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A TRADITION THAT WORKS

In El Salvador the economic and social importance of coffee is now clearer than ever. In the last decade, a yearly average of more than 160,000 people had a job because of it, while other 700 thousand had indirect jobs.

Despite coffee’s loss in relative economic importance and the diversification of exports, it still represents 2.0% of the Gross Domestic Product (GDP) and 16.7% of the agricultural GDP (in 2001). Coffee has been traditionally an important source of hard currency. In 2000, it accounted for 10.3% of total exports.

The employment’s generation of coffee activity during the 90’s accounted for 29% of the farming & fishery sector and 6.7% nationwide. Coffee activity also infuses over $113 million in salaries to the rural area in normal conditions. This cash flow is a driving force for the demand of national basic products and helps relieve rural poverty.

The employment from the coffee sector gives an enormous social and political stability, and helps to develop micro enterprises, which contribute to reduce migration to the cities and other social problems.

During many years coffee has contribute for rural communities to have a more adequate infrastructure for a living, such as roads, schools and basic services among others.

In the year 2001, approximately 52% of the total loans given to farming sector were for coffee sub sector, this percentage climbs to 84% if we take only into account agricultural products. It also represents for 3.5% of the $5 billion dollars given by the financial sector to all economical activities in El Salvador as credit.

But coffee crisis has hurt Salvadoran growers and coffee revenues have been reducing significantly since 2001. Currently it accounts for 5% of total exports. The social impact of the coffee crisis is probably the worst negative effect of this tragic chronicle. As we have seen, coffee has give support to thousands of families that now are struggling to survive because every day is harder to find work in coffee fields.