Abstract

In the nineteenth century, coffee transformed the economic, social, and political landscapes of Central America. This paper examines the introduction and expansion of coffee cultivation in Nicaragua in light of several key factors that conditioned its growth. From its earliest stages to the development of its most important coffee region, the North-Central Highlands, transport linkages and active government promotion were the most important elements facilitating the expansion of coffee cultivation in Nicaragua. These conclusions allow Nicaragua's early coffee economy to be placed in the context of coffee cultivation throughout the rest of the isthmus.

Introduction

During the nineteenth century, coffee became one of the most valuable commodities in the world. Coffee had reached Europe by the 1600s, and became wildly popular in the eighteenth century. Led initially by Dutch planters, European mercantile interests began to foster coffee production in the tropical colonies, especially in Java and the Caribbean, and by the close of the eighteenth century coffee was grown throughout the tropical world (Wolf 1982; Topik 1998). Growing European and North American demand, advances in transportation technology, and a burgeoning global commodity market led to dramatic increases in the amount of coffee produced and traded internationally in the nineteenth century (Roseberry 1995; Topik 1998). Latin America, of course, was not to be left out of the development of the international coffee trade. Brazil began large-scale export production by the late 1700s, and by the mid-1800s commercial coffee production had spread from South America to the Caribbean to mainland Middle America. The turn to coffee during this era was the beginning of Latin America's coffee century, a period in which coffee dramatically transformed the economic, political, and social landscapes of the New World.

The newly independent republics of Central America were well positioned to take advantage of the increasing demand for coffee in the world economy. In addition to the rich volcanic soils, cool highlands, and abundant rainfall ideal for growing coffee, political and commercial leaders were well aware of the need to create stable economic foundations for their new states. Much has been written about the Liberal reforms which sought to insert Central America into the modem world in the late nineteenth century, but it was under the earlier Conservative regimes that coffee first became established (Woodward 1985). Initially introduced as just one of various attempts to link Central America and the world economy, the high-quality coffee grown on the isthmus quickly became popular on the world market. By the end of the century, Liberal regimes were expanding and intensifying the incentives and export programs of their Conservative forebears, [end p. 17] while improved external transportation made it easier to produce for European and North American markets (Woodward 1985; Topik 1998)¹ Coffee assumed a position as one of the region's leading exports by the end of the century, and it remains so today. In the nineteenth century the development of coffee for export had profound implications for Central America. Yet our current understanding of coffee's impacts and ramifications throughout the region are incomplete, with the bulk of previous academic research being directed at Guatemala, Costa Rica and, to a certain extent, El Salvador.²

In an attempt to expand the historical perspective on coffee in Central America, this paper focuses on Nicaragua, where the foundations of the coffee economy are poorly understood, largely because of extensive gaps in the historical record. Specifically, the purpose of this paper is to examine the early development of coffee in Nicaragua in the context of several key factors that conditioned its introduction and expansion. In so doing, I address some of the most basic and enduring questions concerning the early Nicaraguan coffee economy: Where was it introduced and why? What accounts for the rapid spread of cultivation in the late nineteenth century? How did the major growing regions develop? Exactly what role does coffee play in the historical geography of Nicaragua? To address these questions, this paper traces coffee from its introduction to the creation of what is currently Nicaragua's prized coffee region, the North-Central Highlands. A brief overview of Nicaragua's first coffee region, the Southern Uplands, provides context for investigating the development of the Highlands. I then trace the expansion of coffee throughout the Highlands via a discussion of its previous economic development, transportation linkages, governmental influences, and land, labor, and capital arrangements to reach conclusions concerning the process of regional transformation in post-colonial Nicaragua.

