History

Coffee

Coffee

Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...

 became Nicaragua

Nicaragua

Nicaragua is the largest country in the Central American American isthmus, bordered by Honduras to the north and Costa Rica to the south. The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. The Pacific Ocean...

's principal crop in the 1870s, a position it still held in 1992 despite the growing importance of other crops. Cotton

Cotton

Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....

 gained importance in the late 1940s, and in 1992 was the second biggest export

Export

The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...

 earner. In the early 20th century, Nicaraguan governments were reluctant to give concessions to the large United States banana companies, and banana

Banana

Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....

s never attained the level of prominence in Nicaragua that they reached in Nicaragua's Central American neighbors; bananas were grown in the country, however, and were generally the third largest export earner in the post-World War II

World War II

World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

 period. Beef

Beef

Beef is the culinary name for meat from bovines, especially domestic cattle. Beef can be harvested from cows, bulls, heifers or steers. It is one of the principal meats used in the cuisine of the Middle East , Australia, Argentina, Brazil, Europe and the United States, and is also important in...

 and animal byproducts, the most important agricultural export for the three centuries before the coffee boom of the late 19th century, were still important commodities in 1992.

From the end of World War II to the early 1960s, the growth and diversification of the agricultural sector drove the nation's economic expansion

Economic expansion

An economic expansion is an increase in the level of economic activity, and of the goods and services available in the market place. It is a period of economic growth as measured by a rise in real GDP.The explanation of such fluctuations in aggregate economic activity is one of the primary...

. From the early 1960s until the increased fighting in 1977 caused by the Sandinista revolution, agriculture remained a robust and significant part of the economy

Economy of Nicaragua

Nicaragua's economy is focused primarily on the agricultural sector. However, the country is the least developed country in Central America and the second poorest in the Americas by nominal GDP. GDP fell by almost 3% in 2009, due to decreased export demand in the US and Central American markets,...

, although its growth slowed somewhat in comparison with the previous postwar decades. Statistics for the next fifteen years, however, show stagnation and then a drop in agricultural production.

The agricultural sector declined precipitously in the 1980s. Until the late 1970s, Nicaragua's agricultural export system generated 40 percent of the country's GDP, 60 percent of national employment, and 80 percent of foreign exchange earnings. Throughout the 1980s, the Contras destroyed or disrupted coffee harvests as well as other key income-generating crops. Private industry stopped investing in agriculture because of uncertain returns. Land was taken out of production of export crops to expand plantings of basic grain. Many coffee plants succumbed to disease.

In 1989, the fifth successive year of decline, farm production declined by roughly 7 percent in comparison with the previous year. Production of basic grains fell as a result of Hurricane Joan in 1988 and a drought

Drought

A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...

 in 1989. By 1990 agricultural exports had declined to less than half the level of 1978. The only bright spot was the production of nontraditional export crops such as sesame

Sesame

Sesame is a flowering plant in the genus Sesamum. Numerous wild relatives occur in Africa and a smaller number in India. It is widely naturalized in tropical regions around the world and is cultivated for its edible seeds, which grow in pods....

, tobacco

Tobacco

Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...

, and African palm oil.

Coffee

Large-scale coffee growing began in Nicaragua in the 1850s, and by 1870 coffee was the principal export crop, a position it held for the next century. Coffee is a demanding crop, however, because coffee trees require several years to produce a harvest, and the entire production process requires a greater commitment of capital, labor, and land than do many other crops. Coffee also grows only in the rich volcanic soil found on mountainous terrain, making transportation of the crop to the market difficult.

In 1992 more land was planted in coffee than in any other crop. The actual amount of land devoted to coffee varies somewhat from year to year, but averaged 2,100 km² in the 1980s. Production is centered in the northern part of the central highlands north and east of Estelí

Estelí

Estelí, officially Villa de San Antonio de Pavia de Estelí is a city and municipality within the Estelí department. It is the third largest city in Nicaragua, an active commercial center in the north and is known as "the Diamond of the Segovias."...

