New injections of dollars to support the gourde, amidst structural constraints and a volatile sociopolitical context
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PrintAugust - September 2022
October 2022 - January 2023
IPC v3.1 Acute Food Insecurity Phase
IPC v3.1 Acute Food Insecurity Phase
IPC v3.1 Acute Food Insecurity Phase
current or programmed humanitarian assistance
IPC v3.1 Acute Food Insecurity Phase
countries:
current or programmed humanitarian assistance
CURRENT SITUATION
Percent of mean Normalized Difference Vegetation Index (NDVI) compared to the historical average 2012 - 2021, for the period of July 21-31, 2022
The sociopolitical situation. The sociopolitical situation remains unstable, but efforts by the national police have stopped several gang members, particularly in the capital. August has been relatively calmer than in July, with only 20 percent of the total number of political events and deaths as compared to July according to ACLED (August 2022). Despite the relative lull in August, national roads remain controlled by gangs, and trade flows between the capital and other regions remain disrupted, particularly in the Grand Sud region.
Weather conditions. The spring season was characterized by significant rainfall deficits that led to below-average harvests. Since July, frequent and near-average rains have been recorded through mid-August. During this period (mid-July and mid-August), a considerable improvement was observed in the vegetation index, particularly in Artibonite and the Nord-Ouest—areas that were most strongly affected by the rainfall deficit during the spring season. Farmers took the opportunity to launch the second agricultural season, the summer/autumn season. Short- and medium-term forecasts suggest rainfall close to or above average, which will help reduce the lack of soil moisture and favor agricultural activities this season. In addition, near-average temperatures are maintaining current available moisture conditions favorable for crop development.
Evolution of the agricultural situation. Mitigated in most regions of the country, the spring harvests are complete, apart from Centre department in particular, which started a little later. Currently, farmers, especially in mountain areas, are taking advantage of regular and favorable rains and are engaged in soil preparation activities for maize, beans, and seasonal crops (roots, tubers, and bananas) as part of the summer/autumn season. According to key informants in the field, activities for picking breadfruit and fruit products such as avocado, pineapple, and citrus fruits, are underway, particularly in Sud and Grand'Anse, and are already supplying markets. It should be noted that farmers in the Grand Sud region continue to benefit from the support (seeds, inputs, fertilizers, and finance) of various organizations operating in the region following the earthquake last year.
Income sources. Income from labor experienced a seasonal increase with the summer/autumn season preparation activities. However, it is still below average given the limited employment opportunities for farmers from the poor performance of the spring harvests, in addition to the generally unfavorable sociopolitical and economic context. This results in below-average incomes from agriculture this season. The income from migration to the Dominican Republic remains below average due to the continued deportation of Haitians and the increasingly difficult access to a Dominican visa given the increase in price and processing time.
Food markets and prices. Markets are stocked with maize, beans and other seasonal crops, in addition to imported food products. Nevertheless, markets located in the metropolitan area of Port-au-Prince, particularly Croix-des-Bossales and Croix-des-Bouquets, continue to experience disruptions due to armed clashes, cases of kidnapping, and fuel shortages impeding the flow of people and goods. This also reduces the normal flow of business activities in the capital as well as in other parts of the country. Despite the maize and black bean harvests, retail prices in July did not show significant declines typical for the post-harvest period. While the price of maize was relatively stable between June and July, falling less than 2 percent on average nationally, that of local black peas showed an atypical increase of more than 8 percent. The prices of imported products, rice in particular, continue to show upward fluctuations (less than 5 percent) during the same period. All prices remain above their July 2021 levels and, very atypically, above their five-year average.
Exchange rate and prices trends. Staple food prices are following the trend of the national currency depreciating against the U.S. dollar, particularly on the parallel exchange market, which deviated up to 30 percent from the central bank's official rate. From August 1, 2017 to August 1, 2022, the gourde went from 0.01600 dollars to 0.00852 dollars, representing a loss in value of around 47 percent. Between August 2021 and August 2022, the gourde depreciated by more than 18 percent, according to the Central Bank's official rate. In addition, new monetary policy measures were announced on August 22 to limit a further downward spiraling of the gourde against the U.S. dollar and, in turn, help curb the rise in prices. Monetary officials injected 8.5 million and 10 million dollars into the market, respectively, on August 22 and 25. As soon as these measures were announced, the price of the dollar quickly fell on the parallel exchange market, going from an average of 150 gourdes to nearly 100 gourdes. This translated into a 33.3 percent appreciation of the gourde compared to the dollar in the context of a more than 60 percent unofficially dollarized economy. Wholesale prices of certain imported products such as rice and vegetable oil have only fallen moderately in certain markets, dropping respectively from 4,000 to 3,700 gourdes per 25 kg bag and from 1,700 to 1,300 gourdes on average. per gallon (3.78 L) during the same period.
