1. Introduction

In the early years of Nigeria’s independence, agriculture accounted for nearly 60 percent of Gross Domestic Product (GDP) and 80 percent of export earnings (Shaib, Aliyu, and Bakshi, 1997). Today agriculture accounts for a third of GDP and less than one percent of export earnings, oil accounting for the rest^[1].

Although room exists for Nigeria to prosper, the country continues to face a number of challenges. Policies to date have yet to diversify the productive base away from the continued reliance on a single industry, petroleum. There continues to be underutilization of industrial capacity, high unemployment and political anxiety.

A desirable outcome for the Nigerian populous and current government is a strong diversified economy able to generate employment and sustain incomes for its citizens. Increasing the productivity of agriculture, increasing the utilization of industrial capacity, diversifying export earnings and providing gainful employment for its population are all desirable targets.

To achieve this, President Olusegun Obasanjo’s newly elected government, in 1999, pledged to support the agricultural sector and announced the need for immediate action in five agricultural subsectors: cassava, rice, vegetable oils, livestock and tree crops. The cassava initiative alone seeks to generate US$5 billion in export revenue by 2007. Since its launch in July 2002, great excitement has been generated, creating new hopes and even greater expectations.

To compliment this Initiative, IITA together with the Nigerian National Petroleum Corporation (NNPC) recently signed a four year action plan providing local communities with cassava mosaic disease resistant planting materials and production and marketing support. These improved cultivars also produce more cassava per plant. Their distribution to farmers could lead to a substantial increase in production (IITA, 2003). The question is can the utilization of cassava grow sufficiently to mirror farmer’s enhanced ability to produce cassava?

1.1 Study Objectives

The primary objective of this study was to determine the actual and potential size of the market for cassava and cassava based products in Nigeria and what is required in terms of economic, social and physical investments to develop an efficient cassava industrial sector. The specific objectives and activities directing this study are provided in Appendix A.

The intended audience for the report was to include large, medium and small-scale private sector investors, farmers and processors. It was also intended to guide donor and development bank investments and government policy.

The study team comprised two agricultural economists, a local post harvest specialist and an agronomist. Work began in November 2003 with an extensive search for available data on the Nigerian cassava industry. This involved visits by team members to all state agricultural development programmes (ADPs), federal offices, and key industrial informants. Duplication was minimized by not visiting those informants and industries already visited by previous consultants. Instead information from their reports was used in this report.

The task for this single report is enormous. It is obvious that in its current form, the information contained in this report may be too detailed to interest large, medium and small-scale investors, donors, governments and development banks. Condensed reports or pamphlets for industrial application should be gleamed from this report to suit specific end user interests. The data intensive nature of this study lead to a companion document being assembled, entitled "The Nigerian Cassava Industry: Statistical Handbook".

1.2 The Cassava Statistical Handbook

This study draws heavily from previously presented material on simulating the cassava industry in Nigeria. It was also the intention of this study to draw heavily on data collected and collated by the industry and State and Federal Governments. In travelling across the country it was soon realized that much of the data desired for this study of cassava had not been collected nor collated and was not readily available in a form that could be quickly or easily analysed. It was for this reason that The Nigerian Cassava Industry: Statistical Handbook 2004 was born.

This handbook, a first of its kind for cassava, contains over 100 pages of data in tabular form relevant to the Nigerian cassava industry. The sections provide data on production, processing, utilization, prices, enterprise budgets, transportation, domestic economic indicators and international cassava data. The data is intended to provide a baseline for monitoring changes in the industry and a guide for investments and research. Although some tables are incomplete, sections and table headings are provided, as a guide for future industrial data collection.

The Handbook is intended to provide the Nigerian Cassava Industry and those interested in learning about the industry with a basic understanding of its scope, organization and magnitude. It is hoped that this Handbook will be updated on an annual basis and widely distributed in both hard and soft formats. Hard copies are to be made available to all levels of government, institutions, industries, associations and interested individuals. Soft copies are to be made available on request to those with available technology.

Although many have suggested that such a Handbook can be easily and cheaply maintained in CD or web site form many people in Nigeria do not have access to such technology and even those that do, do not have a steady supply of electricity for it to be available when and as needed. Paper copies are still very important in Nigeria. Especially so, when one considers the fact that less than one percent of the population accesses the Internet or has personal computers (World Bank, 2004).

