Harvests of Postrera crops and income from coffee-growing activities improve the food security situation

• In Honduras, many poor subsistence farming households in the south and southwest have been adversely impacted by low crop yields due to the drought conditions in the last four years. There were near-total crop failures in certain areas in 2015 as a result of the El Niño conditions. However, supplies of 2016 crops and income from the coffee harvest between now and March will maintain Stressed (IPC Phase 2) outcomes among many of these households, at least through the end of the outlook period in May.

• In Nicaragua, even with the higher volume of staple grain production for this year’s Primera and Postrera seasons compared with past few years, the poorest households in the country’s Central-Northern region and northern Pacific Coast area will continue to face Stressed (IPC Phase 2) conditions through at least May. These outcomes are expected due to the erosion in their livelihoods from three consecutive years of crop losses and their limited local employment opportunities.

• El Salvador has been the country most affected by the high rates of coffee rust disease since 2012, what has driven a decline in national coffee production by 70 percent between 2010/2011 and 2013/2014. Staple grain production by many subsistence farmers in the eastern and western parts of the country has declined due to drought conditions in recent years, particularly in 2015. However, the situation of these households has improved in the last few months with the normal harvests of Primera and Postrera crops and an expansion in job opportunities. Accordingly, there will be Minimal (IPC Phase 1) acute food insecurity in all areas of the country at least through May 2017.

Agro-climatic conditions and outlook

• There were persistent La Niña conditions into the month of November, as reflected by the negative sea surface temperature (SST) anomalies in most eastern and central Equatorial Pacific Ocean areas. An analysis of different models shows these conditions weakening in the first quarter of 2017, with a shift to neutral conditions before the beginning of the rainy season in most parts of the region in May.
• According to current forecasts, there is a probability of above-average levels of cumulative rainfall across Central America for the three-month period between December and February, spurring the planting of Postrera Tardía and Apante crops, mainly in northern Guatemala and the Caribbean basin of Honduras and Nicaragua. Temperatures are likely to be slightly above-average during this period.
• Based on the expected neutral ENSO conditions and in the absence of other clear drivers, the most likely scenario is one of normal start-of-season conditions for the 2017 Primera growing season in May.
• The spatial-temporal distribution of rainfall during the planting and growing periods for Postrera crops is expected to put the size of harvests above the three-year average, except in very localized areas reporting crop damage from excessive rainfall or temporary breaks in the rain affecting crops in the flowering and grain filling stages. However, sorghum crops in different crop-producing areas of regional countries have been affected by yellow sugarcane aphid (Melanaphis sacchari. Zehntner) infestations. According to farmers, this pest had never before produced as much damage as it did this season, affecting subsistence farmers growing white sorghum, as well as commercial farmers growing sorghum under extensive farming systems for use as fodder in agro-industrial activities (poultry and cattle-raising activities).

Staple grain production and prices

Staple grain prices across the region began to come down as of September. However, this trend reversed itself in November in the case of red bean prices, in response to the drop-in inventory levels due to  the comparatively small harvests of Primera crops. Normally, Primera crops which are used as seeds for the planting of Postrera crops. Prices are expected to come back down with the harvest for the Postrera growing season, which accounts for the major share of annual production in all three countries. Based on preliminary data the Postrera season has gone more or less normally. Maize prices have reportedly been steadily declining since the end of September and are expected to continue to come down and stabilize at low levels for at least the first few months of 2017. December prices for both these grains are reportedly below the average for last year.

Staple grain production

The small harvests of Primera crops will ease conditions in drought-prone subsistence farming areas, even with the reported crop losses of over 50 percent in very localized areas (according to the EFSA of September 2016). Inventories of these crops will be bolstered by harvests of Postrera crops in November and December.

According to the Ministry of Agriculture (SAG) bulletin, Postrera maize crops planted in Olancho department have made excellent progress in their physiological development, spurred by good climatic conditions, particularly in the country’s western departments (Lempira, Ocotepeque, and Copán). Crops in areas with higher temperatures are currently in the flowering stage, with the flag leaf just beginning to unroll. Crop planting activities for the Postrera Tardía season have gotten underway in the Valle del Aguán under optimal soil moisture conditions, where there are already fields of sprouting maize crops. Postrera Tardía crops have also been planted in farming areas of Santa Bárbara and should be ready for harvesting sometime between February and March.

