History of Coffee in El Salvador

The turbulent history of coffee has left a deep imprint on El Salvador’s history, politics and development. No other country in the region has depended as deeply on coffee, and the country’s fate has risen and fallen sharply with the boom and bust cycles brought by what Salvadorans call “el grano de oro” (the “grain of gold”.) Coffee, however, has treated very differently the elite, whose fortunes rose during the boom years and weathered the bust years, and the small farmers and laborers who have been exploited at nearly every turn.

For many years, indigo had been El Salvador’s most important export crop. In the 1880s, coffee surpassed indigo as the leading export crop and was viewed as the path to progress and development. Indeed, coffee created both great wealth for the landed elite as well as opportunities to rule.

However, in 1881 and 1882, the so-called Liberal Reforms were enacted, which dramatically changed land tenure in the country. One decree stated that “access to common lands was no longer a right and that private title to such lands could be received upon cultivation of specified crops” such as export crops. Another decree forbid “vagrancy”, so this newly created class of landless campesinos was suddenly forced to work for slave-like wages, and in poor conditions on coffee, sugar and cotton plantations. These reforms, in effect, stripped nearly half of El Salvador’s population of their lands because Indigenous communities in El Salvador typically farmed communal property and very few farmers held individual property titles for the land they cultivated.

In 1895, General Tomás Regalado won the presidency. This position enabled the General and his family to ultimately amass 6,000 hectares of plantation land distributed throughout six different provinces. Following Regalado’s term, coffee barons served as successive presidents for the next thirty-one years extending coffee’s dominance and building their own fortunes.

In the 1920’s and 1930’s, coffee exports alone totaled 90% of all of the country’s exports. However, what seemed a smart strategy during boom years appeared foolish during downturns, and the global depression of the 1930’s pushed El Salvador to the brink. With coffee prices dropping to one-third of previous levels, coffee producers cut wages by half while others dismissed their workers altogether. Coffee rotted in the fields, while rural unemployment skyrocketed. Rural discontent turned to anger. For three days in January 1932, tens of thousands of peasants organized an open insurrection in western El Salvador. Their actions were met by bullets.

Thirty thousand peasants were killed in La Matanza, El Salvador’s worst massacre. As historian Thomas Anderson suggests, La Matanza is a way of understanding “the whole political labyrinth of El Salvador.” The combination of the strong grip of a coffee plantation class and a desperate rural proletariat proved to be as volatile in the 1970’s and 1980’s as it was fifty years earlier.

The coffee industry, however, survived and even prospered after the Great Depression. El Salvador became known as one of the most advanced producers of coffee by introducing modern technology on the plantations and sophisticated systems in the coffee processing.

While descendants of Spanish families continued to control the land and production, Italian and English immigrants established themselves in the coffee processing and exporting sectors. Over time, the small number of family groups of the Salvadoran elite began to divide into two factions: the landed aristocracy which held to a low-wage, “plantation” development model for El Salvador, and the modernizing sector of coffee producers and exporters who looked out into the global economy and sought to industrialize and diversify El Salvador’s economy and their control of it. By the 1970’s, El Salvador had become the world’s fourth largest exporter of coffee, but neither the landed aristocracy nor the modernizing faction of the elite showed interest in addressing the poverty and dislocation associated with the coffee trade.

For the small producers and laborers, coffee was a way to survive—barely—and they lacked the power to force changes in the industry. Over time, the rural peasantry became transformed into a rural proletariat, people working for a wage rather than earning a living from a crop.

In the 1960’s and 1970’s, the rumblings of discontent in the rural areas grew once again. Progressive Catholic clergy influenced by the progressive doctrines of liberation theology began to work in rural areas and supported rural workers in organizing unions and self-help cooperatives. The Salvadoran elite, especially the coffee barons, opposed their efforts and formed various paramilitary vigilante groups, or used the National Guard to violently suppress these movements. While many leaders were killed, others went underground joining a growing leftist insurgency known as the Farabundo Marti National Liberation (FMLN) front. Fearing a communist domino effect in the region, the United States stepped up military aid and advisors in the late 1970’s to confront the guerrillas.

The United States also pushed a social reform agenda intended to erode the popular support of the insurgency. Key to the agenda was agrarian reform: expropriating large landholdings, returning land to the tiller and fomenting agricultural cooperatives. Under pressure from the U.S. government, the Salvadoran government declared the first phase of an agrarian reform program. Practically overnight, plantation workers were declared owners of cooperatives (with thirty years to pay for the land). Despite this newly acquired land ownership however, the former coffee pickers were given very little, if any technical assistance, bank credits, or trainings in administration and management.

