Nicaragua

Nicaragua lies at the heart of Central America, with both Pacific and Caribbean coasts. Mountain ranges separate the east, which is largely jungle, from the more developed western regions, which include Lake Nicaragua and some active volcanoes. The highest land is located to the north. The climate is tropical. Traditional exports include cotton, coffee, bananas and gold. The aid dependent economy has suffered from civil war (1978-89) and US sanctions. 

As Central America's poorest nation, Nicaragua relies heavily on its agroindustry, which generates 25 percent of the total employment and 74 percent of the exports. Fortunately, Nicaragua has some of the best land in Central America, containing excellent volcanic soils and ample ground water for irrigation. About 40 percent of the cultivated land is used for export crops. Coffee still accounts for 21 per cent of the foreign income earnings, although over the past five years, the country has diversified into a wide variety of agricultural products.

Nicaragua's Arabicas are usually grown between 700 and 1500 meters. Several coffee types are well defined and officially graded according to their growing altitude. Most of the high-quality Nicaraguan coffees (80%) however, are grown above 1200 meters in the Northern mountains of Jinotega, Matagalpa and the Segovias. According to most importers, Nicaragua produces coffees with good acidity at the beginning of the harvest. They are fragrant when they come from the higher elevations although somewhat irregular, probably due to the standardization of classifications. The majority of the coffee trees are of the Caturra variety,  followed by Bourbon and hybrids varieties, allowing yields of up to 25 bags per hectare. However, the Catimor quality has been questioned by many coffee experts who claim it produces a flat cup. Margogype is disappearing, since its low yield makes it unprofitable for the growers, even with a good premium price.

The Years of Crisis

The industry's history began a hundred years ago, when the Nicaraguan government placed advertisements in rail stations in Germany, luring settlers to the country. A few dozen ambitious adventurers in their mid-twenties accepted land, given on the condition that they would grow coffee. Over the next seventy years, the reputation achieved by the Nicaraguan coffee made it a favorite with European importers, while it remained largely unknown in the United States. But coffee production was about to suffer its worst crisis in history.

In 1978, on 100,000 hectares of the country's cultivated land coffee was planted. Coffee exports were standing well above one million bags per crop. After years of Guerrilla warfare, the Sandinista rebels finally took power in Managua in July 1979. Foreign trade was immediately nationalized, and in 1981, Encafe (Nicaragua's National coffee company) started acting as the sole coffee buyer and exporter. The same year, the new government enacted an agrarian reform law allowing for the expropriation of land (over 350 hectares) that had been abandoned or mismanaged by their owners. Still, in 1982/83, Nicaragua still exported 1.12 million bags of coffee. 

After 1983, the war against the Contra, U.S. - backed rebels, combined with shortages of labor, the rising costs of imported agro-chemicals and spare parts (due to US economic embargo), led to a stagnation in the production of agricultural products, including coffee. In January 1986, the Sandinistas passed additional laws that enabled the government to expropriate even efficient farms. Approximately one million hectares of land had already been distributed to farm workers' cooperatives and landless laborers, and as a result, the large landowners' share of farming fell from 41 percent in 1978 to 11 percent in 1985. For coffee the effects of this evolution were dramatic and production collapsed. By then, most of the large growers had been forced out of business, and many fled to start a new life, mostly in southern Florida. The ones who were able to keep their farms, made little or any new investments during the twelve years of Sandinista rule for fear of confiscation and uncertainties related to currency controls. In 1987/88, Nicaragua exported an all-time low of 460,000 bags of coffee, less than half of what the country exported a few years before.

In total some 30,000 hectares of coffee disappeared or were abandoned. The extensive cutting of ancient hardwood trees that had protected thousands of hectares of coffee plants also reduced coffee production. The trees were cut by the central government to obtain their wood, much of which was sold to Cuba, and in a misguided effort to control the onslaught of coffee rust by exposing the infestation to direct sunlight. Lack of technology in farms and the development of disease also affected the output.
 

A new beginning

When by surprise the liberal Chamorro government was elected in 1991, coffee marketing, processing and exports were again privatised, but many problems still confronted the growers. Most of their trees were more than 30 years old and had to be replaced. No new trees had been planted in Nicaragua for a long time and seedlings were not readily available. Workers and managers, needed to work the farms, were also hard to find. The Central American Bank of Economic Integration (BCIE) immediately started financing a five year coffee renovation plan (worth $33 million), resulting in 25,000 hectares being planted. The main goal was to reach a total production of 2.3 million bags by 1996. But the plan did not reach the expectations because it failed to provide growers with financing after 1993. Today, even while the total coffee planted area is what it was before 1979, yields are still low, with an average of 9.8 bags per hectare.

Nicaragua has a great potential to become a regional leader in coffee production. Fertile lands, internal stability and economic growth makes this country dream to overcome its northern neighbor, Honduras.