Debate Grows Over Future of Colombia’s National Coffee Fund as Contract Renewal Nears
Bogota (Coffee Network) -Colombia’s National Coffee Fund (FoNC), currently administered by the National Federation of Coffee Growers (FNC), cannot be turned into the checkbook of any government, María Claudia Lacouture, president of the Colombian-American Chamber of Commerce (AmCham Colombia), said Tuesday.
The remarks come as the administration of the outgoing President Gustavo Petro considers changes to the governance structure of the FoNC, including greater state oversight of its parafiscal resources. The debate has intensified ahead of the renewal of the fund’s administration contract, which has traditionally been renewed every ten years and is set to expire on July 7.
The FNC has strongly defended its autonomy and historic role as administrator of the fund, arguing that its institutional framework has been fundamental to the development and stability of Colombia’s coffee sector.
In an editorial published Tuesday, FNC General Manager Germán Bahamón stressed that the management of the National Coffee Fund is protected by a longstanding legal and institutional framework.
“The administration of the National Coffee Fund does not depend on short-term political decisions. 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. This structure ensures that coffee-sector resources remain dedicated to coffee growers and are managed by a representative organization of the sector,” Bahamón wrote.
He warned that uncertainty surrounding the contract renewal could have serious consequences for the coffee industry.
“Allowing deadlines to expire, creating uncertainty, or delaying essential decisions can have effects as damaging as an explicit rupture. In a volatile market where coffee purchases depend on trust, liquidity, logistics, and international credibility, institutional uncertainty carries a significant cost—and small producers are ultimately the ones who pay the price,” he said.
The National Coffee Fund is financed primarily through the coffee contribution, a levy paid by Colombian coffee growers on coffee exports. According to the FNC, producers 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.
Bahamón emphasized that these resources are generated by coffee growers and, by law, must be used exclusively to support the welfare, sustainability, and competitiveness of Colombia’s coffee sector.
“Improving what needs to be improved is entirely legitimate. What is not legitimate is putting at risk an institution that supports more than 540,000 coffee-growing families. The real question is whether the objective is to strengthen the house and make it more efficient, or to tear it down while the families are still inside,” he said.
Purchase Guarantee Could Be Jeopardized
Bahamón also warned that any effort to alter the fund’s administration could threaten the Coffee Purchase Guarantee, widely regarded as one of the cornerstones of Colombia’s coffee institutional framework.
The Purchase Guarantee is not a subsidy or a concession, he said, but rather a market mechanism that organizes coffee commercialization, prevents abuses of buying power, and protects producers in a market structure where many sell and relatively few buy.
“When a coffee grower has a guaranteed buyer offering a transparent price and immediate payment, that producer gains freedom. Without that option, growers become exposed to speculation,” Bahamón said.
Without an institution that actively purchases coffee, competes in the market, and publishes a daily reference price, small producers would lose bargaining power. In rural Colombia, he argued, the consequences would extend beyond farm income, affecting food security, education, investment in coffee farms, and overall household stability.
He added that the Federation has long served as a buffer against global price volatility, buyer concentration, climate uncertainty, and the structural disadvantages faced by small-scale coffee producers.
Many growers, Bahamón noted, have grown up with benefits such as guaranteed market access, daily reference prices, technical assistance, scientific research, cooperative networks, regional representation, and the protection of Colombia’s coffee origin. Because these services have become an integral part of daily life, there is a risk of forgetting that they are the result of nearly a century of institutional development and collective effort.
Analysts Warn of Legal and Operational Risks
Meanwhile, two coffee-sector analysts consulted by Coffee Network said speculation is growing that the Petro administration could seek modifications to the administration agreement before its expiration.
Former FNC executive Guillermo Trujillo, now a columnist specializing in coffee-sector issues, said expectations of changes are widespread, although the scope and nature of any revisions remain unclear.
According to Trujillo, the government’s primary objective may not be to directly control the fund’s estimated US$90 million to US$100 million in annual resources, but rather to incorporate broader public-policy priorities into its management.
“There are rumors that changes to the agreement are being considered. The focus appears to be on introducing public-policy criteria into the administration of the fund,” he said.
Another senior coffee-sector expert, who requested anonymity, warned that failure to renew the contract could place the fund in a legal limbo because the agreement does not renew automatically.
“If the contract expires without a new agreement in place, the fund’s resources would effectively be frozen and the Federation would lose access to them,” the expert said.
Under such a scenario, the FNC would lose the legal authority to administer the fund, potentially disrupting coffee purchases, export support programs, technical assistance services, and research activities financed through the FoNC.
The uncertainty comes at a critical time for Colombia’s coffee sector, as producers continue to navigate volatile international markets, rising production costs, and increasing climate-related challenges.
— By Diana Delgado
Sources: Amcham, FNC, industry analysts
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