This is an archived USAID document retained on this web site as a matter of public record.

Central America Drought:
Update #4

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U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT
FACT SHEET

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WASHINGTON, DC 20523
PRESS OFFICE
http://www.usaid.gov
(202) 712-4320

01-099

FOR IMMEDIATE RELEASE
October 17, 2001

Contact: USAID Press Office

Central America is an area prone to natural disasters, as evidenced in recent years by such devastating calamities as Hurricane Mitch and the earthquakes in El Salvador. In addition, nearly two years of unrelenting dry conditions affecting Honduras, Nicaragua, El Salvador, and Guatemala have reduced domestic food production, spurring an increase in internal and external migrations. Economic conditions have worsened at the same time, with low international coffee prices putting coffee farmers out of work and eliminating employment opportunities for many small farmers and landless poor. Emerging evidence from Guatemala indicates that levels of under-nutrition among children under five - already among the highest in the Western Hemisphere - are increasing. Decreased tax revenues resulting from the decline in coffee prices, and the general economic deceleration, which is linked to the economic slowdown in the United States, have limited the ability of national and local governments to respond to these problems.

Summary of USG Assistance

As a response to these development and relief problems, during 2001, Honduras, Nicaragua, El Salvador, and Guatemala will receive over $26 million in regular Title II food assistance to deal with the problems of chronic food insecurity, as well as almost $58 million through the US Department of Agriculture's (USDA) Title I, Food for Progress, and 416 (b) programs. These four countries also will receive an additional $5.6 million in emergency food assistance to help them cope with the effects of the drought. Some of the families that are negatively affected by the drop in coffee prices also will benefit from the food that is made available from both the regular and the emergency programs. Overall, USG food aid for the region for FY01, including regular program and emergency assistance, is valued at nearly $90 million. Total USG emergency drought assistance, which includes food aid, agricultural inputs, nutritional supplements, and construction tools, now totals nearly $12 million for the region (See table below). Approximately $33 million in Title II non-emergency development resources are currently programmed for Nicaragua, Honduras, and Guatemala in 2002.

USG DROUGHT EMERGENCY ASSISTANCE

USG Disaster Assistance, Diversions From Non-emergency Food Program, and Emergency Food Assistance, as of 10/15/01

Country	USG [OFDA,USDA] Disaster Assistance	USG Diverted from Non-emergency Food Program	USG Drought Emergency Food Assistance	Total USG Drought Emergency Assistance	Food (MT)
Honduras	$175,000	$668,753	$1,506,100	$2,349,853	6,504 MT
Nicaragua	$875,000	$4,332,000	$3,032,700	$8,239,700	18,031 MT
El Salvador			$583,600	$583,600	1,290 MT
Guatemala	$25,000	$270,000	$520,200	$815,200	1,441 MT
TOTAL	$1,075,000	$5,270,753	$5,642,600	$11,988,353	27,536 MT

Food Insecurity

Many families in El Salvador, Guatemala, Honduras, and Nicaragua are chronically food insecure. The drought during the first planting cycle in May through June exacerbated this condition and caused severe transitory food insecurity in the region. Although the rains did resume in August and September in many places, it is too early to generalize or to project the yields of the crops in the second planting cycle in September and October. If the second harvest in November through January is also below normal, additional food resources will be required. More food aid may also be needed to help poor households cope with the immediate effects of continuing low coffee prices. The coffee problem is clearly not a short-term crisis, since some estimate that it could take up to five years for coffee prices to recover to previous levels, a prospect that is not guaranteed even then. But as with the drought, many families have lost a major source of their livelihoods as a result of these low prices and could go hungry unless steps are taken to help them deal with this problem in the short as well as the longer term. Chronically malnourished children under five years of age are especially vulnerable to reductions in an already precarious household food supply, and their nutritional status can deteriorate quite rapidly. The table below provides estimates by USAID Missions of the number of people requiring short-term emergency food aid in the region.

