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During the entire period covered by this outlook, poor rural households in localized areas of the Eastern Dry Corridor, the Western Highlands and Alta Verapaz will be classified in Crisis (IPC Phase 3). These households were already carrying debts, and their diet has been extremely poor. In the coming months, despite a temporary rise in income, the quick use of these funds, little or no staple grain harvests and the extended reliance on market purchase at far above-average prices will limit the seasonal improvement in their food security. They will need to continue to cut back on the amount of food consumed and employ negative coping strategies such as atypical migration and the sale of productive assets, thus jeopardizing their livelihoods in the long term. For these households, the lean season will begin prematurely, given the difficulty in generating income and dependence on buying products in the market.
Due to the damage caused by tropical storm Julia in October, several areas in the north of the country are classified in Crisis (IPC Phase 3). However, seasonal improvement in income will allow households to return to Stressed (IPC Phase 2) outcomes beginning in November and continuing through January 2023. Although in the other rural areas, primera harvests were largely average and improved household reserves and incomes allowed for better access to food, high food and transportation costs reduced household purchasing power, resulting in Stressed (IPC Phase 2) outcomes through January. From February onwards, as sources of temporary employment diminish, the number of households needing to intensify negative coping strategies to meet their food needs will rise. Despite this trend, most rural areas will manage to remain Stressed (IPC Phase 2), but some areas will have more households shifting to Crisis (IPC Phase 3), thus changing the area-level classification as well.
In early October, tropical storm Julia caused heavy rainfall, flooding, and landslides that particularly affected different areas within the Northern Transversal Strip and the Polochic Valley. Subsistence farmers in these areas were the most affected, as maize crops were either drying in the fields (en dobla) or were already harvested and in the process of drying in their homes where there is not enough space for post-harvest handling. The loss of crops will cause affected households to have no grain reserves for consumption in the following months, requiring them to purchase instead at far above-average prices.
Stable cash crop exports and improved sale prices will allow the demand for seasonal harvest labor to be within the normal range. However, high food, transportation, and gas prices, particularly diesel — which is no longer subsidized – will place pressure on household purchasing power.
The primera season’s maize harvest began between late September and early October, except in the Western Highlands, where annual harvests are expected in late December. The primera cycle is usually used to grow maize, and, during this season, about 60 percent of the national production is produced. Beans are also grown in primera, but the largest volumes of this crop are produced during the postrera cycle, which begins between September and October. This year, high fertilizer costs have led to its decreased use and reduced cropped areas, especially among subsistence farmers who grow crops for their own consumption. Interviews with farmers and key informants in different areas report lower yields given the lack of fertilizers or low use thereof. Also, erratic rainfall distribution caused periods of heavy rainfall and winds that resulted in flooding, landslides, and localized damage in areas of staple grain crops, particularly in the northern part of the country.
In most of the country, staple grain crops developed well, and the rainfall favored plant growth. By the end of September, fresh grains began to flow into the markets. Nationally, harvests have been reported to be near average, especially for surplus and commercial farmers.
The passage of tropical storm Julia in early October particularly affected the Northern Transversal Strip region and the Polochic area (Figure 1). The soil was already saturated in these areas, and rainfall quickly caused crop damage and losses. Subsistence farmers in these areas were the most affected, as maize crops were drying on the fields or were harvested and in the process of drying in their homes where there was not enough space to handle post-harvest. In addition, there were reports of damages and losses in recently planted bean fields of the postrera cycle as well as of the deterioration of highways, roads, and bridges, which affected the transportation of people and goods for several days and left some places isolated. On October 11, 2022, the government declared a State of Emergency to respond to the damage caused by tropical storm Julia, but no actions had yet been implemented as of the end of October.
The flow of recently harvested maize and beans into market usually drives a seasonal drop in prices, but this has been barely noticeable this year as prices have remained far above average. Between August and September of 2021, there was an 11 percent decline in prices; however, in 2022, the decrease was only 1 percent during the same period. In September, wholesale prices of maize and beans were 62 and 41 percent above the five-year average, respectively. Other causes, in addition to the influence of international factors on prices, including the high cost of fuel, particularly diesel, and poor road conditions, drove prices higher than average. After tropical storm Julia, the damage caused by heavy rainfall increased the cost of transporting cargo. Localized staple grain losses due to rainfall and speculation have also contributed to this situation.
