El Salvador - Agriculture

Agriculture, while showing negligible growth towards the end of the 1990s, has continued to play a key role in the Salvadoran economy, employing nearly 25 percent of the country's labor force , providing a third of its export earnings, and meeting about 70 percent of domestic food needs. In 1996, agriculture accounted for 14 percent of the GDP. By 1999, agriculture accounted for 12 percent of the GDP, but employed nearly 30 percent of the labor force.

Prior to the 1980s most of the land in El Salvador was owned by a minority of wealthy elites. Roughly 70 percent of the farmers who worked the land were sharecroppers or laborers on large plantations. This situation began to change in 1979, when a military-civilian junta came to power and issued sweeping land and agrarian reforms. The government carried out policies of property redistribution to address the grievances of the rural poor and make up for past injustices. Land was transferred to small farmers in an effort to create a rural middle class. By 1990, when the reforms came to an end, 22 percent of El Salvador's land had been transferred to farmers who had previously worked the land but did not own it. Over 500,000 farmers benefitted from the reforms.

El Salvador's mild climate and fertile soil have proven ideal for the production of the country's main export crops—coffee and sugar. Coffee production, which began on a mass scale in the 1850s, dominated the country's economy for over a century and is still the largest agricultural export, accounting for US$244 million in revenues in 1999, about 10 percent of all export earnings. Sugar, the next largest export, was responsible for about 2 percent of export revenues in 1999, bringing in approximately US$46 million. Fisheries have grown more important to the economy as well, mainly through shrimp production, which is third in agricultural export earnings behind coffee and sugar, generating US$25 million in revenues in 1999, a little over 1 percent of the total.

The earnings from agricultural exports as a percentage of the country's total export revenues diminished in the 1990s. Coffee revenues, especially, began to fall during this time. A surge in coffee prices in 1997 led to a brief revitalization in the sector, but poor harvests and falling prices in 1998 sent revenues plummeting. Between 1997 and 1999, coffee earnings dropped by over 50 percent. Improved harvests may raise coffee-generated revenues in the near future, but coffee will not likely regain the position it once held as a mainstay of the economy. Maize, beans, rice, and sorghum are food crops produced primarily for domestic consumption.

Cattle production plays a role, albeit a slight one, in the economy. Widespread cattle rustling and extortion have made ranching difficult, although milk production has increased.

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