The Colombian government will place $34 million (100 billion pesos) in a fund to help coffee farmers hurt by low international prices, the finance minister and the head of the nation's coffee growers' federation said on Tuesday.
The federation, which represents some 550,000 Colombian coffee-growing families, will form a round table with government representatives to decide a price level that will allow use of the money and how it will be distributed, federation chief Roberto Velez told reporters in Bogota.
"We have just finished the National Committee of Coffee Growers, where the anguish is the low price," Velez said in a joint press conference with Finance Minister Alberto Carrasquilla.
"We agreed on the creation of a round table, where we will first agree on the trigger price, and second, what will be the mechanism by which these resources will be delivered." Colombia is the world's largest producer of washed arabica. The domestic price for a 125-kilogram (275-lb) shipment of coffee was 687,000 pesos ($231) on Tuesday, equivalent to around 84 cents per lb.
Velez has said farmers need to earn some $1.40 to $1.50 per lb to pay for fertilizers and still be profitable. The weak domestic price of coffee means the value of the 2018 coffee crop is likely to be 1.4 trillion pesos less than in 2017, hitting hard at coffee regions and the economy as a whole, the federation said in a statement. The global benchmark futures contract for arabica coffee prices fell to a 12-year low last week at 99.35 cents per lb, hurt by a weak currency in top grower Brazil.
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