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Country profile - Honduras

Honduras

With a history of military rule, corruption, and natural disasters, Honduras has one of the highest rates of poverty and inequality in the Western Hemisphere. Half of Hondurans live below the poverty line and the United Nations estimates that over one-fifth are malnourished. Despite its declining importance to the economy, agriculture still accounts for 13 per cent of GDP and employs one-third of the population. Due to its largely mountainous terrain, most cultivable land is located on coastal plains, where plantations dominate. Fluctuating commodity prices, hurricanes, floods and crop disease combine to make returns from farming unpredictable.

Overview

Maize, beans, plantain, sorghum and rice are the primary subsistence crops. However, access to arable land is limited for most subsistence farmers, partly due to Honduras' mountainous terrain, and the dominance of US-owned plantations on the coastal plains. Raising cattle is the main livestock activity but poor infrastructure and lack of pasture are the main limitations to both beef production and the dairy industry.

Honduras suffers from a lack of cultivable land (© FAO)
Honduras suffers from a lack of cultivable land
© FAO

Coffee and banana continue to be the dominant cash crops, although melon and pineapple, tobacco, cotton, African palm and sugarcane are important. Coffee alone accounts for one-quarter of Honduras' exports: it is grown mainly by smallscale farmers but production has been badly affected by low yields and fluctuating international prices.

With exports such as melon and pineapple on the rise, the agricultural sector is diversifying. However, in mid-2008 melon exports were hit by a salmonella scare, which saw the US ban imports for over five months. The combination of this ban and rising costs of production and transportation is expected to prompt many farmers to switch to growing sugarcane or African palm for biofuel, which the government is promoting as a means of diversifying the agricultural sector and reducing the country's dependence on fuel imports.

Farmers also have to contend with tropical storms. In 1998 Hurricane Mitch destroyed over two-thirds of staple food crops and 80 per cent of export crops. The damage was so great that, then President Carlos Roberto Flores said the storm had set back 50 years of progress in the country. Another storm, in October 2008, caused severe flooding, wiping out 18,000 hectares of food crops.

Fish and forests

Exports of fish products, particularly shrimp and lobster, are becoming increasingly important sources of foreign exchange. However, as the industry has become more industrialised, particularly in the Gulf of Fonseca in the southeast of the country, mangroves have been converted into holding ponds, and increasing pollution from waste, nutrients (nitrogen and phosphorus) and antibiotics has affected water quality.

Agricultural expansion, surging demand for fuelwood and illegal logging have resulted in over one third of forest cover being lost between 1990-2005. This has contributed to declining soil fertility and severe mudslides during tropical storms.

"Banana republic"

Honduras is one of the original "banana republics": at its peak in the 1920s, banana accounted for nearly 90 per cent of exports. However the industry faces a number of significant threats.

Banana diseases have, and could again, threaten the survival of the industry. Cavendish, now the most widely traded banana variety, replaced Gros Michel, which was wiped out by Panama disease (Fusarium oxysporum) in the 1950s. But Cavendish itself is vulnerable to disease; once thought to be immune, it is now under threat from a new more virulent strain of Panama disease, affecting Southeast Asia, Indonesia and Australia.

Over one-third of the country's forest cover was lost in between 1990-2005 (© FAO)
Over one-third of the country's forest cover was lost in between 1990-2005
© FAO

Black Sigatoka (Mycosphaerella fijiensis) can halve banana yields and, while treatable with fungicides, long-term build up in the soils and increasing resistance requires more frequent spraying, leading to severe implications for the environment and banana workers. A new resistant banana hybrid - "Goldfinger" - has been developed by the Honduran Foundation of Agricultural Research (FHIA), but it has yet to break the dominance of Cavendish in export markets.

While Goldfinger may reduce the need for future spraying, for many banana workers the damage has already been done. In 2005, Hondurans were part of a multinational group from Central America to file a lawsuit against banana companies, Chiquita and Dole, for damage, allegedly caused by DBCP (dibromochloropropane). The pesticide was widely used in Honduras to control Black Sigatoka, despite being banned in the US in 1979 after being implicated in a range of health problems, including birth defects, liver damage and some cancers.

The banana industry in Honduras could also be in jeopardy if the big banana exporters pull out of Central America and move to Africa in search of cheaper labour, plentiful land and privileged access to EU markets. Only recently, in response to the government raising the minimum wage, Dole and Chiquita said that the extra wage costs would price Honduras out of the market. This, they threatened, could force them to lay-off workers and even close down operations altogether.

Reducing dependence

While diversification of agricultural production has been occurring, progress is slow. Reducing dependency and increasing diversity are important if the agricultural sector is to become less vulnerable to environmental, financial and political shocks. However, to tackle Honduras' high poverty and inequality rates, subsistence farmers need effective government support.

Statistical information
  • Country: República de Honduras
  • Capital: Tegucigalpa
  • Area: 112,090 sq km
  • Population: 7,639,327 (July 2008 est.)
  • Population growth rate: 2.024% (2008 est.)
  • Life expectancy: 69.37 years
  • Ethnic groups: Mestizo (mixed Amerindian and European) 90%, Amerindian 7%, Black 2%, White 1%
  • Languages: Spanish, Amerindian dialects
  • Inflation: 6.9% (2007 est.)
  • GDP purchasing power parity: US$32.26 billion (2007 est.)
  • GDP per capita: US$4,300 (2007 est.)
  • GDP composition by sector: agriculture: 13.4%; industry: 28.1%; services: 34% (2007 est.)
  • Land use: arable land: 9.53%; permanent crops: 3.21%; other: 87.26% (2005)
  • Major industries: sugar, coffee, textiles, clothing, wood products
  • Agricultural products: bananas, coffee, citrus; beef; timber; shrimp, tilapia, lobster; maize, African palm
  • Natural resources: timber, gold, silver, copper, lead, zinc, iron ore, antimony, coal, fish, hydropower
  • Export commodities: coffee, shrimp, banana, gold, palm oil, fruit, lobster, lumber
  • Export partners: US 67.2%, El Salvador 4.9%, Guatemala 3.9% (2007)

Date published: March 2009

 

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