PCM-10-2022

This decree declares a food emergency throughout Honduras during 2022 due to a food security crisis affecting 2.6 million people. It authorizes the National Agricultural Development Bank (BANADESA) to reactivate through direct contracting and receive capitalization funds to provide urgent loans to the agricultural and livestock sector, benefiting farmers and small rural businesses that produce basic foods.

Whereas the Constitution of the Republic establishes that the Executive Branch is exercised by the President of the Republic in representation and for the benefit of the people, corresponding to her to direct the General Policy of the State and represent it, as well as to issue agreements and decrees in accordance with law, to adopt measures for the promotion, prevention, recovery and rehabilitation of the health of the inhabitants (articles 235 and 245, numerals 2, 11 and 29).

Whereas as established in the Constitution of the Republic, the human person is the supreme end of society and the State, and all have the obligation to respect and protect her (article 59). In this sense, the Constitution establishes that the right to life is inviolable, recognizing the right to protection of health, as well as the duty of all to participate in the promotion and preservation of personal and community health and the duty of the State to maintain an adequate environment to protect the health of persons (articles 65 and 145).

Whereas the General Law of Public Administration provides that the President of the Republic has the supreme direction and coordination of the Centralized and Decentralized Public Administration and in the exercise of her functions, she may act by herself or in Council of Ministers (article 11).

Whereas in accordance with the Constitution of the Republic, the President convenes and presides over the Council of Ministers, which shall meet to take resolutions on all matters she deems of national importance (article 252, second paragraph).

Whereas in accordance with article 9 of the State Contracting Law, the declaration of a state of emergency shall be made by Decree of the President of the Republic in Council of Ministers.

Whereas in accordance with what is established in article 347 of the Constitution of the Republic, agricultural production must be oriented preferentially to satisfy the food needs of the Honduran population, within a policy of adequate supply and fair prices for the producer and consumer.

Whereas it is a function of the Government of the Republic to improve food security, implementing for this purpose programs that guarantee sustainable agricultural production, counteracting to the extent possible the effects of climate change, food insecurity and the secondary effects of extreme poverty.

Whereas the National Bank for Agricultural Development (BANADESA) was created by Legislative Decree 903 on March 24, 1980, with the principal objective of channeling financial resources for the development of production and productivity in agriculture, livestock, fishing, poultry farming, beekeeping, forestry or silviculture and other activities related to the primary processing of such production, including its commercialization.

Whereas BANADESA is a fundamental pillar for the development of the agricultural sector and financial support for the country's MSMEs, the fundamental activities for the production, processing and storage of products necessary for the basic food basket and closely linked to guaranteeing food sovereignty, representing an instrument to ensure equity in credit access to key productive sectors related to quality of life, job generation and the reduction of forced migration flows.

Whereas by Executive Decree PCM 04-2022 the agricultural sector was declared a national priority and matter of public interest. The Executive Branch and other related sectors must combine their efforts for the implementation of efficient and effective actions for the strengthening of said sector, in order to guarantee food and nutritional security for families in conditions of poverty and extreme poverty.

Whereas according to figures from the National Institute of Statistics (INE) in 2019, at the national level 41.7% of persons live in households in extreme poverty, that is, their income is below the cost of the basic food basket. In this context, there is a greater concentration of extreme poverty in the rural area, where 6 out of every 10 persons live in that condition (61.5%).

Whereas according to the Analysis of acute food insecurity of the Integrated Food Security Classification in Phases (IPC), implemented by the PROGRESAN-SICA Program, as of February 2022 a total of 2.2 million persons in Honduras are in food crisis or worse. Of these persons, at least 1,987,000 are in food crisis and 241,000 in emergency. Of the total Honduran population, 2.6 million persons will be in crisis or emergency of acute food insecurity in June to August of 2022, which will be affected by an increase in the price of basic food basket products and fuels, as well as the speculation that produces scarcity; a decrease in the production of basic grains such as corn (65%) and beans (75%) due to climatic reasons and limited access to inputs.

Whereas according to the Crop Monitoring Study of the World Food Program (WFP) 2021, the loss of up to 50% in the production of basic grains is recorded in the first cycle, mainly of beans and corn, which impacts subsistence agricultural households, reduces food reserves and in some cases causes the total loss of food reserves.

Whereas currently a global economic crisis is being experienced as a result of the COVID-19 pandemic, to which is added the Russia-Ukraine conflict, which has caused turmoil in international financial markets and has drastically increased uncertainty about the recovery of the global economy.

Whereas the public treasury was devastated in the previous administration and during recent years dispositions were issued that affected the operability of BANADESA and its finances, as a result of which the bank presents a critical unfavorable position in financial indicators, as a consequence of capital deficiency and the lack of implementation of strategic plans, which prevents the provision of services to a fundamental sector of the economy.

Whereas as a result of poor management and failure to comply with the processes of control and monitoring of its operations, BANADESA presents an unprecedented negative capital of THREE THOUSAND TWO HUNDRED SIXTY-THREE MILLION LEMPIRAS, placing the institution in a position of technical insolvency.

Whereas due to the serious institutional situation, the bank was subject to an intervention that resulted in the paralysis of the credit recovery process, the monitoring of investment processes, weakening of internal controls, reduction of personnel, limiting the performance of fundamental activities of the bank for the development of the agricultural sector and support for MSMEs.

Whereas it is urgent for the national interest the financial and administrative reactivation of BANADESA, through the implementation of an institutional improvement plan with the accompaniment of the National Banking and Insurance Commission (CNBS), in order to guarantee food and nutritional security for families in conditions of poverty and extreme poverty.

Whereas the State Contracting Law establishes that direct contracting may be carried out when it has the purpose of providing for the needs occasioned by a situation of emergency under the provisions established in article 9 thereof (article 63, numeral 1).