As shown by the Consumer Price Index, the rise in prices has shown an increasing inflationary trend since June 2022. In September 2022, the inflation rate was 9 percent, 2 percent above the value reported last year. Regional inflation rates were also higher than the national rate, and nationally, the food and transportation spending divisions showed the highest rise (Table 1). Inflation rates among the major basic expenditures most relevant to food security were 32.6 and 29.4 percent for maize and fuel, respectively.
Table 1. Year-on-year increases in the CPI and the basic food basket, September 2022
|Inflation rate by region|
|Region II (Cobán and San Pedro Carcha)||12.7|
|Region III (Puerto Barrios, Santo Tomás de Castilla and Chiquimula)||10.3|
|Region VII (Huehuetenango, Chiantla and Quiché)||10.6|
|Inflation rate by basic expenditure|
|Division of transportation expenditure||9.8|
|Division of food expenditure||13.1|
|Percent increase in price of basic food basket products*|
|Beans, sweet bread, and potatoes||24|
|*Foods showing more than a 20 percent rise in average prices compared to September 2021.||Source: INE|
With respect to the prices of the basic food basket, several food items experienced an increase of more than 20 percent compared to September 2021. As for fuel, in September, diesel still had a subsidy (5 GTQ/gallon); however, the price remained far above the five-year average (55 percent), as did gasoline (37 percent). Fertilizer and concentrate prices have also had an impact on agricultural commodity prices. Fertilizer prices have stabilized since July 2022 but continue to show significant increases – between 80 and 100 percent – compared to the three-year average, with these costs being passed on to the end consumer.
October marks the beginning of the season of high demand for labor for the harvest of cash crops. The majority of temporary workers are hired to harvest coffee, cardamom, and sugar. In contrast, other workers used to harvest bananas, African palm, fruits, and vegetables are hired on a more permanent basis throughout the year. The export value of these products continues to be positive, which is favorable for the current production season as it generates demand for labor and income for producers. When comparing the data with the same period in 2021, from January to August 2022, the exported value of coffee saw a rise in export value of 30 percent, bananas 12 percent, and sugar 44 percent. While the export value of legumes and vegetables remains stable compared to 2021 (but higher than in 2019 and 2020), the export value of cardamom dropped 11 percent.
According to ANACAFE, in the 2021/22 production year, 4.3 million quintals of raw coffee were exported, approximately 9 percent below 2020/21; but, given favorable international prices, the value exported in 2021/22 was 20 percent higher than in the previous cycle. Seventy percent of labor related to coffee is employed from October to February during the harvest. The value of the daily wage for coffee harvesting remains constant between 25-40 GTQ/quintal (100 pounds) of coffee cherries. Most sources of employment are outside of the laborers’ areas of residence, which is why migration to other municipalities, departments, Honduras, and Mexico is important.
One of the factors of concern for the coffee harvest this season is a reduced labor force, which has affected the coffee industry for several years and has become more severe in the last year. According to USDA, the reduced availability of day laborers for work in coffee plantations is a consequence of migration and remittances. The entity indicates that this is especially noticeable in areas near the Mexican border. Key informants consulted in the field confirm this, explaining that temporary workers prefer to migrate to Mexico or Honduras, where they are offered better working conditions. They also indicate that more people, especially young adults, are migrating to the United States seeking employment and better economic opportunities. This trend can also be confirmed by the 116.7 percent rise in returnees from January to August 2022 compared to the same period in 2021. Likewise, the Bank of Guatemala reports continuous growth in family remittances. As of September of this year, remittances were 21 percent higher compared to the same period in 2021, 65 percent higher than in 2020, and 72 percent higher than in 2019. According to CABI, the average amount sent to the departments with the highest receipts has remained stable, which points to an increase in the number of people sending remittances. The median remittance is USD 250, and the average is USD 463 (approximately 25 percent above the agricultural minimum wage). In rural areas, these remittances are usually received by middle-income households who spend them on family expenses. The three departments that receive the most remittances are Guatemala, Huehuetenango, and San Marcos. Almost 80 percent of remittances are destined for family spending.
According to data from the Ministry of Health, as of October 22, the national malnutrition rate is 96.3, two points lower than in the same period in 2021. While moderate malnutrition has dropped (6 percent), severe malnutrition has remained higher than last year (11 percent). Izabal, Suchitepéquez, and Escuintla are the departments with the highest incidence rates of severe malnutrition nationwide, and Alta Verapaz, Chiquimula, Huehuetenango, and Escuintla report the highest number of deaths due to malnutrition.
