Agricultural Exports

Over the past 10 years, coffee—grown in many of the highland regions of central Honduras—has overtaken bananas as the country’s top export cash crop. Plunging international coffee prices in the early part of the decade (in good part due to increased global production, particularly in Vietnam) led export earnings to fall from US$339 million in 2000 to US$161 million in 2001, but coffee made a quick comeback and production has increased yearly since 2001. Between the increased production and rising prices, coffee exports reached historic levels in 2008, bringing roughly US$623 million into the country. As of 2008, Honduras was the second biggest producer of coffee in Central America (a close second to Guatemala), and the 10th largest in the world. Germany is its number one buyer.

The department of Santa Bárbara produces nearly a quarter of the country’s coffee, followed by El Paraíso, Comayagua, La Paz, and Copán. The best coffee in Honduras is considered to be from Marcala, La Paz. Favored climates are between 1,000 and 1,600 meters in elevation, often right at the lower edges of cloud forests. Almost all coffee grown in Honduras is of the arabica variety, which is shade-grown, rather than the lower-quality robusta bean. Many coffee farmers are small-scale, more than half with plots of two hectares of less. Around 70,000 people are employed in coffee production, many organized in local cooperatives.

Coffee trees begin bearing fruit two years after planting, and they usually produce for at least 10 years, unless infected by bean bores or other plant diseases. Normally, plants yield two harvests a year, one in February and the second in April or May. The harvest varies considerably from region to region.

Although much Honduran coffee is of high quality, the sorting and grading process is so lackadaisical that sacks of Honduran coffee beans are regularly discounted US$10 or US$15 on the international market. Fine quality coffee cannot have more than 5 percent of its beans off-grade, and many Honduran cooperatives run more like 10 percent or 15 percent off-grade. Nor do Honduran growers sort by altitude—a major factor in coffee quality. So, for the time being at least, Honduras remains well below El Salvador, Costa Rica, and the regional leader, Guatemala, in the coffee market. Interestingly, the Honduran press reports that large amounts of Honduran coffee have been smuggled into Guatemala in recent years, to then be re-exported as “Guatemalan” coffee.

The original “banana republic,” Honduras still depends in large part on bananas as part of its export earnings. The two big banana companies, Chiquita (United) and Dole (Standard), still maintain large plantations in Honduras and have diversified into pineapple and palm oil, though continued trade disputes with the Europeans and production problems after Hurricane Mitch have slowed business of late. Both companies—which together control half the world banana market—took major losses in 1999, as did the significant sector of independent producers, with total Honduran banana exports down almost 80 percent from the previous year. In an effort to placate unhappy stockholders, the big companies shed several thousand workers but hired some back after protests from unions and the government.

After registering an abysmally low export figure of US$38 million in 1999, after Hurricane Mitch, the banana trade has recovered somewhat, to US$124 million in 2000, US$208 million in 2004, and US$384 million in 2008—but bananas remain a much smaller portion of Honduran exports than in previous years. Other agricultural exports of note include African palm oil, pineapple, sugarcane, and a few nontraditional exports, such as melon, black pepper, ornamental flowers, ginger, Chinese peas, and sweet onions. The shrimp-farm industry on the Golfo de Fonseca grew steadily since its inception in the 1980s, but in recent years it has leveled out at around US$200 million per year. On the Caribbean coast and in the Bay Islands, lobster, conch, and shrimp fishing are mainstays of the local economy.

Cattle and Lumber

In spite of taking up 30 percent of the country’s arable land, much of it suitable for agriculture, the cattle industry plays a proportionally small part in the national economy. In part, this is because ranchers rely on traditional cattle-raising methods dependent on rainfall and pasture feed, which result in unreliable, low yields. A few powerful landowners control most of the ranching.

Considering the great wealth of forests in Honduras, judicious logging holds potential for providing jobs and good income. However, much of the country’s forest wealth has been wasted through over-logging, corruption, and mismanagement. Nearly seven million hectares of land retained forest cover in 1964. By 2005, that figure had dropped to 4.65 million, with the forests disappearing at an estimated rate of 2.88 percent each year. Groups such as the Environmental Investigation Agency have recommended not purchasing lumber from Honduras (sold in places such as Home Depot), given the ease with which illegally harvested timber enters the market, and the challenge in verifying the legality of the wood. Taking a different approach, the Rainforest Alliance certifies companies with sustainable harvesting practices, and in early 2009, 10 Honduran companies had received certification.

The problems of erosion and desertification that go along with logging have hit most of the country but are particularly severe in the south. In search of valuable mahogany and other hardwoods, pirate loggers have even been cutting dirt roads into the periphery of the Río Plátano Biosphere Reserve.

Almost half the legal board-feet of wood cut in Honduras comes from Olancho, followed at a distance by Francisco Morazán, El Paraíso, Yoro, and Comayagua. Pine is still by far the biggest legal logging wood.

© Chris Humphrey and Amy E. Robertson from Moon Honduras, 5th Edition