- Last month, President Gustavo Petro took aim at the FNC, driving a wedge between Colombia’s coffee federation and the government
- The FNC exports 20% of the country’s coffee
- The way forward is unclear, but some believe the Colombian coffee sector might be just fine on its own
THE PRESIDENT of Colombia has started a dispute with the country’s Federación Nacional de Cafeteros (FNC), or the National Federation of Coffee Growers.
President Gustavo Petro met with coffee growers in Pitalito, Huila and announced that if the FNC is not restructured, he would put an end to the contract that gives it the administration of the National Coffee Growers Fund (FoNC).
The FoNC is a “parafiscal” fund, primarily made up of coffee growers’ contributions. It is used for investments in infrastructure, agricultural research, and marketing for the Colombian coffee sector. The government also contributes additional resources to the Federation for management and distribution.
During the meeting in Huila, Petro publicly disclosed the salary of the FNC General Manager, Germán Bahamón.
“How can there be a president representing the coffee guild when the average income of a coffee farmer is 12 million or 20 million pesos a year, and he earns 200 million pesos?” Petro said. “That cannot be.”
Sebastián Muñoz Duque is a coffee & price risk adviser. He says: “This is a technique commonly used on the left to sell the concept of class struggle, depicting the upper and upper-middle class as enemies in search of popular support.”
In response, Bahamón stated that his salary is much lower than Petro claimed – closer to 60 million pesos. He also said that past mistakes should not be an excuse to take ownership of the fund.
Others have been less measured. Former presidential candidate and Oxygen Green Party (Partido Verde Oxígeno) leader, Ingrid Betancourt, accused Petro of having a “destructive” nature. She said that he had previously taken aim at institutions across the country, and the FNC was merely the latest in a long line.
“Petro was destroying everything: with Ecopetrol, with Cerrejon, with investment, with the economy, with health, with the Army and the police. Now he also wanted to destroy the National Federation of Coffee Growers. Did he think he could evade justice by destroying the country?” Betancourt tweeted.
Not the first time
There is a history between Bahamón and Petro which predates these disputes. The former criticised the President back when he was mayor of Bogotá, and those criticisms resurfaced when he became General Manager of the FNC in April this year.
“I believe Petro must be accustomed to this, and I don’t think that’s the source of his discomfort,” Sebastián says. “In fact, President Petro has worked with and allied himself with numerous people who were his opposition in the past during his year in office.
“His discomfort stems from his preference not being fulfilled in the selection process, and he felt deceived.”
While the government can choose the FNC’s manager through ministers involved in the voting process, the president didn’t formally express his preference and allowed selection to proceed openly – meaning it was largely led by coffee growers.
“There is clear dissatisfaction from Gustavo Petro regarding the election of Germán Bahamón,” says Sebastián. “Gustavo Petro, with his characteristic style, guided more by his ideological positions than by reason or knowledge of the sector, had another candidate in mind for the management of the Federation.
“In theory, this other candidate aligned with his ideas about the changes that needed to be made in the coffee industry.”
The committee unanimously chose Germán Bahamón, and the ministers approved it despite the president requesting to delay the decision on Twitter.
“This situation clearly caused the president some discomfort,” Sebastián says.
Bahamón remains diplomatic
Regardless of how this situation has come about, the two men and the entities they represent are now at odds. But what are the two sides actually saying?
Petro is arguing that many Colombian coffee farmers are unrepresented by the FNC. He claimed there are regions of the country that have been “excluded” and have not been supported to make technological and industrial progress as far as production is concerned.
“We have a National Federation of Coffee Growers that lives as if it were in the old coffee era, and we have a coffee world that is different, one that is impoverished, living in the excluded regions of Colombia,” Petro said during his speech in Huila.
Petro also announced his plan to renegotiate the US Free Trade Agreement. He argues that this could create jobs and generate wealth in Colombia. However, critics fear it may create tension with the US and harm the economy, as it could mean tariffs will be imposed on Colombian coffee imported into the US.
This isn’t the first time Petro has faced criticism for a decision deemed ill-informed by the coffee sector. Last year, he introduced a sweeping tax reform bill which the FNC pushed back on.
The FNC expressed concerns that the bill’s generic approach to the agricultural sector would benefit more industrially farmed crops such as avocados and bananas, but could negatively impact smallholder coffee growers.
Today, Bahamón remains diplomatic in spite of his difficult position. He’s said he agrees with Petro on the need to industrialise certain coffee-growing regions. He also believes that the FNC has a role to play in international trade.
Others, however, find it more difficult to see where Petro is coming from.
“Essentially, he’s making media statements without a deep understanding of the sector,” Sebastián says. “He’s saying what anyone on the street would say: That support should be provided to vulnerable small coffee farmers, value should be added, the product should be industrialised, protection should be offered against imports, and prices for small farmers should be improved.”
So how will this affect the Colombian coffee sector?
A strained relationship with the government would undoubtedly cause some problems for the FNC. It could jeopardise resources provided by the government and risk the Federation’s contract with the FoNC.
For the sector more broadly, the impact is uncertain. While the FNC provides a valuable service to Colombia’s coffee industry, many believe that Petro’s claims about inefficiencies are not entirely unfounded. For example, some say its investment in road infrastructure for rural areas is a concern.
Another topic of discussion is FNC’s research arm, Cenicafé.
“Today, many coffee growers are not satisfied with the Cenicafé1 variety because its productivity is not very high, although they appreciate its resistance to coffee leaf rust (la roya),” says Sebastián. “Many of the research findings from Cenicafé, owned by the Federation, are not implemented and aren’t [positive for] coffee growers.”
On the other hand, many believe that the FNC is invaluable because of the role it plays in representing the Colombian coffee sector, even if many farmers operate outside it.
“It’s important to understand that one thing is the National Federation of Coffee Growers as a guild, and another thing is the coffee sector as a whole,” says Sebastián. “The Federation is important and has control and marketing functions, but it exports less than 20% of the country’s coffee.
“This figure has been decreasing rapidly in recent years because the Federation has found it challenging to remain competitive due to its large bureaucracy. More than 80% of the country’s coffee is marketed by private companies; no one needs authorisation from the Federation to trade coffee in Colombia.”
Having said this, Sebastián doesn’t believe there is an entity better equipped to manage the resources of the FoNC – certainly not the government.
“For the government to take over the administration of resources would be unwise. Coffee farming is a complex business that requires a deep understanding,” he says. “An alternative would be to eliminate the FoNC and fully liberalise the market, although I don’t believe this is President Petro’s expectation.”
“In any case, I believe the best scenario would be to seize this moment of uncertainty – for the Federation to genuinely challenge itself to become more efficient and to quickly tackle the challenges of today’s coffee farming in Colombia. To connect with all coffee growers, to develop new varieties, and to ensure that Colombia can maintain its leading position. But one thing is guaranteed – it won’t be easy.”
Coffee Intelligence
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