Nicaragua is Central America’s poorest country, with about half the population of 5.68 million living on less than USD 1 per day, most of these in rural areas. According to the Central Bank of Nicaragua, the agricultural sector represents 20% of GDP and more than 60% of annual exports, while providing 30% of formal employment. As in many developing countries, the sector is dominated by small farmers, with three quarters of farmers owning less than 3.5 hectares.
Nicaraguan agricultural practices are highly inefficient. In the cattle livestock sector, which represents some 45% of the agricultural sector and is alone responsible for 10% of Nicaragua’s GDP, Nicaragua trails its neighbors in per- cow production, fertility and growth. Smallholder cattle farmers generally follow unproductive and environmentally deleterious short-term pasture strategies to compensate for limited grazing areas, often triggering deforestation and land degradation. Forest conversion to pasture land has accounted for some 97% of total CO2 emissions in Brazil, Chile, Nicaragua and Paraguay.
Much of Nicaragua has no access to electricity, with only 43% electrification rates in rural areas, where the majority of the agricultural sector is located. Nicaragua is home to significant renewable potential from various sources, including solar and biomass, and while the government is pursuing aggressive renewable energy goals (94% renewable by 2017), these goals remain elusive.