Impact of Weather Events on Ecuador's Agricultural, Productive, and Energy Sectors

Weather Events in Ecuador in 2023 and 2024

Ecuador faced one of the strongest El Niño phenomena since 1997 in the last quarter of 2023. The El Niño rains affected 20 out of the country's 24 provinces, especially Ecuadorian Coasts. Alternatively, Ecuador experienced less rainfall than anticipated in 2024 due to a weaker El Niño phenomenon. The most impacted provinces include Los Ríos, Guayas, Manabí, Esmeraldas, Santa Elena, El Oro, and Santo Domingo de los Tsáchilas. Despite warmer ocean temperatures reported in Mar-24, atmospheric conditions did not align as expected, leading to reduced precipitation. Forecasts suggest reduced rainfall in the upcoming months, possibly returning to normal by late April.

On the other hand, regions such as the Amazon and Azuay experienced a historic drought in late 2023 and so far in 2024, impacting rivers like the Paute and Coca and reducing water availability. Throughout 2024, the drought intensified in these areas, accompanied by rising temperatures, resulting in significant repercussions nationwide. While some regions grappled with prolonged periods of dry weather, others experienced the disruptive floods of El Niño. These contrasting conditions highlighted the country's susceptibility to climatic extremes, affecting the agriculture, hydroelectric and productive sectors.

Effects on the Agricultural Sector

Despite the government's efforts to alleviate the effects of El Niño by implementing their contingency plan since Nov-23, the effects of El Niño have still affected the agricultural sector. The Chamber of Agriculture of the Coast predicts that approximately 80 thousand hectares (ha) of crops could face losses. These adverse weather conditions also disrupted exports due to the inundation of key transportation routes.

Bananas: The El Niño phenomenon posed a significant threat to Ecuadorian banana crops, particularly in regions like El Oro, which is a major banana-producing province. The initial producer forecast estimated that approximately 50 thousand ha of banana plantations were at risk of being lost. This could significantly impact Ecuador, as bananas are a key export product.

Rice: El Niño affected Ecuador's rice production in late 2023, leading to an estimated 30% drop compared to previous years. This shortfall prompted the country to import rice to meet domestic demand, despite higher prices.

Cocoa: Record cocoa prices in Ecuador are driving farmers to increase production despite the looming threat of El Niño, which could reduce cocoa output by up to 40%, particularly impacting small producers, according to Primicias Newspaper. While efforts to optimize production and expand cultivation are ongoing, concerns linger about the sector's resilience against El Niño's potential impacts.

Maize: In 2023, the president of the Productive Corporation of Maize Producers Ecuador predicted a deficit of 150 to 200 thousand tons of maize in Los Ríos and Manabí due to El Niño. Excessive water affected both highland and lowland areas, potentially reducing production and necessitating maize imports to meet local demand.

Shrimp: Expreso reported that 110 thousand ha of shrimp farms faced El Niño risks. Producers sought government aid for flood-resistant infrastructure, particularly in low-lying coastal zones. Esmeralda province shrimp farmers suffered losses in 2023 from breached walls. Industry seeks infrastructure upgrades to reduce future damages.

Effects on the Energy and Productive Sectors

The recent droughts in certain regions of Ecuador, caused by El Niño and other weather events, have resulted in an energy crisis, impacting the productive sector. On Friday, April 19, 2024, the Ecuadorian President declared a 60-day state of emergency in the country's electricity sector to address power shortages. The interim Energy Minister attributed these outages to the worst drought in 60 years linked to El Niño accelerating evaporation, depleting reservoirs and reducing hydroelectric power, which accounts for 75% of the country's electricity.

The lack of investment in hydropower plants, particularly affecting the eastern region, exacerbated the situation. Additionally, the Ecuadorian President Daniel Noboa accused a former Energy Minister and 22 ministry officials of unprecedented acts of corruption and negligence, resulting in a lawsuit for sabotage against them.

This state of emergency follows the power shortage in 2023 when Ecuador faced an energy crisis and electricity cuts from October to December. During the first energy emergency, the Ecuadorian government signed a contract with the Colombian government to outsource electricity from Colombian power plants. However, this time around, the Colombian government has been unable to supply electricity to Ecuador due to their own drought.

To address the power emergency, the Ecuadorian government began rationing electricity across all sectors of the country, cutting power for an average of eight hours a day. The Ministry of Energy has emphasized the need for other urgent resilience measures, including reforestation with native species, green infrastructure, energy efficiency improvements, and additional energy acquisition to mitigate the impacts of droughts and build long-term sustainability. Measures include actions by the state-owned Corporation Eléctrica del Ecuador (CELEC EP) to incorporate emergency generation, coordination with electricity distributors, and securing natural gas supply.

The power cuts have not only impacted Ecuadorian households, but the Ecuadorian President declared non-working and no-school holidays on April 18 and 19 to aid with power rationing. According to the National Chamber of Commerce, each hour of power cuts is creating a loss of USD 20 million. Furthermore, the recurring power cuts are affecting micro, small, and medium-sized enterprises that do not have power generators, comprising 97% of Ecuador's businesses. All the agricultural and exporting sectors are also affected as the operation of electric equipment is not possible during regular working hours due to lack of power.

Outlook

Ecuador’s energy crisis will likely persist in the coming months, making the outlook uncertain. President Noboa’s declaration of a state of emergency in the electricity sector reflects the severity of the situation and the urgent need for action. As the country grapples with power shortages, measures such as rationing electricity and implementing emergency generation will continue to be necessary to mitigate the impact on households, businesses, and essential services.

In the short term, efforts to secure additional energy sources, improve infrastructure, and enhance energy efficiency will be crucial to address immediate challenges and stabilize the power supply. Collaboration with international partners may also play a significant role in sourcing electricity and implementing sustainable solutions.

In response to the ongoing energy crisis in Ecuador, the agricultural sector faces significant challenges, particularly in maintaining essential farming activities reliant on electric equipment. To navigate these challenges, agricultural enterprises can adopt several strategies. Firstly, diversifying energy sources by exploring alternatives like solar power or biogas can reduce dependence on the grid and mitigate the impact of power cuts. Additionally, implementing energy-efficient technologies and practices, such as drip irrigation systems and energy-saving equipment, can optimize energy usage and minimize reliance on electricity during shortages.

Adjusting farming activities to off-peak hours can also maximize productivity while minimizing energy consumption during scarcity. Investing in backup power generators or battery storage systems ensures a reliable energy source during outages, minimizing disruptions. Furthermore, collaboration with government authorities and industry stakeholders to advocate for supportive policies, such as subsidies for renewable energy technologies, can enhance resilience. Through these measures, the agricultural sector can bolster its ability to withstand energy shortages and uphold food production and security in Ecuador, even amidst uncertain conditions.

Overall, while proactive measures are being taken, the outlook remains uncertain, and continued vigilance and adaptation will be necessary to navigate the challenges posed by the energy crisis in Ecuador.