Famine Early Warning Systems Network

In Nicaragua and Honduras, the period analyzed begins with the end of the apante/postrera tardía harvest, a cycle that is mainly dedicated to bean production. Given the extensive damage to the soil resulting from the flooding caused by hurricanes Eta and Iota, sowing was irregular, and yields are expected to be below average. However, the grain produced will supply the market that had to resort to strategic reserves to offset the major losses in the postrera 2020 cycle caused by tropical storms in November. The flow of grain will result in a seasonal price drop, consequently increasing the income and reserves of producer households.

Given the weather conditions forecast for the period analyzed, with near-average accumulated precipitation and an equally average drought, the primera cycle is expected to take place as usual, with sowing between April and May, and with governmental support, maize yields are expected to reach the national average in the three countries. However, low maize prices in El Salvador could disincentivize commercial producers. At the harvest period, in August/September, producer household food stocks will increase, increasing food availability. In the case of Honduras, the good harvest of 2020 suggest that the government will choose to incentivize bean cultivation by large producers, making the proportion of beans produced in that cycle higher than in previous years. This production will be used mainly for the country’s strategic reserve.

In Honduras and Nicaragua, white maize prices will remain above average throughout the period analyzed, while in El Salvador they will be closer to average. Similarly, red bean prices will remain above average, given the shocks that this bean suffered last year. However, these anomalies are not expected to reach the maximum values recorded during the same period in 2020. As for maize, the country that will register the lowest increase is El Salvador, when compared to Honduras and Nicaragua. In Nicaragua, prices are expected to be above average and higher than the levels reported in 2020 throughout the period analyzed.

In addition to the agricultural outlook, levels of formal and informal employment, and consequently of household income in urban and rural areas, is expected to gradually recover in the coming months, without reaching pre-COVID-19 levels, especially in the case of areas affected by the hurricanes in Honduras and Nicaragua. Although COVID-19 cases are expected to continue to rise in all three countries, even after the second wave has passed, the countries are not expected to establish measures that further restrict population mobility and economic activity. In El Salvador, a new law that was passed near the end of January prohibits generalized lockdowns and guarantees the rights of the population, including freedom of movement, regardless of the incidence of COVID-19 cases in the country. In Honduras, some restrictions are expected to remain in force during the period from February to May, but they will definitely not be as strict as those decreed in 2020. In Nicaragua, restrictions for the country will remain undefined, and although the population could strengthen its protection measures, these will not impose a lockdown as seen in 2020. In this last country, political difficulties and the consequences of the global quarantine in 2020 will play a greater role in the weak economy of households and the country as a whole.

The COVID-19 vaccines, obtained by the countries through the COVAX mechanism, are expected to start arriving in the region between February and March, but the time it will take to deliver the doses destined for each country will depend on the production and distribution capacity of pharmaceutical companies. The purpose of the batches from this mechanism is to support vaccination coverage for 20% of the population, so governments will have to make additional purchases of their own from pharmaceutical companies. Vaccines from these other suppliers will also start being distributed to the region during the period analyzed, but to date there is no clear schedule for making this delivery in Honduras and Nicaragua. El Salvador, on the other hand, received the first batch of 20,000 vaccines from AstraZeneca on February 17th and started vaccinating healthcare workers that same day, according to information published by the Ministry of Health. In any case, the general population will be gradually and slowly receiving vaccines, since immunization plans will prioritize all front-line workers who have greater exposure. In view of the foregoing, vaccination is not expected to reach levels required to contain the disease during the period analyzed, and biosecurity measures should remain in place.

Income from the recent coffee harvest was lower than average for casual workers in El Salvador and Honduras, due to direct damage to crops and increased disease. In El Salvador, the weather conditions in 2020 caused grain maturation delays and a higher incidence of rust, in addition to the losses reported as a result of hurricanes Eta and Iota; according to the data as of January 2021, the harvest would be approximately 30% smaller than the previous year. In addition, the high prevalence of crime in the country also makes it difficult for casual workers to reach farms, as they fear being extorted and assaulted. In Honduras, abundant rainfall reported throughout the 2020 rainy season caused a rise in the incidence of rust. Furthermore, in November, the Honduran Coffee Institute reported the loss of 3,486 hectares due to hurricane Eta and damage to 104.6 hectares as a result of the landslides caused by hurricane Iota, causing most of the damage (79%) to farms, and resulting in only 25% to fruit, with a lower estimated production as of December 31st (58.5%) in comparison to the production of the previous year. Access difficulties during the storms, at which time 23 percent of farms were harvesting their crop, and after the storms, as a result of damaged road infrastructure, caused production losses, because the crop could not be collected in time, and a loss of income for day workers who were not able to work during this period. In the particular case of Nicaragua, income from coffee will be average, since coordination with the migratory authorities in Costa Rica was achieved, so that Nicaraguan migrant laborers were allowed access to that country for the harvest. The Nicaraguan national production fell by approximately 100,000 bags of coffee (approximately 3.5% of the estimated production), which were affected by the storms, according to the National Coffee Council in Nicaragua.

