The Washington Post
September 3, 2001

Coffee Glut And Drought Hit Nicaragua
Sandinistas Gain in Campaign As Hunger Sweeps Rural Areas

By Mary Jordan
Washington Post Foreign Service
Monday, Page A01

MANAGUA, Nicaragua, Sept. 2 -- A devastating drought and plummeting coffee prices have driven Nicaragua into one of its worst economic crises in years,
bringing scenes of hunger, malnutrition and misery to its impoverished countryside.

The crisis is unfolding in the midst of a heated campaign for the Nov. 4 presidential election that many people say has distracted the government from working
aggressively to provide help. And anger among Nicaragua's poorest is fueling support for a possible return to the presidency of Daniel Ortega, the Marxist icon of
this country's war-torn 1980s.

In a soccer field in the town of Matagalpa, a three-hour drive from Managua, 100 hungry children begged for some rice or milk -- anything. Some just whimpered,
unable to muster more of a protest on hollow stomachs. One 18-month-old's hair was falling out, her stomach distended, her tiny brown eyes rolling back in her

"If some of these kids don't get medical attention, they are going to die. It is very bad," said Dr. Mirtila Padilla as she examined the semi-conscious toddler who had
gone for months without decent food and had eaten nothing at all today.

Many Central Americans are suffering from the same two problems -- the drought and the longer-term problem of falling coffee prices. This has caused a noticeable
increase in the flow of migrants from Nicaragua, Honduras, Guatemala and El Salvador into richer Costa Rica and Mexico, and farther north into the United States.

"In the worst-hit areas in the region, some are simply walking out of the country," said Francisco Roque Castro, the Nicaragua-based regional director of the U.N.
World Food Program. "There is chronic hunger."

In the middle of all this misery, Ortega is finding increasing support for his bid to recapture the presidency in the November elections.

"I'm voting for Daniel," said Miguel Garcia, 48, one of thousands of jobless Nicaraguans who turned out this weekend for a rally in the slums of Managua to catch a
glimpse of Ortega. "People are worse off now. Even when the country was at war, people had food. Now there are too many hungry."

Nicaragua is a different country from the Cold War battleground that Ortega presided over more than a decade ago, when he was the nemesis of President Ronald
Reagan and his vice president, George Bush. With the Soviet Union gone and U.S. interests focused elsewhere, Ortega slipped down the path toward anachronism
and irrelevance.

Like so much of Central America, Nicaragua set out to rebuild itself in democracy, led by the money raised by its main export crop, coffee. In recent years, however,
the coffee industry has been devastated by cheap Asian coffee flooding world markets and causing prices to plummet. This year, a drought in Central America
compounded the suffering, leaving at least 1.5 million people in the region without enough to eat.

Now, hunger is creating a yearning among some for the old days, causing the most desperate to forget the blood of the 1980s and remember only the food. Ortega,
who might not have gotten a second look from voters a few years ago, is locked in a tight race in a country that is crying out for help.

"It's the worst economic crisis since the '60s," Ortega said in an interview today. "A lot of it has to do with corruption and this government's failure to meet people's
needs." He said that the government failed to protect small coffee growers from the growing foreign competition and that he would do better.

Ortega said the world has changed since he marched into Managua in 1979 with a machine gun. If he wins in November, he said, he would have no trouble
"coexisting" with the new Bush in the White House.

For more than a century the lush green mountains in one of the most fertile coffee-growing regions in the world provided food and a home for thousands of workers.
The days were long and the pay low, but the farmers and their families ate. But this year, because of a global crash in the value of coffee, more than a quarter of a
million Nicaraguans are suffering, many of them children, because their family income has been slashed or has disappeared. When good times mean earning less than
$2 a day, bad times mean going hungry.

In addition, a regional drought has wiped out the corn and bean fields for tens of thousands of small farmers, who are now forced to survive on a single meal a day.

Castro, from the World Food Program, said more than $2 million in U.S. government aid is en route to the region to tide people over until the next crop of beans,
corn and other foods is harvested in November. The food program and other international aid groups are supplying protein-enriched food and medicine to soothe the
effects of malnourishment and to combat diseases such as dysentery, respiratory infections, cholera and dengue fever.

