production high forest timber for the future. This does not mean that estates in the zone should be given up after logging, because even without silvicultural raw treatment, those acres that remain unplanted will provide essential material at the turn of the century.

34. The minimum plantation effort will require a large scale than has systematic and specific planting program, of a different sort been undertaken in Nigeria. The country's approach to date heretofore the has involved a large number of small areas, scattered throughout dependent upon countryside, and planted under the taungya system, which is are the number of farmers in the area wanting land. Such plantations a relatively cheap to establish and the forestrv program is having are definite beneficial effect throughout the rural area. Mowever, there provide an disadvantages- the plantations are very scattered and may not ANNEX 5 Page 12 annual economic felling unit in the future, and the Forest Services' Moreover, limited supervisory staff is alreadv stretched to the utmost. together the several species with different peculiarities are often planted to this and this undoubtedly results in loss of efficiency. Exceptions State, are the 10,000 acre Omelina arborea project for pulp in Western project started in 1965 and planted over five years, and the teak/Gmelina started in 1966 at Jemaa in North-Central State. Both these projects well, *were implemented by special plantations units and both promised in tending although in Western State there has unfortunately been neglect the plantations already established. It is recommended that consideration be given to establishing functional plantation units in the Forest carry Services, completely divorced from territorial forestry duties, to little out large plantation programs. A few States have already gone a organization way toward this, but a much more positive dicotomy within the Existing of a department is advisable if real progress is to be made. be carried scattered small-scale taungya plantings should, however, still plantation out by the territorial divisions of the departments, and these units should concentrate as far as possible on a single species. there is 35. Two spec{es are of particular interest. In Nigeria well in much experience with Gmelina arborea 1/, which is known to do not only the poorer high forest and derived Savanna States. Gmelina is rather very tolerant to site but seemingly does best on those deep grey, for silty to sandv soils, which are not those necessarily in demand in addition agriculture. It is extremely versatile in its properties and, and printing to yielding good quality pulp suitable for wrapping, writing It grows at paper, it produces a general utility timber arLd peels well. size in a very fast rate on the better sites and produces trees of timber plentiful locally. 20 to 25 years. It coppices freelv. Seed supplies are and to es- It is a species which is both easy to handle in the nursery to a large tablish, and it grows well in pure stands. It: is not subject species number of diseases and insect pests. It is, t:herefore, an ideal of not on which to launch forthwith a large annual regeneration program program less than 15,0n0 ac, i.e., one-half of the projected plantation of the needed to make good the expected timber deficiencies at the turn be centurv. In appropriate areas of the high forest, efforts should are concentrated on Terminalia ivorensis; but because seed supplies High limiting, the program would be limited to about 2,000 ac per annum. limited value timber species such as teak, however, could be grown on a scale for special purpose on a longer rotation. on the 36. The location of the plantations should be determined basis of the industry which it is proposed to serve, land availability, Plantations and the economic potential of the species planted on such land.

of the 1/ A.F.A. Lamb, "Gmelina arborea", Fast Growing Timber Trees Lowland Tropics No. 1, Com.For.Inst. Oxford, 1968. ANNEX 5 Page 13

to supply poles and firewood should be located close to ma:n demand centers, and wherever possible every encouragement should be given to villages and local farmers to create their own plantations. Plantation areas should concentrate, as far as is possible, to form economic management units.

37. The annual planting rate program discussed here--of more than 30,060 acres, of which 25,000 acres should be for timber--is recommended for the present development plan, i.e., the next few years. It should be regarded to a great extent as a training and consolidation period. The acreage rate can be stepped up as soon as the UNDP/FA0 Forestry and Forest Industries Development project have reported their findings, and the recently created Federal Department of Forestry has become established. The location and rate of planting should not be determined simply by the location and rate of exploitation of the high forest estate. Priority should be given to the carrying out of detailed soil studies in the forest estate for plantation purposes.

38. To repeat, it is suggested that the unplanted areas of logged- over forest estate should wherever possible be retained and fully protected to supplement the expected deficiency. No cultural treatment, however, should be carried out in these forests since the benefit of such treatment is marginal and they xwill produce improved yields through future increased intensity in utilization of the growing stock. All regeneration forests should be by plantations, rather than natural regeneration, and the taungya method should be used wherever possible to reduce costs, where it can be operated on a sustained basis.

39. Punds for planting purposes should be established by State r.overnments. Difficulties caused by the uncertainty of funds have already been mentioned. Therefore, budgets voted for and expendable over three financial years are recommended for planting programs.

4n. State Development Plans are in a very unsettled state. There is great uncertainty as to funding. Most of the plans give strong evidence of having been very hastily prepared; many have very little backgroumd data or documentation to support the entries and estimated costs. In several cases the cost figures differ from listings in the National Plan. In many cases the State Development Plans appear to be extensions of their recurrent programs, which are themselves inadequate and which have been restricted because of lack of funds. Although a shortage of funds has undoubtedly been a problem, the more serious deficiency and limiting factor is one of adequate organization and accurate data on which to carry out effective and realistic planning. "lost of the northern States have senior expatriate staffi and North-East State has substantial foreign subprofessional staff as well. But it is doubtful that some States even have adequate technical staff to implement their normal recurrent program in an efficient manner. ANNEX 5 Page 14

41. The major item in most of the States' Development Plans is the establishment of plantations for a wide variety of products - predominantly for timber in the southern States, for pulp in the southern and some of the central and northern States, for poles and fuel in the northern States and for specific end products such as tannin material (Acacia nilotica) and gum arabic (A. senegal) in some of the northern states.

42. It is important that these programs should dovetail into a national program, and that adjoining States should cooperate toward a common goal. There is little evidence of this coordination at present. Most States are more concerned with increasing their acreage of plantations than ensuring that the annual volume production is maximized.

1A3. Although the Tropical Shelterwood System ("TSS") is in abeyance in Nigeria, Western State Plans to carrv out natuiral regeneration of 44 sC mi of forests annually, though there is no indication of funds being provided for this. Moreover, a National. Forestry Development Sub- committee 1i has recommended that "forests not: scheduled for exploitation until 20-50 years hence should be treated to a 'refining' operation", but without comparing the costs and benefits of the exercise. The aim of this operation is to "remove useless trees interfering with valuable trees at the same canopy level and aim to reduce basal area by about a third and in all cases to less than 100 sq ft per acre. The cost would he only two or three man-days per acre. What is not sufficiently emphasized is that it is not the cost per unit area "regenerated" but the cost per increased volume production and the rate of that production that is all important. As the benefits of even a modified "TSS" will not be obtained before 50 years, it is unlikely that the recommendation is economic. All available funds for regeneration purposes should be directed toward plantations of quick growing industrial species, and if possible this should be carried out by the taungaa system, since direct costs are reduced by about E 15 to E 20 per acre.

44. Trildlife conservation and the recreational aspects for forestry, In nartIcular as a means of attracting international tourists and earning foreign exchange, have captured the imagination of many foresters in "Tlceria. But there is much evidence in the State Development Plans to rndicate that individual State Forest Services have not examined priorities for development verv carefully. Manv projects of rather low prioritv from an economic noint of view are being Put forward--parks, gardens, zoos, Came Peserves--without consideration of the drain on trained personnel ani financial resources. The real issue is a question of timing. Preserving the wildlife that still remains int Nigeria is a very worthwhile enternrise. Rut it will take time for animaL populations in the selected areas to bul1d un, and for the tourist traffLc in Nigeria to reach a

It nn 'nevelopment of the Natural Forests ineluding Inventory and Treatment". ANNEX 5 Page 15

the three which can be regarded as a tourism industry. One of level is that of of the newly created Federal Department of Forestry Divisions of the Director and Forest Conservation, and one of the duties Wildlife management, to advise the Federal and State Government on wildlife is costs to national parks and recreation. States should keep development a minimum until the national objectives have been identified. for the acquisi- 45. Most of the northern States list allocations timber enumeration, tion of basic dat:a--soils and vegetation surveys, trials, etc.--with the objective of accelerating improvement snecies These and increasing productivity of their forest estates. management be best deserre high priority, but could in some instances activities members and more economically tackled by regional teams, comprising seconded from interested States. plan to plant shel- 46. Most of the northern States bordering Niger the Departments of terbelts, the projects being carried out jointly by although in Kano Agriculture and of Forestry. These should be pursued, over compensated. State they are orer-costly because landholders are with the welfare 47. Several. States have small projects concerned based cottage of the rural population, viz. the development of forest plantations for industries, the creation of town, village and roadside for free distribution miscellaneous end products, the raising of seedlings to villagers; all these deserve full support. the standard of 48. Several States are concerned with improving most important, sawing among the small sawmillers. This is undoubtedly in collaboration with but it is considered that this would best be done to existing private other States and in providing an advisory service small semimobile mills. State lists the 49. As its top priority project North-Eastern the various creation of a mobile field maintenance unit for servicing on which the running mechanized equipment and plant, including vehicles, This is an aspect of the department in all its activities depends. Nigeria with the which is becoming of increasing importance in northern and one which introduction of mechanization into plantation practice, in their training all States will have to take seriously into account programs at an early date. absolute priority 50. Finally, it is clear that for all the States, aspects of the next few years must go to planning and personnel during executed programs. There must be acceptance that forestry, although their be.a on a State basis because of the Constitution, must essentially national issue. discussed under 51. A number of measures that affect the states are functional headings below. ANNEX 5 Page 16

Tmproving' Utilization

52. Fxploitation Rates. The felling rate for the high forest permanent estate of Mid-Western and Western States was arbitrarily reduced in the mid-1960s from a cutting cycle of 100 years by area to 50 years. The forest area is already fully committed on this basis though production is not yet in top gear. Half the area of the high forest permanent estate in South- rastern State is being extloited on a 40-year cycle by area, and the remainder is similarly under negotiation with a Roumanian concern for the develonment of an integrated industrial operation. 1/ The same concern has verv recently concluded an agreement with the Western State Government for similar developments in the Ondo area, 10 miles ESE of Ibadan. All high forest outside the permanent forest estate is under exploitation and it is the poorer stocked high forest within the forest estate that remains to be exploited. The r%overnment has, therefore, already taken or is taking the necessary stens to imiplement this approach. However, the necessary data are not vet availahle to finalize the cutting rate on the basis of the standing volume, instead of by area.

53. Intensity of UTtilization. There are nearly 600 species of trees which reach a height of at least 40 ft or a girth at breast height of 2 ft, but only about 30 of the more than 100 usable tree species are utilized in anv appreciable quantities. Tncreased technical and marketing research is needed to find uses for more of the species, and improved utilization of the current merchantable species is also necessary. This can be aided by revising the current forest licensing rules and increasing the number of obligatorv species, revising royalty rates, and producing a greater rate differential between desirable and less desirable species, reducing minimum felling girtbs, allowing lower minimum logging standards, and -- as far as marlket conditions allow -- insisting that all trees above these standards are cut. Intensity of utilization can also be assisted by modernizing the forest industry and giving it every encouragement to embark on integrated operations, which can use a wider range of species. A major encouragement will be to guarantee tenure and cutting rights for a minimum of 15-25 years. The existing well-established larger industries, mainly foreign owned, have often been reluctant to expand their activities and intensify utilization by the advantages of scale, owing to the uncertainty of renewal of felling,, areas, the small domestic market, the strong competitive nature of foreign markets, and the profitability of the traditional selective log export trade: the smaller indigenous sawmills do not' have the capital nor the exnertise to expand. Governrments should enter more in partnership with private enterprlse to develop larger forest industries, but these must take fully into account the existinR industries as well as the resource availabi- bility.

1/ Forest operation extending from the felling of the trees to both nrimary and secondary processing of the raw material. In this case a sawmill; plywood, chipboard and veneer mills; and furniiture and woodworkSing sections are being considered. ANNEX 5 Page 17

54. The Oual-Lty of Sawn Timber. There are about 100 sawmills, excluding a similar number of verv small sawmills or sawbenches that scarcely qualify as primary forest industry. Nearly all are located in the southern States. Only 16 mills have a production of over 100,000 cu ft, no more than 10 produce export-grade sawn wood, and only two produce kiln-dried timber. State Governments sihould embark on a much more vigorous control of the number of small sawmills; they should encourage, possibly with financial aid, the amalgamation of smaller mills into more efficient, larger and well located enterprises, and grant felling areas only to licensed mills. The Federal Government should also initiate training in management skills and of intermediate level sawmill technicians. Seasoning and treatment facilities should be set up int all the medium and large sawmills.

55. As previously mentioned under marketing, Government should set up, as a temporary extension service measure, a number of Government timber depots in some of the main and appropriate consumer centers where kiln seasoned, treated and graded timber of different sizes and lengths, and of more than the traditional species, can be bought: operations should be subsidized, if necessary, in the early stages to assist in the promotion of the improved products.

56. rhe Federal Government should also create a special and strong extension Service to advise on the improvement of small-scale existing industries and of wood products, and the development of new markets. All major forestry States should establish a utilization branch comprising a TJtilization Officer and a mobile team or teams operating in the field to assist in implementing the necessary changes.

