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Coffee rust and falling international prices affect the current harvest season

  • Remote Monitoring Report
  • Latin America and the Caribbean
  • November 2013
Coffee rust and falling international prices affect the current harvest season

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  • Key Messages
  • Current situation
  • Perspectiva regional proyectada hasta marzo de 2014
  • Key Messages
    • The Postrera harvest of maize and beans is underway all across the region, which should boost grain supplies in domestic and regional markets. This is lowering prices, of which wholesale prices had been steadily increasing for the past six months. This should improve food availability and access.
    • PROMECAFE estimates crop losses for the 2013/2014 season in these three countries between 18 and 25 percent, which will reduce the supply of jobs for unskilled laborers by a similar margin as well as the incomes of poor households dependent on this sector.
    • The composite price indicator in the international coffee market in October of this year was US$ 107.03/lb, 81 percent below the figure for October 2011. If prices continue to fall, coffee growers will reduce spending on their coffee plantations, affecting coffee rust control measures, whose effects could extend even beyond the year 2015.
    • Poor households in Nicaragua and El Salvador are experiencing Minimal acute food insecurity (IPC Phase 1), while poor households in Honduras are classified as Stressed (IPC Phase 2) due to staple grain crop losses from the Primera season.

    Current situation
    • The normal performance of the rainy season in the last three months of the year permitted adequate Postrera crop growth and development in most crop-producing areas of the three countries. Harvests of these crops, which will be completed by the end of November, are expected to fall within the normal range.
    • The coffee harvest for the 2013/2014 season is underway in coffee-growing areas at altitudes of over 800 meters above sea level. The damaging effects of coffee rust on the growth and development of both last year’s and this year’s coffee crops are expected to reduce yields. The cutting back or pruning of coffee plants as part of efforts to control the fungus and the replacement of diseased plants with new plants, which have not yet grown enough to bear fruit, are also contributing factors to coffee production shortfalls. PROMECAFE estimates that rust is present in 25 percent of coffee-producing areas in Honduras, 74 percent in El Salvador, and 37 percent in Nicaragua.
    • The reduced harvest will reduce the supply of jobs, forcing poor households to look for alternate sources of income.
    • In addition to the crop damage caused by the coffee rust outbreak, the industry has also been impacted by falling world market prices. The ICO composite price for October 2013 was US$107/lb, down by 37 percent from October of last year and by 81 percent from October 2011. These declining prices could have an effect on measures taken to combat the coffee rust outbreak in the near future.

    ZONE

    CURRENT ANOMALIES

    PROJECTED ANOMALIES

    REGION

    • The falling world market prices for coffee will exacerbate the crisis in the coffee sector created by the rust outbreak, risking that revenues from coffee crop sales could be less than production costs.
    • Alternative employment opportunities for populations highly dependent on the coffee sector will be limited, which could undermine food security for affected households. Nonproductive coffee-growing areas during this 2013/2014 season are 32.6 percent in Honduras, 21.3 percent in Nicaragua, and 9.7 percent in El Salvador.
    • At a minimum, areas affected by coffee rust will be nonproductive for the current and the 2014/2015 season. The decline in prices could result in the abandonment of productive coffee plantations, thereby reducing the supply of temporary jobs for very poor households.

    EL SALVADOR

    • None
    • None

    HONDURAS

    • Given this country’s highest percentage of nonproductive coffee-growing areas (32.6 percent), the combined effects of the coffee crisis and of losses of staple grain crops from Primera will cause households to search for alternative employment in other sectors or migrate to other geographic areas.
    • Very poor households will be forced to depend on market purchase for food supplies, compounded by the lack of jobs opportunities in the coffee sector.
    • The forecast for December 2013 through March 2014 is for above-normal rainfall in the central areas of the country’s northwestern region and below-normal rainfall activity on the Caribbean coast and in the La Mosquitia region.

    NICARAGUA

    • None
    • According to the climate outlook for the next four-month period from December through March, there is a high probability of below-normal cumulative rainfall in the Atlantic region of Nicaragua. This could affect the Apante harvest of bean crops (the country’s main source of bean production), particularly in crop-producing areas along the San Juan River and in the country’s Autonomous North and South Atlantic Regions (RAAN and RAAS) which, together, account for approximately 25 percent of national production.