But the autumn harvest will not solve the coffee crisis.

A tenfold increase in coffee production in Vietnam and abundant crops in Indonesia in the past decade have dramatically increased the world's supply of coffee and
lowered its price. A 100-pound bag of coffee from Nicaragua's highlands that sold for more than $350 on the world market in 1976 and was worth $160 two years
ago, is worth just $50 today, according to the Union of Nicaraguan Coffee Growers.

Even though the falling prices did not affect the cost of a cappuccino in the United States, the drop fell like a guillotine here. Many of the workers once housed, fed
and paid on Nicaragua's 30,000 coffee farms -- like their mothers and fathers before them -- are now sleeping in soccer fields and city parks.

Several hundred, including Miquel Zuniga, arrived last week in Managua, the capital, after a 60-day march aimed at getting government attention.

"No one is listening," said Zuniga, his weathered face and thin frame making him seem far older than his 65 years. "We walked and walked and walked. Someone
has to listen to our problems."

Only in recent days has outgoing President Arnoldo Aleman offered some jobless coffee workers $2 a day for sweeping streets and requested international loans. He
has been criticized for politicizing the problems, even saying at one point that they were mainly in towns controlled by mayors from Ortega's Sandinista party.
Weighing more than 300 pounds, Aleman is called "fat man" and increasingly abhorred by hungry Nicaraguans who accuse him of using his office to enrich himself.

Ortega had been slightly ahead in public opinion polls, but the race is now considered too close to call, and one poll in August showed a dip in his support. But many
say he seems to be winning over more of the poor -- even those in coffee lands where the "contras" -- U.S.-backed rebels who fought against Ortega's socialist
government -- had strong support.

Economic analysts, however, said his candidacy was worsening the economic crisis. The image of the Sandinista leader who had been supported by the former
Soviet Union and Cuba returning to power has scared foreign investors and banks, and the flow of credit has virtually stopped.

"He is trying to take advantage of the hunger," Enrique Bolanos, the candidate from the governing Liberal Party who is running against Ortega, said today in an
interview. He said it was Ortega's Sandinista government, which ruled from 1979 to 1990, that plundered the economy.

Bolanos said Ortega "ruined the economy the first time, and I have no doubt he will ruin it again."

The capital, abuzz with presidential campaign rallies including "Ben Hur"-like horse-drawn chariot caravans and musical marches, shows few signs of the deprivation
of the countryside.

But in the highlands, all activity slackens. Whole coffee farms are abandoned. Instead of soccer games in the playing field in this town's center, hundreds of people
are camped out, refugees from the coffee farms, waiting for food handouts by churches.

Alfredo Mejia, one of the owners of La Esperanza, a family-owned coffee processing plant on the outskirts of town, said coffee grown on the other side of the world
has changed everything here. There is so much coffee in Asia now that it is being thrown away, ground up for fertilizer or dumped on the world market.

"What's happening in Asia means that we have nothing to eat here," he said. When the price of a sack of coffee dropped below production costs this year and no
loans were available for the growers, the layoffs began. Last year there were 250 people bustling about his plant; these days there are 15.

So Mejia is organizing a meeting Monday with dozens of local producers. The topic: how to compete in the global coffee market. At his desk, Mejia has a world
map of coffee-growing regions and a chart marking the steady drop in the price of coffee on the New York commodity market. "Increasing our quality -- not volume
-- is the answer. Gourmet, organic coffee is our future, our hope," he said.

Planting better-quality seeds at higher elevation, where the beans grow more slowly and taste better, will raise the value, he said. So will learning how to become
certified as organic coffee growers and taking over the role of the foreign middlemen -- those who roast, grind, package and continue to make money.

Those who are not able to make the transition are expected to abandon coffee and turn the land over to cattle. The transition will be of enormous importance;
traditionally, coffee accounts for more than one-third of Nicaragua's foreign income. On Friday, the Inter-American Development Bank offered up to $6 million in
loans to help the coffee growers and other farmers, in part to try to get them to begin diversifying land use.

Coffee has been grown in their mountains since the early 19th century, so watching it wane is painful, Mejia said. "Coffee is part of the blood here. When I was a kid
my mom didn't give me milk, she gave me coffee."

                                               © 2001 The Washington Post Company