Improved food security with favorable terms of trade

• Food access nationwide in December 2012 was favorable. However, asset losses and insecurity due to conflict in the South and poor 2012 agricultural production in the western coastal lowlands will contribute to food insecurity through June (Figure 1). 

• Current medium-term forecasts for the main, March to June 2013 wet season suggest near-normal rainfall with slightly above normal rainfall along the southern coastal areas of Yemen (Figure 2). 

Despite Yemen’s near total reliance on imports for wheat and rice, livelihoods for a large portion of the rural poor rely significantly on own agricultural production (sorghum, wheat, millet, beans, and vegetables) for food and agricultural labor demand for income. The Food and Agriculture Organization (FAO) estimated that crop production this year is eight percent lower than last year and ten percent lower than the past five year’s average. Below-average production was attributed to below-average precipitation in the western highlands and social unrest in the South. However, labor-to-cereal terms of trade were favorable during the harvests, a peak income-earning time. In addition, humanitarian assistance is substantial in many areas. As a result, the 2013 lean season between March/April and June is likely to be harsher than usual, particularly in areas of the western lowlands and the South with poor humanitarian access, but better than conflict-ridden 2011.

More than 60 percent of the value of projects proposed to the 2012 Emergency Response Fund was disbursed. More than 40 percent of the funds requested under the 2013 Humanitarian Response Plan fall under the food security and agriculture cluster, yet only 2 percent of the appeal has been funded to date. The International Committee of the Red Cross (ICRC), International Organization for Migration (IOM), Charitable Society for Social Welfare (CSSW), and Médecins Sans Frontiers Spain and France (MSF-S, MSF-F) have a sustained physical presence in Abyan despite security risks. Non-traditional actors have also shown significant support for needs in Yemen and also in the South. However, insufficient information is available to determine the extent to which assistance is meeting gaps in minimum food needs.

Terms of trade for labor and livestock to cereals are generally favorable. In most areas, labor-to-cereal terms of trade were relatively stable. However, the national-level decline in labor-to-cereal terms of trade between November and December may be attributed to the significant drop casual labor wages in Amran. Put into context, this decline is not likely an indicator of worsening food security either in Amran or in Yemen as a whole. Casual labor wages in Amran in November were 25 percent higher than any other reference market in the country. The drop in casual labor wages to 2000 YER/day in December 2012 (the same rate as in Sana’a) may represent a correction—a normalization—of the labor market rather than a sign of decline.

Though the 12-month moving average of food inflation continues to surpass general inflation (about 6 and 5 percent, respectively, in December 2012), inflation rates have been declining steadily in 2012 from their January 2012 highs exceeding 20 percent. This is a reflection of improved economic stability after the peak of the conflict in 2011.

The first rainy season, which peaks in late April-May, is important for the cereal harvests of wheat and millet, as well as market gardening. Current rainfall forecasts from the European Centre for Medium-Range Weather Forecasts (ECMWF) and the International Research Institute for Climate and Society (IRI) suggest that rainfall is likely to be near average in Yemen during that time (Figure 2). Harvests in June/July are likely to be near average.