100127 A g r i c u lt u r e G l o b a l P r a c t i c e N o t e 16 Senegal Agricultural Sector Risk Assessment Stephen D’Alessandro, Amadou Abdoulaye Fall, George Grey, Simon Simpkin, and Abdrahmane Wane Despite uneven performance, Senegal’s agricultural sector remains vital to the national economy. It accounts for roughly one-sixth of gross domestic product (GDP) and continues to be a major source of employment. Nearly three in five Senegalese (58 percent) live in rural areas and depend primarily on agriculture for their livelihood. Expanding the sector and achieving food self-sufficiency is one of the core pillars of the country’s economic development strategy, Plan Senegal Emergent. Successive government policies have promoted intensification of crop and livestock production. Yet, sector growth has lagged behind population growth and growth in other sectors. During the most recent decade (2004–13), the sector expanded by 3.5 percent on average, well below Government targets. The sector’s poor performance is partly due to limited take up of productivity-enhancing inputs among smallholder farmers who dominate the country’s agricultural production. It is also due to increasing climate unpredictability and adverse impacts from unmanaged risks. This Note summarizes key findings, conclusions, and farmers, traders, processors, and others in rural Senegal recommendations of an agricultural risk assessment as well as with government and agricultural research that was undertaken jointly by the World Bank and the staff. The results of the analysis are considered in the Government of Senegal during 2014–15. The study’s light of the vulnerability of the different stakeholders to principal objective was to assess production, market, the effects of ex post shock events and the resulting ex and enabling environment risks facing farmers and ante impact upon investments. other stakeholders across Senegal’s agricultural sector and to identify pathways to improved risk manage- MAJOR RISKS ment. The study’s principal findings highlighted agricultural The analysis was based on extensive analysis of crop production and livelihood systems in Senegal that are and livestock production, price, and meteorological highly vulnerable to downside risks. data records over the period 1980–2012. It included a review of key documentary evidence of yield and risk Production risks events together with input from interviews held with The most significant risk facing Senegalese agriculture is increasingly erratic rainfall and drought as a more AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 Figure 1: Timeline of major shocks to agricultural production in Senegal (2004–06 = 100), 1980–2012 Production index (2004–06 = 100) Source: World Development Indicators, Authors’ notes. Year extreme but less frequent expression of the same rate of the CFA franc (XAF) to the U.S. dollar has shown phenomenon. Severe drought, especially in northern only modest variability over the past 12 years. regions, emerges as the biggest risk in terms of esti- mated aggregate losses to crop and livestock—a one Traditionally, the limited reliance of pastoralists upon in every four years event on average over the review markets implied a limited impact of price risk upon pas- period. The analysis also suggests a corresponding toral livestock production, but this situation is changing. increase in the frequency of floods over the same pe- Livestock prices often plummet while food prices riod, but with limited aggregate impact on agricultural increase; this is now a common shock-induced pattern supply chains. After drought, locust infestations were in dry lands and a major risk for livestock owners. Within the second most common and costly risk to agricultural the poultry sector, price volatility of imported feed production. Other crop pests—such as birds and components—notably corn and soya, which contribute grasshoppers—brushfires, and livestock diseases also 80 percent of poultry feed—is considered a major count among the most significant production risks. source of risk. Market risks Enabling environment risks The impact of price risk varies substantially according to When ranked in terms of impact and frequency, a key the crop and its importance to the rural economy. There risk noted within the livestock sector is derived from is considerable variability in domestic food crop prices uncertainty over land tenure and access. Since access and more limited variability in domestic cash crop and mobility are critical to pastoral livelihoods, inconsis- prices. International prices of rice, maize, groundnut tent land tenure policy and uneven implementation of oil, and cotton were more variable, with coefficients of regulations may weaken traditional coping mechanisms variation exceeding 40 percent in some cases. Com- and increase vulnerability levels among pastoralist panies that process locally purchased commodities for communities, particularly in the north where land-use export (cotton and groundnuts) face a significant price pressures are increasing. Similar uncertainty is derived risk because the domestic purchasing price may vary from the inconsistent delivery of animal health services, independently of the export price. Although exchange including the enforcement of policies on vaccination, rate fluctuations can also contribute to price risk for quarantine, and movement. exporters of locally purchased products, the exchange 2 | AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 Figure 2: Estimated losses from agricultural production shocks 1980–2012 Millions of US$ Year Source: World Development Indicators, Authors’ notes. Adverse Impacts of Risks rural and urban households are affected through food price spikes, which increase food insecurity and correlate Figure 1 depicts a historical timeline of risk events that to spikes in malnutrition rates. The government’s fiscal adversely affected sector performance from 1980–2012. position