Research and Manpower

57. Three Federal activities -- the Savanna Forestry Research Station, the Forest and Forest Industries Development in South-Western Nigeria, and the improvement of selected Nigerian hardwood species -- are associated with technical assistance projects, the first two with UNDP/FAO and the third with the United Kingdom.

58. Research is undertaken mainly on a federal basis, but certain individual States also carry out a limited amount of applied research. The research program appears generally sound, but greater concentration should be placed on the preparation of growth, and yield tables for monospecific even-aged stands of proven plantation species; of pilot plantations of promising species, such as pine.: and of detailed and fully comprehensive nlantation costings. These are essential requisites for launching any large-scale plantation program, especially if outside financing for its implementation is desired. The program should concentrate on a few of the most promising relatively fast growing exotic and indigenous species, both in respect of techniques for establishment and growth and in tree improvement including pilot plantations of the more promising pines in thet middle ANNEX 5 Page 18 belt. It is recommended that a small research team be established to study specifically the problems of Gmelina arborea, and especially in the fields of fertilizer anplication and yields.

59. An item not includled in the current Federal development program, but which is recommended for early consideration, is the locating of a simall research and development center or extension station in the "middle belt" of the country, nossibly as a substation of the Savanna Forest Research Station at Samaru, which at present serves the research and development for the whole Savanna. Samaru is too far away to give really effective attention to the middle belt zone and its undoubted forestry potential. Consideration might be given for the replacement of the east:ern States substation formerly at Enugu to fulfill this need, and for it to tbe located perhaps at Lokoja, `akurdi or NTsukka. The rebuilding of the Tbaclan School of Forestry merits the highest priority. Priority should also be given to developing a second school to cater the needs of States with SavarLna vegetation. Instruction in mechanized afforestation methods is a pressting need, based on research finding of the Savanna Forest Research Station. A functional on-the-job type school would better serve the needs of these States, considering the scarcity of academically qualified candidates for the present Ibadan School of Forestry. North-Eastern State is an extreme example and one where forestrv is particularly active, and the State's development program depends to a very great extent upon the retention of foreign personnel. fin. It is estimated by the National Forestry Development Committee that the annual increase of trained personnel required until 1985 is as fol.lovs: Wood Forestry Technologyj Wildlife Total

Professional 14 5 4 23

Senior Technical (for supt. or equivalent) 26 5 6 37

Junior Technical (for asst. or equivalent) 71 20 6 97

Voocationa3 244 - 47 291

61. The Committee envisages that (i) the Department of Forestry, I!niversity of Thadan can easily cater for the professional demand, (ii) the School of Forestry Ibadan, which is already basing its new building program on trainina 16 Forest superintendents and 54 Forest Assistants each year, could meet the need by the provision of extra buildings and staff, (iii) an extra center for training wood technology technical staff should be built alongside the present School of Forestry, and (iv) the necessary technical wildlife staff would be trained outside the country. ANNEX 5 Page 19

62. on the vocational side, the Committee considers that (i) the capacity of the existing school of Jos should be expanded to enable it to run two courses of 50-60 junior technicians each year, (if) a new school of the same size should be established in the south, possibly at Benin, (iii) a wildLife school should be established at Kainji, and (iv) vocational personnel for wood technology would be recruited from applicants with Government trade tests.

63. A very important factor that the subcommittee did not consider is the problem of t-Leing in the necessary training to the requirements of individual States. The all-Nigeria figures used above mean littie when States are concernedi with filling their permanent establishment with their own State nat-Lonals. On the professional side, to take an example, the breakdown of the State of origin of potential forestry graduates from the University of Thadan-July 1970 to July 1972--indicates that students from the Western (2R) and Mid-W4estern (15) States predominate to the extent of 86% of the total, and that there are no students at all from East-Central, Kano, Lagos, North-Eastern and North-Western States, and only one from each of Benue-Plateau, Kwara and River States, of which two are taking the one-vear nonprofessional Certificate course. Although the numbers from the Mid-Western and Western States are excessive for the recuirements of tbese States on a regular basis. None has been recruited 'bv other States, even though they are deficient in senior staff. Many have gone to Federal Services. Funds in the development plan are only for rebuilding the Technical Forestry School at Ibadan to current capacity and of providing extra accommodation at the vocational Forestry School at Jos. It -is recommended that the Jos School be converted to a technical school for savanna students, new vocational schools be established on a regional, subregional, or State basis as appropriate, and a small WTildlife School be established at either Bauchi or Kainji.

64. Government proposes to recruit staff for the new Federal Depart- ment primarily from among those in the State Services. However, it is doubtful whether adequate local staff will be forthcoming, especially as most States are already having to rely fairly heavily on expatriates (see Appendix 3). The Federal Department must have the ability to provide effective liaison and planning and to advise both the Federal and State Governments on the measures necessary to ensure coordination. (The separation of the authorities controlling the forest resource from those controlling trade and industry in most State Governments introduces another complicating factor.) It is suggested that the Federal Government should recruit for a few years on the international market to fill key staff positions in the new Federal Department, thereby providing time for the more inexperienced staff to be fully trained. Also, FAO could be asked to provide a F7orest Trade and Industries Adviser to the Federal 1inistry of Trade and Industry to comDlement the present FAO Planning Adviser and ensure the fullest liaison and closest collaboration between the authorities controlling the two main functional aspects of forestry. ANNEX 5 Page 20

the recruitment of ex- It is also recommended that priority be given to for a limited number of Derienced expatriate subprofessionals on contract program, especially to assist in the implementation of the plantation years the training northern States. This would greatly assist in in the in the field. program of the technical staff by example and demonstration establishment of a fi5. Consideration might even be given to the staff, but retaining unified Nigerian service for the senior forest as is the case in State technical Staff and State control of forestry this could be a possible TJest Malaysia. Although not an ideal system, implementation of means of attaining greater unification and improved policy for the national good. of the Director is "to 66. Planning Staff. One of the major duties analysis of all produc- cooperate in the collection, and particularly the Data are short and un-- tion and trade statistics concerning Nigeria". sound planning is impossible. reliable yet without reliable and adequate data, requests a team of It is strongly recommended that the Federal Government or groups of State not less than four experts to be attached to individual data required and the Forest Services to assist in advising the type of manner of its collection.

C. Investment Opportunities

during the next 67. There are three major investment possibilities integrated industries, and 10 to 15 years: (i) pulp and paper mills, (ii) (iii) nlantations for timber and pulp.

Pulp Mills per annum today and consump- 65. Nigeria consumes 60,000 t of paper 1980. There is one is exDected to double by 1975 and quadrup'Le by tion on imported pulp. t paPer mill at Jebba in Kwara State operating 12,000 of an integrated The Federal Development plan proposes the esta'blishment pulp and 70,000 t of pulp and paper mill to produce 40,000 t of kraft EN million. This project industrial papers at an approximate cost of 10 is of priority. Assistance are currently 69. Subsector studies under Finnish Technical type and capacity of being undertaken to determine the location, number, be dependent on imported pulp mills and a further paper mill, which would are near Calabar in pulp in the initial years. The most likely areas a possible alternative South-East State and near Epe in Westeni Statet with alternative at Jebba. in the lower reaches of the Niger and an unlikely ANNEX 5 Page 21

The Commonwealth Development Corporation (CDC) of the United 70. the estab- Kingdom is current:ly undertaking prefeasibility studies into east of lishment of Gmelina arborea plantations for pulp some 30 miles 5,000 ac of Epe and the development of a pulp and newsprint mill. Some and plantations, plant:ed between 1967 and 1970, are alreadv available, annually a 50,000 t pulp mill is envisaged in the early stages requiring wood from about 8,000 acres of Gmelina plantations. These plantations will yield can be establishedl at an overall cost of E 35-50 per acre, of si: years. about 2,000 cu ft per acre of pulpwood on a coppice rotation

Integrated Industries markets 71. An integrated industry for both domestic and overseas is under consideration in both Western State at Ondo and in South-Eastern comprise State of Calabar, by Technoforest of Rumania. The industry will and wood- a sawmill, plywood, chipboard and veneer mills, and furniture working sections, will be developed in phases and cost an estimated and there E 5-h million. Integrated industries are desirable in Nigeria, cu ft is available timber in both areas to provide the annual 3 million that small required for the scale of operations being considered, except There are local sa'wmillers in the vicinity of Ondo may be affected. of poor approximately 10 sq mi of "good forest" at Ondo and 25 sq mi of 40-50 forest north of Calabar available annually on a cutting cycle for in- years. 1/ After exploitation, these areas would be very suitable tensive regeneration.

Plantations timber and 72. Plantations on a large scale are required for both cu ft round pulp. Present consunmption of timber amounts to 50 million Present and is exnected to double by year 2,000, only 30 years hence. 10 million cu ft consumption of paper per annum is equivalent to about and quadruple by round of DulpTood and is expected to double by 1975 19p)0. are proven fast growing 73. C-melina arborea and Terminalia ivorensis girth at breast species in Nigeria which will reach timber size of 5 ft respectively. height (gth) in 2n years and 6-7 ft pbh in 30 years, after .melina grows veryv rapidly in early years, but slows up considerably it is also reaching 4-5 ft gbh and should not be grown beyond 5 ft gbh; a very desirable short fibre species for pulp. have been 74. UTntil the exact locations of the future pulp mills specifically decided, it is unwise to plant extensive acreages of Gmelina grown for pulp. WThile nlantations of Gmelina for timber should be

acre, and 'poor' 11 "Cood forest:" is defined as that yielding h5n cu ft per as vielding under 250 cu ft per acre. ANNEX 5 Page 22 wherever Dossible, the Termi nalia species should be given priority in the high forest area of '4id-Western State to the limit of seed availability.

75. T%ithin the initial annual planting of 25,00n ac for timber, it is recommended that a number of plantation units of 20,000 ac of Gmelina be established, at an annual planting rate of 1,000 ac each in all States where Gmel1na is known to growT well and where suitable sites exist. Sug- gested States are East-Central, Kwara, Mid-W4estern, South-Eastern and !4estern. It is further recommended that these units be regarded in the same light as rubber and other tree crop plantations and operate under an exDerienced coordinating consultant management team. It is appreciated that there could be diffictlties in operating such a scheme with units operating in several States, and under the normal government budgetary svstem. These difficulties, however, are not insurmountable and have been successfully overcome in the agricultural field with the formation of development authorities. It is recommended that the team should be Federal and that, if it is not possible to recruit Nigerians, consideration should be given to contracting the role to an experienced foreign agency. A team of four--an economist, silviculturist, soil scientist, and cost accountant--is suggested. A unit of 2n,_040 ac of Omelina should provide annually, on a conservative basis, 1.5 million cu ft of timber, excluding thinnings and branchwood, or 100,000 to of pulp. The overall annual cost of 15 such nlantation units would amount to approximately E 550,000.

7h, An efficiently operating nlantation unit could have supplementary traininR and demonstration benefits at this stage exceeding those of the true objective of the Dlantations. Training centers should be established at two plantation units, for both vocational ancd technical personnel, where even undergraduate trainees could undertake practical work during vacations.

77. Investments for further plantations in the northern States using mechanical equipment will be available in the mid- to late 1970's, when the research of the Savanna 7orestry Station is more advanced and the various forestry services have the necessary technically trained staff. Further investments in the southern States will become available when the location of the puln mills has been decided, the UNDP/FAO enumeration and planning team for the southwest has comnleted its findings, and the States' forestry services are nulmerically and technically ready to undertake the task. FOREST ESTATE OF NIGERIA

1/ 2/ Forest -Percentage area Area of State:/ Population- Forest Estate - Plantations under Forest STATE (square miles) ('ooo) (square miles) (Acres) as of 1970 2/ Estate (acres)

Benue-Plateau 38,923 4,009 1,713 1,096,128 12,590 4.4 East-Central 11,310 7,228 160 102,000 13,600 1.4 Kano 16,630 5,775 863 552,320 5,780 5.2 Kwara 28,672 2,399 4,242 2,715,136 2,200 14.8 Lagos 1,381 1,444 8 5,120 50 0.6 Mid-Western 1h,922 2,536 2,448 1,566,976 57,350 16.h North-Central 27,108 4,098 11,828 7,570,176 4,080 h3.6 North-Eastern 105,300 7.893 6,811 4,359,o4o 6,760 6.0 North-Western 65,143 5,733 9,240 5,913,344 3,320 14.2 Rivers 7,008 1,544 - - 50 South-Eastern 11,166 3,623 2,476 1,58h,832 9,530 22.6 Western 29,100 9,488 5,030 3,219,392 35,520 17.3

Total 356,669 55,770 44,820 28,684,464 150,840 12.6

1/ Nigeria Year Book 1970.

