Improvement in the food security situation, but low income levels from coffee remain unchanged

• Recent harvests helped increase household food reserves and, together with labor income from unskilled work, households will meet food needs through February/March. The annual lean season will begin soon thereafter, ending with the harvest of Primera crops.
• Very poor households in the western part of the country will meet their basic food needs with grain harvests for the Primera growing season and, thus, will experience Minimal food insecurity (IPC Phase 1) in the first quarter of the year. With decreased demand for labor in the coffee sector, day laborers will have difficulty meeting their basic food needs and, thus, will be Stressed (Phase 2, IPC 2.0) between April and June of this year.
• The above-average harvest for the Postrera growing season caused a decrease in grain prices resulting in lower incomes from grain sales. Incomes for very poor households also decreased as a result in decreased labor demand in the coffee sector. Nevertheless, very poor households in the eastern part of the country will experience Minimal food insecurity (IPC Phase 1) through June of this year.

Current situation

The harvest of Postrera crops was completed in November/December. Crop yields were average to above-average. These crops helped households top off their food reserves, particularly bean stocks, the main crop grown in the season. An increase in domestic market inventories drove  maize and beans prices—already below the five-year average for the past few months—even lower. This price behavior is the result of a surplus of both domestic and regional stocks, which has also reduced exports to other Central American countries.

The peak-demand period for unskilled labor is in full swing, with near-normal levels of crop performance in harvests of all major high-yielding crops with the exception of coffee.

As of December 2013, on average, 45 percent of coffee plantations were reporting coffee rust infestations, though the affected area was smaller than last year. The magnitude of current infestations will affect output for the 2014/2015 season. The projected shortfall in the current harvest, however, is five percent, with an associated 22 percent reduction in employment, compared with figures for the 2011/2012 harvest. In an effort to compensate for falling coffee prices, producers have cut wage rates to lower their labor costs. From a food security standpoint, day laborers are the group hardest hit by lower coffee production, though small coffee growers will also earn less income.

According to reports by the Ministry of Health, the cumulative nationwide global acute malnutrition (GAM) rate as of December 29 was 22 percent higher than at the same time in 2012, reflecting the increase in the number of cases of malnutrition in 2013, particularly during the lean season in the middle of the year. However, the household food security situation improved with the harvest of Primera crops, which was followed by a seasonal decline in severe acute malnutrition (SAM) rates, which dropped sharply towards the end of the year.

Assumptions

• Primera growing season for staple grains: The rainy season is forecast to begin on time in April in Pacific Basin areas, and is expected to start shortly thereafter in the rest of the country. In addition, the Central American Climate Outlook Forum is predicting above-normal levels of cumulative rainfall between January and March in the North, the Transversal Strip, and the Caribbean region, and normal rainfall activity in the rest of the country. Moreover, there should be a timely supply of fertilizer at government-subsidized prices.
• Staple grain supplies and prices: With the above-average output from the Postrera growing season and the expected near-average harvest of staple grain crops in Petén and the Northern Transversal Strip in February/March, movements in prices throughout the outlook period should be in line with normal seasonal trends (rising through March, dipping slightly in May, then rising again, with maize prices reaching their yearly peak in June and bean prices steadily climbing through July).
• Demand for labor: There should be a more or less normal demand for unskilled labor, except in the coffee sector, which is expected to decline by two percent compared to last year and 22 percent compared with figures for the 2011/12 harvest due to the rust outbreak on coffee plantations since 2012.

Most likely food security outcomes

The food security situation has improved in most parts of the country. The harvest of staple grain crops for the Postrera growing season improved food availability for farming households and helped bring down domestic market prices even further, improving food access for all consumer households. This will continue to be the case throughout the first quarter of this year. The annual high-demand period for unskilled labor will continue through March, helping to generate household income. This will also help improve food access by strengthening household purchasing power. The lean season for very poor households will begin in February instead of in April, particularly for households dependent on coffee. In line with these same seasonal trends, global acute malnutrition (GAM) rates for children under five are expected to start off the year at comparatively low levels and seasonally rise by February. Nevertheless, most areas of the country will experience Minimal acute food insecurity (IPC Phase 1) between January and June of this year, with the exception of the temperate western highlands where food security outcomes will be Stressed (IPC Phase 2). The rainy season is expected to begin on schedule, resulting in a timely harvest for the Primera growing season in April/May, bolstered by the timely supply of farm inputs provided by the government. This could be a positive factor in shaping conditions during the second half of the year.

Day laborers dependent on coffee in Livelihood Zone 5 (subsistence agriculture), Livelihood Zone 8 (basic grains, border zone with Honduras and El Salvador), and Livelihood Zone 9 (basic grains and wage labor)*

Current situation

The yearly harvest in the western highlands and an above-average harvest of Postrera crops in the other two livelihood zones in November/December helped very poor households replenish their food reserves, enabling them to meet their basic food needs in spite of the crop losses during the Primera growing season. According to the field survey conducted by FEWS NET in conjunction with SESAN (Guatemala’s Food and Nutritional Security Agency) and the WFP, the harvest in the western highlands will give households three months worth of maize reserves and three to four months worth of bean reserves. According to the monthly monitoring report by the FAO, food reserves in the east have been replenished. Maize should last for three months as well as beans, which are larger than they have been in the last five years.

The current high-demand for labor is helping households generate income for food purchase, which, coupled with the low prices of staple foods, is helping to improve food access. Very poor households in these areas are currently experiencing Minimal acute food insecurity (IPC Phase 1).

