The Coffee Industry In Colombia

Coffee is one of the most relevant primary products in the world trade, around 143.371 thousand 60kg bags were produced in 2015 all over the world. Colombia has been one of the major producers and providers of it through the history. According to Café de Colombia: “Colombia began exporting coffee in 1835 (around 2500 bags to the U.S.), by 1875 Colombia was now exporting 170,000 bags to U.S. and Europe and in 1992 exports of coffee topped at 17, 000,000 bags, and are currently around 11, 000,000 bags per year” (Café de Colombia, 2015). According to the excellent circumstances that the country has for growing it, Colombia´s coffee is nowadays famous worldwide.

The importance of coffee for the agricultural sector of Colombia is vital:

1. In

In percentage this means that the 32% of the citizens that work in the countryside. In addition to this, the 95% of the Colombian coffee producers live on small farms with 2 hectares on average and only the 5% of the producers have coffee plantations which bigger size of 5 hectares.

Farmers are affected by several endogenous problems, which are traduced in huge economic losses and several painful situations. The main problems are:

1. The volatility of world market prices. This has provoked disasters to the growers, even resulting in situations of unprofitability (lower prices than costs). An example of this kind of situation happened in the 2001 crisis: “In 2001 prices plummeted to 45 cents a pound, throwing hundreds of thousands of farmers and landless workers into poverty or destitution” (Fair Trade, 2013). This crisis was caused by the current imbalance between coffee supply and demand. Total production was estimated at around 113 million bags (60-kg bags) while world consumption was just over 106 million bags. On top of that, world stocks amounted to 40 million bags. Coffee production was rising at an average annual rate of 3.6%, but demand was increasing by only

The exports became dramatically reduced, causing several damages to the producers. Thus the situation forced the “Fondo Nacional del Café” to put a price subsidy of 30 US$ for every 125 kg of coffee produced to keep the production in function.

This situation is nowadays unsustainable for the 570,000 small farm coffee producers. Relating to productive ability it exists a huge difference between large producers of other countries and producers of Colombia, who lack of capital for modernization. “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 - 12.4 bags, Costa Rica - 16 bags, Honduras - 17 bags.” (Colombia es Pasión,