THIRD UPDATE: Colombia’s Coffee Growers Federation’ Manager Quits After President’s Request
(Adds comments from Roberto Velez general manager of coffee growers federation)
Coffee Network (Bogota) – The general manager of the Colombia’s coffee growers federation has quit after tthe country’s first leftist president Gustavo Petro requested his resignation.
“On Tuesday afternoon, I received a call from Gustavo Petro's chief of staff, who told me that Petro wanted me to start a pre-election process for a new general manager,” Roberto Velez Vallejo told local radio station La W.
Velez was the general manager of the coffee growers federation since 2015, and his resignation happened while coffee growers held its annual coffee summit.
"This step to the side opens a space so that, in harmony with the current government, the union continues working for the welfare of the 540,000 coffee-growing families in the country," he said in a statement posted on his Twitter account.
Speaking at a press conference Velez said president Petro wants to work with someone closer to him.
“He (Petro) wants to work with someone closer to him, and I respect profoundly his decision,” he told reporters at the end of the 90th coffee growers summit."There is nothing against Roberto Velez here," he noted.
People familiar with the situation and coffee analysts said the government is deeply worried about the defaults of coffee contracts.
A source who declined to be named said coffee growers owe 50 million kilograms of coffee to the Coffee Fund worth more than US$100 million as mainly coffee growers breached contracts.
It is estimated that some 7,000 coffee growers have breached delivery contracts of coffee. In Colombia, 540,000 families grow coffee.
Coffee analysts and experts said the request of the President to choose a new general manager breaks the autonomy of the union to choose its general manager.
The coffee growers federation works as a private union but it manages the national coffee fund. The national coffee fund is a parafiscal account to which Colombian coffee growers contribute but it is supervised by the government, Velez explained.
The challenges of the new FNC manager will be to ensure funds to carry out the needed renovation of plantations. The new manager will also have to rebuild destroyed roads in coffee areas, and return production to above 14 millon bags.
Colombia, the world’s third-largest coffee producer, is expected to produce less than 12 million bags of 60-kg in the calendar year 2022.
Three candidates shortlisted by the National Committee of Growers must be submitted to the consideration of the National Coffee summit. One of them must have the express and favorable vote of the Minister of Finance, Guillermo Trujillo, a coffee expert, said. An extroardinary coffee summit must be carried out to choose the new FNC manager.
The news took by surprise attendees to the 90th coffee summit.
"This came as a surprise at times that the results from the coffee sector are the best in history," Alvaro Jaramillo, director of the Antioquia coffee committee told Coffee Network in an interview. Antioquia is the second largest coffee-producing province contributing 15% of total national output.
"There is always a fear that the government's shortlisted candidates are not suitable to the union," Jaramillo added.
A coffee analyst said the sector is worried that the new post is taken by a politician who ignores the dynamism of the coffee sector as well as the financial sector.
“There is concern. This forces us to be vigilant of the selection process, who ideally must be a coffee grower. The coffee growers federation must be independent from the government but must have a good relationship with the government”, the former FNC worker said.
“The new general manager must come from the south of Colombia, from the departments of Huila, Cauca, Nariño or Tolima where the largest coffee production comes now. The correct selection is choosing a manager where the preponderance of production is based,” Trujillo added.
Agriculture Minister Cecilia Lopez thanked Velez at the closing ceremony of the coffee Summit. “I want to thank Roberto Velez for leading the institution for seven years,” she said.
Finance Minister Jose Antonio Ocampo said on Wednesday, Colombia, the world's third largest coffee producer, decided to suspend the purchase of coffee for forward deliveries as a measure to prevent the unfulfillment of further contracts.
“Based on a series of analyzes carried out by the Federation and presented to the National Committee of Coffee Growers, it was decided to suspend the purchase (of coffee) for forward deliveries,” Ocampo said during the annual coffee summit held by the coffee growers federation.
That means the coffee growers federation no longer authorizes coffee cooperatives to engage in forward purchases of physical coffee due to the counterparty risk. Since 2003, the Federation has promoted the sale of coffee for future delivery among producers as an instrument to stabilize coffee income.
Petro did not come to the FNC coffee summit as he announced a medical condition yesterday.
By Diana Delgado