2/ From amended cyclostyled 1971 draft report of the National Forestry Development Sub-Committee on the "Development of Plantations 1970-85". The area of forest estate differs greatly from that given by A.M. Oseni in the Development of Tree Crops and Timber Industries in Nigeria, Nig. For. Inform.Bull. (New Series) No. 19, Dept. of For. Res., Ibadan, 1969 and by J.F. Redhead in the Timber Resources of Nigeria, paper presented at the Forestry Association of Nigeria, October 1970 conference, both of whom quote a figure of only 36,104 square miles). ANNEX 5 Appendix 2

TTMBER EXPORTS BY PRODUCT CLASSES 1960-69

Veneers Total Logs Sawnwood Plywood Volume Value Value Volume Value Volume Value Year ('000 cu ft) (V000) (E'000) (0nn0 cu ft) (f'000) ('000 cu ft) (E'000) 1,111 674 1,097 8,136 1960 22,211 5,928 2,097 1,244 718 1,198 7,921 1961 2n,340 5,479 2,200 769 1,296 6,970 1962 16,212 4,373 2,337 1,301 725 1,036 7,848 1963 19,662 5,449 2,690 1,363 745 1,098 9,018 1964 21,420 6,387 2,695 1,533 880 1,207 7,461 1965 16,167 4,891 2,508 1,373 742 1,066 6,695 1966 15,344 4,400 2,373 1,229 884 525 783 4,209 1967 8,996 2,542 1,733 938 584 746 4,159 1968 8,535 2,475 1,918 1,240 714 937 5,156 1969 9,061 2,979 2,348

November 2, 1971 STAFF NUISMBS AND THEIR DISTRFlKi LONt FOREST ESTATE STATISTICS AND PLANTATION PROGRAH

Technicians Plantation Program Professional & Research Super- Forest 1970/7[ Nigerian inter-dents. Forest Plantstions State Yissicn Under Tech. Forest Silv. Estate Actual Proposals Estimates Service In Post Trainingi! EXpatriate Officers Assts. Assts. ('000 Acres) (Acres) (Acres/Year) (Acres/Year

Federal 4 . Z/ Federal Research 21 2Y/ 19 7 - University of Ibadeanr 4 Benue-Plateau 5 1 2 3 12 7 1,096 12,585 650 500 East-Central 15 - - 16 38 - 102 13,605 6,000 6,ooo Kano 1 - 3 3 6 12 552 5,780 1,500 500 Kwara 4 2 2 4 13 19 2,715 2,204 750 500 Lagos - - - 1 - - 5 50 450 50 Mid-Western 15 15 - 7 many - 1,567 57,352 19,000 10,000 North-Central 2 1 3 2 5 12 7,570 4,080 1,600 1,000 1,000 North-Eastern 3 - 3152 7 14 12 4,359 6,759 1,300 North-Western 5 - 1 6 5 13 5,913 3,324 1,200 500 Rivers 2 1 - 1 4 - - 53 100 50 South-Eastern 5 3 - 6 11 - 1,585 9,527 1,800 1,000 Western 23 28 - 17 66 - 3.52 17. 10. Total . 28.68] 159JU2 Sl.l10 31,100 1/ Includes only those reading forestry at the Dapartment of Forestry, University of Ibadan during 1969/70. There are a few others training abroad. 2/ Excludes those on international projects. 7/ Includes 9 technicians in North-Eastern State. / It is considered that about 25,000 acres of this should be for timber and 5,000 acres for other purposes. ANNFX 5 Appendix 4

FORFCAST OP TOTAL WOOD COMTSITIPTION

in Nigeria for 1985 Enahor 1/ forecast the total wood consumption made t:he following assumptions of and 2nno, as shown in Table 1 , below. He income growth: annual nonulation growth and ner capita real

A B C

27 2.5% 3% Population growth till 1985 1985-2000 1.5% 2% 2.5%

2.5%. 37 3.5% Per canita real. income growth till 19:35 1985-2000 3% 3.5% 4%

products included a 0.5% higher Ither snecific assumptions for the various than real per capita income up to 1985 rate for canita lumber consumption rate, exclud-ing exports. He forecast and thereafter at the same average 63 million in 2000. exports of 4n million cti ft in 19R5 andf

IN NIGERIA, 1985 and 2000 A.D. Table 1- PnPTAIAST On TOTAJL WOOD CONSTUPTION (Million cu ft, Roundwood Equivalent)

1966 1985 2000

Alternative Alternative

C A B C A B

2,234.00 2,644.00 3,125.00 Pueltwood 1,716.00 2,072.nn 2,277.00 2,500.nO

1.50 2.6n 2.60 2.60 Other Pourd-ood AA.nn 1.5n 1.50

81.80 96.60 113.80 qandewood in.or 52.5n 57.50 63.20

.08 1.3n 1 .32 1.56 2.02 'Tood Panels .71- .8 1

52.00 72.n0 126.00 223.00 273.00 Paner & Panprhoard (.0n 37.00

2,445.72 2967.76 3,414.00 Total 1,796.74 2,16f3.98 I,39S.29 .63P.00

ConsumDtion Requirements for Nigerian 1J w.Y. Enahor: "Estimatinf, Potential conference of For. Assn. of Nigeria, vorest Products", pnaner presented at 0 ctober 1Q7n.

November 2, 1971 ANNEX 5 Appendix 5

wRF,CAST OF TT7 TOTAT T V)T) CONSTTMPTION IN TIF SAVANNA RFC TIN

1980 and 200n A.D. (million cu ft round4wood equivalent)

1q65 1j8n 2000

Alternative- Alternative 1

A B A B

Firewood 785 820 950 865 1,230

Poles 22 2f 3n 31 44

Other household consumntion of roundwiood 21 21 27 21 35

Sawmwood 11 20 22 44 61

Paper 1.3 8 11 45 97

Telenbone and Transmission poles 0.M4 0.2 0.3 1.2 1.8

Total SO 885 11n40_ 1 n07 1 469

/1 Alternative A represents ?% per year increase in population anM an increased per canita consumption. Alternative B renresents 2.57 per year increase for both variables.

Source, "T'!oodiRemuirements in the Savanna Region of Nigeria", Op. cit. For: SFNiPR 16, Tech. Rep. No. 1, p. 29, FAO, Rome, 1970.

November 2, 1971

ANNEX 6 Page 1

NIGERIA

AGRICULTURAL SECTOR SURVEY

IRRIGATION PLANS AND PROSPECTS

A. Introduction

Need for Irrigationr

1. As Annex 1 indicates, annual rainfall in Nigeria varies tremendously -- from less than 20 in on the average in the north to over 160 in in the southeast. About :10% of the entire country, however, receives less than 40 in yearly, and over the northern three-fourths of the country the rainy season lasts no longer than five months. Many areas receive less than 4 in of rain monthly in as many as seven to nine months of the year; some receive less than 1 in mostly in six months (Table 1). Moreover, the onset of the rainy season and the amount of rainfall can vary considerably from year to year. Double-cropping is practiced very little, even in the heavier rainfall areas of the south. Yields are frequently low as a result of variations in the amount and timing of the rainfall.

2. Irrigation would permit double-cropping and, by providing supplementary water during the wet season, allow higher and more certain yields in the north. For perennial crops, particularly sugarcane, irrigation is needed to supply water throughout the year. For cultivation which depends on flood irrigation, water control, both to reduce flooding as well as supply irrigation water, is needed to allow multiple cropping and raise yields. Most of the country's rice is grown in this fashion on river banks and fadamas (adjacent flood plains).

Land and Water Resources for Irrigation

3. Nigeria possesses lands suitable for irrigation and water resources which could supply such irrigation. Much of the 179 million ac classified by the FAO as potentially of medium to very high productivity (Annex 1) would benefit from irrigation. Over three million ac have been tentatively identified to date as irrigable. Potential irrigation development and storage reservoir sites are listed in Appendix 1 and shown on the map of existing and potential projects at the end of Volume I of this report. Identification was based in some cases on semidetailed surveys, in many cases on reconnaisance, and in some instances only on general examination. Most of these :Lands are situated along and depend upon the flow of Nigeria's three principal river systems. Many are the more fertile lands occuring along the river systems in low-lying flood plain areas or fadamas. While these lands are subject to flooding during several months of the rainy season, they must receive supplemental water during the ensuing dry season. Thus, they require both flood control and irrigation measures. ANNEX 6 Page 2

Table 1: RAINFALL

Number of Months Rain- fall Averages Less Less Average than than Location Vegetation Zone Annual Rainfall 4-in 1-in (in)

Northern States Savanna North-Western (Sokoto) Sudan 30.1 8 6 (Yelwa ) Sub-Sudan 41.8 7 5 (Minna ) South Guinea 54.9 6 4 North-Eastern (Maiduguri) Sudan 27.5 9 6 (Yola) Sub-Sudan 37.9 7 5 7 Kano (Kano) Sudan 35.7 8 5 North-Central (Kaduna) Northern Guinea 51.3 7 Benue-Plateau (Makurdi) Southern Guinea 57.6 5 4 (Jos) (Plateau) 57.6 6 4 4 Kwara (lokoja) Derived Savanna 48.0 5 (Ilorin) (Forest-northern edge) 50.3 5 2

2 Western State (Ibadan) Forest 52.3 4

Mid-Western 1 State (Benin City) Forest 70.0 4

Lagos State (Lagos) Freshwater Swamp/ Mangrove 71.8 5 0

Eastern States East-Central (Enugu) Forest 68.8 4 1 South-Eastern (Calabar) Forest 123.8 2 0 Rivers (Port Harcourt) Forest 94.3 3 2

SOURCES: Rainfall - Federal Survey, Nigeria. Vegetation zones - FAO Savanna Forestry Research Station Int:erim Report. ANNEX 6 Page 3

Table 2: WATER RESOURCES

Drainage Annual Irrigable Area Flow Area ('000 sq mi) (million ac ft) (million ac)

Niger-Benue System

Niger River n.a. 65.0 1.2 Sokoto-River 35 2.6 Kaduna 26 18.0

Benue River 90 /1 92.0 1.0 Gongola 6.5 Tazaba 10.0 Donga 11.0 Katsina Ala 19.0

Total Niger-Benue System 222 /1 157.0 2.2

Lake Chad Basin System

Kano and Chalawa Rivers - Hadejia River Jakarade and Tomas Rivers Jamaari an& Yobe Rivers

Subtotal n.a. 9 0.3

Lake Chad 6 33 0.3

Total 64 /1 0.6

Cross River Basin 17 n.a. 0.1

Western State Rivers 10 n.a. /2

3.0

/1 In Nigeria. /2 60,000 ac.

4. Nigeria is traversed by three principal river systems: those draining the Niger River - Benue River basins, the Chad Lake Basin, and the Cross River Basin. The Niger River originates in the Republics of Sierra Leone and Guinea, and traverses the Republics of Mali and Niger before entering Nigeria near the southwest corner of North-Western State. The Benue River rises in the Republic of Cameroon and flows through south-central North-Eastern State and central Benue-Plateau State to join the Niger River ANNEX 6 Page 4

more than three-quarters of the at Lokoja. The Migpr-Benue Basin dominates entire area of the countrv. and their tributaries Annual,yields of the Niger and Benue Rivers 5. been dominated by two flood in Table 2. The Niger River flow has are shown the upper catchments of the "black flood", which originates in periods: flood stage from December outside Nigeria and keeps the river at the river until December, which is April; and the "white flood", from August. until With the construction of runoff from local rainfall in the wet season. flow is being regulated to maintain a Kainji Dam and reservoir, the Niger's on t:he other rivers in Nigeria fairly level flow the year around. Runoff flooding from August until November, coincides with the local rainfall pattern, spring seasons. then virtually drying up in the winter and area, located partly in 6. The Lake Chad Basin is a bowl-shaped basin dIrains into Lake Chad, a Nigeria, Niger, Chad and Cameroon. The abouit 6,000 sq mi in area. Nigeria's shallow land-locked fresh water lake of one-tenth of the total basin area portion of the Chad Basin is approximately about 5% of the total. Four minor and Nigerian drainage accounts for only The largest inflows, totalling 33 streams drain the area into the lake. Chari-Lagone River system which has million ac ft annually, come from the its source in the Chad Republic. of the Chad Basin The headwater streams at the western end 7. flow easterly some in the uplands catchments of Kano State, originate lake bed area of the Basin, across a large expanse of the ancient 300 miles Of an annual yield in the into Lake Chad through the Yobe River. and empty water, less than 350,000 ac catchments of about 3 million ac ft of upstream is lost mostly to evaporation ft finally flow into Lake Chad. The remainder in traversing the old lake bed. and unrecoverable subsurface percolations the Kano, Chalawa, Hadejia and Major streams in the upper catchment are Bunga-Jamaari. the Cameroon Republic and drains 8. The Cross River originates in a few staff gauge records for parts of southeast Nigeria. Except for for the Cross River is not available. navigation information, hydrologic data in Nigeria to date have discovered 9. Groundwater investigations made of Northern Nigeria underlain by the little groundwater. 1/ In large areas

in Western Sokoto Province, Exploratory Drilling for Ground Water 1/ Anderson, USGS, July 1965. Nigeria. William Ogilbee and Henry R. Basin of Bornu and Dikwa Availability of Ground Water in the Chad Miller and Richard H. Johnson Emirates, Northern Nigeria, Raymond E. U. Ozoma, GS of Nigeria, USGS and Jonathan A.I. Olowu and Joseph June 1965. Dikwa Emirates, Hydrology of the Chad Basin in Bornu and Ground Water Life of the Nigeria with Special emphasis on the Flow Northeastern J. A. J. Alowu and Artesian System, R. E. Miller, R. H. Johnson, I. J. U. Ozoma USGS Water Supply Paper 1959 - ANNEX 6 Page 5

Rasement r'omnlex, the mantles are too thin to hotd much groundwater or to nrovide the subsurface flow through aquifers. Aquifers are known to occur in the Benue, r7ongola, Niger and Sokoto River Basins, but they are not sufficient to provitde much irrigation. Artesian wells bored in the Chad basin in the Bornu area and in the Sardauna area of the Benue River Basin are of limited canacitv, sufficient for domestic and stockwater use only. Existing Irrifation

1n. An estimated 3A,n00 ac are now under irrigation in Nigeria, mainly in the North-Western, North-Fastern, and Kwara States (see Appendix 2). Schemes mostlv are small, varving from 100 to 5,0n0 ac. Several are pilot nrolects. Anpendbx 2 lists most of the existing schemes, and these are shown on the Map in Volume I.

