Olancho Department

Olancho is Honduras's largest department by area—a cattle frontier where subsistence agriculture meets narcotrafficking networks in a territory that central government has never fully controlled. The department's interior location and inadequate road networks have historically limited market access, creating an economy based on what can be consumed locally or transported on hoof rather than integrated into export supply chains.

Cattle ranching dominates the landscape, with extensive pastures replacing forest as settlers expand the agricultural frontier. This creates a pattern visible across Latin American frontiers: forest converted to pasture, pasture consolidating into larger holdings, smallholders pushed further into remaining forest. The Patuca River system—Honduras's longest—cuts through Olancho, and the controversial Patuca III dam now under construction will affect both agricultural communities and downstream ecosystems.

Narcotrafficking has become the dark substrate beneath the visible economy. Olancho's isolation and proximity to Gracias a Dios creates transit corridors for cocaine moving from South America toward North American markets. Illicit economies distort land prices, enable violence against communities resisting expansion, and create parallel authority structures that undermine state presence. This represents resource capture where legitimate development cannot compete with criminal capital flows.

Indigenous Nahua communities face particular pressure from mining projects developed without consultation. By 2026, expect continued frontier expansion as cattle ranching remains profitable, hydroelectric development proceeds despite opposition, and security challenges persist in areas where state presence remains minimal.