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Second rainy season heralds a promising Postrera

  • Remote Monitoring Report
  • Latin America and the Caribbean
  • October 2016
Second rainy season heralds a promising Postrera

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  • Key Messages
  • REGIONAL OUTLOOK
  • Honduras
  • El Salvador
  • Nicaragua
  • Key Messages
    • In Honduras, food security for the poorest households of subsistence farmers, located in the south and southwest of the country, who have experienced successive drought losses in the last four years, is expected to remain Stressed (IPC Phase 2) until at least May, despite the arrival of basic grains from the Postrera harvest in December/January. For farm workers and small-scale coffee growers, this is compounded by the fact that many areas have not recovered from the damage caused by leaf rust, which is affecting income and the labor market.

    • In El Salvador, the recent Primera harvest is expected to be above average, even in areas repeatedly affected by drought in recent years, mainly in the east and the west. From November onward, with the harvests of the Postrera basic grains and increased employment options, food insecurity in the country is expected to remain Minimal (IPC Phase 1).

    • In Nicaragua, it is estimated that the poorest households in the Pacific North and Central North regions will remain Stressed (IPC Phase 2) until at least May 2017, due to the deterioration of their livelihoods following crop losses for more than three consecutive years, in addition to limited local employment.

    • After the drop in international coffee prices during the 2015/2016 harvest, these have seen a partial recovery in recent months; in September, the price according to the International Coffee Organization’s (ICO) indicator was listed at US$1.38/pound, representing a 22-percent increase on the same month in 2015. The countries of the region are expecting a greater yield for the 2016/2017 harvest than in the previous season; Honduras in particular is anticipating a record yield. However, the current price is below prevailing prices during the October 2014–March 2015 harvest, which will impact the daily wage paid to workers in the sector.  


    REGIONAL OUTLOOK

    Agroclimatic conditions and forecast

    • Despite the rainfall anomalies recorded during the Primera season, a near-average harvest is expected in Central America. Localized crop losses have been recorded due to uneven rainfall distribution, especially at the lower altitudes of the Dry Corridor.
    • An above-average start to the second rainy season has benefited agricultural activities for the planting of Postrera crops. However, irregular rains could persist and affect crops (mainly beans) due to excess moisture.
    • There is uncertainty about the onset of La Niña conditions. However, long-term forecasts suggest above-average rainfall and temperatures in Central America, which may favor the development of pests and diseases on crops.
    • In Honduras, Primera crops have been affected due to the delayed start of the rainy season and the irregular rainfall distribution in some areas, mainly in subsistence farming areas concentrated in the departments of Choluteca, Valle and El Paraíso.
    • In El Salvador, crops were unaffected by rainfall anomalies. Farmers are expecting an average to above-average Primera harvest, although with a delay of two to three weeks in the eastern part of the country as the Government postponed the delivery of seeds on the National Meteorological Service’s recommendation, due to the continuation of El Niño conditions around the time of year for planting.
    • In Nicaragua, the Primera bean harvest is expected to be near average, despite some losses caused by the cumulative heavy rainfall in late August and early September, which dampened the grains during the harvest, thus affecting the quality of the grain.

    Basic grain production and prices

    From September onward, prices of maize and red bean dropped due to the arrival of Primera crops, which have begun to supply markets with the yield from the new harvests. This downward trend is expected to continue for the rest of 2016, owing to better harvests compared with recent years, despite rainfall remaining below average in cumulative terms during the Primera season. Postrera production is expected to be normal to above normal.


    Honduras

    Basic grain production

    Drought damage has been reported in production areas in the south suffering from recurring drought, mainly in the departments of El Paraíso, Choluteca, Francisco Morazán and Valle. The affected communities are mainly located in livelihood zone 7 – Subsistence Grains and Remittances – and livelihood zone 5 – Mountainous Coffee. Approximately 12 percent of domestic Primera crop production is concentrated in these departments. 

    Prices of basic grains stabilized from September onward and are beginning to drop. This downward trend is expected to continue and stabilize at the end of the year, with the possibility of no changes during the first quarter of 2017 due to the outcomes of the Primera production and those of the Postrera harvests – these are considered to be above normal owing to better rainfall distribution. While the drop in prices is advantageous for consumers, this in turn means a reduction in income for producers selling their surplus crops. In production areas, the price of maize (price paid to the producer) is reported to be 400–450 Honduran lempira (HNL) per bag (approx. 180 pounds), for wet maize. Deducting the weight lost due to moisture, the farmer is delivering a net volume of approximately 140 pounds of maize; in monetary terms, this means the farmer would be selling their maize for approximately HNL 321 per quintal.  

    Climate forecasts indicated normal weather conditions and better than normal for the September–November period, facilitating good growth for the Postrera crops, which were planted during September and October throughout the country. However, in the third week of October, high levels of precipitation were recorded in central and southern Honduras, causing floods and landslides in the lower parts of the country and in the production areas close to riverbanks. As such, there is the potential for damage to Postrera bean crops due to the spread of pests and diseases resulting from excess moisture.

