. The Cotton Boom and Its Primary Causes

Abstract

This chapter shows how cheap labor, rich soil, and a favorable climate gave Central America great potential for becoming a producer of cotton; however, without modern insecticides, yields were too low to make the crop commercially viable. With the discovery of DDT and related compounds, the most important barrier to Central American cotton production was removed. After World War II, the growing demand for cotton in the world market and the availability of fertilizers, herbicides, and modern agricultural equipment were some of the other factors that boosted Central America's potential as a cotton producer. Private market conditions were favorable for Central American cotton, but government intervention was crucial in turning a possibility into a reality. With the guidance and financial support of the World Bank, governments built paved roads through the middle of the zones where the potential for growing cotton was greatest, and governments subsidized cotton by providing cheap credit to growers.