11. The large-st prolect is at Bacita, where the Nigerian Sugar Co. has developed a ac sugarcane plantation along the Niger River. With the exception of the nilot pro-jects at Wurno (North-Western State) and Kadawa (Kano State), which use storage reservoirs, all of the schemes depend on run- of-river siinnlies. B3ecause drv season river flows are so limited, a second crop cannot he grown on more than one-half the land presently irrigated. vynv of the schemes Provide little more than partial flood protection and sunnt.emental irrigation during the wet season.

1?. Pice is the largest irrigated crop, but the area under irrigation (1 3,qO0 ac) is still not great. Most of the irrigated rice is on small schemes in the Niger and Kaduna river basins and near Sokoto in the North- Western State. Yields vary greatlv -- renortedlv from about 800 to 2,500 lbfac of naddv --hut generally are low, due to flooding, late season water shortages, and poor husbandry.

1. The Bacita Sugar Estate in Kwara State was established in the mid 1hn 's ultimately to supplv cane for ¾,onnn tons of refined sugar annually. Annroximately Q,100 ac of the planned 10-12,000 ac is presently being cultivated, using gravitv (5,2O0 ac) and sprinkler (4,1nO ac) irrigation. Water is ptumned from the Niger River and delivered to the project area through a three-mile long canal. Irrigation is needed for the six-month drv neriod onl.v. Yields average about 36 tons of cane per ac.

14. Wheat, requiring sufficientlv low temneratures for normal growth and grain settinp, can only be grown in the extreme north of Nigeria and on the .Jos Plateau during the cold months of the dry season. There are apnroximatelv 12,nOO ac of wheat. Since rainfall during this time is scanty, some form of irrigation is essential. Using shaduf,.the traditional irri- eation method, w.rheat has been grown in the north along river banks for decades as a "luxury" croip on small pieces of land. ANNEX 6 Page 6

1S. The VomaduRu-Yobe and Fbhel. River Projects in North-Eastern State were estahlished in 1q60 and 1q63 to ex,lore the feasibility of culti.vatine wheat mnder irripation on the lands bordering Lake Chad. Since water is nu7nned from run-of-river flows, the period of irrigation is limited from abolut August till Februarv. Wheat is grown in the dry season, mid- October to Pebruarv. Excent for small acreages nianted to rice and vegetable crons in the wet season, the farming is limited to a single cron of wheat loss annuallv. Yields have averaged about 1 ,000 lb/ac.

16. The Wurno Irrigation Scheme, in North-Western State near Sokoto, T.was initiated in the early 1060's to develop ahout 2,4n0 ac for vear-round i.rrifcation. A shallow storage reservoir was completed in 1962 with a capacity of about 15,nnn ac ft. Fvaporation losses annually run up to 807 of the 7Tater stored in the reservoir. Land develonment has been slow. only about Son acres are uinder cultivation. An additional 60n acres are being levelled and nroviAed with distrilittion and drainage. rCropping presently is confined mainly to rice on the heavy soils in the wet se-ason and wheat on the lighter soils in the drv season. Plots are assigned annuallv to farmers by the T.ocal G0overnment Authoritv and a T inistrv of Natural Resources rommittee. The MNP r oes mechanical. tilling for the farmers.

T)evel.orment Plans

17. The Second National TDevelopment Plan pronoses expanding the irrigated area from 36,0On ac at present to 160,0nO ac by 1974, with an exnenditire of more than ENT 1.0 million during 1n70-74. Over the longer term, nlans call for adding 450,0On ac betwyeen lOPO and 19P5. The area under irrigation woul.d total 1ln,n0O ac bv 1iO2 and over one-million ac by 15n5. The Drincinal exnansion during 1q7r-71t is the Kano River Project, Tqhere a ATrn at Ti,a Panids is to be constructed, with a reservoir of 1.6 mil.lion ac ft canacitv, and canals and distribution for 40,000 ac completed bv 107/i. The estimated cost is ENT 10 million. iR. The other exnansion programmed for 1(70-74 are mainlv small schemes and nilot nroiects to develon crop data, train personnel, and introduce irrigation to farmers. A 1 , 9 0 -ac pilot nroject is being established in coniunction with the Kano River Project at Kadawa. As part of the South Chad Irrigation Scheme, the Commonwealth Develonment Corporation (CDC) will he]In establish and manage a 1 ,0OO-ac pilot prolect for three vears. In the North-Uestern State, a 3,00n ac pi.1.ot project is to be developed as the first stage of the Sokoto River Valley Project. The Yarkofoji Dam on the Roho River would be constructed to form a 41 ,nnn ac ft reservoir for irrigation.

1°. Between 1074-19P5, far more extensive development is contemplated. The Kano River Project would he extended to 200,000 ac under irrigation. Irrigation on the fadama lands of the Vadelia River, connected with the Kano, woul_d exnand to 3n,nn0 ac. The Talata Mafara Project, second stage of the Sokoto River develoDment, would construct the Bakolori Dam on the Sokoto Piver with a 340,0O0 ac ft reservoir, irrigating 26,0nn ac. Further develonments in the Sokoto and Niger Valleys would add another 30,000 ac of irrigateA 1and. ANNEX 6 Page 7

20. In the North-Eastern State, plans call for expanding the South Chad Irrigation Scheme by 40,000 ac during 1974-85, and adding a 10,000 ac irrigated wheat plantation. Other major projects contemplated include: (a) the 20,000 ac irrigated sugar plantation and factory near Numan on the Benue River; (b) the Gongola River Project which would construct a dam on the river at Dadin Kowa, forming a reservoir of 2 million ac ft to generate 230 million kwh of electricity and ultimately irrigate 200,000 ac (50,000 ac to be developed by 1985); and (c) increasing irrigation on the Yobe River by 20,000 ac.

21. The proposed Numan plantation and factory would at full development produce 80,000 tons of refined sugar annually. The Savannah Sugar Company, owned by the Federal Government, North-Eastern State Government, and the Commonwealth Development Corporation, presently is developing a 140-ac pilot plot. Construction is scheduled to commence in 1974 and be completed in 1977. For the Gongola Project, NEDECO completed a reconnaisance and preliminary study in May, 1970. The Niger Dam Authority in the near future is to commission feasibility studies for irrigation development and detailed surveys and designs of the dam, to be ready by June 1973. The North-Eastern State Government in the meanwhile will set up a 1,200 ac pilot irrigated farm in the project area.

B. Development Plans

Irrigable Land Potentials

22. An inventory of suitable irrigable lands and development possibilities along the various river systems in Nigeria which can be developed for irrigation agriculture are listed on Table 3. In many instances, identification of these potentials have been made on very preliminary reconnaissance bases, and further examination and study would need to be devoted to the project evaluations to prove their feasibility. The status for these major projects are discussed below, along with tentative assessments of their potentials. ANNEX 6 Page 8

Tal4e 3 LIATER RESOTIRCES ANT) LAND SITTTABLF FOR IPRIGATION

Annual Stream Plow Drainage Area Suitable Potential million Area for Irrigation Dam Sites ac ft at ('no0 sq mi) ('000 ac)

Piver/Lake

Benue River q? Confluence 90.0 500 Makurdi with Niger Dadin/Ilausa Piver Congola 6.5 Confluence 2nn Dadin/Kowa with Benuie Kiri Taraha 1in . Dalli T)onga 11 Katsina Ala 1q lawTal 20

Niger Piver 69 60n Kiduna 1iR Confluence 25.5 Shiroro Gorge with Niger Sokoto-Pima 2.6 35.0 230 Bakolori Kaura Namoda Kachare Talata Mafara

TJake Chad 33. All streamts 60.n 8nn (250) flowing into (Nigeria only) lake Kano River 20n Tiga Rapids Katini Chalawa Piver Chalawa Gorge "ade1ia-Yohe 0.4 nischarge into ) Jamaari River L.ake Chad ) ion Bunga Lame Pb iii

Cross River n.a. 17.3 100

TNestern State Rivers n.a. 10.0 6n

(van 0gun 0shtmn (thers 2.2 ANNEX 6 Page 9

23. Sokoto-Rima Valley - These investigations and studies are documented in a 1969 UNDP/FAO report. 1/ The study was carried out over a six year period and involved a comprehensive reconnaissance investigation of the land and water resources of the Sokoto-Rima River and tributaries. The study identified about 230,000 ac of irrigable fadama and terrace lands which could be developed for irrigation, for which construction of five flood control and conservation storage dams and seven polders would be needed on the various tributary rivers. The study was primarily on a reconnaissance basis, mainly to indicate the technical and engineering feasibility of the project. The total estimated costt of the full scale project was EN 48 million. Total annual gross value of crop production was estimated at up to EN 15 million.

24. The report recommends the implementation of a first phase program to precede a full scale development of the entire project. This would involve the construction of two dams and the preparation of 26,600 ac of fadama and terrace lands for irrigation, and would be separated into two stages: (i) a 3,000 ac pilot project for training and for providing experience to operating personnel, for performing field trials on cropping, and for indoctrinating farmers into irrigation practices; and (ii) the construction of the Bakolori Danm to create a 340,000 ac ft reservoir on the Sokoto River and the development of the additional 23,600 ac of lands for irrigation. The first stage development would involve the establishment of a 41,000 ac ft reservoir on Bobo River by the construction of Yarkofoji Dam, and the preparation of a ne!t area of 3,000 ac for both gravity and pumping irrigation. The estimated costs for the first stage Bobo development is EN 0.9 million, and the second stage completion would cost an additional EN 7.1 million. The report indicated that the first and second stage schemes would be economically viable.

25. It appears that the first-stage Bobo scheme has been included in the project plan to permit a smaller initial development, and that the storage afforded by construction of the Yarkofoji Dam is not needed when the Bakolori Dam is completed. On this basis, if the full phase development were to be undertaken at one time, most of the EN 0.9 million cost associated with the first-stage pilot project could be saved. This saving would thus make the first phase Sokoto River development a more viable project. An alternative cheaper solution to the pilot scheme concept would therefore be worthy of further study. In this connection, there may be a possibility of developing a dependable year-round irrigation water supply to serve.a sizable area from subsurface storages which appear to be available in the riverbed sands in the main river channels and in the sand strata underlying the fadamas through low-head pumping from shallow wells. Evidence of this was demonstrated at the Tunfafia trial plot, where a 5-inch pump was capable of pumping about 1-1/2 cusecs from the riverbed sands without exhausting its shallow well's capacity. Also, downstream from Sokoto the river flows are perennial and some of these run-of-the-river waters could be utilized for year-round irrigation on the adjacent fadamas and terrace lands.

1/ "Soil and Water Resources Survey of the Sokoto Valley, Nigeria," Volumes 1-6. ANIEX 6 Page 10

26. The UNDP/FAO first phase plan considers initially only the planned irrigation development of the terrace lands and fadamas on the Sokoto River near Talata Mafara, downstream from the proposed Bakolori Dam. Except for partially controlling flood stages at the downstream fadamas on the main river system by regulating releases from Bakolori reservoir storages, no irrigation works were suggested in the plan for serving these lands with supplemental irrigation water. Means for delivering supplemental irrigation water to the fadamas have as yet not been defined, but because of the extent of and the scattered distribution of suitable lands along the rivers it would appear logical that delivery would be by release of stored water into the river from the reservoir and then by pumping from the river near the land areas to he served. If present run-of-river flows and subsurface storages prove sufficient to serve sizeable areas without the supplemental water supplies, these lands can be placed under irrigation immediately and could also be a substitute for Bobo for establishing the pilot undertaking.

27. The total amounts of dependable irrigation supply from the river sands could only be proven by pumping trials from a series of shallow wells. Each test could be conducted in conjunction with the establishment of a small irrigation development plot or demonstration farm, and the procedure gradually be expanded up and down the rivers until a limit would be reached on a dependable supply. A sizeable first phase project might thus be developed in a much cheaper and more effective manner than would be the establishment of the UNDP/FAO scheme. If the trials proved the water supply inadequate, the UNDP/FAO first phase scheme could still be adopted, whether or not the Bobo pilot project would need to be included.

