Development Prospects of Niger

Report No. 487a-NIR Current Economic Position and Fit. c py Development Prospects of Niger (In Three Volumes) Public Disclosure Authorized Volume 11: The Agricultural Sector (Main Report) Aug&st 20, 1974 Western Africa Regional Office Not for Public Use Public Disclosure Authorized Public Disclosure Authorized

Document of the International Bank for Reconstruction and Development International Development Association Public Disclosure Authorized

This report was prepared for official use only by the Bank Group It may not be published, quoted or cited without Bank Group authorization.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

Before 1969: US$1.00 = CFAF 247 1969-1971: US$1.00 = CFAF 278 1972: US$1.00 = CFAF 252 1973: US$1.00 = CFAF 222 1974 and after: US$1.00 = CFAF 250

WEIGHTS AND MEASURES (Metric System)

1 hectare (ha) = 2.469 acres 1 kilometer (kmn) = 0.6215 miles 1 kilogram (kg) = 2.2047 pounds 1 ton (t) = 1.1023 short tons = 0.9842 long tons 1 liter (1) = 1.057 US quarts

FISCAL YEAR

October 1.- September 30 NIGER

CURRENT ECONOMIC POSITION AND DEVELOPMENT PROSPECTS

TABLE OF CONTENTS

LIST OF ABBREVIATIONS

COUNTRY DATA

MAPS

SUMMARY AND CONCLUSIONS i - viii

INTRODUCTION

Production and Income ...... 1 Foreign Trade ...... 2 Public Finance ...... 3

PART ONE: RECENT DEVELOPMENTS IN AGRICULTURE ...... 5

I. Production and Trade ...... 5

Overall picture ...... 5 Main crops ...... 6 Millet-Sorghum ...... 6 Rice ...... 7 Beans ...... 8 Groundnuts ...... 9 Cotton ...... 10 Onions ...... 11 Tomatoes ...... 11 Livestock ...... 12 Fisheries ...... 13 The Drought ...... 13

II. Rural Development Structures and Institutions ...... 15

The farm system ...... 15 Rural development institutions and services ...... 16

III. Current Rural Development Policies ...... 20

A - Development Programs ...... 20

General coverage programs ...... 20 Specific agricultural projects ...... 21 Table of Contents (Cont'd)

Page

Specific schemes for livestock ...... 24 Irrigation projects ...... 26 Agro-industries ...... 27 Industrial projects in preparation ...... 28 The "drought program" ...... 30

B - Investment and External Aid ...... 31

C - Economic Policy Instruments: Prices, Subsidies, Taxation, Credit ...... 34

Prices ...... 34 Subsidies ...... 36 Taxation ...... 37 Agricultural credit ...... 38

D - Training ...... 39

E - Agronomic Research ...... 41

PART TWO: LONG-TERM RURAL DEVELOPMENT PROSPECTS ...... 43

IV. Government Policy - Directions and Objectives ..... 44

A - Historical Background ...... 44 B - Apparent Objectives ...... 46

V. Problems and Constraints of Long-term Rural Development ...... 48

A - Natural Constraints ...... 48 B - Population Constraints ...... 50 C - Water Resources: Constraints ...... 51 D - Economic Dependence ...... 52 E - Institutional Constraints ...... 53

VI. Strategy and Prospects ...... 56

A - General Objectives and Development Styles ...... 56

B - Overall Development Strategy ...... 59

General coverage programs ...... 59 Productivity operations of integrated rural development projects ...... 59 Irrigation projects ...... 61 Livestock policy ...... 66 Drought control ...... 68 Processing of agricultural products ...... 69 Table of Contents (Cont'd)

Page

C - Outline of the Rural Development Program and Projected Results ...... 71

Expected results: agricultural production and exports ...... 79 Agricultural growth and population ...... 82 Prices ...... 82 Investments ...... 84

D - After the Next Decade ...... 86

STATISTICAL APPENDIX

This report is based on the findings of an economic mission that visited Niger in October-November 1973. The mission included Messrs. L. de Azcarate (chief), P. Streng (economist), and R. Sordoillet (agronomist, consultant). This volume was prepared by Messrs. Sordoillet and de Azcarate.

LIST OF ABBREVIATIONS

BDRN Banque de D6veloppement de la R6publique du Niger

CCCE Caisse Centrale de Cooperation Economique (France) CFDT Compagnie Frangaise pour le Developpement des Fibres Textiles CNCA Caisse Nationale de Cr6dit Agricole CSPPN Caisse de Stabilisation des Prix des Produits du Niger

FAC Fonds d'Aide et de Cooperation (France) FED Fonds Europeen de Developpement FNI Fonds National d'Investissement

IRAT Institut de Recherches Agronomiques Tropicales

MER Ministere de 1'Economie Rurale

NITEX Societe Nig6rienne des Textiles

OCDN Organisation Commune Dahomey-Niger des Chemins de Fer et des Transports OFEDES Office des Eaux du Sous-Sol OLANI Office du Lait du Niger OPVN Office des Produits Vivriers du Niger

SEPANI Societe d'Exploitation des Produits d'Arachide du Niger SHN Societ6 des Huileries du Niger SICONIGER Societe Industrielle et Commerciale du Niger SNC Soci6t6 Nationale de Cimenterie SONARA Societ6 Nigerienne de Commercialisation de l'Arachide SONERAN Societ6 Nigerienne d'Exploitation des Ressources Animales SONICERAM Societ6 Nig6rienne de C6ramiques SONIFAME Soci6t6 Nigerienne de Fabrication de Meubles M6talliques SONIPRIM Soci6t6 Nig6rienne des Primeurs SOTRAMIL SocietW de Transformation du Mil et du Sorgho

UNCC Union Nigerienne de Cr6dit et de Cooperation

page 1 of 3 pages

COUNTRYDATA - NIGER

ARRA POPULATION DENSITY 1,267,000 ka7 4.25 million (mid-1972)3 32 /a Per lanlof arable land

SOCIAL INDICATORS Reference Countrie. Niger 197l Sund Son=E;

ONP PER CAPITA US$ (ATLAS bASIS) a 130 90 100 /b 120 /b 260 /b

DEMOGRAPHIC Crude birth rate (per thoueand) 52 /c 52 d 49 /d e 49 44 Crude death rate (per thousand) 27 7 23 7__! 24 18 22 InWant mortality rate (per thoueand live birth.) 200c .. -. 94 156 /I Life expectancy at birth (year.) 37 7j; 42 39 48 42

Groan reproduction rate /2 3.1 3.5 3.2 3.4 3.0 Population growth rates 3.0 2.9 /26 2.8I 2.1I Population growth rato - urban 6/h 7 7i 4

Age etruoture (percent) 0-14 44 /I 45 /a 44 /i 45 42 15-64 53 7! 52 7i 52 7ii 52 54 65 and over 37! 377 4 77 3 4 Depondency ratio A 1.6 7-n 1.0 7 ,n 1.1 7;i 1.0 /n 1.1 /n Urban population as percent of total 6 h 8 /h 6 /i 12 29 /I Family planning: No. of acceptors cumulative (thou.) No. of users (%of married worsen) EXPLOYIENT Total l.bor force (thoseands) 770 /o 1,900 /a 2,0008 8 /I 7,40C /e 1,600 /e,q Percentage employed in agriculture 97 7o 91 7pi 8 7 73 Percentage un-nployed 7

INCOMEDISTRIBUTION Percent of national income received by highest 5% 23 Percent of national income recoived by highest 20% i42 Perc.nt of national income received by lowest 20% 6 Percent of national income received by lowest 40% 18 DISTRIBUTIONOF LANDOWAERSNIP %ouned by top l(S of owners S owned by smallest 10% of omners HEALTHAND NUTRITION Population per physician 71,000 /r 58,260 75 25G /a 15,940 14,940 Population per ursing person 7,500 7'r 77,040 16,090 77 1,950 2,110 Population por hospital bed 1,830 =t 2,230 640 1,0410 /u 730 /A 0 1 ur capita calorie supply as %of requirements 5 90 /r 98 85 v 96 /v Per capitaprotein supply, total (grams per day . 78 7i 63 59 7v7 64 7V Of which, animaland pulse 24 7i 9 24 77 28 7i bath rate 1-4 years /7 EDUCATION Adjusted /@primary aohool enrollTent ratio 6 14 37 25 /a 44 If Adjust.d / secondary school enrollment ratio 0.3 /w 1 3 9 77 7 77 Yearn of schooling provided, firt and aecond level 13- 13 14 12 13 Vocational enrollment as t of sac, school enrollment 4 /-Y 6 /a 3 1 /a 12 /a Adult literacy rat %5 19 7 10 7ii HDUSINO Averag No. of persons per room (urban) .. .. 1.9 /la 2.5/s Percent of occupied uoits without piped water 78 ; a 365b Access to electricity (as %of total population) 16 26 A Percent of rural pupulation connected to electricity 0.0 CONSDPTIXON Radio receivers per 1000 population 1 36 20 12 If 69 Passenger care per 1000 population o.6 a 1 2 2 11 Electric power consumption (kwh p.c.) 3 9 32 25 84 Newsprint consumption p.c. kg per year 0.03 /a 0.04 0.2 0.08 Notes: Figures refer either to the latest periods or to sosoot of onvironmental temperature, body weight, and the latest years. lateat periods refer in principle to dietribution by age and max of national populations. the yeare 1956-60 or 1966-70; the latest years in prin- /6 Protein atandarde (requirements) for all countries as ostab- ciple io 1960 nd 1970. lishad by LSDA&ecomio Research Service provide for a minimum k The Per Capita GNPestimate im at mrrket prices for ailowanco of 60 grams of total protein per day, and 20 grams of yesrs other than 1960, calculated by the ease conversion animal and pulse protein, of which 10 gresm should be animal tecInique as the 1972 World Bank Atlas. protein. These standards are somewhat lover than those of 75 2 Average number of daughters per woman of reproductive gras of total protein and 23 grams of ainim. protein as an age. average for the world, proposed by FAOin the ibird World Food L Pbpulation growth rates are for the decades ending in survey. 1960 and 1970. s atuiiea have suggested that cude death rates of children & Ratio of under 15 and 65 end over age braekets to agea I through 4 say be wed as . firt approximation index of those in labor force bracket of ages 15 through 64. nalntrition. 5 FAD reference standards represent pbyeiological r- i Percentage enrolled of corresponding population of school age iremente for normal activity end health teaking as defined for each oountry. * Resent Bank mission astaixx for eid1972 is 4.TZL iuin.

I 1969; /b 1959-60; /d 1965-70, UK eatimete; /I Estimate; If 19681 / 1960-72; A Definition A not a ale /i -11 teosnhpe and twrn planning rea and TII distriet oemnrs; a Sixty-eight touna; z Cap-Vert region a6g the cities of Saint-Luis, Thies, la1ack, Disurhel and Ziguinchor; Z Estimtae for dejure population, baasd on results of sample survey; /m 1966; & Patio of population under1S and 65 and over to total labor force; /j hetimate baaed an the reslts of a saple warvey and excludes labor foro of Niamey city, nomad population and foreigners; & FAO estiate; /q 1970-n; /r 1962; /e Coverage of data incomplete; A 1963; / Goverosent hospital etablishments; /v 1964J66j /& Not ino!iding private vocational schoolas /x 1965; Public education enly; / let inclu[g teacher training; /aa 19671 /a Urban only; /Ic 1M"

Senegal has been selected as an objective country since ita GNP Is about three timea that of Niger; both countries are in the mamegeographical area, have similar production patterln (with the same dominant crop -- groundnuts), share the sane monetary system and have about the same population.

R2 November 5, 1974

A.X. tjc Page 2 of 3 pages

ECONOMIC INDICATORS

GROSS NATIONAL PRODUCT IN 1969 ANNUAL RATE OF GROWTH (%, constant prices)

FCFA Bln % 196 -6 196 - 19 GNP at Market Prices 103.0 100.0 Gross Domestic Investment 6.3 6.1 Gross National Saving 4.9 4.8 Current Account Balance - 1.4 - 1.4 Exports of Goods, NFS 10.6 10.3 Imports of Goods, NFS 17.2 16.7

OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1971

Value Added Labor Force V.A. per Worker FCFA Bln % Mln % FCFA Agriculture, Livestock, Fishing 51.95 47.6 Manufacturing 11.92 10.9 Construction 3.07 2.8 Services 40.15 36.8 Public Administration ( 8.24) ( 7.6) Other 2.03 1.9 Total/Average 109.12 100.0

GOVERNMENT FINANCE Central Government FCFA Bln °i of GDP 1971/72 1971/72 Current Receipts 12.15 Current Expenditure 11.24 Current Surplus 0.89 Capital Expenditures 2.45 External Assistance 1.53

MONEY, CREDIT AND PRICES (IFS) j 1965 1969 1970 1971 1972 1973 1974 (Million FCFA outstanding end period) Money and Quasi-Money 6,722 9,212 9,596 12,135 12,896 15,504 20,315 Bank Credit to Public Sector (net) -1,046 - 396 -1,652 -2,324 -3,458 _3,402 -7,152 Bank Credit to Private Sector 8,644 10,064 10,047 9,738 10,677 12,464 20,973 Money and Quasi-Money as % of GDP .. 9.4 9.4 11.1 General Price Index (1964 - 100) 2/ 104.0 125.0 125.9 131.2 144.0 160.9 166.3 Annual percentage changes in: General Price Index --- 4.7 --- 0.7 4.2 9.8 11.7 3.I Bank Credit to Public Sector . . . Bank Credit to Private Sector --- 3.9 --- -0.2 -3.1 9.6 16.7 68.3

1/ Data are not strictly comparable with those shown in the Statistical Appendix. 2/ Consumer price index, Niamey. Page 3 of 5 pages

TRADE PAYMENTS AND CAPITAL FLOWS

BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1970-72) 1970 1971 1972 FCFA Mln (Million FCFA) Exports of Goods, NFS 16,802 18,141 20,640 Groundnut Products 5,504 49.8 Imports of Goods, NFS 25,873 24 268 26,272 Live Animals 1,958 17.7 Resource of Gap -9,071 -5,632 Uranium Concentrates 1,449 13.1 Factor Payments (net) - 208 - 218 - 218 Cotton 305 2.8 Private Transfers (net) 48 - 50 Hides and Skins 245 2.2 Current Balance -9,231 -6,345 -5,800 Onions 231 2.1 Direct Investment and Beans 149 1.3 Other Private Long-Term Other 1,216 11.D Capital (net) 5,193 2,960 1,120 Total Recorded Exports 11,059 lfO.O 85.9 Inflow (5,704) (3,171) (1,330) Unrecorded Exports (est.) 1 822 14.1 Outflow (- 511) (- 211) (- 210) Total Merchandise Exports 12,881 100.0 Official Transfers (net) 7,725 7,430 8,700 Government Capital (net) 691 - 84 437 EXTERNAL DEBT, DECEMBER 31, 1973 Inflow (1,050) ( 726) (1,304) US$ Mln Outflow (- 359) ( 810) (- 867) Public Debt, incl. Guaranteed 116.7 j Other Items (net) -1 815 377 -2,187 Change in Reserves 2 >7337 2,270 DEBT SERVICE RATIO for 1972

Gross Reserves (end year) 5,561 9,791 12,113 Central Bank (5,200) (8,592) (10,558) Public Debt, incl. Guaranteed 2.9 | Net Reserves (end year)j 3,275 7,613 9,883 Central Bank (5,081) (8,580) (10,553) IDA LENDING, DECEMEBER 31 , 1974 US$ Mln Petroleum Products Imports - FCFA million 603 1,183 1,392 Outstanding and Disbursed 15.96 - US$ million 2.2 4.3 5.4 Undisbursed 7.96 - 1,000 tons 51.0 56.9 60.3 Outstanding, i. Undisbursed 23.81 / Exports - - -

RATE OF EXCHANGE

Through November 1971 US$1.00 - FCFA 277.71 December 1971 through January 1973 US$1.00 - FCFA 255.79 Since February 1973 US$1.00 - FCFA 230.10

FF 1.00 - FCFA 50.0

I Including US$45.3 million undisbursed. Ratio of external debt service (US$2.3 million) to exports of goods and non-factor services as shown in the balance of payments. / Including medium- and long-term foreign liabilities of development banks. Original principal amount (US$22.10 million) plus adjustment to reflect the devaluation of the United States dollar (US$1.71 million).

not available not applicable

December 1974

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SUMMARY AND CONCLUSIONS

i. This report seeks to present sectoral and policy developments in the recent years, it identifies the factors affecting the medium and long run development prospects and suggests elements for a strategy. The macro- economic framework for the recent past and future prospects is presented in the general economic report.

Recent Developments

ii. Agriculture has remained as important as ever within the Nigerien economy despite the development of some new industrial projects and still more important ones in the mining sector (uranium); its actual contribution is in fact minimized in the national accounts where processing and marketing of agricultural products falls within the secondary and tertiary sectors. The share of agricultural output in the gross domestic product (GDP) appears to have decreased between 1966 and 1969, increased in 1971 and most probably decreased again after 1972. This trend, in line with general evolution observed elsewhere, is partly attributable to the stagnation or possibly to an absolute decrease of agricultural income. The proportion of population principally employed in agriculture has remained very high - more than 90 percent - and real rural income per head has decreased in recent years and has probably reached a historical low in 1973 and 1974 as a result of the prolonged drought. iii. Agricultural exports have stagnated since 1966 at around CFAF 11-12 billion despite the high world prices that have prevailed since 1970. Their relative decrease since 1971 is due to the emergence of uranium exports but they still represent some 80 percent of total exports, or about 12 percent of GDP of which they are one of the key determinants. iv. Agriculture is also important for public finances. Thus, tax and quasi-tax (in the form of marketing "margins" on produce exports) Government revenue from agriculture have turned around CFAF 5 billion per year for the last three campaigns. Taxes on agriculture have represented 25 percent of budget revenue. This means a tax ratio of 10 percent on gross agricultural income, a relatively high proportion in view of the low level of average rural income - about CFAF 14,000 - and the importance of subsistence consumption. Budgetary expenditures directly for agriculture - not including foreign aid - have remained below the level of revenue obtained from the sector. If account was taken of revenue from indirect taxes on goods consumed by the rural sector on the one hand and "payments" to the sector through foreign aid on the other - or about CFAF 1.5 billion - the balance would not be significantly altered. v. Agricultural production - and the overall evolution of the sector since 1968 - has been largely determined by the drought which has reached catastrophic proportions in 1973/74, while it has made necessary emergency food imports of about 100,000 tons in 1972/73. Staple food production - millet and sorghum - which had apparently grown more or less in line with population in - ii -

the past, has decreased by about 30 percent creating a grain deficit estimated at 250,000/300,000 tons relative to "normal" requirements. Commercial crops have felt the direct impact of the drought (lower yields) and have been neglected by the farmers understandably more preoccupied by the problem of ensuring their own food supplies. Thus, the groundnut crop for 1973/74, according to the most recent estimates, is only one tenth of the record level of 300,000 tons (unshelled) of 1966/67. Reportedly, cotton production is only one fourth of the maximum of 12,000 tons (seed cotton) reached in the recent past. Livestock losses are imperfectly known but evidently they are very serious: deaths, premature sales and slaughtering may have reduced the cattle herd by 50 percent below its pre-drought size. Irrigated rice has naturally suffered less but it is still a minor production with some 30,000 tons (paddy) of which only half is under flood control irrigation.

vi. Natural causes of the drought are not known. It is evident, however, that its effects have further deteriorated the environment which is itself slowly but steadily made more difficult as a result of the increasingly intensive occupation of the land by people and herds as well. This entails shorter fallow periods, the use of marginal areas, overgrazing, repeated clashes between nomadic and sedentary tribes, and in the end a lowering of the returns to factors of production and an increased sensitivity of crops to climatic variations. vii. Rural development policies apply therefore under increasing difficult conditions. Despite remarkable progress, the cooperative structure under the aegis of UNCC covers only 20 percent of the 450,000 farms or so that make up the productive basis. Certainly, the cooperative system provides a useful framework for the marketing of agricultural produce and the use of credit; it also facilitates a better transmittal of innovative technical themes and of market indicators such as prices; it is first and above all the chosen environment for the "animation rurale" action, which constitutes the central thrust of the Government's development effort and its privileged instrument for the furtherance of "promotion humaine". However, the cooperative system is not yet, so to speak, an autonomous engine of rural development. viii. The policies of agricultural development proper can be regarded as made of six types of programs, as diverse in purpose as in scope: general coverage programs, specific schemes for crops, livestock and hydro-agriculture, agro-industry projects, and finally the "T drought program". ix. The general coverage programs ("programmes de couverture") comprise the general activities carried out by the Agricultural Services within the framework of their current budgetary allocations and to a lesser degree with the additional limited financial means of the Rural Productivity Improvement Fund (FDAPR). They include chiefly the diffusion of pesticides, improved seeds, fertilizers and animal health programs. The scope of these actions, however, has remained quite limited for lack of receptive structures outside the areas where cooperatives are active, and above all because of the weakness of the financial and personnel facilities of extension services (on the average there is one extension worker 'or 5,000 farmers). Animal nealth programs have been relatively more efficient. - iii - x. Specific schemes, on the contrary, imply a much greater concentration of resources generally with an important element of external financing. They apply particular crops, to particular regions, to livestock and to irrigation. They include, first four crop development schemes for increasing productivity have been carried out successfully; for groundnuts ("improved seeds plan"), the most important export crop; for cotton with a view to developing the country's modest potential of some 20,000 hectares; for cowpeas ("niebe't ) which is increasingly grown on its own since 1971 and is of growing interest as an export; and for fresh vegetables (irrigation project by the Government's Societe Nigerienne des Primeurs) for export to the coastal and European markets. xi. The so-called productivity operations deal with a well defined geographic area rather than with a specific crop. They are conceived as integrated rural development projects with some key common characteristics, in principle at least. They concern the mass of the farmers in a given zone; they are implemented in the framework of traditional farms; they imply an active participation by farmers; they aim at increasing the whole pattern of crops rather than any one particular; they seek to improve general living conditions of the farmers by providing some social infrastructure. The first phase of such an operation has started in the Zinder region with FED financing; in the same vein, though on a more limited scale, projects are underway in Badeguicheri and Dosso. A much more ambitious scheme of this type is expected to begin in 1974/75 in the department of 14aradi and would ultimately concern some 500,000 persons. xii. Specific schemes for livestock concern semi-extensive ranching in the sahelian zone (Ekrafane), milk production around an irrigated lot project (Kirkissoye), and an attempt at developing feedlots with irrigated fodder production (Tiaguirire, to start in 1974). In varying degrees these operations still have an experimental character although they are implemented as actual development projects. xiii. Irrigation projects are the most typical of all specific operations in that they imply a heavy concentration of investments, an almost industrial type of amanagement and a high level of productivity. At the end of 1973 a little over 4,000 hectares, of which 2,500 hectares in the Niger valley, had been put under irrigation at a total cost of about CFAF 3.5 billion. These projects have met with a number of difficulties in connection, among others, with land tenure problems, farmers' resistance to the necessary production discipline, and sometimes unforeseen technical accidents. Net farmer's income, with a moderate subsidy element from the Government - is about CFAF 200,000 per hectare on the low lands ("depressions") in the Niger valley; and about CFAF 120,000 in the Adder Doutchi Maggia. In the recent years considerable progress has been accomplished by UNCC with regard to management as is illustrated by the Karma project; the case of Saga, the largest irrigation project so far near Niamey, which is technically very well managed by a mission from the Republic of China, is less convincing insofar as the subsidy element in both the investment and the operating costs is vey high and apparently farmers do not pay any levy. - iv -

xiv. Special efforts have been made in recent years to develop processing industries based on local products, either through incentives to private investment (oil mills, textile), or by creating public or mixed enterprises (rice mill, millet flour mill, tannery). Furthermore, a number of new projects of varying dimensions are at an advanced stage of preparation: dehydrated onions, tomato concentrate, animal food and above all a cane sugar mill. Oil milling has three productive units and is being expanded to reach a total capacity of 175,000 tons (of unshelled groundnuts) which is far above current production levels. The textile mill is also oversized relatively to local cotton supply. The most notable feature of these firms, however, is that they benefit from very favorable conditions regarding taxes and the purchase price of local raw materials, to the extent that the economics of these projects is at the very least questionable from the viewpoint of the national economy.

xv. Finally, a short term program against the drought has been conceived within the Sahelian Interstate Organization for a little over CFAF 10 billion in regards to Niger alone. It concerns a list of projects whose funding by external sources is practically ensured (including $2 million from IDA). The implementation of these projects however, has not started yet. This program is different from the food relief aid received in 1972/73 (over CFAF 10 billion) or expected for 1973/74.

xvi. Public investment in agriculture is estimated to have been between CFAF 1 and 1.5 billion per year. Total financing available for projects not completed or not yet started at the end of 1971 amounted to some CFAF 5 billion. iNine tenths of these funds come from external sources, mainly FED, the Republic of China (irrigation), the Federal Republic of Germany, French FAC, US-AID, UNDP and IDA. The Government has been quite effective in mobilizing the necessary finance, and the utilization of funds, though rather slow, appears to have been rather faster than in other sectors. xvii. Among the Government's policy instruments, pricing of agricultural products occupies a prominent position. It has long been applied to commercial crops (groundnuts, cotton) and has been extended to cover food crops through the creation, in 1970, of the Office des Produits Vivriers du Niger (OPVN). however, the Office's activity in regulating the grain market has renained limited for lack of adequate storage facilities and because it has been involved in the distribution of imported foodstuff in connection with the drought. The high level of world activity has resulted in world price rises of 100 per cent for groundnuts and 75 percent for cotton between 1967/69 and 1973. These rises have only partially been reflected on producer prices, the most important adjustment having been decided for the 1973/74 crop (plus 16 percent for both groundnuts and cotton). The marketing "margins for exported products have remained quite comfortable (about 60 percent of c.i.f. prices) and so have the surpluses received by the marketing fund (CSPPN). But these surpluses have been severely limited, both on groundnuts and cotton, by the rules imposed on marketing organizations - SONARA and CFDT - for sales to local industries. The distortion thus created and the fall in producers' real incomes due to production shortfalls not compensated for by higher prices should be two major questions of immediate concern to the Government. There is the additional problem posed by the necessary reorientation of SONARA's activity in connection with the fact that a growing proportion of the groundnut production is delivered to local oil mills instead of being exported.

