The National Federation of Coffee Growers of Colombia is currently facing a critical period due to a series of challenges that have hit the coffee industry hard. These challenges include a significant drop in coffee prices, persistent tensions between the government of Gustavo Petro and the coffee industry regarding the National Coffee Fund, low export volumes, declining profitability for coffee growers, and a scandal involving the entry of robusta coffee into the country.
Tensions between Coffee Growers and Government:
The coffee-producing regions of Colombia have taken the first sips of this bitter brew, with the support of municipal committees, signing letters to back the general manager of the National Coffee Federation (Federacafé), Germán Bahamón Jaramillo. Bahamón has had to bear the burden of differences with President Gustavo Petro and certain internal divisions within the industry.
Local Support:
In a letter addressed to the General Secretariat of the National Federation of Coffee Growers, signed by the presidents of the 34 municipal coffee committees of Santander and the president of the Departmental Committee, the coffee producers of the region expressed their support for the election process of Mr. Bahamón. This support comes after Bahamón’s unanimous election as the new manager of the industry.
Government Interference:
The election of Germán Bahamón as the new manager of the coffee industry did not sit well with President Petro. He requested that the election be postponed until the new Minister of Finance, Ricardo Bonilla, could be part of the decision. Despite Petro’s request, the industry chose Bahamón, an entrepreneur from Huila, Colombia’s largest coffee-producing department.
Industry Challenges:
Aside from the strained relations between the government and the coffee industry, the new manager inherited a divided industry with internal irregularities. Issues such as the situation at Almacafé in mid-2022 and concerns about the management of the National Coffee Fund added to the industry’s woes.
New Challenges:
The coffee sector in Colombia is facing what experts believe to be the worst coffee crisis in the country’s history. Several factors contribute to this crisis, including falling international coffee prices, a weakening U.S. dollar, and a decline in production volumes.
Impact of Imports:
One of the new challenges facing the industry is the increase in coffee imports, particularly robusta coffee from Brazil, to satisfy the domestic market. This practice has impacted the quality and price of Colombian coffee in international markets.
Economic Impact:
These imports have led to significant economic losses for coffee growers, estimated to be between 900 billion and 1 trillion Colombian pesos. This further compounds the financial strain on coffee producers.
The Role of Government:
The government’s handling of the coffee crisis has also come under scrutiny. Questions have been raised about how the government plans to use the 700 billion Colombian pesos from the Price Stabilization Fund to prevent coffee growers from operating at a loss.
Conclusion:
The Colombian coffee industry is at a crossroads, facing a multitude of challenges and controversies. The tensions between coffee growers and the government, the influx of imported coffee, and questions about the future of the National Coffee Fund all contribute to the uncertainty surrounding the industry’s future. As coffee producers and policymakers grapple with these issues, the fate of Colombia’s coffee sector hangs in the balance, and the world watches closely as this beloved beverage faces one of its most challenging chapters yet.
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