The Context

Honduras is a middle-income country in Central America that battles persistent poverty, food insecurity and socio-economic inequality. In 2015, 45 per cent of the population lived in rural areas. The country faces major challenges, with a 2016 poverty rate of 66 per cent The indigenous population (representing 6.5 per cent of the total population) has the highest rate of poverty, at 71 per cent.

About 28 per cent of the country is agricultural land, and the agricultural sector employs about 39 per cent of the population. Most of the agricultural area is dedicated to the production of low-profit crops such as bananas, plantains, rice, maize and beans.

Since the 2008-2009 global economic crisis, Honduras has experienced a moderate recovery, driven by public investments, exports and higher remittances. Despite the favourable economic outlook, the country faces the highest level of economic inequality in Latin America. The 2014 Gini coefficient was 0.51.

Honduras suffers from one of the lowest levels of human development in the continent, owing to short life expectancy and the lowest per capita income in the Central American subregion. In rural areas in 2014, 65 per cent of rural households lived in poverty.

Honduras faces challenges regarding climate change, violence and external shocks. The country is prone to natural disasters and has one of the world’s highest homicide rates. In addition, the agricultural sector lost nearly one-third of its revenue over the past two decades, in part due to the declining prices of the country’s export crops, especially banana and coffee.

The Strategy

Our strategy in Honduras is consistent with the country’s poverty reduction strategy. IFAD loans and projects support improving on-farm and off-farm income-generating opportunities for poor rural people.

Activities pay special attention to women and work to strengthen the organizational capacities and bargaining power of rural organizations.

Key activities include:

• helping rural communities participate in the market economy by improving their access to technologies and investments for agricultural and non-agricultural activities
• integrating small-scale producers into agricultural and forestry value chains
• improving access to assets and opportunities such as technology, investments and technical services for processing and diversifying products
• strengthening the organizational capacities and bargaining power of grass-roots organizations
• building the capacity of small farmers’ organizations to manage and administer business ventures
• establishing linkages with the private sector
• supporting indigenous peoples’ organizations as they voice the particular needs and concerns of their communities
• increasing the capacity of local governments to facilitate land registration and to improve the efficiency and coverage of rural savings and loans associations

Results-based country strategic opportunities programme (COSOP):
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