, and also in the hilly volcanic region around Jinotepe

Jinotepe

Jinotepe is a city in Nicaragua, located in Department of Carazo in the South Pacific region of Nicaragua at the municipality of Jinotepe. It borders with Managua, Masaya, Granada, and Rivas.It is a sister city of Santa Cruz, California, United States....

. Although production of coffee dropped somewhat in the late 1980s, the 1989 crop was still 42,000 tons. Nicaragua's poor transportation system and ecological concerns over the amount of land devoted to growing crops on volcanic slopes in the Pacific region limit further expansion of coffee cultivation. These limitations have led growers to explore planting other crops in undeveloped areas of the country.

Cotton

Cotton

Cotton

Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....

 was Nicaragua's second biggest export earner in the 1980s. A latecomer to Nicaraguan agriculture, cotton became feasible as an export crop only in the 1950s, when pesticide

Pesticide

Pesticides are substances or mixture of substances intended for preventing, destroying, repelling or mitigating any pest.A pesticide may be a chemical unicycle, biological agent , antimicrobial, disinfectant or device used against any pest...

s were developed that permitted high yields in tropical climates. Cotton soon became the crop of choice for large landowners along the central Pacific coast. As the amount of land under cultivation grew, however, erosion and pollution from the heavy use of pesticides became serious problems. Lack of credit for planting, a drop in world cotton prices, and competition from Chile discouraged cotton production in the mid-1980s. Production of cotton dropped significantly in the 1980s, and the 1989 crop of 22,000 tons was less than a third of that produced in 1985.

Bananas

Unlike in other Central America

Central America

Central America is the central geographic region of the Americas. It is the southernmost, isthmian portion of the North American continent, which connects with South America on the southeast. When considered part of the unified continental model, it is considered a subcontinent...

n countries, political squabbles over who would control the plantations and shipment of the crop prevented bananas from becoming the major export earner in Nicaragua. Bananas, a native fruit of tropical Asia

Asia

Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...

, were introduced to Nicaragua early in the colonial period

Colonial Period

Colonial Period may generally refer to any period in a country's history when it was subject to administration by a colonial power.*Korea under Japanese rule*Colonial history of the United States...

. Initially, until a market for them appeared in the United States in the 1860s, bananas, like other fruit, were destined mostly for local consumption. Small plots of the Gros Michel

Gros Michel

Gros Michel, often known as Big Mike, is an export cultivar of banana, and was until the 1950s the main variety exported to the United States.-Taxonomy:Gros Michel is a triploid cultivar of the wild banana Musa acuminata, belonging to the AAA group....

 variety of banana were planted for export, but political turmoil and difficulties in establishing secure transportation routes hampered export. Because United States companies developed banana production in neighboring countries, Nicaragua's large potential for this crop remained underdeveloped.

Politics and outbreaks of disease in the 20th century kept banana production low. During their time in power, the Somoza family, who had discovered that coffee and cattle were more profitable, than bananas, refused to give United States banana companies the free rein that they enjoyed throughout the rest of Central America. In addition, an outbreak of Panama disease, a fungus that kills the plant's underground stem, wiped out most of the banana plantations in the early 20th century. New plants of the Valery and Giant Cavendish variety were planted, but constant use of fungicides was required to control black sigatoka disease. Although Cavendish bananas yield three times the harvest of the older Gros Michel type, Cavendish bananas are more difficult to harvest and transport, Cavendish bananas, for example, bruise easily and must be picked at an earlier stage and crated in the fields for transport. Most banana production is in the Pacific lowlands, in a region extending north from Lago de Managua to the Golfo de Fonseca. In 1989, banana production amounted to 132,000 tons.

Other Crops

Although much of lowland Nicaragua has a climate conducive to growing sugarcane, poor transportation has limited production to roughly the same area in northwest Nicaragua where bananas are grown. Most sugarcane is processed into whitish centrifugal sugar, the raw sugar of international commerce. Some plants further process the sugarcane into refined granulated sugar. Demand for sugar remained comparatively low until the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

-imposed embargo

Embargo

An embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it. Embargoes are considered strong diplomatic measures imposed in an effort, by the imposing country, to elicit a given national-interest result from the country on which it is...

 on Cuba

Cuba

The Republic of Cuba is an island nation in the Caribbean. The nation of Cuba consists of the main island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city...

n sugar began in 1960. Demand then soared, and sugar production tripled over in the next two decades. Like all other agricultural products, sugar production was severely hit by the United States trade embargo on Nicaraguan products from 1985 to 1990. Production of raw sugarcane stood at 2,300 tons in 1989.

