In the early 1900s Honduras was known for being a banana exporter thanks to international organizations like the United Fruit Company. Companies like this were established along the north coast of the country and promoted the growth of crops like banana, cacao, sugar cane, and fruits.
The end of the Banana Republic era
Everything was good at first, and Honduras was getting a name for itself as one of the largest exporters, but things changed drastically when people started noticing that their rights were not being taken seriously by these international organizations operating in the country.
Companies like United Fruit Company, Standard Fruit Company, and Cuyamel Fruit Company did not have a good reputation and were often accused of activities such as exploiting the population, expropriating their lands, bribing government officials, and paying little-to-no taxes to the governments.
In May of 1954 Honduran workers went on the biggest strike in the country’s history, fighting for the rights that had been taken from them. A few years, an election, and several strikes later, through the invalidation of the concession contracts originally granted to these companies, Latin American countries were able to further their plan for progress. Honduran President Lopez Arellano later signed the agrarian reform, which allowed Honduran people to gain back the lands these companies had stolen from them. With the lands back in their possession, Honduran families could now make use of them for their own benefit. The Honduran government promoted the production of coffee, which became the most popular crop in the region.
Honduran coffee production
- According to the Statista Research Department, Honduras is one of the largest coffee producers in Latin America. The graph below, retrieved from the Honduran Coffee Institute (IHCAFE in Spanish) 2020 report, details the Honduran coffee production numbers over the last decade.
The Honduran economic system relies on these exports to generate overseas exchange. The country remains the fifth largest coffee exporter globally, owning 4% of the world’s coffee export. Coffee production and export in the country contributes 5% of the country’s GDP and 30% of the agricultural GDP.
Germany, Belgium, France, Italy, and the United States are the top five destinations for Honduran coffee, although some companies have dared to step foot in the Middle East – like Marcala producers Thelmita’s Coffee, who focus on exporting specialty coffee beans to the MENA region. Thelmita’s coffee has been recognized as a prime example of the high-quality coffee beans that can be produced In Honduras, offering a variety of roasts.
The expansion has allowed Honduran coffee to catch the eye of more international entities and coffee aficionados across the world. In 2004, the IHCAFE Cup of Excellent program and promotional event opened and started grouping the best Honduran coffees sold worldwide. About 1,200 producers are chosen in regional quality competitions and, at the end of the process, around 50 move on to participate in this international event. The program has now become one of the world’s most known coffee quality competitions and allows the country’s fame on coffee production to grow across the world.
A few bumps in the road
Although the production process and export still seem stable, the rust, other pests, and economic factors have severely affected farms across the country over the last few years.
The first big noticeable damage was made by hurricane Mitch, which hit Honduras in 1998. Estimates made by the Food and Agriculture Organization of the United Nations put losses at 650,000 coffee bags, over 20% of that year’s expected coffee production. It took some time for farmers to rise from this disaster, but they had to face other difficulties along the way.
The main threat they have had to endure is the rust spread. In the worst of cases of the infection, the leaves are unable to photosynthesize and the tree cannot create energy. The year 2012 was when the epidemic hit the hardest and the Honduran Government had to create assistance programs for all farmers who were affected. According to USAID, over US $1 billion of damage were reported in just two years.
The below graph shows the coffee production by country, in thousands of 60kg bags, and the impact that the rust had in the onset of the rust outbreak in 2012.