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### Viewing cable 03ABUJA587, GUM ARABIC EXPORTS FROM NORTHERN NIGERIA

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
03ABUJA587 | 2003-03-28 11:24 | 2011-08-25 00:00 | UNCLASSIFIED | Embassy Abuja

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 04 ABUJA 000587

    SIPDIS

    USAID/W FOR AFR/WA, MICHAEL KARBELING
    USAID/W FOR EGAT/AA, EMMY SIMMONS
    USAID/W FOR AFR/SD, JEFF HILL
    STATE/W FOR AFW/WA, CALLI FULLER
    USTR/W FOR AFR/IT, FLORIZELLE LISER
    LAGOS FOR ADMIN

    E.O. 12958: N/A
    TAGS: NI
    SUBJECT: GUM ARABIC EXPORTS FROM NORTHERN NIGERIA
    FACILITATED THROUGH USAID SUPPORT

    REF: NONE

    -------
    SUMMARY
    -------
    Gum arabic is a key ingredient in a wide variety of
    products manufactured in the United States, and
    represents an environmentally-friendly export
    opportunity for Nigeria.  But while Nigeria possesses
    the resources to meet a significant portion of U.S.
    demand, poor processing capacity severely limits its
    ability export to the United States. USAID assistance
    is helping Nigeria to realize the export potential of
    gum arabic through improving harvesting and post-
    harvest handling techniques used by the industry in
    northern Nigeria, establishing market linkages with
    U.S. buyers, and providing laboratory equipment to
    certify gum arabic quality. In a ceremony attended by
    U.S. Ambassador Howard F. Jeter on February 26, 2003,
    laboratory equipment funded through the USAID project
    was handed over to the Jigawa State Gum Arabic
    Company.  The laboratory facility will enable gum
    arabic to be tested and certified to meet
    international quality standards, helping to ensure
    that the gum arabic produced in Nigeria is suitable
    for U.S. manufactures and guaranteing that Nigeria's
    gum arabic farmers and producers earn premium prices
    for their product.

    ----------
    BACKGROUND
    ----------
    Gum arabic is a key ingredient in a wide variety of
    U.S. manufactured products and industries, including
    soft drinks, baked goods and candies, cosmetics,
    pharmaceuticals, and printing (e.g., newspapers).
    Given its significance to U.S. manufacturers, the
    United States is the largest consumer of grade one
    (top grade) gum arabic, importing more than 60 percent
    of the world?s raw and processed supply.

    Gum arabic is a naturally occurring product that is
    exuded from the stems and branches of the acacia tree.
    More than 70 percent of the world?s supply is produced
    by Sudan on an annual basis.  However, U.S. sanctions
    against Sudan, initiated in 1997, mean that the U.S.
    manufactures have limited direct access to Sudanese
    gum arabic, with imports of raw gum arabic from Sudan
    dropping from more than 7,000 MT in 1990 to just over
    1,000 MT in 2002.  With demand for gum arabic in the
    United States increasing (overall imports of raw gum
    arabic have doubled since 2000 compared to the early
    1990s), U.S. manufactures have had to increasingly
    rely on intermediary countries for their supply.  For
    example, in 2002, France was the second largest
    exporter of raw gum arabic to the U.S., supplying more
    than one-third of the total imported that year.  All
    of this was imported by France, and subsequently
    exported to the United States.

    Given the importance of gum arabic to U.S.
    manufacturers, USAID has teamed with the U.S. private
    sector to diversify the supply of gum arabic,
    expanding the opportunity for direct imports and
    minimizing the impact of the rapidly changing
    political landscape in eastern Africa.  The initial
    project in this effort is a collaborative gum arabic
    sector development program in Nigeria, one of the
    friendly countries in the gum arabic belt of West
    Africa and, along with Sudan and Chad, one of the top
    three producers worldwide.