    Coffee-growing sector

    Honduras currently has a cultivated area of 430,000 manzanas (with one manzana equivalent to 6,987 square meters or 1.727 acres) of coffee, from which it has the capacity to export 7.10 million bags. This production comes from approximately 120,000 families, of which 95 percent are small-scale producers. Of this production, 69 percent is concentrated in five of the country’s departments (Comayagua, El Paraíso, Santa Bárbara, Lempira and Copán); 20 percent of domestic production is concentrated in the departments of Comayagua. 

    Coffee represents 35 percent of the country’s agricultural domestic product (ADP) and 6 percent of its gross domestic product (GDP). In September 2016, the country exported 6.72 million bags (46 kg), representing an increase of 2.75 percent on the same period of the 2014/2015 export season, in which 6.54 million bags were exported. However, the export value stands at US$843 million, which constitutes a 17-percent reduction compared with the US$1,015 million value of the 2014/2015 season. This difference is due to price reductions, where the average export price was US$125.43, while the average for the 2014/2015 season was US$161.22, i.e. a differential of -22 percent.

    Labor market

    According to the Central Bank of Honduras, there has been an increase in employment opportunities in the various activities associated with rural areas, with the coffee-growing sector being one of the main providers of seasonal work and opening up greater opportunities for the most vulnerable subsistence farming families and agricultural day laborers. The bank also reported that economic activity in the agriculture, livestock, forestry and fisheries sector increased by 3.4 percent (2.9 percent in 2014), resulting from the positive activity in the agriculture and poultry sector (5.5 percent and 10.4 percent, respectively). However, fishing-related activities decreased by 16.8 percent. The momentum in agricultural activity was influenced by the positive performance of the coffee-growing sector (9.5 percent), which was the result of better agricultural practices in maintaining plantations and the incorporation of new crop varieties resistant to pests and leaf rust. Performance was similarly positive for the cultivation of African palm (11.0 percent), due to an increase in the harvested area and greater agricultural yields, resulting from adequate fertilization and pest control in plantations. Similarly, poultry farming grew due to greater poultry production (12.0 percent) and egg production (7.4 percent), in response to increased local consumption.

    One of the main sources of foreign currency in the country is remittances from families abroad, mainly in the United States. According to a report by the Central Bank of Honduras, monetary flows to Honduras in the first half of 2016 (January–June) amounted to US$1.925 million, representing a positive variation of 6.3 percent in relation to the same period in the previous year. The indication is that these increases are directly related to the performance of the US economy and increased migration. 

    According to the six-monthly Family Remittance Survey conducted by the Central Bank of Honduras between 29 July and 1 August 2016, 91.6 percent of migrants reside in the United States, 4.2 percent in Spain, 1.9 percent in Canada and 2.3 percent in other countries. The average age of those surveyed is 47, with an average age of 26 at the time of migration. Of the migrants surveyed, 68.3 percent send an average monthly amount of US$403; 97.6 percent indicated that remittances are primarily intended to cover basic needs or consumption (food, medicine and medical services, education, transportation, purchase of other non-durable goods and services, and others not specified). The remaining 2.4 percent use these resources to purchase or improve a fixed asset of their own or belonging to family members. 

    Food Security Outlook

    In Honduras, the poorest households of subsistence farmers and day laborers, living in the communities of livelihood zones 7 and 5, and mainly in the Dry Corridor in the southern and southwestern parts of the country, will be Stressed (IPC Phase 2) from October to January, a situation that will be mitigated by the limited harvests of the Primera season, which recorded significant crop losses (above 60 percent). Nonetheless, these crops will mitigate the need for purchasing food during the next Postrera harvest, which should take place in December. Income from seasonal work in the coffee harvest, which is expected to be better than that of the previous year, will also mitigate these circumstances. From February to May, these communities will remain Stressed (IPC Phase 2) due to the deterioration of their livelihoods, which have suffered in recent years. There is a risk of moving into Crisis (IPC Phase 3), although this will depend on the Postrera harvests and the possibility of better-paid seasonal employment for extended periods.


    El Salvador

    Basic grain production and markets

    No issues with Primera crops have been reported in production areas, even among areas that have been affected by drought over the past three years, both in the western and eastern parts of the country (livelihood zones 2, 3 and 4). In the west, the harvest began as per the season (September–October), while in the east, a delay of three to four weeks was reported due to delayed planting, which was recommended by the Ministry of Agriculture and Livestock (MAG) due to weather conditions. This area accounts for 27 percent of the domestic production of white maize. White maize production is expected to be above average. Markets are supplied by imports of white maize. However, the current harvests of white maize in the western part of the country have begun to their journey to market. Subsistence farmers are expected to have reserves for three to four months. Due to the Primera harvests, prices will likely drop during the first outlook period (October–January), and will begin to increase seasonally from February onward, at the end of the Postrera harvest, until the end of the outlook period (May 2017). However, projections suggest that they will remain below 2015 prices and the five-year average, for both outlook periods.