is affected due to the cost of ex poste response, Since 1980, the agricultural sector has been subject to crowding out spending on health, education, and other at least 11 major production shocks, with a frequency of poverty-reducing investments. every three to four years on average across the 33-year review period. The results of trend analyses indicate RISK MANAGEMENT that for the 12 crops analyzed, annual production losses amounted to approximately 4.82 million metric tons, with The government of Senegal (GoS) understands the an estimated value of US$1.4 billion, or 3.9 percent of an- importance of putting in place effective agricultural risk nual agricultural GDP, on average (see figure 2). It is worth mitigation systems. In recent years, it has adopted a range noting that this reflects only the ex post impact. The ex of capacity-building measures geared toward reducing ante impact may be of equal or even greater magnitude. Senegal’s exposure to natural disasters and impacts from a changing climate. These measures include the creation Although the average annual impact of shocks on GDP of the Directorate of Civil Protection, the development of is relatively modest (less than 4 percent), actual impacts a National Platform for Disaster Risk Reduction (DRR) and when they occur can result in losses of 10 to 20 percent elaboration of a National Action Plan on DRR (2010–15), of sector GDP. Senegalese agriculture is subject to losses and adoption of the National Adaptation Programme of exceeding 10 percent of gross production value in one Action for climate change adaption. Such GoS initiatives out of every five to six years due to unmanaged risks. In are already helping to safeguard livelihoods, promote 2002, a particularly severe drought followed by wide- climate adaptation, and strengthen household resilience. spread locust infestation contributed to losses exceeding And yet, agricultural supply chains in Senegal remain US$217 million, or 32.7 percent of gross production value highly vulnerable to a wide range of risks that jeopardize (see figure 3). Erratic rainfall and/or drought account for rural livelihoods. Building more productive, more resilient, an estimated 50 percent of crop yield reductions. Pests and more sustainable food and marketing systems and diseases, especially locusts, account for roughly is crucial to safeguarding livelihoods and increasing 25 percent. Losses from agricultural risks have adverse economic growth. impacts that are acute and far-reaching. Risks negatively affect rural employment, savings, and assets, and both AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 | 3 Figure 3: Impact and frequency of major agricultural risks in Senegal, 1980–2012 Millions of US$ Frequency A multidisciplinary team of technical specialists from the The following sections summarize the key findings and World Bank, the Ministry of Agriculture and Rural Equip- recommendations from the Phase II report across the ment, the Ministry of Livestock and Animal Production three focus areas. (MEPA), and the Senegalese Institute of Agricultural Research conducted a follow-up assessment in early 2015. 1. Strengthening early warning and early The team evaluated Senegal’s existing risk management response landscape in three target areas to identify pathways to To increase effectiveness of its national EWS, the GoS increased climate resilience via assessing the effectiveness should prioritize upgrading the timeliness, accuracy, of current and past interventions, principal barriers and and area-specificity of seasonal and short-term weather challenges, and potential leverage points for scaling up forecasts. This information should be made more broadly the most effective risk mitigation interventions. Based available in targeted, user-friendly formats to a growing on outcomes of the earlier risk assessment, the three number of trained rural communities. Communities target areas included: 1) enhancing climate resilience of should be increasingly integrated into the national EW/ smallholder systems via improved soil and water manage- ER system through decentralized mechanisms. Senegal’s ment and diversification, 2) strengthening Early Warning ongoing participation in African Risk Capacity (ARC) and Early Response (EW/ER) systems, and 3) improving should be based on improved customization of the Africa management of pastoral resources. RiskView model. This could also benefit from an analysis of The objective of the Phase II assessment was to generate various risk-management and risk-sharing options under insights, inform, and kick-start the development of a different drought/disaster ARC insurance options. Finally, framework for improved risk management and stronger to make the overall system more effective, improved resilience for the agricultural sector. More specific access to climate and short-term forecast information objectives included identifying existing practices and should be matched with improved access to risk-lowering systems that helped smallholders manage risks and farming practices and to key agricultural inputs. increase productivity; identifying the enabling conditions Increase awareness and training in weather fore- necessary for scaling up; and proposing an evidence- casts (media, institutions, rural communities). based program of investments, technical assistance, and Training rural communities in weather forecasts provides policy changes that would establish those conditions. AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 | 4 of rainfall data points and of ground observations for ground-truthing of analyzed satellite data would improve seasonal monitoring, yield forecasts, and pro- spective food security analysis. Customize Africa RiskView and refine the analy- sis of the drought insurance instrument. National institutions and ARC worked together for over a year to derive the set of parameters which triggered the 2015 indemnity payment. However, all