Impact Of Central American Drought

Courtesy of STRATFOR (subscription required), analysis of the impact of Central America’s drought on the region and migration:

Central America and the Caribbean are in the midst of a drought that is impacting Guatemala, Honduras, El Salvador, Nicaragua, Hispaniola and Cuba. Agricultural output has been hit hard, complicated by the fact that the region is still recovering from a recent outbreak of coffee rust. Ongoing El Nino weather patterns, which are forecast to be particularly strong, will only make the situation worse. As the short-term water stress continues, more small farmers will lose their livelihoods — a humanitarian crisis that could drive migrants northward into Mexico and the United States.

Analysis

The world is gearing up to deal with El Nino, long anticipated but only recently confirmed. Prolonged drought is already gripping Central America and the Caribbean. While El Nino could bring heavy rains to the Caribbean coast, El Nino years are usually associated with dry conditions across much of this territory. Central America and the Caribbean are no strangers to drought, both in modernity and at significant points throughout history. From 1997 to 1998, the last major El Nino brought dry conditions resulting in a series of fires that raged out of control. The smoke impacted air quality as far away as Oklahoma. Drought in 2001, which followed other disasters and economic troubles, led to local shortages of basic cereals and vegetables. The most significant drought to date, however, occurred over 1,000 years ago and likely precipitated the collapse of the Mayan civilization, whose nearly 20 million people inhabited modern-day Guatemala, Belize and parts of Mexico, Honduras and El Salvador. Archaeological evidence and environmental data points to prolonged dry periods coupled with deforestation as the Mayan civilization declined.

July and August typically bring a small annual dip in precipitation across much of Central America. This is referred to as the midsummer drought or “Canicula.” The period follows the dry season lasting from January to May and can magnify the impact of poor rainfall at the beginning of the wet season. The current drought, however, began in 2014, and El Nino appears to be poised to prolong it into 2016. Cuba and the Dominican Republic already have had to ration water supplies. Panama reduced the size of ships allowed through the canal. Hydroelectric dams are an important source of power across the region and drops in reservoir levels have threatened power generation during droughts in the past. Reports have also emerged of drops in hydropower output in Panama, which relies on hydropower for more than half of its electricity production. Reservoirs in El Salvador are running deficits and the Dominican Republic has experienced periodic blackouts.

However, power and shipping problems have had a relatively marginal impact on the general population compared to the profound effects of deteriorating agriculture production. Central American farmers have had their share of hardship over the course of the past several years. Arabica coffee, a major export, is still recovering from a severe outbreak of coffee rust in 2012 and 2013. Production forecasts predict a rebound for Honduras and Nicaragua, but Guatemala and El Salvador have both struggled to control the fungus. Poor harvests of coffee, an export cash crop, can decrease a country’s economic output, but reduced production of staples such as corn and red beans will have the broadest impact.

Drought conditions through 2014 have already reduced cereal harvests in several countries, including Guatemala, Nicaragua and Honduras. This year, dry conditions at the start of the main growing season from May through September reduced production estimates once again. In Honduras, the drought damaged roughly half of the country’s corn. El Salvador has reported a $100 million loss due to lost corn and bean harvests. Irrigation and infrastructure lack investment, in part because many farmers do not own the land they till, making it harder for farmers to adapt to adverse conditions. Imports are increasing to cover the gap, but along with decreases in production, price spikes have occurred across the region. While the price of basic staples rose 40 percent in some areas in 2014 because of the drought, regional prices stabilized this year by the end of July, with the exception of white maize in Honduras and corn in Haiti. However, prices can change quickly, and reports already have emerged of price controls being imposed in El Salvador in an effort to mitigate the impact of rising prices.

Poor climate conditions and high prices have left hundreds of thousands of families across the region without access to basic food necessities. Farmers working small holdings lack the surplus or access to credit to compensate for a poorer-than-expected or missed harvest. Many subsistence farmers, particularly in Honduras, Guatemala and El Salvador, do not have the money to buy alternate food products to replace what they would grow themselves. The U.N. Food and Agriculture Organization estimated that nearly 1 million people in Guatemala do not have sufficient food. The longer the drought continues, the worse the humanitarian situation will become.

The crisis could exacerbate or even accelerate migration from Central America into Mexico and the United States. Several El Nino years, including 1973 and 1983, yielded an uptick in border apprehensions. As small and medium-sized farms fail, people could move into cities in an attempt to find alternate sources of income. And as competition for work increases, more people, including children, could migrate north. In 2014, Central America overtook Mexico as the largest origin point for U.S. border apprehensions. Drought is, of course, only one of several factors contributing to an uptick in migration north. The isthmus has long been a vital choke point for drug trafficking, and several countries have high homicide rates and drug-related violence.

The Central American nations have a tough road ahead. El Nino and the adverse weather conditions it brings with it are expected to continue into 2016. Should dry conditions last into the spring of 2016, we could see yet another main planting season suffer. Though many Central American nations have seen an uptick in foreign direct investment in recent years that could lead to growth in sectors outside of agriculture, farming is still the backbone of most Central American economies. And as it continues to suffer, the chances that it will encourage greater migration north will rise.