Country	Number of People Requiring Short-Term Emergency Food Assistance
Honduras	300,000
Nicaragua	303,000
El Salvador	200,000
Guatemala	76,290
Mexico	NA
Total	879,290

Coffee Crisis

Low coffee prices have had a devastating effect on the coffee-producing areas of the region, many of them also affected by the drought. [The map below indicates where coffee producing areas and drought areas intersect.] Coffee prices hit a new low of 40.5 cents per pound in the last week of September. The cost to produce coffee exceeds the selling price in most places, making it uneconomical to harvest and putting many farmers who borrowed against their crops out of business. This aggravates the short-term problem of household food availability, since the lost wages from significantly reduced coffee season employment were likely to have been used to buy food for the family. As experts predict that prices will continue to be low for the next few years, this situation requires both interim support measures and longer-term change in household income and food strategies in coffee producing areas.

Because of the importance of coffee in the economies of all Central American nations, the impact on poor, rural families has been enormous. In Honduras, early survey results indicate that up to 40 percent of local coffee producers will not harvest this year's crops, causing layoffs of an estimated 50,000 permanent employees and leaving over 150,000 temporary seasonal pickers without employment. Therefore about 200,000 coffee workers and their families will experience food insecurity this year and next. In El Salvador, according to preliminary estimates, losses of coffee sector jobs combined with those resulting from the drought may approach 65,000 this year. In Guatemala, ANACAFE (The National Coffee Association), now estimates that some 50 percent of the estimated 500-600,000 rural coffee workers will see their earnings halved this year. It warns that this situation may worsen in November if many farmers elect not to pick their coffee because of low prices. Nicaragua has some 200,000 employed in the coffee sector. In the two largest producing departments, as many as 24,000 permanent coffee workers, many of them landless, depend on coffee estates for livelihood, but will likely see earnings significantly reduced this year.

USAID is working with local partners in the host governments, civil society, and non-governmental organizations (NGOs) to examine both immediate and longer-term ways of responding to this rural crisis. In the near term, the Agency is addressing hunger. The longer perspective is focused on broader challenges impeding growth in rural areas. The strategy emphasizes economic integration and trade, good governance, innovative uses of science and technology, and management of environmental and economic risks. It involves a mix of interventions including feeding and health/nutrition programs, works projects, income generation activities, education and retraining, crop diversification, and technical improvements in coffee production and marketing.

Internal and External Migration

Anecdotal reports from USAID Missions indicate that internal and external migration has been increasing over the past few months. Although seasonal migrations are common during the coffee harvesting seasons in Costa Rica, reports by the Costa Rican presidential spokesperson indicate that increased numbers of legal and illegal Nicaraguan immigrants have entered Costa Rica this year in search of work and food. While El Salvador has not yet seen evidence of significant movement, Honduras and Guatemala report anecdotal examples of migrations of male labor force out of rural areas. Movement within countries to urban areas seems to be increasing, and there are indications that emigration to wealthier countries is on the rise. A September 23 article in the Washington Post reports that while the number of illegal entrants apprehended in the Tucson border area with Mexico declined by 26 percent last year, at the same time, the number of non-Mexican detentions grew by 42 percent. Most of the non-Mexican migrants are from Central America.

USG Emergency Food Strategy

USAID's Hurricane Mitch reconstruction and food assistance programs constituted an effective early warning system for the Central American drought. Since July, USAID has collaborated actively with US private voluntary organizations (PVOs) responsible for distributing PL480 Title II development food aid - Adventist Development Relief Agency (ADRA), CARE, Catholic Relief Services (CRS), Project Concern International (PCI), Save the Children, and SHARE - to transfer in-country Title II commodities to drought emergency zones. Most emergency food aid is being distributed through food-for-work projects aimed at improving long-term food security and rehabilitating community infrastructure. In addition to emergency and non-emergency food aid, the USG is supporting programs that also provide seeds and other agricultural inputs to farmers for the second planting season in August and September in these affected regions.

