Presentation prepared by Xinshen Diao, Paul Dorosh, Josee Randriamamonjy, and James Thurlow, all with the International Food Policy Research Institute, Washington DC. This is part of the Global Crisis Country Series.
Scaling up coastal adaptation in Maldives through the NAP process
Niger: Impacts of the Ukraine and Global Crisis on Food Systems and Poverty
1. Version: 12 June 2022
Niger
Impacts of the Ukraine and Global
Crisis on Food Systems and Poverty
Xinshen Diao, Paul Dorosh, Josee Randriamamonjy, James Thurlow
International Food Policy Research Institute, Washington DC
These country studies are conducted by IFPRI with financial support from
BMGF, FCDO, and USAID. All studies use data and models developed with
ongoing support from BMGF, USAID and the CGIAR’s “Foresight and Metrics”
initiative.
2. Version: 12 June 2022
Overview
• Series of country case studies
• Economywide modeling
• Capture world market shocks
• Estimate impacts on economy, agri-food
system, poverty, food security, etc.
• Simulate policy responses
• Three phases of analysis:
1. Initial data collection and impact assessment
2. Data revisions and analysis of broad policy options
• Cash transfers, food aid, and fertilizer subsidies
• Fiscal implications for national governments
3. In-country engagement and tailored policy analysis
Impact
assessment
Policy
analysis
Country coverage
Countries with IFPRI RIAPA models
May June
July
3. Version: 12 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are food and fertilizer imports in
local market?
How important is the windfall revenue from oil
exports for the government?
Which sectors use the affected products as
inputs?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations World Price Shocks
Source: World Bank Pink Sheets
Global data
11%
-13%
100%
56%
34%
88%
101%
Maize Rice Wheat Palm oil Crude oil Natural gas Fertilizer
Change in real world prices (June 2021 to April 2022)
30 Jun 2021 - 31 Jan 2022 31 Jan 2022 - 30 Apr 2022
30 Jun 2021 - 30 Apr 2022
4. Version: 12 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are food and fertilizer imports in
local market?
How important is the windfall revenue from oil
exports for the government?
Which sectors use the affected products as
inputs?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Supply and Demand
Supply
(% by source)
Demand
(% by use)
Niger data
Source: IFPRI Niger RIAPA Model
64%
11%
31%
89%
69%
4%
Maize Wheat Edible oils Oil products
Imports
Domestic
47%
37%
11%
90%
53%
89%
1%
9%
Maize Wheat Edible oils Oil products
Exports
Final use
Input use
+ Others = 100%
+ + +
0.1% 0.2% 0.7% 7.2%
Products’ share of the
value of total demand
throughout the economy
5. Version: 12 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are food and fertilizer imports in
local market?
How important is the windfall revenue from oil
exports for the government?
Which sectors use the affected products as
inputs?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Consumption Baskets
Niger data
Source: IFPRI Niger RIAPA Model
24.9%
35.5%
6.2%
46.3%
20.7%
45.0%
46.5%
47.5%
37.6%
49.2%
30.1%
22.3%
50.2%
19.5%
34.4%
All households Rural Urban Poor Nonpoor
Composition of household consumption spending
Cereals & edible oils Other foods Non-food goods & services
6. Version: 12 June 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations Fertilizer Adoption Rate
Source: Harmonized Survey on Household Living Conditions (EHCVM) 2018/19, Niger
Timing When is the fertilizer needed?
Niger data
18.3%
78.9%
65.7%
44.1%
10.2%
46.5%
100.0%
67.9%
67.9%
91.6%
Maize
Rice
Wheat
Other cereals
Pulses
Cassava
Irish potatoes
Leafy vegetables
Other vegetables
Fruits
Share of cultivated land using fertilizer
7. Version: 12 June 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations
Crop Calendar
Source: FEWSNET Niger
Timing When is the fertilizer needed?