Unskilled labor in the coffee sector. The coffee sector has been hard hit by the coffee rust infestation, which is exacerbating the negative effects of the biannual harvesting of coffee crops. ANACAFE and other sources are reporting a nine to 19 percent decline in output from the 2013/14 harvest in the west and losses of 10 to 16 percent of the harvest in the east. Part of the reduction in output is due to the biannual harvesting of these crops, but there are areas such as Santa Rosa, Jutiapa, and Jalapa which have been severely affected by the rust outbreak and parts of Huehuetenango at altitudes between 800 and 2,000 meters above sea-level (in the corridor extending from Colotenango to San Pedro Necta, La Democracia, Santa Ana Huista, San Antonio Huista, Jacaltenago, and Concepción Huista) where monitoring activities by FEWS NET and its partners found sharp upsurge in the coffee rust outbreak.

There is also reportedly less demand for labor in the Mexican coffee harvest, reducing employment levels by as much as 40 percent. These plantations, which were previously popular destinations for migrant workers, are simply not producing as much as they did in past years. Daily wages have also reportedly been reduced by cuts in pay rates to between Q25 and Q40.00/quintal plus meals, both in Guatemala and in Mexico, compared with last year’s rates of up to Q50/quintal, which is a 10 to 30 percent reduction. In addition, the condition of coffee plantations has reduced the amount and size of coffee cherries to the point that workers in the current harvest are picking only 0.5 quintal per day, when they were previously able to pick a full quintal in a day’s work. Together, these two factors are reducing total monthly incomes. Day laborers in the coffee sector make up approximately 15 to 20 percent of the population of each of these areas. 

Staple grain prices. There are normal staple grain flows to local markets in the areas of concern from surplus-producing areas (the southern coast in the case of maize and the east, Petén, and the Northern Transversal Strip in the case of beans), which are reporting above-average harvests as a result of the good pattern of rainfall for Postrera crops. In general, wholesale and retail prices for both maize and beans have been at a five-year low. For example, according to the FAO consumer price index for December 2013 in the departmental capital of Huehuetenango, a reference market, the price of beans was down by 16.7 percent and the price of maize by 13.5 percent from December of the previous year. FAO price data also puts producer prices for both maize and beans in both areas at their lowest level in five years.

Nutritional situation. Of the departments in the country’s western highlands, Quetzaltenango department’s reported  global acute malnutrition rate as of December 29 was above the national average. Quetzaltenango, Huehuetenango, Chimaltenango, and Quiché departments all reported increases in the number of cases of malnutrition. As has previously been the case, the Oriental region ended the year with the country’s highest acute malnutrition rates, with more than 4,500 reported cases of malnutrition, mostly in Chiquimula department, which reported 1,468 cases of malnutrition. These trends in the nutritional situation are the result of problems with household food access engendered by the losses of staple crops in the past two years and the reduction in income from coffee-growing activities.

Assumptions

The outlook for this region is based on the following area-specific assumption in addition to the nationwide assumptions outlined earlier in the report:

• Income from coffee will be reduced by 20 percent in the western highlands and by 15 percent in the east due to a 10 percent decline in demand for labor and a comparable cut in wage rates for day laborers.

Most likely food security outcomes

Households in livelihood zone 5 (Figure 1) are expected to have more or less normal food access through February/March on account of their food reserves. In contrast to normal years in which the yearly lean season begins in May/June, this year’s lean season could begin as early as February for these households due to their losses of staple grain crops to the dry spell and reduced incomes, which are as much as 20 percent lower than usual. However, with existing reserves expected to cover household food needs, the severity of food insecurity in this area between January and March of this year is classified as Minimal (IPC Phase 1).

However, household food access will be reduced by as much as 45 to 50 percent by April with the seasonal decline in employment options and the growing household dependence on market purchasing. Though consumer prices for staple grains are much lower than they were last year, this will not fully compensate for the reduction in household income. Based on the choice of household coping strategies, this is expected to produce a food consumption deficit of 30 percent through the end of the outlook period in terms of both the quality and quantity of food consumption. Accordingly, there are likely to be above-normal rates of acute malnutrition, particularly during the yearly lean season. However, they are not expected to surpass 10 percent, nor are under-five mortality rates expected to exceed 1/10,000/day. With the erosion in the purchasing power of local households, food insecurity levels in this area in the last three months of the outlook period are being classified as Stressed ( IPC Phase 2).

A good harvest of Postrera crops will ensure grain availability for households in livelihood zones 7 and 8, particularly for beans (Figure 1). However, the surplus is expected to be earmarked for sale rather than for consumption. Sale prices for maize and beans are down from last year by approximately 18 percent and 21 percent, respectively, which will mean lower sales revenues than in previous years. Combined with cuts in wage rates and the number of work days will put incomes during this period approximately 15 percent below-normal. The most critical period for income shortfalls will be in the second quarter. 

Losses of Primera maize crops will force certain households to resort to purchasing supplies of this grain earlier than usual, since the Postrera growing season produces more beans than maize. Retail prices for maize in December were unchanged from the previous year which, with the further 10 percent reduction in bean prices, in general, should ensure food access through February. With the subsequent slight decline in food access, households will begin employing their coping strategies earlier than usual, including the sale of backyard animals, fuelwood, and wild fruits and atypical migration. These strategies will be intensified towards the second quarter of the year, particularly in the face of this year’s expected shortfalls in income.

With no noticeable changes in local livelihoods and with households resorting to their customary strategies to ensure food availability for their families, the severity of food insecurity in this area for the entire outlook period is classified as Minimal (IPC Phase 1). 

Table 1: Possible events in the next six months that could change the most-likely scenario