    The Nigerian gum arabic sector is substantially under-
    developed with respect to commercial production and
    marketing standards.  Nigerian gum is traditionally
    harvested from wild forests on public or private
    lands, and could benefit from an inherent price
    advantage over Sudan and Chad due to the county's port
    access.  But while Nigeria possesses the natural
    resources to supply at least one-third (5,000 MT) of
    current U.S. demand for raw gum arabic, poor harvest
    and post-harvest production capacity limit Nigeria's
    ability to export to the United States, which
    accounted for less than one percent (100 MT) of total
    U.S. imports in 2002.

    In addition to benefiting U.S. manufacturers,
    enhancing Nigeria's capacity to produce gum arabic
    will develop an economic opportunity for rural farmers
    in the Muslim North.  With low input costs (consisting
    largely of a rudimentary tapping tool, labor and
    transportation costs) and a value of between $1,000
    and $1,500 per MT, gum arabic is the most profitable
    crop in the region of northern Nigeria. Gum arabic
    producers earn between $0.27 and $0.35 per kg.   In
    comparison, other non-irrigated products that are
    grown in similar areas, including cowpeas, groundnuts,
    sesame, sorghum and millet, currently earn farmers
    between $0.19 and $0.27 per kg (with equal or higher
    input costs).  Given that competing crops earn less
    revenue and have comparable to moderately higher input
    costs, gum arabic harvesting would seem to be a
    rational choice of crop for farmers to concentrate on,
    perhaps in conjunction with one of the other food
    crops.

    Environmentally, by increasing the economic
    opportunities associated with old-growth acacia
    forests naturally occurring in Nigeria, improving gum
    arabic post-harvest production will encourage
    Nigeria's farmers to preserve existing forests which
    would otherwise be cut-down in order to plant other
    crops.  Similarly, increased production capacity will
    enhance the potential for including acacia trees in
    integrated and rotated cropping schemes, helping to
    reduce soil erosion, fix nitrogen, and recycle other
    nutrients lost to leeching from the top-soil.

    ------------------------
    USAID GUM ARABIC PROJECT
    ------------------------
    Beginning in early 2002, USAID initiated a project to
    improve the production and marketing of Nigerian gum
    arabic through strengthening gum arabic associations
    and enhancing the capacity of local private sector
    participants involved in gum arabic trading.  The
    training was conducted in five states in northern
    Nigeria (Bauchi, Borno, Jigawa, Kano and Yobe).  The
    project has had strong collaboration from the U.S.
    private sector, which assisted with training in
    product standards, preparing training materials, and
    providing technical advice during training workshops.
    The project also included support to purchase and
    install laboratory equipment to certify the quality of
    the gum produced.

    The USAID program successfully trained approximately
    200 farmers and traders from the targeted states on
    the management of gum arabic plantations to improve
    output and marketing. These trained participants
    reported that they have extended information on best
    practices to a further 3,000 people. These trainings
    are already showing results. The most telling evidence
    of successful adoption of practices leading to
    increased productive capacity are the increased size
    of gum nodules, a reduction in the instances of
    adulteration, and the introduction of traceability
    techniques.  The use of improved tapping techniques by
    farmers allows gum to exude into larger nodules, which
    in turn is realized in increased volumes of grade one
    gum, which corresponds to a higher quality product as
    larger gum nodules are cleaner, easier to grade, sort
    and bag.  This increase in grade one volume has
    occurred despite problems of locusts and the wetter
    than usual rainy season, which have lowered overall
    gum production in the northern region.  Traders have
    reported that the gum they are buying is purer than it
    has been in recent years.

    The USAID program stimulated increased commercial
    interest in the gum producing states.  For instance,
    in Jigawa state, about 330 hectares of new plantations
    have been established, while 250,000 seedlings were
    raised as part of the state's long term strategy. This
    is in addition to the approximately 900 hectares of
    gum arabic in the state, some 500 hectares of which
    are being harvesting for export. In Yobe state, the
    Government during the year produced and distributed 10
    million seedlings with support from the National
    Association of Gum Arabic Producers, Processors and
    Exporters of Nigeria (NAGAPPEN).

