Sunday, December 7, 2014

High Times for Colombian Coffee

Coffee farmers offer a thumbs up. (Image: Colombian National Federation of Coffee Farmers)
While petroleum prices tumble, threatening to take Colombia's economy down with them, a more
Colombian coffee farmers are
benefiting from high world prices
and big harvests.
traditional product is enjoying a banner year.

Only a few years ago, Colombian coffee suffered a crisis: A fungus infested the crop, forcing farmers to tear out their bushes and replant them with a resistant variety specially developed by Colombian agronomists.

Today, those new plants have are producing big time - and at just the right moment. This year, the Brazilian and Indonesian crops have been hit by drought, while a fungus has attacked Central American crops.

At the same time, coffee consumption is rising, especially in Asia, removing more coffee from the world market.

The global coffee shortage means that, just as Colombia's production is peaking, so are world prices. Last November, coffee cost 107 cents per pound on world markets, according to the International Coffee Organization; this past November, the same pound sold for 162 cents.

Minister of Finance and Credit Mauricio Cardenas addresses
the recent National Coffee Farmers Congress.
Good times, however, have not prevented Colombian coffee farmers from fighting amongst themselves. At the recent national Congress of Coffee Producers, some regional associations called for the ouster of the head of the National Federation of Coffee Growers. Also at the congress, growers and exporters debated over whether the federation should continue its role as buyer of last resort across the country. Now, the federation offers to buy farmers' harvests, creating a floor for bean prices. Private buyers and exporters, naturally, would prefer to not have to compete with the troublesome Federation and be able to offer whatever price they like to the often-vulnerable small farmers.

"Eliminating the price guarantee would for the exporters be like touching heaven," a coffee farmer leader said during the congress.

Despite its good times, Colombia's coffee industry is also experiencing some troubling trends. One is the exodus of young people from rural areas to the cities. At the same time, paradoxically, coffee farms have become smaller and smaller as a family's land gets divided among several children.

Thru the 1950s and later coffee was a mainstay of Colombia's economy. Today, coffee continues to form an important part of Colombia's economy, but other exports, especially oil and coal, generate far more export income.

Coffee is farmed throughout Colombia's mountains.
(Image: Colombian National Federation of Coffee Farmers)
But, despite coffee's much smaller place in Colombia's economy today, it has much more importance than hydrocarbons in at least one sense: employment. While raw materials exports produce lots of royalties, they generate few jobs, damage the environment and often feed corruption.

Coffee farming, in contrast, employs more than a half a million Colombian families, according to the Federation of Coffee Growers. If those families average five members each, we're talking some 2.5 million people, or 5% of the Colombian people.

By putting money directly into the pockets of working families, coffee continues contributing greatly to Colombia's national well-being, another reason why high world coffee prices are a good thing.

Drink up, coffee snobs.

By Mike Ceaser, of Bogotá Bike Tours

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