The Introduction of Coffee Into Nicaragua

Commercial coffee production was already well established in Guatemala and Costa Rica before it began in Nicaragua. Though the exact nature and timing is subject to some debate, most accounts attribute its introduction to Dr. Manual Matus Torres, a resident of Jinotepe in southwestern Nicaragua (Radell 1969). Matus learned about coffee while studying as a medical student in Costa Rica, and upon his return to Nicaragua one of his fellow students sent him a gift comprised of two coffee seedlings and some coffee beans; Matus subsequently planted the seedlings in a private garden sometime during the l820s (Levy 1873; Radell 1969; Lanuza 1976). Other than this date, few facts concerning the introduction of coffee are known, particularly when it became the focus of commercial development. Edelman (1864) referred to coffee promotion at the local level in the 1840s, and Lanuza (1976) cites official correspondence to this effect as well. United States envoy George Ephraim Squier documented extensive coffee groves in the Sierras de Managua in 1849 (Squier 1852). The gap between Matus' planting and these early observations is approximately fifteen years, a period for which the historical record is apparently non-existent, hindering any in depth understanding of coffee's earliest period in Nicaragua.

Early Cultivation: The Southern Uplands

That coffee was first introduced and commercially grown in the areas surrounding Jinotepe and the Sierras de Managua is not surprising. This region, stretching southwest from the Managua-Granada axis to the plateaus near Jinotepe (Figure 1), was the most agriculturally developed region in Nicaragua before coffee's introduction, and has historically been at or near the center of Nicaraguan political, social, and economic power. Though Nicaragua was more or less a stagnant backwater of colonial Central [end p. 18] America, the Uplands had a strong subsistence base, played a role in the dyestuff and cacao trade, and was integrated into the internal Central American cattle trade (Levy 1873; Radell 1969). Largely as a result of this economic activity, transportation linkages in the Uplands, though poor, were some of the best in Nicaragua in the early and middle nineteenth century (Squier 1852; Lanuza 1983). Semi-improved cart roads (carretas) linked the Uplands to Granada, Managua, and Nicaraguan ports, but were not extensive enough to provide efficient or inexpensive transport (Radell 1964). Proximal relations to Nicaraguan political power structures (virtually synonymous with the area's landowning elite) ensured that commercial interests in the Uplands were able to capitalize on early post colonial development schemes such as coffee.

The growth of coffee production in the Uplands was materially aided by active government promotion. The local efforts of the 1840s were supplemented with national legislation. Owners of larger coffee farms were granted exemptions from military service, tax subsidies, and import substitution credits. Government subsidies also provided coffee seedlings at cost, facilitated the transfer of land to coffee production, and even granted cash awards to growers (Lanuza 1976; Burns 1991). The construction of railroads in the late nineteenth century also helped to consolidate the coffee economy of the Uplands, and reinforced the importance of foreign capital and government involvement in the trade (Williams 1994). The [end p. 19] main line was built outward from the northwestern port of Corinto in 1878, reaching Momotombo, on Lago de Managua, in 1886. A steamship line from this point to Managua lowered transport costs and provided quicker transit for coffee from the Sierras de Managua (Radell 1964). In the late 1890s rail links were completed between Masaya and Jinotepe, and from Jinotepe and Diriamba to Managua, but the final rail link between Managua and Corinto was not constructed until 1903 (Radell 1964; Charlip 1995).

Initially stimulated by Cornelius Vanderbilt's steamship line across Lago de Nicaragua and then the close of the National War in 1859, coffee production expanded rapidly throughout the Uplands, and by the mid-1860s Nicaragua had begun exporting coffee to the world market (Bureau 1892; Radell 1964). The Uplands was not only the first of Nicaragua's coffee regions, but it remained the most productive and important through the remainder of the nineteenth century (Bureau 1892; Niederlein 1898). The success of coffee production in the Southern Uplands was also the impetus for expanding the coffee economy, primarily into the fertile, undeveloped area known as the North-Central Highlands.

Expanding Cultivation: The North-Central Highlands

Nicaragua's North-Central Highlands range from just south of Matagalpa, through Esteli to the Honduran border, and northeastward through the cordillera (Figure 2). This mountainous region is the most favorable physical environment in Nicaragua for cultivating coffee, which has historically resulted in more favorable market prices for Highland coffee. Although some accounts cite coffee growing in the Highlands as early as the 1850s (Scherzer 1857), widespread commercial production did not begin until the early 1870s (Levy 1873; Bureau 1892). Like the Southern Uplands, the early coffee economy of the Highlands is best understood in light of the conditions and processes framing the introduction and expansion of commercial cultivation through the early twentieth century.

