Colombia to consider aiding struggling coffee farmers

BOGOTA (Reuters) - The Colombian government is examining possible help for coffee farmers hit by low international prices, the agriculture minister said on Wednesday, after repeated requests for aid by the country’s coffee growers’ federation.

FILE PHOTO: Coffee grower Rubiela and her daughter Camila walk amidst coffee plants to pick coffee in San Carlos, Colombia July 14, 2017. REUTERS/Federico Rios/File Photo

Colombia is the world’s largest producer of washed arabica and the federation represents some 550,000 families.

The global benchmark futures contract for arabica coffee prices fell to a 12-year low, at 99.35 cents per lb, on Wednesday, hurt by a weak currency in top grower Brazil.

This marked its first fall below $1 per lb since July 2006, a level below the cost of production in mountainous countries like Colombia, where farm owners must pay workers to pick the crop, unlike in some parts of Brazil where harvest is mechanized.

“We are going to work with the finance minister to see if we can give a hand to the coffee growers with some measures,” Agriculture Minister Andres Valencia told journalists. Valencia is part of the government of new right-wing President Ivan Duque, who has pledged to cut taxes and bolster flagging growth.

“Obviously we have an enormous fiscal challenge, but right now we are studying the possibility of helping in various ways,” Valencia said. “It’s probable that we’re going to propose more than one measure, which could be help with fertilizers, help with debts, incentives for (crop) renovations.”

The domestic price for a 125 kilogram (275 lb) shipment of coffee was 685,000 pesos ($229) on Tuesday, equivalent to about 83 cents per lb.

Coffee federation head Roberto Velez said farmers needed to earn some $1.40 to $1.50 per lb.

“If they don’t do something we run the risk, not just in Colombia, but in the world, that people will leave coffee and change their crops to other alternatives or that they don’t care for their crops and productivity falls,” Velez told Reuters late on Tuesday.

He said in central Colombia some coffee farmers have already sold their land to developers building vacation condominiums.

In 2013 and 2014 the government spent more then $350 million in subsidies for growers. But the current fiscal difficulties may restrict the government’s options.

Colombia is forecasting production of 14 million 60-kg bags of coffee this year, similar to last year’s output.

(This version of the story has been refiled to add reporting credit)

Reporting by Luis Jaime Acosta, additional reporting by Marcy Nicholson in New York; Writing by Julia Symmes Cobb, Editing by Rosalba O’Brien