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COMPETITION PUTS PRESSURE ON CENTRAL AMERICAN COFFEE

Last Updated on January 8, 2021 by monica chan

Increased competition is putting pressure on Central American coffee.

In Nicaragua people report seeing the ripe red coffee cherries sitting on trees when they should be harvested. Nobody wants to pick them because there’s not enough money in it and most of the coffee cherries will fall to the ground and go to waste.

Farmers in the country have blamed an increase in production from other countries that has driven down prices. A series of droughts and storms over the last few years have added to the problem, making coffee growing unattractive for some.

In the North of the country, coffee is a cornerstone of the economy but a  series of droughts in 2016 and 2017 put harvests at risk.  if the droughts weren’t enough off.the rains that followed compounded the damage.

Some farmers became insolvent and found themselves in debt, while the workers who are needed to pick the coffee, left the country. Some emigrated to the US, while others went to nearby Costa Rica to work.

The twin hurricanes of Eta and Iota in 2020 caused widespread damage – see our previous article, but climate issues are not new to the region. 

The difficulties faced by the sector are more likely to be related to their competitiveness in a global market where other countries, sometimes with better infrastructure and technology, are able to out-produce them.

One second order impact is that workers needed to do the picking are migrating – either to places like Costa Rica, or to the US in hope for a better life. A smaller pool of willing workers is likely to exacerbate the problems in the future.

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