Pre-Coffee Economic Development

Prior to the introduction of coffee, the Highlands was an almost entirely undeveloped frontier region. At contact, indigenous groups engaged in shifting agriculture and rudimentary trade populated the Highlands. Of these groups, the Matagalpa accounted for the majority of the estimated three to four hundred thousand people living in the Central Highlands (Newson 1987). Spanish interest focused on gold and silver, but meager early returns discouraged intense exploitation of the Highlands. Indigenous resistance to Spanish control, usually in the form of armed attacks on Spanish settlements, also discouraged agricultural development in the rich alluvial valleys of the region. Distance from the Leon-Chinandega cattle complex and rugged terrain also kept the Highlands isolated through the colonial era and into the nineteenth century, although Scherzer (1857) reported cattle ranches in the bottomlands surrounding Jinotega and Matagalpa. Mining resumed in the nineteenth century, but was neither extensive nor lucrative enough to significantly develop the region (Scherzer 1857; Denevan 1961). Despite nearly two centuries of Spanish control, the Highlands effectively remained a region of predominately subsistence agriculture, isolated from the commercial and political power structures of Nicaragua.

Transportation

Given its general isolation and underdevelopment, it is not surprising that transportation was also seriously deficient in the Highlands. Nicaragua's most developed transportation linkages were in the lowland plain between Granada and Leon (Lanuza 1983). In the Highlands, transportation routes consisted of a series of unimproved mule trails and footpaths, meaning that transport was both inefficient and expensive. During the rainy season most mule trails simply became impassable (Radell 1964). [end p. 20] The only significant transportation linkage to Nicaragua's economic heartland was a 184 kilometer mule trail from Matagalpa to Leon, a trail usually difficult to traverse (Radell 1969). Through the end of the nineteenth century this trail was the only means of transporting goods to an external market. Owing largely to the constraints of regional transport, most coffee was introduced in close proximity to the towns of Jinotega and Matagalpa (Radell 1969).

By the 1890s railroad construction had commenced in Nicaragua, but the Highlands was excluded, most likely due to the region's imposing terrain and general isolation from Nicaragua's commercial hubs. In the early 1900s local growers seized the initiative and attempted to improve transportation on their own terms. The mule trail to Leon was improved for the introduction of a steam powered trackless locomotive, but the effort was quickly abandoned after difficulties with water supplies and the terrain proved insurmountable (Radell 1964). Though the trackless rail line proved to be unsuccessful, the mule trail was eventually converted into a carreta road, increasing the amount of products which could be shipped at one time and significantly reducing transport costs from the Highlands. This route remained the only commercial link between the Highlands and the rest of Nicaragua until well into the twentieth century, thus transportation difficulties continued to be a major obstacle to expanding coffee production throughout this period.

Government Promotion

Aggressive attempts by the Nicaraguan [end p. 21]government to expand coffee growing served in many ways to counteract the dearth of effective transport networks in the Highlands. The state had been actively involved in the promotion of coffee since the early 1840s (Edelman 1864), but under the regime of Enrique Carazo in the 1870s development of the Highlands became a major focus of the Nicaraguan government. One of the primary avenues chosen was to stimulate foreign immigration to the region. In 1875 foreigners were allowed to retain their native citizenship even if they became landholders in Nicaragua. The nominally vacant tierras baldias were given away in parcels up to 350 manzanas³ in size, and foreign landholders were exempted from property taxes and military service (Bureau 1892). The Nicaraguan government also introduced coffee subsidies in an attempt to stimulate increased cultivation. An initial subsidy in 1879 and an additional one in 1889 were both targeted at growers in the northern departments of Nueva Segovia, Chontales, Matagalpa, and Jinotega (Bureau 1892; Niederlein 1898). These laws provided five cents per coffee tree to any grower willing to plant at least 5,000 trees. The 1889 subsidy was also linked to an expansion of the land giveaway program, increasing the lot size to 500 manzanas in exchange for a pledge to plant at least 25,000 trees (Bureau 1892; Delgado 1973). Generally, these measures were successful, attracting numerous immigrants from Germany, Great Britain, and the United States. This influx of foreigners, many of whom came with sizeable capital, initiated the formation of large-scale coffee estates in the Highlands (Niederlein 1898; Radell 1969).

