Seasonal improvements in food reserves and income in the rural area until February

• The average or above-average yields between November and February will fill the reserves of rural farming households and will increase household availability of basic grains, keeping prices close to the average throughout the period analyzed.

• With the peak of the season for labor demand, from October to February, the income earned by laborers in the poorest rural households will increase seasonally but will not reach the levels of the previous year, due to harvest reduction, the delayed start of the coffee harvest, limits on mobility and a greater supply of laborers.

• In urban areas, lower prices and improved access to markets will maintain good food availability. However, a slow recovery in incomes, due to debt payment obligations and unemployment rates that remain above pre-COVID levels, will mean that the poorest households will have low purchasing power and continue to face the food limitations they are already confronting.

• The rural food situation will improve until February, given the higher incomes from casual labor during cash crop harvest and from the the Postrera and Apante harvests; therefore, the majority of households will be Stressed (IPC Phase 2), with the exception of households in El Salvador that are dependent on coffee and the poorest households in the Dry Corridor of Honduras, which will be in Crisis (IPC Phase 3). An uptick in COVID cases will mean a return to certain restrictions on economic activities, which will mainly impact the urban area that will not see a recovery in income and employment levels. However, these households will remain Stressed (IPC Phase 2).

With a La Niña phenomenon already established and predicted to last throughout the period of analysis, the cumulative rainfall forecasts indicate values between average and above average throughout the region. This scenario, combined with a larger cultivated area and government incentives for production during the Postrera cycle (September to November) and the apante/postrera tardía cycle (December to February), is conducive to average yields, and even above average yields in some cases. However, the excess humidity may cause some problems with fungal diseases on susceptible crops, such as beans, if the necessary agricultural measures are not taken.

These agricultural measures will lead to an increase in the availability of basic grains until February/March both in farming households and markets. The latter will cause prices to remain slightly above average (Figure 1), which will result in improved access to these foods by non-farming households. This is especially true in the case of red beans which, since April, have sold at abnormally high values, making them difficult to purchase in a scenario where the population’s income has decreased significantly due to the slowdown in economic activities and the unemployment that it created.

Looking to the next crop year, the 2021 Primera planting season, between April and May, is expected to benefit from good precipitation.

The hurricane season, which ends in November and is predicted to be more active than usual, is a factor that could modify the abovementioned scenario.

Agricultural issues aside, the evolution of the COVID-19 pandemic has had, and will continue to have, a very significant impact on the food security of urban and rural populations in the region.

In the case of Nicaragua, the government never established any restrictive measures, but the population reduced its mobility and economic activity, on its own initiative, as a precautionary measure in the face of the virus. These measures, combined with the socioeconomic challenges facing the country since the 2018 crisis, have resulted in an increase in the unemployment level, especially in the informal sector and the formal sectors related to tourism, commerce, and services. Although the reduction in household incomes has been less severe than in the rest of the region, a significant recovery is not expected during the period analyzed, with the exception households of the agricultural sector, due to the start of the peak-labor demand season. Given that Costa Rica has announced the implementation of protocols to allow the migration of Nicaraguan laborers, and that Honduras already reopened its land borders, the employment availability outlook over the coming months is more positive than previously expected. Nonetheless, the excess labor supply, the difficulty and added cost of securing alternatives to public transportation, and the restrictions that biosafety measures require will all reduce the total income earned by day laborers until the end of the season.

In the case of Honduras, there are still some restrictions on mobility, such as the overnight curfew and permission to circulate based on the last digit of one’s identity document, and the operational capacity of businesses is still reduced. The epidemic curve of COVID-19 cases shows a continued upward trend, but the death rate seems to be falling. However, according to this scenario and the projections made by the Institute for Health Metrics and Evaluation, there will likely be a surge in cases atthe end of the year, as restrictions are relaxed. Given that the national economy and households have still not recovered, following the sharp drop in income, especially in the informal sector and urban areas, access to food will continue to be a limiting factor, in spite of the deployment of response strategies, including reducing portion sizes during meals. Furthermore, the adoption of negative strategies, such as the sale of productive assets (e. g., tools and, in some cases, land) during the months of confinement, especially in rural areas, will result in a reduced capacity to recover in the medium term.

The 2020/2021 coffee harvest in this country began on October 1st and it is expected that 8.2 quintals of coffee will be harvested, one million quintals more than last year. More than 120,000 families are expected to participate in the harvest during the six months the season lasts. This seasonal increase in demand for informal labor will translate into higher incomes than those earned in the last quarter. However, a larger supply due to the unusually high levels of unemployment, the irregularity of public transportation and some limitations related to the implementation of biosafety protocols, will mean lower than normal incomes in households that depend on this daily wage.

In El Salvador, practically the entire country has already reopened, even though some restrictions remain in place. However, the data provided by the Salvadoran government show that the current level of activity has provoked a spike in COVID-19 cases, especially in certain municipalities, following a relative decline in September. Nonetheless, the health authorities have indicated that, for the time being, they are ruling out restrictive measures, such as the stay-at-home orders established at the end of the previous month. If this trend continues, the Institute for Health Metrics and Evaluation projects a second wave of transmission at the end of the year, with the subsequent return of mobility restrictions, although they will very likely be less strict than those imposed previously. This will slow the already limited progress made in terms of income generation, especially in urban areas, where much of the population that depends on the formal sector still reports unemployment and reduced income.

