Coffee crisis in full swing in Colombia

Last week, Colombian coffee growers initiated a clash with security forces. They stopped working, blocked the road and demanded support from the authorities. Ten of thirty two parts of the country were affected by protests, at least 59 protesters were injured. The coffee crisis has already ruined thousands of small farmers.

"We are dealing with a very serious crisis," said local Democratic Party Senator Jorge Enrique Robledo who supported the strikers.

The protest, which, as promised by the organizers, will last "forever", has been in the making for several years. Coffee producers faced a series of disasters, including torrential rains, coffee trees diseases, sharp depreciation of the national currency and decrease in the world prices of coffee, and as a result, a decline in its production. Last year, Columbia collected 7.7 million 132-kg bags of coffee, which is less than half of the volume of 1992, and the lowest volume in three decades. In the ranking of the world's coffee exporters the country has dropped from third to fourth place, behind Brazil, Vietnam and Indonesia.

The situation in the country of Juan Manuel Santos is so bad that Colombia even has to import coffee. This is equal to Saudi Arabia or Iran importing oil. Two out of three cups of coffee consumed by Colombians today are made from coffee beans imported from neighboring Peru and Ecuador, because local Arabica is meant strictly for export.

To cope with the adversity, farmers need the support of the state, but the government is in no hurry to provide it. Colombian officials argue that they are doing everything they can, and President Santos called the protests "unnecessary and unfair."

Head of the National Federation of Coffee Growers Luis Genaro Muñoz blamed the coffee crisis on political factors. Next year presidential and parliamentary elections will be held in Colombia, and everyone, from left to right, blames the current situation on Santos. Former Colombian President Alvaro Uribe, for example, twitted that Santos acted as a terrorist in relation to coffee producers.

But this does not do any good to the farmers. Since 2010, the rains and flooding have destroyed several farms and washed away roads and bridges. It is much more difficult, if not impossible, to deliver coffee to the market. Overabundance of moisture made coffee trees more susceptible to rot, causing significant decrease in production. Farmers have planted two billion trees resistant to coffee rust disease, but it will take them two years to begin to bear fruit.

Meanwhile, the Colombian peso is losing value. Four years ago, the U.S. dollar was exchanged for 2.3 thousand pesos, and today - 1.8 thousand. This means that all Colombian exports, from coffee and flowers to oil and coal, bring producers less profit. Another issue is the collapse of prices in the global coffee market. Compared to last year, they have fallen by 35 percent. This was caused by the efforts of speculators and unexpectedly high yield of coffee in Brazil.

Santos was not sitting idle. The President used to be a member of the National Federation of Coffee Growers, and extended the program under which farmers receive a subsidy of 16 dollars for each bag of coffee. Over the past four years, half of all state subsidies to agriculture (total of $670 million) was allocated to coffee producers. "We all know about the problems faced by coffee growers. But they are not alone," Santos said in the beginning of the protests.

Farmers, in turn, argue that even with the subsidies they are losing money, and demanded that the government sets a minimum price for coffee. The government refused, and after a series of unsuccessful meetings with the officials coffee producers decided to resort to extreme measures - go on strike.

"The problem cannot be solved with one last minute meeting. The government should not toy with the livelihoods of 500,000 farm families who depend on coffee," said the organizer Oscar Gutierrez. One of the striking farmers added: "The strike is the decisive moment. Either we achieve triumph or perish."

Analysts have their own vision of the problem. The state aid, regardless the amount, will not help keep coffee producers afloat, they say. The problem is beyond the pricing roller coaster and bad weather, it is a structural issue.

Most of the 570,000 coffee producers are small farmers with plots of land under five acres. In terms of performance where is a large gap between big manufacturers and farmers who do not have money for new trees and modernization, which is very noticeable. On average, a Colombian farmer harvests 8.3 bags of coffee per hectare. In other countries, where the coffee industry is mechanized, fully or partially, this number is much higher. In Guatemala it is 12.4 bags, Costa Rica - 16 bags, Honduras - 17 bags, and in some areas of Brazil - 22 bags.

Natalya Sinitsa.

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Author`s name Dmitry Sudakov