These fiscal measures were put in place through negotiations with the International Monetary Fund (IMF), which require the Haitian government to adopt austerity measures relating to public finances as a prerequisite for any financial support. The IMF uses different measures to reduce public expenditures, which include implementing a structural budget reform that includes the reduction of subsidies (fuel), increasing revenue through higher tax collection, reforming the tax code and tax system, and improving overall governance in preparation for providing financial assistance. It should be noted that the Central Bank is trying to implement these austerity measures in a difficult and volatile sociopolitical context.
Current food security outcomes. Food security conditions continue to be impacted by inflation and low household income. In addition, the poor performance of the spring harvests negatively affected the start of the summer/autumn season given that 70 to 80 percent of the inputs come from the spring season. This low availability of seeds leads to an increase in the cost of seeds in the market. Farmers face difficulties in financing their agricultural seasons with a below average income from the sale of agricultural products. Therefore, demand for labor is very low, resulting in below average incomes for agricultural workers.
Very poor households in rural areas, having missed the spring season, and those in precarious neighborhoods rampant with insecurity in Port-au-Prince, continue to adopt crisis strategies. Households may increase sales of coal or wood and female animals, consume early harvests or food with low nutritional value, and beg, to name a few, to maintain their normal level of food consumption and are therefore in Crisis (IPC Phase 3) food insecurity. Those in areas that were able to harvest in July as a result of less deficient rainfall conditions, and those that received humanitarian aid or livelihood recovery support, could adopt stress strategies such as reducing daily food consumption and dietary quality and borrowing or buying food on credit, and would experience Stressed (IPC Phase 2) food insecurity outcomes.
UPDATED ASSUMPTIONS
Overall, the assumptions used to develop FEWS NET’s most likely scenario for the Haiti June 2022 to January 2023 Food Security Outlook remain unchanged except for the following:
- Despite the weak capacity of the government to continue to subsidize fuel products, the already high cost of living and the lack of public confidence will continue to serve as obstacles to any attempt to increase the prices of these products in gas stations. This will strengthen the informal market for these products, which will become increasingly rare and therefore increasingly expensive on the informal market.
- The restrictive monetary policy measures announced, such as the probable injection of 100 to 150 million U.S. dollars on the foreign exchange market before the end of the current fiscal year, will slightly slow down the drop in the gourde, resulting in a moderate drop in the prices of some products in the short term.
- The sudden fall in the value of the dollar on the market will lead to a loss in purchasing power for households holding dollars given that the drop in price will be less proportional to that of the value of the dollar on the market.
- The number of violent events and deaths recorded in August will be lower than in July, and if the authorities increase their interventions against the gangs, a substantial improvement in the security situation of the country will be observed, particularly in the capital. Thus, the supply of markets and the movement of people can resume their normal course, especially as the end-of-year holidays approach.
PROJECTED OUTLOOK THROUGH JANUARY 2023
With the below average spring harvests, households have very little or no reserves for August to September. The summer/autumn season agricultural activities are therefore limited because of the insufficient income from the spring agricultural season. Thus, the performance of the summer/autumn season will be compromised, causing harvests, and even incomes, to be below average.
The reduced supply of local products, below average incomes, and the still high level of commodity prices despite the new monetary policies of the Central Bank, will negatively affect food access for poor households and in turn their purchasing power. Therefore, the poorest households will adopt crisis strategies, in particular: increased sales of charcoal or wood and female animals, consumption of early harvests or food with low nutritional value, reduction of daily meals, reduced consumption by adults to benefit children, engaging in unusual activities such as daytime sales in private homes to do laundry, shoe polishing in urban areas, and other similar activities. Some municipalities (Irois, Anse-d'Hainault, Dame-Marie, and Bonbon) and others in the southern coastal region will be in Crisis (IPC Phase 3). Other municipalities (Corail, Pestel, and Roseaux) that are less dependent on the market having had a successful spring season and benefited from the support of a few organizations supporting livelihoods, will be Stressed (IPC Phase 2).
The second scenario period (October 2022 to January 2023) coincides with the winter season, as do the harvests of seasonal crops such as pigeon pea, lima bean, and cowpea. Despite the more or less favorable agro-climatological conditions for these seasons, losses resulting from the spring season will negatively affect the production of these seasons, which already represent a small contribution to national agricultural production. Therefore, food consumption will depend almost entirely on market purchases. Low purchasing power, due to high food prices and insignificant income, will continue to impact the food situation for the poorest households. Livelihoods will not change significantly either. End-of-year holidays represent a source of additional income. Nevertheless, the rise in the prices of fuel products and cereals (particularly rice and flour), in an unfavorable international context, does not lend itself to an improvement in the food security situation in the area. Poor and very poor households will therefore have to resort, once again, to the crisis strategies mentioned above, apart from the sustained humanitarian assistance targeted at recovering their livelihoods. Thus, Crisis (IPC Phase 3) and Stressed (IPC Phase 2) food insecurity, respectively, will be observed in the municipalities mentioned above.
About this Update
This monthly report covers current conditions as well as changes to the projected outlook for food insecurity in this country. It updates FEWS NET’s quarterly Food Security Outlook. Learn more about our work here.
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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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