Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy

Liverpool-Tasie, L.S.O. and Parkhi, C. (2020). Climate risk, adaptation, and technology adoption in the midstream of crop value chains: Evidence from Nigerian maize traders. Journal of Agricultural Economics.

Abstract

Climate induced events exacerbate food production and distribution risks, posing a threat to global food security. Though many studies focus on farmer adaptation to climate change, there are few studies of actors in the middle of agricultural value chains such as traders, logistics providers, and processors. The activities of these actors, referred to as the ‘hidden middle’, are key determinants of the prices received by farmers and the price and quality of food products for consumers. We explore how climate events and risk perceptions affect the adoption of value‐adding and damage control strategies among maize traders in Nigeria, Africa’s largest economy and most populous country. We find consistent evidence that climate events and climate risk perception discourage the adoption of value‐adding practices including storage. This potentially affects the availability and price of maize for consumers (household and industry) in the lean season. However, once traders store maize, climate risk does not affect the adoption of damage control, but training and social networks do. These findings suggest that actors in the midstream of food value chains are responding to climate change and more attention needs to be paid to these actors to maintain the availability of affordable and safe maize products throughout the year. There is also a need for strategies to reduce the risks of trading activities due to climate change.