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Colombian Government Rules out Reviving PIC, Analyzes Alternatives To Help Growers
CoffeeNetwork(Bogota)- The Colombian government said it rules out reviving a mechanism called (Protección al Ingreso de Los Caficultores, PIC), in which it provides a subsidy per load of coffee to ensure farmers obtain enough money to cover production costs, but it will study other mechanisms to help coffee growers survive amid low internal prices.
Colombia’s Finance Minister Mauricio Cardenas said the government does not have funds now to reactivate the PIC.
Cardenas said the government is working on a National Council of Economic and Social Policy (CONPES) for the coffee sector that will guarantee funds for eight years to maintain the goal of renewing 100,000 hectares a year, he told reporters at the end of meeting at the end of the National Committee of Coffee Growers.
The government also studies another proposal that may exempt the coffee growers’ federation from paying pension liabilities of the so-called Flota Mercante Gran Colombiana, a marine shipping agency that no longer exists in Colombia, but it generates 52 billion Colombian pesos ($18.9 million) in yearly payments. The pension liabilities are currently financed with Fedecafé’s funds, and such funds could be channeled into other activities that will benefit growers, Roberto Velez general manager of Fedecafé said.
For now, the government will undertake a study to analyze different alternatives to provide aid to growers. For that purpose, the government expects to carry out a meeting of the Board of Directors of the central bank to analyze potential solutions next week.
Internal coffee price closed at 709,000 yesterday for a 125-kg bag of parchment coffee, but production costs for the same bag ranges between 700,000 and 750,000 pesos for regular growers, which means many growers, are already producing at a loss.
The internal coffee is rapidly approaching the 700,000 pesos benchmark, and some coffee analysts believe growers might then start blocking roads to call the government’s attention. Prices have dropped 8.6% since the beginning of the year as the same bag for parchment coffee was trading at 776,000 pesos on January 1.
Writing by Diana Delgado