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Colombian Coffee Growers Urge Extension of National Coffee Fund Contract Amid Governance Debate

By: Diana Delgado, Contractor

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Colombian Coffee Dignity Urges Extension of National Coffee Fund Contract Amid Governance Debate

Bogota (Coffee Network) -Colombian coffee growers represented by Dignidad Cafetera, an organization that advocates for coffee producers' interests and improved rural livelihoods, have called on the government to extend the administration contract for the National Coffee Fund (FoNC), warning that failure to do so before its July 7 expiration could disrupt key functions of the country's coffee sector.

The National Coffee Fund, administered by the National Federation of Coffee Growers (FNC), finances a range of services considered essential to Colombia’s coffee industry, including the coffee purchase guarantee, research conducted by Cenicafé, extension services, and support for coffee cooperatives.

In a public statement, Dignidad Cafetera expressed concern over ongoing negotiations between the government and the FNC regarding a new administration agreement. The group warned that uncertainty surrounding the contract could have serious consequences for producers, traders, exporters, and the broader coffee economy.

The concerns were echoed by Faber Buitrago Patiño, a candidate for the National Coffee Congress representing the Circasia-Montenegro district in Quindío for the 2026-2030 term. Buitrago said the government has invited coffee associations and cooperatives to a meeting in Bogotá on June 16, fueling concerns about the future of the fund's administration.

"The apparent intention not to renew the National Coffee Fund administration contract with the Federation — and instead fragment its management for political purposes — threatens the social and economic engine of Colombia's coffee-growing regions," Buitrago said.

He argued that transferring the management of the fund's resources to entities lacking the technical expertise and institutional experience of the FNC could weaken coffee production, jeopardize research and extension programs, and undermine the sector's ability to address pests, diseases, and climate-related challenges.

Buitrago also warned that failing to renew the contract could endanger the coffee purchase guarantee, a cornerstone of Colombia's coffee sector that ensures growers can sell their harvest at a transparent market-based reference price.

"The Federation has built the confidence of the financial sector over decades, enabling it to secure the resources needed to purchase Colombia's coffee harvest," he said.

He added that politicizing or fragmenting the management of the fund could jeopardize rural employment, coffee commercialization, the international promotion of Colombian coffee, and the reputation of the world's leading producer of high-quality mild arabica coffee.

Calls for Extension and Greater Oversight

Despite expressing concerns about transparency and governance within the FNC, Dignidad Cafetera said it does not support ending the Federation's role as administrator of the fund.

Instead, the organization proposed extending the current contract while negotiations continue and creating a formal discussion forum involving different coffee-grower organizations to help build consensus on the future governance of the fund.

The group has also advocated reforms aimed at increasing oversight and strengthening democratic participation within the Federation, including the creation of an independent monitoring body composed of coffee growers with no institutional ties to the FNC.

FNC Defends Its Historic Role

The debate comes as the administration of President Gustavo Petro considers potential changes to the governance structure of the FoNC, including greater government oversight of its parafiscal resources.

In an editorial published Tuesday, FNC General Manager Germán Bahamón emphasized that the administration of the fund is supported by a longstanding legal and institutional framework.

"The administration of the National Coffee Fund does not depend on short-term political decisions," Bahamón wrote. "It is governed by a solid legal and historical framework that has recognized the Federation as administrator through agreements with the government, renewed every ten years."

He argued that the arrangement has ensured that coffee-sector resources remain dedicated exclusively to coffee growers and are managed by an organization that represents the industry.

Bahamón also warned that uncertainty surrounding the renewal process could have serious consequences for Colombia's coffee sector.

Fund Financed by Coffee Growers

The National Coffee Fund is financed primarily through a coffee levy paid by Colombian producers on coffee exports. According to the FNC, growers contribute US$0.06 per pound of exported green coffee, US$1.08 per pound of roasted coffee, US$0.48 per pound of soluble coffee, and US$0.36 per pound of coffee extract.

The Federation maintains that these resources are generated by coffee growers and, by law, must be used exclusively to support the welfare, sustainability, and competitiveness of the sector.

Analysts Warn of Risks

Coffee-sector analysts say uncertainty has increased as the expiration date approaches.

Guillermo Trujillo, a former FNC executive and current coffee-sector columnist, said there is widespread speculation that the government may seek changes to the administration agreement, although the details remain unclear.

"There are rumors that modifications to the agreement are being considered," Trujillo said. "The focus appears to be on incorporating broader public-policy objectives into the administration of the fund."

Another senior industry expert, who requested anonymity, warned that allowing the contract to expire without a replacement could create significant legal and operational challenges.

"If the contract expires without a new agreement in place, the fund's resources could effectively be frozen and the Federation would lose access to them," the analyst said.

Such a scenario could disrupt coffee purchases, export support programs, technical assistance services, and research activities financed through the National Coffee Fund.

The uncertainty comes at a critical time for Colombia's coffee sector as growers continue to navigate volatile international markets, rising production costs, and mounting climate-related challenges.

By Diana Delgado
Sources: Dignidad Cafetera, National Federation of Coffee Growers (FNC), industry analysts

 

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