The World Food Program (WFP) emergency Central America Protracted Relief and Recovery Operation has requested 16,000 tons of food to address the drought in the region. In response, USAID's Office of Food for Peace has provided 4,800 metric tons of PL 480 Title II commodities to the WFP to assist drought-affected farmers and unemployed coffee plantation workers in Nicaragua, Honduras, El Salvador, and Guatemala. The estimated value of the food aid, including ocean freight, internal transport, storage, and handling is $2.1 million. This is the only confirmed contribution to the WFP appeal, and WFP is borrowing from its existing in-country program stocks to avoid breaks in the assistance pipeline.

The following presents an update on drought conditions in Honduras, Nicaragua, El Salvador, and Guatemala, and the USG response to these conditions.

HONDURAS

The Rural Crisis. The second harvest crop continues to develop, but rainfall during the first ten days of October seems to have fallen off. In order to ensure an average yield for the second harvest, precipitation needs to be at least at regular levels until the end of October or the first week in November. Hurricane Iris brought moderate to heavy rain to areas that were not seriously affected by the drought, such as the North Coast, but it did not extend to the drought regions. Even with good rains, USAID anticipates that bean production from the second harvest will be below normal as only about 45 percent of the farmers who were hard hit by the drought received seeds. With the rural economy so dependent on coffee, it is no surprise that ripple effects have been felt in rural non-coffee enterprises. Local businesses report sales down 20-40 percent compared with last year. There will be little liquidity to pay coffee workers, and farmers may pay pickers in coffee. This will mean extreme subsistence living for workers and families who have relied on this source of income to supplement their crop production.

USG Response. The USAID/Honduras drought working-group continues to monitor the situation. USAID approved CARE's transfer of 217 metric tons of Title II food from its regular program to the drought emergency, and WFP diverted over $600,000 of regular program food to the emergency. USAID also furnished WFP with an additional 4,287 metric tons of food with a value of $1,506,100 for emergency relief. The US Ambassador issued a disaster declaration for drought relief that provided $25,000 from OFDA to purchase and distribute seeds. OFDA also granted an additional $150,000 for seed purchase and distribution through Zamorano Agricultural School.

NICARAGUA

The Rural Crisis. The Ministry of Agriculture increased its estimate of losses of basic grains due to the drought, revising it upwards to 20.7 percent of basic grain crops. Assessments conducted by USAID in several municipalities in the Department of Chinandega confirmed that people in the area had very little food, the grain storage facilities were empty, and there had been a near total crop loss in the spring planting cycle. One of the most disadvantaged groups identified by USAID is landless farmers, who comprise between 10 to 20 percent of the rural population. These farmers are completely dependent on employment opportunities generated by other farmers and are among the poorest of the already highly vulnerable rural population.

Recent rains in September provide hope that there will be a normal harvest of beans and corn during the second harvest period. An OFDA assessment team reported on September 27 that in 23 communities in six departments visited, all had successfully replanted using USAID donated seed and fertilizer. WFP and USAID are conducting coordinated assessments during the second week of October.

USG Response. USAID is coordinating its efforts closely with the WFP. As an immediate USG response to the drought, up to $2 million of PL 480 Title II food stocks (8,000 MT) that arrived in Nicaragua at the end of July were distributed to drought victims beginning on August 2. For the medium term USG assistance, a total of $3,125,900 (13,613 MT) in 416b food commodities and $2,206,000 in Title II food (4,366 MT) began to arrive in Nicaragua in early October for immediate distribution. PVO activities already underway with Title II food will be extended and expanded to remote areas of Chinandega, Leon, Esteli, and Matagalpa departments. Additionally, OFDA provided $200,000 that was used for local food purchases. Also, a total of $132,000 has been made available for the purchase of tools and $575,000 for the purchase of seeds and fertilizer for the second planting season. All tools, seeds, and fertilizer have been delivered and seeds were planted prior to September 15.