Strategy and Prospects for Agricultural Development xviii. Although the Government's agricultural policy has been fairly energetic, and in several respects imaginative and effective, its results have remained fragile, as is demonstrated in a dramatic way by the effects of the drought. This situation has shattered the belief of the authorities in the virtues of a planning system through which considerable human and financial resources were mobilized in the past. It has not impaired the Government's determination, however, to continue its agricultural development effort. A new ten year "perspective" for 1974/83 is under preparation, but it seems that no comprehensive program of action has been put together yet. Some official priorities are already quite clear though; they are: To ensure a permanent supply of basic foodstuffs; protection of national resources; full utilization of water resources; revival of agricultural exports. The style of future development will seek to maintain, as in the past, the active participation of the rural population within the framework of the village community, assisted by a reinforced cooperative movement. xix. Long-term development faces severe constraints: geographical constraints resulting in high transportation costs for imports and exports, aggravated by thne consequences of the energy crisis; climatic constraints creating uncertainties which make all planning highly unreliable, even if one disregards periods of prolonged drought which one can only hope will remain the exception; ecological constraints contributing to the harmful competition of livestock and farming activities, generating human conflict rather than complementary production; external constraints which express themselves in a high degree of dependence upon fluctuating world markets and sources of finance that are more or less eager to help but generally given to red-tape in their procedures; finally, there is the scarcity of water resources resulting in limited possibilities for irrigation and highi investment and production costs. xx. The constraints of nature are compounded by human constraints: thus, population growth (estimated by different sources at between 2.2 and 2.8 percent a year) is at the heart of the development problem in the long run. Besides creating inextricable difficulties in employment and education, it has a direct bearing on agricultural development because of the limited avail- ability of land, itself the combined result of ecological constraints and past population pressure on agricultural land makes itself felt in many ways (see para. 6). Therefore, extensive agricultural development associated with decreasing yields can no longer be the model for future development. xxi. In the medium term, say the coming decade, demograplhic factors cannot be noticeably changed. The strategy for agricultural development must therefore take into account that by 1985, population will have increased by - vi - over a million people. With due regard to the general objectives of the Government, the report proposes an ambitious program consisting of three types of operations: integrated rural development ('productivity operations'), irrigation projects, and modernization of livestock raising. Under the program, productivity operations following the model of the Maradi project (in preparation), will cover the usable areas in the South along a time schedule that takes account of the fact that each of them has a maturation period of five years. Thus, the "departements' concerned would be covered as follows: Zinder: 1974/78; Maradi: 1975/79; Dosso: 1979/84; Niamey: 1984/89. The main target of these schemes is to raise food production (millet, sorghum.) by the middle of the 1980's by 25 percent, and groundnut production by 65 percent over their 1971 levels. At the same time, cotton production would reach its ceiling of around 14,000 tons of seed cotton. Production of other crops (niebe, onions, etc.) will also have increased, and living conditions in the villages will have improved because of the other components (equipment, training) of tile projects. Nevertheless, since this group of projects concerns a large number of people, it will not bear full fruit before the middle of the last decade of this century. xxii. The irrigation program is conceived not as a substitute, but as a complement of the productivity operations. These, in fact, must leave an important role to commercial crops in order to achieve the indispensable increase of agricultural exports; on the other nand, they cannot escape the vagaries of the weather. Irrigated agriculture would then function as a food insurance at the national level capable of compensating for the effects of "normal' variations in rainfall; it would be complemented by a storage policy aiming at stocking, as a first approximation, 20 percent of annual grain requirements. xxiii. The irrigation program contemplated here is a complex operation requiring a study of the river valley and making it desirable to create a special study and mianagement organization which would work together with the (international) River Niger Commission. During the coming decade about 12,500 nectares of lowlands ("cuvettes") would be developed which, by the end of the period, could produce some 110,000 tons of paddy. Beyond this threshold the river's water delivery would have to be regulated by a dam (e.g. the Kandadji dam, the cost of which is estimated at 25 billion current CFAF). The feasibility of the multi-purpose dam should be studied as an integral part of the river valley general survey. xxiv. Each irrigation project will have to be the subject of a separate feasibility analysis since no general standards can be recommended a priori. It becomes clear from an overall technical and economic analysis, however, that a large difference in productivity can be aclhieved for a small difference in cost by moving from flooding to controlled flooding, and that a large difference in cost producing little difference in productivity is connected with the step from controlled flooding to artificial flooding. Development of the type 'C1' projects (as in Karna) will thus recommend itself in most cases. - vii - xxv. Proper management - technical and financial - requires the general- ization of procedures which UNCC already tries to apply at Karma. TIe question of Government subsidies, which in a development of this type now amount to about 20 percent of current cost, has to be reviewed. The energy crisis has introduced a serious element of uncertainty in one particularly important cost item (pumping), however, and its impact on the economics of irrigation projects remains to be fully measured. Finally, the production pattern in the new developments, in wlhich paddy will undoubtedly play a major role, also demands to be studied giving particular attention to the possibility of introducing improved strains of sorghum, long-cycle niebe, and fodder crops. xxvi. Livestock policy will be founded on the recognition of the comple- mentarity of different zones: extensive reproduction in the pastoral zone, raising on ranches in the intermediate zone, and fattening in the agricultural zone. According to a recent study, this approach would require the semi- extensive use of the pastoral zone through pastoral production units" (PPU) of 10-15 km radius around a watering point benefitting from close supervision by extension services. Four pilot zones of 10-15 PPU each would constitute the initial phase of the program. The cattle would then transit through backgrounding ranches (the feasibility of two of them is already under study) and would end the cycle in intensive feeder zones either of the traditional type as already exists in the South of the 'departement' of Dosso, or in modern feedlots. For this reason the proposed irrigation program foresees the development over ten years of 2,000 hectares of feedlots along the river ;iger. This three-stage-circuit, organized for example by mixed enterprises managing cattle raising ranches and feedlots and sel-ling meat through SONERAN, would develop gradually, in parallel to the traditional circuits. xxvii. Because of the livestock losses caused by the drought, the first objective must be the rebuilding of the herd. It is tentatively estimated that the cattle stock will regain its optimum size (4 nillion head) around 19&3. The proposed policy would facilitate this task and would at the same time allow an appreciable and needed increase of the rate of exploitation. xxviii. No specific industrialization proram is proposed. In line with its declared policy the Government will seek to attract private capital to this sector to be joined, if necessary, by public funds. It is strongly recommended, on the other ihand, to analyse much more carefully than in thle past economic costs and benefits of each project giving particular attention to market prices. The problem is, in snort, to avoid the disguised but all- the-same costly subsidies IIow enjoyed by the textile and oil mills. Among the important new project proposals under consideration by the Government, that for a sugar mill would have to be reviewed starting from a new basis. xxix. No action in agriculture will achieve its target unless it is accompanied by an appropriate price policy. In this respect, external market prospects, worldwide (groundnuts, groundnut oil and cakes, cotton, vegetables) as well as within Africa (meat, niebe, etc.), are relatively encouraging and should enable the Government to respect two important guidelines: to maintain, at least, the real producer price, and to apply equal treatment regardless of the destination of the product (export market or local industry). - viii - xxx. The basic program proposed will require a major financing effort: for the decade 1974-83 its cost is estimated at FCFA 30 billion, representing twice the annual amount spent in recent years. Slightly more than half of the total would go into integrated rural development projects, 24 percent into irrigation projects and storage facilities, and 23 percent into livestock. This also implies a very considerable increase in the share of public investment going to the rural sector, which amounted to only 16 percent in the recent past. xxxi. The results expected from the program are, first of all, an assured supply of basic foodstuffs, except in the case of a prolonged drought of catastrophic proportions; secondly, an increase in the volume of total agricultural production of about 25 percent and in the volume of agricultural exports of about 66 percent between 1971 and 1980. The value in current dollars of agricultural exports in 1980 will be nearly two and a half times that of 1971, because of expected price increases (close to 50 percent for the package of export goods). The increase in import prices will most probably be still more, however, resulting in a deterioration of the terms of trade (excluding non-agricultural Nigerien exports) of perhaps 20 percent. xxxii. Assuming no change in the present population growth trend, one must realistically expect the emergence of disguised unemployment in agriculture, essentially due to the fact that the proposed rural development strategy is based on yield increases per hectare and per head without much expansion of area, since such area expansion (irrigation projects excepted) would have to take place in zones which are less and less suitable for agriculture. Employment creation in other sectors as well as emigration will provide a partial solution of this problem. xxxiii. In the absence of a family planning policy the problem of agricultural unemployment would make itself most painfully felt in the longer term - the period beyond the next 10-15 years. At that time, the operations started under the proposed program will have come to full fruition, and a growing gap would open between food demand and food production. Conceivable solutions are of various kinds: A reorientation of production towards food crops and away from export crops, which presupposes that other exports - e.g. minerals - would make up for the shortfall; a "technological revolution" in agriculture, unforeseeable now, which would systematically raise yields; massive capital investments aiming at intensifying production especially through regulation of the river flow and large-scale irrigation on terrace land along the river. It is impossible to say now which of these solutions or which combination of them will be feasible and preferable. INTRODUCTION

1. Wnile there is no doubt as to the importance of agriculture in Niger's economy, the lack of data makes it difficult to determine its precise role. In particular, it is practically impossible to distinguish between agriculture in the strict sense and other rural-sector activities such as the processing, transportation and marketing of foodstuffs, when such activities are not carried out by "modern" enterprises. The absence of figures on rural population and rural employment hampers any study of rural-sector development, particularly that of productivity and per capita income. It also prevents comparison of production in the different sectors and estimation of the distribution of real income and consumption with any degree of confidence. The apparent accuracy of the available figures can thus be misleading; the fact is that knowledge of Niger's rural economy is still very superficial, so that even the framing of suitable development policies presents a considerable problem.

Production and Income

2. In recent years Niger has followed the world tendency for agriculture's share in GDP to decrease. Estimated at over 60% just after independence, this share fell to 46% in 1970 and then rose to 52% in 1971; with the recent drought it has probably fallen again. What is more important is that the relative decline in agricultural product results partly from an absolute reduction in the value added of the sector. Despite unreliable statistics, this trend is clear enough: from 1966 to 1969 agricultural product at current prices apparently fell from 54 billion to around 50 billion.

3. The evolution of farm income is unclear since we have no data on rural employment or on rural activities outside agriculture proper. However, it certainly seems that the real per capita income of the rural sector has fallen during the past few years. There is no doubt about this where the recent past is concerned, in view of the disastrous effects of the drought on the 1973/74 harvest; between 1969 and that year, however, the strong upswing in world groundnut prices, at least, was a compensating factor.

4. Per capita domestic product in the agricultural sector is apparently now around CFAF 14,000, against CFAF 90,000 in the other sectors, assuming that 90% of the population makes its living from mainly agricultural activities. This would put the average rural product at about half, and the non rural" product at three and a half times, the average national product of CFAF 26,000. These figures no doubt exaggerate the average difference between "rural" real income and "urban" real income because of cost of living differences and because agricultural product is lower than rural income, though to an unknown degree. However this may be, the average rural standard of living is still very low, has probably been falling for several years and is certainly a good deal lower than that of the non-rural sectors. - 2 -

5. This situation is serious and, moreover, is not properly reflected in the figures. Thus, while the fall of some 30% in grain production (millet, sorghum) in 1973/74 below the "normal" level probably represents no more than 5-6% of GDP, in absolute terms it means a reduction in the standard of living of the mass of rural population to below the vital minimum. It is therefore understandable that Niger's Ministry of Development should demonstrate a certain skepticism towards the figures, and even the very concepts of the national accounts. It is to be hoped that this attitude will encourage improvement of statistics and methods, with priority attention being given to the collection of primary data at farm level.

Foreign Trade 1/

6. The essential role of agriculture is most clearly seen when looking at Niger's foreign trade. Not only do agricultural exports -- produce and semi-processed products -- represent by far the largest export item; they also considerably exceed agricultural imports. It should be noted however that when textiles are included the share of goods of agricultural origin in total imports (excluding exceptional food imports due to the drought) is high -- about 40%. The fact is that Niger continues to be a highly specialized producer and exporter of agricultural products in relation to its own consumption structure: most of the imported goods face no competition in domestic production.

7. Until uranium was exported in 1971, agricultural products accounted for 80-90% of total exports. Two product groups (i) shelled groundnuts, and groundnut oil and cake, and (ii) live animals and livestock products accounted for almost all the country's agricultural exports, with group (i) representing two thirds and group (ii) one third. Such a concentration of exports naturally means a certain instability, especially when, as in this case, the products involved are susceptible to climatic variations. Also, in the case of groundnuts and their derivatives, the sharp fluctuations in export prices have not been cushioned at all since the various external support systems (French and later EEC) ended during the period 1966-1968.

8. Although the export figures cannot be regarded as accurate in view of the scale of the smuggling that goes on, it seems that the most striking feature of recent years has been the stagnation of agricultural exports and consequently (until 1971) of total exports. For agricultural exports the peak of CFAF 11 billion recorded in 1966 was not reached again until 1972. The increase in total exports in 1971 and 1972 is chiefly attributable to sales of uraniun concentrates. It is very likely that the figures for 1973 will show no improvement, and all indications are that 1974 will be a catastrophic year despite high prices on the world markets, because of the poor harvests and heavy cattle losses resulting from the persistent drought.

1/ Except where otherwise stated, comments relate to estimated total exports, not just to recorded exports. The former figure is about 25% higher than the latter. 9. As regards groundnuts and derivatives, Niger has benefited from a favorable world market situation: prices of shelled groundnuts rose 40% between 1967/69 and 1972, more than doubled between 1967/69 and 1973, and seem to be headed for record levels in 1974. Oil and cake prices have followed a similar trend. Unfortunately, Niaer, which contributes only a very small proportion to world supply, has not been able to take full advantage of these increases because of the reduction in exportable quantities. The same goes for cotton. The quasi-stability of agricultural export earnings is thus essentially explained by the coincidence of a drop in production and a rise in prices. This rise has certainly improved the terms of trade over the past five years (particularly in view of the apparent considerable improvement in cattle and beef prices over the period); however, this improvement cannot have been more than 10-20% because of the substantial increase in European export prices since 1972.

10. To a large extent, the country's mediocre economic performance since the mid-1960s is largely due to the continuing weakness of exports in general. Although exports account for only 12% of GDP, they are together with the capital inflows and transfers from abroad, one of the key factors determining Niger's national income and its variations over time.

Public Finance

11. Agriculture's importance in GDP formation and exports explains its role in the public finances, though here again it is difficult to arrive at quantitative estimates. Government revenues from agriculture comprise: (i) income tax charged either at a flat rate on the source of the income (minimum personal tax, livestock duties) or more or less proportionately on the income itself, in the form of export duties on products the price of which is determined on foreign markets; (ii) quasi tax revenue in the form of profits made by the price stabilization board--CSPPN; 1/ (iii) miscellaneous charges, generally linked to services used (animal health tax, etc.), and (iv) taxes and duties on goods consumed by the farmers. In the absence of data

1/ Caisse de Stabilisation des Prix des Produits du Niger. - 4 - on final and intermediate consumption by the rural sectors, this latter category can be estimated only very roughly. 1/

12. On the other hand, certain expenditures by the government and the parastatal agencies, particularly CSPPN (with SONARA well behind), benefit agriculture, directly or indirectly, such as the expenditures by the government's rural development services, as well as investments and transfers (subsidies, participations, price support, etc.). Total expenditures of this kind -- aside from operations financed by external aid -- have over the past 4 years ranged between CFAF 1.5 and 3 billion annually, averaging 11% of the combined budget and CSPPN expenditures. Net taxes and quasi-taxes borne by the agricultural sector would thus be around CFAF 1.2 - 1.3 billion a year taking into account direct taxation only, and CFAF 2.7 - 3.5 billion including the very approximate estimate of taxes and charges on consumption by the sector. 1/

13. The picture of agriculture given in the national accounts and the foreign trade and public finances figures is both static and incomplete. The basic fact, agriculture continues to provide the basis for overall economic growth and an improved standard of living for the masses. Above all, the macro-economic data disguise the complexity and diversity of the problems. These, the present report seeks to identify by first analyzing recent developments in production, trade, institutions and agricultural policy, and then looking into the problems, strategies and prospects of rural development in the medium and long term.

1/ Indirect taxation of goods consumed by the agricultural sector could be estimated on the basis of the hypothesis that the sector's consumption of taxable goods corresponds to agriculture's share of GDP, i.e. about 50%. However, farmers' incomes, and consequently their consumption, as mentioned above, are certainly higher than agricultural product; on the other hand, because of subsistence consumption and the fact that part of rural consumption derives from goods smuggled in, the portion of taxable goods consumed in the rural sector is undoubtedly lower than the average. Lastly, certain heavily taxed goods such as alcohol, tobacco, and petroleum products count for very little in the rural consumption pattern. It may thus be assumed, very roughly, that the rural sector bears one-quarter to one-third of total indirect tax burden including TCA (turnover tax), the specific taxes and all import duties and taxes, i.e. for 1973/74 CFAF 1.6 - 2.1 billion out of an estimated CFAF 6.3 billion. - 5 -

PART ONE

RECENT DEVELOPMENTS IN AGRICULTURE

I. Production and Trade

Overall Picture

1.1 About 90% (some 3.8 million in 1972) of Niger's population live in the rural areas under very unfavorable conditions: their activities are re- stricted by the climate in their particular zone and hampered by a number of severe natural handicaps that have been very much in evidence during the past few years.

1.2 The different zones (see statistical Tables 2 and 3) are determined by the isohyets which run from east to west parallel to the edge of the Sahara desert, with rainfall increasing toward the south to reach 800 mm. In succession, the zones are as follows:

- in the south, the farming zone, accounting for a quarter of the country's total area and containing three-quarters of its population. This agricultural zone, bounded on the north by isohyet 350 mm, forms a long strip of more or less arable land extending for over 1,500 km from west to east along the frontiers with Upper Volta, Dahomey and Nigeria. Food crops (millet, sorghum, Niebe) and cash crops (groundnuts, cotton) are grown and sedentary or mixed stock-raising is practiced in this area;

- in the center, the pastoral zone, extending northward as far as isohyet 100 mm. This is the zone of transhumant livestock where the herds move to pastures renewed by the short rainy season and return after harvest time to spend the dry season in the agricultural zone;

- in the north, the desert zone.

These geoclimatic constraints on agricultural activities in Niger are aggravated by other factors such as its landlocked position, unreliable climate and scanty water resources, which are considered further on in connection with the long-term development problem.

1.3 Traditionally, Niger's agriculture is a subsistence agriculture, based primarily on millet and sorghum and secondarily on fonio, cassava, sweet potato and a few leguminous crops. Cash crops (groundunts, cotton) a source of monetary income for the farmer and of foreign exchange for the government, were introduced comparatively recently and, as experience has shown, are of only secondary interest to the farmers. - 6 -

1.4 The accuracy of the data on total cultivated areas and on area by product, and the contradictions between statistical sources, prevent any detailed quantitative analysis of short-term developments. It is possible however from direct and indirect observations to draw a few meaningful conclusions, particularly as regards future development: these observations are:

- a long-term trend of continued expansion of cultivated area at a slightly faster rate than population growth;

- following the years of insufficient rainfall, a very rapid increase in areas under cultivation, though not on a permanent basis;

- prolonged periods of drought, such as that began in 1968, led the farmers to turn more and more acreage over to food crops, at the expense of commercial crops;

- the length of fallow periods has generally decreased over the course of the years;

- the increase in cultivated area takes place in zones less and less favorable from the point of view of both soils and rainfall.

1.5 Recent trends in agricultural production, as shown in Tables 3 to 6 of the Statistical Annex, are studied using 1967 a year of "normal" climate as a reference period. Comments are given for the years after 1970, the date of the last agricultural review of Niger by IBRD 1/. The most salient feature of the recent period, marked by five years of drought, has been a decline in production linked to the decline in average yields, which has not been offset by the expansion of the area under cultivation. It is likely that for the 1973/74 crop year total grain production will be 307 below "normal", cotton production only one-third of the peak reached in the past and groundnut production an all time low of 20,000 tons or so. Per capita agricultural production will probably be the lowest ever. However, farmers' cash incomes and agricultural exports have been relatively less affected by reason of the strong upswing in world prices of groundnuts and cotton.

Main Crops

1.6 The principal grains, millet and sorghum, must be considered together, as these are the staple food crops and are more or less interchangeable at the consumer level. They account for nearly 90% of the farmland under cultivation.

1.7 Millet yields vary widely, chiefly with rainfall, averaging about 500 kg/ha. Millet is occasionally grown as a single crop but is more often combined with groundnuts and niebe (cowpeas). It is traditionally grown without fertilizer: the men prepare the soil using the daba and do the weeding, and the women sow and harvest the crop. Sorghum needs richer, heavier

1/ Economic Report, December 1971 (Working Document AW-36). - 7 - soil and this limits the area under that crop. Sorghum yields also vary greatly, averaging about 600 kg/ha.

1.8 During the last normal years before the drought, food crop production (around 1 million tons of millet grown on 2 million ha, and 300,000 tons of sorghum grown on 500,000 ha) varied by 10-20% up or down from one year to the next, depending on the rainfall, and barely keeping pace with population growth.

1.9 During the recent drought years (1968 and 1970-73) the areas under these two food crops has expanded considerablv (perhaps by 25%) at the expense of cash crops. This expansion did not prevent a food shortage which has been chronic since 1971 and reached its peak in 1973. It is the characteristic feature of present-day agriculture in Niger, together with the following two developments:

- deterioration of soil fertility and increased erosion, both in the farming zone, because of shortened fallow periods, and on the southern fringe of the pastoral zone as the result of stepped-up cultivation of crops with highly unreliable yields;

- increased migration, both internal (mainly to the towns) and external (to the coastal countries).

1.10 The bulk of millet and sorghum production is consumed by the farmers themselves. A small part (10-15%) is marketed, and prices fluctuate around the official rate of CFAF 25 per kg for millet and CFAF 20 per kg for sorghum (October 1973) by very wide margins (about 300%) depending on place and more so on time. In order to stabilize prices, the Office des Produits Vivriers du Niger (OPVN) was set up in October 1970. The Office. by contributing to make then into cash crops is helping to raise the value to the farmer of millet and sorghum, still the most suitable crops for the country's severe conditions. SOTRAMIL (Zinder), which processes millet into flour and pasta, is also working to the same end, with encouraging results.

1.11 Paddy rice production is concentrated along the river. In past years production is said to have reached 40,000 tons.1/ In the recent years of drought, yields have been unpredictable but the production of the traditional rice-growing sector seems now to have levelled off at about 30,000 tons. Thanks to recent progress in developing the lowlands 2/ along the river, their production, with 2,000 ha yielding two harvests of 4 tons per ha per year. i.e. a total of 16,000 tons, has considerably increased to reach the level of traditional floating rice production (15,000 ha x 1 ton = 15,000 tons).

1.12 Traditional rice-growing is highly susceptible to changes in river flow and to the ravages of predators (fish, birds, etc.). Not only are yields small and unpredictable; the rice is also of poor quality as the result of improper drying. In the depressions, variety D52-37 has proved to be the

1/ National Accounts, 1966-69. 2/ The word 'cuvettes" is translated as either "depressions" or "lowlands". - 8 - best suited to the water conditions finally developed. There are two crop cycles: a winter cycle from June (seed-bed) to October (130 to 150 days), when pumped irrigation supplements the rainfall (6,000 to 7,000 m3 per crop; maximum height 3m at the time of low water in July); and a dry cycle from December (seed-bed) to April (this cycle is a little longer because of the lower temperatures in J&nuary). This crop is grown by flood control irrigation (highest water in February), with pumping supplementing the flood water at the start of the cycle, and, if the river falls early, also at the end of the cycle (15,000 to 17,000 m3 per crop).

1.13 By applying urea (100 kg per ha) and weeding by daba, a good rice- grower can obtain yields of 4 tons per ha in the rainy season and 4.5 tons in the dry season. This means a net annual income to the farmer of about CFAF 120,000 for 226 days of work, i.e, CFAF 460 a day when growing conditions are good and with a small government subsidy of about 11% of operating expenditures (see Annex X). A riverbank family will cultivate a maximum of 30 areas of rice field, on the basis of 10 ares per working member. Whatever the size of the rice field, this system helps the rural family considerably, since it supplements its traditional farming (6 to 9 ha of millet and sorghum in the Niamey region) and yields two harvests a year.

1.14 The entire rice production is absorbed by the domestic market, 60% being sold in the form of ground rice through the traditional distribution circuits. A small part (about 3,000 tons) is processed by "Le Riz du Niger", a public enterprise at Tillabery. However, the latter is having difficulty in procuring the paddy rice and also in bringing out a good quality product. It is therefore working at only 50% of capacity, its cost-price is consequently inflated and it is difficult to find a market for the processed product. Exam- ination of these difficulties has brought a number of factors to light: the rice is supplied in non-homogeneous batches, making processing more difficult; drying is faulty, so that the rice breaks easily; the batches contain a high proportion of inert matter; grains are broken during threshing; and the plants do not have the proper equipment to process the available raw material into the desired end product.

1.15 Beans (voandzou and above all niebe), the production of which (about 120,000 tons) has steadily increased over the past few years, are grown in association with millet and sorghum. Up to now the yield of this crop (approximate average: 150 kg/ha, against 2,000 kg/ha at the research station) has been very low because of a succession of attacks by parasites both in the fields and in the barns.

1.16 Agronomic research has recently developed short-cycle varieties capable of yielding 800 kg/ha when grown on its own in a normal year, and has also come up with satisfactory processing and storage procedures. Seed multiplication fields have even yielded 500 kg/ha in a dry year (1973). The farmers are very receptive to this crop, since they also use the greenery to feed their goats and sheep. - 9 -

1.17 While voandzou is consumed entirely by the farmers, there is a brisk export trade in niebe, which is sold to neighboring coastal countries (mainly Nigeria). This should help stabilize prices at a remunerative level and promote niebe to the rank of a true cash crop. Recent studies have revealed that niebe has a high protein content and can be used as an ingredient in various food products.

1.18 Groundnuts account for barely 10-12% of the value added by agriculture, i.e. 5-6% of GDP. In the national accounts the whole of marketing expenditures is assigned to value added of the "tertiary" sector, and the value added through processing into oil is assigned to the "secondary" sector. The role of groundnuts in the economy is thus underestimated since national accounts figures are given at producer level, but, of course, this crop is of prime importance both in rural cash-income formation (probably over 50% in a normal year) and in exports, as already mentioned.

1.19 Groundnuts are well suited to the sandy soils of Niger, but this crop, like cotton, another rainfed cash crop, is doubly dependent on rainfall: in a dry year, yields are directly affected, and the following year the farmer cut down on groundnuts in favor of food crops to replenish their food stocks. Groundnut production expanded considerably during the 1960s from 150,000 tons (unshelled), to a record of almost 300,000 tons in 1967. During the recent drought period, production fell, rose again (though not to its 1967 level) and then fell again, to around 200,000 tons in 1972 and an estimated 20,000 tons in 1973, or barely enough to meet the demand for seeds. Groundnut cultivation is concentrated mainly in the Departments of Zinder and Maradi, which respectively account for 43% and 48% of total production in a normal year.

1.20 The principal extension campaigns (selected seed, seed treatment with fungicides, seed density, fertilizer) conducted by the Service de l'Agriculture do not seem to have had much effect during the past few years, probably owing to a combination of three factors.

1.21 First of all the drought, by reducing yields (average yield for 1972 was barely 400 kg/ha, less than half the 1967 figure) impairs the distribution of selected seed, in fact of any seed at all, and thereby also affects seed density. Secondly, groundnut prices (although they have increased though not to the same extent as world prices), when compared to the price of food crops which circumstances have made competitive, and to subsidized fertilizer prices do not encourage the farmers to devote particular attention to cultivation of this crop. Thirdly, and this is the major factor, the extension activities of the Service de l'Agriculture suffer from the usual weaknesses associated with this technical/administrative system: the super- visors are too widely dispersed and too much in demand for other tasks; they are poorly paid and lack incentives; the work of the extension agents is not properly organized and they do not have quantified production goals; the physical and financial operating resources are inadequate; and, despite the "plan de campagne" there is not enough coordination between the Service de - 10 - l'Agriculture and other agencies such as the Service de l'Animation Rurale and the UNCC, 1/ which is in charge of certain aspects of procurement. Lastly, the lack of follow-up makes it impossible to determine speedily the reasons for any failures and to correct promptly any errors in program preparation or execution.

1.22 The groundnut marketing "season" starts in November and lasts until March of the following year. In 1963, SONARA 2/ was set up as a mixed enterprise and given the monopoly for the storage and export of shelled groundnuts. Since then, primary collection of the groundnuts has been carried out by the cooperative network and UNCC and, in zones where there are as yet no cooperatives, by private dealers. Once the product has been purchased on the market, SONARA takes charge of it and transports it to the storage centers and shelling plants (Dosso, Tchadaoua). The expansion of the oil mills, combined with the drop in production, has considerably diminished the role (exportation) for which SONARA was established. The proportion of the 1972/73 groundnut crop actually crushed in Niger (by the mills of SHN at Matameye, SICONIGER at Maradi, SEPANI at Magaria) reached almost 60%. The further decline in production anticipated for 1973/74 will mean that exports of shelled groundnuts will be nil and that the mills will probably remain idle this year.

1.23 World groundnut prices fell from 1965 to 1968 and then stabilized, so that in 1967/68 when, under the Yaounde accords, the French and later the Community, preferential system came to an end, the blow was not too severe. In addition, the steady prices enabled the Government to increase the producer price per shelled kilo by 30% over 4 years from CFAF 18 in 1968/69 to CFAF 24 in 1972/73 and CFAF 28 in 1973/74; SONARA was able to make large operating profits, despite the drop in production; and CSPPN also benefited, since it received a large part of SONARA's profits (see paragraph 3.38 ff). 1.24 Cotton has reached, in extensive cultivation, the 20,000 ha or so that are suitable for this crop. Cotton in the farming zone can grow with additional water only: runoff, natural flooding, or irrigation. Its cultivation is therefore limited to the alluvial valleys of the ADM, the goulbi of Maradi, and the region of Gaya where rainfall exceeds 750 mm.

1.25 Although cotton has survived the succession of droughts better than other crops, probably because drought diminishes parasite infestation, yields and areas planted have decreased considerably during the past 3 years: 1973/74, with 8,700 ha and 3,000 tons of cotton, was Niger's worst cotton production year since 1962. Average yields are of the order of 400 kg/ha (rainfed) and 1.5 - 2.0 tons/ha (irrigated).

1.26 Nevertheless, the productive potential of the Nigerien cotton-growing areas has been demonstrated, both by the trials conducted by IRCT 3/ and by the experiences of the farmers belonging to the Groupements Mutualistes de Production

1/ Union Nigerienne de Credit et de Cooperation. 2/ Societe Nigerienne de Commercialisation de l'Arachide. 3/ Institut de Recherche du Coton et des Fibres Textiles. - 11 -

(GMP). Moreover, the fiber is fairly long and of excellent quality. Over the past few years the efforts have been continued to apply such methods as sowing dates and maintenance, plant health treatments, together designed to achieve a yield of 1,000 kg/ha, i.e. to increase the rainfed yield and the grower's net income by two and a half times. Supplementary campaigns, such as promotion of animal traction, which helps save water through proper soil preparation and reduces competition between cash crops and food crops thanks to more rapid cultivation practices, and promotion of fertilzer use where there is no risk of a water deficit, have also been developed by the Cotton Service of UNCC, which is in charge of operating the ADM 1/ projects. This Cotton Service has absorbed the "production" staff of the CFDT. 2/ The decline in cotton production is only indirectly attributable to the drought. The chief causes of this decline are the now intensive character of Niger's cotton-growing and above all the lack of antiparasite treatments.

1.27 Primary collecting of the cotton is done by CFDT, UNCC and the cooperatives. Ginning takes place in four factories managed by CFDT (Madaoua, Maradi, Saga, Gaya). The fiber leaving the mills used to be exported in its entirety to Europe but since 1969/70 part of it (1,000 tons) has been sold, on special terms, to the NITEX textile plant recently built at Niamey. The average purchase price (standardized for each Department) has fluctuated to some extent over the past few years, maintaining a rather loose relationship with world prices. The current price (1972/73) is CFAF 32 a kilo (price in Upper Volta: CFAF 35).

1.28 Onions are grown chiefly in the Maggia. They were recently introduced also into the ADM irrigation perimeters and the river terraces. This is an economically interesting crop--it adapts well to local conditions and the cultivation methods used, although traditional, are fairly well refined. The average yield is about 20 tons per ha. With better water management and greater sowing density yields of 30 to 40 tons per ha could be obtained in the irrigated perimeters. Gross agricultural product would then be comfortable, e.g. 3 or 4 times that of cotton. Almost all the onion production is marketed, at prices that vary considerably depending on place and season: CFAF 5 per kg for the April harvest, against CFAF 300 per kg for the winter harvest (the reason for this high price is that stocks are running out at that time of the year and there are problems of conservation and transportation). The production is sold through a traditional network, most of it being exported fresh to coastal countries, part is dehydrated and sold on the domestic market.

1.29 Tomatoes have also long been grown in Niger, where agro-climatic conditions are favorable. The area devoted to tomato-growing is apparently 300 to 500 ha a year (mainly in the Departments of Tahoua and Zinder); the average yield is about 10 tons/ha, part of the production is consumed fresh and part is dried and sold to Nigeria.

