Food Security Outlook

Seasonal income gains fail to fully alleviate food insecurity

October 2021 to May 2022

October 2021 - January 2022

February - May 2022

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
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

  • Minimal (IPC Phase 1) outcomes are expected throughout the outlook period in urban area thanks to the economy’s gradual recovery. Staple grain harvests and peak demand for agricultural labor will allow poor rural households to improve their food access and availability. However, high food and transport costs and debt repayments will limit purchasing power and improvements to the quality of their diet, thus these households will experience Stressed (IPC Phase 2) outcomes through January 2022.

  • In areas of the Dry Corridor and the Altiplano, as well as in the areas most affected by hurricanes Eta and Iota, poorer households will be classified as in Crisis (IPC Phase 3) throughout the outlook period, as they have fewer resources to protect their livelihoods following multiple shocks in recent years. From February onward, as income decreases, the number of households in these areas experiencing Crisis (IPC Phase 3) outcomes will increase and the lean season will begin prematurely.

  • Throughout the period covered by this outlook, markets will remain supplied with domestic grains and those imported from Mexico. The primera, postrera and postrera tardía staple grain harvests will be within average ranges, which will support a seasonal reduction in the price of maize and beans. However, due to external factors, the prices of food, gas, and public and freight transportation continue to be above the five-year average and above last year's prices and continue to negatively affect household purchasing power.

  • October marks the beginning of the harvest of the main cash crops (coffee, sugar, cardamom), which is expected to be within average ranges, and with it the season when demand for agricultural labor is highest. However, high transportation costs could reduce the number of trips and therefore number of days worked for casual laborers.  The economic upturn under way in urban areas is improving job recovery.

NATIONAL OVERVIEW

Current Situation

The primera maize and bean harvests came to an end in most of the country this month, with average yields. However, there were localized areas in the Dry Corridor and the northern region where subsistence farmers suffered damage and losses due to winds, flooding, and reduced rainfall. In the only productive cycle of the western Altiplano, staple grain crops are in the final stages of development, while nationwide postrera crops are in their growth phase and are developing adequately. Both crops are expected to be harvested at the end of the year. Accumulated rainfall during September and October was below normal, particularly in the center of the country (Figure 1). Hence, crops in these areas show signs of water stress, according to the Water Requirement Satisfaction Index (WRSI).[1]

At the national level, economic activity continues to improve and with it the recovery of household income sources. Peak demand for seasonal agricultural workers starts in October when the harvest of the most important cash crops for export, such as coffee, sugar, cardamom, fruit, and vegetables, begins. The coffee harvest is an important source of employment for very poor households as coffee is produced in various departments of the country, either within the area where they live, or outside it in areas where they migrate for longer periods, such as other areas of Guatemala or Mexico or Honduras. The United States Department of Agriculture (USDA) forecasts that for the 2020–2021 season, Guatemalan coffee production will be slightly higher than last year, which would mean stable demand for cutting labor. In contrast to last year, when border crossings were restricted, this year there are fewer COVID-19-related migration controls, which should improve the flow of Guatemalan migrant workers to neighboring countries. Coffee prices have been favorable, with a 60.6 percent increase between October 2020 and September 2021. This is expected to stabilize small-scale producers who, during 2020, did not have the resources to properly manage their crops or whose plantations were affected by hurricanes Eta and Iota. In 2020, cardamom exports were higher than in previous years thanks to their increased selling price. This year, production is expected to be maintained and selling prices are expected to be in favorable ranges, which should translate into stable sales and daily wages. Labor related to sugar cane production is one of the main sources of employment for the subsistence population. The sugar harvest starts in November and ends in May. Since sugar production has remained steady in recent years, the demand for workers is expected to be normal.

According to the Bank of Guatemala (BANGUAT), for the second quarter of 2021, gross domestic product grew by 15.1 percent, after a considerable reduction in 2020. All productive activity sectors showed growth, with the largest year-on-year changes observed in the activities most affected last year: accommodation and food services, transportation and storage, and health with 64.1 percent, 38.5 percent, and 35.2 percent, respectively. Likewise, the number of workers contributing to the Guatemalan Institute of Social Security (IGSS) increased significantly, after having remained in negative numbers during 2020 and beginning to recover slightly in the first quarter of 2021. This reflects progress in the recovery of formal employment. These data are consistent with the II Encuesta de Percepción Empresarial [Second Business Perceptions Survey] 2021 conducted by the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (CACIF), in which most of the businesspeople interviewed stated that employment was stable during the second quarter of the year. However, the tourism sector remains the hardest hit. According to the Guatemalan Institute of Tourism (INGUAT), the hotel occupancy rate for the first half of 2021 was almost five percentage points below that of 2020 and almost 40 percentage points below that of 2019 (pre-pandemic year). This sector relies on foreign visits, which are still limited not only by the level of COVID-19 infection and vaccination in the country, but also by external factors. These include the evolution of COVID-19 globally, the reduction in sources of household income and savings and consequently money to go on vacation, the continuation of online work and the decrease in tourism services provided for meetings, conferences, and business travel.