Despite the fact that remittances dropped during the most critical part of the lockdown, during the second quarter of 2020, state statistics report a rise in remittances, with values even higher than those reported in previous years. Despite the global economy facing hardships and there being countries that have gone back to lockdown due to a second wave of COVID-19, remittances are expected to post average levels, although with the high indebtedness index due to the economic hardships during the previous year and the caution due to the great uncertainty of the economic outlook during this year, receiving households are expected to use them to pay off debts, cover basic needs and build savings, consequently making investments to a lesser degree.

As far as government humanitarian aid is concerned, in Honduras, government food assistance is expected to be provided to 283,500 people over the next two months, through family money transfers of 82.17 USD (2,000 HNL) per family, and food rations for approximately 660,779 people are to be provided by international cooperation organizations. However, all together, that assistance is not expected to be enough to close the food gap. For Nicaragua, limited food assistance is expected, while in El Salvador, the government will continue to provide food packages, especially since the aforementioned law requires the government to guarantee the population’s food security, although it does not go into detail on serving size, frequency and coverage. It is important to note, however, that the delivery of in-kind food assistance has had a negative effect on domestic producers and traders, seeing that it is based on imported product and reduces local sales.

Expected Food Security Outcomes: From February to May 2021, very poor households in both urban and rural areas in the three countries are expected to have trouble generating income because employment options are seasonally low and because economic recovery is still very slow, with high levels of unemployment. At this time, rural households, like urban households throughout the year, are highly dependent on purchasing as a source of food until the primera harvest in September. Special attention must be paid to the poorest urban households in the region, which will have a very slow economic recovery following the pandemic, as well as to households in the areas affected by hurricanes Eta and Iota, those in the rural area of the Honduran Dry Corridor and those in the Salvadoran coffee-growing zone. In a normal year, these households do not have reserves during this time, which makes them more dependent on purchasing; however, the basic grain production losses in 2020, the effects of lower coffee production and other informal jobs (such as domestic work and miscellaneous trade) on sources of income, and the loss of assets in 2020, as a direct result of the storms or due to the sale of assets as a critical response strategy to face the drop in income due to the anti-COVID-19 measures adopted, will cause their purchasing power to be lower, consequently reducing their access to food, producing an early start to the lean season. These households will have to resort to Crisis strategies, such as a reduction in health and education spending, a greater use of savings, an increase in indebtedness and the sale of productive assets, to obtain their food. However, it is also expected that, despite the foregoing, they will continue to resort to reducing both the quantity and quality of their diet, including reducing portion sizes, adjusting meal times and even asking for food borrowed, behaviors already seen in 2020 during lockdown. Therefore, these households are expected to remain in Crisis (IPC Phase 3). The rest of the poor households are expected to remain Stressed (IPC Phase 2) since, in the three countries, economic reactivation is expected to increase food availability and spur a gradual rise in income for most of the population, although for Nicaragua, this reactivation is expected to be more modest due to the country’s political scenario.

From June to September 2021, food insecurity conditions are expected to worsen seasonally until before the primera harvest, in August/September, with decreased availability of food reserves in producer households in rural areas. In addition, the fact that prices show an increase on top of the seasonal trend, in a period in which the poorest rural and urban households basically depend on purchasing as a source of food, will limit access to food. In this period, the options for income generation are seasonally low, which further reduces the purchasing power of those exact same households. Therefore, the poorest households in the areas most affected in the previous period will continue to be in Crisis (IPC Phase 3) until the end of the primera harvest, while the rest of the poor urban and rural households will remain Stressed (IPC Phase 2), although their situation shows a slight improvement with the end of the harvest and with the progression in the countries’ economic recovery.

During both periods analyzed, the food assistance provided is not expected to be enough to close the food gap, especially for those households in Phase 3.