Lawmakers in Colombia Postpone Coffee Debate On the Absence of Finance Minister
Bogota (Coffee Network )- Lawmakers in Colombia decided to postpone a congressional debate at Congress as the finance minister failed to show up to ensure funds for the sustainability of coffee growers in Colombia.
The debate, set to start at 10:00 local time today, began at 13:00 today at the Lower House. The debate was attended by the Minister of Agriculture Jhenifer Mojica and the commerce Minister German Umaña. But lawmakers defending coffee growers were requesting the presence of finance minister Ricardo Bonilla to ensure funds for a policy to allow the sustainability of growers.
A total of 97 lower house representatives voted to postpone the debate, against eight who voted against the rescheduling.
This is the third time a debate to discuss coffee issues is postponed in Colombia, said a lower house representative.
“The citing lawmakers had an idea that the debate must approve funds to ensure a policy to support growers, but without the presence of the finance minister the policy cannot be approved,” Oscar Gutierrez, director of Coffee Dignity, told Coffee Network.
Coffee Dignity, the group that advocates for improved living standards to coffee growers in Colombia, has requested the administration of President Gustavo Petro to activate the coffee stabilization fund amid low coffee prices, and pay attention to the growers’ needs.
Coffee Dignity said they have sent several letters and communiques to the government seeking meetings with government officials, but they have not been heard.
Coffee growers requested the national government to regulate the coffee price stabilization fund which has COP300 billion Colombian pesos in funds in ($75 million) to ensure a minimum price now that coffee prices are lower than production costs, Oscar Gutierrez, general manager of coffee Dignity, during a coffee summit in Pereira.
In December 2019, the former government created the coffee price stabilization fund. It was created with COP180 billion Colombian pesos ($53 million) injected by the government and a contribution by coffee growers.
But three years later, the Colombian government and FNC have failed to establish the regulation, which will determine whether the price stabilization fund will create hedging mechanisms or if the producer will ensure a minimum price when coffee prices are low. Consequently, the regulation will also set a benchmark price that triggers the bailout to the coffee price stabilization fund.
According to Gutierrez, the incumbent national development plan, the roadmap of President Gustavo Petro for the next three years, has mandated the creation of the regulation to ensure that the price stabilization fund begins to disburse money to growers at times of low coffee prices.
The reference price for two bags of 125kg of parchment coffee is being paid at COP1.262 million pesos ($317), but coffee growers claim that production costs are ranging from COP1.450 million and COP1.55 million, resulting in losses to growers.
Coffee prices were close to reaching as high as COP2.5 million pesos for two bags of parchment coffee last year.
Coffee Dignity also requested global coffee consumers to pay a higher price for Colombian beans that recognizes at least production costs.
Gutierrez also requested the government to export coffee beans at a differential exchange rate to ensure higher revenues for their exported beans.
Coffee Dignity said the slump of commodities including coffee is a fact that cannot be controlled. The average price for Arabica beans in the NY market was 133 cents per pound in 2019, 158 cents per pound in 2020, 218 cents per pound in 2021.
In January-June, the average price was 215 but since June until now, it has dropped to 161 centavos.
In Colombia, the reference price for parchment coffee has also dropped associated to the sharp appreciation of the Colombian peso, which is one of the most appreciated currencies in the world so far this year.
Other clouds that are threatening the coffee sector in Colombia include the massive importations of low- quality beans, called pasillas, the poor financial statements of some cooperatives and the absence of relationships between FNC and the government, Gutierrez said.
By Diana Delgado
