A Coffee Crisis' Devastating Domino Effect in Nicaragua

By David Gonzalez, The New York Times, 29 August 2001

EL TUMA-LA DALIA, Nicaragua, Aug. 25—With no land and no work, thousands of coffee-field hands here can plant only one thing: themselves, on the roadside, as they beg for food, jobs or attention to their needs.

A steep drop in coffee prices on the world market has led to a crisis in Central America, forcing growers to scale back or to close down. Thousands of landless agricultural workers, who relied on the farms and their own two hands to feed and clothe their families, are now jobless.

About 16,000 people—a quarter of the residents of this city and its surrounding villages—are unemployed, according to local officials, and many of them are still owed wages for last year's harvest. Countless others from Matagalpa and neighboring Jinotega Provinces have streamed to the bigger cities and to Managua, the capital, where they hope to pressure the government into heeding their pleas for help.

In the coffee areas, migrant farm workers huddle dazed and tired under plastic tents while their children dart into the road and try futilely to stop passing cars with a frayed string barricade and an outstretched cup.

We have no food, said Yamileth Davila, who, like several dozen of her neighbors from El Puente de las Caqas, south of here, had gone without eating that day. The children cry from hunger. There is no work. The coffee growers cannot get money to pay us.

Coffee growers in Matagalpa and Jinotega have long prided themselves on producing more than 80 percent of Nicaragua's coffee exports, which in good years totaled 120 million pounds of beans. In Matagalpa, most of the 44,000 growers are small farmers with only a few acres to cultivate.

But they are the lifeline for tens of thousands of landless workers who tend the fields, local officials said. In the fall, the number swells to 400,000 as families with their children and itinerant workers come from neighboring areas for the coffee harvest, usually earning as little as $3 a day for their labors.

This area has been spared the worst of the drought in the region. But over the last two years, a glut of coffee from Vietnam and Indonesia has driven down prices on the world market, sending the market price plummeting to about $50 per hundred pounds from $140 two years ago. The immediate result is that the farmers here cannot even recoup their production costs—$83 per hundred pounds.