28. Niger River Valley. A reconnaissance investigation to identify irrigable land potentials along the Niger River from Jebba to Lokoja was conducted in 1960 by NEDECO. 1/ Of a total of one million acres of land in the flood plain fadamas of the Niger River in the reach under study, about these 600,000 ac were identified as suitable for irrigation agriculture. Of areas 200,000 ac comprised large parcels of uniform unintersected lands and 400,000 ac consisted of smaller parcels, intersected by streams and gullies. Upstream from the Niger-Kaduna confluence, 140,000 ac of the former and 145,000 ac of the latter were classified, each divided equally between the North and South banks.

29. These irrigable lands are mainly on the flood plain of the Niger River. Because of floods on the Niger, these Lands were periodically inundat- ed or threatened by flooding and were not util-Lzed for agriculture. With the construction of Kainji Dam, releases during high flood inflows will be moderated giving flood protection to the higher lying lands as far as the confluence of the Niger and ICaduna.

30. Kainji Dam has been constructed primarily for hydroelectric development and as a navigation facilitating project. Although irrigation

1/ "Niger Dams Project, Electric Corporation of Nigeria, Federal Government of Nigeria, April 1961, by NEDECO and Balfour Beatty and Co., Ltd., Vol. 5, Part 7, Irrigation and Agriculture." ANNEX 6 Page 11

storage was not provided, releases for power generation and for maintaining river stages for navigation are more than sufficient to furnish all water needed for pumped irrigation on the river bank lands.

31. Flood control regulation at Kainji is presently having an adverse affect on the traditional fadama agriculture in the Valley. Heretofore, annual flooding controlled the cropping pattern and provided soil moisture after the floods receded; but now the higher fadanas are continuously above flood level and these lands have been practically abandoned for rice cropping. Reestablishment of cropping on lower areas has been slow in developing. The implementation of small irrigation projects to replace the loss of productivity from formerly cropped areas would appear to be a necessary adjunct to the Kainji Dam development.

32. The Niger Valley fadama areas are now sparsely populated, owing to poor access and difficult environmental conditions. Extensive areas are inaccessible except by boat. Inducements for transmigrant resettlement will have to include many infrastructure provisions, of which access roads should command top priority. Another constraint to the establishment of irrigation projects in the.Niger Valley will be the high cost of fuel energy for driving the pumps. A cheaper source of electric energy could be made available from off-peak generation at Kainji, by the extension of power lines into the area from the Jebba substation.

33. To date, the Bacita Sugar Co. enterprise and a 150 ac pilot project for rice cultivation at Raba are the only instances of developments of these Niger fadama lands. Other than the 1960 NEDECO study, no further investigations except hydrologic data reading and recording have been undertaken. Proposals are now being considered for studies leading to the development of an irrigated sugar plantation similar to Bacita, either at Lafiagi, or at Baro.

34. Niger River Tributaries. Extensive fadama lands along the banks of the many tributariets of the Niger River offer opportunities for reclamation and irrigation development. Most of these tributaries carry flows in the wet season sufficient to develop sizeable schemes for gravity irrigation. These tributary river flows diminish in the dry season so as to limit the areas which can be cropped from that supply, but because of the areas proximity to the Niger River, it may be possible to supplement the tributary stream yield with pumped water from the Niger for year-round cropping.

35. The Niger River tributaries near which large areas of fadama exist are the Oshin, Oyi, Kampe, Kaduna, Gbako, and Gurara. These tributary fadamas should be appraised in conjunction with large developments on the Niger fadamas.

36. Benue River Valley. The Benue River and its tributaries, from the standpoint of water yield, is the largest river system in Nigeria. Irrigable land areas along the main river have been identified, but until hydrologic information on flood stages have been accumulated, it would not be known if these can be protected against inundation by annual flooding of ANNEX 6 Page 12

the tribut- the river. Irrigable lands have also been identified on some of Taraba, aries. Potential projects have been identified on the Gongola, Hawal, installa- Donga, Shemanker, Mada, and Katsina Ala Rivers. A multipurpose dam tion at Makurdi has also been suggested. the above 37. Studies on the prospects for irrigation developments on only. A rivers have so far been of a reconnaissance identification nature technical request has recently been initiated by the Benue-Plateau State for river assistance on a study for irrigation development on that reach of the in a in this state. The North-Eastern State has indicated its interest study similar study for its reach of the river. A comprehensive basin-wide would be the ideal means of proceeding toward selection of projects. project 38. Gongola River Project. A Reconnaissance study of a potential by on the Gongola River, a tributary of the Benue River, has been prepared at the NEDECO. 1/ The report identifles a dam site on the Gongola River and Dadin/Kowa which would create a reservoir of over 2 million ac storage; perennial irrigable land downstream of up to 126,000 ac which could be served there of water supplies from reservoir storage. A hydropower installation kwh of elec- 60 mw would be capable of generating annually tup to 230 million delivery tricity. The irrigable lands are mainly on upland areas, such that from of irrigation water would mostly have to be pumped; with heads varying power for 50 ft to over 160 ft. It would be planned to use project-generated for irrigation pumping; about 40% of the total generated would be utilized this purpose. an 39. At Numan, near the confluence of the Gongola and Benue Rivers, a planta- area of about 20,000 ac has been identified as a possible site for will tion type irrigated sugar estate. Final judgement on such a proposal and have to await agronomic trials, which have recently been started, a proposal feasibility studies which are to follow. Additionally, there is enterprise to establish an entrepreneur-sponsored tomato and vegetable cropping downstream covering about 5,000 ac on benchlands bordering the Gongola River nucleus from the indicated damsite. Both of these undertakings could form with smallholder estates within the Gongola project area which, together workable farmer developments, could be the basis for a justification of a of irrigation project. Until studied in much greater detail, the viability the project as now conceived could not be established. A very preliminary by them assessment by NEDECO of economic worth of the project as proposed showed an internal return of about 6%. of land and 40. Kano - Hadejia Valley. Reconnaissance investigations S. Bureau of water resources in the Lake Chad area were conducted by the U. Netherlands Reclamation (BUREC) from 1965-1968. 2/ Based on this study, The

of the 1/ "Gongola River Project, Situated in the North Eastern State Federal Republic of Nigeria, Executing Agency: The Niger Dams Authority, Reconnaissance Report April 1970." 1968." 2/ "Reconnaissance Study, Land and Water Resources, Lake Chad Basin, ANNEX 6 Page 13

Engineering Consultants (NEDECO) undertook a feasibility study on the Kano River Project. 1/ The NEDECO study recommended an initial irrigation development for 60,000 ac of upland area lying to the east and south of the Kano River near its junction with the Hadejia River, with an ultimate expansion to serve 170,000 ac. A storage reservoir of 700,000 ac ft capacity at Tiga Rapids was specified. Subsequently, NEDECO has been commissioned to prepare final designs for the dam and distribution system, and to implement a 1,500 ac pilot irrigation project at Kadawa.

41. The 1970--74 Development Plan calls for the Tiga Rapids Dam to be completed by 1974 and the canals and distribution system to be completed for 40,000 ac by that t:ime. The cost of this work is estimated at EN 10 million. It was indicated that Government funding is available for this work and that construction would be by Government forces instead of by contract, with the MOWS building the dam and main canal and the MNR constructing the distribution system and irrigation works. The MOWS has started to build Tiga Dam, with a reservoir greatly in excess of the capacity suggested by NEDECO. The capacity chosen by MOWS is about 1.6 million ac ft, retained by a dam 30 ft higher than suggested so a spillway sited on natural ledge rock high on the abutment could be utilized. The volume of fill in the dam would be about three times the size of the reservoir proposed by NTEDECO, increasing from 3.5 million to about 11 million cu yds. Although based on questionable feasibility and justification, the MOWS plan includes a 42 mw firm peaking power plant. The Kano River Project is discussed in more detail in Appendix 3.

42. As a summary evaluation, it appears that a reservoir In the range of 700,000 ac ft would satisfy the needs of project development covering up to 170,000 ac of irrigated area. Construction of a higher dam, including a power plant, would serve doubtful purposes. Reservations are in order for the following reasons. First of all, increasing the dam height by 30 ft will increase its volume three-fold with associated increased capital costs which must be chargEd to the project. Greater reservoir storage capacity will offer little in providing increased water yields for irrigation.

43. Secondly, operating the reservoir at nearly full levels to obtain more power head (which would be the major justification for a higher dam) will result in a much larger exposed reservoir area, increasing from about 24,000 ac to 44,000 ac. The larger flooded area would have evaporation losses equal ito more than 125,000 ac ft greater than the smaller reservoir. A larger reservoir area would also mean the flooding out of densely populated agricultural lands and the displacement of as many as 4,000 families (20,000 people). Reservoir storage released exclusively for firm power generation which could not be salvaged for irrigation might also exceed 120,000 ac ft. These- losses would then penalize the Kano and Hadejia irrigation potentials to the extent of about 200,000 ac ft of river yield, reducing the area which could be served irrigation water by at least 40,000 ac.

1/ "Kano River. Project, Feasibility Study, April 1970.1? ANNEX 6 Page 14

44. Thirdly, studies of the effects on flow regime in the downstream Hadejia area lands brought on by the construction of upstream conservation reservoirs are yet to be carried out.

45. Furthermore, as presently constituted, neither the MOWS nor the MNR are adequately staffed to carry out an undertaking of this magnitude, even to the extent of administering the work if executed by contract. With but few exceptions, all of the professional technical staff positions in the Ministries are held by expatriates, and there are at present no qualified Nigerians who can be assigned to these positions. It appears that to properly undertake the construction of a project of this magnitude, the work should be contracted out to a qualified foreign contractor, with the engineering and technical supervision performed by a reputable foreign consulting group.

46. A 1,500 ac pilot project at Kadawa is now being established by NEDECO in conjunction with the Kano River Project, to develop data on cropping, to train operating personnel, and to introduce irrigation practices to farmers. A plot of 200 ac is to be reserved for a Government sponsored farm, to be operated jointly by the MNR, the University of Zaria, and NEDECO. The remaining 1,300 ac are to be developed for smallholder farmers who formerly farmed the lands. It is planned to complete the 1,500 ac project by May 1972. Water to the extent of 10,000 ac ft annually is being made available from Bagauda Reservoir, built for water supply for the City of Kano. The water is now surplus to the City's needs and is expected to remain so for the next four or five years.

47. There is every reason to believe that the establishment and operation of the pilot project under NEDECO's management will prove successful. It will be the responsibility of the MNR to concentrate their efforts in recruiting and developing a staff of irrigation engineers, irrigation superintendents, agronomists, extension staff, etc., who can take over and begin operations as construction of the main irrigation project advances.

48. Hadejia River Valley. For the Hadejia area, the agriculture now practiced on the fadama lands is dominated by the wet season runoffs from the upper catchment of the basin, principally from the Kano and Chalawa Rivers. The Kano contributes about 60% of the runoff and the Chalawa about 40%. If an ultimate project plan for the Kano River Project would involve the construction of a dam on the Chalawa as well as on the Kano, the conserv- ing of all flood runoffs with consequent slow releases will undoubtedly have a marked impact on the nature of flows reaching the Hadejia area, either beneficial or detrimental depending on how the releases are regulated at the upstream reservoirs. Whereas large flood flows might reach the lower Hadejia lands with little loss of volume, for slowly released flows it is estimated that over 80% of the volume is lost to evaporation and subsurface percolation. In planning for the Kano development, downstream river regimen changes may not have been taken into full account when formulating the size of the Kano reservoir, in establishing the reservoir operating and release program, or in selecting the optimum size of the Kano irrigation area. ANNEX 6 Page 15

T he MNR is nresentlv asking that a studv be undertaken of the Jiadelia area for the reclamation of the fadama lands and the development of irrigation in that region. This study is being requested for only a specific stretch of the xwhole river system as was the case with the Kano River Study. Since changes in river regimen are greatlv affected by what is done elsewhere on the system, t'here is no assurance that a separate study will develop a T-lan forT'tilation that hest satisfies the needs of either project. A feasibilitv study outlining a plan formulation on one segment of a river systein has little meaning unless the plan is first formulated on the basis of an entire basin study, where both economic and social considerations and constraints are applied to evolve an overall optimum plan. Such an annroach is often made difficult if individual portions of a river basin development are constructed before the master plan is finalized.

5n. South Lake Chad Trrigation Schere. Because of the paucity of dry season flows in the rivers in NTorth-Eastern State, irripation svstems develoned to date there have been small scale, utilizing waters from run-of- river diversions, only for end of wet season sunplemental irrigation. Tnvesti- gations are now beinp undertaken to exnlore the feasibility of establishing a large scale irrigation nrolect along the south of Lake Chad using lake water ,anr encompassing un to 1 million ac of flat land near the lake. A request haq been submitted t:o lT)IP/Special Fund/FAO for surveys and investigations to exnlore and identifv suitable land having irrigation potentials. The nrogram would involve tonographic survevs and soil mapping on semidetailed standards on over r;n0n,)O ac of land, and a detailed feasibility study for a 4,n0n0 ac first stage scheme utilizing water pumped from Lake Chad. It is nlanned to have the study completed within 2-1!2 vears.