1/ Adder Doutchi Maggia (the main area of cotton production in the south- central part of Niger). 2/ Compagnie Francaise pour le Developpement des Fibres Textiles. - 12 -

Livestock

1.30 Stockraising is the country's second most important resource, after farming, and the sole source of income for some 800,000 herdsmen Peuls and Touaregs. It is difficult to evaluate the present herd size after the particularly severe droughts of 1968/69, 1972/73 and 1973/74. The following figures are given by way of indication only (1970 estimate, made by the last IBRD mission) and approximately reflect the "normal" size of the herd:

cattle (Azawack, Batoro) 4,100,000 sheep 2,100,000 goats 5,900,000 horses 175,000 donkeys, asses 350,000 camels 335,000

In 1970 the value of the herd was estimated at CFAF 50 billion. According to the national accounts, the average value added of stockraising, at producer level, was approximately CFAF 17 billion in 1966/68, i.e. 30% of agricultural product and a rather handsome 34% yield on capital value--if one is to believe the figures. It fell to CFAF 11 billion in 1969, and although it re- covered slightly during the next three years it will certainly have fallen again in 1973, probably to below the 1969 level. Livestock exports account for 20-25% of total exports in a "normal" year, but the figures are very in- accurate because of the smuggling that goes on across the Nigerian border.

1.31 The herd--the cattle herd, at least-- is divided more or less equally between the pastoral and the farming sectors. The pastoral sector runs from the northern farmland boundary (isohyet 350mm) northward almost to isohyet 100mm. The dry season in the pastoral zone lasts for 8 to 10 months every year. The herdsmen in the zone manage the fodder resources of these Sahelian and pre- Sahelian regions along traditional lines, using regular itineraries which are quite small even under normal circumstances and which have been getting smaller over the last few years because of overgrazing around watering points installed in that area. In the farming zone, herd management methods vary according to cropping intensity, which in turn depends on the particular rainfall zone. In the marginal regions, low-density stockraising is practised: most of the herds are cared for by herdsmen who leave the farming zone during the rainy season and come back during the dry season to let the herds graze on the stubble. Farmers who own herds also keep on their concession a few animals (one or two cows, a few sheep and goats) for their family's needs. Lastly, a system of fattening young cattle has been developing for several years, an extension of the ancient practice ("turka") of fattening lambs for the Tabaski.

1.32 The animal production figures are given in Appendix Table 7. The domestic market absorbs 63% of total meat production (estimated at 90,000 tons carcass equivalent in 1970)--though it takes only 30% of beef production. Annual average per capita consumption is estimated at 14 kg. Livestock exports are mainly on the hoof, with 90% going to Nigeria. The rest of the meat - 13 -

production is shipped in the form of refrigerated carcasses from the Niamey slaughterhouse (500 to 700 tons year) to markets which, SONIERANI 1/, a mixed enterprise is endeavoring to open up and expand despite difficulties as regards prices, tariffs, air freight rates and health regulations (Abidjan, Ghana, French West Indies, Libya). So far there have been more failures than successes: a contract for 30 tons a week to the West Indies was cancelled following an outbreak of foot-and-mouth disease at the Ekrafane ranch; more recently, a contract for 15 tons a week to Libya had to be suspended because meat was in short supply after the drought. There is a considerable trade in hides and skins: 1971 exports totalled CFAF 329 million, nearly 10% of meat exports. Packing, marketing and export are supervised by a specialized team of about 100 moniteurs from the Service de l'Elevage which covers four- fifths of the open markets. The Societe Nationale de Tannerie (SONITAN) recently took over the collection and initial treatment of the hides in Maradi. The most important export item is Maradi's "red-goat" skin.

1.33 The number of river fishermen is estimated at over 1,000; many of them are of foreign origin. They use several hundred vessels, mainly the traditional type of canoe (pirogue), a few of which have outboard motors. About 3,000 fishermen operate on Lake Chad and on the Komadougou. Lake fishing conditions are difficult, and the only craft used are small boats made of papyrus stems. Total annual production is about 10,000 tons, of which about one-fifth is consumed in the form of fresh fish. The rest is smoked and mostly exported to neighboring countries, principally Nigeria. The lack of proper transportation and storage facilities leads to high losses, mainly as the result of insect- borne infections. A fishing center was set up at N'Gortogol on Lake Chad in 1970 to train young fishermen in modern fishing methods and in fish processing and conservation methods. Since its establishment, this center has trained several dozen fishermen. Upon leaving the center they receive a collective loan ("mutuel" groups organized by UNCC) in the form of fishing equipment. This center is to be developed to train 400 fishermen in 4 years under a UNDP project, forming part of the regional project for the development of Lake Chad (US$275,000 starting in 1974).

The Drought

1.34 Throughout this description of Niger's agriculture, repeated reference has been made to the recent years of drought to explain, at least partially, recent developments or deteriorations. By the end of 1973, a year of outright catastrophic climate following a year of seriously deficient rainfall, people were starting to gauge the immediate and long-term effects of the disaster that had befallen not only Niger but also its neighbors. The food sector was the hardest hit, and the food shortage will be even more severe in 1973/74 than it was in 1972/73, but since this was foreseen at the end of the 1973 rainy season it should be possible, as long as international solidarity holds out, to remedy the shortage more rapidly, using less improvised, more effective and less costly means with, in particular, participation on a large scale by OPVN. The statistics both on agriculture and on population are unreliable, but as a cautious estimate one may put the gross harvest shortfall at about 480,000 tons grain equivalent for 1973/74. Grain production (millet and

1/ Societe Nigerienne d'Exploitation des Ressources Animales. - 14 -

sorghum) will only be 795,000 tons this year, against 1.3 million tons in a normal year. However, an estimate based on minimum requirements limits these to about 250,000 tons to 350,000.

1.35 The depressive effect on commercial crops of the conjunction of different factors was noted earlier. The direct effect on yields in a bad year continue to be felt the following year because the farmers reduce their acreage under commercial crops to give more priority than ever to food crops. In the case of groundnuts, a further disadvantage is that the seeds are frequently eaten. In contrast, cotton parasitism is checked and exerts less effect in reducing yields.

1.36 In the livestock sector, not only actual production is affected (weight loss in adults) but also production potential, a more serious matter (calf mortality, death of beasts of burden and draft animals, miscarriages). On the other hand, the disappearance of old females has a beneficial effect on the structure of the herd and on its reproduction capacity. Reduction of the male herd, wqhich has had to be carried out first, has had a comparable effect. Lastly, malnutrition among young animals that have survived is likely to retard their growth. It is difficult to put these various effects into figures but an estimate will be made at the time of the survey to be conducted in conjunction with the 1974 vaccination campaign. Until then, it may be estimated that a possible 2 million head are missing from the total pastoral bovine herd, though it is difficult to say just how many have died, how many have been prematurely slaughtered or hurriedly exported, and how many are more or less settled in the south or across the frontier. 1/

1.37 Finally the effect on human beings is also difficult to assess. Though one cannot speak of death from starvation, surveys have showed that in some areas 30% of the population are affected by severe malnutrition, so that anyone who becomes ill has less chance of recovery. There has also been a number of migrations, many villages in the marginal fringe of the farming zone being completely abandoned, and there are cases of nomadic herdsmen who have lost their entire herds and now occupy temporary camps outside the towns, particularly Niamey and Ayorou. Annex I attempts to make a more thorough analysis of the causes and the effects of the drought. 2/

1/ Preliminary surveys (March/April 1974) show that losses through death and emergency slaughtering may have reduced tihe herd by as much as 50 to 60% of its "normal" size.

2/ See Volume III, The Agricultural Sector (Annexes). - 15 -

II. RURAL DEVELOPMENT STRUCTURES AND INSTITUTIONS

2.1 In agriculture, the production structure is composed of a large number of farms and production and subsistence units based on a cooperative structure that has been constantly expanding since independence, and an administrative parastatal structure that guides, devises, encourages, and co- ordinates, and sometimes even takes over central executive functions. Then there is an unusual series of mixed enterprises whose mission, in the interests of the farmers and of the Government is in principle to rationalize most of the activities subsequent to farming, i.e. marketing, storage, processing, and export. There have been few institutional changes since 1971, and what follows is simply a recapitulation.

The Farm System

2.2 By farm is meant a family group working a common tract of land under the authority of the head of the family. The Service Statistique de l'Agri- culture has tried (see statistical Table 11) to define the principal characteristics of the farms, by Department, on the basis of data or estimates of different origins collected in 1970/71. According to this table there are about 450,000 farms in Niger. On average, each farm comprises 6.7 persons (2.8 in working age and cultivates 6 ha, i.e. 2.2 ha per working member. During that year,, average gross agricultural income per farm was about CFAF 57,000, i.e. CFAF 8,500 per person and CFAF 20,000 per working member, 1/ compared with a per capita GDP of about CFAF 26,000.

2.3 A sample survey taken in 1972/73 in the Department of Dosso appreciably confirms these figures:

Population 462,000 Number of farms 75,600 Population per farm 6.12 Active population per farm 3.26 Average area per farm 5.41 ha (3.63 to 6.47) Average no. of parcels per farm 1.92

2.4 These primary characteristics, supplemented by crop data, are still far from sufficient to give a true picture of the farmers' possibilities, needs, aspirations, and constraints. In particular, far less is known about the farms themselves, as socio-economic production and consumption units, than about the technical and economic conditions governing particular crops.

1/ These figures differ considerably from those of the 1966-69 national accounts mentioned in the introduction (paragraph 4). The difference is only partly explained by different economic situations; it is no doubt due also in part to the fact that the above figures do not include stockraisers, whose average income in a normal year is higher than the overall agricultural average, and also to evaluation discrepancies. - 16 -

Rural Development Institutions and Services 1/

2.5 Since independence, there has been a continued drive to organize the farming population by providing it with community structures through which it can, in the long term, effectively participate in the rural development programs. Niger has created some unusual structures for this purpose. The Service de l'Animation of the Ministry of Human Promotion goes first of all to the farmers and makes them aware of what is going on. Next, on the basis of educational principles developed with the assistance of IRAM, 2/ it provides training courses (sensitization, initiation, refresher) in technical and civic subjects. An initial discussion of the situation of the villages encourages the village leaders to define the development goals in which they are interested. This entire process fosters the emergence of rural leaders and of a basic information and consultation network comprising the "regroupe- ments de Villages Animes" (RVA). The cooperatives constitute the second component of Niger's road to development. Their aim is to meet the different needs of the farms, so their function is essentially to provide a service (procurement, harvesting and collection, storage, credit) and to train farmers and middle-level staff (cooperative training, agricultural extension work, functional literacy).

2.6 The establishment of the cooperatives, which benefits greatly from the new "awareness" instilled by the "animation" service, is based on the following principles:

- the village (or village district, in the case of a large village) becomes a Groupement Mutualiste Villageois (GMV);

- membership in the GMV is collective: the villagers decide jointly on their participation in the activities of the GMV;

- 5 to 12 GlVs constitute a cooperative;

- in the groundnut zone several cooperatives, combined into an Association Locale de Cooperatives (ALC) share a common market, the cooperative market (in the cotton zone the market is usually at the level of a single cooperative);

- the GMVs and the cooperatives are linked financially, sales surpluses serving as security for loans obtained;

- the members of each GMV elect a cnairman, a treasurer/secretary and village representatives;

1/ The following paragraphs refer to the situation before the military take over of April 15, 1974.

2/ Institut de Recherches et d'Amelioration des Methodes de Developpement, a French private organization. - 17 -

- in each cooperative, the representatives elect a secretary and a weighman (peseur) at ALC level, and participate in the election of the head of marketing, the accountant and the stores clerk.

Although the cooperative movement has developed considerably since its incep- tion in 1963/64, it still reaches no more than 20% of the rural population.

2.7 To enable the cooperative movement to get established and to operate in the zones that had already been the target of animation efforts, an organization was created in 1962 to supervise the cooperatives and provide them with technical assistance: the Union Nigerienne de Credit et de Cooperation (UNCC), a semi-public agency with administrative and financial autonomy. Initially, UNCC agents perform and supervise all operations and keep the accounts; then, as the training of the cooperative leaders progresses, the UNCC gradually hands over to them all functions except that of management supervision. In 1967, UNCC assumed responsibility for providing the cotton sector with supervisory personnel and infrastructures (cotton had up to then been the province of CFDT) and took over the staff of CFDT. UNCC also manages the irrigated agriculture projects of ADNI and some of the river projects. Al- though rural credit has since 1967 been the responsibility of the Caisse Nationale de Credit Agricole (CNCA), which exists in Niamey only (see paragraph 3.49 below), UNCC continues to serve as intermediary between the farmers and CNCA, and also grants a small amount of short-term credit for plant health treatments in the cotton-growing sector.

2.8 With the development and diversification of its activities, the former structure of the organization proved to be ill-adapted, being too rigidly bound by its capacity as a public administrative body, and ran into financial difficulties. In addition, it did not foster the growth and development of the functions delegated to the cooperatives. It consequently became necessary to carry out an internal reorganization of UNCC, and this took place in 1970 and 1971. Its actual statutes were not affected but its structures and accounting system were altered. Three principal services now take the place of the former "directions":

- Administrative and financial;

- Cooperation (animation, literacy, training, marketing, accounts and cooperatives);

- Production (tecinical work, extension).

New management methods and rules were introduced, a new accounting system was established, assigning responsibility to the 5 Departmental representatives, and the post of Controller was created. UNCC's budget for 1973 comprised: expenditures for CFAF 230 million (including 100 million for personnel costs); income for 162 million in the form of government subsidies (rural credit) and 53 million in the form of miscellaneous subsidies. - 18 -

2.9 Extension is carried out by the Service de l'Agriculture, whose external organization is modeled on the territorial administrative organization. The scanty human and financial resources assigned to this substantial task have been noted earlier as well as the difficult working conditions of the agricultural moniteurs. These difficulties are compounded by laxity in certain spheres (improved seed plans, delays in product distribution) and lack of supervision. The basis for a better equipped and more efficient extension service will have to be found in the productivity campaigns (see paragraph 3.13 below).

2.10 At the central level the major rural development institutions are the Ministry of Rural Economy, followed by three other ministries and a number of SEMs 1/ (mixed-capital companies) that were formerly under the Comite Inter-ministeriel de Tutelle des SEM (Ministry of Economic Affairs, Commerce and Industry), and now come under the particular Secretariat d'Etat a la Presidence responsible for supervising the mixed companies. The Ministry of Rural Economy comprises four technical divisions or "directions": Agriculture, Livestock, Rural Engineering (Genie Rural), and Water and Forests (Eaux et Forets). It also supervises public agencies in the administrative, industrial and commercial fields:

- UNCC;

- Caisse Nationale de Credit Agricole (CNCA);

- Office des Produits Vivriers du Niger (OPVN), responsible for organ- izing the food products market with a view to price stabilization at both producer and consumer levels;

- Office des Eaux du Sous-Sol (OFEDES), which is responsible for maintenance and operation of dug and tube wells in rural areas and, since recently, for "human investment" in well-digging.

There are also three technical education establishments under the Ministry of Rural Economy:

- Institut Pratique de Developpement Rural (IPDR), of Kolo, which trains technical agricultural agents (level Cl) in 2-3 years; the Ecole des Assistants et Agents Techniques de l'Elevage, of Niamey (levels B2 and Cl); and the Ecole des Moniteurs des Cuirs et Peaux, of Maradi.

2.11 The other ministries involved in rural development are: the Ministry of National Education (Service National d'Alphabetisation), the Ministry of Human Promotion (Service de l'Animation Rurale); the Ministry of Development

1/ Societes d'Economie Mixte, mixed interprises, usually under Government control. - 19 -

and Cooperation, which succeeded the former Commissariat General au Developpe- ment (CGD) and is chiefly concerned with agriculture, directing national and regional planning, and centralizing and coordinating the substantial international cooperation in this field.

2.12 The following mixed companies are directly associated with agricultural activities:

Date Name Acronym established Purpose

Societe nigerienne de SONARA 1962 Groundnut storage and commercialisation de marketing (export) l'arachide

Le Riz du Niger RINI 1964 Rice packing and marketing

Societe de transforma- SOTRAMIL 1967 MIanufacture of flour and food tion du mil et du sorgho products from millet,sorghum and niebe

Societe nigerienne SONERAN 1968 Management of Ekrafane ranch, d'exploitation des res- use of animal resources sources animales

Societe nigerienne des SONIPRIM 1969 Production and marketing of primeurs early vegetables

Societe d'etudes et de SUCRENIGER 1970 Study, promotion and execution realisation de of a sugar industry in Niger l'industrie sucriere

The finances and operating results of these companies vary considerably. At the end of 1971/72 (September 30, 1972) SOTRAMIL was just emerging from its deficitary experimental stage and starting to break even. SONIPRII is still running at a loss but its problems are being solved and it should break even in 1974 (Annex IV). Of the other companies, all running at a profit, SONARA is by far the largest (net profit of CFAF 214 million at year's end). - 20 -

III. CURRENT RURAL DEVELOPMENT POLICIES

3.1 The present rural development policy of the government is made of two quite different components. One includes the various sectoral programs usually strongly linked to foreign aid because of the magnitude of the investments and technical assistance they require. The second comprises the instruments of economic policy that determine the economic "environment" in which these programs are carried out: prices, subsidies, credit, taxation and investment allocation.

A. Development Programs

3.2 Among the programs undertaken or under study in recent years -- whether in farming or stockraising -- a distinction has been made between the traditional, broadly aimed programs of the various government agencies, -- the general coverage programs -- and the specific schemes, clearly defined as to area covered, duration, resources deployed and objectives, even though applied to widely varying projects. The agro-industrial projects form a separate category. Finally, reference will be made to the special projects formulated recently as part of the "drought program".

General Coverage Programs

3.3 The general coverage programs comprise activities carried out directly by the agricultural services from their annual budget allocations and to a lesser degree, in the case of some emergency and unprogrammed action, with additional limited resources obtained from a Treasury special fund, the FDAPR (Fonds de Developpement pour l'Amelioration de la Production Rurale).

3.4 They include chiefly the diffusion of farming know-how (vulgarisation): use of fungicides, essentials of fertilizer use, introduction of draft animals, distribution of improved seed, planting of fruit trees for household consumption, etc. The following inputs have been distributed by the Department of Agriculture under this type of program:

1971 1972 (tons) (tons)

Plant health products 24 21 Fertilizer 408 404

Seed: Rice 21.3 361.3 Groundnuts 1,678.6 5,187.3 (improved seed included): 711.6 532.5 Millet 38.7 35.2 Niebe 25.4 122.2 Maize 2.5 1.6

Cottton 779 -- Sesame -- 0.76 Fruit tree seedlings 8,017 8,547 - 21 -

These agricultural extension activities are supplemented by the operation of demonstration and seed production plots. Obviously, at their present level the impact of the general coverage activities can only remain minimal. This is due mainly to the very small number of extension staff: there is barely one extension worker per 5,000 sedentary farmers.

3.5 The general program in the livestock field covers health protection of herds by means of vaccination (especially against rinderpest and bovine lung plague), using serum prepared by the Niamey laboratory (1,475,000 vacci- nations in 1970 and 1,537,000 in 1971), and also the distribution of improved breeding stock:

1971 1972

Maradi poultry station -- roosters 476 944

Maradi Goat Center -- males and females 1,647 1,493

3.6 The main purpose of the reforestation program, undertaken directly by the Service des Eaux et Forets or fostered through the supply of saplings to individual owners, is to rebuild firewood and lumber reserves. A secondary purpose is to protect the land (windbreaks and "gaos" plantations). The CTFT 1/ has been trying for some years to produce Eucalyptus varieties adapted to conditions in Niger from Australian stock. From 1969 to 1973 a total of 160 ha was planted under the ADM operation (with FAC financing of CFAF 55 million) plus 300 ha a year on the outskirts of towns in the interior. Finally, the general coverage program can also be said to include the village wells program (200 to 300 wells a year from 1972), undertaken with the support of OFEDES and many external financial aid sources (see Annex III).

Specific Agricultural Projects

3.7 Sgecific schemes, which are tending to become the preferred method for agricultural development, cover on-farm development, stockraising and irrigation projects.

3.8 A first series of specific operations is aimed at improving the yields of particular products: niebe, groundnuts, cotton and out-of-season vegetables. The development of niebe-growing as a single-crop operation was launched in 1971 because of the export prospects and recent progress both as regards varieties (72-day and 90-day varieties adapted to low rainfall) and as regards field-and-barn pest control. This operation is divided into two separate projects. The first is the'niebe project, forming part of the Dosso rural development project which was started in 1971, and has now reached the production stage (750 ha); CFAF 11.2 million was spent in 1973. The second project, now at the seed multiplication stage (20 ha) is under way in Maradi (Mayahi arrondissement): CFAF 900,000 were spent in 1973). Yields were poor in 1973 (about 500 kg/ha) as a result of the inadequate rainfall, but should

1/ Centre Technique Forestier Tropical, a French research institute. - 22 -

normally reach 750 to 800 kg/ha if the techniques taught are properly applied. With a yield of 750 kg/ha, niebe gives a farm income per hectare (gross receipts less cash expenses, equal to CFAF 8,500) double that of millet. Even so, however, it makes efficient use only of male labor (60% of total labor, harvesting being done by women).

3.9 The goal of the groundnut seed plan is an annual production of 10,750 tons of selected seed adapted to Niger's various ecological environ- ments. This is only one quarter of normal needs with an area under cultivation of 430,000 ha which means that seed stock has to be replenished every four years. The underlying principle of this project is a series of successive seed multiplication operations, proceeding from 15 tons of pure stock (MO) the first year (x 10), to 1,350 tons (M2) the third year (x 9) and finally 10,750 tons (M3) the fourth year (x 8). The MO stock is being supplied by IRAT. The seed plan consists of multiplications Ml and M2. It is being carried out by the Service de l'Agriculture with the technical assistance of IRHO. 1/ These multiplications are being conducted in the Departments, at the Centres de Formation des Jeunes Agriculteurs (CFJA) or using "seed farmers" under contract. M2 seed is sold (CFAF 25/kg, i.e. the official price increased by CFAF 9) to productivity projects which are responsible for multiplication stage M3 before any distribution and extension work is undertaken. Yields are expected to increase by 85 kg/ha as a result of this improvement in varietal genetic potential.

3.10 The project was launched at Dosso and Maradi in 1971 and was extended to Zinder in 1973. Its financial needs (operating expenses, capital expenditure and working capital) are as follows:

CFAF Million

1971 5 1972 65 1973 135 1974 135

Financing has apparently been obtained for the first three years in the form of a FAC grant of CFAF 66 million and a FED grant of CFAF 90 million.

3.11 The cotton development scheme. UNCC has absorbed the CFDT technical staff charged with reduction support and marketing, with financing from an annual FAC grant-in-aid of approximately CFAF 45 million. In view of the location of the cotton-growing areas, the scheme has been broken down and integrated into other larger specific schemes (Maradi and Dosso productivity projects; ADM irrigated agriculture projects). As already mentioned, its

1/ Institut de Recherche pour les Huiles et les Oleagineux. - 23 -

goal since the outset has been to exploit the country's cotton-growing potential. The target of this scheme -- 15,000 to 18,000 tons of seed cotton over 20,000 ha -- is necessarily modest in view of the ecological constraints.

3.12 Out-of-season vegetable farming, for which the Sudanese-Sahelian area enjoys both a favorable climate and abundant labor, has been developed in Niger since 1971 under the aegis of SONIPRIM. The objective of SONIPRIM, which currently produces 500 tons of produce on 62 ha, a ceiling imposed until now by the limited air freight capacity out of Niamey, is to reach 1,000 tons on 87 ha by 1975. Air freight capacity should increase soon, with the completion of the expansion of Niamey airport to enable it to handle heavy aircraft. SONIPRIM is making good progress and when the necessary technical, operational and management adjustments, are effected it should be able to operate at a profit both for its member growers and itself (see Annex IV).

3.13 The so-called Productivity Operations deal with a well defined geographic area rather than with a specific crop. They grew out of the realization borne of experience that rain-fed farming could be intensified efficiently only within the framework of operations clearly delimited in terms of time and area, managed as integrated projects under undivided responsibility, provided with specific resources and having carefully predetermined goals, with the necessary progress controls. As integrated rural development projects these operations share some common key characteristics, in principle at least: they concern, progressively, the mass of the farmers in a given zone; they seek to improve production in the traditional small-farm framework, without fundamentally changing the productive apparatus; they imply an active participation by farmers within the framework of existing cooperative structures; and they aim both at increasing agricultural production and at improving rural living conditions by providing, for example, public amenities and training. The goals of these operations include: increased production by raising yields through dissemination of tested techniques, improved seed, short-cycle varieties adapted to local rainfall conditions, seed treatment, proper timing and density of sowing, use of fertilizer, plant health protection and the supply of miscellaneous means of production. The operations concern both food crops and cash crops, soil conservation and soil rehabilitation; and the combination of stockraising with farming animal-drawn cultivation and fattening on the farm is also a medium-term objective of all of them.

3.14 Three operations of this type are currently under way, all on a modest scale, at Badeguicheri, Zinder (the "3M" project), and Dosso. The fourth should get under way in 1974 or 1975 in the Maradi Department. The latter, an integrated rural development operation for which financing has been requested from IDA would be much larger than the other two. These projects are described briefly in Annexes V, VI, VII and VIII. Their main quantitative features are summarized in the following table: - 24 -

Outside aid Production granted targets Timetable Total Amount (increase Duration cost (CFAF (CFA Operation in tons) Year 1 in years million) Source million)

Badeguicheri Grains: +1,350 (Annex V) +2,700 1973 4 345 FED 315

Cotton +1,750 +2,500

Zinder (3M) Grains: (Annex VI) Cereal +16,000 1973 4 826 FED 521

Groundnuts: (shell) +23,000

Dosso (a) Dallol Maori (Annex VIII) pilot project 1970 6 350 UNDP 265

(b) First experimental stage (groundnuts, grains, niebe, cotton, livestock) 1973 6 FAC 145 Maradi Grains +20,000 (Annex VII) 1974/75 5 3,900 IDA not specifi

Groundnuts (shell) +23,000

Cotton: +1,200

3.15 Specific schemes for livestock concern two projects that have been under way for a number of years: the Ekrafane ranch and the Kirkissoye experimental station (dairy and feed-lots), and three projects for which financing was recently obtained or is under negotiation.

3.16 The Ekrafane ranch covers 100,000 hectares about 400 km northeast of Niamey. It has a capacity of 10,000 head. Its establishment required an investment of CFAF 170 million, financed by FAC. It is operated by SONERAN and has faced a number of problems: (lack of funds, epidemics of lung plague and then of foot-and-mouth disease, and drought). These have prevented its operation from getting into top gear so far. Its equipment (fencing, buildings, watering points, technical and health installations, agricultural equipment - 25 -

and vehicles) is complete with the exception of a weighbridge. The most recent operating statistics (period October 1972 to March 1973) show a herd of 5,439 head of cattle at the end of the period and a total slaughtered of 1,218 head, corresponding to 313 tons of meat. Advantage is being taken of the drought to make cattle purchases to bring the scale of operations to their full normal level, since it is causing stockmen in the region to get rid of a large number of animals.

3.17 The Kirkissoye station covers 70 ha on the right bank of the river, 5 km downstream from Niamey. It has been experimenting for a number of years in milk production (lactations of 1,300 to 1,500 kg in 250 days) feedlot development with irrigated fodder production. A small farmer section has been established to test in the field the results obtained experimentally. It comprises 8 farmers, each provided with 1 ha of irrigated fodder crops, a barn and 8 heifers and dairy cows, at a cost of CFAF 100,000. These farmers repay the capital investment in kind, in the form of calves sold to the station at 130 kg. The females are used to replenish the project herd; the males are sent to the small-farmers' feedlot at Boubon. Unfortunately, the lack of figures (inputs, yields, etc.) for forage and animal production means that the results are only approximately known and cannot be used with any degree of assurance.

3.18 The cattle feedlots development project with irrigated fodder production planned at Tiaguirire (see Annex IX), in effect an extension of the experience obtained at Kirkissoye, was made possible by the continuing upward trend in meat prices. The capital investment of CFAF 400 million (irrigation projects covering 300 hectares and livestock facilities) is to be financed out of aid obtained from Germany (Federal Republic).

3.19 A cattle trails and markets project for western and west central Niger (SCET study financed by FED) is intended to improve conditions for getting cattle to market in the region (watering points, access trails, health protection and market information) and to facilitate the work of the Service de l'Elevage (health control and marketing). It consists of markets, trails dotted with wells from Ekrafane and Niamey to the frontier posts in the direction of Dahomey and Upper Volta, veterinary stations and cattle resting areas. It is planned to charge market taxes. The investment of CFAF 200 million will receive US-AID financing.

3.20 Finally, following a feasibility study, it is planned to build a small slaughterhouse at Maradi, with a capacity of 1,000 tons. It is intended to meet local consumption needs, since the limitations imposed by Nigeria and the problems of transit through Niamey make the export of meat impossible for the time being. Here again, the investment (CFAF 43 million) would receive US-AID financing. Two similar slaughterhouses are planned, at Tahoua and Zinder. - 26 -

Irrigation Projects

3.21 Irrigated agriculture projects are the most typical of all specific operations in that they imply a heavy concentration of investment, an almost industrial type of management, and, in principle, high productivity.

3.22 In Niger, water readily accessible for agricultural use can be found in three types of locations (see para. 5.11ff):

- along the permanent rivers (the Niger, and to a lesser extent the Komadougou), either in the main bed (depressions averaging about 300 ha) or on the river terraces;

- downstream from hill reservoirs, in the only area where the latter are feasible: the enclosed valleys of the Ader Doutchi Maggia;

- around wells, using close-to-surface ground water, usually in the dry valleys (dallols, goulbis) that offer both water and suitable soils.

