Remote Monitoring Report

Below-average production and labor demand negatively affecting parts of Honduras and El Salvador

August 2021 to January 2022

August - September 2021

October 2021 - January 2022

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Would likely be at least one phase worse without current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

IPC v3.0 Acute Food Insecurity Phase

Presence countries:
1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Remote monitoring
countries:
1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

Key Messages

  • Crisis (IPC Phase 3) outcomes are expected to persist in the Honduran Dry Corridor and the coffee-producing areas of central and eastern Honduras and western El Salvador through January. In these areas, smallholder farmers face below-average maize and bean production while households that rely on income from agricultural labor face reduced demand for labor on coffee farms. Many of these households have already accumulated debt and lost productive assets due to previous shocks.

  • For the postrera season, national harvests are expected to be near average. However, localized excess moisture during the August to November rainy season may cause some bean crop losses – the season’s main crop –due to this crop’s vulnerability to fungal diseases.

  • Since most COVID-19-related restrictions have been lifted, cash crop labor demand will likely be higher than 2020, improving poor households’ income. In Honduras, however, 2021/2022 coffee production is expected to be below-average due to this year’s irregular rainfall and the carryover effects from past shocks, such as Eta and Iota.

  • Multiple waves of COVID-19 are expected in the region, as new variants appear, and vaccination progress continues unevenly. Despite this, national governments are not likely to implement more stringent COVID-19-related restrictions throughout this outlook period. This is expected to continue to permit a gradual economic recovery and improvement in household incomes, particularly for those most impacted by restrictions, such as households reliant on tourism, commerce, services, or informal employment.

ZONE CURRENT ANOMALIES PROJECTED ANOMALIES
Honduras and Nicaragua A dry spell in late July and early August exacerbated already dry conditions in central Honduras and central Nicaragua. Nonetheless, the impact was milder than expected, given crops’ low water requirements at their stage of development when the dry spells occurred. At the national level, near-average primera production is expected for medium and large producers during the season. However, below-normal production is expected among smallholder farmers in central and eastern Honduras and northwestern Nicaragua, due to their limited capacity to prevent or mitigate losses. Due to setbacks earlier in the season, primera harvests are delayed until September in these areas, which will likely result in some post-harvest losses from the onset of rains at the start of the second rainfall season. In addition, the delayed harvest will likely lead to a delay in sowing for the postrera season.
El Salvador Localized flooding was reported in the eastern region, with marginal impacts to smallholder farmers’ primera yields. Both the primera and postrera harvests are expected to be average at the national level, with localized losses of smallholders’ crops due to excess moisture.
Regional In Central America, average to above-average rainfall is expected in August, with moderate to locally heavy rains expected in parts of Honduras and El Salvador, likely exacerbating localized oversaturation, landslides, and flooding. These hazards are likely to cause localized primera maize crop losses in affected areas and localized delays in postrera land preparation. Throughout the postrera season, localized incidences of excess moisture may result in some losses of beans due to this crop’s particular moisture sensitivity and vulnerability to fungal diseases. Although governments in the region have committed to providing fertilizers and improved seed, smallholder farmers will remain vulnerable as they will still have limited access to fungicides. Large and medium producers’ production, on the other hand, is expected to be near average.
  In El Salvador and Honduras, white maize retail and wholesale prices in July are stable compared to June, declining from the atypically high prices of 2020, and below the five-year averages. In Nicaragua, white maize wholesale prices are reportedly 17 percent higher than June and are 23 and 29 percent higher than 2020 and the five-year average, respectively, mostly due to price speculation based on the expectation that irregular rainfall would cause shortfalls in supply. Beginning in October, a seasonal decrease in white maize prices is expected in key reference markets (Tegucigalpa, Managua, and San Salvador) driven by the primera harvest. In Honduras and El Salvador, they are expected to remain near average throughout the outlook period, while in Nicaragua prices are expected to remain high.
  Red bean wholesale and retail prices have declined by 23-44 percent compared to the price spikes reported in 2020 and remain near the five-year average throughout the region. Prices in July are stable compared to last month as imports have increased supply. Red bean prices are expected to decrease seasonally with the harvests throughout the region but remain 10 to 33 percent above the five-year average through January. Prices are likely to stay high due to the anticipated delays in the postrera harvest in Honduras and Nicaragua, and some localized crop losses that will push prices upward by the end of the outlook period.
  Despite continued vaccination progress, COVID-19 cases remain high across the region. Governments have not implemented significant restrictions. Governments are not expected to reintroduce stringent COVID-19-related restrictions, facilitating a gradual economic recovery.
    Seasonal cash crop (coffee, sugar cane, peanuts, etc.) labor demand is expected to slightly increase in El Salvador and Nicaragua. A reduction of up to 12 percent in the coffee production in Honduras (according to United States Department of Agriculture (USDA/FAS) forecasts), will likely drive a similar trend in labor demand. Minimal COVID-19 related disruptions to transportation and harvest activities are expected, although higher transportation costs are foreseen due to increased fuel prices.

 

PROJECTED REGIONAL OUTLOOK THROUGH JANUARY 2022

The primera harvest marks the end of this year’s atypically long lean season brought about by hurricane-induced crop damage in late 2020. Although the harvest in El Salvador is anticipated on time at the end of August, the harvest will be delayed in Honduras and Nicaragua until late September due to irregular early-season rainfall. National level production is expected to be close to average in the three countries, but the yields for smallholder farmers are expected to be below-average, particularly in Honduras and Nicaragua, given that erratic rainfall throughout the season and above-average rainfall in August (Figure 1) expected to cause some localized losses. Despite this, the harvest will increase available food stocks for all producing households and increase market supply. A seasonal decrease in prices, particularly for maize, is expected, but all prices are still expected to remain near the five-year average.