In the early 1990s, the government attempted to diversify agriculture, but had limited results. Tobacco and sesame are both produced for export. The first African palm oil plantations, which were established in the Caribbean

Caribbean

The Caribbean is a crescent-shaped group of islands more than 2,000 miles long separating the Gulf of Mexico and the Caribbean Sea, to the west and south, from the Atlantic Ocean, to the east and north...

 lowlands, began production in 1990. Beans, corn, rice, and sorghum

Sorghum

Sorghum is a genus of numerous species of grasses, one of which is raised for grain and many of which are used as fodder plants either cultivated or as part of pasture. The plants are cultivated in warmer climates worldwide. Species are native to tropical and subtropical regions of all continents...

 continue to be widely grown and consumed domestically.

Livestock

The first cattle

Cattle

Cattle are the most common type of large domesticated ungulates. They are a prominent modern member of the subfamily Bovinae, are the most widespread species of the genus Bos, and are most commonly classified collectively as Bos primigenius...

 were brought to Nicaragua by the Spanish

Spain

Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...

 in the 16th century, and livestock

Livestock

Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...

 raising was a mainstay of the early colony. Drier areas on the western slopes of the central highlands were ideal for cattle raising, and by the mid-18th century, a wealthy elite, whose income was based on livestock raising, controlled León, Nicaragua

León, Nicaragua

León is a department in northwestern Nicaragua . It is also the second largest city in Nicaragua, after Managua. It was founded by the Spaniards as Santiago de los Caballeros de León and rivals Granada, Nicaragua, in the number of historic Spanish colonial homes and churches...

's colonial capital. In the late 20th century, as was true in the late 16th century, cattle raising has been concentrated in the areas east of Lago de Managua. Most beef animals are improved zebu strains. Smaller herds of dairy cattle- -mostly Jersey, Guernsey, or Holstein breeds—are found near population centers. A breed that is unique to Nicaragua is the La Reina

La Reina (cattle)

The La Reina is a Creole breed of cattle and was developed in, and is unique to, Nicaragua. The Reina cattle have special characteristics for the tropics, they possess genes that make them heat tolerant...

.

Agricultural Policy

In 1979 the new Sandinista administration quickly identified food as a national priority in order that the country's chronically malnourished rural population could be fed. The government planned to increase production to attain self sufficiency in grains by 1990. Self-sufficiency in other dietary necessities was planned for the year 2000. For a variety of reasons, however, including the private sector's retention of 60 percent of arable land, the Sandinista government continued to import food and grow cash crops. In 1993 the goal of self sufficiency in food production was still far from being achieved.

To generate essential foreign exchange, the Ortega

Daniel Ortega

José Daniel Ortega Saavedra is a Nicaraguan politician and revolutionary, currently serving as the 83rd President of Nicaragua, a position that he has held since 2007. He previously served as the 79th President, between 1985 and 1990, and for much of his life, has been a leader in the Sandinista...

 administration continued to support an upscale, high-tech agroexport sector, but returns on its investment diminished. By 1990 only one-quarter of the pre-1979 area planted in cotton, one of the leading foreign exchange earners in the 1970s, was still under cultivation. Despite an established priority for food production, food imports to Nicaragua grew enormously from the mid-1970s to the mid-1980s.

In general, the Sandinista made little progress in reducing economic dependence on traditional export crops. To the contrary, faced with the need for food self sufficiency versus the need for essential foreign exchange earnings, the Ortega administration, demonstrating scant economic expertise, continued to prop up the country's traditional agroindustrial export system. They did so despite expensive foreign imports, diminished export markets, and a powerful opposing private sector. However, revenues from traditional export crops continued their rapid decline throughout the 1980s. Despite this drop, agriculture accounted for 29 percent of the GDP in 1989 and an estimated 24 percent in 1991. Agriculture still employed about 45% of the work force in 1991.