Appendix Table 21 recapitulates the projects carried out to date, by year and category. A total of 4,050 ha had been developed as of the end of 1973, at a total cost of about CFAF 3.5 billion, financed by FAC, FED, Chinese aid (Taiwan) and the Niger Government. ADM's best sites have already been developed. However, in the cases of depressions and river terraces and, to a lesser extent, the groundwater-irrigated nuclei, the work accomplished represents only a small proportion of the development potential.

3.23 The management of these development projects has met with a number of difficulties in connection with land tenure problems that have hampered implementation of the law on land distribution; with the associated problem of the mentality of the river valley farmers, who do not readily pay their levies; and, finally, with the lack of uniformity of management, which is stricter in projects managed by UNCC than those managed directly by the Service de l'Agriculture. A mission from the Republic of China (Taiwan) has been working on the Saga site near Niamey since 1969. By the end of 1973, this mission will have developed a total of 700 ha of artificially flooded land. The Chinese mission is doing the development, work, operating the system and providing agricultural leadership services to the farmers and training Niger supervisory staff. In addition, the farmers on this project pay no levy, which is something of a paradox since this is the most sophisticated development undertaken so far.

3.24 ADM's irrigated agriculture are an integral part of the development of this very special region of Niger, subject to intensive natural erosion and densely populated. The operation, financed by FAC, has been almost completed. ADM's irrigation projects, as such, certainly create more problems than river - 27 - projects: limited potential, high capital investment per hectare hydrological problems caused by poor filling of the reservoir at times and high evapo- ration losses, technical problems due to silting up of the reservoirs, and finally difficulty in finding highly productive crops: cotton (2,000 kg x CFAF 30 = CFAY 120,000/ha), and even onions (30,000 kg x CFAF 4 = CFAF 120,000/ ha), have the highest gross monetary yield but this is still below that of irrigated rice on the Niger river (8,000 kg x CFAF 25 = CFAF 200,000/ha).

Agro-Industries

3.25 Agro-industries account for half of all total industrial concerns though they have been limited up to now to oil mills (the leading agro- industry) and a few industries of secondary importance in terms of turnover. The following table summarizes the position:

Annual Starting-up Annual Produc- Industry date Location Capacity tion

Oil mills:

SICONIGER 1942 Maradi (unshelled) 15,000 tons

SHN 1954 Matameye 20,000 tons

SEPANI 1972 Mfagaria 65,000 tons

Brewery: BRANIGER 1967 Niamey 25,000 tons

Rice mill: Le Riz du Niger 1964 Tillabery 6,000 tons (1 t/ha)

Tannery: SONITAN 1971 Maradi 500,000 skins

Flour mill: SOMINI 1965 Niamey 6,000 tons Operation (closed in (wheat) suspended in 1966) 1966

Niamey slaughterhouses 1967 Niamey 6,500 tons 650 tons of meat exported

A relatively large number of projects are in course of study or execution, reflecting the government's desire to increase the value added of the country's production. While the provisions of the Investment Code (on tariffs, taxation, financing, and prices) as supplemented by the individual agreements are generally very beneficial to the projects themselves they are of questionable value from the point of view of the national economy (see below, under "Price policy") . - 28 -

3.26 A second SICONIGER oil mill with a capacity of 75,000 tons of unshelled groundnuts is planned to be built in 1974 near Maradi. It will raise Niger's groundnut milling capacity to 175,000 tons. The investment, total- ing some CFAF 1 billion, will be financed by SICONIGER and BDRN. 1/ The 20-30% difference between the export price and the price to be charged to the oil mill is not the least of the incentives granted to this and the other oil mill operators.

3.27 At Zinder, SOTRAMIL, which has been processing millet and sorghum since 1967 (flour and byproducts) is now moving out of the experimental into the development stage. At present, SOTRkMIL's plant comprises:

- A millet (plus sorghum and maize) flour mill with a capacity of 2 tons an hours (12,000 tons a year). Its breakeven point is 6,000 tons a year (of grain), though the lactic fermentation system used up to now limits processing to only 3,000 tons;

- A unit for experimental work on the manufacture of pastas and of infant's food (with the addition of groundnuts and sesame);

- warehousing facilities (3,000-ton millet silo and a 300-ton flour store).

3.28 The economic advantages of the millet flour mill (which produces five grades of flour of varying fineness, depending on intended use) are its better yield (72%) than that obtained with traditional pounding (60%) and the fact that it raises to the status of commercial crops grains that are well adapted to Niger's severe climate. It also offers the social advantage of eliminating an arduous and demanding task performed by women. The technological problems (work flow, machinery) have now been solved. Stabilization of the flour is not a real problem since a three-month "keeping time" is adequate for a market where consumption is continuous. To prolong keeping time, it would be necessary to remove the germ (lipid) but this would mean removing the proteins, which would be absurd. The problem of baking, using 30% millet flour to 2-1/2% fats has been solved at Dakar (FAO project). This is not an important problem for Niger, which consumes less than 5,000 tons of flour a year. SOTRAMIL, which has been operating at a profit since 1971, thus now faces development problems: cost cutting, commercial problems (market studies, advertising, packaging) and training of Niger nationals in supervisory grades. SOTRAMIL has received financing from FED and from UNDP, which has been asked for a third aid tranche for 1974.

Industrial Projects in Preparation

3.29 An onion dehydration plant is planned at Galmi (annual capacity: 1,000 tons of dried onions, i.e. 8,200 tons of raw onions), associated with a 48-ha irrigation project. It would produce for the European market. The investment would be CFAF 1,145 million (645 million for the agricultural and

1/ Banque de Developpement de la Republique du Niger. - 29 -

500 million for the industrial component). The financing program, which would depend on the organizational structure of the agro-industrial complex, has not yet been finalized.

3.30 A tomato concentrate factory is under study. It is designed to meet the increasing domestic demand (1972: 615 tons imported at Niamey at a cost of approximately CFAF 200 kg and sold at CFAF 250-300/kg), and also to create a market for an irrigated crop easy to grow in Niger. The factory could start with a capcity of 600 tons (4,000 tons of fresh tomatoes, yielding 1 ton an hour of concentrate over a season of 90 days). However, if the plant is to pay the grower CFAF 7/kg, its breakeven point would be 800 tons a year. The factory could be built at Maradi, where it would provide an outlet for the irrigated tomato-growing that it is proposed to develop as part of the productivity project mentioned above. The total investment would be CFAF 130 million (capital expenditure CFAF 90 million, working capital CFAF 25 million). The operational details have not yet been finalized.

3.31 A sugar plantation and mill (15,000-20,000 tons) is under study for construction at Tillabery, where IRAT has been conducting sugar cane experimental work and multiplication programs since 1968 (see Annex II). Niger's consumption of sugar (bought on the world market or from EEC and marketed by COPRONIGER) is estimated at 14,000 tons, allowing for illicit imports from Nigeria, i.e., at 3.5 kg a year per capita (against 17 kg in Senegal). A project for the production of 10,000 tons of granulated and 10,000 tons of lump sugar a year has been proposed by a foreign promoter, with a supplier's credit equal to two-thirds of the total investment. The cane would be grown on a furrow-irrigation perimeter of 2,500 ha (2,000 ha under cane), using wage labor. The harvest would last 150 days, from November 1 to April 30. The investment is estimated at CFAF 5 billion (1.4 billion for the agricultural and 3.6 billion for the industrial component). The financing plan proposed is as follows:

CFAF million

Share capital (1/3 of capital expenditure 1,200 plus 1/10 of working capital)

Suppliers' credit (10 years at 7%) 3,800

5,000

Application has been made by the promoter for exemption from import duties and profit and sales taxation for several years. Average sugar-cane cost would be CFAF 2,500 a ton. The average ex-works sugar price would be CFAF 67 a kg (granulated) and CFAF 103 a kg (lump sugar).

3.32 Quite apart from the fact that the dossier says nothing about numerous technical and commercial aspects of the project and provides no - 30 -

basis for appraisal of the technical arrangements and costs adopted, i.e. for judging the operational risks, the financing formula leaves practically all these risks to be borne by Niger. Furthermore, Tillabery has serious drawbacks as the site of the project, stemming in part from its remote geographical location in relation to the sugar consuming centers and fuel sources, (with the consequent cost price increases) and above all from its climate (average annual rainfall 400 mm), which implies a substantial consumption of irrigation water (23,000 m3/ha). Besides, the terraced structure of its soil would require a water delivery head of some 10 m and expensive soil breaking. These drawbacks may well force the project, as currently conceived, into a situation with no alternatives other than to sell the sugar at above import cost, to accept heavy losses, or to fail to depreciate the equipment or re- munerate the entire project. The project would therefore seem to require further study.

3.33 A livestock feed production center is planned for Niamey. There are many livestock activities in the area: the Lamorde poultry station, the Tiaguirire feedlots project, SOLANI, and the operation to save young animals (drought program). It comprises a factory with a capacity of 3,000 tons a year (2 tons an hour), using local products. The investment is estimated at CFAF CFAF 90 million. Aid would be requested from FED or the Federal Republic of Germany.

The "Drought Program"

3.34 Finally, in addition to these various projects -- recently launched, in the planning stage or under study for several years -- there is the "drought program", a collection of very diverse operations designed to alleviate the immediate and longer-term effects of recent or future droughts. First, there is the food relief aid received in 1972/73 at a cost of about CFAF 10.5 billion and expected for 1973/74 in at least the same amount provided that no very large volume of air freight is required. Second, there are a number of small specific projects some of which are probably of long standing while others have appeared in response to the particular circumstances. Their total cost (at the end of 1973) is estimated at CFAF 1.4 - 1.5 billion; financing has been approved by IDA (World Bank Group), FED, the Federal Republic of Germany Germany and US-AID. A list of these projects is given in Annex XI. This program may well be expanded slightly in view of additional financing apparently available (particularly from US-AID and the Federal Republicrof Germany) from the beginning of 1974. Thirdly, these projects are supplemented by a much more ambitious program which unfortunately, even more than the others, lacks a basis of precise evaluation of costs and operating results. This program was formulated at Ouagadougou at the September 1973 meeting of the Comite Inter-Etats de Lutte contre la Secheresse dans le Sahel, at which each of the six countries announced a program of some CFAF 10 billion. The breakdown of Niger's program is as follows: - 31 -

CFAF billion

Village, pastoral and farming water supply (irrigated agriculture component: 5) 6.18

Productivity operations for Niamey and Tahoua 1.60

S tockrais ing 1.90

Reforestation, nature conservation 1.90

10.23 Finally, in addition to the national programs, a regional program centered on better utilization of the Niger River, through the execution of large works was also proposed at Ouagadougou. As matters stand at present, it is not known how this complex of programs (other than its food aid and small projects already financed) will be integrated into overall development policy, and eventually translated into execution projects, financed and put into service.

B. Investment and External Aid

3.35 Public investment in agriculture has increased over the last few years from approximately CFAF 1 billion to CFAF 1.3 billion a year. This accounts for slightly more than 18% of total public investment appropriations at the end of 1971. Table 22 (see Statistical Annex) shows the main categories of investment operations under way in 1971, the last year for which information on commitments and disbursements was obtained. The volume of operations in progress in 1971 was close to CFAF 5 billion, distributed as follows:

CFAF million

Agriculture 1,034 Stockraising 1,330 Forestry and Water Resources 60 Rural Engineering (irrigation) 1,459 UNCC 1,108

4,991

The main factor governing the rate of agricultural investment is the flow of external aid and the capacity of Niger's operational services to absorb it. The following table compares credit commitments and the disbursement rates in respect of operations under way in 1971 for agriculture and all other "investment" ministries: - 32 -

CFAF billion

Amount of Disbursements Unused credits Balance granted to Prior to in in at Percentage 9/30/71 1970 1970 1971 9/30/71 disbursement (1) (2) (3) (4) (5) (6)

Agriculture 4.99 1.58 0.80 1.19 1.42 72

Other 27.06 3.87 5.84 4.11 13.24 51

Total 32.05 5.45 6.64 5.30 14.66 54

Source: Report on Supervision of Public Investment Execution, MDC 1971.

It is clear that, generally speaking, the Government of Niger has been largely successful in its efforts to mobilize domestic and foreign resources. More- over, the agricultural sector, though generally believed to be less effective in this respect, has succeeded in absorbing investment credits at an appreciably higher rate than all other sectors combined. However, this is no doubt due in part to the fact that the sector's share of total investment is still small.

3.36 External aid to agriculture covers both technical assistance and capital investments, of which it accounts for more than 90%. Table 23 (see Statistical Annex) summarizes various aid components in the operations under way in 1971, the last year for which commitments and disbursements have been recorded at the Ministry of Development. Total aid (almost all investment funds) has apparently been running at an annual rate of CFAF 1.2 billion over the more recent years. France (FAC) clearly accounts for most of this aid (more than 50%). In 1971 this French investment assistance was accompanied by the provision of about 60 technical assistants (84% of cost borne by France), an agricultural research program of which France finances 50% plus about 20 experts, and a contribution of CFAF 1 billion to FNI (the government investment budget) which provided some CFAF 359 million for financing of agricultural operations. FED aid comes second in order of volume. These two important sources have tended to specialize in certain sectors (Adder Doutchi Maggia research, development projects and stockraising, in the case of FAC; Niger River irrigation improvements, installation of cooperative infrastructures and pastoral and village water supply in the case of FED). The aid flow appears to have increased during 1972 and 1973, particularly with the recent contributions to the "drought" emergency program. A summary of the principal commitments, recently entered into or about to be finalized at the end of 1973, is given in the following table, the completeness of which cannot be guaranteed: - 33 -

AGRICULTURAL PROJECTS FINANCED OUT OF EXTERNAL AID Estimated Commitments After End of 1971

Amount Source Project (CFAF million)

UNDP SOTRAMIL (Stage II) 150 Dallol Maouri (Stage II) 250

China (Taiwan) Rice Development, Saga 1,800*

IDA Credit to CNCA for productivity 135 Development credit (emergency 400 program - drought)

FAC Niamey slaughterhouse/cold-storage 130 expansidn 130 Dosso productivity project (Stage I) 145

FED Badeguicheri project 345 Karma development study 67 SOTRAMIL - Silos 85 Zinder productivity project 521 Pastoral stockraising: wells and fodder (emergency project) 400 Niamey airport, palletization 70

Germany(FR) Tiaguirire feed-lots project 400

US-AID Livestock trails and markets (West Niger) 200 Maradi slaughterhouse 43

Libya Keita and Saga development projects 171 OFEDES (rural wells) 77 OPVN (vehicles, silos) 46

Total 5,435

Estimate for 300 ha of additional development projects undertaken after the end of 1971. - 34 -

C. Economic Policy Instruments: Prices, Subsidies, Taxation, Credit

3.37 Among economic policy instruments, designed to promote and guide the behavior of economic operators and together forming what might be called the "economic environment" policy, the most important is price policies. Subsidies and taxation are simply modifications of the price system itself, while agricultural credit has so far played only a limited role.

Prices

3.38 Intervention in price determination is a long-standing ingredient of the Government's agricultural policy, to a large extent inherited from the pre- independence period and is regarded in Niger as part of the natural order of things, though its objectives are not always absolutely clear. A prime purpose is no doubt to insulate producer prices against seasonal fluctuations in world market prices which would be ill received by the farmers. A second purpose is to avoid sharp price changes from year to year, including upward since there might have to be reversed later. A third purpose could well be to try to maintain or -- to alter in the desired direction -- the real unit value of production, i.e. the producer's terms of trade. An even more ambitious purpose would be to try to stabilize or at least to influence the grower's income, nominal or real. Finally, by setting producer prices, the Government is in effect fixing its own "profit margin" above the marketing cost, in the form of taxes or parafiscal charges. These policy objectives are not always mutually compatible and may in fact directly conflict with one;another, especially price stabilization and maintenance of the farm income when sharp fluctuations occur in external prices or in quantities produced.

3.39 Export crops, groundnuts, and cotton rank first as subjects of Government attention. For these crops, within-year stabilization has been accomplished without difficulty. As for the other objectives, the following table (allowing for the unreliability of the consumer prices index) gives an indication of the complexity of the problem (see Statistical Annex, Tables 16 and 17): - 35 -

PRICE AND INCOME INDICES (Figures rounded)

1969/70 1970/71 1971/72 1972/73 1973/74 (forecasts)

Groundnuts Price to producer 100 105 120 120 140 Terms of trade 100 104 105 95 100 Total nominal income 100 104 133 118 69 Total real income 100 103 116 93 49

Cotton Price to producer 100 102 105 112 130 Terms of trade 100 100 91 89 93 Total nominal income 100 85 75 54 31 Total real income 100 84 65 42 22

3.40 It will be seen that the favorable world economic situation in recent years has meant that producer prices have been rising (though more slowly than world prices). But this upward trend has not brought about any appreciable improvement in the producer's terms of trade for groundnuts or prevented their deterioration in the case of cotton; in particular, real income has been unavoidably affected by the falls in production. Here again the policy objectives have been thwarted by the unpredicatble factor of climate. The cash crops situation has been aggravated by the rise in the consumer prices of imported and also of locally produced goods (the latter increase being related to the fall in food production).

3.41 The Government has also used the prices instrument to encourage industrialization. For instance, over the past five years the selling price of groundnuts to oil mills has been 20-30% below the f.o.b. export price. An even more marked difference has been laid down for cotton sold to the textile mill. The grower is not directly affected by this discriminatory price policy since he has a fixed selling price for groundnuts and for cotton that has been, so far, well below the export price. What does happen is that through this policy the Government makes a transfer to the benefit of the industrialists against which must be set the increase in foreign exchange earnings obtained from exports of oil and oil-cake instead of groundnuts (or the saving on textile imports). Based on world market prices this gain appears to be approximately 8% for the oil mills. Taxes and parafiscal charges, i.e. marketing profits accruing to the Government total an estimated 22% of the - 36 - c.i.f. price (shelled groundnut base) (1972/73) in the case of groundnuts sold to the oil mills and 42% in the case of direct exports of shelled groundnuts. Thus, the government gains 8% in foreign exchange for a loss of 20% in local revenues, which means that there is a net gain on the operation if the foreign currency is considered to be worth more than 2.5 times the official exchange rate. One may well ask whether such an implicit overvaluation of the CFA franc is not somewhat excessive in the case of Niger. This example does serve to demonstrate the sometimes markedly indirect impact of price policies of which the Government should be fully aware.

3.42 In the case of foodstuffs intended for the domestic market, state intervention seeks to protect both the producer and the consumer by fixing both minimum and maximum prices and endeavoring to make them effective through OPVN purchases and sales of the millet, sorghum, rice and so on. The effects of this policy are not clear at this time, if only because of the heavy foodstuffs shortages, which have completely disrupted the market. The same is true of livestock: the market structures make price regulation very difficult. It does seem, however, that in the case of bovine cattle these structures are less ineffective than they are sometimes said to be and that, generally speaking, the stockraisers receive a reasonable proportion of the final selling price. Additional information on prices and marketing is given in Annex XIII.

Subsidies

3.43 Data are lacking on which to base an evaluation of the current subsidies policy for agriculture -- and indeed to determine whether any overall policy exists in this field. The policy of officially fixed producer prices -- when it is effective, as in the case of groundnuts and cotton -- implies possible price support or compensatory payments either to the farmer or to the marketing agency. Since 1967/68, when it received CFAF 170 million from the price stabilization board (CSPPN), SONARA has not had to be paid any compensation for losses; on the contrary, the high market prices for groundnuts have enabled it to show a profit. The same applies to cotton marketed by CFDT. In 1973/74, however, CFDT will probably suffer a loss owing to the low prices imposed on its sales to NITEX. In the case of both groundnuts and cotton, Niger's agriculture has not only fully adapted to world market conditions while at the same time minimizing producer-price fluctuations; it also appears that the conditions under which sales are made to local industries in fact amount to subsidization of these industries by the Government.

3.44 These are not the only forms of subsidy: there are direct subsidies to certain agricultural organizations and indirect subsidies to users of certain current inputs and to agricultural credit. Organizations like UNCC and OFEDES 1/ are to some degree extensions of the Department of Agriculture,

1/ See Annex III. - 37 - and from this point of view the operating subsidies they recieve are on a par with normal budgetary allocations. Both UNCC and OFEDES indirectly benefit the farmers: for instance, the Government bears 10-12% of the operating expenses of irrigated agriculture projects managed by UNCC, thereby reducing the levies payable by the farmers. The situation of SONIPRIM and SOTRAMIL, commercial-type organizations which had cumulative losses of about CFAF 45 million each at the end of 1972 that are borne by the Government budget, is linked, in various ways, to their still experimental nature and can no doubt be rememdied.

3.45 The most obvious form of subsidy concerns fertilizers. These are sold well below cost in order to encourage their use, which is still small (less than 800 tons in 1972). The following are the subsidy rates for 1973:

Cost Selling Subsidy delivered price Type of to farm to farmer Amount As percent Fertilizer (CFAF/ton) (CFAF/ton) (CFAF/ton) of cost

Urea (rice) 46,400 30,000 16,400 35

Simple superphosphate 46,300 20,000 26,300 57

Triple superphosphate 57,400 20,000 37,400 65

Urea consumption in rice cultivation is still low (about 100 tons a year). However, rice growing already receives considerable Government aid through development projects, whose infrastructure cost is not passed on to the farmer. Moreover, rice is one of the most profitable and, in any case, one of the most reliable crops in Niger. In these circumstances, and bearing in mind that its elimination would reduce a net agricultural income per hectare of about CFAF 120,000 by only CFAF 1,225, the urea subsidy does not appear to be justified, while it may be justified in the case of other fertilizers as a necessary incentive for their use for example in cotton cultivation. 1/

Taxation

3.46 The overall role of taxation of agriculture and parafiscal charges was discussed in the general introduction. Niger's fiscal policy instruments have remained basically unchanged during recent years; the only noteworthy

1/ However, the recent and foreseeable evolution of phosphate and petroleum prices and the consequent increase in the cost of fertilizers will put the whole question into a different context where the choice will be between much higher subsidization or no use of fertilizer. - 38 - change was the two-stage elimination of livestock taxes under the 1973 and 1974 Finance Laws. In view of the losses caused by the drought, this action is understandable. It will perhaps also facilitate the taking of a livestock census and, in a general way, make stockraisers less suspicious of Government actions and make it easier to implement projects affecting them. The lost revenue from this tax (CFAF 665 million in 1970/71) could be made up by special subsidy from FED in 1974.

3.47 Little is known, for lack of information on farm budgets, about the real tax burden on the farmer, and even less about its impact on farmers' economic behavior. Direct taxes -- the DIF (impot du minimum fiscal) and the TA (taxe d'arrondissement) -- have remained unchanged over the last four years and amount to CFAF 1,000 to 1,500 (depending on the region) per adult over fourteen. This is already a relatively heavy burden since it would represent 7-10% of average agricultural income, including subsistence consumption. But the rigidity of direct taxation, at a time when agricultural incomes are falling sharply, increases the burden to the point that 1973/74 collection will no doubt prevent serious difficulties in most areas. The percentage rates of taxation of income from cash crops, through the mechanisms of producer prices, marketing profits and export duties are both very much higher and subject to wider fluctuations. Thus, for 1972/73, the total revenue to the Government per ton of groundnuts exported was about CFAF 34,000, i.e. 40% more than the amount received by the grower, whereas until 1967/68, this taxation turned out to be negative in most years as producer prices were in fact subsidized. By levying an increasing proportion of the margin between the producer price and the world market price when the latter rises as has been the case, the Government is in fact applying progressive taxation of producers' income at a rate which, in the final analysis, would appear to be governed more by (perfectly legitimate) budgetary considerations than by any concern for fiscal equity.

Agricultural Credit

3.48 The system of agricultural credit jointly and severally guaranteed by the village as a community on the basis of sales is an original system which, in spite of the low level of available income, seems to have been more successful -- or at any rate less unsuccessful -- than other systems of agricultural credit in Africa, at least from a technical standpoint.

3.49 The agricultural credit procedure varies according to whether the Caisse Nationale de Credit Agricole (CNCA) is lending to the members of cooperatives or to wage earners. In the case of a cooperative, the needs in terms of means of production are assessed at arrondissement level by the local extension services or by UNCC staff. Requests examined at arrondissement level are in practice forwarded to CNCA with the opinion of the UNCC departmental representative. In areas where UNCC operates, it takes part in the collection of loan repayments. Individual applications originating from officials or wage earners fo-r agricultural projects (e.g. for the development of - 39 -

vegetable growing) are sent directly to CNCA which usually merely checks that the borrower's income will enable him to service the loan. Appendix table 18 summarizes the agricultural credit operations for the last three years. Pro- duction loans show a continuous increase. Medium-term loans (about 80%) are granted basically to finance the development and equipping of individual vegetable gardens and orchards. Short-term loans provide crop-year credit, particularly to cooperatives. Following the introduction of a maturities control register enabling closer track to be kept of repayments, the rate of default on normal payment installments fell from 14.8% at September 30, 1971 to 5.54% at September 30, 1972.

3.50 This apparently satisfactory management of agricultural credit in fact conceals some diversion of the credit (especially in the case of medium- term loans) to other than the declared uses and it is not certain that the rural world is in fact the main beneficiary. Moreover, the actual interest rates charged appear to vary widely, without any apparent economic justification, and are often extremely high, at any rate in comparison with the rates structure of the BCEAO 1/ area. Finally, in deciding, in February 1972, to withdraw its allocation of funds to CNCA the Government placed CNCA in a difficult financial position which it is meeting, provisionally, through short-term advances from BDRN. It all seems to suggest that CNCA could well be abolished very soon and the agricultural credit operations handed over to BDRN. 2/

D. Training

3.51 With a 5% literacy rate, 12% school enrollment and an education system poorly adapted to the country's needs and potential, agricultural promotion is not an easy task in Niger. However, training programs for the rural adult masses have been in operation for 10 years in the fields of community development promotion and instruction about cooperatives. More recently, with a view to increasing the impact of these two programs, a functional literacy program was added.

3.52 As regards agricultural cadres "A" level professionals (agronomists or rural engineers) are mainly trained in France (but also at Dakar, at Abidjan and in the United States). "B" level professionals (field advisers and conducteurs) are mainly trained in West Africa (agriculture: at Katibougou, Mali; rural engineering: at Saria, Upper Volta; cooperatives; at Douala, Cameroun). "B" level livestock technicians complete their training (second cycle) at Niamey, at the Ecole des Assistants et Infirmiers d'Elevage (School for livestock Technicians and Veterminary Aides). The training of "C" level technicians (all fields of specialization is given in Niger itself, at the Institut Pratique de Developpement Rural (IPDR), at Kolo; the course lasts three years (annual graduation: 30 to 40, plus 15 in the stockraising section, first cycle). The status of professionals currently under training, by category and year when they will enter into service, is shown in the following table; t/ Banque Centrale des Etats de l'Afrique de l'Ouest. 2/ Banque de Developpement de la Republique du Niger. - 40 -

Category 1974 1975 1976 1977 1978 1979/82 (forecast)

Engineers, Al 1/ 15 6 4 5 2 42

Engineers, A2 6 3 13 13 2 8

Extension Advisers, B1 10 10 15 1 2 a year

Technicians (Conduc- teurs) B2 14 16 15 10-15 a year

Technicians (Agents Tech- niques) Cl ~55 62 52 52 about 60 a year, including 25 former "D" level technicians retrained

3.53 A better picture of this training effort is obtained by comparing the number of professionals under training above with the number of similar staff currently working in the Ministry of Rural Economy:

Category: Al A2 B1 B2 C1 D E

Number: 16 5 59 67 99 421 87

The planning of training is a particularly complex task. Although it is relatively easy to forecast the requirements of the various Government services, the launching of specific operations (especially productivity operations) causes sharp surges not only in demand (when project financing is obtained) but also in supply when, several years later, the project is completed or it settles down to its normal operational tempo with reduced staffing requirements. These surges have a particularly heavy impact on the budget, since the staff generally have civil servant status; moreover, other positions consistent with their qualifications are unavailable within Niger's economy. Young professionals of category Al must of necessity occupy posts of responsibility which they will hold for a long time. This makes their personal and professional qualities a matter of prime importance.

1/ Mostly veterinarians. - 41 -

E. Agronomic Research

3.54 Agronomic research has been entrusted to French institutes under an agreement between France and Niger whereby the costs are borne equally by the two countries. The Institut de Recherches Agronomiques Tropicales (IRAT) is the most important institute in Niger and also the longest established (1962). It is concerned mainly with general agronomy, food crops, fodder crops, vegetables and groundnuts. The Institut de Recherches sur le Coton et le Textile (IRCT) resumed experimental work on cotton in 1968. The Institut Francaise de Recherches Fruitieres outre Mer (IFAC) and The Centre Technique Forestier Tropical (CTFT) are working in Niger but not in the research field.

3.55 IRAT operates three stations, at Tarna near Maradi; at Kolo near Niamey; and (since 1968) at Tillabery, for experimentation with sugar-cane growing on the river terraces. There are also about six support points, representative of agricultural areas, and a network of testing stations under the department of Agriculture. Also, since 1970 two laboratories using isotopes for agricultural research have been set up, in collaboration with CEA, 1/ at Niamey, one for mapping water movements (isotope hydrology) and the other for insect tracking (isotope entomology).