_51. The more fertile soils in the area are those of heavy clay "firki" texture and low Dermeability, for which systems of management for irrigated agriculture have vet to be exDlored. For this purpose a 1,n0O ac pilot project is being started bv the TAJR, to be managed by the Commonwealth Tlevelorment "orporation (CDC) for a three vear neriod. The CDC will operate an area of 500 ac for wheat cropping, and will manage an area of 400 ac to be farmed hv smal],holder farmers. A 100 ac research plot will be operated as an exnerimental farm lointlv bv the IAR at Samaru and FAO. The capital cost for construction the delivery canal to the project land and the distribution and drainage system will amount to about ET 260 per ac.

5?2. The practicabilitv of developing a workable scheme will not be known until the pilot prolect trials and the investigations and studies are carried out. Ouestions to he answered are:

(a) soil suitability and adaptability under irrigation, including fertility pronerties, salinitv and alkalinitv prohlems, soil drainage characteristics, denth of cultivation needed To increase Permeability, etc!

(b) optimum cronning selections and cropning seqiuences for cultivating wheat, rice, cotton, maize, etc., under double- cropping: ANNEX 6 Page 16

(d) water consumption requirements and irrigation water demands for various crops;

(e) cost of irrigation water delivery to the project lands;

(f) land development and drainage works costs;

(g) ecological affect on Lake Chad region by lowering lake level owing to irrigation water withdrawals;

(h) attitude of other riparian nations regarding withdrawals of Lake Chad waters.

53. Cross River Basin. A Ford Foundation - USAID report prepared in 1963 suggested that over 100,000 ac of land exist along the Cross River and the lower reaches of its tributaries where soil and topography appear satisfactory for irrigation farming; and where a water supply to undertake irrigation might be obtained at reasonable cost. It was suggested that flood control and drainage works would additionally be needed for this irrigation development. Necessary topographic mapping, hydrologic studies, and design studies have not yet been initiated and the merits of the proposal are not known at this time. Rainfall is more plentiful and rainfall-short periods are short in South-Eastern and East Central States. Small economic advantages gained from irrigation farming over rain-fed farming might not be sufficient to justify large capital costs. However, land reclamation in poldering areas with flood protective levees might show promise in reclaiming certain of the low lying lands.

54. Other Potential Projects. Other projects noted in the development plan have been identified on a very cursory reconnaissance basis and no detailed investigations nor studies have as yet been undertaken.

C. Problems and Constraints

Ongoing Schemes

55. Irrigation systems constructed to date in Nigeria have been mostly of a pioneering nature, started mainly as pilot works and small trial schemes. Built on low capital budgets, such measures as flood protective levees, drainage, land levelling and consolidation, etc., were not always incorporated. Nevertheless, the projects are now serving as training grounds for: (i) evaluating farmers adaptabilities and performances, (ii) ascertaining crop yields under irrigation, (iii) devising cropping patterns, (iv) formulating techniques and procedures, (v) determining problem areas in project operations and (vi) developing data and criteria for planning other projects. ANNEX 6 Page 17

56. Farmers performances on the irrigated rice projects have not measured up to expectations in all instances, as evidenced by the experienced crop yields. Several basic shortcomings can be noted. Rain-fed food crops on upland areas are generally grown concurrently with irrigated rice cropping; and strict attention is not given to early planting of the rice, to night irrigation, to fertilizer and insecticide application, to weeding or to other labor consuming tasks. Mechanization cannot be adopted on many of the irrigated projects because of difficulties in employing large equipment on the small plots, so time consuming hand labor must be utilized. Undulating terrain with multiple terracing and benching to accommodate rice paddies are common, making large scale mechanization impractical, and few facilities were made in the original project layouts for levelling or land consolidation. Also, because irrigation supplies are from run-of-river sources, shortages of late season irrigation water in some instances have resulted in low crop yields.

57. Land tenure is another problem for the rice projects. Tenure for individual farmers is alloted by the Local Government, on a year to year basis. This practice tends to discourage the farmers from improving their lands and in adopting better farming practices. Permanent tenure would give good farmers incentive for investing more of their own capital to improve their irrigation facilities.

58. Wheat growing irrigation projects are not experiencing farmer indoctrination problems to the same extent as noted above. Although the facilities in most instances are better designed, and the farmers have dis- played greater competence and interest in their operations, the results so far achieved have not attained the full potentials which are possible under irrigation. Lower than expected productivity are presently attributed to agronomic problems such as soil suitability, shortage of seed of higher yielding varieties of wheat, and lack of experience of good husbandry practice on the difficult soils encountered.

Future Projects

59. For most of the schemes being proposed, there is a deficiency of basic data to properly plan the project. Many of these plans have been suggested on the basis of only cursory reconnaissance considerations, and more thorough studies and investigations will have to be carried out to prove whether in fact they are economically and socially feasible and viable undertakings. In many instances hydrologic data are meager or nonexistent; topographic and soil and land surveys are yet to be accomplished; cropping programs need to be established and crop-soil acceptances and crop husbandry procedures need to be investigated. Investigations and studies to develop these basic data are of necessity prolonged procedures which must be accomplished by establishing hydrologic data gathering installations, by constructing and operating pilot schemes and trial plots, and by carrying out surveys and explorations.

60. The activities of project planning and formulation, and the special- ties of design and construction supervision of major irrigation works require a large staff of experienced professional engineers and technicians, and it ANNEX 6 Page 18

will take time for Nigerian engineers to build up a background of such experience. However, this problem can he alleviated by engaging qualified outside consultants to plan, design, and supervise construction on the major works.

61. Qualified agricultural staffs must be trained for the investigation and development work concerned with agronomic and other agricultural problems related to the establishment of large irrigation projects. After irrigation works are completed, trained farm service and extension personnel would have to be available to implement operation of the projects. Additional education- al facilities and training institutions might have to be established or enlarged to provide sufficient qualified people for these responsibilities.

62. W4ater resource planning should he done on a basin-wide basis, for optimum and equitable use of the resources. W1ater resource planning to date on the various river systems has tended to be provincial, as has been demonstrated in the plan development of the Kzinji Hydropower Project, the Kano River proposal, etc. On the Niger and Benue River system separate requests have been submitted by several interested States and by a Federal Authority, each asking for detailed studies of the water resource and land development possibilities of these rivers. However, each request is for a study to encompass only its particular area of interest. Those concerned with the irrigation potentials have framed their request asking for assistance from agencies which are oriented toward the agricultural disciplines; while those concerned with the power potential have directed their requests to different "power-oriented" Agencies. iWith this approach to planning, full considerations for the best uses of the water resources are often overlooked. Basin-wide planning, for which a systems study should be conducted, will aid in formulating the optimal and most equitable "master plan" possible.

63. Iligh pumping costs function as a det:errent for establishing pumped irrigation projects. Mhere fuel oil must be used to drive the pump engines for pumped irrigation, special concessions should be sought to reduce costs or alternative ways of developing energy sources should be explored. With the surplus Kainji power which is now available, and with additional generation capac:ity planned for the future, it might be prudent to develop irrigation pumping schemes on the basis of electric driven pumps which would include extending power lines into the area eligible for pumped irrigation. Preferential rates for the energyr which would be needed could also be sought to enhance the feasibility of lthese developments.

64. International agreements are lacking for the distribution of waters originating in other countries. The origin of many of the river systems in Nigeria are in neighboring countries, and future useages and depletions of flows before they reach Nigeria are now a constraint of unknown seriousness. Where projects are proposed which must utilize the waters of international origin, it is prudent to come to definite agreements with the riparian countries on the distribution of these waters before large projects are undertaken. In particular, the projects on rivers which forml the border with neighboring countries and those contemplating the withdrawal of Lake Chad water would be affected. ANNEX 6 Page 19

65. The smalLholder farmer is not well indoctrinated into the discipline of irrigation farming. With no intent to downgrade the competency of the Nigerian farmer, experience elsewhere has shown that long periods of orientation, indoctrination and demonstration are needed to upgrade the subsistence-type farmer from his traditional method of dry land farming to the more sophisticated procedures which are needed for successful irrigation farming. This can best be effected on demonstration plots and trial farms and small-scale irrigation projects.

D. Prospects for Irrigation

Economic Possibilities for Irrigation

66. It is estimated that of the more than 80 million ac of arable lands in Nigeria, no more than 30 million ac are now being cropped under rain-fed cultivation. Of the 3 million ac identified as potentially irrigable, even on the very optimistic program suggested in the National Agricul- tural Development Committee ad-hoc report, it would appear that no more than 500,000 ac: could ble brought under irrigation by 1985 (at a cost of well over EN 100 million). Assuming further that if production on this acreage of irrigated land would increase three-fold over that which could be grown on rain-fed lands, the net effect on total nation-wide production would be to increase agricultural output a mere 3%. Alternatively, this same goal could be achieved by putting more of the rain-fed lands under cultivation. By expanding these areas by a million acres or so similar results would be attained, and thus accomplished with a much smaller investment. If this premise has validity, it appears that irrigation as a means of increasing agricultural productivity should be considered only as an alternative to other programs which would achieve the same end, on the basis of economic merit. Possible exceptions to this premise are discussed below.

67. Wheat can be grown in Nigeria only on dry season irrigated land and sugarcane in most areas must receive supplemental irrigation in the dry season for successful cropping. Thus there is no alternative to the consideration of irrigated production. On the basis of an expected annual demand for sugar of about 250,000 tons by 1985, sugarcane cultivation under irrigation xould have to be increased from the present 10,000 ac to about 60,000 ac (assuming 40 t/ac). The prospects for wheat raising under irrigation in the northern states are at present uncertain, from many aspects, as has been discussed elsewhere in this report. 68. To bolster rice production in Niger, the question is whether flood control measures and irrigation works can be developed at reasonable costs. Some such undertakings have already been implemented where run-of-river water supply sources are available, and additional expansion for these types of developments are possible. Where irrigation projects with year-round irrigation water are to be developed serving fadama lands, rice cropping would no doubt be the leading contender as a wet season crop. ANNEX 6 Page 20

69. In high population density areas, such as Kano, where lands are now intensely farmed and where surplus lands for agricultural expansion are not available, increased productivity through irrigation might be economically justified. A cheaper alternative, however, might be the development of irrigated lands in less densely populated areas, to which people could be trahsmigrated and resettled. The Niger and Benue Valley lands may offer this alternative.

Priorities and Scheduling

70. To introduce irrigation to areas where projects are planned, the State Governments have already established small trial farms and pilot projects, or have plans for their implementation. The most recently planned irrigated pilot schemes are to serve a dual purpose: first, to provide plots for Government operated field trials, demonstration tracts, and seed propagation and experimental farms; and secondly, to provide farm plots for smallholders. The government units are to be managed by experienced consultant operators and researchers. It is hoped that this approach can provide the rationale for an expansion to a larger scale project. However, until it can be conclusively demonstrated, through pilot projects and small irrigation schemes, that the smallholder farmers to be serviced are oriented and organized in sufficient numbers to adapt to a more concentrated agriculture, immediate establishment of large irrigation projects to serve only smallholder undertakings would be ill advised. There may be better prospects for certain irrigation projects which would include nucleus plantations and large entrepreneur-operated tracts growing specialty crops. For such projects, smallholders and outgrowers might be included as participants in the project, by being employed part time where they can observe and learn proper irrigation practices and also have an outlet for their production by selling to or through the nucleus estates. Possibilities for sugar nucleus-estate establishment at Numan on the Benue River and at Lafiagi on the Niger River were discussed earlier in this Annex.

71. For the high population density areas surrounding Kano and Sokoto, irrigated crop production has been advocated as a means of relieving some of the economic stress within the region. Thus a large irrigation undertaking on the Kano River has been predominant in the activities of the MNR. Although the project plans have not been thoroughly studied nor properly formulated, the State Government has embarked on construction of the project and intends to have 40,000 ac of land under irrigation by 1974. As was pointed out earlier, specialist consultation would be a highly desirable addition to the project plans. On the Sokoto-Rima Project, the immediate plans contemplate only the implementation of a pilot project, so evidence should be forthcoming as to the justification for major capital investment, tentatively scheduled after 1975.

72. Likewise, the future of the Lake Chad development awaits results on the pilot project there and on surveys and studies now being proposed. However, the general evidence suggests that a project based on wheat cropping as its major consideration would have difficulty in showing economic justification. ANNEX 6 Page 21

73. The Niger River areas appear to have some promise for irrigation development, at least upstream from the Kaduna confluence. As previously noted, the flood control regulation brought about by the operation at Kainji reservoir has altered the rice cropping culture on the downstream fadamas to the extent that much land formerly cropped to rice has now been abandoned. It would be possible to develop these and other lands for irrigation, and especially for plantation type developments. The population density in the riverain region is now comparatively low and farmers would have to be transmigrated into the area if a large smallholder farmer undertaking would be considered. Infrastructure provisions would be a necessary part of any development. The attractiveness of these areas for pumped irrigation would be enhanced if power lines from Kainji would be brought in.

74. The merit of a project on the Gongola River will not be established until the proposed feasibility study is undertaken. Here, too, with a low population density in the area, the urgency for a project solely for smallholder farmers does not command a high priority.