Planting for Niger’s 2022 season is underway
Niger
8. Version: 12 June 2022
Results | GDP and Employment
• National GDP and employment declines
• Negative terms-of-trade shock
(i.e., negative effect of higher import prices slightly outweighs
positive effect of higher fuel export prices)
• Rising import costs reduces spending on
domestically produced goods
• Falling production leads to job losses
• Agri-food system GDP falls but employment is
less affected
• GDP declines in both primary agriculture and off-
farm agri-food sectors (e.g., processing, trading)
• Larger GDP declines in agriculture (equal to 54% of
overall GDP losses in the country)
• Faster job losses in off-farm sectors, especially in
food-related services, incl. trade and transport
• Agricultural employment is not affected
• Employment impact is larger than GDP impact
outside agri-food (60 percent of job losses are
outside agri-food system)
Source: IFPRI Niger RIAPA Model
Contribution to total change
GDP
Jobs
-0.3%
-0.4%
-0.5%
-0.3%
-0.2%
-0.3%
-0.2%
0.1%
-3.0%
-0.6%
-3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Change in GDP and employment due to
food, fuel and fertilizer shocks (%)
GDP Employment 55%
9%
36%
Agriculture
Off-farm
Outside AFS
-34%
79%
55%
9. Version: 12 June 2022
Results | Drivers of GDP Losses
• Fertilizer shocks drive most of the decline in national
GDP
• Agri-food GDP losses also driven by fertilizer shocks
• Fertilizer directly affects primary agricultural production
more
• Disrupts downstream processing via supply chains mainly
from food shock
• Off-farm more adversely affected by higher food prices
• GDP losses outside the agri-food system driven equally
by fuel and fertilizer shocks
• Higher transaction costs
• Lower consumer demand
Source: IFPRI Niger RIAPA Model
Contribution
to change
-0.1%
-0.1%
-0.1%
-0.1%
-0.1%
0.0%
0.0%
0.1%
0.0%
-0.1%
-0.2%
-0.4%
-0.5%
-0.2%
0.0%
-0.3%
-0.4%
-0.5%
-0.3%
-0.2%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Percentage change in real GDP due to food, fuel
and fertilizer shocks (%)
Food prices Fuel prices Fertilizer prices & response
25%
8%
67%
10. Version: 12 June 2022
Results | Household Consumption
Source: IFPRI Niger RIAPA Model
• Household consumption falls significantly
• Households do not benefit from rising fuel export prices
• Rising food price and fertilizer shocks are most important
drivers of consumption losses
• Importance of shocks differs across population groups:
• Food prices important for rural households
• Higher food consumption share for rural households, means
larger impacts
• Fertilizer shocks affect all households
• Most consumed foods are locally produced
• Fuel shocks affect only urban households significantly
• Income gains from rising fuel production are modest to
households as a large share of production capital owned by
foreign companies
• Urban households consume products with larger transaction
cost margins
Contribution
to change
-0.7%
-0.7%
-0.5%
-0.6%
-0.7%
-0.1%
0.1%
-0.3%
0.0%
-0.1%
-0.4%
-0.4%
-0.5%
-0.3%
-0.5%
-1.2%
-1.1%
-1.3%
-0.9%
-1.2%
National
Rural
Urban
Poor
Nonpoor
Percentage change in real consumption
Food prices Fuel prices Fertilizer prices & response
56%
6%
38%
11. Version: 12 June 2022
Results | Changes in Inequality
• Differential effects across households will not greatly
affect inequality:
• Fuel shocks will have little impact on the low-income
groups and only cause large consumption losses for
households in the top quintile
• Food prices affect all households with slightly large impact
for households in the top quintile
• Fertilizer shocks have similar impact across quintiles
• Combined shocks are dominated by food and fertilizer
shocks for most households except for the top quintile
• Overall, inequality is less affected
• Because only households in the top quintile affected for
fuel shocks
Source: IFPRI Niger RIAPA Model
-1.5%
-1.0%
-0.5%
0.0%
0.5%
Q1 Q2 Q3 Q4 Q5
Percentage change in quintile consumption
Food prices
Fuel prices
Fertilizer prices & response
Combined food, fuel and fertilizer shocks
12. Version: 12 June 2022
Share of population
falling into poverty
Results | Poverty
• Poverty rises significantly
• Headcount rate up modestly to 0.8% points
• 200 thousand more people pushed into poverty
• Poverty increases in rural areas
• Almost 100 percent of expanded poor population
• Extremely low urbanization rate with a majority of
population living in rural
• Mainly driven by food and fertilizer shock
Source: IFPRI Niger RIAPA Model
Contribution
to change
0.7%
0.0%
0.8%
0.0%
0.0%
0.0%
0.2%
0.0%
0.2%
0.9%
0.0%
1.0%
National
Urban
Rural
Change in poverty headcount rate (%-point)
Food prices Fuel prices Fertilizer prices & response
169
0
169
0
40
0
40
209
209
National
Urban
Rural
Change in poor population (1000s)
Food prices Fuel prices Fertilizer prices & response
81%
0%
19%
0%
100%
Urban
Rural
13. Version: 12 June 2022
• Food, fuel and fertilizer shocks together increase the
cost of a healthy reference diet
• Reference diet is the EAT-Lancet’s “healthy” diet
thresholds for the six major food groups
• Rising prices for edible oils (in added fats) increase the
cost of the recommended healthy diet, while falling
incomes reduce demand for diary and proteins (meats
& fish) and lower their costs
Results | Diet Quality
Source: IFPRI Niger RIAPA Model
• Rising food prices and falling incomes cause diet quality
to worsen for many households
• Prior to the crisis, few households had consumption levels
and diversity needed for a healthy diet
• Rising food and fertilizer prices cause 614 thousand people
to become deprived in at least one additional food group
• Rural population accounts for more of the deterioration in
diet quality
3.4%
-0.1%
0.2%
-0.3%
-0.4%
4.0%
Net change in
cost of healthy
diet
Contributions of
food groups to
change
Change in the real cost of a healthy
reference diet caused by rising world
prices (%)
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
9.4%
9.1%
17.4%
27.8%
28.0%
8.3%
Shares of six food groups
in total cost of a healthy
diet prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
372
119
251
242
46
198
614
165
450
National
Urban
Rural
Number of people to become deprived in at least one
additional food group (1000s)
Food prices Fuel prices Fertilizer prices & response
14. Version: 12 June 2022
Headlines
• Food, fuel and fertilizer shocks lead to reductions in GDP
and employment in Niger
• Agri-food system also adversely affected
• Agriculture is particularly at risk to fertilizer shocks, esp. if it
leads to lower fertilizer use in the current season
• Rural households are especially vulnerable
• All increased poor people are in rural
• Rural has larger contribution to the deterioration in diet
quality
• Next steps
• Evaluate policy options available to governments and
development partners to mitigate impacts on food systems,
poverty, and food insecurity (e.g., cash transfers, food aid,
fertilizer subsidies, fiscal support, etc.)
Impact
assessment
Policy
analysis
Country coverage
May June
July