Traditional Crops

Honduras Table of Contents

Throughout the twentieth century, Honduras's agriculture has been dominated first by bananas and then to a lesser extent by coffee and sugar. Although their overall importance has declined somewhat, bananas and coffee together still accounted for 50 percent of the value of Honduran exports in 1992. The combined value of the two crops also continued to make the biggest contribution to the economy in 1992. Total banana sales that year were US$287 million, and total coffee sales amounted to US$148 million. These figures, which reflect a substantial decline from previous years' sales, reflect production losses suffered by banana producers and the withholding of coffee exports from the market in a futile effort to force improvements in the face of record breaking price declines.

Two United States-based, multinational corporations--Chiquita Brands International and Dole Food Company--now account for most Honduran banana production and exports. Honduras's traditional system of independent banana producers, who, as late as the 1980s, sold their crops to the international banana companies, was eroded in the 1990s. In the absence of policies designed to protect independent suppliers, economically strapped cooperatives began to sell land to the two large corporations.

Although Honduran banana production is dominated by multinational giants, such is not the case with coffee, which is grown by about 55,000 mostly small producers. Coffee production in Honduras has been high despite relatively low yields because of the large numbers of producers. Honduras, in fact, consistently produced more than its international quota until growers began to withhold the crop in the 1980s in an attempt to stimulate higher prices. Despite the efforts of the growers, coffee prices plunged on the international market from a high of more than US$2.25 per kilogram in the mid-1970s to less than US$0.45 per kilogram in the early 1990s. As a result of the declining prices, coffee producers were becoming increasingly marginalized.

The outlook for the sugar industry, which had boomed during the 1980s when Honduran producers were allowed to fill Nicaragua's sugar quota to the United States, seemed bleak in 1993. Restoration of the sugar quota to Nicaraguan growers has been a major blow to Honduras's small independent producers, who had added most of Nicaragua's quota to their own during the United States embargo of Nicaragua. Higher costs for imported fertilizers because of the devaluation of the lempira add to the problem. Honduran producers seek relief from a relatively low official price of 25 lempiras per kilogram of sugar by smuggling sugar across the borders to Nicaragua and El Salvador, where the support prices are higher. Sugar growers who can afford it have begun to diversify by growing pineapples and rice. Many independent sugar growers, like independent banana producers, have become indignant over the relatively high profits shown by refiners and exporters. Strikes by producers at harvest time in 1991 forced the closure of the Choluteca refinery for a short time but had little effect on the depressed long-term outlook for the industry.

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Source: U.S. Library of Congress