Current Food Security Outcomes
Economic activity continues to advance positively, especially with the lifting of restrictions to avoid the spread of COVID-19. The easing of restrictions has favored sectors still limited by capacity limits and physical distance requirements (tourism, commerce, education, lodging, restaurants) and informal occupations. Given these improvements, urban areas of the country are classified as facing Minimal (IPC Phase 1) outcomes.
In rural areas, primera harvests were largely average and have contributed to households being able to rely on their own grains for consumption. October also marks the beginning of the season for high labor demand for the major cash crops, which is improving the incomes of poor rural households dependent on agricultural wages. These two events ended the extended lean season in most of the country’s rural areas. However, high food, transportation, and agricultural input prices for farmers have reduced household purchasing power and are limiting the positive impact of economic recovery and seasonal improvement in rural incomes. Although poor households are no longer experiencing food consumption gaps, they still need to continue repaying debts accrued in recent years and employ coping strategies such as cutting non-essential expenditures, reducing expenditures on health and education, and reducing the quality and diversity of foods included in their diets. Despite these limitations, seasonal improvements are allowing improvements to Stressed (IPC Phase 2) outcomes for most poor rural households.
However, in localized areas of the Eastern Dry Corridor and Western Highlands, households have carried debts for a long time, suffered from low incomes and high food prices, and had low staple grain production due to the lack of fertilizer use. These events have forced households to engage in negative coping strategies, including reducing the amount and number of meals, atypical migration of several or all family members, or selling productive assets to acquire food, thus, they are experiencing Crisis (IPC Phase 3) outcomes. Likewise, there are poor households in Alta Verapaz that, two years after the impact of Eta and Iota, have not been able to recover their livelihoods, particularly due to the loss of soil and the inability to produce staple grains as usual. These and other households in Izabal, northern Quiché, and Huehuetenango experienced an above-average second rainy season, causing heavy rains, flooding, and landslides. These events resulted in the loss of cropped areas, damaged roads and houses, and flooding in communities. Areas recently affected by tropical storm Julia are classified as facing Crisis (IPC Phase 3) outcomes for the current month.
The most likely scenario from October 2022 to May 2023 is based on the following national-level assumptions:
- Average rainfall is expected throughout the period covered by this outlook, which is likely to favor planting and the development of postrera and postrera tardía staple grain crops, resulting in average national staple grain production.
- For subsistence farmers who reduced or did not use chemical fertilizers and for farmers in the northern areas of the country affected by tropical storm Julia, a reduction in staple grain harvests is expected.
- The primera 2023 rainy season is expected to be average, which will likely allow for the timely start of planting for staple grains. However, total production, particularly that of subsistence farmers, will likely be limited by high transportation and agricultural input prices.
- Average income from seasonal manual labor for cash crops, is expected, including for sugar, African palm, bananas, and coffee (both domestically and in Mexican and Honduran plantations).
- Demand for local manual labor locally and for small and medium-sized coffee production is likely to be below average due to efforts to reduce production costs, but the contracting of temporary labor in Honduras and Mexico is expected to remain average.
- Agricultural labor demand for planting and preparation activities for the 2023 primera season could be below average but similar to 2022 due to persistently high production costs driven by agricultural input prices.
- Non-agricultural employment, informal work, as well as tourism, will likely continue to improve, but remain slightly below pre-pandemic levels.
- Remittances will likely continue to be above last year’s and above the last five-year average, which would continue to benefit middle-income households that are able to afford the cost of sending a family member to the U.S.; although this income boosts local economies, it does not directly benefit poorer households.
- Debts will likely remain above average and savings will likely be below average.
- Inflation could remain stable but above expectations and above 5 percent.
- Despite the arrival of national harvests to the markets, maize and bean prices will likely remain about 70 and 40 percent above the five-year average, respectively, as well as that of other staple foods, fuel and transportation, and fertilizers.
Most Likely Food Security Outcomes
Throughout the period covered by this outlook, urban areas are expected to face Minimal (IPC Phase 1) food insecurity, given the continued recovery of jobs and the economic dynamics that have allowed important sectors to reach full reactivation.
In October, the season of high demand for manual labor begins and seasonal work in the various cash crops is expected to be average. Domestic and international coffee harvests will employ the most manual labor during the following months, and associated households will be able to increase their income. Despite USDA forecasts of a slight drop in production for the 2022/23 period due to higher production costs associated with higher fertilizer prices and the difficulty in employing local labor, the international sales price of coffee, along with its stable demand for labor, will continue its upward trend for 2022/23 (CABI-ANACAFE 2022).
