Rising food assistance needs will likely peak prior to the start of the primera harvest in late August

• Food access among poor urban and rural households is likely to worsen until the start of the primera harvest in late August, driving an increase in food assistance needs. Below-normal household income from various livelihood sources, coupled with rising staple food prices (particularly for beans), is suppressing purchasing power.

• Primera crop production is expected to be average on the national level across the region, based on a forecast of above-average rainfall in April and May, government seed distributions, and production capacity of medium and large farms. Among smallholder farmers, however, high fertilizer prices and localized poor soil conditions will most likely lead to below-average harvests on the household level. Still, the availability of several months of food stocks will end the lean season by September.

• Economic recovery is anticipated to be uneven and gradual through September. A slow vaccination rollout and few to no COVID-19 movement restrictions are expected to continue hindering economic activity, especially in urban areas.

• Crisis (IPC Phase 3) outcomes are expected to persist through September in hurricane-affected areas of northern and southern Honduras and northwestern Nicaragua, the Dry Corridor, and parts of the coffee-producing livelihood zone in western El Salvador. However, a slight decline in the food-insecure population is anticipated by late August/September, attributed to the availability of the harvest and related seasonal decline in prices. In the rest of the region, most rural and urban areas are expected to be Stressed (IPC Phase 2) with some households in Crisis (IPC Phase 3).

April marks the start of the rainy season and the beginning of the primera crop production season with land preparation. According to satellite-derived data, the rainfall season has begun 5-20 days early across Honduras, El Salvador, and parts of Nicaragua (Figure 1). Despite some variation in weekly rainfall distribution, cumulative rainfall since April 1^st is thus far above average and sufficient to support the planting of maize and, to a lesser extent, red beans. Country governments have also begun seed distributions to farmers, including drought-tolerant seeds to areas in Nicaragua that are still dry (Nueva Segovia, Jinotega, Madriz, Estelí, departments in localized areas of Nicaragua’s Dry Corridor). Based on the various ensemble model forecasts, rainfall in April and May is generally expected to be adequate for normal crop development. In areas where localized deficits are likely to persist in Nicaragua, drought-tolerant seeds are expected to be resilient to the drier-than-normal conditions.

The broadly favorable start of season and seed distribution support is expected to support near-average net national primera crop production, led by medium and large farmers. In Honduras, the government is also expected to incentivize bean production based on the success of 2020 programs. However, smallholder farmers with limited financial capacity will face crop production challenges, resulting in household-level shortfalls. Smallholder farmers in rural areas of Honduras and Nicaragua that were hit by hurricanes Eta and Iota in late 2020, farmers in Dry Corridor areas where the economic impacts of COVID-19 compounded income losses from prior drought, and farmers that lost coffee production income in western El Salvador are most likely to have difficulty purchasing sufficient inputs to maintain normal planted area and yields. Fertilizer prices have risen by as much as 25 percent since February in Honduras, for example, driven by increased demand from the United States and Brazil that is placing pressure on the global fertilizer market. Additionally, farmers located in areas that were heavily flooded in late 2020 report poor soil conditions that are likely to negatively affect primera crop development.

Since the primera harvest does not begin until late August/September and since the late 2020 harvests have already been consumed or sold at the household level, both rural and urban poor households are currently primarily purchasing their food from local markets. In March, white maize prices trended lower than anticipated and were below March 2020 and the five-year averages. Although this trend has alleviated price pressure on poor rural and urban households to some extent, household purchasing power remains limited due to income losses. Conversely, maize sellers are facing a reduction in their income due to lower prices and higher fuel costs. Conversely, red bean prices remain above the March 2020 and five-year averages, with consequences for household dietary diversity. Similar trends are expected through September, dictated by the release of strategic reserves, imports of food commodities, irregular food assistance delivery, the impacts of high fuel prices on food transportation costs, and suppressed demand due to low household purchasing power.

