MILAN – In a bid to help coffee farmers improve their revenues, Colombia is launching a special fund worth 218 billion pesos, or $ 64 that will help stabilize prices and limit market volatility. The fund will allow to cover production costs and avoid losses when an unexpected fall in prices occurs.
Production costs will be determined following methodologies specific to every region of the country.
The fund is a dream come true for coffee growers, and will allow them to protect prices, Agriculture Minister Andres Valencia said.
The country’s producers currently receive 930,000 pesos ($272.70) per 125 kg. That compares with corresponding production costs of 780,000 pesos ($228.70) calculated by the National Coffee Federation last year.
The government of Colombia will provide the bulk of the resources for the fund, although coffee growers will also contribute financially through the National Coffee Fund (FoNC), Finance Minister Alberto Carrasquilla said.
“It will give certainty and reassurance that prices are secure, so farmers can dedicate their time to growing the best coffee in the world and not worry about fluctuations,” he told to Reuters.
The National Coffee Federation has also stressed the importance in this strategy to bet on quality, sustainability and differentiation to fetch better prices from loyal customers.
Coffee is grown across roughly 880,000 hectares (2174527.36 acres) and about 560,000 families depend on the industry.