Reuters
July 19, 2001

SAN SALVADOR, July 19 (Reuters) -- Rock-bottom prices in the international coffee market have caused some 30,000 job losses in El Salvador, a top industry official said on Thursday.

Ricardo Espitia, head of the Salvadoran Coffee Council, told Reuters that many of the nation's 22,000 coffee growers had decided to abandon their plantations or not to harvest the next crop at all as a result of the coffee crisis.

"We are talking about around 30,000 jobs fewer" than the 130,000 permanent jobs that coffee production generates annually, Espitia said.

That does not include the 500,000 indirect jobs involved in production. In the 2000/01 harvest, 2.3 million 46 kg-bags were produced and for the 2001/02 the harvest is expected to yield as much as 2.5 million bags.

Exports in the 2000-01 harvest up to July 6 -- the season runs Oct. 1 through Sept. 30 -- have dropped 47 percent and revenue from the beans is down 66 percent for the year to date, according to official statistics.

Thanks to low prices, exports so far this season have dropped to 1.5 million 46-kg bags for a total of $205.5 million in revenue.

Espitia added that producers had only received $14 million of $50 million in government credits put aside for growers and that could cause further job losses.

The credits are used by growers to prepare their plantations and collect their harvests from Oct. 1, but depressed prices have caused many to abandon their plantations in search of alternative work. Some areas are threatened with famine.

Growers in the area of Berlin, in Usulutan province, east of San Salvador, told La Prensa Grafica daily that around 15,000 people could be on the verge of famine due to the shortage of work in the coffee plantations.

"We are in a real crisis. Some 60 percent of the plantations are abandoned. We can only commend ourselves to God," Juan Pineda, head of the Berlin coffee growers cooperative, told the newspaper.

Espitia said it was not economical for coffee growers to harvest the crop, given the low price of the bean.

"Everyone is looking for alternatives to coffee growing and ways to reduce the costs of harvesting," he said.

Espitia also criticized the World Bank's decision to promote coffee cultivation in Vietnam to help reduce poverty there, without foreseeing the impact this would have on growers elsewhere.

"The World Bank politicians provoked a surplus of production without foreseeing that the market was not going to be able to absorb this additional production," he said.