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150 Years in the Making: The Nicaraguan Coffee Industry

This is the first of several articles about Nicaraguan food culture, enjoy!

The air is refreshing, hot but not oppressive. The soil is rich, almost untainted but full of rich minerals and nutrients. The rain comes at the perfect time, feeding the crops and quenching the ground. Nicaragua has some of the best agricultural conditions to grow coffee, so it comes as no surprise that coffee is at the top of the country’s long list of agricultural exports. Coffee is a $425 billion-dollar industry and accounts for 13% of Nicaragua’s exports. Currently, over 43 thousand families are supported by coffee farming.

A bag of Nicaraguan coffee beans (photo by Kris Dreessen)

Nicaragua has not always been the perfect place to grow coffee. Lacking the economic and transportation infrastructure, Nicaragua was not able to realize the potential of its coffee industry until the late 1800s. This period was deemed the coffee boom. Nicaragua needed to leap several hurdles to make coffee production viable. Lack of workers, land, capital, trains, and roads were the largest problems for the country. To overcome these, they needed to welcome foreign investors, German and Britain to be specific, to front the capital for the infrastructure. Trains and roads were built for easier movement of the coffee. The planting first began in the regions of Managua and Masaya, in east central Nicaragua.

The industry eventually expanded northwards, where the land was rich and the climate was perfect for the coffee crops. It was more temperate, cooler temperatures and steady rain. However, the government would have to take extreme measures to gain access to this land. Before the late 1800s, land had been communal. During the coffee boom, land was nationalized and reallocated to produce coffee. This coffee boom changed the way people viewed property, it was the beginning of a shift from communal ownership to private ownership and commercialization of land and goods. Residents were given the option of buying the land back from the government in auctions. Some land owners began a system called “pactos de retroventa” (“resale agreements”). Foreigner investors purchased the land from the farmer. The farmers then rented the property from the investors with the intention of buying it in the future. In the meantime, they had access to the capital they needed to begin growing coffee.

The government began a series of tax reforms to jump start the industry. Farmers were given subsidies, cash prizes, exemption from military service and easy access to land. The government gave away land to potential farmers with the stipulation that they must plant 25 thousand trees in the first year. Labor laws were changed to accommodate periodic/seasonal workers who assisted during harvest season. By the late 1800s, coffee exports had reached a whopping 9.3 million pounds after only ~30 years of industry development. The construction of roads and trains in conjunction with tax and labor reforms made the coffee industry lucrative and attractive to Nicaraguans. Until the late 1900s, the coffee industry thrived and provided a source of income for thousands of Nicaraguans in a country where 50% of the population lives below the poverty line. However, from 1990 on the coffee industry would face challenges that persist well into 2017…

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