Journal of Commerce / February 25, 1999
By Larry Luxner
WASHINGTON -- In the aftermath of Hurricane Mitch, Nicaragua's coffee exports will be cut in half, while it'll take years for coffee growers in El Salvador, Honduras and Guatemala to rebound from the disaster, according to ambassadors of the four countries interviewed recently in Washington.
William Stixrud Herrera took over as Guatemala's envoy in Washington on Sept. 10 -- less than two months before the powerful storm slammed into Central America. He says Mitch caused at least $50 million in damages to the Guatemalan coffee industry.
"Rain was falling at the rate of three inches an hour for more than three consecutive days, so a lot of cherries fell to the ground," he said. "The equivalent of 500,000 bags was lost because while the coffee in the lowlands was in harvest, nobody would go out to harvest it under the circumstances."
Mr. Stixrud, who was president of Anacafe -- Guatemala's National Coffee Association -- before taking up his current post, said Mitch is "one of the worst things ever to affect Guatemala's coffee industry." About 25,000 acres were affected, not to mention the high humidity, which encourages the growth of fungus -- meaning trees will have to be pruned.
When the hurricane hit, Mr. Stixrud was in Guatemala getting ready for his daughter's wedding. In the storm's aftermath, the diplomat helped coordinate assistance arriving from Guatemalans living in the United States. He says total damage to the country's agriculture sector is around $263 million.
"Recuperating the trees will take three to four years. It's not like melons or bananas, which grow back much sooner," says Mr. Stixrud, who owns coffee farms in southeastern Guatemala. Fortunately, the famous Antigua strictly hard bean variety, cultivated at 4,500 to 6,000 feet above sea level, was hardly affected by Mitch.
The situation is far more serious in Honduras and Nicaragua, which even before the hurricane were two of the poorest countries in the Western Hemisphere.
Francisco Aguirre Sacasa, Nicaragua's ambassador to the United States, says Mitch left 4,000 dead and 900,000 homeless in his country, and caused damages of $1.5 billion -- which would be equivalent to $5 trillion in damages for the United States.
"It was our worst disaster ever, much worse than the 1972 earthquake that leveled Managua because that didn't even touch our productive apparatus," he said. "This hurricane will affect our exports for years to come."
Nicaragua's coffee exports, currently estimated at $300 million a year, have been effectively cut in half, said the ambassador.
"The coffee sector has been hard-hit," said Mr. Sacasa. "The greatest problem we have isn't destruction of the trees, but getting workers to harvest the crop, because there are no roads to get the beans to market. So much of the 1998 crop may go unharvested."
The storm, which destroyed over 100 bridges in Nicaragua, also caused extensive damage to the country's shrimp and tobacco industries.
In El Salvador, 250 died and around 84,000 people were left homeless by Mitch, which also caused an estimated $100 million in damages to the coffee sector.
"We have lost 30% to 40% of our total coffee production," said El Salvador's envoy to the United States, Rene Leon, estimating losses at 100 million quintales (hundred-weights). "This will create a very demanding economic and social situation in our country. The trees are there, but all the fruit was washed away by the water and flooding."
Mr. Leon says direct damages to El Salvador's infrastructure come to $130 million, including damages to schools, bridges, highways and electric utilities. The main destruction was in the eastern departments of Usulutan and San Miguel, mainly because of the flooding of two rivers, the Río Grande and the Río Lempa.
"We are expecting heavy losses in our main agricultural products, especially in sugar cane, which is an integrated activity that creates jobs for more than 150,000 people. We'll lose at least 40% or 50% or our total sugar-cane production, amounting to over three million tons," said the 38-year-old diplomat, who was El Salvador's deputy minister of trade before taking up his current post in August 1997. "This will affect not only the peasants but also the sugar-cane mill workers and intermediate people in one of El Salvador's most critical agricultural activities."
In terms of loss of life, Honduras -- where over 7,000 people died -- bore the brunt of Mitch more than any other country in Central America. Edgardo Dumas Rodriguez, former Honduran ambassador to the United States and now defense minister, says that "before the hurricane, the economy was moving ahead. We didn't have much unemployment, and things were OK. But now, we have 1.5 million people doing nothing. At least 40% of the coffee crop was destroyed. The problem is, when the cherries fell to the ground, you can't do anything with them."
Mr. Dumas predicts his country's Gross Domestic Product will tumble 25% from this year to next, given an estimated $400 million in damages to the Honduran banana sector, the destruction of hundreds of bridges and the devastation of Tegucigalpa, the capital city. Nevertheless, Honduras is already rebuilding, with massive help from the World Bank, the Inter-American Development Bank and foreign governments including the United States.
"Nature was bad to us, and this gives us an opportunity to do something," said the Honduran ambassador. "We have to take advantage of the situation instead of sitting down and crying."