For the longer-term USG response, the Mission will request an additional $6 million in food assistance in FY 2002 for unemployed coffee farmers. Beginning in January 2002, under its regular development program, the Mission will receive $10.5 million per year, over a five-year period, in Title II food assistance. A first increment of 3,715 MT of food (out of a total of 6,375 MT for the year) will arrive in December 2001 and will be distributed over a five-month period. An additional 32,000 MT of wheat will be monetized to cover administrative costs.

With minor exceptions, the USG remains the primary donor responding to the drought crisis in Nicaragua. The United Nations Food and Agriculture Organization (FAO) provided $300,000 for the purchase of seed and fertilizer, and the IDB provided approximately $300,000 from its Poverty Reduction Project.

EL SALVADOR

The Rural Crisis. The drought has subsided over the past few weeks, with substantial rain falling across most of the country, including, to a lesser degree, the four drought-stricken departments. The Ministry of Agriculture announced on October 8, 2001, that the 2.4 million quintales of corn (1 quintal=100 lbs.) that were lost to the drought will be recuperated at the national level in the second season harvest (late October). This does not necessarily mean that the farmers most affected by the drought would have additional food.

The USG Response. The integrated host-country led program, which began implementation two weeks ago, continues. It includes foodstuffs distributed via the WFP, a Food-for-Work program providing for economic infrastructure in the areas of rural roads, irrigation, and reservoirs, and a credit program implemented through the country's Banco de Fomento de Agropecuario. USAID is contributing $583,600 of Title II commodities to this effort, and these commodities will start to arrive in El Salvador during the second week of October. A number of NGOs, including CARE, Catholic Relief Services, and the Lutheran World Federation have been working closely with the WFP to help get the food to the most needy.

GUATEMALA

The Rural Crisis. Drought conditions have remained relatively the same during the past several weeks in the nine affected departments. The dry conditions have severely affected Chiquimula Department, especially its two eastern municipalities of Camotán and Jocotán, which also rely heavily on seasonal migration to coffee and sugar areas to provide for family food needs. USAID conducted more intensive field visits to examine malnutrition levels with its Title II food aid partners, and after discussions with UNICEF and WFP, has confirmed that the prevalence of wasting (acute malnutrition) among children is as much as three times higher than the national maternal child health survey of two years ago. The problem is concentrated in the poorer areas of the country such as El Quiche, Huehuetenango, Chiquimula, and San Marcos whose large poor and indigenous populations rely on seasonal migration to coffee areas for income. More than 70 percent of the children in these areas were already stunted (chronic malnutrition) and thus susceptible to becoming wasted with reductions in household food consumption or other stresses such as diseases. The vast majority of these wasted children do not get to hospitals because of remote distances, lack of financial resources, and negative cultural attitudes about hospitals. The urgent challenge is to find where they are and treat them. For example, the doctors in Jocotán are going door-to-door to survey the status of children who are not getting to the centers, but this is costly, time-consuming, and difficult work.

USG Response. USG drought emergency assistance to Guatemala currently totals $815,200. In direct response to the current crisis, the US Ambassador issued a disaster declaration for drought relief that is providing $25,000 from OFDA for health personnel training, water treatment, and micronutrient supplements for drought-affected people, especially acutely malnourished children in the Camotán and Jocotán municipalities in Chiquimula. USAID also authorized Catholic Relief Services to use PL480 Title II commodities, valued at $270,000, to provide emergency rations in Zacapa and Chiquimula. In addition, the USG also approved a food aid donation valued at $520,200 to the WFP for use in Guatemala. Based on two recent site visits to the most severely affected areas, the USAID Mission has determined that additional emergency assistance will be required. Along with its Title II food aid partners and health NGOs, USAID is identifying the hardest-hit communities and is developing a strategy involving food aid, health care, and cash employment for drought victims. The USAID Mission may also require additional food aid to implement this strategy.

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