     

    The 41st Central American Climate Outlook Forum is predicting neutral El Niño/La Niña conditions from December 2013 through March 2014, with normal cumulative rainfall in the Pacific and central regions. Cumulative rainfall totals in certain Atlantic areas are expected to be slightly below-normal, mainly in Honduras and Nicaragua, but this should only have a minor effect on Apante bean harvests in Nicaragua.

    The government of Nicaragua’s proposed a strategy for mitigating the effects of food crises on poor households and the instability of domestic market prices is to promote Apante crop development.This could create a production surplus in February/March, once the harvest is completed, driving down bean prices even further. As of October, bean prices were still 30 to 34.8 percent below the five-year average.

    If international coffee prices continue to decline to the point where they go below the cost of production, coffee producers could decide to change crops or reduce their spending on crop management to a bare minimum, triggering a new outbreak of coffee rust or other crop pests or diseases. In either case, the medium- and long-term repercussions would reduce demand for unskilled labor, limiting employment options for very poor households.

    EL SALVADOR. In spite of the socioeconomic effects related to losses in the coffee sector and the localized nature of any damage to Primera crops, poor households should be able to meet their food needs through the end of the year. Households are experiencing Minimal acute food insecurity (IPC Phase 1).

    Table 1. Areas of El Salvador affected by anomalies

     

    Affected by crop production anomalies

    Affected by the coffee rust outbreak

    Departments

    Unión, Morazán, San Miguel, and Usulután

     

    Santa Ana, Ahuachapán, Sonsonate, La Libertad, San Vicente, Usulután, San Miguel, and Morazán

    Livelihood zones

    Zone 4: Eastern Basic Grains, Livestock, and Remittances

    Zone 1: Basic Grains and Wage Labor

    The World Food Program (WFP) has been working with the Salvadoran government’s Social Inclusion Ministry to target and assist households categorized as food-insecure based on their reduced incomes, scarce food reserves, and limited access to alternative livelihoods in coffee-growing regions. This assistance program consisted of three monthly distributions of food rations to 10,000 households through the end of November.

    HONDURAS. Due to the effects of the drop in employment in the coffee sector and the damage to Primera crops for certain areas within the dry corridor, poor households will see reduced income and are facing Stressed food insecurity outcomes (IPC Phase 2).

    Table 2. Areas of Honduras affected by anomalies

     

    Affected by crop production anomalies

    Affected by the coffee rust outbreak

    Departments

    Olancho, Francisco Morazán, Comayagua, and El Paraíso

    Copán, Ocotepeque, Lempira, North Santa Bárbara and Cortés, Santa Bárbara, Lempira and Intibucá, La Paz, Comayagua, and El Paraíso.

    Livelihood zones

    Zone 3: Vegetables and Coffee

    Zone 4: Livestock and Basic Grains
    Zone 5: Agro-industries
    Zone 8: Subsistence Basic Grains
    Zone 9: Basic Grains and Timber
    Zone 15: Coffee and Basic Grains

    Zone 8: Subsistence Basic Grains

    Zone 15: Basic Grains and Coffee

    Under the Feed the Future initiative and its partners, WFP, the United States Embassy, and TechnoServe have partnered to promote a program for small farmers involving the validation and dissemination of five improved varieties of beans. These new varieties are higher-yielding, have more nutritional value, and are more resistant to climate change. The program also includes two varieties of high-yield maize designed for highland farming areas. The program will be conducted in major basic grain-producing departments of Honduras (for maize and beans).

    NICARAGUA. In spite of the socioeconomic effects related to losses in the coffee sector and the localized nature of any damage to Primera crops, poor households should be able to meet their food needs through the end of the year. Households are experiencing Minimal acute food insecurity (IPC Phase 1).

