Developments in the Coffee and Cotton Sectors of El Salvador and Perspectives for Agrarian Policy in the 1980s

The crisis of the 1980s appears to be questioning the basic viability of the agro-export development model in Central America. The effects of slackening world market demand, unstable international prices, worsening terms of trade and negative net external capital flows have combined with those of social unrest, repression and in most countries even civil war, resulting in serious external and internal imbalances of the overall economic system. Some studies speak of the end of an era, the consequences of which might be comparable to those of the disappearance of the international indigo markets in the nineteenth century. Then, the inability to make profits on the world market resulted in a drastic change in the production structure of Central America.1