Bean harvests for the Postrera season are underway in Olancho department, where 60 percent of cropped areas should be harvested by the end of December. Seventy-five percent of cropped areas in the country’s western departments (Lempira, Ocotepeque, and Copán) have already been harvested. There were some minor problems in the southern part of Lempira department caused by the drought. Crop planting activities for the Postrera Tardía season have already started up in the Valle del Aguán, while the harvesting of Postrera crops will continue throughout the month of January in high-elevation areas of the Valley. The harvest in Santa Bárbara department has gotten underway, where 60 percent of crops should be harvested by the end of December and the remaining 40 percent in January.

The government is estimating red bean production for the current growing season (2016/2017) at three million quintals, which has helped bring down prices. This trend is expected to continue, with prices remaining low into the early part of 2017.

Coffee sector

According to the Honduran Coffee Institute (IHCAFE), as of November the total exports so far this season amount to 395,900 (46 kg) bags of coffee, which is an increase of 85 percent over the same figure for the 2015-2016 season (213,020 bags). The value of exports for this same period is USD 54.51 million, USD 28 million more than the figure for last season (2015-2016). The average selling price for these latest exports is USD 137.69 per (46 kg) bag, up by 13.26 percent from the selling price of coffee at the same time in the 2015-2016 season, or USD 121.56 per bag.

Job market and migration

According to coffee production records for the 2015/2016 season, Honduras produced 7.1 million 46 kg bags of coffee, which makes it the number one coffee producer in Central America, the third largest producer in the Americas, and the sixth largest producer in the world. In macroeconomic terms, coffee contributes four percent of the country’s GDP and 30 percent of its agricultural GDP, creating more than a million direct jobs.

Food security outlook

In Honduras, poor subsistence farming households and households of day laborers in livelihood zones 7 and 5, mainly in communities within the Dry Corridor in the southern and southwestern parts of the country, will face Stressed (IPC Phase 2) food security conditions between December and January. These conditions will be eased by the small harvests of Primera crops, even with the reported crop losses of over 50 percent in localized areas. Inventories of these crops will be bolstered by harvests of Postrera crops in December and cash income from temporary employment in this season’s larger coffee harvest compared with the last few years, both in terms of the size of the area to be harvested and the volume of production. Households in these areas hardest hit by losses of Primera crops risk being propelled into a Crisis (IPC Phase 3) between February and May 2017 with the depletion of their food reserves and the end of the peak demand period for labor.

Staple grain production and markets

According to consultations with official sources and local informants, the Primera season devoted mainly to maize production went normally and is considered one of the best seasons in recent years.  There were still maize crops scheduled to be harvested in December grown as companion crops with beans and sesame and picked along with these grain crops as part of the harvest for the Postrera season. Likewise, Postrera crops also did better than last year due to a better distribution of rainfall. This season is normally devoted to red bean, sesame, and sorghum production. Bean harvests for this growing season have the highest nationwide coverage rates and account for the largest share of annual bean production.

El Salvador has been more successful in implementing a climate change strategy. This is reflected in the fact that its agricultural sector had the highest rate of economic growth this year (4.2 percent), even after five consecutive years of drought. The government has been assisting 104 municipalities in the country’s Dry Corridor. This assistance includes the upgrading of all existing irrigation systems and the installation of new systems in seven of the worst drought-stricken municipalities, as well as the distribution of 415,932 farming packages for maize crops, 145,252 packages for bean production, and 44,910 food packages for drought-stricken households.

Coffee sector

Statistical data from the Salvadoran Coffee Council puts coffee exports by El Salvador so far this season (October – November 2016) at 19,405 quintals, 32 percent more than the reported 14,312 quintals of coffee exports by the same time of the 2015/2016 season. The total value of exports so far this season is USD 3.17 million, up 64 percent from the reported USD 1.9 million in exports for the same time last season. 

According to a press release, the coffee sector is currently USD 197 million in debt and faced with a small harvest producing barely 800,000 quintals of coffee, which suggests a crisis driven by environmental and financial factors and civil security problems.

Job market

The government of El Salvador passed new minimum wage legislation effective as of January 1, 2017 setting the minimum wage for farm workers at USD 200 per month and as high as USD 224 for workers on sugar cane plantations. The minimum wage for workers in coffee-growing activities was set at USD 129/month in 2016. Workers in the textile and garment sector will be paid a minimum wage of USD 295/month, while the minimum wage for workers in the trade and services sector and the industrial sector will be USD 300/month. The new minimum wage law is encountering opposition from employers in the agricultural sector displeased by the wage hike. Its potential impact on the agricultural sector is yet to be seen, particularly on the coffee sector, which employs the largest workforce.

