Dealing with the Coffee Crisis in Central America : Impacts and Strategies
Current coffee prices are at record lows and below the cost of production for many producers in Central America. Moreover, the coffee crisis is structural, and changes in supply and demand do not indicate a quick recovery of prices. So, coffee prod...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/03/2191889/dealing-coffee-crisis-central-america-impacts-strategies http://hdl.handle.net/10986/18273 |
| Summary: | Current coffee prices are at record lows
and below the cost of production for many producers in
Central America. Moreover, the coffee crisis is structural,
and changes in supply and demand do not indicate a quick
recovery of prices. So, coffee producers in Central America
are facing new challenges-as are coffee laborers, coffee
exporters, and others linked to the coffee sector. Coffee
plays a major economic role in Costa Rica, El Salvador,
Guatemala, Honduras, and Nicaragua. The coffee crisis is
actually part of a broader rural crisis caused by weather
shocks (such as Hurricane Mitch and droughts), low
international agricultural commodity prices, and the global
recession. These challenges call for new strategies for
Central American countries aimed at broad-based sustainable
development of their rural economies. The authors deal with
the impact of the coffee crisis and strategies to deal with
it. They include an analysis of the international coffee
situation and country-specific analyses. The authors explore
options and constraints for increased competitiveness and
diversification, and discuss social, environmental, and
institutional dimensions of the crisis. The authors conclude
that there are specific solutions that can be pursued for
the coffee sector. Some are already being applied, but more
can be done in a more systematic way. Also, there is a need
for safety nets to deal with the short-term impact of the
crisis. Longer-term solutions are to be found in increased
competitiveness and diversification in the context of
broad-based sustainable rural economic development. |
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