    Table 3. Areas of Nicaragua affected by anomalies

     

    Affected by crop production anomalies

    Affected by the coffee rust outbreak

    Departments

    Low-lying areas of Madriz, Nueva Segovia, and Matagalpa (San Juan de Limay, Somoto, and Las Marías)

    Matagalpa, Nueva Segovia, and Madriz

     

    Livelihood zones

    Zone 3: Northwest Subsistence Agriculture, Livestock, and Alternate Income Activities

    Zone 3: Northwest Subsistence Agriculture, Livestock, and Alternate Income Activities

    Nicaragua’s National Farmers’ and Cattle Breeder’s Union (UNAG), which serves as Executive Secretariat for the National Bean Council, has a network of 6,000 black bean producers. Based on applied agricultural inputs, crop yields between 25 to 30 quintals per manzana (1 manzana = 0.7 hectares; 1 quintal = 46 kg or 100 lbs) are expected, harvesting approximately 200,000 quintals of black beans for the Postrera season. Potentially, production could triple for the Apante season, whose crops would be exported to Venezuela.

    An area of 799,956 hectares will be planted, 95 percent of which will be sown with staple grain crops for the 2013-2014 season. Small and medium-size farmers may allocate the other five percent of their land to grow chia (Salvia hispánica L), a plant in the mint family, for commercial sale to meet the growing demand for this crop.

    The coffee harvest is underway in highland areas at altitudes between 1,000 and 1,500 meters above sea level. Workers are paid US$5.35/quintal, the official wage rate in effect since 2010. As part of the Crissol-Café program, the government will offer technical assistance and financing to coffee growers with less than three manzanas (roughly 2.1 hectares) of land. This assistance is designed to improve current technology packages (agricultural technical assistance and inputs) and crop management practices to control the coffee rust. In total, 28,647 coffee growers with a combined total of 32,939 manzanas of land will be assisted under this program.


    Perspectiva regional proyectada hasta marzo de 2014

    Según el XLI Foro del Clima de América Central, de diciembre 2013 a marzo 2014 se esperan condiciones neutras del fenómeno El Niño/La Niña, con acumulados de lluvia del comportamiento normal en las regiones del Pacífico y centrales. Sin embargo, en algunas regiones del Atlántico, principalmente de Honduras y Nicaragua, se prevé que los acumulados de lluvia se ubiquen en un rango ligeramente debajo de lo normal. Sin embargo, esto tendría repercusiones leves en la producción de frijol de apante únicamente en Nicaragua.

    El gobierno de Nicaragua plantea como estrategia, para amortiguar las crisis alimentarias en los hogares pobres y la estabilidad de los precios del mercado nacional, el fomento de las siembras de apante. Sin embargo, esto podría resultar en un superávit de producción al salir la cosecha en febrero/marzo, dando como resultado una caída aún mayor en los precios del frijol. Los precios de frijoles a octubre se han mantenido en un rango de reducción de precios del 30 al 34.8 por ciento con relación al promedio de los últimos cinco años.

    De continuar la tendencia en la caída de los precios internacionales del café por debajo de los costos de producción, los productores podrían cambiar de cultivo o invertir lo mínimo en el manejo del café, pudiendo incidir en el repunte de la roya o de otras enfermedades o plagas. En ambos casos, las consecuencias serán en el mediano y largo plazo una reducción en la demanda de mano de obra no calificada, afectando las opciones de empleo de los hogares más pobres.

    EL SALVADOR. A pesar de los efectos socioeconómicos que derivan de los daños al sector cafetalero, y debido a que los daños en la siembra de primera son focalizados, los hogares pobres podrán cubrir sus necesidades alimentarias a final de año, por lo que se considera El Salvador con Mínima (Fase 1, CIF) inseguridad alimentaria aguda.

    Tabla 1. Áreas con anomalías en El Salvador

     

    Afectado por la producción agrícola

    Afectado por la roya del café

    Departamentos

    Unión, Morazán, San Miguel y Usulután

    Santa Ana, Ahuachapán, Sonsonate, La Libertad, San Vicente, Usulután, San Miguel y Morazán

    Zonas de medios de vida

    Zona 4: Oriental, de granos básicos ganadería y remesas

    Zona 1: Granos básicos y venta de mano de obra

    El PMA, en coordinación con la Secretaría de Inclusión Social del Gobierno Salvadoreño, localiza y atiende a familias en situación de inseguridad alimentaria causada por la reducción de ingresos, escasas reservas, y limitado acceso a medios de vida alternativos en las zonas cafetaleras. Esta asistencia consiste en tres distribuciones mensuales de alimentos que concluirán en noviembre, para 10,000 hogares.

