Monday, June 04, 2007

Coffee fields yield to urban sprawl

A recent article in Reuters describes how a sprawl of housing developments is devouring coffee farms and endangering the country's already overstressed ecosystems:

Only the size of Massachusetts, El Salvador has lost some 35,000 hectares of coffee farms, or 21 percent of the planted area, since its 2001 census, some to abandonment or other crops but much to urban sprawl.

In its first harvest after its civil war, El Salvador produced 3.3 million 60 kg bags of beans. This year's harvest is estimated at just 1.24 million bags, and yields are well below international standards.

Once the backbone of the economy, coffee growers have suffered from years of low international coffee prices, many are in debt and the decision to sell is easy.

"El Salvadoran producers have had a series of setbacks that have made us lose our links with agriculture," said Jeff Holman, president of coffee exporter Volcan, who blames an economic structure based on workers who live abroad.

"The housing boom is a boom based on the fact that there is no real income apart from what goes on outside the country," he said.

A quarter of El Salvador's 9 million citizens are estimated to live outside the country, primarily in the United States.

They sent home $3.3 billion in remittances last year, and much of it was used by families to make down payments on new homes, particularly in coffee-rich western El Salvador.

El Salvador has a density of 330 people per square kilometer, the highest of any country in the Americas and similar to Japan or Belgium. By comparison, nearby Costa Rica has 81 people per square kilometer.

For a country that is already severely deforested, the construction boom is a looming environmental disaster.

The bulk of El Salvador's forest cover comes from coffee farms, where aging bourbon-variety trees grow beneath a towering canopy of secondary forest. These "coffee forests" provide the little water table protection and migratory bird habitat that is left.

A report last year by Washington-based think tank Resources for the Future warned that El Salvador faces grave environmental challenges in the near future unless the destruction of coffee farms is halted.

This article should be read in conjunction with the efforts of the Saca government and real estate developers to entice more and more Salvadorans in the US to build second homes back in El Salvador.

13 comments:

El-Visitador said...

Let me see:

6/28/06: deficit in low-cost housing!
5/19/07: less pop. growth than f'cast!
6/4/07: too much housing bought by poor people with émigré relatives!

There is a cloud in every silver lining. The mind boggles.

One guesses there are some people form whom the glass is always half-empty.

Tim said...

E-V,

I'm not sure if you are calling me a "half-glass empty" person. I think you will see that I did not comment on whether attracting housing investment from the north was a good thing when I wrote about it in early May. In fact, I think that housing construction is a very good thing -- that kind of development creates jobs and economic activity and is why housing starts is a leading economic indicator in the US economy. That being said, I think it is also fair to advocate for government policies which do two things -- (a) ensure that there is also decent housing available to all sectors of society -- a construction boom of $250,000 houses does not provide housing for the street vendor in the informal economy, and (b) have sensible land use restrictions which minimize environmental consequences of unbridles urbanization.

El-Visitador said...

«(b) have sensible land use restrictions which minimize environmental consequences of unbridles urbanization.»

Agreed.

It goes without saying, however, that sensible land use requires vertical housing... and functioning vertical housing requires:

(1) a strong/fast/fair court system
(2) minority stake protections
(3) strong public prosecutors to defend the interests of those unable to defend themselves

Since none of the above even register with the population as priorities, much less the government, vertical housing is simply not an option for most buyers. The risks of anything going wrong with the building or the condo assoc. is too large.

Therefore, we will continue to see sprawl.



- * -


When people are given the right incentives, and the right tools (such as a good court system), people will usually do the right thing. I think a bureaucracy set-up to simply issue "anti-sprawl permits" will solve nothing, waste money, and create corruption.

wally said...

Could part of the problem be also that Salvadoran coffee is not as good as coffee grown in neighboring countries? I don´t claim to be a coffee connisseur, but I frequently carry bags of coffe from here as gifts when I go to the states, and my coffee guzzling friends tell me that it´s really not all that good compared to say Colombian coffees or others. I´m not sure what causes that or if somehow the quality of it can be improved. But I assume that the imported coffee market is probably quite competitive, and if your local variety doesn´t excite the buyers, coffee sales from that country go down, which makes using the land for other things more attractive.

Tim said...

E-V:

That's a very interesting comment. I had never previously seen a link between the ability to create high-rise apartments/condos and an efficiently functioning court system.