The Handbook should be used as a companion when reading this report. Data summarized in this report can be examined in detailed tabular form in the Handbook. It is hoped that as the use and availability of the handbook become widespread, industrial stakeholders, policy makers and national researchers will be able to undertake their own or similar analysis and interpretation of the data when and as needed. This report together with the Statistical Handbook forms a pool of information from which private sector investor information can be drawn.

Another innovation brought about by this study was the development of regional production models that can be used to simulate the outcome of alternative production scenarios.

1.3 Regional Production Models

Regional production models have traditionally been used to assess the potential responses of farmers to changes in policy, technology and market conditions. Depending on the objectives of the analyses and the availability of data, the scope of such models has ranged from that of individual farms to aggregate models representing the entire agricultural industry.

For this study linear programming was selected as an appropriate technique to develop regional production models. Linear programming is a technique that maximizes or minimizes an objective function subject to a set of constraints. In the case of regional modelling the objective function normally consists of maximizing profit or output from farming activities, or minimizing costs of production or use of inputs. The constraints generally refer to the availability of land and labour and the need to meet some minimum marketing, or consumption standard.

These models are typically based on enterprise budgets. Ideally the budgets provide an indication of quantity and cost of production inputs, as well as the timing of these activities. These budgets also provide information on the output and value of production activities. The budgets may also provide information on the linkages between different production activities, such as the amount of produce that is processed into another commodity (e.g. cassava roots to gari).

Initial data collection activities led to the belief that each Agricultural Development Programme (ADP) had enterprise budgets for the primary cropping patterns in its state. It was thus planned to develop farm models for each state. Unfortunately, the visit to 16 ADPs proved otherwise. Only three of the 16 visited ADPs were able to provide enterprise budgets that were representative of the commonly practiced intercropped activities of the state. Two additional states provided an enterprise budget on mono-crop activities, but it was felt that these could not be used to develop representative farm models. It was suggested by various ADPs that the desired enterprise budgets be available at the Project Coordinating Unit (PCU) in Abuja. Unfortunately it was not possible in the two-day visit to the PCU in Abuja to collect the desired data.

Copies of the 2000/2001 Advisors Handbook (Projects Coordinating Unit, 2002) which contained a compilation of over 40 crop enterprise budgets collected from 6 states. From the point of view of farm modelling the data lacked information on the quantity of inputs (labour and purchased inputs) and location of the states used to develop the budgets. Appendix B details how the data was adjusted to account for this missing detail. With this adjustment, these data represented the best and most comprehensive source of cost of production data we were able to find and formed the starting point for developing regional farm models.

The constraints to the model were regional land availability and producer food consumption requirements. The regional models are annual models that maximize gross margins (revenue minus input and labour expenditures) subject to minimal farmer consumption and limited by available land.

The regional models were used to compare four scenarios against a base scenario. The base scenario is designed to represent current regional conditions of land use, food consumption and agricultural production. Land constraints are used to insure that the base results are similar to calculated regional averages.

A feature of the model is that it was assumed that the traditional harvesting of cassava continues into the second year. The implication for the annual model is that enterprises containing cassava require 2 ha of land rather than 1 ha of land, as do all other enterprises. The four scenarios are based around two changes. One change results in cassava being harvested in one year as opposed to two years. The second is the adoption of high yielding varieties.

Scenario A assumes yields increase to 15 tonne/ha but harvesting continues into second year. Scenario B assumes that cassava is harvested within a single year but yields don’t improve. Scenario C assumes yield increases to 15 tonne/ha and cassava is harvested in one year. Scenario D assumes yield increases to 20 tonne/ha and cassava is harvested in one year.

The results obtained from these scenarios on production, area and quantities marketed are illustrated and discussed throughout the report.

1.4 The Revolution

The cassava revolution in Nigeria is at its infancy. This report hopes to describe it in the context of its current status; new initiatives; future targets; and future directions. The report organizes the discussion within six sections: Introduction, Production, Utilization and Processing, Prices and Margins, Development Clusters, and The Ultimate Way Forward. Each section, except for the last, contains the four subsections: Current Status, Future Targets, New Initiatives, and The Way Forward.