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Good basic grain harvests mitigate food insecurity

  • Remote Monitoring Report
  • Latin America and the Caribbean
  • October 2017
Good basic grain harvests mitigate food insecurity

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  • Key Messages
  • Regional Climate Outlook
  • Prices of basic grains in the region
  • Honduras
  • El Salvador
  • Nicaragua
  • Key Messages
    • Good rainfall distribution during the first part of the rainy season (April-September) has had a positive impact on agriculture across the region, especially for grain crops. The Primera cropping season is estimated to produce yields above the five-year average, and may be the best harvest in the dry corridor region in nearly four years.

    • Based on the above-average prospects for the Primera crops in the region, it is estimated that as of October most poor households are experiencing Minimal (IPC Phase 1) food insecurity and these outcomes will continue until the end of the outlook period in May 2018. However, households in southern and southwestern Honduras that are unable to cultivate this season and were affected by consecutive years of crop losses will be Stressed (IPC Phase 2) during the outlook period.

    • High rainfall in September and October will increase the risk of crop damage due to fungus in certain production areas in the region where grains are still in the field and have not yet been harvested. Areas most vulnerable to this type of crop damage are located in valleys, riverbanks, low river basins, and plains on the coastlines. Due to the high probability of the development of a La Niña event, which would result in excessive rainfall, there is also risk of damage to crops during the Postrera and Apante seasons.


    Regional Climate Outlook

    Rainfall during the Postrera sowing period in the main production areas of Central America was above average (Figure 1), which favored the development of maize, bean and sorghum crops in their first phenological stage. However, excess precipitation could affect areas cultivated in valleys and along riverbanks, as well as production areas in the low-lying regions along the Pacific coastline. 

    El Niño conditions remained within the neutral range in September. However, sea surface temperatures are nearing below-average figures across the central and eastern Pacific Ocean. The analysis of the National Oceanic Atmospheric Administration Climate Prediction Center (NOAA CPC) and the International Research Institute for Climate and Society (IRI) supports the development of La Niña conditions (approximately 55–65 percent probability) during autumn and winter 2017/2018 in the northern hemisphere. It is therefore likely that rainfall will remain higher than normal in the last quarter of 2017 and in early 2018.


    Prices of basic grains in the region

    In September 2017, maize prices were sitting significantly below those of the previous year and between 25 and 40 percent lower than the five-year average in the main markets analyzed (Figure 2). This downward trend is a result of the markets being sufficiently supplied with produce from the recent Primera harvest, and is expected to continue until early next year.

    Red bean prices are behaving similarly to maize prices. In September, they were in decline compared with the previous year and about 25 percent below the five-year average. These variations are considered exceptional because the reaction is in response to the Primera harvest, which is less significant, since the main bean harvest comes from the Postrera season crop between November and December. There is therefore a high probability of low prices that will last until the first quarter of next year, provided that planting is not affected by the rains at the end of the year.


    Honduras

    Basic Grain Production

    For the 2017/2018 production season, government authorities in the agricultural and livestock sector are estimating a harvest of 18.5 million quintals of basic grains. Of this estimate, 14 million quintals correspond to maize, 3 million to bean and 1.5 million to rice. This harvest has marked the beginning of the season in which the Government, through the Honduran Institute of Agricultural Marketing (IHMA), purchases directly from farmers in the various production areas, paying 1,000 Honduran lempira (HNL) per quintal of beans. 

    Consultations with contacts in the production areas indicate that the production of basic grains this season will exceed the average harvests over the last five years. However, there is still a chance that in certain production areas, crops could have been affected by excess rain – mainly those located on the banks of wider rivers, in valleys plains and along the Pacific coastline.

    Coffee Sector

    The Honduran Coffee Institute’s (IHCAFE) statistical bulletin of 30 September 2017 reports that exports to date amount to 9,509,895 bags of coffee, weighing 46 kg each. This is a 42-percent increase on the 6,704,359 bags exported in the same period of the 2015/2016 season. The export value in this period is US$1,327.6 million, which constitutes an increase of 57 percent compared with the exports in the same period of 2015/2016. The average export price to date is US$139.61, compared with the average price in 2015/2016 of US$125.93, representing an increase of 11 percent.

