Ann Arbor News
December 10, 2001
By Phyllis Ponvert

I recently returned from Matagalpa, Nicaragua, located in the mountainous coffee growing region. The recent drop in world coffee prices has produced widespread unemployment and hunger in this region which grows most of Nicaragua's coffee. This visit gave me a first hand look at the crisis affecting the entire country and which depends on coffee as the main export crop.

So many of us feel like we can't start our day without our cup o' Joe. We drink our coffee every day without a thought of how it arrived into our cups. But, whether we like it or not, our daily consumption affects people all over the world.

One important coffee-growing region is in Matagalpa, Nicaragua, where this year a widespread famine forced hungry people to seek refuge and beg for food in the city's parks. "Our children have had to go far to try to find food, eating tiny, unripe bananas or mango peels. Once we couldn't find any more fruit, we were forced to come here to seek help in the city," said Marta Mena, mother of nine and one of hundreds who squatted in Matagalpa's parks.

But, driving into Matalgalpa, the region does not look like a place where there should be a famine. The rainy season was not as abundant as usual, but the hillsides are still covered with lush greenery and soil is rich and black.

So, why should people be going hungry? According to Jose Solrzano, president of Union of Agricultural and Cattle Ranchers (UNAG), Nicaragua's role in the world market since 1880 has been that of agroexporter to countries in the north. Coffee accounts for 27% of Nicaragua's exports, and the coffee industry employs 100,000 people in Matagalpa alone.

But this year coffee prices on the world market dropped drastically, as they often do when there is overproduction on a global level. The World Bank, as part of its structural adjustment plans, has encouraged Asian countries such as Vietnam to export more and more coffee (as they have encouraged Nicaragua to do in the past) in order to get money to pay off their debts. The result of this glut of coffee on the world market has been devastating for Nicaraguan coffee producers, such as Israel Gomez, who normally contracts 60 people to harvest his coffee. Last year, he sold a hundred pounds of coffee for $130. This year the price has dropped to $45. And his cost to produce 100 pounds of coffee is $75.

Farmers like Gomez have had to lay off their workers and let their coffee rot on the vine. Marta Mena is now one of the approximately 13,000 coffee workers who have been out of work for the entire year. "We looked for work everywhere . . . all the plantations are being repossessed by the banks, and there is no work." Without income, people cannot buy food, and even though the land is fertile, all land has been planted with coffee. But you can't eat coffee.

"This widespread hunger that we are seeing could be solved immediately if coffee producers received financing to rehire our coffee pickers," said Gomez. But now Nicaragua's structural adjustment prescriptions, imposed by the World Bank and IMF, have discouraged financing for small and medium coffee producers. In fact, these institutions pressured Nicaragua's president to veto a bill passed by the National Assembly providing economic relief to coffee growers so that they could pay their workers. "First they (World Bank and IMF) impose this model of agroexport on us, and now they take away our financing, telling us that coffee is passe for Nicaragua. What are we suppose to do now?" said Solrzano, representative of UNAG.

Perhaps we should ask ourselves, "Who is benefiting from this economic model?" Not Marta Mena or the thousands of starving coffee workers in Nicaragua. Not Israel Gomez, who obediently cultivated coffee for export for years, only to now lose everything. Not U.S. coffee drinkers who continue to pay $2.50 -$3.00 for a cup of coffee. Large, transnational coffee distributors now get to pocket the difference.

By participating in Fair Trade Coffee campaigns, consumers don't have to participate in a model which prioritizes profits over the lives of people. Coffee producers in Nicaragua who were part of Fair Trade networks continued to receive over $120 per 100 pounds of coffee, allowing them to continue to make a profit to feed their families. But unfortunately this market is still very small so few producers benefit.

Phyllis Ponvert is an Ann Arbor resident. News readers can contribute essays of general interest to Other Voices. Please call the editorial page editor at (734) 994-6764.