Sunday, September 22, 2002

Coffee woes spur El Salvador jobs plan

                  SAN SALVADOR, El Salvador (AP) -- President Francisco Flores on
                  Sunday announced an ambitious economic package designed to create
                  thousands of new jobs in rural areas devastated by the plummeting
                  worldwide price of coffee.

                  In a national radio and television address, Flores said that starting next month, his government
                  will spend $185 million on infrastructure projects and farming initiatives designed to help 25,000
                  coffee farmers and their families find ways to make a living that have nothing to do wit h

                  The international price of coffee has dropped sharply in recent years, falling to about $56 per
                  100-pound (46-kilogram) bag.

                  "El Salvador can't escape the coffee crisis caused by falling prices on the world market,"
                  Flores said.

                  He said the new program will create jobs in 69 towns and villages in the eastern provinces of
                  Ahuachapan, Santa Ana and Sonsonate where 87 percent of the population depends on
                  coffee crops to survive.

                  The program will create a $100 million fund that will extend low-interest loans and farm aid to
                  coffee farmers willing to grow new crops.

                  Another $85 million will go toward creating construction jobs by building new roads, bridges
                  and schools in the area, Flores said. That money also will go to fund dozens of employment
                  workshops designed to expand the options of the work force in eastern El Salvador.

                  Flores' announcement came four days before the legislature is expected to allow coffee
                  producers to have more time to pay a $23 million loan private banks extended the industry. The
                  deadline for payment was Monday, but lawmakers plan to order banks to allow producers
                  another three years to pay off as much of the debt as they can.

                  According to the Salvadoran Banking Association, 75 percent of coffee producers have paid
                  off their loans, meaning that the industry as a whole owes more than $3.3 million.

                  Copyright 2002 The Associated Press.