3.56 Financing of costs incurred over the period 1962-72 was obtained under the general agreement between France and Niger and a number of special agreements between IRAT and the Niger Government. The figures for recent years are as follows:

RESEARCH BUrGET OF IRAT (CFAF million)

1967 1968 1969 1970 1971 1972

General General program; 51.4 57.8 48.0 45.9 44.8 46.3 agreements Isotope agronomics - - - - 23.5 16.1

Special Support points 8.4 6.5 5.5 9.5 11.4 11.4 agreements

Agricultural 11.8 29.0 17.6 17.6 - - hydraulics

Sugar cane - - 32.8 28.7 35.0 35.0

1/ Commissariat a l'Energie Atomique (French). - 42 -

3.57 Research findings-so far concern mainly soil deficiencies, soil rehabilitation and maintenance fertilization, and crop varities and cultivation techniques relating chiefly to groundnuts and cotton but also to grains, niebe and vegetables. Annex II gives some detail on these lines of research which form the technical basis for improvements to be introduced into agricultural operations. - 43 -

PART TWO

LONG-TERM RURAL DEVELOPMENT PROSPECTS

Niger's long-term rural development prospects depend in rart on the present situation of the rural economy and projects already under way described in Part One. They also depend on the actual objectives set by the Government, and the means it proposes to deploy, at this particularly difficult time in the country's economic history (Chapter IV). The range of policy choices, however, is limited by a number of constraints of varying rigidity which together constitute the heart of the development problem (Chapter V). The prospects derived in Chapter VI take account of this background situation; the possible programs are discussed, with their costs and anticipated results for the current decade, while the longer-term outlook is summarily presented so as to bring out the essentially new character of the problems that will arise after the coming decade. - 44 -

IV. GOVERNMENT POLICY-DIRECTIONS AND OBJECTIVES

A. Historical Background

4.1 The Government program embodied in the Perspectives Decennales 1965/74 (Prospects for the Ten-Year Period 1965-74) placed the emphasis on growth of agricultural production and income, and proposed:

- strengthening of rural structures, by intensifying the extension work started in 1963, and of cooperative organization;

- improvement of farming methods through distribution of means of production such as pesticides and improved seed and promotion of animal drawn cultivation;

- development of irrigated agriculture regarded as of priority importance for increasing and diversifying agriculture production: in fact the Plan for 1965/68 provided for investment expenditures in such projects four times as high as in projects for improving the productivity of rain-fed crops.

4.2 The draft 1971-74 Plan showed evidence of the lessons learned from the earlier operations:

- as regards improvement of traditional agriculture, it took into account the difficulties encountered in, and slow pace of, the general dissemination of modern, progressive methods; it did not propose any substantial changes in the techniques themselves but it did recommend that the agricultural programs be implemented within the context of operations whose location, objectives and duration had been more precisely defined than previously; such operations were also to generate their own voluntary extension svstem to take over from the large team of extension workers from the department of Agriculture needed for launching the operations;

- in connection with irrigation projects it took note of the poor results accomplished in the past but once again provided for a substantial volume of investment:

- finally, in the area of institutions, it included a plan for reforming the Government services, with the establishment of a large Rural Production Development Department (Direction Generale du Developpement de la Production Rurale -- DGPR), to improve the coordination and efficiency of the departments and agencies responsible for the various agricultural development functions. - 45 -

4.3 Although the draft 1971-74 Plan has not got beyond the working document status, events of the last few years have served only to confirm the views and general directions in it. At the same time, the prolonged drought has brought home the fragility of the results of the productivity efforts and the need for tighter planning and execution. It has also made the development of livestock policy, which the authorities have been trying for several years to formulate, a matter of urgency. Finally, the drought has demonstrated -- incidentally, it is true, but nonetheless forcefully, -- the potential value of irrigation projects, just at a time when considerable improvement is becoming evident both in their design and in their operation.

4.4 A new ten-year "Perspectives" extending to 1982/83 has been under preparation for three years. The draft sectoral reports, two of which -- Rural Economy and Regional Planning -- are mainly concerned with rural development, were studied and revised by ad hoc commissions during 1973 and were being processed into a synthesis report and were to be approved before mid-1974. The Bank mission was not informed of the content (apparently substantial) of the preliminary studies and reports, which were regarded as internal working documents.

4.5 The slowness of the transition from the plans and programs growing out of the first "Perspectives" to the formulation of policies for the future seemed to indicate a certain hesitation on the part of the former Government concerning the forms and perhaps even the principles of planning, especially for the rural sector. While not all the reasons for this sort of "wait and see" attitude could be discerned, it is fairly clear that the mediocre accom- plishments of past planning, as they were felt to be, and the fragility of the results achieved, clearly demonstrated by the effects of the prolonged drought, no doubt justify an in-depth review of policies. Added to this is the persistent weakness of the planning services, both at the center and in the technical departments. This weakness stems essentially from the shortage of middle level and supervisory personnel which, to make things worse, nullifies the efforts of the small number of senior civil servants by burden- ing them with subsidiary administrative duties that should not be their responsibility. The slowness and inadequacy of the preparation of development programs and projects is aggravated by sometime cumbersome and widely varying foreign aid procedures. The result is limited "absorptive capacity" and to a certain degree difficulties in formulating and formalizing long-term policies. Also, the efforts to alleviate the consequences of the drought are inevitably absorbing the Government's energies at the present time and will continue to do so for some time. - 46 -

B. Apparent Objectives

4.6 Despite the lack of an official overall policy, some important general objectives of the Government 1/ may be inferred from the indications that exist:

(a) Priority attention to food production, by intensifying farming and raising yields, without expanding acreage. The food deficit hampers any agricultural development by discrediting the improved farming methods in the eyes of the farmers and causing them to abandon cash crops. Increased food production will be sought both through productivity operations relating to rain-fed crops, with inseparable association of grains and cash crops, and through efficient use of available water, achieved mainly, though not solely, through classical irrigated agriculture projects.

(b) Drought protection and land conservation. The land is threatened by a process of "desertification", the most important indications of which are the reduction of fallow periods in the most heavily cultivated areas, more serious effects of river floods, lowering of the water table, and deterioration of pastures at the southern limit of the pastoral zone and around certain important watering points. A major element of land conservation policy would be to establish farming/stockraising specialization, backed by regional coordination, in place of the present North/South dualism, with its disastrous results. A further element of such a policy would be a vast reforestation program.

(c) Expansion of exports, in two ways: first, by recovery of traditional agricultural exports (groundnuts, cotton and livestock), all badly affected by the drought; and second, by developing other exports that today are of only secondary importance (meat, niebe, millet products, fresh vegetables etc.) to be sold on regional markets considered to offer better prospects for Niger's products, at least in the longer term, than world markets generally. Increased groundnut and cotton production will be sought within the context of the productivity operations discussed earlier in connection with food crops.

(d) Raising of the value of agricultural production by local processing, thereby increasing the value added in Niger, obtaining byproducts for local use and reducing transportation constraints (waste, losses and high-freight costs for shipment of low unit value). This objective of raising the value of production applies to both local consumption and export products.

1/ This refers to the previous Government: there are no indications however that the objectives of the new Authorities will be essentially different. - 47 -

(e) Human development, meaning in the case of rural populations, raising of rural money incomes; improvement of rural living conditions (drinking water supply, access roads, health facilities); development of basic education, expanded use of audiovisual aids; and regional development, avoiding the excessive geographical disparities and revitalizing secondary urban centers notably Maradi, Zinder and Tillabery so as to avoid systematic polarization around Niamey.

4.7 The style of future development will be the same as that followed by Niger since independence, based on the active participation of the rural population without disrupting traditional productive and social structures. "Integrated action" is still the choice, with the cooperative as the basic unit. Cooperative organization itself will be strengthened by a better adaptation of structures to functions: the GMV at the village level performing the credit function, based on joint and several community guarantee; procurement and extension work being handled through the cooperative; and, finally, marketing being provided at ALC level, the ALCs managing the cooperative markets. Pending reform of the complex of government services integrated action would be increasingly the responsibility of UNCC.

4.8 Following this same socio-political orientation, the emphasis would be on large-scale "human investment", i.e. intensive use of labor force for works of general interest - though its objectives and methods have yet to be determined.

4.9 In the practical application of these methods based on population participation, the Government would continue, as in the past, to play the role of energizer and coordinator, through public agencies or mixed companies performing "downstream" activities -- marketing, processing and agro-industrial operations.

4.10 The Government would of course have a decisive role in the financing of development operations. But, like the quantitative production objectives, the means of financing have not yet been decided. Public sector investment in projects included in the 1972/82 ten year "Perspectives" are reported to total CFAF 100-120 billion; however, rural development's share of this total is not yet known and the Government's intentions in this respect were not clarified by the President's speech at Ouagadougou, in September 1973, when he mentioned sums of twice that amount for drought control and mobilization of water resources alone.

4.11 This report is thus being prepared at a time when, in the development field, the transition from intentions to action programs has not yet been made. Consequently, there is no question, in what follows, of suggesting alternatives to or evaluating official policies. The proposed action program cannot be more than an outline of one possibility -- the most reasonable possibility, in the mission's view given the nature of the development problem. It is certainly not the only possibility, nor does it claim to be a "plan", which is something only the Niger authorities themselves would be in a position to draw up, but only a broad stategy based on a pattern of feasible projects. - 48 -

V. PROBLEMS AND CONSTRAINTS OF LONG-TERM RURAL DEVELOP1ENT

5.1 The most serious of the problems the Government must now tackle is, of course, that of the food supply of the rural population during 1974, in view of the massive shortfall in the 1973/74 food crops harvest. The dimensions of the problem have already been outlined. However, this report is directed exclusively to an analysis of the prospects of rural development in the longer term because the solutions to the immediate difficulties are known and the means to be used are being progressively mobilized. 1/ Moreover, the basic problems, including the short-term problems, can only be properly understood in a much longer perspective and designing lasting solutions to them will itself take several years. There is no attempt at predicting changes year by year in terms of marginal variations in economic aggregates, as can be done for more complex economies. The essential reason for this is not only the lack of statistical data but the very nature of the economy and particularly of the agriculture economy in which uncontrollable exogenous factors -- beginning with climatic conditions -- play a leading role and are themselves largely unpredicatable.

5.2 The conditions governing long-term rural development are the result of a combination of natural and geographical factors that are basically un- changing and, therefore, largely recognized; of human and demographic elements that evolve slowly and are perhaps less readily recognized; and, finally, of more short-term influences linked to national and international economic policies. This set of problems may be conveniently examined in the form of a series of more or less "plastic" constraints.

A. Natural Constraints

5.3 The natural constraints are, of course, the least tractable. They are rigid per se and are aggravated by reason of their combination with other factors. For example internal and external distances: no point in Niger is less than 1,000 km from the coast; the main route for the shipment of exports, through Nigeria via Lagos, is 1,400 km long; the "useful" belt of Niger extends for 1,500 km; the extreme points of economic activity -- Agadez, Arlit, Bilma -- deep in the Sahara are twice as far from the coast, etc. The result, of course, is high freight costs, as the following examples show (another less measurable but serious effect is delays in delivery of goods, as the experience with food aid imports amply demonstrated):

- the cost of a ton of normal superphosphate is 80% more at Niamey and 120% more at Maradi than at the port of Cotonou;

- the price of a ton of fuel oil delivered Niamey is about twice its price on the coast (before the oil "crisis");

1/ For an overall assessment of the short term economic outlook. See Main Report, Part Two A. - 49 -

- the price of a ton of shelled groundnuts delivered at the port of exportation (Cotonou, Lagos) includes an overland freight cost which is 6 to 8 times as high as that of a ton of groundnuts from Senegal exported through Dakar;

- of the cost of imported sorghum delivered Niamey, overland freight from Cotonou or Lagos accounts for 35%;

- the price of a ton of Niger cotton includes, at Cotonou, a freight cost element 3 or 4 times as high as that of a ton of Ivory Coast cotton delivered Abidjan, etc.

Niger's geographical position thus imposes a heavy handicap on all agricultural products competing with those of other countries of the region; such products at present account for one-half to two-thirds of its total exports.

5.4 On the other hand, the high transportation cost is a form of natural protection that correspondingly should expand the domestic market for locally produced goods. This should be an important factor for industries processing local agricultural products such as groundnuts and cotton. Un- fortuantely, the very limited size of the market largely nullifies this advantage, as the situation of the industries already installed seems to show.

5.5 Another more effective advantage of Niger's landlocked position is to place at its very doors the markets of the economically more important and more dynamic coastal countries, particularly Nigeria. Niger is already turn- ing this to account through its exports of cattle and a few other agricultural goods. However, there are two kinds of obstacles: first, the coastal countries are to a large extent competitors of Niger for the agricultural products they consume, more particularly Northern Nigeria; second, they practice certain forms of protectionism, for example in the case of meat, though this obstacle could at least in theory be eliminated. Be that as it may, the somewhat theoretical concept of an economic "domination" must surely leave room for the "pull" effect of the economy of Niger's powerful neighbor, provided that inter-governmental cooperation is organized. In this connection the revival of the joint Niger-Nigeria commission is an encouraging indication.

5.6 Probably the most severe limitation is the climatic constraint. Situated in a climatically marginal area, Niger is subject to erratic rainfall resulting in years or periods of inadequate rainfall, such as the present period in which rainfall has been below the average 1930-1960 level for 5 out of 6 years. Droughts are, after all, the crises points, or peaks, of a general hazardous situation. The short and long-range consequences are many: food shortages, expansion of cultivated area at the expense of fallow or grazing lands, wiping out of efforts to increase producitivity, abandonment of cash crops and reduction in the productive potential of herds, all of which combine to bring about the stagnation or regression of agriculture and finally - 50 - to make planning itself problematical. As to the question of whether the present drought is the beginning of a long downward trend in rainfall or a particularly severe accident as has occurred twice, it would seem, over the last 50 years, is a question that is disputed among scientists.

5.7 The longitudinal geographical division of the productive part of Niger into separate agricultural and pastoral stockraising areas, as at present, cannot be described as a successful regional specialization. On the contrary, it crystallizes the dualism -- or separatism -- of stockraising and farming, with clashes of interest observable in two areas of confrontation. The progressive shifting northward of the area of crop cultivation is depriv- ing the pastoral zone for many years of its best pasture land without any substantial crop yields to show for it. And from North to South, the transhumant herd movements, northward at the beginning of the crop season, but especially southward, at the end of the crop season, when the millet has not yet been harvested, gives rise to perpetual conflicts which are further aggravated now by the effects of the drought.

B. Population Constraints

5.8 The demographic constraint, because it evolves slowly, is perhaps less clearly Elt. It is, however, already severe and will become critical in the next decade. It has two complementary aspects. First of all, the rapid population growth -- whether it is 2.2 or 2.8% -- and the consequently "young" structure of the population means that the ratio of dependents to gainfully employed workers is high; that the necessary social outlays -- particularly on education -- are heavy, and the number oL jobs to be created is large; that is to say "higher", "heavier" and "larger" than would be the case with a lower rate of population growth and, as a matter of fact, higher, heavier and larger than Niger's economy can support. However, this aspect of the demographic problem applies throughout the economy and not only to the agricultural sector.

5.9 The second aspect of the problem is more of an agricultural nature. It concerns the ratio of rural population to available agricultural land. however, incomplete the available demographic data and however imprecise the very definition of agricultural land, it can scarcely be denied that there is an increasing imbalance between population and land the major effects of which are the gradual bringing under cultivation of "imarginal" land in the north, overgrazing and southward incursion of the herds, shortening of fallow- ing time and, finally, deterioration of the country land resource. Even though in the short term the effect of climatic factors on the harvests masks the underlying phenomenon linked to population growth, that phenomenon appears nonetheless very real if judged in a long-range perspective: ten years from now population will have increased by 25-30%, and in 20 years, by 55-70%. And neither increases in yields -- more and more difficult to achieve as ecologically less favorable areas are settled -- nor migration to the cities will make a substantial expansion of area under cultivation any less inevitable. The question therefore is: is it realistic to believe that the - 51 - necessary margin exists for such an expansion? On the contrary, is it not more realistic to acknowledge that the growing imbalance between population and land is already one of the main causes of the "desertification", a. phenomenon that is perhaps too readily attributed only to the droughts?

C. Water Resources: Constraints

5.10 In any event the development of water resources is of vital importance to Niger's economy, in which men, herds and crops almost everywhere face the problem of a water regime that is unbalanced in relation to their needs. The advantages of water management in dry-tropical climates are well known: increased land productivity and production, more rural employment and above all a more secure food supply and a better nutritional balance. Unfortunately, water use faces two main difficulties in Niger:

- the resources are very limited;

- their economical use is very difficult because of the heavy investments required, the small number of commercially profitable products, and management problems arising more particularly from the change in the farmer's mentality required.

5.11 The potential for irrigated agriculture deriving from the conjunction in the same area of suitable water and land resources must be appraised on a site-to-site basis:

(a) On the Niger River, which flows through the country for 500 km of its course, most of the depressions (heavy hydromorphic soils, naturally more or less flooded) and terraces (good quality light- heavy soils) are situated between Say and the Mali frontier. There are probably about 30,000 hectares of depressions (average area: 300 ha), particularly suitable for rice cultivation, and 20,000 hectares of terraces. Irrigation of these 50,000 hectares would require a flow of the order of 100 m3/s. Although the average annual discharge of the river is about 1,000 m3/s, its low stream flow regularly falls below 100 m3/s for 50 to 80 days in June, July and August. Mean low streamflow is 41 m3/s; the lowest ever recorded was 3 m3/s (June 1973). Optimum use of land and water resources thus calls for either adaptation of agricultural programs and of new land utilization programs to the water resources available at low streamflows of an acceptable frequency, or raising of this low streamflow by river-regulating works enabling irrigable lands to be fully utilized;

(b) On the Komadougou River, in the East, the average discharge would permit bringing under cultivation only 5,000 hectares of depressions out of the 10,000 hectares potentially reclaimable; - 52 -

(c) The Maggia valleys are the only ones suitable for gravity irrigation from hillside retaining basins. However, these sites present many problems (cost, erosion and silting up of the basins, unsatis- factory water filling) and their potential will never exceed a few thousand hectares;

(d) The drv valleys (dallols, goulbis) usually have fertile soils. They have limited surface water resources 1/ but easily exploitable ground water near the surface. These could irrigate an area limited to about 50,000 hectares:

(e) 35,000 hectares of terraces could be irrigated on the shores of Lake Chad;

(f) Finally, the Telak and Errazer plains probably represent 10,00 to 20,000 hectares irrigable essentially by means of tubewells.

This gives a total maximum of 150,000 to 165,000 hectares potentially usable; of these a little over 4,000 hectares has already been developed.

5.12 It may be said that water control tends to "industrialize" agriculture by removing the influence of unpredictable weather condition and by im- posing strict discipline to the labor factor. That is, of course, what makes it attractive but it is also the source of its constraints. The economic- efficiency and financial-return problems of irrigated agriculture projects are particularly difficult in Niger, where the cost of site development per unit of area is high and where products having a high specific value and assured of regular and large commercial outlets are few (sugar cane, rice for domestic consumption; off-season vegetables for export; possibly fodder crops for fattening). What is more, irrigation water is not merely one additional input into the pre-existing farming system; in practice irrigation demands a change in the outlook of the farmer by plunging him into a high-productivity system whose collective constraints and costs he is not ready to bear. The result is management difficulties affecting the maintenance of structures as well as the collection of levies.

D. Economic Dependence

5.13 Of a completely different nature are the constraints linked to Niger's economic dependence, whether in the matter of investments, commer- c4al outlets, or sources of supply. More than 90% of agricultural investment is financed by bilateral or international aid. Apart from the fact that it is difficult to make long-term forecasts concerning such investments and thus to incorporate them into planning -- of which, paradoxically, they represent the major source of financing -- their number and the diversity of criteria greatly complicate the task of administering them and slow down loan absorption. Whether it is groundnuts or cotton, which are sold on fluctuating world markets, or meat, whose importers stringently control the tariff conditions (Nigeria) or retail selling prices (Ivory Coast), Niger's

1/ The discharge of the Maradi goulbi has been much smaller since a dam was built upstream in Nigeria. - 53 - agricultural exports are also greatly dependent on external factors on which Niger can at most exert only an indirect influence. Finally, although inter- governmental regional coordination is necessary to Niger, to enable it rationally to solve its problems in the fields of transportation (navigability of the Niger River, roads), dams (Kandadji project, stradding the Mali frontier), water (Niger River, Lake Chad), and power (electricity from Nigeria), it is also to some extent the source of delays and procrastination. The very fact that Niger is a member of no less than ten regional coordination bodies demonstrates the extent of the problem.

5.14 The present energy crisis spotlights the dependence of Niger so far as its supply services are concerned. The agricultural sector will be mainly affected in three ways: like the rest of the economy, by the rise in transportation costs, which will further weaken Niger's competitivity on export markets; by the rise in the cost of irrigation, the most expensive element of which is pumping now primarily based on motor-driven pumps that use fuel oil, the price of which is expected to double in early 1974 relative to the pre-September 1973 level; and by the rise in the price of kerosene used by rural families for household needs. Furthermore, the dramatic rise in the price of certain raw materials such as phosphates and the very possibility of shortages in fertilizers will aggravate the already difficult economic conditions under which they are used. On the other hand, the prices outlook for agricultural products such as groundnuts, cotton and meat has improved although it is widely believed that the peaks of 1973/74 will not be sustained.

E. Institutional Constraints

5.15 In Niger, as everywhere else, the past has bequeathed institutional structures as well as practices and ways of thinking that are not necessarily suited to the demands of future policies. It is no easy matter to change them. Thus, although rural development institutions have received the attention of the political authorities ever since their establishment, their powers and duties have still not been clearly defined or their activities properly coordinated at the national and regional levels. This is primarily a problem of institutional rigidity that still remains to be solved. As already noted, rural development was based on the implementation of an imaginative approach covering the animation, agriculture extension and cooperative development. In practice these structures have not yielded the expected results, owing to lack of coordination, difficulty in rapidly superimposing very different techniques on each other, waste of energy and time in competition between services, lack of competent professionals and of inadequate budgetary allocation.

5.16 The first type of activity undertaken to alleviate these difficulties was the "integrated action program", based in each district on an annual cropping plan adopted by all the services and implemented by a desig- nated coordinator. At departmental level there is an advisory committee - 54 - attached to the Prefect, the Departmental Technical Committee (COTEDEP), composed of the subprefects and local heads of the various Government departments involved. Finally, there is a regional development service composed in each department, of a team consisting of an economist, a programmer and a training officer under the supervision of the relevant department in the Ministry of Development and Cooperation (MDC). To a large extent, however, this organization was more theoretical than effective. In the end, the difficulties of coordinated action that characterize the present structures had already led the former Government to devise a reorganization plan of which the essential elements were to be the following: maintenance of the three basic functions: animation, agricultural extension, development of cooperatives; incorporation of the lessons of past experience concerning a more effective decentralization of tasks to increase responsibilities at department and district levels; proper integration of the activities of the various services at each level; choice of the "project" approach, whereby each operation is more strictly defined as to area and timing, is allocated specific resources and is assigned specific objectives, with follow-up supervision.

5.17 At national level the idea was to differentiate research, design, control, and evaluation agencies from executing and managerial agencies; and to entrust each project, each time to a single supervisory agency. This supervisory agency would not-necessarily always be the same. It might be the UNCC in certain instances, or ad hoc agencies established in response to the particular needs of a given project, the design responsibilities being entrusted to a rural production development board within the Ministry of Rural Economy (MER). The reorganization thus outlined appears to have made little headway (before the change in Government) a situation that is likely to have a dis- couraging effect at all levels and to jeopardize what has already been accomplished, which is considerable. At all events, it will perhaps be possible to put the principles outlined above into practice on an experimental and temporary basis in certain very specific schemes such as the forthcoming integrated rural development project for Maradi.

5.18 Until 1963/64 a favorable price support system by France permitted to escape world market -conditions altogether and provided an incentive under which production began to increase to reach its peak for groundnuts in 1966/67. At that time and until 1967/68 a combination of price support from France being progressively replaced by compensatory payments from EEC, still guaranteed above world market prices. All supports were eventually terminated after the 1967/68 campaign. As the price support systems of the past were to a large extent taken for granted and EEC aid for "diversification" did not in fact lead to any significant development of production away from groundnuts, it can be said that price policy in the past - with very active external participation - was a rigid system conceived as means to ensure more stable incomes from production rather than as an instrument for allocating resources in response to market conditions. "Stability of export prices" is indeed one of the most forcefully expressed themes of Nigerien representatives in international circles. But then, and especially from 1970 onwards, world market conditions improved and the problem of adjusting to world conditions has thus vanished - though only to be overtaken by grave production difficulties due - 55 -

to drought. However, with its policy of encouraging local processing of agricultural products the Government has introduced new rigidities and serious distortions into the price system as already indicated (see para. 3.41). These are the more serious that they are embodied in contractual arrangements with the industrialists concerned that may prove difficult to change. The same applies to the various incentives - notably tax holidays, protection and other privileges that amount to creating sheltered industries rather than incentives to higher productivity.

5.19 Other forms of self created constraints could be cited: thus, also in connection with industrialization of the groundnut industry, it is clear that an institution like SONARA (see Annex XIII) that was established to favor exports of groundnuts is not any more justified, at least in this role, since an increasing share of the crop is sold to the local oil mills. However, it is certainly not an easy task to remodel such a large institution.

5.20 The foregoing analysis of the long-term problems of rural development may seem unduly pessimistic. But the truth is that the task is enormous and a full awareness of the constraints on progress is essential. The elements of a possible strategy and the results that it can be expected to produce are set forth in the next chapter. - 56 -

VI. STRATEGY AND PROSPECTS

This chapter first establishes the desirable general objectives (A) and then presents the qualitative content and the justification of the proposed strategy (B). It goes on to quantify the essential elements of the program, the results expected and the cost, and concludes with an examination of the longer-term problems.

A. General Objectives and Development Styles

6.1 The general objectives set by the former Government, explicitly or implicitly, appear to be generally in line with the fundamental facts of Niger's physical and economic situation, subject to the action that will be taken to deal with the difficult population problem.

6.2 An assured food supply must definitely be given absolute priority: the present deficit years show how a food shortage can paralyze all development efforts, on the part both of the farmer, who tends to neglect everything for a policy of "every man for himself", and of the Government, whose financial and administrative resources are seriously impaired by the application of short-term solutions. The lack of food poses a triple problem of volume, quality and safety. In this regard, irrigation projects, whose production is independent of the vagaries of the climate and at the same time the highest per unit of land will have a very special role to play, side by side with a policy of building up safety stocks.

6.3 Exports also necessary, to finance irreducible imports, reduce foreign capital needs accordingly, and increase farm income. Tnis means that, in the foreseeable future, the margin of choice between food production and agricultural exports is a very narrow one: the problem is more difficult and consists in combining the development of the one with the development of the other. It is therefore necessary to revive traditional exports -- groundnuts, cotton, cattle -- and to develop new exports: because of the fluctuations in world prices, diversification of exports is a prerequisite of their sustained development. Fortunately, regional trade offers good prospects for Niger's products, i.e. products already adapted -- and capable of being even better adapted -- to the country's severe soil and climatic conditions. Niebe is in growing demand in traditionally consumer countries (including Nigeria, of course, but also in Brazil). Furthermore, its high protein content opens up possibilities, for industrial processing as a foodstuff additive. Although exports of meat (as opposed to animals on the hoof) have thus far been handicapped by tariffs and non tariff barriers such as control of consumer prices in the coastal countries, prospects are for an easing of these bottlenecks. However, the volume, quality and reliability of production will have to be improved to meet the increasing demands of external markets. Given an improvement in quality rice is assured, in the event of local surpluses that should be marginal in any event of a long-term market in the coastal countries, notwithstanding these countries' efforts to - 57 -

increase their own production. There are also promising prospects for onions (exported fresh to the neighboring countries and dried to Europe) and for off-season fresh vegetables exported to Europe and the urban centers on the coast.

6.4 Conservation of natural resources is a pressing need, all the more so because in Niger they are scarce and precarious. The key lies in the intensification of agriculture -- by restoring and maintaining fertility over a stable, or even reduced, cultivated area -- and rational pasture management. But these are, of course, long-range undertakings and the progress that can be achieved is in any case limited in the conditions prevailing in Niger.

6.5 For this reason, this third objective, like the other two, is logi- cally intermeshed with a fourth objective: population 2lanning, which does not at present form part of the Government's policy. But the problem is nevertheless posed here and now, not only in the present situation of drought and famine, but also because of the sLow effects of desertization, which is the reflection of the growing imbalance between population and land. Furthermore, in the long run efforts to exploit the limited possibilities for restoring and safeguarding the food balance itself would rapidly be reduced to naught without a parallel effort to moderate the population growth. The general problems of population growth have been discussed above (paragraphs 5.8 and 5.9). To illustrate the points made in terms of production goals, it is enough to mention the facts that the irrigable potential of the order of 150,000 hectares points to a potential production of approximately 600,000 tons of "grain." Assume 30 years are needed to realize this potential. In that time the population, assumed to grow at the minimum rate of 2.25% annually, will increase to about 9 million, and its food needs will increase by more than 1 million tons a year. This would be the rock of Sisyphus on which Niger's development policies might well be wrecked. There is no doubt that in Niger, most of whose people are Moslem, the idea of birth control, and the use of birth control methods, will take a considerable time to spread and to produce tangible results 1/. This is one more reason for raising the issue openly here and now. Since "human development" is one of the most constantly affirmed political goals in Niger it should be possible to promote the necessary awareness of this problem. An active population policy, however, will be only one of the elements in the balance between population and resources; moreover, the effects of such a policy take a long time to materi- alize; in no hypothesis will the population prospects for the next ten years be substantially changed.

6.6 As for methods or styles of development, the choices made appear to be wise and well suited to conditions in Niger. But their application calls

1/ See, however, the examples of Egypt and Tunisia -- and in tropical Africa, that of Kenya, in which a family planning policy is in effect. In Zaire the "principle of planned parenthood" has been proclaimed by the President. The Malagasy Republic has just decided (January 1974) to adopt the same policy. - 58 - for further improvements. An example is the implementation of rural development schemes in which the participation and responsibility of farmers, through the cooperative movement, is unquestionable, and in which unit of responsibility and of management is desired; but in which the structural problems that have arisen have not yet been completely solved. If UNCC, for example, becomes the single supervisory agency of rural development schemes it would seem that its infrastructure, its new legal status and its recent administrative and accounting reorganization make it suitable for such responsibilities. But it would then need to have more qualified personnel and more local high-level staff. Two further measures are needed so that each project may be conducted as an enterprise, in which the results obtained may be judged in the light of the resources deployed:

- it should be possible for the officers of the agricultural and animation services of the project to be seconded full time to the agency responsible for the project -- for instance, the !NCC; where appropriate they should receive adequate allowances for the increase of their responsibilities;

- the problems of coordination that would thereby be eliminated should not be allowed to reappear, either between various Government services, or within the UNCC between its various departments.