Food security outlook

The good climatic conditions helped give subsistence farming households in the eastern and western parts of the country average harvests. They also helped improve their economic access to staple grains compared with their situation in recent years, mainly through the employment and income-earning opportunities afforded by the coffee harvest. Thus, households in livelihood zones 2, 3, and 4 should experience Minimal (IPC Phase 1) food insecurity during the current outlook period (December 2016 through May 2017). However, after four consecutive years of drought-induced damage to their crops and with the lower levels of coffee production as a result of the poor recovery from the rust outbreak, very poor households in these areas affected by crop losses for this season are likely to face Stressed (IPC Phase 2) food security conditions. The draining of their food and cash reserves and erosion in their livelihoods from three consecutive years of drought could put very poor households in the eastern part of the country in the Stressed (IPC Phase 2) phase of food insecurity in the last few months of the outlook period (March through May 2017) with the depletion of bean crops and the end of the high-demand period for labor for coffee and sugar cane crops. However, the number of these households will not reach the 20 percent threshold required for reclassifying any area, which will keep the country in the Minimal (IPC Phase 1) food insecurity for the entire period.

Staple grain production

Maize and bean crops for both growing seasons (the Primera and Postrera seasons) had normal growing cycles and harvests are expected to exceed national averages for the last three years. However, rainfall anomalies in the form of either rainfall deficits or excess rainfall reportedly caused damage to crops in very localized areas. Sorghum crops in Nicaragua, like in other regional countries (Guatemala, Honduras, and El Salvador) suffered heavy damage from yellow sugarcane aphid (Melanaphis sacchari. Zehntner) infestations, causing total crop failures. Sorghum crops are normally planted at the end of the rainy season since, by nature, they do not need as much water. They are grown by commercial farmers for use as fodder (in cattle and poultry-raising operations), as well as by subsistence farmers, as food for their families and fodder for their farmyard animals.

Coffee sector

The Export Processing Center (CETREX) puts the total volume of coffee exports for the period from January 1, 2016 through December 14, 2016 at 2.5 million quintals, which is a 13 percent increase over the figure for the same time last year (2.23 million quintals). However, the average annual selling price of coffee in 2016 was USD 3.40/kg, 10 percent under last year’s average price of USD 3.80/kg), driven down by the drop in international coffee prices.

Nicaragua has expanded its coffee-producing area to parts of the country at altitudes as high as 400 meters above sea level, where it is planning to introduce improved Robusta coffee plants. In addition to expanding the size of the area devoted to coffee production, this will extend the coffee growing season in Nicaragua by attempting to grow late-season varieties with harvests beginning in March and ending sometime between May and June, creating more job opportunities for the country’s rural population.

Job market

According to the third report for 2016 by the Nicaraguan Foundation for Socioeconomic Development (FUNIDES), employment statistics available as of August 2016 put the number of people registered with and insured by the Nicaraguan Social Security System (INSS) as of that month at 863,711, 11.8 percent more than in August of 2015, though the rate of growth in these numbers has slowed slightly over the course of this past year. The formal sector of the economy added 52,463 new workers between January and August 2016, with 56 percent employed in the services sector (which is largely informal) and 29 percent in the trade sector.

The coffee harvest has been underway for approximately a month, during which there is a regular flow of migration by paid farm workers and their families to different coffee-growing areas for an estimated period of four months looking to earn enough income to help meet their basic needs for part of the year. Current rates of pay range from 35 to 40 NIO (Nicaraguan Cordobas) per can of ripe coffee beans picked. The country’s main sources of job creation are coffee-producing areas of Nueva Segovia, Jinotega, and Matagalpa departments, even for migrant workers from certain border areas of Honduras

Food security outlook

In Nicaragua, very poor subsistence farming households and households of day laborers and small coffee growers in Northern Pacific and Northwestern areas of the country in livelihood zones 3 and 12 with meager harvests of drought-stricken Primera crops and poor bean harvests for the Postrera growing season and whose sorghum crops were wiped out by yellow sugarcane aphid infestations, limiting their food reserves, will be facing Stressed (IPC Phase 2) food security conditions throughout the  outlook period from December through May, which could be mitigated by potential earnings from work in the coffee harvest.