Nicaragua is the second-poorest country in Latin America, and the country with the lowest per capita income among Central American countries. The agricultural sector is considered the motor of the economy, representing about 20% of GDP. By comparison, agriculture in the United States accounts for around 5% of GDP. Among the sector’s most important products in Nicaragua are basic grains, which represent nearly 40% of agricultural GDP, coffee, which provides more than 50% of the sector’s jobs, and livestock, representing 45% of agricultural GDP. As far as important crops go, the main exports are coffee, cotton, sugar, and bananas. For local consumption, farmers grow sorghum, cacao, yucca, tobacco, plantains, maize, beans, and many others. Interestingly, small and medium-sized farms produce 90% of the food consumed nationally. This fact goes hand in hand with the 45% of Nicaraguans living in rural areas, of which 80% depend on agriculture. In general, sorghum and maize is grown in the lowlands, with beans and vegetables grown in the highlands.
The following is a land utilization map in Nicaragua:
Coffee is a hugely important export crop for the Nicaraguan economy and many farmers. It is a demanding crop, requiring much land, labor, and capital relative to others. Additionally, it only grows in the rich volcanic soils found in the mountains, which Nicaragua is endowed with plenty of. Production mainly occurs in the northern part of the central highlands around Estelí and in the hilly volcanic region and Jinotepe.
Cotton emerged as a major export crop in the 1950s after heavy pesticide use made it economically viable. It is generally produced by large landowners along the central Pacific coast. Increased pesticide usage has brought with it erosion and pollution, leading to significant externalities from cotton production. Additionally, a drop in world cotton prices and competition from Chile led to drastically decreased production in the 1980s.
As for bananas, production was stunted throughout much of Nicaraguan history due to the refusal to let American corporations operate. When they were grown, bananas relied on heavy fungicide application, and most are grown in the Pacific lowlands of the country. Sugar is also an important crop, and is mainly limited to lowland Nicaragua. The government attempted to diversify away from sugar in the 1990s.
Lastly, livestock raising is important in Nicaragua. Historically, the wealthy elite benefited from raising cattle. Cattle raising is now mostly concentrated east of Lake Managua, and Nicaragua is the largest beef exporter in the surrounding region. Many small farming families rely on cattle, chickens, and pigs as crucial food sources to supplement crop production.