75. Prospects for other identified irrigation schemes also await detailed investigations and studies.

Investments

76. Kano State has programmed an expenditure of EN 10 million for the Kano River Project covering the period 1971-74. It is implied policy that no outside financing will be needed but changes in project plans could alter this policy. A technical and economic review of the investment plan is definitely needed.

77. For the Bobo Pilot Project construction, the North-Western State !M4R has made a request to the African Development Bank for financial assistance to implement the project. Negotiations in this regard have as yet not been finalized. If the alternative approach of establishing a pilot project proves to have merit, it may be possible that the proposed funding assistance could be transferred to that enterprise. This funding might cover both the physical installations and the technical assistance needed to establish and operate the undertaking.

78. The irrigation potentials which have been identified by the State Ministries in the various States, although very tentative in many cases, suggest that considerable winnowing of possible projects will have to take place. That is, even if all projects should be found to have economic viability, the program is a very optimistic one, considering staff and farmer adaptability constraints. A realistic assessment points toward aiming for about 25,000 ac increase in irrigated projects by 1974 and about 200,000 ac more by 1985.

Studies

79. The need for overall basin planning has been noted. With the interest now being evidenced in project possibilities on the Benue River, a comprehensive study which would include the whole Niger-Benue system and ANNEX 6 Page 22 exploring all multipurpose uses of the river waters might be considered. Similarly, a more comprehensive study of the Sokoto-Rima River system and of tne Kano-Hodejia-Yobe svstem might evolve better overall plans that have now been formulated.

80. The following studies are underway or have been completed:

Project Type of Study Conducted by

Lake Chiad Basin Reconnaissance BUREC

Sokoto-Rimna Valley Reconnaissance UNDP/FAO Kano River Pre-feasibility NEDECO

l1adejia Valley Identification BUREC

South Lake Chad Soils investigat-ioni and feasibility UNDP/FAO South Lake Chad Pilot Area selection CDC Gongola River Reconnaissance NEDECO

Niger Valley (below Kainji Land Dam) classification NEDECO

Numan Sugar Project Pre-feasibility CDC Cross River Basin Reconnaissance USAID/Ford Foundation

81. The following investigations and studies are being suggested by the various State Ministries:

Project Type of Study Estimated Cost EN tMillions

lHadejia Valley Land & Water resource study 1.0 Gongola Feasibility & pilot schemes 1.5 Benue Valley Soil and water resource survey 1.0 Niger River Valley Investigation, surveys and feasibility 0.5

82. Basin-wide master plan studies for the following river basins are suggested for consideration by Nigeria:

Basin Type of Study Estimated Cost EN Millions

Sokoto-Rima Multipurpose project System analysis 0.5 Benue-Niger below Kainji Same 1.5 Kano-Hadejia- Yobe Valley Same 0.5 AXNEX 6 Page 23

83. In view of the interstate and international aspects involved in such studies, and of the divergent interests and responsibilities of the State and National Ministries and Agencies concerned with water resource problems, it would appear that one specific Federal Government Agency should be vested with full responsibility for coordinating the basin studies. This responsibility should include sponsoring of data collection, coordinating surveys and investigations, and directing the studies. Where bilateral assistance would be sought, this organization would then also serve as the counterpart agency for furnishing the local organizational and funding requirements.

Appendi. l

N I o E R I A

Potontial Irrigation Pro ectg

POTENTIAL IRRIGABLS LNRD RIVU vALLIa TIPS OF DEVELOPMENT STOAGE RNS.RVDIR SITER MUICH CAN BR SERVED (ACRES)

KIOE' RIVBR SYSTEM

Sokoto River Valley Conservation aut flood control storage. Fadma recliu- 340,000 ac ft Bakolari Reservoir on Sokoto River 230,000 - fadama tion and irrigation by polder construction. Fada and 290,000 ac ft Tautabaki Reservoir on Qagare River 388,000 - upland upland irrigtion along riere tr puping swd gravity. 300,000 ac ft Zoba Reservoir on Ruasuru Rivor 460,000 ac ft Kachwra Reservoir on Rina Rivor

Kainji Lake - Punping froe Kntnji Lake mid tributary streass. Left Shore Area Selected wrean Irrigated by puMping. Kainji Laks reservoir on Niger River 5,OOo - scattered arse.

Niger River Vallay and Conservation and flood control storage. Fadaa 9,600,000 a. ft Xe,li Reservoir on Niger River 600,000 - fadama Tributary Rivers below recleaction and diking protection along rivers. 1,000,000 ac ft Jebba Roservoir on Niger River [cinji Reaervoir Irrigation by gravity fron tributary atreams and 2,100,000 *c ft Shiroro Reservoir on Kaduna River by pumping fro. Niger and Kadana Rivers. Subtotal - Niger River systm . 1,223,000

"MiUE RIVER SYSTEh

Upper Benue, River Valley Conservation anl flood control storage. Fadama Dasin Hausa Reservoir on Benue River (upstream reclamation and irrigation along Banue River of Yala) 500,000 - fadma Valley.

Gongola River tributary Conservation and flood oontrol storage. Fadama and 0,400,000 *c ft Dadin Ko.a Reservoir on Gongol 200,000 - fadama and upland upland irrigation lorg Gongola and Benua River by River gravity and puqping.

Haval Rivss Conservation and flood control storage. Irrigation Garkida Reservoir on Haval River 20,000 along Haval Riv,sr.

Taraba River Conservation anl flood control storage. Irrigation Dclii Reaervoir on Texaoa River 10,000 along Taraba River fadaaow.

Donga Rivser Flood control and irrigation; reclamation crd irriga- Not yet deternined 30,000 tion of Donga fadansa by pusping.

Shananker Flver Conservation cml flood control storage. Irrigation Not yet determined 20,000 area ar Doka rofa, aouth of Pankshin

Dsp River Pumping irrigat'on at 0. Tat., east of Ascikibo Run-of-river 500

Wase River Paspigg irrigation neow town of Wase Run-of-river 70

Gcoaneri (below Benue Gravity irrigatkon near V.a, south of Jon Shallow da 1,000 Plateau escapment)

Made River Conservation cd flood control storage. Irrigation Not yet deternined 4o,000 area along eada River near Akum-loko

KatWein Ala River F.dama Raclaantion and flood control on Katsina Ale Not yet determ,ined 5,000

Lover Benae River Valley Run-of-river puiiping along Benue River after flood Dain aeuse Reservoir 50,OO at Ibi control and navIgation established from Dsin Reuse 20,0o0 at lunge Reaservoir 40,000 at Obajilbe 20,000Gt Loko

Lo..r Bonus. River Makurdi multipu-pose rservoir for nydropover, flood Bon.e River and Niger River Reservoir; 30,000 Il.shi Flood Pliai control, navigation and conservation to regulate lower Niger 1v,-r flows below Lakoja I13,000 Otoer areas

Subtotal Benue River Syatem 1,000,000

CHAD 3ASIN 5STEN -UPPER CATCH?METS

Kano nd Cbala.a Rivers Conservation sni flood control storage. Uplnd -rriga- 900.000 cc ft Tig, Rtpods Reservoir -, Rano River tion by gravity cnd pumping. 450,D0o c ft Chala.. Reservoir on C-lece River 200,000 - upland

HNdejia River Valley Conservation m&d flood control storage. FadaDa reclama- 900,000 ac ft Tiga Rapids Reservoir on. Kano River tion and river nhannelination, diking and polder 450,000 ac ft Ihalawa Reservoir on Chelava River 30,000 - fadama dea,lopmnt.

Jakerade and Thace Rivers Pumping irrigatian from run-of-river flows None contemplated 5,000

Jemari cnd Yobe Ricer Valley Conaervation and flood control storage. Flood protection, drainage cd irrigation Bunga Resercoir on Jarar River 100,000 ffeduna ad -ccop r-ce-stion CHAD RASIN - LAKR AREA

South Chad Lake Border Lands Pwnping in multipLe stages from lAke Chad to flatlands 6,000 sq miles Labk Coed 250,000 - clay soil fltlaesa near Lake

Subtotal - Lakoe Chad Bsin 585,000

CROSS RIVE3 BASIN

In Souts-Ra.t.rn State Drainag and irrigation fron run-of-river diver- Not yet determined 111,000 eions on Cross River nd tributaries

In East Cntral State Village and large irrigation works Not yet determined 20,000

WRSTIENSTAll RIV3R

Oyan, Ogun, Oabun and others Not yet determined Not yet determined 60,000

INORTHCOTHAL STATS

Rangsi River Conservation at,-rage. Irrigation by gravity Raservoir on Kangizi River 8,000

Deura, Dabirin nd Iiac. Fadma reolmation Not a* yet deterained 13.000

IHJND TOTAL 3,023,000

i NNFY 6 Ap-penix 2 - Pagr

N L G E R I A

Roltetin IrtiaatoioProleots

PtoJe-t Type of devele- ent LO-atLoa Project aref Rk

NORTH rESTERNSTATE

Wuorno Pilot project for 8bykte Alo-g Ri-t River 500 too-c u-d-r cultivation Offstr-am reservoir oeveiooertn by tNR. River development, farmed 0-0r Wurmo 600 ac betir developed 15,000 -c ft apat.ty by atoll holders- Wet and 900 cc yet to be devIeped dry ceaae oroppieg, haste cod ric. 2,000 c Tote1

T-rf-vie PFM)Agro-ery trial. poject. Along SRketo 25 uoder-c cfirivotive Peeping from Sobkat Projrc- being oprrat.d -yder Wlo ard dry ma.m orop- River t Toefa-ia Eopeot to eapeed 00 6C c River tr-erbod evperrieloo of FOG. Tva grovo- pi,.. thro-gh 5' tuba cell eltet a.ig-ed tvru-agt v-oratnon. bRker, PAL)Agr-ony trial. pJ-ect. NRor Sakota River 80 *- -ode- ailo:Oan. Prupivg Iron Lake Nato ProJect beivg oparo-ed -nd-r W.a tod dry ornpptig.-eaca ac Fakurv Proposed to avp-nd 00 500 ac (Netur-l Ltka) st 30 soyrroiivo of FAO. Tvu grv-..- ft. p-eiteg hbad nlets aesigned tvoo ..gc vpcror-v-.

Edaebili Ru friverfl cupplenstic1 Palderrd fade 3,000 acE grace Grc jiko ad Kopeko, Cot.ruotted by IR. ilpabratad oct-r or cot maccoo rve along- Radon i,d50 or.noy tu-l-vaned pereetel toibunay by L.O.A.N.edn putytig draivgu. bigatlo. crY aca- River .aer Jim. etIcoc of Kdora coo irrigation nn 400 to River.

Radeggi R-u of river mapplatere1 Pado land at 1,750 ac groea 0-00 Gravity floe Ices M1c Co..rvo-ted by IRI. Opar..td by eater far ec irrifation Obsk. River esar 1.430 so ton ti.>Ovtaid Rio. oributerysc- L3..A. .Soflood p-otecti avrk. B.deggi. f Gbako Rver.

Tor.k. Rut of river auppi-t1tat Near Bid. 200 o Egroat cr00 Gravity flaw frt C-netru-ted by MPR. Op.roted by ster for rige irrigatlon 30 c took cv ilvated K nko stre tiribuistry famr.. af Obako River.

Logvre Run of river sappOemettal Left bkak of 400 so g,ovm ara Gravity flow lrov Erai ed by PRi. Ope.r.ttd by --ier far ripe irrigatio gigr River 3I .0 i,- RPecR ,ulLivoLcOtrlib--acoti-1e. LbGA. M. flood prpvtivon eoke, - at lam ass a at of Niger RIaro ear k.tth.. Kstc h.

Edd.-L.p.l Ror af riorr sapplt atal Or Ets.a River SO to coitivoted Otcoa River Co-etrorted by YNR. Op-rattd oaleo far riso tr-gcti-o .ear Ed. Io Lnp.a iy L.O,A.

8 small scheese: Gao..higlgSppioae-tcl aeter fte I. fadaegs sloog Taal groac cr0- 1,720 aR Rvn-oftriver fl0 Iodlvidoai el-l1 pro-jci avv Jaaig at .seeco. far riot -aIl1 tributary Culrtied area 1,520 s. iron -tl11 tributary -trottedby I * 0 Kpalyp Groogtio streons of Nig-r Mt.abfot o-d Ktdo. Rivers Kutigber- A.bero 0 aratco Eyagi

Ruba Pilot .cohba far rice At Rba, t left 150 or P apind direct from PI1ot -oheoo flo 5,000 at pvl--d bcink of .igeo Niger Rver. d.elioPert.