Though foreigners were the primary target of government promotion, native Nicaraguans were not entirely forgotten in the process either. Cash premiums for meeting coffee export quotas were established in 1877, and the subsidies of 1879 and 1889 were also available for nationals as well as foreigners (Bureau 1892). In the late 1890s and early 1900s these subsidies encouraged a substantial number of Nicaraguans to settle in the Highlands. By the 1909 coffee census several new towns had been established east and northeast of Matagalpa and Jinotega, expanding the frontier boundary (Denevan 1961). The conscious efforts of successive government regimes not only stimulated settlement in the Highlands, but also proved vital to its emergence as a coffee zone. Government initiative brought substantial parcels of land under cultivation, enticed foreign settlement (and the capital that came with it) and helped nudge the region's economy from subsistence agriculture to an externally focused coffee zone.

Land Tenure and Access

The introduction and expansion of coffee in Nicaragua was necessarily predicated on land availability, types of land tenure, and landholding size. In nineteenth-century Nicaragua land was considered to be so freely available that it was almost considered ludicrous to actually purchase property, especially outside of the more densely settled Pacific lowlands (Dunlop 1847).⁴ By mid century, low population density and an open frontier to the north and east combined to ensure that land was abundantly available in the Highlands to anyone willing to settle and claim it (Levy 1873; Denevan 1961).

The primary exception to this rule was indigenous land. As long-term occupants comprising an absolute majority of the Highlands population, indigenous peoples occupied most of the best agricultural land in the region. Once coffee promotion began in the 1870s, the Nicaraguan government sought to appropriate indigenous lands through taxation, land auctions, or even outright confiscation. Armed suppression of indigenous resistance in the 1880s led to further dispersal of communal lands and forced many natives to the agricultural frontier (Radell 1969; Paige 1997). The government's ability to seize and control indigenous lands was one of the key factors that drew settlers and investors into the region in the late 1880s and early 1890s.

These new settlers dramatically changed the landholding patterns of the Highlands. Whereas previous land ownership had been in the [end p. 22] form of communal indigenous lands or vacant government lands, private ownership quickly became the standard. Between 1889-1891 nearly 24,000 manzanas of land were privatized in the Department of Matagalpa alone, and the indigenous Matagalpa community lost over ten percent of their land between 1895 and 1911, primarily to new or expanding coffee farms (Gould 1994). The continued expansion of the agricultural frontier during this period also indicates an ongoing privatization of landholding.

Incomplete and nonexistent land records make it difficult to assess this process, yet a broad picture of landholding sizes in the Highlands can be constructed. Before the development of the coffee economy, land was generally concentrated in large blocks, either as indigenous communal property or nominally owned by the state. By the 1909 coffee census, coffee had become the dominant feature of agriculture in the Highlands and landholding had assumed a completely different character. Minifundios and small farms dominated the coffee lands in Nueva Segovia and Esteli, but were less than half of the total in Matagalpa and Jinotega (Williams 1994). Given that the latter two departments were the focus of the earliest and most intense efforts to entice foreigners to cultivate coffee, it is not surprising that medium and large-scale farms were more prevalent. If not for the continual outward pressure of smallholders on the agricultural frontier the percentage might have been even higher. Thus it appears that both large and small landholders were involved in the spread of coffee in the Highlands, with both groups being involved in a continuous process of land privatization as well as marginalization of indigenous groups.