    The program also supported the management of NAGAPPEN.
    This aspect of the program implementation has shown
    the most visible result.  NAGAPPEN has emerged as an
    association that is capable of effectively
    representing the gum arabic sector in each gum
    producing state and organizing economic activity
    through the monitoring and enforcement of improved
    practices.  Dues paying members, with no outside
    guidance, have initiated these chapters independently.
    The Association, which is less than two years old, now
    has over 2,000 dues-paying members.

    --------------------------------------------- ---
    LABORATORY EQUIPMENT CEREMONY, FEBRUARY 26, 2003
    --------------------------------------------- ---
    On February 26, 2003, USAID-funded laboratory
    equipment was formally presented to the Jigawa Gum
    Arabic Processing Company, Ltd. (GAPCO), at a ceremony
    attended by U.S. Ambassador Howard Jeter, and His
    Excellency, the Governor of Jigawa State, Saminu
    Turaki.  The laboratory is located at Maigatari Export
    Processing Zone (EPZ), in Jigawa State, and will serve
    the major processing zone of northern Nigeria, as well
    as neighboring countries, including Chad.  This
    quality control is essential in order to meet the
    quality standards demanded by buyers from the United
    States and Europe.

    U.S. Ambassador Howard Jeter cut the tape marking the
    official opening of the facility, and noted the strong
    need to enhance the Jigawa Gum Arabic Processing
    Company's production capacity, and to encourage
    farmers in the state to expand their capacity to
    provide a high quality product.  Apart from being a
    great source of employment, he said, the laboratory
    would "give importers greater confidence in the
    products they are buying".

    Ambassador Jeter reiterated that the Nigerian Gum
    Arabic Program is a win-win situation in which the
    U.S. industry would gain by diversifying its sources
    of gum arabic, thus minimizing risk, and the Nigerian
    farmers, traders and exporters would see a significant
    improvement in their incomes and employment from the
    development of the gum arabic sector.

    --------------------------
    REMARKS BY JIGAWA GOVERNOR
    --------------------------
    His Excellency, the Governor of Jigawa State, Saminu
    Turaki, expressed satisfaction with the state's
    relationship with the United States and noted that the
    laboratory presentation had positioned Jigawa State to
    pursue further negotiations with TIC gums, a U.S.
    based firm that has negotiated a memorandum of
    understanding for the purchase of high quality gum.
    Governor Turaki said the gum arabic project was meant
    to enhance the economic status of the region,
    including Niger Republic, where some 10 million
    seedlings were recently distributed to farmers.  The
    regional outlook of the project, he said, would enable
    the producers to compete effectively in the
    international market.  Turaki said women who formed
    the larger percentage of the poor in the region would
    be mobilized to take part in the initiative.

    The participants to the ceremony toured the GAPCO
    warehouse and observed several tons of gum being
    sorted and graded in sacks with the GAPCO labels.
    This is the first commercial shipment of gum being
    exported from Jigawa state.  The gum acacia trees had
    been planted some 25 years ago for reforestation
    purposes, and its potential for gum arabic production
    had not been realized prior to this project.  The
    first year harvest and export is expected to be a
    modest 168 tons, but will undoubtedly grow due to the
    strong leadership of Jigawa state, private sector
    partnership with U.S. companies, and the enhanced
    capacity of Nigerian farmers to properly harvest the
    gum.

    ----------
    CONCLUSION
    ----------
    While production of premium-quality grade one gum
    arabic in Nigeria is still low, the potential for
    significantly expanding the production of gum arabic
    suitable for export to the United States articularly
    in terms of grade and quality is high.

    The USAID project has sought to educate farmers and
    traders on the comparative advantages of producing gum
    arabic.  By introducing best practices in cultivation,
    harvesting and marketing, trainees have learned to
    meet the specifications of U.S. importers, and have
    extended these practices to others in their locations.
    The sector is poised to be globally competitive
    through the establishment of NAGAPPEN chapters in each
    of the targeted states, which will be crucial to
    future dissemination of best practices, industry
    monitoring and self enforcement.

    USAID's program to improve the production of gum
    arabic in Nigeria is contributing to the strategic
    U.S. goal of diversifying sources of imports, while at
    the same time providing much needed income and foreign
    exchange earnings to farmers in northern Nigeria.
    JETER

`