In the case of rural El Salvador, unemployment in the formal sector is still a factor to consider. In the informal sector, the coming months will bring the start of season when demand for laborers — especially coffee harvesters — peaks. This year, however, the excess rainfall and challenges with maintaining the plantations led to a greater prevalence of blight on farms and production is expected to be 30 percent lower than the previous year. In addition, there was a delay in the maturation of the grain, so the harvest season will be pushed back a month. These two factors, added to the challenges posed by COVID-19, will result in an extension of the food scarcity period and lower incomes for harvesters at the end of the season. Producers will also see a dip in their incomes as a result of reduced production and lower sale prices, coupled with an increase in costs related to the implementation of health safety measures aimed at reducing the transmission of COVID-19 among their employees.

For the three countries, the statistics as of September show that the inflow of remittances has increased, signifying a recovery from the drop that took place in the second quarter. This upward trend is expected to continue and hover at close to average levels. However, remittance-receiving households are careful about how they use the money they receive, allocating it mainly to cover their basic needs, pay debts and keep savings, eschewing investments in businesses and homes, which may mean fewer informal employment options in the areas that are top recipients.

With regard to governmental humanitarian assistance, none is anticipated for Nicaragua, and the governments of Honduras and El Salvador have not provided information on whether this assistance will continue in the coming months. According to the regional report of the World Food Program (WFP), between August and September, 50 and 73 percent of the surveyed population from Honduras and El Salvador, respectively, indicated that they had regular access to government assistance. For the rest of the year, USAID has announced the delivery of monetary assistance for people affected by COVID-19 and other shocks in Honduras and El Salvador. In Honduras, 8 million USD in assistance will be provided to 116,000 people in the departments of Cortés, Yoro, Francisco Morazán, and Valle through the World Food Program and the Adventist Development and Relief Agency. In El Salvador, 3 million USD in assistance will be provided to 32,000 people located in 21 municipalities in Ahuachapán, Cabañas, Morazán, San Vicente, Usulután, La Unión, San Salvador, and Santa Ana.

Expected food security outcomes: From October 2020 to January 2021, farming households will see an increase in their food reserves with the recent Primera harvest and the Postrera harvest anticipated for the end of the year. In addition, a seasonal improvement in the incomes of very poor rural households in the region is expected as the season of high demand for agricultural labor begins, offering more employment options. Although these households have debts and a slow economic recovery due to the impact of COVID-19 over the previous months, the income flow will result in a slight improvement in purchasing power, at a time when food prices will also decrease seasonally. However, they will not be able to return, economically, to pre-COVID levels, given that total incomes are expected to be lower than usual. In the case of El Salvador, the incomes of the poorest households that are dependent on daily wages from coffee plantation will be even lower than those earned the previous year. As a result, these households are expected to remain in Crisis (IPC Phase 3), as are the households located in the Dry Corridor of Honduras, which have had several consecutive years of shocks. The rest of the rural households in these two countries, including the recipients of humanitarian assistance from USAID, and in Nicaragua will be Stressed (IPC Phase 2).

In the urban area, households in the three countries will see a slight improvement in their incomes as the economy picks up, although the improvement will be delayed by the measures needed to contain the resurgence of COVID-19 cases at the end of the year. Access to households, due to greater mobility and lower prices, and the availability of food has also improved in relation to previous months; therefore, most of these households will be Stressed (IPC Phase 2).

From February to May 2021, households that produce basic grains will also have a flow of basic grains at the end of the apante/postrera tardía season with which they will fill their food reserves for the rest of the period analyzed. For non-farming rural households, the season of high demand for agricultural labor will end between February and March. And because these households have generated less income, they have debts to pay and must seek out ways to recover from negative response strategies, the income generated during this season will not last as long as usual. This will mean that their purchasing power will be limited, at a time when the seasonal increase in prices begins, between March and April. This will result in a gradual increase in the number of households in all three countries that have difficulties meeting their food needs, as this period progresses. However, most of these households will be Stressed (IPC Phase 2). The exception, once again, will be the Honduran households located in the Dry Corridor and, to a lesser degree, the poorest households whose livelihoods are tied to coffee in El Salvador, which will be in Crisis (IPC Phase 3).

In the case of the urban population, access to markets and their food availability will continue to normalize as a more normal economic dynamic returns. However, the drop in incomes, as a result of the measures taken in 2020 in response to COVID-19, will continue, given the slow recovery of the economy in the three countries and the difficulty of bringing down the rates of unemployment in the formal and informal sectors. In addition, these households had to resort to their savings, to taking on debt and, even, to selling certain productive assets. This means that part of the income they allocate to food must be redirected, thereby maintaining the limitations on meeting these basic needs and making them more vulnerable to future shocks. These households will mostly be Stressed (IPC Phase 2).