Skip to main content

Coffee rust infestation will lead to decrease in income for the region’s poorest populations

  • Remote Monitoring Report
  • Latin America and the Caribbean
  • January 2014
Coffee rust infestation will lead to decrease in income for the region’s poorest populations

Download the Report

  • Key Messages
  • Market Behavior
  • Agricultural Production
  • Impact of Coffee Rust on the Coffee Production Sector
  • Nutrition Situation
  • Regional Outlook Projected Through 2014
  • Key Messages
    • Slight variations will be observed in coffee rust infestation estimates for the 2013-2014 season in remotely monitored countries as compared to the 2012-2013 season. This will impact coffee sector employment by worsening income status for the poorest households who depend on this source of income.
    • The Postrera maize and beans harvest began in November throughout the entire region, and this will increase the supply of cereal grains in these three countries, with prices projected to decrease in late January. This in turn will improve food availability and access for the poorest households during the first two months of 2014.
    • Based on 2013 grain harvests and the demand for temporary day labor (October through February), these countries are classified at the Minimum level of food insecurity (IPC Phase 1), with the exception of the southern region of Honduras which – as a result of harvest losses for crops planted in the Primera season, combined with decreases in the availability of coffee harvest employment opportunities – is classified at the Stress level of food insecurity (IPC Phase 2).

    ZONE

    CURRENT ANOMALIES

    PROJECTED ANOMALIES

    REGIONAL

    • The international price of coffee as of November 2013 decreased by 26 percent compared to coffee prices in November 2012.
    • The decrease in coffee harvest employment opportunities will impact the poorest population groups in rural areas.
    • The daily wage received for coffee harvest day labor has decreased in comparison to the previous year.
    • The decrease in prices will exacerbate the impact of the current outbreak of coffee rust. Production costs could exceed sales prices, which will act as a disincentive to regional coffee production.
    • The decrease in employment opportunities, coupled with a reduction in the number of days worked and a corresponding reduction in income received from coffee harvest for the poorest households.

    HONDURAS

    • Income from coffee harvest wages has decreased by an estimated 14 percent compared to wages received during the 2012-2013 season.
    • Change in consumer behavior
    • Consistent with anomalies projected for the region.

    NICARAGUA

    • An estimated 45 percent reduction in temporary employment opportunities in the coffee sector compared to a normal year.
    • Income for temporary day laborers has decreased between 12.8 and 26.8 percent.
    • Consistent with anomalies projected for the region.

     


    Market Behavior

    Maize and bean prices in the region began to decrease gradually during the final two months of last year as a function of the flows of these commodities to the market. Only in Nicaragua was a price increase observed, attributable to the fact that the bulk of national production (43 percent) comes from the harvest of Apante crops, which will not commence until late February. Consistent with production seasonality, maize and bean prices are expected to reach their lowest levels in late January and remain low during the first quarter of the year.


    Agricultural Production

    During the Postrera season, beans are the primary crop planted in the region.  Harvests are normally completed in January. This is typically followed by Apante crops. Nicaragua plants the greatest area during this season of the year and harvesting usually takes place during February/March.

    According to El Salvador’s Directorate General of Agro-livestock Economy, optimistic estimates of maize production for the 2012-2013 season will likely total some 22.5 million quintales, reflecting a 13 percent increase over last year, despite the losses recorded as a result of precipitation anomalies affecting Primera crops. Among the factors that could affect these estimates are: greater access to land, low costs for leasing land, and implementation of government support strategies (e.g., distribution to producers of improved seed by the Ministry of Agriculture, an increase of 65,000 farm packets delivered to producers for the current 2013-2014 crop cycle, and technical assistance provided within the framework of the Family Agriculture Plan).

    The most extensive areas devoted to Apante crops are found in Nicaragua – 112 hectares (43 percent of national production) – planting of which is now complete, with harvesting expected to begin in February/March. Apante crop production in Honduras represents approximately 10 percent of national production; crops are planted in the month of December for harvesting in late February and March. These crops are planted in the coastal Caribbean production region, primarily in the departments of Atlántida and Colón, and involve mainly red beans grown by commercial-level farmers. El Salvador’s Ahuachapán department includes production areas for Apante crops, which will be harvested in late February. Precipitation images for December 2013 show that, in most of Nicaragua’s production area and throughout Honduras’ Atlantic Coast region, rainfall remained above normal levels. However, information received from the field indicates that no damage to basic grain crops has been reported and that a normal harvest is expected.


    Impact of Coffee Rust on the Coffee Production Sector

    The international price of coffee as of November reflected a 26 percent decrease from the November 2012 price. This reduction will further exacerbate the crisis resulting from the coffee rust infestation in the coffee production sector, which could cause revenues from coffee marketing to fall below production costs. According to the ICO, coffee prices reached their lowest levels for the past six years (US$100.99/Nov.) and are fast approaching production costs (US$80.00 to $120.00/lb.).

    According to the Regional Cooperative Program for the Technological Development and Modernization of Coffee Production (Programa Cooperativo Regional para el Desarrollo Tecnológico y Modernización de la Caficultura – PROMECAFE), estimates of the presence of coffee rust on the total acreage planted coffee will be as follows for the 2013-2014 season: Honduras, 25 percent; El Salvador, 74 percent; and Nicaragua, 37 percent (2012-2013 estimate).

