Location of Repository

Coping with the Coffee Crisis in Central America: The Role of the Nicaraguan

By John A. Maluccio


Abstract: The international and local Nicaraguan media have widely reported on the “coffee crisis ” in Latin America and there is substantial evidence that there has been a downturn and that this has been more severe in the coffee growing regions. Using household panel data from a randomized community-based intervention carried out in both coffee and non-coffee growing areas, I examine the role of a conditional cash transfer program, the Red de Protección Social (RPS) during this downturn. While not designed as a traditional safety net program in the sense of reacting or adjusting to crises or shocks, RPS has performed like one, with larger estimated program effects for those who were more affected by the downturn. For example, it protected households against declines in per capita expenditures and, while not significantly depressing labor supply relative to before the program, muted additional labor effort for beneficiaries in coffee growing areas, relative to their counterparts without the program. The evidence is more mixed, however, as to whether RPS enabled households to reallocate their resources in a fashion consistent with the historical downward trends in coffee prices. Beneficiaries who participated in the coffee industry as laborers were more likely to have exited the coffee industry, whereas those who participated as producers were less likely to have exited. The findings are consistent with the existence of credit constraints inhibiting such transitions in the absence of the program. Overall, then, RPS appears to be playing an important part in the “risk ” coping strategies of households, a conclusion also supported by a separate analysis of individual household-level idiosyncratic shocks

Year: 2003
OAI identifier: oai:CiteSeerX.psu:
Provided by: CiteSeerX
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://citeseerx.ist.psu.edu/v... (external link)
  • http://www.apec.umn.edu/facult... (external link)
  • Suggested articles

    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.