Persons from all political persuasions ought to be able to agree that improvements in El Salvador's legal system (corruption, delays, lack of predictability, competence, transparency) are greatly needed.

Tim

El-Visitador said...

"Persons from all political persuasions ought to be able to agree that improvements in El Salvador's legal system"

Again, agreed.

Unfortunately, Salvadoreans get bombarded by messages such as "sprawl, deforestation" and they are frequently told that these are regulated by environmental bureaucracies in the developed world.

Which can be true... but developed countries have simply superimposed a layer of meta-government above a functioning base of government.

El Salvador, conversely, does not get it that it needs to fix the essentials of government before it tries the fancy, fashionable bits.

Therefore, we end up with all kinds of fashionable, useless bureaucracies that can never effectively work, because the basic infrastructure they need is simply not there. MARN is the best example of it, but the soup letter is deep and wide.

SalvaAlchemist said...

"Could part of the problem be also that Salvadoran coffee is not as good as coffee grown in neighboring countries?"

http://www.forbes.com/forbeslife/2006/07/19/priciest-coffee-beans_cx_hl_0720featA_ls.html

According to Forbes, El Salvador has some of the most expensive coffee in the world. Not even Colombia was on that list. The only Latin American countries on the list are Guatemala, Panama, El Salvador, and Jamaica. El Salvador, for the most part grows an arabica variety of coffee not grown very much in other countries. Reason for this is b/c during the war many farmers left theirs plantations at a time when demand was was for a hybrid type of coffee bean. El Salvador's coffee is considered very good and competes internationally with very strong results. Problem is that most of the good stuff gets imported to Europe.

The other big reason why yields are so much smaller is b/c many people left the coffee business when deflation rates hit coffee prices hard in the 90s around the world. Thus A lot less people are in the coffee business in El Salvador. i think thats biggest reason why production has gone down. A lot of the coffee growers aren't peasants, so I doubt they're being pushed around by the govt with their land.

Last year I went to visit a coffee plantation in Santa Ana in hopes of landing some type of internship with the owner and the company. I haven't graduated college yet, but I was hoping I could get my feet wet last summer in the business. What the owner told me was that 50-60% of imports went to Europe and maybe 10% to the States, with the rest to Japan. He told me the market just wasn't there when most Americans are already settled with Colombian and Guatemalan coffee.

El Salvador just needs a better marketing campaign with their coffee.

Anonymous said...

Many people in the U.S. actually like the taste of Salvadoran coffee because it reminds them of Folgers and other commercial brands. People who are trying fair trade and organic coffees for the first time find they often like coffee from El Salvador.

Anonymous said...

Some of the larger cafes in North America use coffee from El Salvador as the top brand. The garbage sold in most stores is the crud that is cheap but lacks flavor and gives El Salvador a bad name for coffee production. With the reduction in yeild, the coffee producers are deveoping high grade brands, that take longer to process but give higher profits. There are solutions.

wally said...

Can you give me some brand names of good coffees available here in El Salvador? Next time I go to the States I´ll buy some and take them with me. Thanks.

HODAD26 said...

Viva cafe de El Salvador at Cubi's wife's cafe on Avenida Bernal at 6:30 AM in a styrofoam cup for .10
and of course eggs,chorizo,frijoles and pan lol

yes, ES has some good cafe, and i know Cali, Bogota etc.
as a post said, it just needs some good marketing

build domes for housing, cheap, any coverings and earthquake resistant
www.geodomehome.com
but actually building houses is good for ANY economy
just ES is small,
actually there are too many people on this planet that is the problemo

Tim said...

For some of my earlier posts on premium coffees of El Salvador, click here.

Jose Roberto Magaña said...

This is a very interesting issue in El Salvador but I think the article fails to address some of the causes that are causing the reallocation of resources: 1) Family remittances are not only increasing the purchasing power and creating a demand for different investments alternatives for salvadoreans living abroad but also is causing a damaging effect by making labor resource more expensive. It is well know that salvadoreans who get financial support have less incentives to work. This in general is not bad. In fact, without the invaluable money that salvadoreans living here are sending, I can not imagine where El Salvador would be!.
2) The coffee sector in El Salvador has got several rescue boat from different governments in the last 15 years. This made financial resources scarce because farmers believe that they could take unlimited risks and not being punished. In plain English, plantations were poorly managed. I would think that the financial sector is reluctant to provide more funding as a logical conclusion considering all the political pressures from farmers to make the government force banks to forgive the loans and take the losses.