Finance

Though land was more or less freely available in nineteenth-century Nicaragua, securing the capital or credit to switch to coffee was more problematic. Commercial banking institutions were nearly non-existent, and private lending often resulted in onerous lending terms. One of the most common means of obtaining capital was through short-term loans offered in advance of upcoming harvests, generally secured from private citizens. Specific property financing arrangements were developed specifically for the coffee economy, most notably the pactos de retroventa. This was a return sale process whereby a farmer would sell his land and then lease it back from the buyer for a specified period, eventually repurchasing the land at a later date. Though this was a risky form of obtaining capital, it was popular because it provided longer-term financing than traditional short-term crop advances. Despite ensuring that smaller growers would continue to have access to land in the main coffee areas, the retroventa also increased the concentration of capital in the hands of the wealthiest growers and processors (Williams 1994; Charlip 1995).

Foreign capital also played a major role in the developing coffee economy of the Highlands. Most foreign immigrants to the region came with sums ranging from five to twenty-five thousand dollars (Radell 1969). With the Nicaraguan government reducing the costs of cultivation, foreigners were free to use their capital to develop large-scale coffee estates and hire the wage labor necessary to work them. Of the twelve coffee estates with more than 100,000 trees listed in the 1909 coffee census for Matagalpa and Jinotega, ten were owned by individuals with non-Spanish surnames (Williams 1994). Foreign capital was also most likely crucial for the creation of the all important coffee beneficios. Though many aspects of Nicaraguan finance and capital are unknown or incomplete, it appears to be a safe assumption that foreign capital was crucial, and that enough lending sources existed for both small and large landholders to shift to growing coffee.

Labor and Population

The transformation of the agricultural complex in the North-Central Highlands was directly affected by labor and population concerns. Though population data for nineteenth century Nicaragua can be highly inaccurate and often misleading, by the mid-1800s the northern departments of Nueva Segovia and Matagalpa [end p. 23] contained approximately 20 percent of Nicaragua's 250,000 inhabitants (Levy 1873). The majority of the northern population clustered around the principal towns, especially Matagalpa and Jinotega. In relative numbers, the available supply of agricultural labor in the Highlands was small, constricting early coffee production to small and medium size farms (those less than 200 manzanas), where family labor and minimal amounts of wage labor were the rule (Williams 1994). Many of the Europeans and North Americans visiting Nicaragua in the nineteenth century pointed to its overwhelming shortage of capable agricultural workers (Lanuza 1976).

Addressing this shortage became one of the chief aims of governmental efforts to stimulate the Nicaraguan coffee economy. By the 1880s more than a dozen laws had been passed specifically binding agricultural workers to labor contracts or specific farms. Agricultural justices were established to control the labor situation, vested with progressively broader powers of arrest, the ability to levy fines, and even extradition (Delgado 1973; Lanuza 1983). Public works projects were also used as a means of punishment for workers avoiding the obligations of agricultural labor contracts (Charlip 1995). Distance from the central state structure in Managua and the open frontier to the east and northeast diminished the effectiveness of these labor controls until the 1890s. The indigenous groups of the Highlands, among the most concentrated and populous in Nicaragua at the time (Scherzer 1857; Levy 1873), also provided [end p. 24] strong resistance to labor regulations. As the largest pool of available labor in the Highlands, these groups were the frequent targets of government enforcement efforts, and the issue of forced labor became the flashpoint for a whole range of indigenous grievances against the state. Armed rebellion erupted in 1881, prompting the Nicaraguan military to occupy the Highlands through the decade (Gould 1994)⁵.

In the l890s the Liberal dictator José Santos Zelaya initiated aggressive measures to solve Nicaraguan labor problems. These included a national identity card, new vagrancy laws with military service as punishment, and increased numbers and power for the agricultural justices (Teplitz 1973). Nevertheless, the Highlands remained problematic, as evidenced by a turn-of-the-century survey of coffee farms in Matagalpa showing that nearly 25 percent of laborers had abandoned their obligations (Teplitz 1973). Labor would continue to be an issue in the Highlands well into the twentieth century, despite the region's increasing population, control of native resistance to state power, and the continuing growth of the coffee sector.

