The late start of the rains could extend the lean season for area households

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1 Remote Monitoring Update June 2016 KEY MESSAGES The late start of the rains could extend the lean season for area households Very poor subsistence farming households and households of small coffee growers and salaried farm workers in southwestern Honduras, eastern and western El Salvador, and the Northern Pacific and North-Central regions of Nicaragua will be in Crisis (IPC Phase 3) from June to October, due to the reduction in temporary and the deterioration in livelihoods due to the repeated damage from rainfall deficits over the past four years. Figure 1. Projected food security outcomes for June through September 2016 Without staple food reserves, the households most affected by drought and coffee rust in recent years will depend on market purchases of staple foods for an extended period. Coffee prices increased in May for the fourth consecutive month. However, prices remain below levels of the same time last year. Lower prices discourage investment in coffee-growing activities, particularly for small producers who have still not rehabilitated their coffee plantations damaged by the rust fungus. There is a risk of heavy rainfall in the second part of the rainy season with the expected transition from El Niño to La Niña conditions. This could negatively affect the harvest for the Primera growing season, as well as the Postrera crops, causing damage to physiologically mature grain crops from fungal infestations and triggering a proliferation of fungal diseases during the early developmental stages of crops, particularly beans. Source: FEWS NET Figure 2. Projected food security outcomes for October 2016 through January 2017 Source: FEWS NET These maps show relevant acute food insecurity outcomes in significant areas of concern for decision-making. They do not necessarily reflect outcomes across the country or chronic food insecurity. For more information, visit: FEWS NET CENTRAL AMERICA fews.guatemala@fews.net FEWS NET is a USAID-funded activity. The content of this report does not necessarily reflect the view of the United States Agency for International Development or the United States Government.

2 COUNTRY CURRENT ANOMALIES PROJECTED ANOMALIES REGIONAL Poor households are market-dependent for longer periods in the absence of grain reserves and with their limited. Late start of the rainy season. Stabilization of prices at a time normally marked by seasonal rises in prices. Expected poor spatial and temporal distribution of rainfall. Expected rises in prices to levels above the yearly average during the lean season across the region (July through September). Flooding in lower watershed areas and landslides in areas with eroded soils. The combined effects of increased rainfall activity and other agro-meteorological variables foster conditions conducive to outbreaks of rust disease and other coffee pests and diseases. CLIMATE OUTLOOK The rainy season was established in most of the region by the end of May, initiating planting for the Primera growing season. However, rainfall anomaly images through the fifth pentad of June generated by the USGS CHIRPS model show certain areas of the region with levels of cumulative rainfall below the historical average, which could be creating poor soil moisture conditions that could adversely affect developing crops. Figure 3. Estimated rainfall anomalies for the period from May 1 through June 25, 2016, Preliminary CHIRPS Honduras: The rainy season began between May and June, with an uneven distribution across the country. Most of the rainfall was concentrated in the Choluteca, Nacaome, Goascoran, Lempa, Ulúa, and Patuca watersheds, which has been favorable for May planting in subsistence farming areas (Francisco Morazán, Paraíso, Choluteca, and La Paz). The rains began in early June in most commercial farming areas (Olancho, Paraíso, Comayagua, and Yoro). Current conditions are in sharp contrast to the pattern last year when most departments were reporting crop losses, mainly in subsistence farming areas. Monitoring data from the Ministry of Environment of El Salvador on daily soil moisture availability across the country for the period from June 13 th through June 22 nd shows adequate, Source: USGS/FEWS NET moist, and very moist conditions, with soils in most areas falling into the moist and adequate categories. These conditions have encouraged the planting of crops. So far, crops are deemed to be developing normally. According to Nicaragua s National Land Studies Institute (INETER), the rainy season was fully established in all parts of the country by the first week of June, with forecasts for the ensuing three months showing a continued normal pattern of rainfall. The rains began at the end of May In certain regions, where crops are already 10 to 25 days past germination. The Nicaraguan Farmers and Producers Union (UPANIC) is reporting that staple crops for the current growing season (2016/2017) are making normal progress and is expecting strong national production for the season, due to ongoing adequate rainfall and increased area planted. It estimates that harvests of both maize and beans for the Primera growing season will surpass production figures for the last two growing seasons. 2