parties recognize that further improvements could be made. In light of the country’s evolving risk profile, the respective risks being assumed by Senegal and the insurer and the premium-payout ratio under the ARC scheme should be re-assessed. Photo credit: World Bank Broaden and formalize the involvement of rural communities in early warning/early response. An increasing number of rural communities are capable of playing more active roles in natural resources manage- substantial benefits in terms of higher yields, lower in- ment, weather information use, rainfall data collection, put use, and greater resilience to erratic rainfall events. and even food security monitoring. It can also 1) provide a basis for expansion and higher density ground-level data collection points needed Improve desert locust contingency planning. for a down-scaling of current weather forecasts, and 2) Locust early warning should be integrated with other contribute to better integration of rural communities EW/ER interventions, and the national desert locust into local early warning/early response mechanisms. control plan should be updated accordingly, with a Broaden the current dissemination of seasonal view to its use as the basis for potential applications and short-term weather forecast, and warnings. through the UN for emergency response funds. Finan- Weather-forecast information is in high demand, cial requirements for desert locust control need to be but does not always flow smoothly; many rural radio revised based on past experiences and the new con- stations, for instance, have intermittent or no access figurations of EW/ER consistent with improved seasonal to internet or even to the mobile network. A modest monitoring. Finally, explore options for quick disburse- amount of support is needed to improve internet and/ ment of all or part of the desert locust control budget or telephone connections and to increase the number under the current ARC Memorandum of Understanding of individuals who receive weather forecast information or the upcoming ARC Outbreak and Epidemic Insur- through their mobile devices. ance Programme for African Sovereigns. Refine and downscale seasonal and short-term 2. Strengthening the climate resilience of weather forecasts, and seasonal monitoring. This smallholder systems would address one of producers’ chief complaints: While challenges from climatic shocks are significant due to high spatial variability, current forecasts for any and growing, this report highlights experiences in given area do not necessarily pertain to all communi- Senegal and elsewhere in the sub-region that show ties within that area and can be misleading. Another how certain risk management practices can help most advantage is that it would improve the spatial accuracy dryland farmers reduce climate-induced risks to their of vegetation index and rainfall estimates modeling. livelihoods. They do this by reducing runoff, improving Improve ground data-based validation for sea- the soil’s capacity to retain soil nutrients and hold sonal monitoring. A combination of higher density moisture, improving rainfall- and fertilizer-use efficiency, 5 | AGRICULTURE GLOBAL PRACTICE NOTE —OCTOBER 2015 Photo credit: M. Tall/CCAFS and via livelihood diversification. Experiences in Senegal Promote farmer adoption of effective water harvest- and within the region also show that promoting a busi- ing practices. Aménagement en Courbe de Niveau, a form ness approach to scaling up these practices is not only of ridge tillage, has been shown to increase rainfall infil- possible, but is the most effective pathway to successful tration rates by 66 percent and yields by 30–50 percent adoption. in Mali field tests, with even greater increases recorded during poor rainfall years. Promote broader adoption of Conservation Agricul- ture (CA). Through demonstration plots and farmer-to- Promote farmer adoption of Zaï holes and Demi- farmer visits, wider farmer use of furrows and minimum Lunes. Zaïs have a long track record of improving yields, tillage technology combined with composting, mulch- particularly in areas subject to poor and erratic rainfall. ing, and other soil conservation practices would help to Applying micro-doses of manure/compost and urea to increase rainfall and fertilizer-use efficiencies and reduce the zaï increases yields substantially. fertilizer costs. In 2013, yields on CA fields were 57 percent higher than non-CA fields (USAID 2014) and as much as Scale up Community-based Charcoal Management double the yields in some areas. (CBCM). Introduced recently to Senegal by the World Bank’s Sustainable and Participatory Energy Manage- Promote adoption of Farmer-Managed Natural ment Project and USAID’s Wula Nafa program, CBCM is Regeneration (FMNR). FMNR benefits include the an- a sustainable-yield, revenue-generating forest manage- nual deposits of organic matter from annual tree pruning ment intervention that generates revenues for local on the fields, nutrient recycling, hydrologic lifting of soil governments and supplemental income for rural farming moisture, and income diversification via the provision of communities that is less dependent on rainfall. high-quality browse and fuel wood. AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 | 6 Photo credit: Milo Mitchell/IFPRI Promote integration of small animal husbandry pressure, and optimize trade-offs between cash income into cropping systems. Integration of livestock into needs, family labor, productive smaller herds, and local rain-fed cropping systems can be transformational as sales of fodder and milk. The aim is to enable a more a strategy for improving household resilience as it pro- sustainable, dynamic combination of both mobile and vides a supplemental source of nutrition and income sedentary livestock production. In the short-term, a that is not directly dependent on adequate rainfall. less rainfall dependent, broader feed-base for pastoral