Remote Monitoring Report

Coffee rust and falling international prices affect the current harvest season

November 2013
2013-Q4-0-0-caribbean-central-america-en

IPC 2.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Would likely be at least one phase worse without current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.

IPC 2.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

IPC 2.0 Acute Food Insecurity Phase

Presence countries:
1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Remote monitoring
countries:
1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

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.

 

Projected regional outlook through March 2014

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.

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