Coffee Dignity In Colombia Requests Petro To Activate Coffee Stabilization Fund
Coffee Dignity In Colombia Requests Petro To Activate Coffee Stabilization Fund
Bogota (coffee Network)- Coffee Dignity, the group that advocates for improved living standards to coffee growers in Colombia, 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.
In August 2022, they sent a letter to former agriculture minister Cecilia Lopez to dialogue about several aspects of the agricultural sector. On November 26, they sent a letter to the President to solve problems such as improve revenues to growers, solve problems with coffee cooperative, boost production, and pay attention to the low renovation of plantations.
On June 24, 2023, they urged the government to participate in decision-making about the future of coffee growers in a meeting held in Pereira attended by the new agriculture minister Jhenifer Mojica.
“Unfortunately, she limited to remain about the importance of the coffee industry without proposing solutions to the low coffee prices,” Coffee Dignity said.
Congress will hold a meeting on 15 September to discuss about the convenience of activating the coffee stabilization fund, Coffee Dignity said.
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 COP1.286 million pesos ($323), 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 but prices have slumped to around 1.295 million on Friday.
Gutierrez told the attendees of the coffee summit in Pereira that if the government nor FNC provide solutions to low coffee prices, coffee growers will no doubt block roads as they did in 2012 when they blocked roads for several months.
“If life obliges us we will block roads, but before this situation emerges,we need to resolve this situation,” he said.
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, the absence of relationships between FNC and the government, Gutierrez said.
By Diana Delgado