    Due to the weather conditions, with average rainfall to provide moisture, the Postrera planting of red bean is expected to be above that of 2015 and the five-year average in both the west and the east of the country. Planting began in September and is expected to follow the seasonal pattern, with harvests taking place as per the season (January–February 2017). Prices will see a slight downturn during the first outlook period (October–January), due to the markets being supplied by imports. After the Postrera harvest the markets will be supplied with domestic product, which will help bring down prices until March, after which they will start to see seasonal increases until the end of the outlook period (May 2017). However, they will remain below the previous year’s prices until April and below the five-year average, for both outlook periods.  

    Coffee-growing sector

    After a 70-percent decline in production between 2010/2011 and 2013/2014, the coffee harvest for 2016/2017 is expected to see an 18-percent increase compared with the previous season (PROCAFE, October 2016). The current prevalence of leaf rust at the national level is less than 10 percent. However, humidity and high temperatures during the first outlook period may prompt outbreaks of crop diseases. This may also cause the coffee to ripen prematurely and the grain to fall. According to CENTA Café (a branch of the National Center for Agriculture, Livestock and Forestry Technology – CENTA), the strategy for reinvigorating the coffee-growing sector focuses on four strategic areas: technical assistance for research, ongoing monitoring of leaf rust at the national level, reasonable chemical control of leaf rust and genetic control of leaf rust. 

    Labor market

    The demand for labor to harvest Primera basic grains began in September/October. From November onward, labor demand for other crops will increase, mainly coffee and sugar cane. The daily wage for harvesting coffee is US$1.00–1.25 per arroba (with one arroba equivalent to 25 pounds) – a day laborer cuts up to 4 arrobas a day. With coffee and sugar cane harvests expected to be higher, opportunities for day labor for the population are also expected to improve.  

    Food Security Outlook

    In El Salvador, due to favorable weather conditions, households in the western and eastern parts of the country that depend on subsistence farming for basic grains will have an average harvest. With basic grain prices lower than in 2015 and than the five-year average, good infrastructure to bring the crop to market, opportunities for day labor and reserves of basic grains that will last between three to four months of household production, the poor households living in livelihood zones 2, 3 and 4 will experience Minimal (IPC Phase 1) food insecurity in the first outlook period (October–January). However, due to four successive years of damage caused by dry conditions, and reduced coffee production due to leaf rust, it may be that some households are still waiting for the maize harvest in October and as such, may find themselves Stressed (IPC Phase 2) during this month. Following the bean harvest and the period of high labor demand (basic grains, coffee, sugar cane), for the second outlook period (February–May 2017) the poorest households living in the east of the country could be Stressed (IPC Phase 2) due to the depletion of their reserves and the effects of three consecutive years of drought. However, these households will not exceed the 20-percent threshold used to define the classification of an area, so the country will be classified as Minimal (IPC Phase 1) throughout the whole period.


    Nicaragua

    Basic grain production

    In Nicaragua, the Proyecto de Apoyo a la Producción de Semillas de Granos Básicos para La Seguridad Alimentaria [project to support the production of basic grains for food security] is being promoted to help increase the permanent supply of basic foods (rice, beans, maize and sorghum), by building the capacities of small- and medium-scale seed producers working within cooperatives or other types of associations (certified seeds – beans, maize and rice, and Creole seeds – beans, maize and sorghum). According to consultations on the ground, production of basic grains for this season (2016/2017) is expected to be greater than that of the previous season, owing to sufficient rainfall during the Primera season and the evolution of this rainfall during the Postrera season. This suggests a high chance of meeting the volumes set out in government expectations, which were projected as follows: Red bean: Cultivation of 400,000 manzanas, with an estimated production of 4.4 million quintals and average yields of 11 quintals per manzana. White maize: Cultivation of 500,000 manzanas, with an estimated production of 9 million quintals and yields of 18 quintals per manzana. This target is higher than the outlooks of previous planting seasons, and in this season is highly likely to be reached, at least in areas with potential surplus and commercial production.

    Coffee-growing sector

    Statistics from the Export Processing Center (CETREX) reported in August coffee exports from the 2015/2016 export season of 2,403,286 quintals, which constitutes a 4-percent increase on the 2014/2015 season, where 2,303,608 quintals were exported. According to consultations with experts in Nicaraguan coffee growing, production in the 2016/2017 season is estimated to exceed 2.5 million quintals in the next season.

    Labor market

    According to official reports, coffee accounts for 18 percent of Nicaragua’s total exports and generates approximately 300,000 direct and indirect jobs, figures that are still below those of the years prior to the emergence of leaf rust.

    Food Security Outlook

    In Nicaragua, the poorest households of subsistence farmers, day laborers and small-scale coffee growers living in the Pacific North and northwestern parts of country, in livelihood zones 3 and 12, will have limited food reserves from the irregular Primera harvests, which were affected by the drought. During the October–January outlook period, most of these households will be Stressed (IPC Phase 2), although able to mitigate their situation with coffee-harvesting work, as well as the possibility of harvesting Postrera crops. During the February–May 2017 outlook period, households will remain Stressed (IPC Phase 2) due to the deterioration of their livelihoods, which does not leave them with greater alternatives for generating an income, despite a rainy season that will be beneficial for crops.

    Figures Figure 1. Regional wholesale prices.

    Figure 1

    Source: FEWS NET, with data from market information systems in each country.

    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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