* Striking farmers have been blocking roads since Monday
* Strong local currency, low output have hurt growers
By Diana Delgado
BOGOTA, March 2 Colombia's government raised a
subsidy to coffee farmers on Saturday and called for them to end
a strike, but farm leaders said they will continue protesting
and blocking roads because they want buyers to pay a minimum
price for beans.
Coffee growers in Colombia, the world's top producer of
high-quality Arabica beans, are demanding more help from the
government after being hit by years of poor weather, crop
disease and a strong currency.
They have been blocking key highways and secondary roads
since Monday, especially in the coffee producing provinces of
Huila and Cauca.
"There is no reason to continue with the strike and
blockages. This is a solution with a strong financial appeal,"
said Luis Genaro Munoz, head of the coffee growers federation
after meeting government officials to discuss their demands.
The government has offered to increase a subsidy to 115,000
pesos from 60,000 pesos previously for a 125-kg sack of
parchment coffee for small producers when the internal coffee
price is below 650,000 pesos. The subsidy also increases to
95,000 pesos from 60,000 previously for big land owners.
The measure will become effective on Sunday and will run
until Dec. 31, said Finance Minister Mauricio Cardenas.
"I invite coffee growers from all over the country to lift
the strike immediately. ... The government is doing an enormous
effort to provide this aid. I believe the strike will end,"
But strike leaders said protests will continue until the
government agrees to set a minimum price of 650,000 pesos for
125 kilos of parchment coffee regardless of foreign exchange and
international coffee prices.
"People are furious. We will continue blocking roads," said
Ermison Sterling, a coffee grower who has been leading blockages
in the Huila region.
BELOW PRODUCTION COSTS
Coffee growers are now getting around 521,000 Colombian
pesos ($288) for 125-kg bags while production costs are 650,000
pesos for an efficient grower and as much as 700,000 pesos for
regular ones, producers and exporters said.
Meanwhile, truck drivers went on strike on Saturday to
demand lower fuel prices, which would further hamper
transportation of goods in Colombia and could lead to food or
fuel shortages in some big cities.
"The decision has already been made, there's no way back,"
said Pedro Aguilar, head of the Colombian Truckers Association,
adding that some 340,000 drivers will join the strike.
Workers at the country's largest coal miner, Cerrejon, have
also been on strike for nearly a month.
The labor disputes are putting pressure on President Juan
Manuel Santos, who is taking the biggest gamble of his career by
engaging in peace talks with the Revolutionary Armed Forces of
Colombia (FARC), Latin America's largest guerrilla group.
A poll released earlier this week showed his popularity is
at its lowest level since he took office in 2010, in part
because many believe the FARC are gaining ground.
Colombia's coffee farmers have seen their livelihoods shrink
in recent years as the cost of fertilizers and other imports
needed to produce coffee has chipped away at earnings, already
reduced by low bean prices and the country's strong currency.
Growers have also suffered since 2009 from the impact of
torrential rains that knocked beans from trees and brought on
disease that wiped out production.
Colombia, a top producer worldwide after Brazil, Vietnam and
Indonesia, last year reported its smallest crop in three decades
at 7.74 million 60-kg sacks. If the dispute is not resolved
quickly, it could dash the country's hopes of increasing output
to 10 million bags this year.
(Reporting by Diana Delgado; Writing by Eduardo Garcia; Editing
by Todd Eastham)