Conclusions

By 1871 coffee accounted for nearly nine percent of Nicaragua's total exports (Levy 1873), and was increasing on an annual basis (Table 1). Though the Southern Uplands accounted for nearly all of the initial export production, expanding cultivation in the North-Central Highlands during the late 1870s and 1880s solidified Nicaragua's role in the still-expanding Central American coffee economy (Table 2). By 1892 commercial production in the Highlands had been underway for less than two decades, but had already progressed to the point that it accounted for nearly twenty percent of Nicaragua's annual total (Bureau 1892). When the first coffee census was conducted in 1909, coffee had expanded throughout the Highlands (Figure 3), and accounted for nearly one-third of total national production (Williams 1994; Charlip 1995). Clearly, coffee was a dynamic economic sector at the dawn of the twentieth century.

This study strongly suggests that transportation (or lack thereof) and government involvement were the two most important factors affecting the introduction, growth, and expansion of coffee in Nicaragua. This certainly holds true for the North-Central Highlands, which was a stagnant economic backwater before the government took an active role in its development and which grew despite poor transportation linkages to external markets. It is also worth [end p. 25] noting that these factors held true for the Southern Uplands. With the best transportation linkages in Nicaragua and close ties between its large growers and early government promotional efforts, it was almost inevitable that the Uplands would assume a dominant position in the early Nicaraguan coffee economy.⁶

These conclusions hold true in the larger tale of coffee in Central America. Throughout the isthmus, government legislation and development efforts were the primary stimuli to increasing coffee production. Costa Rica, one the region's poorest state at the end of the colonial era, was transformed into one of its most progressive largely through active government promotion of coffee and the infrastructure to move it to markets (Hall 1976). Sources of labor to work the coffee estates were only guaranteed after national governments instituted strict vagrancy laws, contract regulations, and enforcement measures. Foreign participation in all aspects of the coffee trade, as in Guatemala, was encouraged by government subsidies, tax policies, and immigration policies. Even the role of foreign capital in developing the coffee economy can be seen as a key focus of government-led efforts to develop export crops (Woodward 1985; Williams 1994). And, as numerous studies have indicated, political power has been intimately linked with the coffee economy since its earliest stages in Central America (Williams 1994; Roseberry et al. 1995, Paige 1997).

Transportation, so essential to the creation of a viable export economy, also played a significant role in determining the course of coffee on the isthmus. Improved road networks, rail linkages, and the creation of new port facilities were directly responsible for expanding cultivation in numerous areas, while the lack thereof hindered the growth of more than one promising coffee growing region (Woodward 1985; Williams 1994). The challenge for the future is to conduct additional research on Nicaragua's coffee economy, focusing on the key roles of state power and the development of its transportation infrastructure. Only then can Nicaragua be more fully considered in the ongoing dialogue concerning the development of coffee in Central America and the world economy.

Notes

1. One of the best recent overviews of Liberalism in Latin America and its impacts on the export economy can be found in Topik and Wells (1998). Woodward (1985) also extensively discusses the growth and implications of Liberalism in Central America.

2. Some of the best examples include Seligson (1975), Hall (1976), and Gudmundson (1986) on Costa Rica, Cambranes (1985) on Guatemala, and Browning (1971) and Lindo Fuentes (1990) on El Salvador.

3. A manzana is approximately equal to 1.73 acres.

4. Admittedly, all land was not equally valuable or desirable. Williams (1994) outlines some of the issues I related to land acquisition, including literacy, wealth, and previous use.

5. Gould (1994) is also the best treatment of the indigenous perspective in the Highlands throughout the development of coffee production.

6. A detailed treatment of the importance of transportation in the Southern Uplands can be found in Radell (1964) as well as Lanuza (1976). Political and commercial linkages are best addressed in Lanuza (1976, 1983).

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Resumen

En el siglo XIX, el café transformó los paisajes económicos, sociales, y políticos de Centroamerica. Este articulo examina la introducción y expansión del cultivo de café en Nicaragua en vista de los factores que condicionaban su crecimiento. Desde las etapas tempranas hasta el desarrollo de la región más importante, los acoplamientos del transporte y la promoción activa del gobierno eran los elementos más importantes que facilitaban la extensión de la cultivación del cafe en Nicaragua. Estas conclusiones permiten que la economía temprana del café de Nicaragua sea puesta en el contexto de la cultivación del café a través del resto del isthmus.