Colombia coffee growers demand financial help as prices slide

By Peter Murphy

BOGOTA, March 31 (Reuters) – Colombia’s coffee growers are requesting government cash to help cover rising costs after a recent sharp fall in the price of arabica beans, a growers’ representative said on Monday, as discontent resurfaces across Colombia’s farm sector.

The Dignidad Cafetera movement, which led protests by coffee growers in 2013, wants the government to pay out 850 billion pesos ($327 million) of subsidies not disbursed last year after arabica prices shot above an agreed subsidy cut-off rate.

Coffee growers met with two congressmen on Monday to discuss their financial difficulties after a 17 percent slide in arabica prices and to demand left-over subsidy cash be channeled into a fund that would top up farmer incomes when prices fall low enough.

“We are demanding that these 850 billion pesos are returned to create a stabilization fund to compensate for production costs,” said Alonso Suarez, Dignidad Cafetera spokesman for Antioquia, one of Colombia’s biggest coffee regions.

Suarez said the movement would also seek a meeting with Agriculture Minister Aurelio Iragorri to discuss their demands and said a repeat of protests in 2013, in which farmers blocked roads and refused to sell beans, was a “last option.”

Colombia is the world’s top producer of mild, washed arabicas.

The government is unlikely to be as receptive to requests for funds as it was two years ago. Its coffers have been shrunken by last year’s plunge in oil prices last year that prompted a hasty tax reform to ensure it could still pay bills.

The dip in international prices for coffee has been offset by a weaker peso, which has lost more than a fifth of its value versus the dollar in a year and hit its weakest level since 2006 on Monday. But that also raises the cost of imports like fertilizer.

The farmer-funded National Coffee Growers’ Federation was not involved in Monday’s meeting, which included representatives from other agriculture sectors including cocoa, rice and plantain, who are also seeking government intervention.

Arabica prices have plunged after fears subsided that world top coffee grower Brazil would face a shrunken, weather-hit crop for a second year in a row after rains recently ended a harsh dry spell and due to the weakening of the Brazilian currency.