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Coffee Group Demands Creation Of Price Stabilization Fund
COFFEENETWORK (Bogota)-Colombian Coffee leaders, members of the power group Dignity for Agriculture Workers, which oversees Coffee Workers (Dignidad Cafetera), will demand from the government the creation of a stabilization fund, which aims to guarantee a price that covers production costs, Oscar Gutierrez, Director of the Movement for, said.
Farmers have been hit by low international coffee prices and a firming peso in the past months, prompting the internal coffee price to drop to 746,000 pesos ($262) for a 125kg bag of parchment coffee yesterday, but production costs for the same bag ranges between 700,000 and 750,000 pesos for regular growers, risking the growers’ income.
Growers will meet on March 21 to address a series of government requests to improve internal coffee prices.
The stabilization fund, which will be presented to the country’s Finance Minister, could be financed with government funds and the so-called coffee contribution. Growers in Colombia pay a coffee contribution, which goes to the National Coffee Fund. The Coffee Fund is consisted of a contribution paid by coffee producers, and levying on coffee exports.
Coffee Dignity is a power association that in 2013 promoted a national strike, in which coffee growers blocked main roads in the country for eleven days.
“We will request a meeting with the national government, and depending on the government’s attitude, if it is not going to solve anything, people and growers are willing to block roads once again,” Gutierrez said.
The government spent 1.2 trillion Colombian pesos ($480 million) in subsidies for the coffee sector in the years 2012, 2013 and 2014 when internal coffee prices reached multi-year lows.
Internal coffee prices are set every day by the Coffee Growers Federation after taking into account two economic variables: the exchange rate of Colombian peso and international coffee prices.
Internal bean prices have dropped 3.9% since the beginning of the year. They reached 728,375 on February 21, the lowest level since May 1 2016, and sharply below the record high of 1.065 million pesos hit on November 7 of last year.
Prices have also been hit by the strengthening of the Colombian peso, which has gained 4.2% since the beginning to the year to trade at 2,859 per dollar yesterday.
Writing by Diana Delgado