How Nicaragua’s Political Climate Is Impacting Its Coffee Industry

Nicaragua has a long history of growing coffee and an economy that is strongly linked to the crop. But recent political unrest is impacting the coffee industry and the ability for producers to make a living income.

Read on to find out more about the events have affected economic growth, safety, and security for Nicaraguan coffee farmers.

What’s Happening in Nicaragua?

Last spring, the specialty coffee community flew into Seattle for the annual SCA Expo. Meanwhile, approximately 4,000 miles away, in Nicaragua, a social uprising was taking place. 

On April 18, 2018, demonstrators in several cities took to the streets to protest social security reforms. The protests were not simply a reaction to increased taxes and reduced benefits – Amnesty International states that signs of a deterioration in the human rights situation in Nicaragua had been increasingly visible in the years leading up to the protests.

On the eve of the 2016 presidential elections, the organization expressed concern that Nicaragua was “very quickly and dangerously slipping back into some of the darkest times the country has seen in decades.”

The April 2018 protests resulted in five days of violence and disorder, including the deaths of several people, before President Daniel Ortega announced the cancellation of the reforms. Since then, opposition to President Ortega and his government’s heavy-handed repression of protests has grown and over 62,000 people have fled Nicaragua to escape the violence and insecurity.

An Economic Crisis For Coffee Producers

Coffee is a major export crop in Nicaragua, where the industry employs over 300,000 people. The country is also one of Latin America’s least economically developed countries, with a GDP per capita five times lower than that of neighboring Costa Rica.

In this context, any effect on the nation’s ability to produce and export coffee can have a huge impact on the daily survival of hundreds of thousands of people. The political crisis has affected business confidence, pushing the country into a sharp economic recession. GDP declined by 3.8% in 2018 and is expected to shrink by 5% in 2019.

An October 2018 USDA report states that Nicaragua’s sociopolitical crisis has negatively affected farmers’ access to credit, putting at risk future crops and the long-term sustainability of the coffee sector.

“Private banks have stopped lending because so many depositors are taking out their money,“ Gustavo Cerna tells me. He is Manager of Commercialization and Sustainable Sourcing at Macercafe, a Nicaraguan coffee producer and export company. He is also a Nicaraguan coffee supply chain expert.

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