Throughout the postrera season, localized incidences of excess moisture may result in some losses of beans due to this crop’s particular moisture sensitivity and vulnerability to fungal diseases. Although governments in the region have committed to providing fertilizers and improved seed, smallholder farmers will remain vulnerable to above-average rainfall as they will still have limited access to fungicides. Large and medium producers’ production, on the other hand, is expected to be near-average.

A seasonal increase in demand for agricultural labor will occur in October with the beginning of the 2021/2022 coffee harvest, followed by the harvest of other cash crops, such as sugar cane, peanuts, vegetables, among others. As movement restrictions from last year have been reduced and as vaccines are made available, overall labor demand is expected to be higher than the 2020/2021 harvest and reach approximately average levels. Normal labor demand is expected to translate into an increase in incomes for rural households. At the same time, staple food prices are expected to decline in response to the flow of freshly harvested grain. As a result, most rural households will experience an improvement in their purchasing power and access to food, enabling Stressed (IPC Phase 2) outcomes in households of most of the region.

In Honduras, however, coffee production is anticipated to be even lower than 2020/2021 due to the combined impacts of damage from hurricanes Eta and Iota, irregular rainfall during the first rainy season, and an increase in coffee rust incidence. The decline will affect labor-dependent households that typically work on coffee farms, further impeding their economic recovery from the previous shocks of COVID-19 and the hurricanes. Reduced incomes will further decrease their purchasing power during the 2022 lean season, as cash earned during the coffee harvest will not last as long. In areas affected by the irregular rainfall in the Honduran Dry Corridor, smallholder farmers are also expected to have a reduced primera harvest in September, which will likely reduce their food access as less food stocks mean they will have to purchase food from the market earlier than usual to meet their food needs. Poor households in the Dry Corridor and coffee-producing areas in the center and eastern Honduras are therefore likely to experience Crisis (IPC Phase 3) outcomes throughout this outlook period.

In addition, poor households in coffee-producing areas of El Salvador, particularly in Ahuachapán, have been struggling with debt accumulation and the erosion of productive assets due to declining coffee production over the last decade. This trend was compounded by the economic impacts of COVID-19 last year. As poor households use part of the cash generated during the high labor season to pay down some of their debt, the amount left to cover food and other basic needs is expected to be inadequate, resulting in at least slight food consumption gaps during the outlook period. Asset deterioration also hinders households’ ability to invest in their livelihoods, prolonging the time horizon for recovery. Consequently, this area is expected to remain in Crisis (IPC Phase 3) through January 2022. Recently, the Salvadoran government announced the continuation of food assistance delivery through the end of this year as part of the measures to mitigate the impact of COVID-19. However, limited information on the scope and delivery of assistance makes the impacts on food security outcomes difficult to determine.

In urban areas, economic activity is gradually recovering as national governments have loosened COVID-19-related restrictions and promote vaccination efforts in El Salvador and, to a lesser extent, in Honduras. In Nicaragua, the slow vaccination campaign and recent political challenges are likely to stall economic recovery. In all three countries, COVID-19 cases remain high, hindering a full return to normal activities and higher investment in economic revitalization programs. Poor urban households across the region will therefore still experience lower incomes from being un- or under-employed in both the formal and informal sectors through January 2022. Additionally, high fuel prices are expected to increase transportation costs and constrain households’ budgets, reducing the share allocated for food purchases as they are totally dependent on markets. Meanwhile, in El Salvador, the government has introduced a 20 percent increase in the official minimal wage beginning August 1. While the wage hike will increase income for many formally employed households, it is possible that some employers may downsize to reduce costs, which would negatively affect other households. The government is providing payroll support to small businesses to cover these increased costs during 2021, but some economic analyses suggest this support is likely insufficient to offset the added costs for formal sector employers and deter layoffs. Based on the above factors, Stressed (IPC Phase 2) outcomes are expected in urban areas across the region. However, some of the poorest households are likely to face Crisis (IPC Phase 3) outcomes, particularly those that work in the services, commerce, and tourism sectors.

Events that Might Change the Outlook

Table 1. Possible events over the next eight months that could change the most likely scenario

AREA EVENT IMPACT ON FOOD SECURITY OUTCOMES
Regional Hurricanes  According to the compilation by the Barcelona Supercomputing Center and Colorado State University Seasonal Hurricane Predictions, an above-average hurricane season is forecast through November 2021. Depending on the trajectory and magnitude of a storms, the direct or indirect impacts could change crop production prospects and negatively affect other food and income sources. Crop and other livelihood losses would likely increase the population in Stressed (IPC Phase 2) and Crisis (IPC Phase 3).

 

About Remote Monitoring

In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.

About FEWS NET

The Famine Early Warning Systems Network is a leading provider of early warning and analysis on food insecurity. Created by USAID in 1985 to help decision-makers plan for humanitarian crises, FEWS NET provides evidence-based analysis on approximately 30 countries. Implementing team members include NASA, NOAA, USDA, USGS, and CHC-UCSB, along with Chemonics International Inc. and Kimetrica.
Learn more About Us.

Link to United States Agency for International Development (USAID)Link to the United States Geological Survey's (USGS) FEWS NET Data PortalLink to U.S. Department of Agriculture (USDA)
Link to National Aeronautics and Space Administration's (NASA) Earth ObservatoryLink to the National Oceanic and Atmospheric Administration's (NOAA) National Weather Service, Climage Prediction CenterLink to the Climate Hazards Center - UC Santa BarbaraLink to KimetricaLink to Chemonics