With the arrival of the new general manager of the National Federation of Coffee Growers of Colombia (FNC), the sector has been working on different factors to carry out the main non-mining export product of the country.
Germán Bahamón, helmsman of the coffee growers, in conversation with Portafolio explained the plans he has as head of the union, and the marked interest in strengthening ties with the government of Gustavo Petro.
(Government leaves coffee growers planted).
How are you doing in management as the new manager?
I am the only one of the Federation managers who does not come from within. I am a coffee farmer, so I understand coffee farming, but I have to delve into issues of various companies, such as Almacafé, Procafecol, everything.
I come from the corporate world, I believe that the two most important things that management can have at this time is this: an experience that allows us to demonstrate the opportunities that coffee has as a national product in international markets and, on the other hand, to understand the producer.
We want a less centralized union organization, closer to the regions, that sees closely what the needs are, without losing sight of the fact that coffee is clearly exportable. Although our business is from the port to the outside, the social component of the 548,000 families that I represent is from the port to the inside.
This has allowed me to identify those needs that always lead me to think that the only way is a harmonious relationship with the Government, and that necessarily makes the product of the country’s first agricultural line interesting for any Government.
Are you concerned about the increased imports and the fall in national consumption?
We Colombians were taught from the cradle to drink coffee of the lowest possible quality, which is why in the last two or three years imports have grown in volume.
(How did Colombia do in the international market in the first semester).
This occurred because coffee had high prices, which generated increases in the stock market price, which caused the load to increase and for the same Colombian coffee we could not raise the value three times. That is why coffee of other qualities had to be imported to satisfy domestic consumption. Currently, the price on the New York stock market has been showing a drop, so there is no longer a need to import.
How will it affect us if Brazil recovers?
We are very worried. What is happening at the moment is that the drop in the price, after the commodities begin to regulate, causes our internal price to also fall.
These are cyclical crops and the harvest from two years ago is being received with high costs, this is creating a problem and that is that we do not have profitability in coffee farming. And it is the first agricultural line of the country, 1% of the total GDP of Colombia. That is why our dialogue with the Government has to be effective. There is a government responsibility to protect 548,000 families, 2.5 million jobs and obviously $14 billion in business at harvest.
On Wednesday they had an appointment with the Government, what happened that it did not take place?
We have had effective contacts with different portfolios. We work on the identification of the opportunities that the Federation has in the construction of the objectives of the National Development Plan.
(Export to Cuba of labor inputs is gaining ground).
For example, in the objective of formalizing land and a country of rural owners, we can accompany them on the issue of land titling, we have identified and georeferenced 548,000 families and we know that 45% of our coffee growers do not have a land title. property.
We did not have the opportunity to have the meeting, but with a very kind letter they asked us to postpone it, identifying the clear objectives that we have to pursue together. They ask us to make the Coffee Price Stabilization Fund Committee on August 2 and to make the National Committee on August 16.
Germán Bahamón, manager of the National Federation of Coffee Growers.
Cesar Melgarejo / CEET
What are the challenges you have identified for coffee farmers?
The most important thing for the coffee grower is the tertiary roads and the improvement of housing habitability conditions and today we know that 65% of the coffee growers still have a kitchen where they use firewood. There is no gas there.
(‘The European market demands cannabis flower’: GreenLab).
During the coffee boom, there was talk that coffee growers had to save, was this done?
We have a very high concern and it is that prices are very close to costs in many regions; even in some the price could already be below cost.
I understand that one can look back and say that they wish they had saved. And I am convinced that what many of the Colombian coffee growers did was catch up.
I am sure that all those who came with a debt backlog were able to catch up, had the chance to improve their conditions, have an education, suddenly improve their home or why not have a car. But that does not mean that one can tell a coffee grower, who has 1.5 hectares, that he did save in two years to be able to live five.
I think the coffee growers were responsible, they paid their debts, they caught up, they improved their family’s conditions, they even grew more coffee. The invitation that we have always made to the Government is that they accompany us in this policy to protect.
(Latin America should work on reactivation for alliances with the EU).
What measures are needed?