For poor households in the north of the country that depend on cardamom production, employment opportunities will be average, but daily wages will be below average due to low international prices. As with small coffee producers, cardamom producers will not see a profit as the sale of their product will be marginal. Food availability will improve for producing households following the primera staple grains harvest (starting in September) and following the only productive cycle in the Highlands, the postrera, and postrera tardía seasons (in late 2022 and early 2023). However, lower yields due to reduced cropped areas and reduced or non-use of fertilizers will not allow harvests to last as long as usual, and households will have to resort to an earlier-than-normal reliance on markets.
Above-average fertilizer and fuel prices will continue to affect food prices directly. The entrance of national staple grain harvests into the markets will not generate the typical price drop. For most poor households, incomes remain stable, but the cost of living has risen sharply, reducing their purchasing power. To cover their food needs, they will adjust the quality and diversity of foods included in their diet and cut back on non-essential expenditures and on health and food expenses. The vast majority of households across the country will experience these conditions, including some areas flooded by tropical storm Julia, resulting in their classification as Stressed (IPC Phase 2) from October 2022 to January 2023.
During the same period, in some areas of the Eastern Dry Corridor and Western Highlands, households which have incurred debt due to heavy reliance on purchasing food at high prices for a lengthy period and recent improvements in income have not been sufficient to improve their food security. In addition, below-average volumes of staple grains forced premature market purchases. Poor households affected by Eta and Iota were also impacted by tropical storm Julia. Despite the temporary rise in their income, worst-affected households will not be able to restore their livelihoods, repay debts, or improve their diets. The purchasing power of these households will continue to be reduced due to high food prices. As a result, households will continue to cut back on food quantity, take on unsustainable debt, resort to atypical migration of more household members, and sell productive assets, resulting in Crisis (IPC Phase 3) outcomes throughout the outlook period.
Beginning in February, given that harvesting activities for cash crops decrease at this time, the demand for manual labor and associated income will reduce. Households that managed to produce near-average volumes of staple grains will be able to rely on these reserves for a month or two and use the newly received income to supplement their diets. Nevertheless, faced with high food and transportation prices, households will need to adjust their diets and employ coping strategies to cover their basic diet, which will therefore result in Stressed (IPC Phase 2) outcomes through May 2023. However, from March onwards, as grain reserves run out and purchasing capacity drops, more households will experience an early onset of the lean season, and, with it, Crisis (IPC Phase 3) outcomes.
Poor rural households that experienced an extended lean season in prior years due to harvest losses will have dedicated the newly received income to repaying debts and purchasing staple foods. Households will need to reduce their quantity of food and implement more severe strategies such as selling productive assets and atypical migration – possibly of more family members than expected and to more distant locations in Guatemala, Honduras, or Mexico. Although plantings for the 2023 primera season will start on time, they will not lead to improved income for local day laborers. Community farmers will have to cut back on hiring labor due to higher production costs. Over time, with the approach of the lean season, more poor households will face Crisis (IPC Phase 3) outcomes. From February to May, farmers tend to stay in their area of residence as they engage in their own staple grain planting to obtain a few days of local labor to generate a small income. However, this source of employment will be depressed due to the high production costs that have resulted in a cutting back of hiring.
Events that Might Change the Outlook
Table 2. Possible events over the next eight months that could change the most-likely scenario.
|Area||Event||Impact on food security outcomes|
|National||Excessive rainfall during the postrera and postrera tardía season||This would cause crop damage, low yields and crop losses, resulting in more households facing Stressed (IPC Phase 2) and Crisis (IPC Phase 3) outcomes.|
|National||Additional increase in international fertilizer and fuel prices||This would imply higher food production and transportation costs, which would further reduce household purchasing power, cause food consumption to deteriorate, resulting in a higher proportion of households facing Stressed (IPC Phase 2) and Crisis (IPC Phase 3) outcomes.|
|National||Start of food assistance programs via international cooperation||This would improve the availability and access of staple foods for household consumption for the poorest households facing Crisis (IPC Phase 3) outcomes, enabling them to be classified as facing Stressed! (IPC Phase 2!) outcomes with food assistance.|
SEASONAL CALENDAR FOR A TYPICAL YEAR
Fonte: FEWS NET
Fonte: UCSB-USGS/FEWS NET
To project food security outcomes, FEWS NET develops a set of assumptions about likely events, their effects, and the probable responses of various actors. FEWS NET analyzes these assumptions in the context of current conditions and local livelihoods to arrive at a most likely scenario for the coming eight months. Learn more here.