    The IHCAFE Leaf Rust Monitoring System indicates that the incidence of leaf rust in August 2017 in most coffee-growing departments remained at average levels, below 5 percent for the two varieties (susceptible and resistant), which corresponds to “blue alert”, i.e. minimal risk. However, the departments of Cortés, Francisco Morazán, Comayagua, Santa Bárbara, Yoro and Olancho saw the incidence level surpass 5 percent in susceptible varieties, generating “green alert”, i.e. low risk, although with an upward trend. Most susceptible varieties showed higher incidences, with the Caturra variety having an incidence greater than 20 percent, placing it at the maximum risk level, or “red alert”. The Bourbon, Catuai, Icatu, Pacas and Pacamara varieties showed incidences of between 5 and 19.9 percent.

    Food security perspective and populations of concern

    Subsistence farming households, who often cover only part of their food consumption needs with their own yield of basic grains, will be able to meet their food needs for several months with the Primera harvests, due to the good rainfall distribution during the season that resulted in average to above-average harvests. These households will thus see their situation improve, and will experience only Minimal (IPC Phase 1) food insecurity. However, many poor households within the Dry Corridor that have been affected by irregular rainfall distribution and crops pests over the past four or more years have resorted to strategies such as borrowing money and changing their livelihoods to meet their basic needs. Owing to limited resources, some of these households did not sow their Primera basic grain crops and could remain Stressed (IPC Phase 2), even after the Postrera harvests, experiencing difficulties in covering their non-food needs. Most of these households are located in the south and southwestern part of the country, in livelihood zones 7 and 5. Stressed (IPC Phase 2) food security may continue for a limited number of households that were unable to sow their Primera crops, or even due to losses resulting from damage caused by crop pests (white grubs, fall armyworm or aphids). This situation will be compounded by the limited employment opportunities and the debt accumulated over recent years.


    El Salvador

    Basic Grain Production

    According to government authorities, the harvest of basic grains in the 2016/2017 season amounted to approximately 26 million quintals, which is significantly higher than that of the previous season (2015/2016). The authorities expect this season’s harvests (2017/2018) to be good and higher than last year’s, resulting from better rainfall patterns and effective government programs to distribute agricultural packages. 

    Coffee Sector

    Government actions to boost the Salvadorean coffee industry are yielding positive results, given that the 2016/2017 harvest produced 845,600 quintals of coffee and the projections for the 2017/2018 harvest stand at 1.03 million quintals. The renovation and expansion of new coffee plantations has been a determining factor in this growth process, having produced approximately 14 million leaf rust-resistant coffee seedlings this year, and up to 33 million over the last three years, as part of the strategy to salvage the coffee-growing sector. 

    Remittances

    According to the Central Bank of El Salvador remittance register, income from family remittances in the third quarter of 2017 shows a growth of 10.4 percent over the same period last year. Remittances received amounted to US$3,440.7 million, of which 97 percent came from the United States. Remittances from Canada amounted to US$32 million (0.9 percent), similar to those from the European Union, which amounted to US$31.1 million (0.9 percent). In September 2017, US$401 million was received in the form of remittances, which constitutes US$38.3 million (10.6 percent) more than the value reported in the same month of 2016. The five departments that received the highest remittances in September 2017 were: San Salvador (20.1 percent), San Miguel (12.5 percent), La Unión (8.5 percent), Santa Ana (8.3 percent) and La Libertad (7.9 percent). Those that received fewer remittances include San Vicente (3.5 percent) and Cuscatlán (2.5 percent).

    Food Security Perspective

    Increased yields from basic grain production in the Primera and Postrera seasons, alongside more opportunities for seasonal work in the coffee-growing sector and other agricultural and agroindustrial activities, will enable many poor farming households living in the eastern and western Dry Corridor of El Salvador to bring their food insecurity down to Minimal (IPC Phase 1). However, it is possible that households whose crops were affected by irregular rainfall (deficit or excess), and whose employment opportunities are limited due to the lack of recovery in the coffee-growing sector – mainly for farmers without land in the coffee-growing mountain ranges – could remain Stressed (IPC Phase 2) after the Postrera harvests and the coffee-harvesting season. Nevertheless, these households will not exceed the 20 percent threshold in the area, hence food security in the country will continue to be considered Minimal (IPC Phase 1) during the period.