After a peak in COVID-19 infections in August, cases have begun to decline as vaccination is slowly progressing. However, the low vaccination rate is an obstacle to the country’s continued economic recovery, as municipalities remain under maximum infection alert and have greater social distancing measures and tighter limits on gatherings and capacities. According to the Ministry of Health, by 24 October, 24.8 percent of the population over the age of 12 were fully vaccinated and 41.1 percent had had one dose. According to these data, more urban areas, such as the metropolitan area and departmental capitals, have the highest vaccination rates. For example, Guatemala City has 62.9 percent of its population fully vaccinated, while in rural municipalities such as Santa Barbara in Huehuetenango, Panzós in Alta Verapaz, and San Bartolomé Jocotenango in Quiché, the figure is less than 5 percent each. Almost 70 percent of municipalities have vaccinated less than 25 percent.

Throughout the year, pressure has been put on household spending by increases in food prices and transportation costs, reflecting higher fuel prices. Such is the case for maize, the price of which has remained high because of increased demand for local maize due to the increase in international prices of yellow maize and transportation. These increases are reflected in the Consumer Price Index (CPI), which in September 2021 showed a year-on-year inflation rate of 3.7 percent and a monthly inflation rate of 0.2 percent. Transportation costs reflect the largest variation (15.6 percent), with inflation evident since last year due to movement restrictions and now added surging fuel prices (Figure 2). Within this category, basic expenditures on diesel (42.6 percent), regular gas (37.3 percent), premium gas (34.8 percent) and peri-urban bus services (27.6 percent) show the largest year-on-year changes. Additionally, the urban bus category of the CPI shows a national increase of 43 percent compared with September 2019, with gas and diesel spending increasing by 9 percent and 18 percent respectively, and food spending by 13 percent, for the same period. 

The food category is up 3 percent compared with September 2020. At the national level, basic spending on maize increased by 26 percent in September 2021 compared with 2019. According to data from the Ministry of Agriculture’s Directorate of Planning (DIPLAN), in September 2021 the wholesale price of 100 kg of white maize was 14 percent higher than last year's price and 20 percent higher than the five-year average (Figure 3). According to CPI data, these variations are most evident in rural areas, with increases of 41 percent and 37 percent in Región VIII (Petén) and Región VII (Huehuetenango and Quiché) respectively. Increased spending on urban and peri-urban bus services has affected the rise in prices, mainly in Región II (Alta and Baja Verapaz) and Región V (Sacatepéquez and Escuintla), where increases of 100 percent have been reported. In addition, there have been price increases for propane gas and firewood, which are the main sources of energy for cooking (National Statistics Institute of Guatemala). Very poor households in rural areas of concern use solely firewood, although the increase in the cost of liquefied petroleum gas (LPG) may affect some services used by this group. According to monitoring data from the Ministry of Energy and Mines, the cost of a 25 lb. drum of LPG rose from 99 GTQ at the beginning of the year to 132 GTQ in October: a 33 percent increase in ten months.

Remittances have shown sustained growth throughout the year, setting records for three months. In September 2021, these transfers were 24 percent higher than in 2020 and 64 percent higher than the five-year average. Generally, poorer households do not receive these remittances. The five departments that receive the most remittances are: Guatemala in the center of the country, Huehuetenango, San Marcos, and Quetzaltenango in the west, and Petén in the north.

The increase in deportations of Guatemalans who have recently attempted to migrate to the United States is an important phenomenon to monitor. According to information on the official website of U.S. Customs and Border Protection, between October 2020 and August 2021, about 255,000 Guatemalans were found at the southwest border of the United States. This year, the largest proportion is adults traveling alone, whereas more family units were traveling in 2019. From January to 27 September 2021, 28,559 Guatemalans, including 3,550 unaccompanied minors, were returned by land from Mexico and 9,000 people, including 912 unaccompanied minors, were deported by air from the United States and Mexico. According to International Organization for Migration (IOM) data, between January and August 2021, the majority of returnees headed for Guatemala City, and the departments of San Marcos, Huehuetenango and Quetzaltenango. Returnees often find themselves without money, home, or land as they have lost or pawned their livelihoods and their families have gone into debt to fund the journey of one household member. They have no productive wealth but face considerable debt and need to earn an income to contribute to the household. Although these households are only a small proportion of the total population, they may have problems accessing food and may use a variety of coping strategies to meet their needs.