As noted above, income remains below normal among both rural and urban households. Most households are expected to continue to be un- or under-employed in both the formal and informal sectors in 2021. To date, government or self-imposed movement restrictions have been the primary driver of reduced access to food and income during the pandemic. In 2021, the absence of more stringent restrictions is anticipated to continue to facilitate some gradual recovery in economic activity and employment, according to forecasts by central banks and global financial institutions. However, COVID-19 cases have sharply increased since Holy Week and a third wave is ongoing, with consequences for economic recovery. Access to vaccines remains low, particularly in Honduras and Nicaragua, where there are delays in the delivery of the allocated doses. To date, Honduras and Nicaragua have vaccinated less than one percent of their population, while El Salvador has vaccinated nearly 12 percent of its population. Given international vaccine market dynamics and reliance on the COVAX mechanism and donations, access to vaccines is expected to remain low and hinder effective coverage among the general public.

Based on the above factors, Crisis (IPC Phase 3) outcomes are expected to persist through September in hurricane-affected areas of northern and southern Honduras and northwestern Nicaragua, the Dry Corridor, and parts of the coffee-producing livelihood zone in western El Salvador. In other rural and urban areas, Stressed (IPC Phase 2) outcomes with some households in Crisis (IPC Phase 3) are likely. Food assistance needs are expected to peak in July/August prior to the start of the primera harvest in late August/September. The availability of the primera harvest is anticipated to provide several months of food stocks and some crop sales income at the household level while driving a seasonal decline in staple food prices at the market.

Among poor rural households, low food availability, seasonal and atypical increases in food prices, few income-earning opportunities during the lean season, and sluggish economic activity will be the main drivers of food insecurity. Staple food prices typically reach their peak in July, and steeper increases are likely for red beans and other commodities due to rising fuel prices. At the same time, households are relying more heavily on the market than normal due to 2020 postrera crop losses. Agricultural and casual labor demand is also seasonally lower and exacerbated by the economic impacts of COVID-19. Many poor rural households have already implemented negative coping strategies that left them indebted and with an eroded resilience capacity. As a result, smallholder farmers have reduced financial capacity to afford essential inputs, such as fertilizer, and face insufficient income to both meet their minimum food needs and invest in crop production.

Areas that are still recovering from the hurricanes and likely to be in Crisis (IPC Phase 3) include Cortés, Colón, Atlántida, and Santa Bárbara departments in Honduras and Jinotega, RACCN, and RACCS departments in Nicaragua. Most households suffered large-scale crop losses or could not replant during the apante/postrera tardía season or lost fishing income, while reconstruction of essential infrastructure is still ongoing. Livelihoods were severely disrupted and have not yet been fully restored. As a result, household income will be lower and more irregular than normal, hindering their food access. Although food assistance has been delivered and there are plans to continue, data on beneficiaries and locations are unavailable.

Crisis (IPC Phase 3) outcomes are also likely among poor rural households in the coffee livelihood zone in El Salvador, especially in Ahuachapán department. Although El Salvador was less affected by the hurricanes, the 2020/2021 coffee harvest was below the five-year average, and the 2019/2020 harvest and COVID-19 economic impacts were significant. As a result, households lost significant labor income from coffee production and have few alternative income sources.

Other areas of concern include Choluteca, La Paz, Valle, El Paraíso, and Eastern Olancho departments in Honduras and Estelí, Madriz, Matagalpa, and Nueva Segovia in Nicaragua, where significant shares of households are likely to face Crisis (IPC Phase 3) outcomes. Many farmers in these Dry Corridor areas have not recovered their livelihoods from prior consecutive years of drought, and coping capacity further eroded due to the impacts of COVID-19 on household labor income and expenditures. Additionally, these households are more likely to have at least slightly below-average primera harvests, based on past trends showing lower yields in the Dry Corridor compared to smallholder farmers in the rest of the country.

Finally, Stressed (IPC Phase 2) outcomes with some households in Crisis (IPC Phase 3) are expected in urban areas. Although those who depend on the informal sector and formal employment in sectors such as services, commerce, domestic tourism, and associated industries are likely to see partial recovery in their income, household income will most likely remain below normal due to sluggish economic recovery. Given that these households purchase all of their food and are sensitive to income and price shocks, and since food and public transport prices are rising, their access to food will remain below normal.

Events that Might Change the Outlook

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