    HONDURAS. Debido a la disminución en la generación de ingresos provenientes del sector cafetalero y a los daños a la producción de primera en áreas del corredor seco, se considera que los hogares pobres se encuentran con inseguridad alimentaria en Estrés (Fase 2, CIF).

    Tabla 2. Áreas con anomalías en Honduras

     

    Afectado por la producción agrícola

    Afectado por la roya del café

    Departamentos

    Olancho, Francisco Morazán, Comayagua y El Paraíso

    Copán, Ocotepeque, Lempira, Norte de Santa Bárbara y Cortés, Santa Bárbara, Lempira e Intibucá, La Paz, Comayagua, y El Paraíso.

    Zonas de medios de vida

    Zona 3: Zona Hortícola con Café Zona 4: Ganadería y de Granos Básicos
    Zona 5: Agro-industria
    Zona 8: Granos Básicos de Subsistencia
    Zona 9: Granos Básicos y Madera
    Zona 15: Café y Granos Básicos

    Zona 8: Granos Básicos de Subsistencia

    Zona 15: Granos Básicos y Café

    Dentro del marco del Programa Alimentando el Futuro y sus socios, el Programa Mundial de Alimentos (PMA), la Embajada de los Estados Unidos de América, y TechnoServe impulsan a pequeños agricultores un programa de validación y diseminación de cinco variedades mejoradas de fríjol. Estos frijoles tienen características que permitan un mayor valor nutritivo, son resistentes al cambio climático, y den mayor rendimiento. Además son dos variedades de maíz de alto rendimiento para cultivo en tierras altas. Este plan se desarrollará en los departamentos de mayor producción de granos básicos (maíz y frijol).

    NICARAGUA. A pesar de la reducción en la generación de ingresos derivada de los daños al sector cafetalero, se prevé que los hogares pobres podrán cubrir sus necesidades alimentarias a final de año, ya que los daños en los cultivos de primera fueron focalizados. Por lo tanto se clasifican inseguridad alimentaria aguda Mínima (Fase 1, CIF).

    Tabla 3. Áreas con anomalías en Nicaragua

     

    Afectado por la producción agrícola

    Afectado por la roya del café

    Departamentos

    Partes bajas de Madriz, Nueva Segovia y Matagalpa (San Juan de Limay, Somoto, y las Marías)

    Matagalpa, Nueva Segovia, Madriz

     

    Zonas de medios de vida

    Zona 3: Noroccidental agropecuaria de subsistencia, ganadería y economías alternativas;

    Zona 3: Noroccidental agropecuaria de subsistencia, ganadería y economías alternativas

    La Unión Nacional de Agricultores y Ganaderos de Nicaragua (UNAG), que funge como Secretaría Ejecutiva de la Mesa Nacional del Frijol, tiene una red de 6,000 productores de frijol negro. De acuerdo a los paquetes tecnológicos que aplican, esperan rendimientos entre 25 a 30 quintales por hectárea, para cosechar aproximadamente 200,000 quintales de frijol negro en el ciclo de postrera, proyectando triplicar la producción en la siembra de apante, producción que sería destinada para la exportación a Venezuela.

    Para la temporada 2013-2014, se cultivarán 799,956 hectáreas de granos básicos, 95 por ciento de lo proyectado cultivar. La reducción se atribuye a que pequeños y medianos agricultores que destinan parte de sus tierras para la siembra de la Chía (Salvia hispánica L) para la comercialización, cuya demanda viene en crecimiento.

    En las regiones altas entre 1,000 a 1,500 msnm, ha iniciado la cosecha del café y el jornal es de US$5.35/quintal, cuya normativa salarial se mantiene vigente desde el 2010. El gobierno, a través del plan CRISSOL café, brindará asistencia técnica y financiamiento a los productores que poseen menos de 3 manzanas de café. Este apoyo prevé mejorar los paquetes tecnológicos (asistencia técnica agrícola e insumos) y el manejo del cultivo, con el objetivo de contrarrestar la roya. En total, 28,647 productores serán apoyados, quienes en conjunto tienen una extensión de 32,939 manzanas.

    Figures Seasonal calendar for a typical year

    Figure 1

    Seasonal calendar for a typical year

    Source: FEWS NET

    Figure 2

    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.

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