According to the Ministry of Health, on 18 September the Epidemiological Situation of Acute Malnutrition[1] reported a total of 22,417 cases of acute malnutrition in children under 5 years of age and a rate of 97.1 per 10,000 children under 5 years of age. This represents an increase of ten points in the rate and 11 percent in the number of cases identified since last year. The nine health areas with the highest rates are Escuintla, Retalhuleu, Zacapa, Izabal, San Marcos, Suchitepéquez, Guatemala Noroccidente, Alta Verapaz, and Huehuetenango.

Current food security outcomes

Economic activities continue to recover and jobs in various sectors are beginning to stabilize, which has allowed urban areas to be classified as Minimal (IPC Phase 1). In rural areas, primera maize harvests improved food availability in poor households, meaning they did not have to buy at market for a couple of months. As peak high demand for labor begins, seasonal workers are starting work in various agricultural activities. This period of time is the most important for income generation, as it is when households manage to be employed continuously for two to four months. After this period, only sporadic agricultural work is available. Workers use the income generated to buy food and save money for the lean season. October is the first month of employment and with the initial income, households will be able to buy food and start paying off debts incurred during the last long lean season. However, debt repayments and the high cost of food and transportation will limit purchasing power, so there will be no immediate improvement to diets nor will it allow them to start recovering lost livelihoods. Therefore, in October, households are classified as Stressed (IPC Phase 2). In areas of the Dry Corridor and the Altiplano, as well as in the areas most affected by hurricanes Eta and Iota, poor households are in Crisis (IPC Phase 3) as they have fewer resources to protect their livelihoods following multiple shocks in recent years. For these households, the impacts of i) the COVID-19 restrictions on income sources and ii) high food and transportation costs have been more pronounced and have led to the recurrent use of negative Crisis coping strategies and a deterioration in their livelihoods. The onset of the seasonal demand for labor will lead to a slight improvement in food consumption, but market dependence, high prices and significant debts prevent poor households from reinvesting and rebuilding their livelihoods. Seasonal improvements are therefore insufficient to change their IPC food security classification.

National Assumptions

The outlook between October 2021 and May 2022 is based on the following assumptions at the national level:

  • Markets are expected to have a normal supply of fresh and stored domestic grain, as well as formal and informal imports from Mexico.
  • Staple grain reserves are likely to be average, except for areas where primera and postrera harvests were lower than usual due to weather events.
  • Rainfall during the second rainy season is expected to be average, which is likely to favor the growth of postrera crops and postrera tardía planting. In localized areas of the Dry Corridor, there could be below-average rainfall during the last months of the year.
  • Postrera staple grain production and the only production cycle of the western Altiplano are likely to be within average ranges, except in the eastern lowlands where consecutive days of reduced rainfall has damaged crops.
  • An average start of the first rainy season is likely to allow planting at the usual times for the primera 2022 cycle. 
  • COVID-19 restrictions will continue to be governed by the traffic-light alert system. Through the end of the year, COVID-19 cases are likely to remain high, as well as the number of municipalities on red alert, and with it social distancing measures and limitations on gatherings and capacities.
  • Economic recovery will continue, but will not reach pre-pandemic levels, especially in formal activities such as restaurants, hotels, and stores, and informal ones such as domestic services, personal services, small shops, and businesses. Employment is likely to continue to be below normal in terms of fewer working days, reduced working hours, part-time work and/or lower daily pay, however, a slight improvement compared with last year is expected.
  • Tourism will continue to be significantly below average, which will affect households that depend on these sources of employment, whether formal or informal, in the various tourism services (hotels, restaurants, transportation, tour guides, stores, and the production and sale of handicrafts). For these households, incomes will continue to be below average.
  • The production of coffee, cardamom, sugar, bananas—which employ a significant number of seasonal workers during this period—is expected to be within average ranges, which would mean that daily wages and demand for labor will remain stable.
  • Demand for daily labor for staple grains is expected to be lower than usual as labor-demanding households are still recovering their income from last year's shock.
  • The high cost of transportation in urban and rural areas will continue to significantly affect commuting, seasonal agricultural work, and migration. Poor households may reduce the number of trips they make to areas for work, thus reducing their income.
  • Remittances will continue to rise, stabilizing at approximately 30 percent above previous years. However, they will be used in particular for consumer spending and to rebuild savings and are not expected to reach poor households.
  • Maize and bean prices would remain above average, by 20 and 10 percent, respectively. The high cost of transportation, the increase in prices for agricultural inputs and possible increases in prices for imported maize for industrial use will also lead to increased demand for domestic maize.
  • The price of maize imported from Mexico is likely to increase due to the high cost of agricultural inputs.
  • Gas and diesel prices are likely to remain above average and be reflected in transportation and food costs. This would be in addition to the increases in propane gas and electricity prices.

