Colombia’s FNC Defends Management of National Coffee Fund As Contract of Fund is Set to Expire in July 2026
Bogotá (Coffee Network)-The general manager of Colombia’s coffee growers federation (FNC) defended the administration of the National Coffee Fund (FoNC), managed by FNC as the administration contract of the fund expires in July 2026 and the government has said it seeks to regain the administration of this fund.
According to German Bahamon, general manager of FNC, the fund-- the country’s first parafiscal fund- remains a benchmark of the model as policymakers approach a decision on renewing its administration contract, historically managed by the National Federation of Coffee Growers (FNC).
Yet the ministry of agriculture said in December during the national coffee congress said that those funds are public funds.
“The country must understand—and producers must understand—that all contributions they pay are public resources which, under the law, are administered by a private entity. As public funds, they have a specific purpose that must be fulfilled,” Agriculture Minister Martha Carvajalino, who attended the opening event in December said. The implicit message is clear: although the federation is a private entity, it manages public funds and must be accountable for them. With the contract renewal on the horizon and coffee sector elections approaching, transparency will be essential.
The government of President Gustavo Petro has expressed interest in modifying the administration of the National Coffee Fund (FoNC). The government aims to exert greater control over parafiscal resources, particularly as the administration contract—set to expire in 2026—approaches renewal, creating tensions with the federation, which is defending its autonomy.
In the past other governments, have taken the control of other parafiscal funds. For instance, the National Cattle Fund (FNG) was managed for years by the cattle federation Fedegán, but in 2016 the government took control through the agriculture ministry and later assigned it to a public entity (National Meat and Dairy Account). Also, the National Pork Fund has been under close state oversight, with periods of stronger government intervention in its management
FoNC was created to channel earmarked resources into strengthening the coffee sector, the fund operates under a decentralized public-private framework recognized by law. Its administration contract is renewed every 10 years, prompting renewed scrutiny of its performance, Bahamon said.
“Over the past decade, revenue from the coffee levy has fallen short of covering the public goods provided to producers. The fund collected COP3.7 trillion ($1.03bn) in contributions, while investments in key sector programs reached COP6 trillion. Coffee output remained broadly stable at around 13.3mn bags, with levy revenues growing at an annual rate of 3.3pc, compared with a 6.1pc rise in the cost of public goods, leaving a structural gap covered through FNC management,” Bahamon added in an editorial.
These public goods underpin the global differentiation of Colombian coffee. Scientific research—one of the sector’s key value drivers—received COP365bn in investment, with knowledge transferred free of charge to growers through the extension service, which operates in 611 municipalities across 23 departments. This outreach effort alone required COP1.7 trillion over the decade, Bahamon noted.
Social investment projects have also remained central, reflecting nearly a century of institutional work. Initiatives have included schools, healthcare centers, rural electrification, water access, road infrastructure, and, more recently, industrialization projects to boost value creation. The country’s 15 departmental coffee committees have committed COP807bn to these efforts, often leveraging co-financing with local and regional governments.
The fund has also absorbed legacy costs, including roughly COP1 trillion over the past decade to cover pension liabilities linked to Colombia’s former state-backed merchant fleet—an obligation inherited following economic liberalization.
The FNC has also generated value through intellectual property. According to the comptroller’s office, it has been the only entity to successfully build a major intangible asset through parafiscal resources, notably the Café de Colombia brand. Royalties paid to the fund for the use of the Juan Valdez brand totaled COP324bn, growing at an average annual rate of 14.3pc.
Beyond managing parafiscal resources, the federation plays a central commercial role through its coffee purchase guarantee program. Contrary to common perception, the coffee levy does not finance coffee purchases; instead, the FNC relies on private bank financing to support the program. Over the past decade, it has purchased COP21.6 trillion worth of coffee, including COP4.2 trillion in the past year alone, channelled through a network of 33 coffee grower cooperatives.
At critical moments, about half of these cooperatives relied solely on federation support, which implemented a solidarity action plan backed by the financial supervisor and recognized by the comptroller’s office. This intervention helped sustain and strengthen the cooperative system.
The FNC’s legitimacy as administrator of Colombia’s largest parafiscal fund continues to be reinforced by its participatory governance model, representing a rural economy of smallholders who contribute to equitable land distribution and provide an alternative to illicit crops.
As the contract renewal approaches, the federation argues that continued stewardship will be key to sustaining institutional stability and advancing the long-term development of Colombia’s coffee sector.
By Diana Delgado
Source: FNC
This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.
The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.
References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.
StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.
R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.
StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.
This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.
StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.
StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).
SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.
StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism.
StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.
StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.
StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
© 2026 StoneX Group Inc. All Rights Reserved.