J.bba

KWARASTATE

BaiLna Agoo-ieduatrial Sig-r 0 uplaed fadattac 9,300 c Tati1 P-opiog froa Niger oporatrd by Slioriat Sopor Co avacii. Plotes aordrycn oouth ba-n of 5,200 a prrn ir rgtion River. Ponpig -apa-tiy ODrYy toer appLicao,io-ppali- cescon gravi to aad mprlo- ler irriRatIotn F krova-3 appi -tioi 912- dayt- 45*'

rko-LaLte Ron af river muppIo-neaI BRaltaLtdr city, Total drove cor- 2,203 . Cravity flat f-rDe k Sme-lhllhal- ploii tfr-d by ab.tt osto!rfar oat ccsao 10 muse from Und-r ou6tio t-ou 1630G ac anram, tibi.tcryof 500 lao-1 and imagti..Ifar-or- rota trt4gcgave . PstOgt at JDoki Niger River AveragI plot aboot 3 orrt.. Con- carson. etrorcod by q.N eavrdM ", L.O.A.

4 emaIl schesae: Lafiagi Ro, of r ee sppi:ttal Faaa 0 rb- 5 t Fre -11 toibatary e 2ero2 atr y --00 puny co-o , Kaia eater for Ic iscame tarY mgre *oat n ofn v River by gtoity at fLoi tar veivo croP. Uba riv- i-ripetm rigbt dd. of Ild nenotg. Roll Nlg.r Riva.

KAO STNtTE

J.kcarada d Dry ssion irr tion ,tf Nerth of kota 500 acres groa Pu. tg fIro Jak-rda PIca ev-- d t 000 a T-t Ri...vers vhrat med coatt-red .t1ed -thbns Rivr d p ioi..vr. vegafablem cad aioc -n o^Rvr eelpnn nitr

HRdcjaIIdaea irririea it sia 0 WLda beds 670 v In ci aeparant pluto. Poeplg Ion pada aed Prj Jrct e-rod io 19b2 0-h 30 .eParteccfor dry ret of Radejic ooogbh i ri va- chb.vee Plst t. agreed Plots iv abc.. emeeco hb-a pilaf Pr- ... 9D-1,000 at. loyarftue ja.

adn plit Pilot Prelt fa gam 0 Ic matth of 200 Cb -- t o trgL... d Temporarypipeliec sod aivuel vupply of 10 OOC ..h-e. RIver Prajsot. Kiot at leadta be fare far trials med poopiec Iron Bcgaoda boaBOcds Ierololf Ittladed Re Keem drme-vrttrLmo-n r.a.serspply.. avilable .tnil veeIddfai. River Pr-J.ct arc at-rage for City ef far ayo C-lo "opplyo: 0.. 2,000 at Slo holder iama-r KRave ba -ailable for pilot p07.0- Oar deveiopmeei lot dry aeot 4 or 5 yers. ssot irrigatiet flDpe-diog aont fvb s.aply) AN1igl 6 Xrpcird 2 - Pcge 2

F I L g R T A

KatLeing T-rigettcp ProJmrto

c- Wat r Roartk Pr?jot rype f feeowt Loc ttia ProJect A-r Source

LOS-R EASTPRSSTA- mtwc atcted biy MIRt. After 3 year. North Q..4 Ooe cro per yeer develoIp- Along Yore River 0,10) acre -leered Ru-!clr eprotloo by L.n.A. ioa~~gs-!eb. coot foe ,-ct tod rice coo MAek Chod ' 42302 ,crr ,-craror ie from Ye.c RIcer tier Projeat lrrigeetel - trorogy Dpl., Ya. end tot 1970 .niime-nedic soils Adber Co-aotroctd by RI. Aftr 3 ner-, South Chad - Une rop per cr develop- Near Coobocta 2,300 -crn, OnW-of-river panpiDg Rliver Operett. by t.l.A. EbejI EIcer Proj. root for oheat and tire fro EbJt Ilit.cr clay -oil.. Prejet t-trcd bl ? Soath Chbd pilot Pilot protjet for eoet At Nge.L, coer 100I cc eperioentel fars PampleS fro- FbLji -M-a. hR... ' efirkij *nth nec of 400 c dev.lepocee plot River, viol 14i ile K raged by CDC or 3 year Po-j- irrlgotiec bricr elay seth. ~~~Lobeflhed 500 ce sai holdioe pl.o delivery cco.l Euporla.tul fern epvatad by R..rere sc-r-on soIeira e FAO/Chad.

by Sloae Sogar Ce., Trial plot, for ar Ner NHa, n 140 * plot e 1 -Lvi1 cat P-pire fr le.on Gp-rmted Nce Sger Roost. fr-e loBsot. 2/3 foet. so....eed cod 1/3 TCD Trial plute one culture ofr type. Revu River 40 e i.,pe orosoine clays River ted of°sail C-eek, -ribcenoy of npO...red. loruc Rivor

BItO FLATCATSTATE ReNar Von, comt, 20 re f ec. del upi-m, Run-of-ete-r pt pig P1r d -otroi ef eho11 -rc i Pilut Vet deeodyncpplsssetoyt f-a irelgtier rice nod dry e4amee vegetbl, of Jue 6f or. oct .... o sc..yplvoecri or poes-r ateemgeee--ve Proj-u goty irrig.ti-c ir-igatiu at 102 -c by

--ri ef P-jo Proj-Ct Yer-reid irrgeoe. N-l toep of Wese, 70 . noder c-lti-ttor Rio-f-rive p-rpio n. u.c. River at pr..o.. Riceseanor. ie aec 00W.ee River Tram Wae. RIver Plced egtbeRedry ecee.- petpieg fror PIne to -et-d to 500 Dlp Iver- Prcjret Yeer-reo.d rict irrigtieL.. Ner C. ITa, suet 100 c.. roe:pod at prosce Rloe-f-riv-e of A.osikio Dlep Rier totel dev-epoopen by 1074.

NORTHCEOTRAL STATE 1 AIR operated. Sle-1 hld-er Lalma RIcer Projees ed eons to ppOIr.tseory .c Colo Aot inot re clent ud ceg-bch.lo Ruom-r-rivec p-pict med dry ec riroigottim c.ec of tori. from W-c. RIvet f-reig.

SOUTHEASTERN S1ATi

Vfllnge 5th s. Nol ideetiftid lot idomtified 300 a fior rcc- cod -ee_- Not idrotiffod

Jif,701 CgTfiLLTAb17404 och- holdere e. .o.e..y oc Ucn-icnodi froo PcWiog cad gr;vity for Or 3iver Obi... Poll det-eyvet 3,000 to 5,000 Thice River d-licopd by Rec-oco- SoiRlemot Schoce y-nr-r-od irrigetio. cc. yre...ol ly developed SliO no-ah-. plat mu 40 cor echnas iS-l I indiol deol 1,010 It i500montta tue-t-rier iveston as de- -ecaJlo dillege scheme on leec ferotr. coetly for ric coLti- develotoYnt sod groredseer fto calico epreed over .1de

tliD WESTElS STATE YLverIoa-ec Sceh-e -edm redeot.eteg cod TItohi Flood Plamie Perd etrol cod drofe- AlEss iger l-ec 2,000 *c for flonlteg ri- hoer ego of fedem locds for fuc oF ibiaje c-lc- control cloileie

RIVERS STATE cropyiog ator-t -t d driege, LNifer lcInn Cc0 t pcc ccop d Dr-i-nae ood -erigati- Tet plee fc P-rbih Ton hoclenior, occ,moivof riec ccl er Plot fIlrd -t-cr1 end -ice- - RIcer at PItrb 60 cc. dc-lopcd icc- Dlcha Crok gaoler of froth teetr Troth

r flues Son Giavtrur -chr-es. Villeg sche- lot ide.tified ol l epdividacl 5,0010c tocaL Roe-cf-rie oprood oer sr

Tocal cod, r -lotivetioo 35,915 c.

T-ocl Iviog dcreluped at procc ct 2,520 c

Total 00 be d-1olupcd L. rear futur- 1,355 ec

G-rDd ToI.1l 39,790 or. ANNEX 6 Appendix 3 Page 1

KANO - HADEJIA RIVER VALLEY STUDIES

1. Reconnaissance investigations for the Kano-Hadejia area were conducted by the U.S. Bureau of Reclamation (BUREC) from 1965-1968 1/. The study inventoriecl the potentials for irrigation developments near the western headwaters of the Chad Basin, principally along the Kano and Chalawa Rivers. Conditions in the lower Hadejia River areas downstream from Ringim were briefly noted, but a study of that portion of the river valley was not included in the investigation.

2. Based on the Burec reconnaissance study, the Netherlands Engineer- ing Consultants (NEDECO) undertook a feasibility study of the Kano River Project 2/ Among other requirements, the terms of reference defining the scope of the study listed the following to be carried out for the Tiga Dam:

"( a studv of the feasibility of a higher dam at the selected site;

(ii) a studv of the feasibility of installing turbines in the water outlet of the dam;

(iii) a study of the feasibility of constructing the dam in stapes;

(iv) a study of the consequences of the Tiga Dam and alternatives, including the above mentioned points, on projects further downstream such as the Hadejia scheme;

3. Of the above requirements, items (i) and (ii) were covered with only little detail in the report; and discussions on items (iii) and (iv) were not included.

4. The BUREC study indicated that, for the year 1949-67, the average annual river yield of the Kano River was about 880,000 ac ft. Their plans contemplated the irrigation of about 58,400 ac of land for which an average annual reservoir demand of 378,000 ac ft was indicated, excluding shortage years. With an assumed reservoir of 510,000 ac ft of storage capacity (normal water surface elevation 1984), shortages in the order of 22% during the dry seasons of 1949 and 1950 were indicated. An annual evaporation from the reservoir averagLng about 57,000 ac ft was estimated for this scheme.

1/ Documented in "Reconnaissance Study, Land and Water Resources, Lake Chad Basin, 1968."

2/ Documented in their report "Kano River Project, Feasibility Study, April 1970." ANNEX 6 Appendix 3 Page 2

development on about 5. The NEDECO study contemplated an initial of the Kano River near its 60,000 ac of uplands lying to the east and south indicated that on the basis of junction with the Hadejia River. Their study would be 215,000 ac ft a selected cropping the irrigation requirements with the Burec estimate of annually, or 3.5 ac ft/acre served (as contrasted basis and with their 6.5 ac ft/acre). On the NEDECO irrigation demand they estimated that the project estimated annual river yield of 800,000 ac ft, ac. To provide storage area could be expanded ultimately to about 170,000 storage for less than average for this size project, considering holdover with an active capacity of year yields, it was concluded that a reservoir power installation about 600,000 ac ft should be provided. A hydroelectric ac ft of inactive storage was included in this plan for which about 100,000 to item (i) in tne terms to provide minimum head was needed. In response with a total storage capacity of reference, the report indicated a reservoir elevation 1700). No assigned of about 700,000 ac ft (normal water surface in the scheme; but some storage space for flood control was provided by reservoir filling restric- measures of flood control could be available tions. of reference, the report 6. In response to item (ii) of the terms was not finalized nor was discussed a power installation, but the capacity nonfirm plant, whether the it indicated whether it would be a fi-nn or a capacity, or how this plant installation would be for base Load or peaking The report studies implied would fit into the present power grid network. feasibility, but on the basis that a small base load plant would not show power source, a peaking of comparison with Kainji power as an alternative studies did not shoxw, however, installation might indicate feasibility. The to be released exclusively wthat portions of reservoir storage would need not: be salvaged for irrigation for power generation, which water could then power plant whose capacity use. The NEDECO report's conclusions indicated 100 to 10% load factor. could be between 6 to 60 mw irith corresponding feasibility report, they 7. Subsequent to the issuance of NEDECO's, the dam and distribution were commissioned to prepare final designs of project at Kadawa. system, and to implement a 1,500 ac pilot irrigation for the construc- The Ministry of W4orks and1 Surveys (MOWS) is responsible plant, and the main canal tion of the dam and appurtenances, the power The Ministry of Agriculture and leading from the dam to the project area. construction of the projects Natural Resources (MNR) is responsible for the preparation. The MOWS has irrigation distribution system and of the land that suggested by NiEDECO, to already started building Tiga D.m higher than impound 1,600,000 ac ft of storage. peaking power plant, for which 8. The MOWS plan includes a 42 mw firm to he allocated exclusively about 120,000 ac ft of stored water would need reservoir area of the greater for power. Additionally, the larger exposed 125,000 ac ft of water to capacity reservoir would then lose up to another Kano and Hadejia irrigation evaporation. This would then penalize the yield, whlich would to the extent of albout 200,000 ac ft of river potentials water by at least then reduce the area which could be served irrigation this point of view alone, a 40,000 ac. It appears, therefore, that `romi ANNEX 6 Appendix 3 Page 3

larger than necessary reservoir should not be built and a power plant installation at Tiga might show questionable feasibility.

9. In discussions with the Niger Dams Authority, who are responsible for power delivery to the Kano area from Kainji Dam, they indicated that at the present time power generated at Tiga would not be beneficial to them and from their point of view a power installation there could not be justified. The power plant installed capacity at Kainji Dam is presently at one-third its full designed capacity, and they feel it would be more prudent to complete the installation there before embarking on construction of other power plants. They indicated their present transmission capacity to the Kano area to be aclequate to handle loads greater than the demands at present, the unused capacity now being greater than what could be generated at Tiga, on the firm generation basis. Their 132 kv line from Kaduna to Kana can carry about 35 mw and total demands at Kano are now only from 15 to 20 mw. They halve plans for providing additional transmission facilities, when demands warrant them.