The 1980 land reform was an anathema to the coffee barons and they opposed the measures both vehemently and violently. Although hundreds of coffee cooperatives were established through the land reform, the price was high: hundreds of cooperativists and two US reform specialists were killed by right wing death squads. The violence reached such proportions that human rights activists launched a boycott against “death squad coffee” from El Salvador.

By the late 1980’s, the modernizing sector of the Salvadoran elite including the processors and exporters, wanted to expand their control of the Salvadoran economy and diversify their holdings. They joined other sectors in urging a negotiated settlement to the civil war. They knew that the war had to end if they were going to be able to further economic development and implement their policies of corporate globalization. In 1989, the right wing modernist candidate, Alfredo Cristiani, who was a prominent coffee grower and banker, was elected President. In 1992, the government and the FMLN reached a peace agreement brokered by the United Nations. The loss was catastrophic—seventy-five thousand people lost their lives in the twelve year war—but the promise of a new era of peace and prosperity brought hope to the country.

For a country recovering from war and facing overwhelming poverty, high foreign debt, low education levels and other development challenges, coffee presented an opportunity to reap a new kind of wealth—socially distributed wealth. Coffee still accounted for half of El Salvador’s GDP (1988 figures). By the 1990’s, 78% of coffee farms and 40% of the total area were in the hands of small producers. Furthermore, coffee trees represented the majority of forested land in the hemisphere’s second most deforested country, and coffee provided direct employment for 155,000 Salvadorans.

Over the past fifteen years, the politics of repression has given way to elected, civilian governments, but coffee farmers have faced a new challenge: the conventional coffee market. Plummeting global coffee prices over the past decade have forced more than 80,000 small scale coffee producers and coffee pickers off the land and into desperation. Thousands migrated to the cities in search of work—in the informal sector as street vendors and the textile maquilas (sweat shops) —and to live in squatter communities. Thousands more risk their lives in journeys to Mexico and the United States in search of work. Over two millions Salvadorans now live in the U.S. and the over $2 billion per year they send home in remittances to their families keeps the economy in their home country afloat.

For those who stayed, the prospects have been grim. In the coffee producing provinces of Ahuachapan, Sonsonate, Santa Ana and La Libertad, UNICEF reports that nearly 30,000 families suffer hunger due to the coffee crisis. El Salvador’s Ministry of Health documents that in one year alone, 4,000 children under the age of five whose parents were coffee producers were ill from malnutrition. Fifty-two of those children died.

Although coffee farmers today face many challenges, those farmers who are organized in Fair Trade cooperatives are receiving the best prices, as well as technical assistance in the production, marketing and exporting of their coffee. In addition, because they belong to global networks of Fair Trade advocates and buyers, they have been able to take advantage of development projects and other forms of support from governmental, non-governmental and religious development agencies. One “Fair Trade” cooperative is El Pinal, which was founded on land in La Libertad province expropriated from El Salvador’s former President Pio Romero Bosque (1927-1931). Unlike many of the other coffee cooperatives in El Salvador, El Pinal has managed to pay its land debt to the banks. In addition, by participating in the Fair Trade system, El Pinal has used both premiums from the sales of its coffee and emergency funds from concerned Fair Trade partners, to build a grade school, rebuild their homes from earthquake damage and train members in leadership development.

Las Colinas, another Fair Trade coop is located in the western province of Ahuachapan. One of the provinces most affected by the low coffee prices of the past, the members of Las Colinas are receiving prices for their coffee often two and three times that of neighboring communities. The coop inherited a dry processing mill and has used its premiums to maintain, rebuild, and modernize the infrastructure. An emergency medical fund enables the coop’s health promoter to keep a supply of basic medicines on-hand and to help pay for transportation to the local health clinic or hospital. In 2005, Equal Exchange gave a donation of computers to the coop, and members have been receiving trainings in computer programs and in use of the Internet.

Today, the first Fair Trade Café, “Foto Café” has opened in San Salvador. The café sells coffee exclusively from two Fair Trade coops: El Pinal and Las Colinas. Photos on the wall and brochures on the tables help educate fellow Salvadorans about the plight of the farmers and the importance of Fair Trade coffee. The Café’s owners hope that they can begin to influence the buying decisions of local Salvadorans, while taking advantage of the growing number of foreign visitors coming to the country.

Fair Trade has made a difference in the lives of these farmers and others who participate in coffee cooperatives. The more Fair Trade coffee that can be sold in this country, the more opportunities can be given to other farmers and the greater the impact can be. In this way, we hope to accompany the Salvadoran farmers and make coffee a means to development instead of the bitter grounds of disappointment.