Colombia’s minister of agriculture said Wednesday that it is imperative the country changes the course of its declining coffee production.
Minister Juan Camilo Restrepo Salazar expressed “the urgent need to change the direction and pace of coffee production,” stating government concerns about the decline of the country’s coffee production while speaking at an event commemorating 85 years of the National Federation of Coffee Growers (FedeCafe).
“We are producing less than half [the coffee] we produced two decades ago,” President Juan Manuel Santos lamented. “Our goal as a government, with all these measures that benefit coffee and coffee producing familes, is to return production levels to the order of 11 or 12 million [130lb.] bags per year in the near future,” he added. Colombia produced 7.8 million bags in 2011 compared to 12.7 million in 2007.
Restrepo highlighted the falling coffee production’s negative impact on Colombia’s GDP and participation in international markets, the agricultural income of grain producers, and the finances of the National Coffee Fund, an investment fund concerned with stabilizing the national coffee market.
According to the agricultural minister, Colombia has suffered four years of declining coffee production due to lower international prices and the revaluation of the country’s peso, which raised the price of coffee internationally, making Colombia’s product less competitive on the global market.
Revaluation occurs when a country officially increases the value of its currency in relation to other currencies, often done under international market pressure. Restrepo asked the Central Bank Wednesday to mitigate the practice in order to soften the blow revaluation has had on the coffee sector.
Another major factor affecting coffee production in the region, according to FedeCafe, is the La Niña weather phenomenon, which had increased the incidence of coffee rust, a devastating fungus for plants.
Santos highlighted his administration’s efforts to promote planting a variety of species that are more resistant to disease, pests and the effects of climate change. His government pledged close to $164 million last year for research, marketing and cultivation efforts in the coffee sector.
Santos has made it a priority to support massive plantation renewal projects, which provide farmers with loans in order to renovate low-yielding coffee farms. While the initiative is largely seen as positive in the long run, it represents “lower production in the short term,” according to Santos. He promised to provide $655,000 in loans to coffee farmers in 2012, primarily for renewal projects.
FedeCafe promised $85 million in aid to coffee growers over the next five years, of which Nestle, the world’s largest nutrition company, will donate $50 million towards building sustainable production practices.