Most Likely Food Security Outcomes

Economic activity will continue to recover despite limitations on gatherings and capacities and social distancing and biosecurity measures being observed. Employment in various economic sectors is beginning to stabilize and, in line with the business outlook, this recovery process is expected to continue. The traffic-light alert system will continue to regulate limitations on gatherings and capacities and social distancing measures. Vaccination will continue at a slow pace in rural areas, due to both vaccine shortages and vaccine hesitancy. This could delay the decline in cases and the lowering of the COVID-19 alert level, hindering the reactivation of sectors such as services and tourism. Some formal and informal activities such as cleaning, personal care, and food and entertainment services — which are carried out by a considerable number of poor households and are currently restricted under strict capacity constraints — will partially improve.

October marks the beginning of peak demand for labor in the agricultural sector, during which there is the greatest availability of seasonal employment for poorer households in rural areas. According to the outlook, the main cash crops (coffee, cardamom, sugar) are expected to maintain average production ranges and prices are expected to remain favorable, which will result in stable demand for labor at the national level. This year, fewer border controls than in 2020 are expected and migrant day laborers will be able to travel and be employed as usual on coffee farms in Honduras and in Mexico, both in coffee harvesting and in other non-agricultural products and services. However, high transportation costs will reduce travel to employment sites and thus working days, resulting in lower income. Thanks to average primera harvests of staple grains, households were able to build up their reserves for a few months. However, the increase in food and transport costs, coupled with the repayment of debts incurred during the year, will not allow them to rebuild their savings or their livelihoods (e.g., with the purchase of farming tools, livestock and other animals, fishing equipment or textiles), and will improve food security in the income-generating months only.

In urban areas, Minimal (IPC Phase 1) outcomes are expected throughout the period, although some households struggling to recover their income levels will remain Stressed (IPC Phase 2) or in Crisis (IPC Phase 3). In rural areas, Stressed (IPC Phase 2) outcomes are widely expected through January 2022 when peak demand for labor reduces. While many rural households will manage to remain Stressed (IPC Phase 2) during the second period covered by this outlook, households located in the Dry Corridor, northern areas affected by hurricanes Eta and Iota, and those who lost their staple grain harvests from the 2021 primera cycle will fall back into Crisis (IPC Phase 3). For these households, the lean season will start earlier than usual, as the income generated during peak labor demand will be insufficient to sustainably improve their diets or eliminate the need to use negative coping strategies (such as atypical and additional household migration, increased debt and selling productive assets). Meanwhile, in areas of the Dry Corridor and the Altiplano, as well as in the areas most affected by hurricanes Eta and Iota, the poorer households will be classified as in Crisis (IPC Phase 3) throughout the period, as they have fewer resources to protect their livelihoods following several shocks in recent years. COVID-19-related restrictions had a more severe impact on these households’ income sources, and current increases in food and transportation costs further limit access to food, leading to the use of Crisis coping strategies and the deterioration of their livelihoods. Income generated during the season of peak demand for labor in the agricultural sector will bring about a slight improvement in food consumption, but reliance on the market, high food prices, and debt repayment will not allow households to fully rebuild their livelihoods.

Events that Might Change the Outlook

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

AREA EVENT Impact on Food Security Outcomes
National A tropical depression or a period of heavy rainfall in the first half of the outlook. This would cause flooding, soil erosion, landslides, and mudslides and consequently crop losses and damage to transportation routes. This would negatively affect food availability and access to employment and markets, increasing the areas and population in Crisis (IPC Phase 3).
 

The extension or tightening of COVID-19-related restrictions.

This would negatively affect the recovery of income for households working in the informal economy and formal employees in non-essential sectors, placing some households in Crisis (IPC Phase 3).
  Further increase in fuel or freight prices. This would improve food security outcomes in some municipalities under Stress (IPC Phase 2!).
  Mayor aumento de precios de combustibles o fletes marítimos  This would cause a further rise in the prices of food, fertilizers, and raw materials.

 


[1] The Water Requirement Satisfaction Index is a way of assessing crop condition based on the availability of water in the soil over 10-day periods (dekad).


[2] The Ministry of Health reports the cumulative cases of acute malnutrition identified by anthropometry or clinical signs as well as the incidence rate per ten thousand (10,000) children under 5 years of age by municipality and health area.

About Scenario Development

To project food security outcomes, FEWS NET develops a set of assumptions about likely events, their effects, and the probable responses of various actors. FEWS NET analyzes these assumptions in the context of current conditions and local livelihoods to arrive at a most likely scenario for the coming eight months. Learn more 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.
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