Animals such as chicken and goats can also become a livestock can provide the extra resilience the system cash reserve in times of food shortages. requires to remain sustainable in order to benefit from longer-term positive changes in land tenure, supportive Promote household gardening. By offering a year- policy, more efficient value chains, improved natural round revenue stream that is less dependent on rainfall resource management, and better access to services than annual staple crops, micro-gardening is another and education. activity that can help strengthen the climate resilience of vulnerable populations, particularly for women. Promote development of local fodder production. Given that such gardens are in production year round, Following analysis of site-specific rainfall, hydrological, they provide a viable means to manage risks during the agro-ecological, and economical parameters, including time of the year when food or cash may be scarce. local market studies for milk, fodder, and fodder seeds, promote market-driven models to establish fodder 3. Strengthening management of rangeland production via: 1) purely rain-fed fodder production; and livestock resources 2) rain-fed fodder with supplemental irrigation from The main objectives of the proposed set of priority harvested rainwater (e.g., sub-surface dams); and 3) fod- interventions are to broaden the feed-base for livestock, der production based on the groundwater irrigation for reduce dependence on rainfall, decrease grazing sites with groundwater table close to the surface. 7 | AGRICULTURE GLOBAL PRACTICE NOTE — OCTOBER 2015 Build-out of underground rainwater storage & water Securing livestock mobility by reducing conflict harvesting infrastructure. Sub-surface dams (or “sand along transhumance routes. During normal years dams”) for trapping and storing run-off in riverbeds Ferlo livestock mobility is critical only 20 percent of the provide water for human needs, livestock, pastures, and time. During drought years transhumance regains critical crop and fodder production. In comparison to conven- importance for the larger part of the herd (75–80 percent tional surface dams, this technology loses far less water of the animals). Proposed investments would support to evapo-transpiration and has very low maintenance MEPA in building capacity of the communautés rurales requirements (i.e., no silting up). It is well established in (multiple villages administered by directly elected local parts of east Africa and also in semi-arid northwest India. government) to defuse existing tensions in transhumance Costs for a large sand-dam (including well, infiltration corridors and dry-season grazing areas. It is crucial to pipe, pump, and generator) supplying 80,000m3 water/ strike a suitable balance between interests of resident year are in the range of US$16,250, excluding community communities (e.g., protection of crops, timing of livestock labor and pump-house (Nissen-Petersen 2006). Consider- arrival in relation to harvest, prevention of bushfires) and ing the low number of conventional surface dams for wa- interests of mobile communities that only graze livestock ter harvesting in the Ferlo, systematic placement of such in these areas for a short time per year (e.g., access to wa- dams in underutilized pasture areas should be prioritized. ter, sufficient grazing areas along the corridors). Interven- Potential for establishment of water spreading weirs, or tions could draw on positive experiences from Niger and spate irrigation, in the Ferlo (widely used in Burkina Faso, elsewhere. Chad, and Niger) to improve pastures and grow crops and fodder next to seasonal rivers should also be explored. CONCLUSIONS Fast-track reform of Operation Sauvegarde du This policy note highlights potential pathways to increase Bétail (OSB). OSB has long been a central component the climate resilience of agricultural systems in Senegal of GoS emergency response strategy in times of drought. via improved ex ante risk mitigation. The list of options it The potential transformation of OSB into a mechanism presents within the proposed priority areas of interven- that secures access of pastoral livestock owners to afford- tion is not meant to be exhaustive but only illustrative able animal feed during the most critical part of the dry of the types of strategies and approaches that have season by regulating animal feed markets and curbing shown promise in Senegal and elsewhere in the region excessive prices should be explored. OSB can also be in strengthening the resilience of agricultural production designed to directly complement local fodder produc- and marketing systems. More research is needed to tion. Tying access to OSB-subsidized feed to maximum generate crucial empirical evidence as to which invest- herd size limits would specifically target low- and middle- ments offer the best returns when considered from a income livestock owners. Compliance of herd owners cost/benefit standpoint. Nonetheless, it is hoped that the with the national livestock vaccination campaign should main findings will serve to inform policy discussions and be a precondition to access. future investment planning for the sector. This Note was based on the World Bank publication: Stephen D’Alessandro, Amadou Abdoulaye Fall, George Grey, Simon Simpkin, and Abdrahmane Wane. 2015. Senegal agricultural sector risk assessment. Agriculture global practice technical assistance paper. Washington, D.C. : World Bank Group. This work was funded by the World Bank, the United States Agency for International Development, and a Multi-Donor Trust Fund on Agricultural Risk Management financed by the Ministry of Foreign Affairs of the Government of the Netherlands and the State Secretariat for Economic Affairs (SECO) of the Government of Switzerland, and was conducted by the World Bank’s Agricultural Risk Management Team. Internet: www.worldbank.org/agriculture, Twitter: wb_agriculture