6.7 "Human investment" is not yet very widespread in Niger 1/ even though some of the required conditions exist for a more intensive mobilization of one of Niger's principal resources, a rural labor force available during at least four months of the dry season for employment in investment projects with a high unskilled labor component: well digging, tree planting, building soil- conservation beaches and terraces, final irrigated agriculture improvements (embankments, leveling). But it would be an illusion to expect too much from such an effort: massive human investment presupposes supervisory structures and motivations that do not exist in Niger; it entails financial costs usually in excess of what is planned and in most cases it is only moderately productive. In any event, as emerges clearly later in this report, the capital needs of agriculture are going to increase substantially.

6.8 As already noted, agricultural planning or the mere designing of projects have been greatly hindered by the lack or poor quality of agricultural statistics. It is true that general censuses take a long time, are expensive and call for skilled personnel. But an improvement in this area could be obtained, at least in each of the current productivity schemes and in those to be undertaken to complete the agricultural coverage. It would consist in integrating the socio-economic surveys and the annual measurement of results as components of the project within which they would have the benefit of both field personnel and of ad hoc means, particularly financial. These surveys (particularly yield measurements) would serve initially to monitor the project

1/ "Investissement humain" i.e. use of non-paid labor for works of general interest, as it has been used so far for soil conservation in the Adder Doutchi Maggia and for well-digging. - 59 -

themselves but would also provide data for national statistics whose non- systematic character would be compensated for by their greater objectivity.

B. Overall Development Strategy

6.9 With the general objectives outlined, with the development style favored by the Government, and regardless of whether or not an active population policy is adopted now, the rural development strategy can very well be fitted into the operational framework represented collectively by the six types of programs which in varying degrees are already being implemented (see Chapter III). What needs to be done, however, while correcting their present shortcomings, is to impart to some of those schemes -- namely the productivity operations and irrigation projects -- a scope and dynanism hitherto unknown, to the point where, if it succeeds, thle implementation of all the programs will in fact constitute a new strategy.

General Coverage Programs

6.10 The general coverage programs, conducted by the field personnel of the Agricultural Service, within the constraints noted cannot be expected to achieve too much. They require, however, sharper focusing on their chosen field: the mass dissemination of "uncomplicated" practices beneficial in all circumstances, even when used separately, and requiring as little as possible in the way of supplies and credit. Examples are the pesticidal treatment of seeds, density of sowing, timing of sowing, regionalization of plant varieties in accordance with rainfall. They prepare the ground for the future implementation of more ambitious schemes. Their objective is not to provide a dense network of supervisory and other professional staff -- as is the case of specific projects -- but to arouse the farmers' interest, to inform and to give them simple technical advice.

6.11 The coverage programs, which are the principal justification for having field personnel from the Agriculture Service, should lead it to manage its personnel with greater foresight so as to serve as a "buffer stock" for the productivity schemes, the implementation of which will generate sudden surges in the supply of and demand for extension personnel.

Productivity Operations or Integrated Rural Development Projects

6.12 It should be said at the outset that although they have adopted as objectives farming models that vary according to the geographical setting, the productivity operations (or integrated rural development projects), whose development is one of the major elements of the recommended strategy, are of necessity hazardous undertakings in the climatic conditions prevailing in Niger. They are nevertheless necessary, both per se, in that they are the only way of achieving the necessary intensification of food and cash crops farming, and as a whole, in that they help, as they are extended throughout the country, to reduce the climatic hazard at the national level through the - 60 -

geographical diversification of production. Indeed, it has been noted both in the Sahel and in Niger that the inadequate rainfall in a drought year is rather erratically distributed space wise, without obeying any apparent "law", even at the same latitude. 1/

6.13 Two defects have already been noted in the current productivity schemes (Badeguicheri, Zinder) which could easily be corrected: they are still conducted as "integrated projects" i.e. by a variety of Government agencies under an agreed coordinated program for each successive campaign, and not, as they should be, as "enterprises" with a single agency responsible for the project; also they appear to neglect the measurement of results as an integral part of the program.

6.14 Furthermore, the launching of the current schemes -- like the preparation of the forthcoming Maradi project -- has suffered from two defects: -insufficient knowledge of the region and of the farms as the basic units which after all is said and done are the operators of the project; lack of testing of the farming models developed as objective models. These shortcomings cannot be overcome by increasing the number of expert missions. Tney call rather for a review of the methodology of the productivity schemes including their time- tables and the role of the persons in charge of the successive phases:

- it is for the Government services to identify the project, within the framework of the Plan, and to define the guidelines;

- this would be followed by a qualitative or pilot phase, lasting say three years, the program for which would comprise two main elements:

- testing of the farming models in the homogeneous micro- regions of the area covered by the scheme;

1/ In projecting their expected results, these schemes intentionally assume normal climatic conditions. It may be well possible to devise a reductioh factor applicable to the yield margin discounted to allow for years in which the rainfall is subnormal. This factor should be calculated from an analysis of the frequency of local rains and of the depressive effect on yields of a reduced water supply, which could be determined by research or by statistical correlation. Since wide climatic variations are normal in Niger, this would seem to provide a more objective picture of the actual prospects opened up by these schemes. Furthermore, these operational projections are usually made for stable cultivated areas and population. If the first assumption is justified by the fact that the cultivated land is actually saturated, the second is not: the population covered by the scheme will have increased by more than 20% at the end of the 10 years considered to be the period for their maturation that is to say, at the end of which the possible increases in production would have "peaked". - 61 -

- inventory of the resources and the constraints of the operation area; delimitation of the homogeneous areas; study of the farms from the standpoint of their needs, their resources and their aspirations.

This preinvestment study, which would be completed in the third year of the program by a feasibility study, should normally be financed by a bilateral- aid or a UNDP grant. Next would follow the quantitative phase (development phase), which would have to be not less than four or five years: this would be the project proper, provided with well-defined resources and given quantitative objectives, then qualifying for substantial external financing.

6.15 Such an approach could be applied in future schemes. A first analysis suggests that favorable conditions for its application would be found in the Dosso region, where a UNDP/FAO experimental project has been under way since 1967 and a French financed (FAC) project, conceived as the qualitative phase mentioned above, has been in progress since 1972. The region moreover enjoys relatively favorable natural conditions (more abundant rainfall in the South, and possibilities of round-water irrigation, also in the South).

Irrigation Projects

6.16 Irrigated agriculture projects offer the best possibilities for agricultural intensification and diversification, with high and reliable yields, characteristics which are the exact opposite of those of rainfed crops; they therefore deserve to be integrated into Niger's agricultural development strategy. Irrigation projects will be called on to make a substantial contribution to Niger's assured supply of basic foodstuffs. The Niger River depressions alone would represent a production potential of more than 200,000 tons of paddy, which is about half the estimated grain shortfall in 1973/74. If the facts of life of Niger are taken into account, this should lead to a careful review of the criteria for evaluating irrigation projects that takes into consideration their role in providing an assured supply of basic foodstuffs at the national level. Furthermore, the limited potentialities demand a special effort for the optimum mobilization of water and land resources in the light of a series of considerations relating to the financial and economic aspects, the technical choices associated with them, management and production patterns.

6.17 The financial and economic appraisal should be based on criteria that reflect the main concerns of the two economic agents involved, namely the national community, represented by the Government and the farmer benefitting from the project. The Government, which makes the investment and is responsible for rural employment, the country's general food supply and the development of natural resources, has three concerns: the rate of economic return, which governs the efficient use of capital, whether of internal or external origin; the investment per unit of area and thus the financing needs of a given program; and the annual additional production per hectare of the depressions and thus the additional assured production each year. - 62 -

6.18 The farmer, who supplies only his labor force but who bears the production charges, is interested in total income and in increasing the value of his day's work. The options open to the Government lie in the use of capital and natural resources for various purposes; the options of the farmer, in the application of his labor to different activities and in the division of his time between work and leisure. It has already been seen (paragraph 1.13) that the net income of the farmer was quite good under normal conditions (for example, the Karma development) and was a sufficient incentive to warrant the belief that there will be no lack of candidates for the projects. 6.19 As regards the type of irrigation, there is no optimal standard model. Each type of project has its own hydrological, technical, agricultural and economic characteristics and should be evaluated individually. The techniques of" development of Niger River depressions, which with their heavy hydromorphic soils, flooded for part of the year, are a priority area of activity can be more or less sophisticated. It always includes a flood protection embankment allowing one rice crop a year under uncontrolled flooding, during the period of flood, i.e. the dry season. By adding pumping, irrigation and drainage facilities the water regimen can be regulated (controlled flooding), and the effects of rain shortfalls in the rainy season and of low floods in the dry season alleviated, thereby permitting two crops a year. Finally, in each case, the perimeter can be arranged so as to limit and regulate the water layer in the rice fields, either simply by terracing (building levees that follow the countours) or, in a more sophisticated way, by making level checks or levee beds (artificial flooding). Each of these improvements entails a cost but also an additional yield. Each site requires a more or less high investment per hectare, depending on its shape and topography, determined by two main para- meters: the volume of embankment per hectare protected (above 300 m3 /ha the site is generally not an economic proposition), and the cost of internal layout.

6.20 However, experience seems to show that in most cases there is a great difference in productivity for a small difference in cost between uncontrolled and controlled flooding, and a great difference in cost for a small difference in productivity between controlled and artificial flooding. The most suitable formula therefore seems to be controlled flooding with the so-called type C1 (Karma 1973) 1/ terracing, which calls for an investment of the order of CFAF 600,000 per hectare and allows two 4-ton paddy harvests per year. This technique is in fact the goal of the Government's Rural Engineering Service, both for new and for remodeling of existing projects, at least in an initial phase of a few years, during which yields will be limited more by the skill of the farmer than by the degree of improvement of ricefield development technique. Again, these conclusions will be reinforced in the near future by much greater efficiency in the execution of construction works (which should bring down this cost) and in farming practices. In that case, more sophisticated projects of the "Dl type", with level checks, may be justified. In any event, it appears that uncontrolled flooding is ruled out and that the redevelopment of the depressions laid out earlier, which is now being done by the Rural Engineering Service accordingly is justified.

1/ See Annex X. - 63 -

6.21 The overall economic justification for irrigation projects (with the understanding that each individual project will in addition be the subject of a feasibility study), 1/ is that they will make it unnecessary to import rice and other grains in the event of a national shortage -- except in the event of a catastrophic series of dry years. 2/ Present forecasts indicate a rise in the world price of about 100% between 1972 and 1980. 3/ In constant 1974 dollars, the anticipated rise over the period is 13%. It is foreseen (subject to all the usual uncertainties), that in 1980, at the present exchange rate ($1 = CFAF 250) imported rice delivered Niamey will cost about CFAF 106,000 a ton at current prices (and about CFAF 88,000 a ton in constant prices) or more than 60% over the present price of CFAF 65,o0o a.ton ex Tillabery rice mill. This should make it possible to absorb the reasonably foreseeable price and cost increases in Niger in the years ahead.

6.22 What is more, experience shows that in the event of a serious grain shortage import prices are likely to be much higher than world market prices, either because it is necessary to enter into purchase contracts on unfavorable terms or because freight charges are increased by the excessive pressure on transportation services or the need to use exceptional means such as air transport. Thus, the average cost of the food aid -- mostly grains -- received by Niger in 1972/73 has been around CFAF 100,000 a ton. Furthermore, adverse climatic conditions can affect both the supplier countries and the Sahelian countries at the same time -- as happened in 1973 -- and cause dramatic price rises: the price of Asian rice in 1973 was more than twice the 1972 price. Finally, the recourse to international food aid, even at no or little direct cost to Niger, is clearly an operation that the Government will for obvious reasons wish to avoid save in quite exceptional circumstances.

6.23 Although substantial progress has been made in the operation and management of irrigation projects in recent years, the fact remains that the traditions of the population of the river region still militate against

.1/ The study will take into account the costs resulting from the new data on the world petroleum situation: it is possible that, in particular, the cost of fuel oil and lubricants, which at present account for 12% of operating costs (see Annex X), will double between now and 1975. 2/ The economic importance of an assured irrigated output is also clear if we assume that, without it, the food crop programs within the rainfed productivity projects would have to provide each year a safety margin over and above the production expected to be obtained under normal climatic conditions. -This margin would in practice be materialized by assigning to food crops additional land taken away from export crops. The value of the export crops thus foregone is a measure of the economic importance of irrigated crops.

3/ Although slightly lower than the extraordinarily high levels foreseen for 1974. - 64 -

rational farming. There is a twofold problem here: of authority, to enforce the land law, and of training, which should be stepped up in the GNP's and the cooperatives. Finally, excessive fragmentation, in the sense of a large number of individually worked plots, gives rise to difficulties in the collection of levies. It may be asked whether, since rice-growing is necessarily collective and is directed in actual fact by the UNCC, the managing agency, the production cooperative would be a more suitable structure, at least initially, than the simple service cooperative. Even if it kept the system of individual plots on the ricefields, it would at least make it possible to collect the levy on the spot, as soon as the harvest was in, in the form of paddy. This paddy would enable the UNCC to make up the shortfall in supply of the Tillabery rice mill.

6.24 Sharing of costs between the Government (infrastructure) and the farmers (levy covering operating costs) should be a generally applied principle. 1/ On the other hand, subsidies, which are disguised income transfers, distort the price system and overburden the Government budget and should be avoided. They can play a role in the start-up phase or in moderating the effects of increases in certain cost/price components or when market prices are clearly unrelated to the real economic costs. This type of consideration would justify, quid pro quo, the taxation of any windfall profits made by the beneficiaries o' irrigated agriculture projects by reason of market conditions; the same result will be obtained by a buffer stocks policy, which is in fact recommended (see footnote 1/3.

6.25 The 5roduction pattern of the irrigation projects should also be reconsidered in the light of the results of recent experiments. So far, the depressions have been devoted to rice (two crops) and, to a much less extent, to fodder crops; sugar cane and garden crops are grown on a very small scale on the terraces. In the depressions rice-growing could be intensified and efforts made to obtain three crops a year with ad hoc varieties of the Thailand RDI hybrid type, or RDJ types obtained by crossing local hardy varieties with IRRI varieties, which are highly productive, are not sensitive to day-length and have a shorter cycle. 2/ Alternatively, taking into consideration the limited needs of the domestic market for rice and the role of

1/ The principle underlying this cost-sharing, with the infrastructure costs borne by the national authorities and not by the benefiting farmer, appears to be widely accepted throughout the world. In the present case it is strengthened by the fact that the objective of the irrigated agriculture projects is to provide "food-supply insurance" at the national level. The benefits deriving from the investments made therefore concern the community in the same way, for exanple, as the national transportation network. But by the same token, increases in the prices of the goods produced on the projects resulting from food shortages in the rest of the country should be "confiscated" by the community through the mechanism of buffer stocks managed by the public authorities instead of accruing to the individual producers. For that reason the execution of the projects and stockpiling are two aspects of a single policy. 2/ The Chinese mission is already experimenting with three crops a year at Saga. - 65 -

"insurer" played by the irrigated agriculture projects, the second crop could be diversified. The rainy-season crop would still be rice, which is better adapted to the hydromorphic soils in that season and requires only half as much water as in the dry season. But the dry-season crop could be an improved sorghum (Janjare, yielding 5 tons per hectare) or a long-cycle niebe (2 tons per hectare). Fodder crops are grown continuously (replanting every 4 years) and certain depressions would be wholly reserved for them (see livestock policy, paragraph 6.29 ff). With two crops, the total gross annual product would be substantially the same and would be around CFAF 200,000.

6.26 Because of the higher pumping costs (a 10-m head instead of a 3 m in the depressions) and the enormous consumption of water in summer, dry- season irrigation of the river terraces is not prima facie economically justified except for crops that produce a high gross income per hectare (sugar cane: 100 tons x CFAF 2,500 = CFAF 250,000; garden crops for export: 10 tons x CFAF 30,000 = CFAF 300,000; onions, tomatoes). On the other hand, supplementary irrigation in the rainy season (150-200 mm) would ensure good yields for sorghum, maize, niebe or soybean. To reduce the charge for amorti- zation of the pumping equipment, which is used for the most part for one crop a year, it would be advisable wherever possible to combine the development of the terrace with that of an adjacent depression, whose station (on which little demand is made in the rainy season) would constitute the first pumping stage.

6.27 The hydrological problems are many and to a large extent determine the dimension -- that is, the cost and time-structure -- of the overall irrigation program of the valley. As yet they have hardly made themselves felt because only a very small part of the available potential has been developed (2,500 hectares of depressions, out of 30,000 hectares; and 400 hectares of terraces, out of 20,000 hectares -- cf. Annex X). As regards flow-rate problems, it would appear that the water requirements for the development of all the depressions and terraces that could be irrigated in June- July, (of the order of 51 m3/s) at lowest streamflow, would exceed the minimum discharge (in July, 90%-frequency flow: 21-26 m3/s). Thus, developing the whole potential area presupposes "beefing up" the low-water volume either by means of a retaining dam upstream such as the Kandadji dam project, near the Mali frontier) or by reducing losses (65% of inflow) in the river's spreading area upstream in Mali. The fall of the Kandadji dam would be low (20-30 m) and the reserve would be of the order of 15 billion m3. It would be a multipurpose dam, and the water release regimen should improve the navigability of the river, generate electricity and supply irrigation water. The dam would be expensive, especially because of the marked seasonal variation in flow. It is very provisionally costed at CFAF 22.5 billion ($90 million). In other words, the feasibility of the project is far from certain. Prelimi- nary studies on the Kandadji dam would probably be made by a Franco-American group of companies. As regards the depth of water in the river, it would be necessary to examine the effects, during floods, of gradual embanking of the depressions and, contrary wise, of lowering of the floods by a dam. In the meantime the irrigation program must clearly be designed within the river possibilities in the absence of such a dam. - 66 -

6.28 Because o f their magnitude and interdependence, the agricultural, technical, economic and -- in view of the international status of the waters of the Niger -- legal problems of an irrigation program can only be rationally -resolved within the framework of a regional plan for the whole of the basin. Two recommendations stem from this:

- The River Niger Commission, the existing regional structure (headquarters in Niamey) should begin the study of an indicative master plan for the harnessing of the river as quickly as possible, with the assistance of the UNDP and/or bilateral agencies;

- In Niger itself, these problems should be dealt with in a coordinated way by an ad hoc agency such as an "Office du Fleuve", or "Niger River Bureau" or, initially, by an appropriate administrative unit with responsibility limited in the first phase to general studies, physical development planning and supervision of execution of the projects. Tnis agency would be the sole competent spokesman of Niger vis-a-vis the Niger River Commission. It would be in a better position than an administrative service to manage, in due course, an equipment pool and to undertake work on force account while UNCC would continue to be the management agency for the irrigated areas.

Livestock Policy 1/

6.29 Not only has the livestock policy of the past decade failed to solve the problem of the separatism between stockraising activities and 'arming that -isso often the cause of clashes, it has also failed to a large extent to ful- fill the hopes placed in the irrigated agriculture program for stockraising or in the Sahelian ranching program (Ekrafane). Tubewells provided with pumping equipment and operated communally, that is to say for the benefit of all in theory and moreover free of charge, have frequently led to over-grazing and produced such an imbalance between stock, water and forage resources that it has sometimes been necessary to plug them. Apart from its short-term economic difficulties, the Ekrafane ranch, though able to play its role of destocking the range of young animals, is hardly capable of performing its role of fattening high-quality cattle at an economically viable production rate.

6.30 Because of this situation a study on the "modernization of livestock in the pastoral region" was commissioned by the Government (with FAC financing) -in 1971. This study resulted, in 1973, in a recasting of the entire policy. -As defined in ihe consultants' sumnmary report (SEDES, July 1973), -- whose conclusions should, it is felt, be adopted by the Government in their entirety -- this policy is based on a comprehensive plan for the organization of cattle raising that recognizes land-use suitabilities:

;1/ Please note changes between this presentation and the updated version given in Volume I, paeragraphs 175ff. - 67 -

- low-density breeding in the pastoral zone, where the breeders can "absorb" without too much hardship the inevitable variations in weight, whether seasonal or periodic, and where the young animals must be destocked at an early age. This area is destined to become, as it were, the "womb" of cattle raising in Niger;

- backgrounding of young animals (for a period of about a year) on ranches of the intermediate area, on the fringe of the northern limit of the arable farming zone. This area is the "downstream" market of the pastoral zone, from which it purchases young animals and the "upstream" supplier of the fattening area;

- fattening in the agricultural area, either in the traditional way or in feedlots using the by--products of agro-industries or irrigated forage crops grown intensively along the river.

6.31 The modernization of stock raising in the pastoral zone could be organized on the basis of grazing production units - Unites de Production Pastorales (UPP) with a radius of 10 to 15 kilometers around a watering point and with supervising and advisory personnel nearby. The UPPs are designed to avoid the drawbacks of the present communal pasture, applying the following principles:

- assignment of pastures and watering points to groups of responsible breeders so as to rationalize the management of the livestock/water/forage resources package;

- rotation of pastures;

- annual fencing in of a portion of the area to permit re-establishment of the flora and reseeding;

- use of the watering point, depending on its output, not only for the water supply of men and animals but also to establish a small irrigated forage reserve;

- early destocking of young animals to backgrounding ranches;

- health control.

6.32 To test the methods advocated, the study recommends the establishment of four pilot project areas, each containing 10-15 UPPs, to be operated for a period of five years. This program would involve the establishment of 200 additional watering points.

6.33 Marketing would be reorganized by establishing a public distribution system -- for comparison and guidance -- side by side with the traditional commercial distribution channels, which would themselves be better supervised, for example by the introduction of a licensing system. - 68 -

6.34 Stockraising activities would henceforth be organized on the basis -of functional specialization. The responsibilities of the veterinary service (administrative service) would be confined to the health protection of livestock, and animal husbandry improvements. An Office National de l'Elevage (ONDE) would coordinate all production and development activities: grazing project zones, backgrounding ranches, traditional fattening and feedlots. The ranches and feedlots would be advantageously linked and entrusted to mixed enterprises (SEMs). Finally, SONERAN the mixed enterprise in charge .of marketing meat, reorganized and given greater resources and responsibility, 'would supervise cattle and meat marketing and retain the monopoly of export .of meat from animals slaughtered under Government control. This presupposes, in the long run, the building of a meat-packing plant and of a landing strip for heavy cargo aircraft at Zinder; both of these projects will, however, 'need individual feasibility studies.

6.35 A prerequisite of implementation of this policy is sufficiently remunerative prices at all levels to motivate the stockraisers -- whose active support is essential, and not easy to mobilize -- and to justify the necessary Investments. The recent increase (CFAF 140 per kilo live weight at Abidjan, a 100% increase between 1967 and 1973) would seem to make the entire program feasible on the basis of a price of CFAF 80 per kilo live weight for the purchase of young animals from stockraisers, CFAF 100/kg for the same of fattening ani- 'mals by the backgrounding ranches and CFAF 120/kg for the same of fat to stock to SONERAN. On the basis of foreseeable development of supply and demand in the West African Region, current prices in 1980 may be estimated as follows (per kilo liveweight, Abidjan):

CFAF

good quality 180 - 200 medinum quality 160 - 180 lower quality 140 - 160

This would represent an average f.o.b. price of CFAF 105-110/kg. A rise in the price of beef is, moreover, expected on the world markets: thus, a 60-percent price increase (Argentine meat in London) over that of 1972, at current prices is foreseen for 1980. The long-term trend therefore appears to justify prompt implementation of the entire program, particularly since the experiments conducted in recent years at Kirkissoye, however approximate they may be would seem to offer possible agro-economic standards for intensive fattening.

Drought Control

6.36 A long-term drought control program is essential in order to remove the threat of this periodical calamity to agricultural development in Niger. However, long-term drought control will essentially involve a package of measures that form part of "normal" development programs, which is another way of saying that, in designing these programs, the possibility of rainfall deficits should be taken into account. Thus the three types of the operations described above togetlher constitute a defense program against the effects of future droughts: - 69 -

- the launching of productivity operations throughout the settled area in order to diversify the risks geographically;

- the development of irrigated agriculture projects ensuring high and dependable yields;

- a stockraising policy adapted to the land-use suitabilities of the various regions, so as to secure improved livestock/ forage resources management, as has just been outlined.

6.37 A number of specific activities could also be undertaken in the area of "human investment": soil conservation work; planting of gaos, windbreaks; digging of wells in the dry valleys to increase the number of "lots" irrigated by animal-powered or mechanical pumps.

6.38 Another specific program in this respect would consist in widening the scope of intra-annual grain price stabilization by OPVN to include creation and management of grain stocks as reserves against food deficits caused by the drought. A food reserve policy is in fact of the same economic nature as and a logical complement to the recommended irrigation program seen as a sort of notional insurance scheme rather than a substitute to rainfed production. It is estimated (see Annex I) that the maximum level of stocks needed by OPVN to effectively help stabilize prices in the main markets, between seasons and between regions, is about 12,000 tons now increasing to 27,000 tons by 1982. Additional reserve stocks that would aim at ensuring three months of supplies would require more than doubling these amounts. At the end of 1973 storage capacity of OPVN was about 15,000 tons, to be increased to 27,000 tons by 1975 (US-AID financing). Additional capacity of close to 30,000 tons would need to be installed, both at central, regional and cooperative level, by 1982. How- ever, what is needed first is a more refined study of the optimal allocation of resources between irrigated production and reserve stocks.

Processing of Agricultural Products

6.39 Defensible as the principle of local processing of agricultural produce may be its application is nonetheless problematic. It is indeed extraordinarily difficult to recommend a policy of agricultural industrialization without first emphasizing that industrialization in itself has no particular economic merit and that each project must be based on a serious economic cost/benefit analysis. A further point is that a"good" project may be turned into a "bad" project by the way in which it is executed, technically or financially, or managed. Experience in Niger and elsewhere shows that these points, however obvious they may be, are frequently overlooked. It is therefore perhaps not superfluous to recall them here. - 70 -

6.40 A certain t'ype of primary processing is not optional, and is to some extent, an integral part of the process of agricultural production; for example, grain and groundnut husking and cotton ginning. Here, the principal "processing" is done on the farms themselves, usually by the women who thus create a value added that is considerable even though it is poorly reflected, if at all, in the national accounts. Industrialization of this type of activity is sometimes necessary for technical reasons, as for example in cotton ginning which does not pose any economic problem in principle and will therefore develop in step with production. In practice, the existing cotton ginning capacity will be sufficient, with some renewals investment, to handle the production increases foreseen.

6.41 When industrial processing is not essential, two groups of factors, technical and economic, will have to be carefully weighed. From the technical standpoint, the industrial process is usually more efficient and therefore avoids losses, and produces a better quality product (e.g. rice mill, SOTRAMIL). Economically, however, industrialization involves the use of scarce factors capital and skilled labor, instead of an abundant factor -- unskilled farm labor. Such a substitution is therefore by no means the obvious thing to do from the standpoint of the national interest. In this connection the price system should be taken into account, much more than in the past, as a useful indicator: if the price offered to the producer of the unprocessed product -- and the price proposed to the user of the final product (the local or foreign consumer) -- are considered attractive 1/ by both of them and if, at the same time, the industry established is viable without direct or indirect subsidy, then there will at least be a strong presumption in favor of the industrial project whether it is a husking plant, a rice, oil, or sugar mill or a textile factory. A project that does not satisfy this simple criterion may nevertheless be justified if the market prices (price of the agricultural raw material and of the finished product), exchange rate, interest rate and wages do not reflect the actual scarcity of the goods and factors involved -- which should then be demonstrated. The very real danger therefore is that industrialization may, without one being really aware of it, penalize one or more of the agents concerned -- the farmer, the consumer, the Government or the industry itself - without any compensatory benefit for the others, or else may involve a questionable income transfer (as in the case of oil mills).

6.42 The prices (net of duties) of imported products may, generally speaking, serve as a guide for agricultural products processed for the local market (sugar, rice, flour, textiles, etc.). Export prices are even more compelling for Niger whose exports are not such as to influence the world market. In this regard, it is to be noted that certain features of the export market are relatively unfavorable to the local processing of exportable goods. Thus, because of the relationship between the price of shelled

1/ For example, where the case applies, in comparison with the price of the imported product excluding the rate of differential taxation of the imported product. - 71 -

groundnuts and of groundnut oil and cake, the gross receipts from the export of a ton of groundnuts exported are only very slightly less than the sum of the gross receipts from export of the oil and cake produced from the same tone of groundnuts, as noted earlier (para. 3.41). 1/

6.43 The result produced, in the case of groundnuts by the structure of the world market can also be generated by protectionist policies of importing countries. Thus, though a ton of carcass meat is worth considerably more on Nigeria's market than the equivalent live weight, the customs duty of about 60% on carcass meat applied by this country cancels out this difference and makes the sale on the hoof the only profitable method at present.

6.44 These observations lead to the conclusion that agricultural processing policy must above all be alert to the conditions the domestic and of the export markets. This obviously does not exclude efforts to remove the constraints they impose; quite the contrary. Niger will accordingly continue to support all efforts aimed at an organization of the raw materials markets that is more favorable to the producing countries. Meanwhile, the agricultural program proposed here does not include any specific recommendation on processing (except for required technical processing) since it is not possible in this report to evaluate the economic benefits of the possible projects. Furthermore, since the purpose here is to determine the size of the public investment program, it is assumed that, in accordance with the policy so far pursued by the Government of Niger, the "downstream" industries will have to be financed primarily by private capital, supplemented and stimulated, where appropriate, by Government action.