We have a law that Congress created and with which the Coffee Price Stabilization Fund was carried out. We coffee growers have saved, of the six cents of the coffee contribution, 0.5 cents of the dollar. That’s $300 billion. But that does not help us to mitigate the impact. What we want is for the Government to accompany us, for us to put a weight and they put another. This would be a relief for the coffee farm, so that we can stabilize the prices and there are no losses for the coffee farmer.
How are you protecting the contracts?
The most important thing here is that the Federation does not set the price. This is made up of three variables: the exchange rate, the price of the pound on the New York Stock Exchange and the price differential of Colombian coffee with respect to the price of type C coffee.
The Federation is in charge of public goods, for example, with Cenicafé, which has investigated 82% of variables resistant to rust and with this we have saved coffee growers more than US$230 million. The second public good is the transfer of knowledge that is done with the funds of the coffee growers.
(Freight cost, difficulty for exporters from free zones).
The third is the purchase guarantee. I have not seen the first coffee grower sitting in the central square of a town with a bundle of unsold dry parchment coffee. You will always be bought, it is the only union that has a purchase guarantee and we exercise it through the Colombian cooperative system. And the fourth is the promotion of the Café de Colombia brand, it is the one that represents Colombians, not even coffee growers.
What to do with the quality improvement process?
The ill-wishers of the Federation have been selling a false idea that Colombian coffee has lowered its quality and that is why the price differential has dropped. That’s a lie. The 20 cents that we have today at a different price compared to the New York Stock Exchange is what has kept Colombian coffee growing throughout history.
The focus that I have asked all of your companies, be it Juan Valdez, Buen Café or Federación, is that we have to keep an eye on China. Today, of the Federation’s exports, only 2% go to the Asian giant and 50% go to the United States and Canada.
We have to continue creating narratives from marketing to help them have a product with special attributes. The number one objective of my management in the Federation is to make Juan Valdez truly an international brand.
(Unilever expands its operating capacity with a new ‘megaplant’).
How is the renovation going?
15 years ago our coffee farm had what we call an average coffee plantation age of around 11 years. That was very high, the ideal, they told us, was before 5 years. Today we are 6.32 years old, we are not bad but not good either. The best truth would be 2.5 years or three years on average.
What we are actively doing is reinforcing the issue of the need to renew at least 10% of the annual coffee plantation; the ideal is 20%. We are looking for the Government to accompany us, not only in stabilizing prices, but in an incentive plan for rural capitalization, the ICR, so that we can carry out an important renewal plan.
How much would they require from the Government?
A renovation costs $70,000 million, that is, 10% of the coffee park. Our renovation goal this year is 84,000 hectares and we are on the right track. In the first semester we finished close to 40,000. We have done the renovation with our own resources.
Has the price of fertilizers already decreased a bit?
Inputs such as urea fell faster than the correction experienced in the New York share price. Today we found a package of urea on the market for $100,000 pesos. A year ago there were $240,000. Fertilization is 25% of the costs, but there is 40% that is harvesting labor and we also have to work with the Government there.
(Colombia and Japan seek to strengthen their economic relationship).
Will work affect them?
Those of us who are members of the SAC are working to provide inputs to the Government so that it understands the realities of the countryside without a reform, which must be social, affecting agricultural production.
And the drop in the dollar?
For the price of coffee, for the dollar to fall as it has fallen, more than 16% since January 1, definitely affects income, but it also improves on the subject of 25% of the cost. However, the price is 100%. The key is manpower.
(Textiles, medicines and petrochemicals, keys to reindustrialization).
What measures are you taking for the El Niño phenomenon?
Today we have variants in the coffee park that are resistant to climatic changes. We know that an El Niño phenomenon is coming, in the first months it will be beneficial for coffee growing, because the plants express themselves according to the luminosity to carry out their photosynthesis process and deliver a fruit, then it will favor the issue of flowering, load and productivity. The problem with a very long or strong El Niño is that the drought begins to affect the plant and the borer is generated. This pest finds the best conditions and its breeding ground is in the drought, in the sun, and what it can do is generate more pasilla.
For this reason, our production goal for the coffee year should be to stay very close to what we did last year, that is, 11.2 million bags of coffee.
We hope that the drop due to the effects of La Niña will not be very pronounced. Hopefully we can stay at that level.
DIANA K. RODRIGUEZ T.
Portfolio Journalist
ÓMAR G. AHUMADA ROJAS
Portfolio Editor