3 Regional: The ENSO forecast published by the International Research Institute for Climate and Society (IRI) at the beginning of June shows a 64 percent likelihood of La Niña conditions between July and September, which increases to over 70 percent in subsequent months and through at least the first quarter of Based on analyses by regional meteorological services and recent years with similar transitions from El Niño to La Niña conditions, it is likely that rainfall will be above average beginning in September. The expected shift to La Niña conditions could cause damage to Primera crops from heavy rains in certain areas, which could lead to fungal infestations in mature crops. There is also a risk of damage to Postrera crops, primarily beans, from fungal diseases during their early developmental stages. This lowers previous expectations for improved production due to wetter conditions than last year. The high levels of rainfall could also help foster the spread of the coffee rust fungus and other coffee pests and diseases. REGIONAL STAPLE PRODUCTION AND MARKETING Honduras: The production forecast by the Ministry of Agriculture and Livestock (SAG) for this season puts maize production at 12 million quintals, above the figure for last season of 8.3 million quintals. Bean production is projected at 2.3 million quintals, similar to this past season, which was considered a very good level of production. The government continues its strategy of promoting bean production through production and marketing agreements between farmers and the Honduran Crop Marketing Board (IHMA), establishing a guaranteed price of HNL 1,000 per quintal of beans. This arrangement is designed to sustain and boost supplies to meet domestic demand and some of the regional demand. To promote fortified maize production, the research program by the Agricultural Science and Technology Department (DICTA) of SAG distributed five thousand quintals of seeds for the planting of 14 thousand hectares of land in maize varieties with a higher protein and mineral content. The seeds were distributed to small farmers in hillside areas, mainly in departments within the Dry Corridor, disseminating new maize and bean varieties for different agro-climatic conditions. In El Salvador, the Ministry of Agriculture and Livestock (MAG) provided farmers with recommendations on crop planting schedules based on weather forecasts for this season. In municipalities of the eastern zone, the recommendation was to plant in July, which is considered to be the Postrera season, as long as the soil was sufficiently moist. For the rest of the country, it recommended that crops be planted between the last week in May and the first week in June. Seeds have been delivered according to the season. The first delivery was in April, providing 233,198 farmers with agricultural packages. The second delivery to 166,802 farmers in the country s eastern zone and municipalities within the Dry Corridor is to be completed by the end of June. The seed packages are being distributed to farmers with plots of up to 2.1 hectares to help ensure that their households have a supply of staple grains. Each package contains 22 pounds of H-59, CENTA Santa Rosa, and CENTA / Pasaquina varieties of certified maize seeds, which can tolerate soil moisture deficits to some extent and produce good crop yields, plus 100 pounds of fertilizer. A total of 410,000 packages of maize seeds and fertilizer will be distributed at a cost of over USD 17 million, the equivalent of enough seeds for the planting of 280,000 hectares of land in maize. The Salvadoran government approved duty-free import quotas in June, allowing for duty-free imports of 146,000 metric tons of yellow maize for industrial use and 62,000 MT for human consumption. Imports beyond these quotas will be subject to a 15 percent import duty. The quota for duty-free imports of white maize is 100,000 MT. Any additional quantities of white maize entering the country will be subject to a 20 percent import duty. The quotas will remain in effect through the end of the year. In Nicaragua, production estimates published by the government indicate that staple production for the 2016/2017 growing season will be greater than last year. Bean production is projected at 4.4 million quintals, up 27 percent from the figure for last season (3.2 million quintals). White maize production is estimated at nine million quintals, 29 percent above the figure for last season (6.4 million). Rice production is estimated at five million quintals, up 18 percent from the production figure for last season (4.1 million). Trends in staple prices on major markets across the region are unusual for this time of year. Prices are trending downwards, particularly red bean prices in Nicaragua and El Salvador, which is not normally the case at this time of year, given reduced trade flows from crop-producing areas and the depletion of existing inventories. This current market behavior is attributable to the final surplus of Postrera and Apante crops and the influx of imports from outside the Central America region. The sole exception is the price of maize in Honduras, which is up slightly from last month and 10 percent higher than last year, which is in line with normal seasonal trends. 3

4 Trends in wholesale prices across the region (USD/kg) RED BEANS WHITE MAIZE Country HONDURAS EL SALVADOR NICARAGUA HONDURAS EL SALVADOR NICARAGUA Market Tegucigalpa San Salvador Managua Tegucigalpa San Salvador Managua PRICES (USD/kg) April May DIFFERENCE For the month -1.0% -3.7% -11.1% 2.1% -2.6% -13.6% For the year -18.7% -21.5% -28.2% 10.8% -3.1% 6.3% Over five years -8.4% -14.9% -9.2% 22.7% 4.2% 19.0% Source: FEWS NET, with feedback from government agencies monitoring markets COFFEE SECTOR Honduras: As of June 20, 2016, there were bills of sale for a total of 6.5 million 46 kg bags of coffee from the 2015/2016 harvest, an increase of 6.28 percent over the 6.1 million bags sold at the same time in However, the value of exports to date is USD 690 million, which is 23 percent less than the USD 897 million in exports at the same time in This lower value of exports is attributable to the drop in prices during the current harvest season, from an average of USD in 2014/2015 to an average export price of USD , a 21 percent reduction. El Salvador: As of April, the cumulative volume of coffee exports for this season came to 105,073 quintals, generating USD million in revenues based on an average selling price of USD /quintal. Cumulative exports as of April were up slightly by 3.3 percent in terms of their volume, though the value of coffee exports was down by 13 percent from the same time last season. The government, through the Ministry of Agriculture and Livestock (MAG), will furnish 10,000 small and medium-size coffee growers across the country with systemic fungicides for the 2016/2017 coffee-growing season to combat the rust fungus, protecting 136,994 hectares of coffee farms. Nicaragua: Coffee producers are concerned by the growing infestation of coffee cherry borers. Use of the agrochemical Endosulfan or any other insecticide against this pest is banned in Nicaragua. Coffee producers estimate its current impact on production at 10 percent, up from two percent, due to the impediments to containment efforts. Accordingly, they are asking the government to approve the use of this insecticide since traps alone are not enough to control current infestation levels. This pest is expected to have significant impact on production for the upcoming season. 4

5 PROJECTED REGIONAL OUTLOOK THROUGH JANUARY 2017 COUNTRY LIVELIHOOD ZONE SITUATION Honduras El Salvador Nicaragua Poor subsistence farming households and households of day laborers in parts of livelihood zones 7 and 5 Households of small subsistence farmers in the east and west and households of small coffee producers or day laborers in livelihood zones 2, 3, and 4 Very poor households of subsistence farmers, day laborers, and small coffee growers in the northern and northwestern parts of the country in livelihood zones 3 and 12 IPC PHASE, June-Sept IPC PHASE, Oct-Jan Phase 3 Phase 2 Phase 2 Phase 2 Phase 2 Phase 2 EXPECTED END OF THE CRISIS Green harvests of maize and in the harvest Green harvests of maize, crop sales, and in grain harvests Green harvests of maize for the Primera growing season and local in livestockraising and tobacco-growing operations ABOUT REMOTE MONITORING 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. 5