C. Outline of the Rural Development Program and Projected Results

6.45 The program is really the framework of a strategy thought necessary to attain the major policy goals outlined earlier to ensure the self- sufficiency in basic foodstuffs of a population numbering 4,300,000 in 1973 and growing at an assumed 2.25% a year 2/ and, at the same time, to re- establish and develop export flows while ensuring a better protection of

1/ Thus, the projected 1975 prices of the three commodities (US$ per ton, c.i.f. Liverpool) are: groundnuts $392; oil $687; and cake $201. A ton of groundnuts yields approximately 0.46 tons of oil and 0.55 tons of cake. The possible receipts are therefore: groundnuts $392; oil and cake 0.46 x $687 + 0.54 x $201 = $424, or approximately 8% more. For 1972 the same calculation shows a difference of less than 6%; for 1980, of 9%, and so on. The reason for this situation is of course that most of the value added is generated at the stages following the primary processing into unrefined oil and cake: the price of groundnuts in the form of table oil or other oil (margarine) is about 3 to 4 times as high as that of the raw material. 2/ The rate of 2.25% -- which is near that of 2.22% given by a United Nations study -- has been adopted for convenience of calculation. - 72 -

natural resources than at present. It disregards a whole series of secondary or optional projects. Despite its already wide scope, therefore, it represents a minimal policy. The general scheme is to carry out simultaneously a number of basic programs whose development will determine future balances. Thus: first, launching of productivity operations in the main agricultural regions, this being the most appropriate way of insuring the concommitant development of grain production and rapid improvement of the living conditions of the rural population; next, development of the rice-growing depressions of the Niger River at a rate sufficient to contribute to an assured food supply - concurrently with storage facilities - up to the point at which flow regulation becomes necessary, while not interfering with other desirable uses; implementation of a livestock policy based on differentiation of functions (breeding in the Northern pastoral area, backgrounding on ranches in the middle belt, and fattening primarily with irrigated forage crops along the river and Southern region); and finally, promotion of secondary exports within the framework of the various projects.

6.46 It is proposed in what follows to spell out the content of these programs; to project the results that can be reasonably expected from them -- particularly in three areas: production and income, exports, and employment; and finally to evaluate the amount and timing of the necessary investments. The production and export projections are given in Annex XIV. The method selected is thus essentially inductive. It is not a macro-economic approach that would start from quantitative goals (for example a production growth rate) and determine the necessary investments through capital coefficients. Nor do we start out from a financial constraint and then determine how to spend it. The approach is rather to formulate the package of programs regarded as desirable, and at first sight feasible, in the light of the constraints and the general goals examined earlier, and then measuring their results and their costs.

6.47 In so doing it is necessary to keep well in mind that the projections resulting from the analysis are essentially deceptive on at least one point: all trends -- with the possible exception of the population trend -- are actually uneven, with peaks and troughs caused by climatic influences or external economic situations; they are not continuous, even though they have to be presented that way owing to our inability to guess the future entirely.

6.48 A productivity operation known as "3M" was launched in the region of Zinder in 1973; another, more of the nature and size of an integrated rural development project, is planned for Maradi. The departments of Zinder ,and Maradi are Niger's two main agricultural regions; in a normal year, they ;together account for 40% of grain and 90% of groundnut production.

-6.49 A third operation could be started in the department of Dosso, the southern half of which has good physical potential. Studies and activities ,are currently under way in Dosso (see para. 6.15) that could develop into the pilot phase of an integrated development project of the same type as ,the Maradi project. - 73 -

6.50 A fourth operation would be launched in the department of Niamey, which produces no groundnuts but accounts for a large share (about 30%) of grain production. The Niamey operation would probably exclude the arrondissements of Say and Tera where the physical and human potential is too weak.

6.51 In all, these four operations would cover from 80% (grains) to 100% (groundnuts) of Niger's productive apparatus for the principal commodities. They would also embrace the totality of cotton production and that of "secondary" vegetables -- niebe, onions, tomatoes -- the future role of which is far from negligible.

6.52 In projecting the costs and benefits of the complex of the productivity operations just mentioned, the standards used for the Maradi project currently under appraisal by IDA have been extrapolated, as it is the one that has received the greater amount of attention, so far. It is one also for which an organizational structure will be applied, subject to Government approval, that is different from the "integrated action" used so far in Niger and that will put the project under the responsibility of a single development agency - still to be determined.

6.53 In these circumstances, the program is so scheduled as to permit a reasonable spacing of investments and to fit the population growth. Under these conditions, the production and consumption of grains (millet + sorghum) would increase as follows: - 74 -

CEREALS: SUPPLY A'ID USES

1971 /1 1979 1980 /2 1984 1989 1994 ------in 1,000's of tons------

,Grain consumption (250 kg per capita per year) 1,025 1,230 1,260 1,375 1,530 1,715

Production, millet + sorghum

- Productivity operations 917 981 1,055 1,069 1,180 1,174 Zinder (1974-78) Maradi (1975-79) Dosso (1979-84) Niamey (1984-89)

- Other regions 200 200 200 200 200 200

Total 1,117 1,181 1,255 1,269 1,380 1,374

/1 Most recent reference year regarded as approximately "normal."

/2 The results for this year, which are not taken directly from the forecasts for each operation, are interpolated.

Source: See Table A, Annex XIV.

The growth curve of grain production (millet + sorghum) in "normal" years would be lying below the curve of food requirements as soon as 1976 as a result of the need to make room for export crops and irrigated rice would thereon play a role as a necessary food supplement.

6.54 Applying the rules used for Maradi groundnut production -- again in "normal" years -- would develop as 'ollows: - 75 -

1971 /1 1979 1980 /2 1984 1989 ------in 1,000's of tons-

Productivity operations 247 323 338 407 413

Zinder (1974-78) Maradi (1975-79) Dosso (1979-84)

Other regions 10 10 10 10 10

Total 257 333 348 417 423

/1 See note to preceding table.

/2 See note to preceding table.

In other words, groundnut production would regain the level it had before the present disaster toward 1977 or 1978 and would level off from 1984 onwards at 60% above the 1971 level and 40% above the peak figure of the past (1966/67).

6.55 Irrigated rice is necessary for two reasons: as a supplement to the general grain supply from 1976 onwards and, in any event, to make up for deficits in grain production (of say up to 20) associated with isolated drought years which occur irregularly but are part of the natural picture and cannot be avoided however efficient the implementation of "productivity operations." Apart from on-farm consumption, rice production will satisfy the urban rice demand which is apparently growing at 8% a year, in line with other cities of West Africa. Should there be a slight surplus in favorable years, with stocks complete, it would be easy to export it to the coastal countries, which will be net importers for a long time to come.

6.56 The projections of area developed, cost and production are made on the bases described in Annex X, which is devoted to an analysis of rice development projects (type "C2," average cost CFAF 650,000/ha; production of 8 tons of paddy in two harvests a year). The present development rate is about 350 ha a year. At double that rate (700 ha/yr) over the next 6 years and 1,200 ha/yr over the following 5 years, the area developed (2,500 ha at present) would reach 6,500 ha by 1979 and 12,500 ha by 1984. This is estimated to be the maximum feasible per year, and the ceiling that could not be exceeded without major regulatory works on the river. Rice production would then increase as follows: - 76 -

1973 1979 1980 1984

Areas developed (ha) 2,500 6,500 7,700 12,500

Paddy production (1,GOOs of tons) - traditional 15 12 12 10 - on developments 15 52 62 100

Total 30 64 74 110

6.57 In addition to development of the depressions, the rice program infrastructure would include expansion of the present hulling capacity (Tillabery, 6,000 tons of paddy a year). There are advantages (better hulling and bleaching output) in handling in the rice mill at least the tonnages intended for stockpiling, for a good part of urban consumption and possibly for export. It has been estimated that 40% of the paddy produced on irrigation projects alone (the only paddy with the required quality) would be processed. Two more rice mills then would be needed:

Capacity (tons) additional total

1979 14,000 209000 1984 20,000 40,000

These mills would be supplied by collection of the development levies in kind, in the form of paddy (meaning about 3 tons per hectare under present conditions).

6.58 Looking only at the next 12 years, it is seen that total millet, sorghum and paddy production, taking into account the programs planned, will about cover food needs. These projections are made for "normal" years, when rainfall is at least equal to the average for 1931-60. The climatic statistics for the past 50 years demonstrate that this food sufficiency is likely to be threatened by two kinds of hazards:

- A casual, out-of-trend hazard of an isolated dry year with a rainfall deficiency such that production drops by 5-20%. This deficit would be covered by the rice production for the year plus the grain stocks, which will presumably be replenished that year or in subsequent years;

- A catastrophic series of more or less deficitary years such as the 1968-73 series, when the food shortage can reach 25-30% or more several years in a row. - 77 -

6.59 The preceding measures would alleviate this deficit but would not suffice to cover it entirely. Without prejudging the frequency of such a catastrophe, it seems prudent to count on international solidarity to meet the residual needs. As a first approximation it would be necessary to set up as soon as possible a grain reserve capacity equal, with rice production included, to about 20% of grain production. This calls for the following program:

tons Storage capacity 1974-76 ...... 100,000 (15,000 tons would be ready in 1973) 1979 ...... +20,000 1984 ...... +20,000 Total .140,000 Rice production (per year, 1984) .110,000 Grand Total .250,000

The storage capacity would be obtained in the form of simple cooperative silos built under priority in the endangered regions (four-fifths of capacity) plus larger national silos (one-fifth of capacity). This would ensure quasi- security of food supply to an economically acceptable degree.

6.60 The role assigned to irrigated crops in the preceding projects as well as consideration of the potential of the river and the irrigation projects specific to stockraising (paragraph 6.62 below) determine the policy to be followed in the harnessing of the river. In the first ten years the 17,500 ha of projects that do not require regulation of the river would have been developed. This land would be used as follows:

Hectares

Depressions Rice developments 12,500 existing ( 2,500) new (10,000) Fodder crops 3,000

Terraces Sugar cane (possibly) 2,000 17,500

Simultaneously, the study of an indicative plan for the Niger Basin would be carried out, at regional level, by the Commission du Fleuve Niger (CFN), and a potentialities and programming study would be done for Niger itself. These studies will indicate whether, for example, a regulation dam at Kandadji would be feasible. If, in view of. its multipurpose nature, this dam should turn out to be technically feasible and economically justified, consideration could be given to future continuation of harnessing of the river, within the limit of the developable land potential, i.e. 30,000 ha of depressions and 20,000 ha of terraces, or an incremental 32,500 ha over the above program. Such a dam will also have to be compatible with the water needs of the other - 78 -

riparian countries -- an aspect of the problem that would have to be considered in the study of the potentialities of the river. Obviously, the economic and financial justification for a project like the Kandadji dam will rest chiefly on the sale of electric power. A prerequisite of such sale, in the case in point, is the existence of industries that are heavy users of electricity; such industries do not exist at present and their appearance is, to say the least, uncertain. In ';he absence of industrial use, it is hard to see how a hectare irrigated through the regulation dam could be expected to bear an additional investment cost of the order of CFAF 1 million as would be the case assuming the entire incremental potential of 32,500 ha were developed. There is thus a very clear feasibility threshold between the irrigation programs "before" and "after" the dam.

6.61 As regards livestock (considering here only cattle, which accounts for almost the whole of exports), projections are hampered by the fact that, as a consequence of the years of drought just past, very li-ttle is known about the numerical and structural composition of the herds. The projections given in Annex XIV (Table C) are based on the hypothesis that the livestock policy described in paragraphs 6.29-6.35 will be implemented from 1975, together with a number of other hypotheses concerning the development and exploitation of the herd.

6.62 In order to reconstitute the herd as quickly as possible and to satisfy domestic demand, and especially to develop meat exports, in the best way compatible with the first objective, the livestock projects to be launched would be the following: 1/

- General modernization project for the pastoral zone (pasture water works and infrastructure (1975-80);

- Intervention zone I project (South Tamesna-breeding herd of 82,000 head) to be linked in direct line-sequence with the neighboring Ekrafane ranch and a feedlot on the river covering 1,200 ha of fodder crops in developed depressions (1975-81). Tne development of intervention zones II and III, in eastern Niger, will apparently have to be postponed, since it seems that the downstream activities in those regions (backgrounding and fattening) cannot be assured in the near future;

- Feedlot project linked to the development of 1,800 ha of depressions on the river, devoted to fodder crops to be supplied with thin cattle from the pastoral herds of western Niger;

Traditional-fattening project on 2,000 ha of irrigated fodder crops under the Dosso rural development project (1979-83). Thin animals also taken from the western Niger herds.

1/ Proposals based on the SEDES study, op. cit., which appear to be responsible and consistent both with the general objectives and the present situation of the herd. - 79 -

6.63 Besides re-establishing the herd to meet domestic demand, these projects would provide the following meat exports:

1971 1975 1979 1981 1983

Herd numbers 4,000 2,650 3,150 3,760 4,000 (in 1,000s of head)

Exports on hoof 45,000 17,000 26,000 30,500 68,000 (in tons, live weight)

Fattening projects:

- Project I - - 5,000 7,000 7,000 - River Feedlot - - 5,800 10,500 - Dosso - - 2,500 7,500 12,000

Total exports 45,000 17,000 33,500 50,800 97,500 (tons, live weight)

6.64 Thus, by 1983 meat exports would reach a steady level of nearly 100,000 tons live weight (one-third fattened animals); under the conditions of operation provided for in the various projects, this would at the same time be a ceiling figure. It would be about double the volume of exports before the great drought of 1968-73.

6.65 All the animals fattened in the Niamey area would be slaughtered at the Niamey abattoir and exported as frozen carcasses. The Niamey slaughterhouse equipment (1974 net capacity: 6,000 tons meat) would consequently have to be enlarged to 15,000 tons net, by 1980. Concentration of slaughtering at this point would make it possible to recover 30,000 additional hides, which could be processed in an annexed tannery.

Expected Results: Agricultural Production and Exports

6.66 The main benefit expected of the program is an increase in agricultural production. The volume of production has been estimated for a group of products (millet, sorghum, rice, groundnuts, cotton, niebe, livestock) accounting for nearly 75% of the gross value of production in a "normal" year (1967). 1/ At the end of the ten-year period, production will be about 20% over 1971, i.e. or barely in line with the probable population growth of 22%. This seemingly modest achievement must be interpreted in the light of three

1/ According to the National Accounts for 1966-69. - 80 -

considerations. First, the progress trend since 1971 includes a general sag in the growth curve in 1972 and 1973, owing to the drought, followed by a rapid recovery in 1974 (crop year 1974/75) caused by a return to an assumed normal rainfall, then a slow gaining of ground through projects implemented henceforward; the recovery will thus be very substantial in relation to the present depressed situation. Second, even more significant than the overall result is the prospect that the food supply in grains will be assured. Final- ly, the entire program will not bear full fruit until 1984 when the production volume will have increased 80% over 1971 as against a 33% growth of total population. The very great difference between the two results is due essentially to the fact that the bovine herd will not be fully re-established until around 1983 -- assuming that no climatic catastrophe occurs in the meantime -- and, moreover, its rate of exploitation will have improved considerably. 1/ Toward the middle of the next decade, real agricultural product per farmer will thus have improved by about 50% over 1971, an average of 2.7% a year. Agricultural exports have been projected at current value up to 1980; they are summarized in the following table:

1/ According to the figures of the 1967 National Accounts the livestock sector accounts for nearly 34% of production; its development therefore strongly affects the general picture. - 81 -

Total Agricultural Exports - Current Prices (in US$ millions) /1

1971 1972 1973 1974 /2 1975 1976 1977 1978 1979 1980

Shelled groundnuts 12.2 18.3 23.4 1.6 3.1 9.1 11.6 13.9 15.5 18.0

Groundnut oil 3.5 4.8 13.5 18.3 25.0 33.8 32.1 30.8 29.4 28.1

Groundnut cake 1.0 1.6 7.5 3.4 7.2 6.7 6.2 5.6 4.7 3.5

Total for 16.7 24.7 44.4 23.3 35.3 49.6 49.9 50.3 49.6 49.6 groundnuts

Cotton (fiber) 1.5 0.8 1.0 0 1.2 2.3 2.4 3.4 3.2 3.5

Animals and Meat 7.1 9.8 1.0 0 6.1 8.6 9.8 13.2 14.5 18.1

Hides and Skins 1.2 0.9 1.5 0.5 0.5 0.6 0.7 0.8 1.2 1.5

Niebes, onions, 1.0 0.8 0.9 2.2 2.3 2.7 3.1 5.3 5.9 6.3 vegetables

Unrecorded exports 5.0 7.5 0.9 2.2 ------

Total 32.5 44.5 49.7 28.2 45.4 63.8 65.9 73.0 74.4 79.0

Value index 100 137 152 87 140 196 203 225 229 243

Volume index 100 166

Price index 100 146

Source: Annex XIV. See note to table D 19 Annex XIV.

/1 Exchange rates used (to US$1): 1971, CFAF 278; 1972, CFAF 252; 1973, CFAF 222; 1974 onwards, CFAF 250.

/2 Estimates overstated in view of recent information (see text Chapter I).

6.67 A prominent feature of the trend of exports is the foreseeable slump in 1974 by reason of the certain drop in production of groundnuts and cotton and the probable fall in production of live animals and meat, in spite of the expected very high price levels. On the other hand, the sharp rises in world prices in 1972 and 1973 offset the quantity shortfalls. After 1974, the - 82 -

quantities exported will increase with production, whereas prices, while remaining considerably above the pre-1972 levels, will in the case of groundnuts and derivatives and cotton decline in the long term after reaching the peaks anticipated for 1974. Meat prices will continue to rise. The value of agricultural exports in 1980, at current prices, will therefore be much higher than the "normal" level of 1971 (up 143%) and some 70% above the average during the world boom of 1972-73.

6.68 These production and export prospects, encourag'ing as they are at first sight, can be fully evaluated only by relating them to the trends for ,other factors: population, prices, investment. Moreover, they cover a relatively short period; the longer-term trend merits at least some mention.

Agricultural Growth and Population

6.69 By 1980 total population will have grown by 22%, and rural population -- assuming a 6% increase in urban population -- by 15%, relative to reference year 1971. This means that per capita volume of exports will have risen by about 3% a year, against 1.1% increase in total production per head; these rates may again seem modest but are to be less so when it is remembered that they apply to the entire rural population. In fact, the increase in productivity will be zero in the areas untouched by the productivity and other -specific projects.

6.70 This remark touches on an important aspect of the planned rural development: the entirety of the foreseeable increases in production could be accomplished without additional manpower compared with the starting position and without expansion of area under cultivation. The productivity operations, according to the Maradi model, entail only a slight increase in working time per existing farm, which should not be hard to achieve. In practice, in view of the traditional rural structures, this will not result directly in overt unemployment. The apparent excess population will be absorbed by a continuous expansion of area cultivated in marginal zones (i.e. zones with lower and lower yields) and increased migration to the cities. In both cases the result will be an increase in disguised -underemployment.

Prices

6.71 In the context of the projected development, there are two aspects to the prices question: internal and external. The external aspect is reflected in the evolution of terms of trade, for which statistics for Niger alone are unfortunately lacking. For the projection period, an approximate price index of agricultural exports (with 1971/72 weighting) gives, as mentioned above, an increase of 46% between 1971/72 and 1980. The export prices index, calculated on the basis of provisional forecasts of the export prices of the European industrial countries and of petroleum prices, would give increases, for the same period, of 85% (petroleum products included) and 72% (petroleum excluded). The deterioration in terms of trade would thus be 26% and 12%, respectively. This indication is, however, of limited value, first because - 83 - it is approximate and unreliable, and second because it fails to take into account other products exported by Niger, first of all uranium. It may nevertheless safely be concluded that the evolution of the terms of trade will be a hindrance rather than a help so far as Niger's agricultural development effort is concerned. This makes it all the more necessary to increase agricultural productivity since, again, the important thing is to improve real agricultural income rather than price relationships.

6.72 Nevertheless, for the farmer, the relationship between his selling prices and his buying prices is a determining factor of the real purchasing power of his production. So far as food products are concerned, the high proportion of on-farm consumption, the fact that the aim of the agricultural programs is indeed to cover the normal food needs, and the stockpiling policy recommended should together ensure a balance between supply and demand that will eliminate the need for (illusory) price-fixing by the authorities. The prices of animal products, particularly bovine, should evolve favorably and facilitate the fixing of producer prices for animals that pass along a channel that includes "organized" fattening (e.g. irrigated feedlots).

6.73 The main problem, as in the past, concerns groundnuts and cotton. Two guidelines might be followed in their cases: maintenance of at least the real price to the producer, and non-discrimination according to destination. This latter aspect has already been discussed in connection with prices to the processing industries and sharing of the value added between the industry and the Government by means of public marketing agencies. As for producer prices, they will of course have to take account of foreseeable world market conditions and should preferably be set before sowing. It is possible on the basis of prospective world prices to indicate the margin within which the producer prices may be set. The following table summarizes the results of a series of reasonable hypotheses (calculations based on a ton of shelled groundnuts). - 84 -

Current Prices (US$1 = CFAF 250)

1974 1975 1976 1977 1978 1979 1980

1. World c.i.f. price ($/ton) 394 392 385 377 368 355 342

2. MIaintenance of present price 28 28 28 28 28 28 28 (CFAF 28/kg = $112/t)

- % of c.i.f. price 28% 29% 29% 30% 30% 32% 33%

3. Increase in percentage of 28% 33% 35% 38% 40% 40% 40% producer price progressively to 40% of c.i.f. price

Producer price (CFAF/kg) 28 32 34 36 37 36 34

4. Increase in producer price by 5% p.a. - price (CFAF/kg) 28 29 31 32 34 36 3& - % of c.i.f. price 28% 30% 32% 34% 37% 40% 44%

5. Increase in producer price by 7% p.a. - price (CFAF/kg) 28 30 32 34 37 39 42 - % of c.i.f. price 28% 31% 33% 36% 40% 44% 49%

6.74 The table shows essentially that the present nominal price can and should be progressively raised and that the producer price could be raised by 5% a year until 1979 or 7% a year until 1978 and still leave a comfortable overall marketing margin (60% or more). Increases of this order should make it possible to maintain the purchasing power per kilo of groundnuts and thus to increase the producer's real income in step with the anticipated productivity increases. Similar conclusions hold good for cotton.

Investment

6.75 The execution of the basic projects essential to achieve the prime objectives of agricultural policy, involves a considerable rise in the level of public investment in agriculture -- or rather of development expenditures since not all of which contribute to the formation of fixed capital. It will also involve in all likelihood an increase in the rural sector's share in tQtal public investment. - 85 -

DEVELOPMENT EXPENDITURE

1st ten-year period 2nd ten-year period 1974-1983 1984-1993 ------in CFAF million ------

Productivity operations 15,900 9,250

Irrigation project/rice processing 6,000 1,180

Storage facilities 1,200 320

Livestock development _6,800 -

Totals 29,900 11,000

The question of financing is disregarded here since it is not really a meaningful one except in relation to public investment as a whole and in the general context of the economy and particularly of the budget and the balance of payments. It will be stressed, however, that a dual effort is required here: to stimulate greater interest on the part of the external sources of financing in the agricultural sector, as the Government has already succeeded in doing on the occasion of the short-term action to combat the effects of the drought; and to reinvest in agriculture at least the equivalent of the fiscal and parafiscal levies imposed on it. In a certain classical model of development, agriculture provides - among other things - the source of financing of the other sector which, being more dynamic, finally pull along the whole economy. In Niger, the Government could not do better than to break with that model and, instead, to work toward a far-reaching transformation of the rural sector as a durable basis for general development.

6.76 Annual development outlays during the first ten-year period would average CFAF 3 billion, about 2.5 times that of recent years; this massive effort would be followed in the second ten years by a sharp decline, barely reaching the old level of about CFAF 1.1 billion. In fact, these forecasts for the second ten years reflect the continuation or completion of the first ten-year program rather than a specific program for the second period. In particular, it assumes that all projects have evolved successfully during the first ten years.

6.77 This program does not include the investments linked to the agro- industrial projects, firstly, because these are not essential to the required minimum agricultural development but increase agricultural value added only provided they are established on sound technical, economic and financial bases; and secondly, because they are to be essentially the responsibility of the private sector. They could perhaps include the following projects (already mentioned), possibly reviewed and corrected:

POSSIBLE AGRO-INDUSTRIAL PROJECTS

CFAF millions

- an agro-industrial sugar complex 4,300

- a tomato concentrate plant 120

- an onion dehydration complex 1,150

- expansion of SONIPRIM's agricultural and 120 processing installations

6.78 In the case of oil mills, the present crushing capacity of 175,000 tons (in the shell) represents 60% of the 1979 and 45% of the 1984 projected volume of marketed groundnuts. Expansion of the capacity of the oil mills will therefore be considered only in the light of economic developments and with due regard to the observations made previously concerning the constraints imposed on agricultural processing by the structure of the external markets (para 6.42).

D. After the Next Decade

6.79 An important-lesson can be derived from the long-term agricultural prospects outlined above. The indicative timetable of the proposed agricultural program shows that from about 1985 the food production curve diverges from the population and the related requirement curves, with the attendant widening of the food deficit (see table para. 6.55). This, however, must not be understood as a prediction but rather as a projection of trends whose underlying significance is more important than the apparent meaning.

6.80 Essentially, what will happen is that, toward the middle of the next decade:

- the productivity operations will have attained maximum impact, in terms both of geographic coverage and of dissemination of improved methods among the farmers;

- irrigated agriculture in the river valley will have reached the threshold beyond which very large river control works would be necessary; - 87 -

the herd will have reached its optimal long-term size in the ecological context.

In theory, therefore, the proposed development programs will have reached saturation and growth will be blocked. In practice, of course, the situation will not be nearly so simple. Climatic conditions will produce bad years before the fatal day and good years after it. Moreover, as already stated, the population growth will lead to bring new areas under cultivation whose yields will not be zero but simply lower and more precarious. Also, the receptivity of the population to productivity techniques will be better in the long run, thanks to improved training and information; and this will also mean that the productivity operations could have an even greater impact than anticipated.

6.81 Basically however, the prospect of a limit on agricultural development possibilities under the conditions now foreseeable is a serious hypothesis -- in the mission's view, the most serious one. Whether the "blockage" occurs in 10, 15 or even 20 years does not alter the nature of the problem.

6.82 Ways out of the deadlock -- other than through the long deterioration in living standards, -- could conceivably fall into four categories which may for convenience, be labelled the population, the industrial, the technological and the capitalistic solutions.

Population Solution: An appreciable reduction in the rate of population growth is, of course, capable of bringing about, in the long term at least, stabilization of the standard of living and in any event improving conditions such that other sources of progress can be effective in the long run. Migration to the coast of people without productive employment, on a much larger scale than at present, would have similar effects.

Industrial Solution: Development of the non-agricultural sectors (e.g. industry and mining) can absorb part of the surplus rural population and bring about an increase in national income part of which would be redistributed to the farmers. Something of this kind can be expected from the increase in uranium production. It is clear, however, that the size of the rural problem is out of proportion to the discernible possibilities for development of other sectors. If, however, the exports burden carried by agriculture could be taken over by industrial (or, what is more plausible) by mineral exports, agriculture could gradually be reoriented toward production entirely for the domestic market. This reorientation alone would considerably postpone the food "blockage." 1/

1/ By way of illustration: If the entire area under groundnuts (about 600,000 ha after full implementation of the productivity programs) were converted to millet and sorghum, the additional production of 360,000 tons would feed about 1,300,000 more people. This would represent approximately the population increase between 1985 and 1995. - 88 -

Technological Solution: The productivity advances expected of the p'rogram outlined are based on the dissemination of known technical improvements, as much remains to be done in this respect, particularly in the sphere of food crops. While on the other hand one can always hope for an "agricul- tiural revolution" one cannot reasonably at the present time rely on such an occurrence as a solution to Niger's long-term problem.

Capitalistic Solution: Through suitable development expenditure it would be possible to achieve a capital intensification of agriculture sufficient to sustain the growth of production in the long and very long term. Two spheres, among others, would lend themselves to massive injections of capital: systematic use of fertilizers in high-density agriculture, and irrigation -- not only of the whole river valley after streamflow regulation b'ut also of dry areas by using of deep-lying ground water. It should be noted, however, that a prerequisite of the program proposed for the next ten years is an already considerable increase in the level of agricultural investment; the long-term capitalistic solution referred to here would involve still higher financing needs.

6.83 Which of the solutions outlined above, or what combination of them, is feasible and preferable is the central problem that the Niger Government must undertake to study, in liaison with the sources of external cooperation, iii order to decide, in the time that remains, on the rural development strategy for the end of this century. Statistical Appendix

List of Tables

1. Agriculture in the economy

2. Use of agricultural land

2a. Agro-climatic zoning

3. Foodcrops (area, production, yields)

4. Cash crops

5. Groundnuts - production - utilization

6. Cotton -production - marketing

7. Livestock - exploitation - officially recorded activities

8. Recorded imports of food and agricultural products

9. Exports of agricultural products

10. Characteristics of farms in Niger

11. Development of cooperative and mutual groups

12. Groundnuts - structure of export prices

13. Groundnuts - comparative structure of selling prices (export and local oil mills)

14. Cotton - structure of marketing prices and selling prices

15. Development of livestock prices to producer, of meat delivered Abidjan and of air freight Niamey-Abidjan

16. Price and value of groundnut production to producer

17. Price and value of cotton production to producer

18. Agricultural Credit Operations

19. UNCC - Agricultural equipment and products sold since 1963

20. Fertilizer - price structure 21. Irrigated agriculture projects (1960/73)

22. Agriculture - investments - operations in progress in 1971

23. Agriculture - foreign aid to operations in progress in 1971 TABLE 1: AGRICULTURE IN THE ECONOMY

A. Value Added (billions current CFAF)

1966 1967 1968 1969 1970 1971 1972

1. GDP 96.0 97e6 95.5 97.8 101.7 109.1 --

2. Agriculture 53.6 53.7 50.9 50.1 46.4 51.9 __

3. Agriculture as 0/o of GDP 55.8 55.0 53.3 51.2 45.6 47.5 --

Sources: 1966-69: Comptes Economiques (by Mlle. Martens, UN Expert).

