Colombian government launches $97 million coffee price stabilisation fund

coffee price stabilisation fund

The Colombian Government has announced the launch of the Coffee Price Stabilisation Fund (FEPC) worth COL$218 billion (about $97 million). The FEPC aims to secure the nation’s coffee farmers against volatile international coffee prices.

“It is an instrument that gives certainty [and] tranquillity to coffee producers that they will receive predetermined prices for their product. [Now they] can be dedicated to growing the best coffee in the world and not worry about those price fluctuations,” says Alberto Carrasquilla, Minister of Finance.

This FEPC will allow coffee growers to cover their production costs, which will be determined based on methodologies specific to different regions of the country.

The fund consists of financing from the national budget alongside contributions from coffee farmers themselves through a National Coffee Fund (FoNC). The FoNC is a parafiscal account of resources considered public, mainly fed by the tax paid for each pound of coffee exported from Colombia.

Other sources of possible financing include contributions from third-party industry actors interested in the sustainability of Colombian coffee growing.

The Colombian Coffee Growers Federation (FNC) says the FEPC has long been an aspiration of coffee growers, who are now reassured of the sustainability of the industry.

“Today is a historic day. We must take advantage of this time to be creative in price protection instruments,” says Roberto Vélez Vallejo, General Manager of the FNC.

Another way the FNC has proposed to improve the income of producers is to invest in the high-quality and differentiation-potential of Colombian coffee, which committed customers are willing to pay better prices for.

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