    Nicaragua

    Basic Grain Production

    Since last year, communities that have been repeatedly affected by drought – mainly those located in the Dry Corridor – have seen a substantial change in production resulting from better rainfall distribution, enabling them to harvest their basic foods (maize, beans and millet). This is evident in the behavior of prices, where the price benchmarks in the Dry Corridor indicated that, at the end of August, a pound of red beans cost 8 Nicaraguan córdobas (NIO) and maize NIO 4, while in the months affected by drought, a pound of red beans cost NIO 17 and maize NIO 6.

    Predominantly in the departments of Madriz, Matagalpa, and Nueva Segovia, the Postrera bean, maize and sorghum crops are in the initial stages of development. Due to uncertainty surrounding rainfall, crops were mostly sown throughout September. Furthermore, in some production areas in Matagalpa and Nueva Segovia, the maize crop has reportedly been affected by tar spot disease, mainly in the production areas of the municipalities of Rancho Grande and Jalapa. Excess rainfall in late September and early October created conditions conducive to the spread of pests and fungal diseases, predominantly causing damage to the bean crop, and primarily in the production areas of Estelí. 

    In the country’s various production areas, the price of beans is listed between NIO 600 and NIO 1300 per quintal, with the lowest prices being reported in production areas such as Jalapa, Nueva Segovia. The price of maize varies between NIO 200 and NIO 360 per quintal, with the lowest prices being reported in the Jalapa production area.

    Employment and remittances

    The Central Bank of Nicaragua (BCN) issued a press release in which it made reference to labor market statistics (employment and wages) published on 11 September 2017 for the month of June, where records of the Nicaraguan Social Security Institute (INSS) indicate that in July, membership stood at 919,469 workers. This is 7.0 percent higher than in the same month of the previous year. Year on year, the economic activities that saw the greatest increases were: trade, hotels and restaurants (14.5 percent); mines and quarries (12.3 percent); agriculture and livestock, forestry, hunting and fisheries (9.4 percent); electricity, gas and water (9.0 percent); and construction (8.1 percent). It was also noted that the nominal average wage of INSS affiliates was NIO 10,073.6, with an annual growth of 5.0 percent. The average real wage, on the other hand, saw an annual increase of 1.8 percent, standing at NIO 4,706.9 in 2016.

    Coffee Sector

    In the Government’s Production, Consumption and Trade Plan, coffee production for the 2017/2018 season is estimated at 2.7 million quintals, representing an increase of 7.1 percent on the 2016/2017 season.

    In September, the national incidence of leaf rust was 6.1 percent, rising by 5.4 percent from the previous month. The departments with higher reported incidence rates of leaf rust were Carazo, Estelí, Matagalpa, Jinotega, Masaya, Nueva Segovia and Managua, with the highest incidence in Carazo (15.4 percent). The coffee varieties with the most severe incidence of leaf rust were reportedly Caturra and Paca (10.0 percent). The moisture conditions in September were such that the disease spread, and it will likely continue to do so as conditions conducive for fungal growth continue in October.  

    The coffee harvest is in its initial stages and the harvest in the production areas of Matagalpa is expected to officially start at the beginning of November, as weather conditions have favored the crop’s uniform ripening. However, worries persist over the lack of a workforce, which may be a limiting factor for the harvests at a crucial time. Due to the increase in production costs and low market prices, the daily wage for harvesting a lata [basket] of coffee remains at NIO 35.00, similar to last year’s wage. As coffee harvesting is better paid in Costa Rica, people prefer to migrate to coffee-growing areas there.

    Food Security Perspective

    Small-scale producers of basic grains (maize, bean and sorghum) in the north Pacific and northwestern parts of the country, within communities living in livelihood zones 3 and 12, who were affected during the last agricultural season and survived on limited food reserves, may move from Stressed (IPC Phase 2) to Minimal (IPC Phase 1) from September onward, as a result of their improved Primera harvests and increased opportunities for seasonal employment due to the labor demand for coffee harvesting and other agroindustrial activities.

    Figures Seasonal Calendar for Typical Year

    Figure 1

    Seasonal Calendar for Typical Year

    Source: FEWS NET

    Figure 1. Precipitation anomalies (mm), August 1 - October 17, 2017.

    Figure 2

    Figure 1. Precipitation anomalies (mm), August 1 - October 17, 2017.

    Source: National Oceanic Atmospheric Administration, Climate Prediction Center morphing…

    Figure 2. Basic grain prices, October 2017.

    Figure 3

    Figure 2. Basic grain prices, October 2017.

    Source: 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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