    The harvest season lasts from October to March. The greatest flows of day labor, however, are recorded in January. It is after this period that the impact of coffee rust on unemployment will be observed. Reduction in temporary employment opportunities estimates for the 2013-2014 season as compared to the 2011-2012 season (which represents a typical year) are 30 percent for Nicaragua, 20 percent for El Salvador, and 16 percent for Honduras.

    According to the Nicaraguan Ministry of Agriculture (MAGFOR, January 8, 2014), a total of 350,000 coffee pickers will be required for the peak period during the current season, and they will pick some 1.7 million quintales – 300,000 fewer than the previous crop cycle – a result of this crop’s two-year cycle and the phytosanitary problems caused by the coffee rust infestation.
    For Honduras, the Assessment of Food and Nutritional Security in Coffee-growing Regions (October 2013, UTSAN and WFP/FAO) indicates that among the study population (420 households in 30 communities located in 10 municipios), the income from coffee picking is US$133/month. To survive, these households spend US$53.55/month, (68 percent of their total income) to cover the cost of a basic food basket. More than 20 percent of the population interviewed indicated that they had experienced problems in meeting their basic food needs, while 45 percent consider themselves to be moderately insecure as regards access to food. The assessment determined that as of October 2013, the nutritional status for populations living in coffee-producing areas showed that 2.2 percent suffered from global acute malnutrition (weight/height) and 32.3 percent suffered from chronic malnutrition (height/age), indicating a critical situation for these populations, and approaching the national average for chronic malnutrition among students at 36.2 percent (Nutrition Institute for Central America and Panama-INCAP).


    Nutrition Situation

    According to the Assessment of Food and Nutritional Security in Coffee-growing Regions (October 2013, UTSAN and WFP/FAO), subsistence households that depend on employment as day laborers on coffee plantations and that will be affected by the absence of or reduction in work opportunities, are resorting to behaviors that are reflective of their difficulties in satisfying their food needs. For example, purchasing power for obtaining basic food supplies is constrained by the reduced amount of the daily wage received for labor. Some 8.7 percent of those evaluated reduce meal portion size, while 7.7 percent decrease the number of meals per day.

    As reflected in the assessment carried out by Acción Contra el Hambre (ACF-E) in December 2013—Situación de Inseguridad Alimentaria de Poblaciones Vulnerables Altamente Dependientes del Café Afectada por la Crisis de la Roya 2013 en Nicaragua—family members of coffee laborers, both with and without basic grain crops, typically survive during a normal year on US$0.83 to US$0.99/person/day respectively, placing them on average, below the poverty line, defined as US$1.0/person/day. 63.4 percent of the families surveyed find themselves at some level of food insecurity in terms of food consumption, with 57.3 percent experiencing severe food insecurity and 6.1 percent a moderate level of food insecurity. 81.3 percent of the families surveyed (September/October 2013) indicated that they stopped consuming one or more foods during the preceding month, with 96 percent indicating lack of money as the principal reason. The foods that they have ceased to consume consist primarily of meat and eggs. The study does show, however, that these families are able to meet their kilocalorie requirement.


    Regional Outlook Projected Through 2014
    • The decrease in demand for temporary labor in coffee harvest activities (Nicaragua, 30 percent; El Salvador, 32 percent, and Honduras, 16 percent) resulting from damage caused by coffee rust and the lack of incentives to invest in coffee plantation management because of lower prices will become evident during the first quarter of 2014.
    • Faced with the lack of food reserves and the absence of production opportunities before the Primera crop harvest, the poorest households will be forced to purchase food supplies in the market. This situation will be exacerbated by the lack of employment opportunities in coffee harvesting activities, which will force poor households to seek other alternatives (local and international migration, sale of assets to generate income, dietary changes, etc.).
    • The weather outlook for the January/March quarter suggests the likelihood of above normal cumulative rainfall levels, primarily in the Atlantic Coast regions of Honduras and Nicaragua, putting the harvest of Apante bean crops at risk.

    Despite the socioeconomic effects of negative shocks to the coffee sector and damages affecting grain planting in the 2013 Primera season, poor households will be able to meet their needs until the next harvest (August 2014), thanks to affordable prices for basic commodities and adequate food reserves. Accordingly, El Salvador and Nicaragua are classified at a Minimum level of acute food insecurity (IPC Phase 1). In Nicaragua, however, it is estimated that some specific communities in certain municipios – Cusmapa (Madriz), Macuelizo (Nueva Segovia) and Estelí (San Juan de Limay) could face Stress levels of food insecurity (IPC Phase 2).
    As a result of the decrease in income generation from day labor in the coffee sector, where no other employment options are available, combined with Primera season crop damages in some areas of the dry corridor, poor households, primarily in the southern region of Honduras, are classified at the Stress level of food insecurity (IPC phase 2).

    Figures Seasonal Calendar for a Typical Year

    Figure 1

    Seasonal Calendar for a Typical Year

    Source: FEWS NET

    Figure 3

    Source:

    In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.

    Get the latest food security updates in your inbox Sign up for emails

    The information provided on this Website is not official U.S. Government information and does not represent the views or positions of the U.S. Agency for International Development or the U.S. Government.

    Jump back to top