FAO Initiative on Soaring Food Prices



In 1996, the government of Guatemala signed a peace agreement, bringing to an end 36 years of civil war.

Since then, Guatemala has experienced a period of economic growth; however, the current global financial crisis threatens to roll back gains the country has made.

Poverty and malnutrition are widespread in this densely populated Central American country, with more than half the country living below the poverty line.

Most of the poor live in rural areas and depend on farming for their survival. However, frequent natural disasters – tropical storms, flooding and, most recently, drought – have wrought havoc on crops and livelihoods.

Food and financial crises raise food insecurity

Guatemala imports most of its staple grains – yellow maize, wheat, and rice– to meet its food requirements. The country also relies heavily on hydrocarbon imports, which makes it extremely vulnerable to fluctuations in the market.

Even before the food crisis, poor households spent much of their income on food with little left over for other expenses. Meagre incomes were stretched even further as food and fuel prices soared in 2008, putting families at greater risk of falling into extreme poverty.

Unseasonably low rainfall this year coupled with declining tourism, foreign direct investment and remittances – by-products of the economic downturn – have worsened the food security of many of the country’s most vulnerable households.

FAO Response

European Union Food Facility

Building the resilience of Guatemala’s rural farmers to future shocks, be they as a result of market volatility, natural disasters or the financial crisis is critical to achieving food and nutrition security in the country.

In June 2009, FAO launched a two-year project to help the government of Guatemala increase the agricultural productivity and marketing capacity of smallholder farmers and improve their nutritional status. The project is being implemented jointly with the UN World Food Programme (WFP).

With funds from the European Union worth € 4.65 million, FAO is providing support to small farmers’ organizations (around 4 000 families) to help them boost the quality and productivity of their maize crops. Work is also being done to strengthen their storage capacity and marketing skills.

Another component of the project involves helping small farmers become more confident in investing in new technologies to access markets and strengthen their capacity to negotiate prices. It is hoped that, by doing so, food processing firms will increase their maize purchases from local markets, especially from small producer organizations supported by the WFP.

By securing better purchasing conditions from the WFP, small farmers will likely be encouraged to apply innovative practices to improve the quantity and quality of their production, helping to generate income and reduce chronic malnutrition.  

The project is working to ensure that at least 6 000 households in the rural areas of El Quiché, Alta and Baja Verapaz have increased supplies of staple grains for household consumption and are able to diversify their food production and diets.

Soil and water management and livelihood protection practices will be linked to food-for-work and food-for-training activities for some 8 000 poor rural families.  

The overall project is in line with the joint programme for the National Strategy for the Reduction of Chronic Malnutrition, developed by the Guatemalan government and various United Nations agencies including FAO.

Other FAO Activities

In response to the food crisis, the Initiative on Soaring Food Prices (ISFP) developed a project proposal to boost community seed production throughout Central America. The overall aim is to boost the food production and incomes of smallholder farmers in Guatemala, Belize, Costa Rica, El Salvador, Honduras, Nicaragua and Panama.


@FAO/R. Grisolia
A woman sells fruit and vegetables at a market in Guatemala.