1970-71: IMF Estimates (Report dated July 1973, Recent Economic Development.)

B. Exports (billions current CFAF)

1966 1967 1968 1969 1970 1971 1972

1. Shelled groundnuts and groundnut products 6.8 7.1 5.9 5.1 5.7 4.6 6.2

2. Livestock and livestock products 3.7 3.0 2.5 2.4 2.4 3.0 3.5

3. Other agricultural products 0.6 0.7 0.9 0.8 1.7 1.7 1.1

4. Total exports (goods and services) 12.9 12.6 11.3 10.6 10.7 12.5 15.4

5. 1 + 2 + 3 as 0/o 86 86 82 78 91 74 70

6. 1, as 0/ 53 56 52 48 53 37 40

Sources: as for Table A. C. Public Finances (billions current CFAF)

Revenue 1970/71 1971/72 1972/13 1973/74 (Actual) (Estimated)

1. Of agricultural origin-/ 2.95 3.31 3.05 2.77

2. Government revenue 11.86 12.28 12.31 12.22

3. 1 as °/o 25 27 25 23

4. Receipts of CSPPN* 1.78 1.45 1.90 (0.20)

5. Total 1 + 4 4.73 4.76 4.95 (2.97)

Expenditures

1. Current expenditures for agriculture 0.89 0.92 0.98 1.04

2. Expenditures in FNI** for agriculture 0.13 0.30 0.40 0.36

3. Total budgetary expenditures 12.48 13.99 15.01 16.62

4. 1 + 2, as o/ 0 of 3 8 9 9 8

Sources: Budget data 1970/71 and 1971/72: Budget regulation laws;

1972/73 and 1973/74: Finance laws.

CSPPN: Data given to IBRD mission for Maradi project; 1972/73: provisional data 1973/74: estimate

* Caisse de Stabilisation des Prix des Produits du Niger. ** Fonds National d?Investissement (Investment budget).

, Defined approximately by the sum of the following items: tax on agricultural profits, minimum fiscal tax other than payroll tax, livestock taxes, customs duty, fiscal tax and flat-rate export tax, grazing levy, health inspection levy and miscellaneous receipts from agricultural services. TABLE 2: USE OF AGRICULTURAL LAND

(1972-73)

(a) Whole country

Area (ha) Item Area Total

Area of Niger 126)700,000

Usable agricultural land 30,000,000

Arable land 15,000,000

1. Dry farming 2,653,600 2. Irrigated 23,520 on developments v off development=2/ 3. Fallow 10,102,880 4. Forest 600,000 5. Miscellaneous 1,620,000

TOTAL 15,000,000

1/ 3,550 ha in all are developed (end 1971)--see Annex XII.

/ Of which about 15,000 ha of floating rice in the river valley.

(b) By depgrtments

Department Total Area (ha) Cultivated area (ha) o/o of total 1971-72 1972-73 area, 1973

Niamey 9,030,000 960,800 1,021,052 11.3 Dosso 3,100,000 484,300 401,947 13.0 Tahara 10,668,000 3685400 380, 224 3.6 Maradi 3,858,000 384,700 428,015 11.0 Zinder 14,543,000 429,900 434,063 3.0 Diffa 14,022,000 92,400 15,819 0.11 Agadez 71,479,000 pom. p.m. pPm.

TOTAL 126,700,000 2,720,500 2,677,120 2.1

Source: Statistique Agricole, 1972-73. TABLE 2a: AGROCLIMATIC ZONING

Populationl/ Climatic zone Normal Area total density Dominant activi irfal( (12000 km2) (1,000 inhab.) (inhab/km 2 ) Sahelo - Sudanian 5g0-850 100 1900 19 Food and cash crops, and sede: tary livestock

Sahelian 350-550 200 1300 6.5 Food crops and livestock (mixe,

Sahelo - Saharan 100-350 300 750 2.5 Transhumant livestock

Saharan 3-100 600 55 0.09 Transhumant livestock

includes (a) 75-100 100-150 55 OeO4 Camels and salt caravans

(b) 3- 75 500-450 0 0 N/A

about 1200 about 4000

2/ Spatial distribution of population in 1970 according to "Analysis of demographic situation in Niger," MDC. TABLE 3: FOOD CROPS A areaa in 1,000 ha) p production (1,Q9O tons) y yields (kg/ha)YL

CROPS 1967- 1968 1969 1971 192

Millet2/ A l,865 1,895 2,272 2,310 2,356 2,370 P 1,000 733 1,095 871 958 919 Y 536 387 482 377 1407 390 Sorghum A 530 557 596 593 580 581 P 342 215 289 230 267 208 Y 645 386 486 380 461 344 Cowpeas A 690 744 968 980 1,000 921 (niSbg) p 77 74 83 84 72 144 Y 112 100 86 86 72 136

Voandzou A 49 48 60 56 56 51 p 42 26 44 29 31 21 y 844 546 723 522 588 419

Rice (paddy) A U.5 15.3 15,5 16.4 17.1 17.2 P 32.6 39.0 38.0 37.1 27.3 31.8 y 2,829 2,553 2,5'21 2,259 1s596 1,407

Maize A 4.6 3.6 2.6 2.7 2.9 3.7 p 2.6 1.8 1.5 1.6 1.9 2.3 Y 576 494 542 585 670 457 Manioc A 23.6 26.8 27.5 24.3 24.3 18.5 (cassava) p 169 198 197 182 166 95 Y 7,550 7,379 7,165 7,480 6,860 7,083

Wheat A o.6 0.3 0.2 0.4 0.3 0.3 p 0.4 o.6 0.2 0.4 0.3 0.36 'Y 1,300 1,480 977 900 900 819 Potatoes A 1.2 1.2 1.3 1.3 1.4 1.5 (sweet) p 12.6 9.7 8.8 8.3 9.5 11.9 Y 10,600 8,010 6,950 6,450 6,800 7,000

Sugar cane A 1.0 1.3 1.4 1.4 105 1.5 p 21.3 24.7 24.9 36.8 53.8 53.6 Y 21,200 19,120 18,280 26,550 36,700 31,130

Source: AnrUal Agricultural Report, 1972. 1/ Geographic not general average. 2/ Last year to be considered climatically normal befOre the 1968-73 drought series.

3/ 1973 estimate = millet + sorghum about 800,000 tons (Agr. Stat.). TABLE 4: GASH CROPS

A area (1,000 ha) P production (1,000 tons) Y yields (kg/ha)!/ crops /6 1968 6 1970 1971 1972

Groundnuts A 356.7 432.0 319.8 357.5 394.2 417.9 (in shell) P 298.3 252,4 206.9 204.6 256.5 260.2* y 836 584 647 572 650 385

Cotton A 17.2 17.3 20.2 19.9 20.6 15.2 (seed) P 6.2 7.0 12.6 10.5 9.0 6.o Y 358 405 626 528 436 382

Onions A 2,1 1.8 1.7 1Q9 2.1 1.3 P 44.1 38.7 27.4 30.7 36.o 20.3 Y 21,390 21,000 16,520 16,430 17,000 13,860

Tomatoes A 0.4 0.5 0.4 0.3 0.3 0.34 F 4.6 4.7 3.6 2.2 2.7 2.5 Y 11,730 9,580 89075 7,490 7,740 10,840

Peppers A 0.8 0.8 0.8 0.4 0.9 0.36 (pirmentos) P 0.7 0.7 0.5 0.2 0.6 0.18 Y 872 781 603 595 603 567

Tobacco A 0.7 0.7 0,7 0.7 0.7 0.63 P 0.2 0.2 0.2 0.2 0.3 0.25 Y 337 273 278 355 360 445

Source: Annual Agricultural Report, 1972.

1/ Geographic not general average.

2/ Last year to be considered climatically normal before the 1968-73 drought series.

* Figures not reliable. More likely 200,000 tons. TABLE 5: GROUNDNUTS - PRODUCTION - UTILIZATION

(thousand tons)

1967-68 1968-69 1969-70 1970-71 1971-Z2 1972-73

Production

(a) In shell 298 252 207 205 256 260O

(b) Shelledl / 209 177 145 144 171 182

(d) Balance 26 13 -20 16 25 72

(e) Crushing in Niger 21 24 33 31 58 64

(f) Exports 162 139 131 96 85 43

Percent

Crushing 11.2 14.7 20.0 24.2 40.8 58.3

Export 88.7 85.3 80.0 75.8 59.2 41.7

100.0 100.0 100.0 100.0 100.0 100.0

ource: Production - MER (Agriculture); Marketing - SONARA.

Figures not reliable. More likely 200,000 tons.

/ Shelled base = 070 base in shell. ' Algebraic sum of imports, on-farm consumption, seed and variation in stocks. TABLE 6: COTTON - PRODUCTION - MARKETING

1967/68 1968/69 1969/70 1970/71 1971/72 1972/73

Production - seed cotton-/

Dry farming Area (ha) 17,135 17,000 21,570 19,370 19,517 12,027 Production(t) 6,030 6,790 9,895 8,261 6,980 4,320 Yield(kg/ha) 351 399 458 426 357 359

Irrigated Area(ha) -- 273 461 625 778 682 Production(t) -- 218 623 1,336 1,292 867 Yield(kg/ha) -- 797 1,351 2.138 1,660 1,270

Total production. marketed (seed cotton) (t) 6,030 79007 10,518 9,597 8,272 5,187

Cost of purchase (CFAF lOOs) 197,394 298,782 277,348 245,328 165,517

Average price (CFAF/kg) 28.74 28.41 28.90 29.67 31.91

Average 0/o ginning yield 35.86 33.52 34.90 36.19 37.23 36.10

Production

Fiber (t) 2,192 29349 3,671 3,468 3,080 1,853

Exports (t) 29192 29349 2s,675 2,918 2,065 853

Delivery Nitex (t) -- -- 996 550 1,015 1,000

Source: Production -CFDT.

1/ These CFDT figures corresponding to intensive cultivation are slightly lower than those of the Agricultural Service (see Table 4, Cash Crops). TABLE 7: LIVESTOCK - EXPLOITATION: OFFICIALLY RECORDED ACTIVITIES

1967 1968 1969 1970 1971 1972

Slaughtering (1000 heads) ---

Cattle 64.6 75.8 75.1 67.0 60.9 60.7

Sheep 81.8 94.5 96.9 92.0 88.6 104.0

Goats 331.1 312.6 384.5 381.7 398.3 396.2

Exports on hoof (1000 heads)

Cattle 60.3 67.3 64.3 101.7 143.0 181.0

Sheep 43.3 25.4 33.2 40.1 43.0 47.7

Goats 16.9 14.5 23.7 32.9 69.7 95.2

Exports of regrigerated meat (t)

Total 673.2 565.7

of which beef accounts for 351.4 371.7 517.6 586.3 530.2 418.0

and mutton accounts for 99.1 158.0 139.8 103.9 85.4

Exports of smoked or dried meats (t) 90.0 72.8 168.3 95.0 45.5 79.4 Hides and skins (1000 units)

Processing

Hides (cow) 164.3 179.6 250.6 232.9 166.0 146.9

Sheepskin 369.9 408.3 5190 4 475.5 467.8 429.7

Goatskin 979.0 1,046.1 ls,393.0 1,316J4 1,336.2 1,170J4

Exports

Hides (cow) 32.4 66.1 70.3 61.0 57.8 39.7

Sheepskin 107.0 154.0 185.7 233.7 403.1 274.7

Goatskin 554.8 906.0 900.9 1,081.4 1,357,5 389.0

Source: Service de 1'Elevage, MER. TABLE 8: RECORDED IMPORTS OF FOOD AND AGRICULTURAL PRODUCTS

(1,000 of tons)

Product 1967 1968 1969 1970 1971 L972/

Milk and milk products 0.8 0.7 0.5 1.0 0.7 0.8

Cola nuts 3.7 2.6 204 2.0 1.5 2.3

Sugar 7.2 3.h 7.6 9.0 6.9 10.6

Wheat flour 3.5 2.8 3.5 4.9 3.4 4.0

Beer, wine, other alcoholic beverages, vinegar 3.0 3.5 1.9 1.5 1.6

Cigarettes 0.3 0.2 0.2 0.3 0.3 0.5 Cotton cloth 1.6 3.6 3.6 4.1 2.5 2.7

Source: Bulletin de Statistique.

1/ Provisional figures. TABLE 9: EXPORTS OF AGRICULTURAL PRODUCTS

1! Product 1967 1968 1969 1970 1971 1972

1) Quantities (lOOOt)

Shelled groundnuts 176.0 162.4 128.3 131.9 93.3 92.2 Cotton fiber 2.6 2.9 2.2 1.3 4.9 1.6 Groundnut oil 7.5 3.8 2.5 7.6 10.4 18.1

Groundnut cake 7.5 5.5 4e4 11.1 9e5 26.8 Cowpeas (ni6b'e) 5.7 12.8 3.9 10.6 3.0 0.8 Onions 3.0 2.3 1.8 4.7 2.8 2.7

Live animals

Cattle/ 17.7 19.4 19.3 30,8 42.6 55.2

Meats 466 482 708 765 655 563 Hides and skins 0.4 0.5 0.9 0.8 1.2 0.6

2) Value (Millions of CFAF)

Shelled groundnuts 5,961 4,513 3,721 4,934 3,413 4,597

Cotton fiber 367 393 297 160 561 194

Groundnut oil 531 330 191 566 967 1,221 Groundnut cake 108 78 63 193 265 356

Cowpeas (ni'ebe) 171 385 116 318 91 37 Onions 49 46 126 326 193 182 Live animals, meat 844 863 890 1,390 1,973 2,511

Hides and skins 95 87 172 185 329 221

Uncontrolled exports31 - 1,880 2,440 1,900 1,866 1,700 Totals 8,575 89016 9,972 9 358 112019

Source: Bulletin de Statistique and mission estimates.

1/ Provisional figures. 2/ On basis of number of cattle x 350kg, 3/ Chiefly on the hoof - estimates. TABLE 10: CHARACTERISTICS OF FARMS IN NIGER

1970/71

Niamey Dosso Tahoua Maradi Zinder Diffa Total

'Total population (sedentary + nomacls in farming area) (thousands) 900 530 750 680 870 150 3,880 Popul.ation of farms (thousands) 675 420 540 530 670 100 2,935

Working farming population 225 145 225 265 330 55 1,245

Nunmber of farms (thousands) 90 70 90 80 100 20 450 Pcpulation per farm 765 6.0 6.0 6.6 6.7 5.0 6.7

W'orking age population per farm 2.5 2.1 265 3.3 3.3 2.7 2.8

Cultivated area (ha) 850 450 370 460 500 90 1,720

Area of farm (ha) 9°4 6.4 4,1 5.7 5.0 465 6e0

Area per head working farm population 3.8 3.1 1.6 1.7 1.5 1.6 2.2

Millet (thousand ha) 830 420 250 280 380 90 2$250

Sorghum (thousand ha) 100 70 100 150 150 2 572

Cowpeas (thousand ha) 390 130 110 130 230 1.5 991 Groundnuts (thousand ha) 165 45 15 175 150 265 389

Miscellaneous (thousand ha) 35 45 20 20 5 2.5 127

Source: Service de la Statistique Agricole, MER. TABLE 11: DEVELOPMENT OF COOPERATIVE AND MUTUAL GROUPS

1963/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73

Cooperative markets (ALC) 7 27 30 45 50 64 69

Cooperatives 7 27 30 79 115 159 164

Mutuals (GMV) 143 363 542 912 1,108 1,396 1,517

Members 2,354 6,202 7,403 24,716 46,229 61,754 69,627

Population affected 15,530 41,460 48s860 159,560 305,110 407,580 459,540

% of total population 0.5 1.4 1.5 406 8.7 110 3 12.2

Source: UNCC.

Total number of farms estimated at 450,000 in 1971 TABLE 12: GROUNDNUTS - STRUCTURE OF EXPORT PRICES (CFAF per ton, shelled)

1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 Purchase price to producer 18,040 17,830 20,000 21,000 24,000 24,000 28,000

Export taxes 2,750 2,250 2,250 2,250 2,250 2,250 2,250

Cost o{/marketing, shelling and 3/ export- 20,970 20,720 22,480 24,300 24,oo00 23,830 26,200

Cost price CIF 41,760 40,800 44,730 47,550 50,250 50,080 56,450

World price European port/ 38,700 45,440 52,470 54,000 65,900 65,900 79,980

Margin (cost price less world price) -3,060 4,640 7.740 6.450 15,650 29,900 41,550

Source: SONARA. 1/ Including purchasing commission, miscellaneous collection costs, storage, handling, shelling, internal transport, maritime transport, insurance, unloading, sale. 2/ Up to 1970/71, avera6e export prices Actually obtained for Nigerien groundnuts (shelled); world prices (Liveroool) thereafter.

3/ Estimate. TABLE 13: GROUNDNUTS - COMPARATIVE STRUCTURE OF SELLING PRICES EXPORT AND LOCAL OIL MILLS (Crop year 1972/73-CFAFiton)

Export Local oil mills

Purchase price to producer CFAF/kg shelled groundnuts 24,000 24,000

Purchasing commission (cooperative or O.S.) 1,970 1,970

Costs SONARA 1,400 1,400

Sacks 1,400 1,400

Operation 4,000 4,000

Margin 1,100 770

Transport to port of exportation 11,500 -

Export tax 2,250 -

Transport and delivery to oil mills - 1,325

Transport and sale in Europe

Freight 3,010

Insurance 150

Financed 300

Miscellaneous 400

Cost price export 50 080 - local oil mills - 33,465

Average selling price received

export (world price) 79,980

local oil mills - 40,500

Net gain of CSPPN 29,900 7,035

Source: SONARA. TABLE 14: COTTON - STRUCTURE OF MARKETING PRICES AND SELLING PRICES

(CFAF/ton)

1967/68 1968/69 1969/70 1970/71 197172 1972/73 1273/7

Average purchase price to producer (CFAF/kg cotton 28,170 28,170 28,410 28,900 29,670 31,910 37,000 seed)

Yield at ginnery (0 /0) 35,860 33,520 34,900 36,190 37,230 36,100 36,ooo

Cost cotton fiber (CFAF/kg) 78,550 84,030 79,860 79,860 79,690 88,390 102,770

Taxes 1,000 400 400 400 400 400 400

Cost of market and transport to ginnery 1f,210 10,050 10,640 10,040 10,040 10,040

Cost of ginning and baling 22,530 17,410 27,190 29,720 30,760 Cost of shipment

in Niger 16,590 14,530 11,750 outside Niger 35,990 23,340 25,060 19,320

Cost price cotton fiber

export (FOB) 147,650 158,240 150,920 153,810 188,540 NITEX - - 124,310 133,220 131,600 148,030 181,260

Average selling price cotton fiber

export (FOB) 140,000 145,810 147,770 183,040 NITEX - _ 134,240 150,840 140,000 177,18:i/

Source: CFDT, Niamey. 1/ Contemplated belling price. TABLE 15: DEVELOPMENT OF LIVESTOCK PRICES TO PRODUCER, OF MEAT DELIVERED ABIDJAN AND OF AIR FREIGHT NIAMEY-ABIDJAN

Increase Sept. 1968 Period (month/year) 9/68 8/69 10/71 11/72 X 9/72 to Sept. 1972

Price of livestock to producer (beef of 350-400 kg) in 30 32 43 43 62 67 +1230/o CFAF/kg live weight

Price of meat CIF Abidjan CFAF/kg

Beef: hindquarters 196 197f5 201 230 260 260 + 33 /o forequarters 125 126.5 130 145 160 160 + 280/o

Mutton, carcase 240 241.5 245 265 265 265 + 10 /o 0 Horse, hindquarters 220 221.5 225 225 245 245 + 11°/o

Freight Niamey-Abidjan in CFAF/kg 45 48 50 50 50 50 + 110/0

Freight + charges CFAF/kg 45.42 48.42 54.65 54.65 54.65 54.65 + 20°/0

Source: SONERAN.

1/ Estimate on a shipment of 6 tons of miscellaneous meat

at 240 CFAF/kg CIF Abidjan in 1972

at 210 CFAF/kg CIF Abidian in 1968. TABLE 16: PRICE AND VALUE OF GROUNDiNUTS PRODUCTION TO PRODUCER

1969/70 1970/71 1971/72 12L/739 Production, shelled (1,000 tons) 143 142 158 140 70

Price to producer (CFAF/kg) 20 21 24 24 28

Value (millions CFAF) 2860 2982 3792 3360 1960

Producer price index 100 105 120 120 140

Consumer price index1/ 100 101.3 114.4 126.8 139.5

Terms of trade 100 103.6 104.9 944.6 100.0

Index of nominal income 100 104,3 132.6 117 5 6865

Index of real income 100 102,9 115.9 92.6 4900

1/ Source: International Financial Statistics; for 1973 - 3 quarters; for 1974 an increase of 1Of over 1973 has been assumed. TABLE: 17: PRICE AND VALUE OF COTTON PRODUCTION TO PRODUCER

12E2/70 197071 1971/72 197 97 Production (seed) (10)0t) 12.6 1005 9.0 6.0 3.0 Price to producer (CFAF/kg) 28.4 28,9 29,7 31.9 37.0 Value (millions CFAF) 357.8 303.5 267.3 191.D4 111.0

Producer price index 100 101.7 104.6 112.3 130.3

Consumer price index1/ 100 101.3 114,14 126o8 139,5

Terms of trade 100 10004 91,o4 88.6 93.4 Index of nominal income 100 84.8 7407 53°5 31.0 Index of real income 100 83.5 65,3 42.0 22.2

1/ Source: International Financial Statistics (FMI); for 1973 = 3 quarters; for 1974 an increase of 10% over 1973 has been assumed. TABLE 18: AGRICULTURAL CREDIT OPERATIONS

PRODUCTION LOANS (number and thousand CFAF)

199a7 19270/1 l97,1L

NATURE Number Amount Number Amount Number Amount

individual short term/ 44 1,983 26 3,529 144 8g520 collective short term1 140 lio,815 68 35,839 39 17,382

Total short tLerm 18 279 39,36 183

individual medium term2 208 41,459 577 82,782 874 127,006

collective medium term 92 28,074 95 8,521 34 5,924

Total medium term 320 6_923L372 __908 132,930

PURPOSE

Land preparation 36,509 570 82,521 735 116,311

Fertilizer 20,110 58 1,934 16 1,980

Seed 60,295 4 16,631 1 828

Miscellaneous equipment- 30,466 134 13,303 234 15,387

Crop credits 34,951 16,282 104 24,326 182,331 1 7822

Source: CNCA Report 1972. 1/ Esp. crop credits (seed, fertilizer). 2/ Esp. equipment and preparation of gardens and orchards. 3/ Cooperative equipment (storehouses, scales). K/ Draft animals, orchards. TABLE 19: UNCC - AGRICULT-URAL EQUIPMENT AND PRODUCTS SOLD SINCE 1963

AGRICULTURAI EQUIPMENT 1963 196i 1965 1966 1967 (Quantities) 1968 1969 1970 1971 12

Tool carrying frames 5 31 122 235 289 216 105 129 191 126 Plow equipment 5 30 104 126 108 113 103 69 139 38 Cultivator equipment - - 15 83 186 158 140 37 59 41 Ridger equipment 3 89 60 247 196 170 117 40 78 65 Hoeing equipment 4 31 56 178 207 108 157 62 103 42 Groundnut sowers 25 14 15 92 99 37 62 64 19 37 Donkey-drawn hoes 33 81 33 67 55 23 27 31 6 31 Carts 4 85 100 133 93 133 143 128 145 98 Total (thousands CFAF) 248 4,764 17,393 25,180 19,372 9,303 7,520 5,220 6,097 4,712 SEED

Quantity (tons) - - 240 1,826 2,860 2,120 2,854 3,324 1,694 1,905 Value (thousands CFAF) - - 9,336 24,629 51,973 32,704 56,036 51,039 42,771 57,558 FERTILIZER

Quantity (tons) - - 82 264 396 375 210 320 269 362 Value (thousands CFAF) - - 1,148 2.,616 5,161 8,111 8,900 4,112 4,o86 6,038 INSECTICIDES

Quantity (tons) - - 4,085 4,145 11,375 10,175 16,552 18,552 20,591 20,979 Value (thousands CFAF) - - 1,483 1,873 652 4,657 4,427 10,200 11,321 11,53L

Sources: UNCC/Service des Approvisionnements. UNCC/Rapport d'activites. TABLE 20: FERTILIZER - PRICE STRUCTURE (CFAF/ton, 19T73; Delivery Delivery CIF price, Transport Handling, Niarmey-river Niamey- Total Price to Cotonou to_Eiamey ae rice field Maradi reg. cost Subsidy farmers FERTILIZER

Urea (rice crop) 26,000 16,000 1,400 3,000 - 46,400 16,400 30,000

Superphosphate

simple 20,700 16,000 1,400 - 8,200 46,300 26,300 20,000 triple

(groundnut crop) 31,800 16,000 1,400 - 8,200 57,400 37,400 20,000

Sources: Ministgre de l'Economie Rurale and UNCC. TABLE 21: IRRIGATED AGRICULTURE PROJECTS 1960-1973

,ear Pr o j e c t s Total area (ha) ADa River-Depression ha River-Terraces ha Hillside dams ha Year Cumulative

953 Firgoun 300 300

956 Daikeima 120 120 420

957 Kolo 400 400 820

962 Bassabandi 30 70 890

Greeskern 40

?63 Petit Lamodg 20 20 910

)64 Petit Kamara 5 5 915

'65 Dillalada 20 Keita 200 220 1135

~66 Dagaya Djaboula 40 Korg 1 50 190 1325

Say-/ 45 Kore 2 15

Sawani 40

67 Kirkissoye 120 Tillakeima 65 Moullela 67 562 1887

Koutakolg 270 Sakoira 40

68 Kirkissoye N. 40 Gabougoura 20 Garadoumg 80 423 2310

Grand Lamod8 100 Kasuara N. 55

Saga 100 Torifafi Ladama 28

j9 Saga 100 Tillakeima 15 Tholimane A 400 515 2825 (ext. IRAT) '0 Saga 100 IPDR (perimeter) 10 Ibolimane B 350 465 3290

1 Boubou 20 Tillabery 10 Guidaumagagi 130 260 3550 (IRAT asp.) Saga 100

2 Karma 150 SONIPRIM C 20 270 3820

Saga 100

3 Tossa 55 SONIPRIM 20 230 4050 Saadia 55

Saga 100

2W 205 1380 4050

Destroyed by flood in February 1968. TABLE 22: AGRICULTURE - INVESTMENTS - OPERATIONS IN PROGRESS IN 1971 J/ (in CFAF 1000s)

Amount Operations Sources of financing Item Amount Total Agriculture

Research (equipment and operation) FNI, FAC 96,350 Studies FAC 33,000 Equipment of services FNI 20,219 Training (equipment, IPOR, CFJA) US, FAC 251,125 Technical assistance (SONIPRIM) FAC 26,450 Distribution of inputs (fertilizer, seed) FNI 33,800 Plant Health Canada 250,200 Dallol Maouri Project (4 years) UNDP+FNI 323,225 1,036,369 Livestock

Veterinary research FNI 12,500 Studies FNI, FNAC 198,784 Equipment of services FNI 259000 Health of cattle FAC, Canada 583,900 Ekrafane Ranch (equipment) FAC 169,000 Goat raising station, Maradi FAC 90,400 Miscellaneous equipment (Niamey dairy, FNI, US 42,695 Kirkissoye, Maradi tannery, and FAC markets and trails) School of Assistants and Veterinary FAC, FED 207,500 1,329,779 Orderlies, Niamey

Water and Forests

Forest research FAC 6,800 Equipment of services FNI 26,576 Reforestation FNI, FAC 29,200 Fishing FNI 2,500 60,076 Rural Engineering

Studies (general, projects) FNI, FAC, FED 138,687 Equipment of services FAC 27,200 Works on irrigation projects FNI, FAC, FED 1,013,915 Soil conservation (ADM, Bad.) FAC 219,000 N'Gourg Ranch UNPD 32,80o Rural trails FAC 27,500 1,459,102 UNCC

Technical assistance (CFDT, IRAM) FAC 125,830 Equipment of cooperatives FED 250,094 Training, literacy FAC,IDA, WSC 1o8,216 Crafts, agricultural equipment IDA, GAAT 36,900 Works on irrigation projects FNI 38,800 Aid to production (equipment, cooperatives) FED 548,384 1,108,224 4s991 ,550 Source: MDC. 1/ Operations financed in 1971 and before and not started or not finished. TABLE 23: AGRICULTURE - FOREIGN AID TO OPERATIONS IN PROGRESS IN 19712/

(1000 CFAF)

Agency Total Credits FNI FAC FED UNDP Canada RFA US-AID IDA CAAT OXFAM WSC CCEE

Min. Agriculture

Agriculture 1,034,369 118,519 323,150 293,725 250,200 48,775

Water & Forests 60,076 43,076 17,000

Livestock 1,329,779 91,239 973,800 187,500 67,000 10,240

Rural Engineering 1,459,102 48,971 1,280,150 97,091 32,800

UNCC 1,108,224 38,800 188,046 798,678 73,400 7,500 2,000

Total Agriculture 4,991,550 340,605 2,782,246 1,083,069 326,525 317,200 59,015 73,400 7,500 2,000

Mines, Public Works, Hydraulics OFEDES 190,552 8,800 19,000 151,752 5,000 6,000

Water Service 527,385 452,385 75,0OO

- Min. National Education

Rural literacy 5,500 5,500

Min. Rural Economy

SOTRAMIL 4,189 4,189

Min. DeveloPment and Cooperation Studies 40,650 40,650 GRAND TOTAL 5_759.82 359, 0 ,846,796 123 326X525 317,200 151,752 -64,l 73,400 7,0So 6 2,000 75,000

Source: MDC. ]/ Operations financed in 1971 and before and not started or not finished.