Colombian Coffee Fund at Stake Amidst Calls for Federation Restructuring

In a recent coffee industry meeting in Pitalito, Huila, President Gustavo Petro warned that the contract with the National Coffee Fund (FoNC) could end if the National Federation of Coffee Growers (Fedecafe) isn’t restructured. The FoNC, a parafiscal account composed of public funds, is primarily fed by the coffee contribution paid for every pound of exported coffee.

While the President is pushing for a federation overhaul, Germán Bahamón, the general manager of Fedecafe, voiced his disagreement with the idea of removing the fund from the coffee growers. He stressed that Fedecafe has responsibly managed the reinvestment of these funds into coffee farming for 96 years. Such management has made coffee Colombia’s top agricultural and non-mineral export product.

Bahamón also emphasized that without FoNC’s strategic actions alongside international banks to protect the 33 coffee cooperatives, Colombia would lack its current cooperative system and its purchasing guarantee.

Currently, the state and Fedecafe have a 10-year agreement, initiated in 2016. In 2022, FoNC reported revenues of US$890 million, with a considerable portion coming from the sale of green coffee.

Some experts, like Guillermo Trujillo, a coffee analyst, see the President’s warning as a means to hand over the federation’s management to government allies. Others highlight the importance of parafiscal funds in assisting technical, research transfer, and marketing policies for various industries.

In 2015, a similar situation occurred when the government ended the National Livestock Fund’s administration contract with the National Federation of Cattle Ranchers. This decision led to significant sanitary setbacks in subsequent years, which were only rectified once the administration was returned to the federation in 2019.