Colombia Coffee Federation Warns Contract Uncertainty Could Threaten Growers and National Coffee Fund Stability
Coffee Network (Bogotá) — The coffee Purchase Guarantee is the core of the Colombian Coffee Growers Federation (FNC), and any attempt to weaken the institution indirectly would ultimately impact the country’s coffee growers, said Germán Bahamón, general manager of the Federation, in an editorial published in La República.
The Purchase Guarantee, he emphasized, is the foundation of the entire coffee system. It is not a subsidy or a concession, but a market-discipline mechanism that organizes commercialization, prevents abuses of buying power, and protects producers in a structure where many sell and few buy. “When a coffee grower has someone to sell their coffee to, with a transparent price and cash payment, they gain freedom. When they do not, they are exposed to speculation,” Bahamón said.
He added that without an institutional framework that competes, purchases coffee, and publishes a reference price, small producers lose bargaining power. In rural Colombia, he noted, this does not only reduce income margins—it also affects food security, education, investment in crops, and overall family stability.
The editorial comes at a sensitive moment, as the contract for the administration of Colombia’s National Coffee Fund (FoNC), currently managed by the FNC, is set to expire on July 7. The outgoing government has indicated its intention to reassess and potentially reclaim direct administration of the fund.
President Gustavo Petro’s administration has expressed interest in revising the governance model of the FoNC, particularly with regard to increasing state oversight of parafiscal resources. The upcoming renewal of the administration contract—traditionally structured on a 10-year cycle—has heightened tensions with the FNC, which is defending its autonomy and historical role in managing the fund.
“The management of the National Coffee Fund does not depend on short-term political will. It is governed by a solid legal and historical framework that has recognized the Federation as administrator through contracts with the Government, renewable every ten years. This structure ensures that coffee resources serve coffee growers and are managed by a representative sector organization,” Bahamón added.
He warned that failure to renew the contract would create significant uncertainty. “Allowing deadlines to expire, sowing doubts, or paralyzing essential decisions can produce effects as severe as an explicit rupture. In a volatile market where buying coffee requires trust, liquidity, logistics, and international credibility, institutional uncertainty is costly—and small producers ultimately pay the price,” he said.
Bahamón also reiterated that the FNC has long functioned as a protective shield against global price volatility, buyer concentration, climatic uncertainty, and the structural asymmetries faced by small producers.
He noted that many coffee growers were born into this system and regard it as a natural part of daily life: the daily reference price, guaranteed market access, technical assistance, scientific research, cooperatives, regional presence, and the defense of origin. When such benefits become routine, he said, there is a risk of forgetting they are the result of nearly a century of collective institution-building.
Meanwhile, two coffee analysts who spoke with Coffee Network said rumors are growing that the outgoing administration of President Gustavo Petro may introduce changes to the contract governing the FoNC, which is set to expire on July 7.
Former FNC employee Guillermo Trujillo, who now writes opinion columns on the coffee sector, said there are expectations of adjustments, though the exact nature of potential changes remains unclear. According to Trujillo, the government is not primarily seeking to directly manage the estimated $90–100 million annual resources of the FoNC, but rather to introduce public policy criteria into its administration.
“There are rumors they want to make changes to the contract. It is about imposing public policy criteria on the management of the fund,” he said, without specifying details.
Another senior coffee sector expert, who requested anonymity, warned that if the contract is not renewed, the fund could enter an interim legal period during which resources would be effectively frozen, since the agreement is not automatically extended.
“If the contract expires and there is no agreement, the fund becomes frozen, and the FNC would not be able to access those resources,” he said.
During such an interim period, the FNC would lose its legal authority to administer the fund, which would in turn restrict its ability to purchase coffee, support exports, provide technical assistance to farmers, and fund research programs, the expert added.
— By Diana Delgado
Source: FNC, two analysts
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