Reduced labor demand affects day labor income

• With the beginning of the high-demand period for unskilled labor, the Postrera crop harvest and low staple grains prices, poor households in most parts of the country will experience Minimal food insecurity (IPC Phase 1) for the entire outlook period.

• Given the expected average to above-average Postrera harvest, which should offset reduced income from coffee labor, subsistence farmers in the eastern part of the country will shift from Stressed food security outcomes (IPC Phase 2) to Minimal food insecurity (IPC Phase 1) by the end of November or December.

• Due to an approximately 15 percent reduction in the 2013/2014 coffee harvest, day laborers in the western part of the country will find it difficult to meet their basic food needs after the harvest of staple grains. As a result, this population group will be facing Stressed food security outcomes (IPC Phase 2) between January and March of next year.

• According to INSIVUMEH (the National Seismology, Vulcanology, Meteorology, and Hydrology Institute), almost all of the country reported above-average rainfall activity in October, with no major effects on crop growth and development. Postrera crops in the eastern and southern parts of the country are in their final stages of development, with no reports of any significant damage from crop pests or diseases. Maize and bean crops in the western part of the country have made good progress, with the harvest expected to get underway by the end of November or December. The second harvest season is just beginning in the north, where crops will be harvested between February and March of next year.
• Prices for staple grains are seasonally stable, with harvests occurring in surplus grain-producing areas of the north (Petén and the Northern Transversal Strip), the south (Escuintla and Retalhuleu), and the east increasing supply. With major crop-producing areas unaffected by the reported rainfall anomalies in the middle of the year, this year’s average to above-average harvests have brought current prices down from last year and below the five-year average. Moreover, low demand in other Central American countries is reducing the volume of maize and bean exports to these countries, resulting in larger inventories for domestic markets than in previous years.
• Estimated losses of coffee crops for the 2013/2014 season are smaller than originally expected and are approximately 15 percent less than the 2011/2012 season. The resulting reduced output, due in part to the pruning of coffee plants as part of earlier efforts to control the rust fungus, has reduced the supply of jobs for unskilled laborers in the coffee harvest. Moreover, world coffee prices have been steadily falling as a result of the large harvests in countries like Brazil and Colombia. The composite October price as established by the International Coffee Organization (ICO) is US$ 107.03, which is down 37 percent from October of last year and 81 percent from October 2011. These falling prices will make treatment of the coffee rust fungus more difficult this year, with coffee producers lacking the necessary funds to cover corresponding costs. This could potentially extend the problem beyond 2015, longer than originally envisioned.

The assumptions used by FEWS NET in establishing the most likely food security scenario for the period from October 2013 through March 2014 have changed as follows:

• The forecast released by the Central American Climate Outlook Forum on November 14 for the period from December 2013 through March 2014 is for above-normal levels of cumulative rainfall in the North, the Northern Transversal Strip, and the Caribbean region, while normal rainfall conditions are expected in the rest of the country. It also predicts an average cold-front season, with roughly 10 to 12 cold fronts producing minimum temperatures as low as minus 7 degrees Celsius in the western highlands.

• The beginning of the high-demand period for labor, the availability of household food reserves, falling prices, and the harvest in the altiplano areas in November/December will mark the end of the lean season in most of the country, with the exception of a few areas in the east and west. As a result, households should be able to meet their short-term food needs. Therefore, most parts of the country are expected to experience Minimal acute food insecurity (IPC Phase 1).

• The harvest of Postrera crops in November/December will also mark the end of the lean season for the small group of poor farmers in the eastern part of the country affected by the dry spell in June and July (in El Progreso, Zacapa, Chiquimula, and Baja Verapaz), who lost 60 to 100 percent of their maize crops from the Primera season. These losses will sharply reduce the size of the maize reserves of the very poor and poor households for next year. While the reduced 2013/2014 coffee harvest will decrease income-generation by 10 percent between October and next March, this should be offset by a good harvest of Postrera bean crops. Therefore, prior Stressed food security outcomes (IPC Phase 2) among households in these areas will shift to Minimal acute food insecurity (IPC Phase 1) with the onset of the Postrera crops harvest at the end of November.

• The estimated 15 percent shortfall for the 2013/2014 harvest will reduce the aggregate incomes of the very poor small producers in the altiplano areas by approximately 12 percent for the outlook period. This will make access to food more difficult as of January, after this area’s only harvest at the end of the year. Therefore, poor households in this area will be Stressed (IPC Phase 2) throughout the three-month period between January and March 2014.