Colombia is considered the largest country with approximately 50 million people, situated at the Northern end of South America. Colombia is known as the World’s second largest coffee exporter due to rich geographic, volcanic soil, and the necessary elements on which coffee plant grows well. According to an estimate, over 50,000 coffee farms tend to be planted in a small area, averaging 5 acres each, so families could easily manage them.
In Colombia, coffee beans represent their national identity and play an integral role in the better economy of Colombia. Coffee growing on a small plot managed by each family is a big step towards rural employments. Colombian’s president, Juan Manuel Santos, highlighted the great importance of coffee for Colombian society and its international image by representing the Colombian Coffee Growers Federation (FNC) at the International Coffee Organization.
In 2019, the Colombian Coffee Growers Federation (FNC) decided to find ways to sell their farmer’s coffee harvest at reasonable prices to meet at least the production cost. In Bogota, FNC chief executive Roberto Velez told reporters that coffee growers should think differently and alter the price of coffee from the market in New York just to cover the production cost and profit.
Colombian’s farmers are restricted to follow the FNC data and meeting the production costs, and they need to make 760,000 pesos (about $240 or €210) per 125-kilogram (275- pound) shipment on the international market.
FNC always focuses on distributing the profits to promote the living standard of coffee growers. Still, they face a big challenge for this purpose because much of the Colombians coffee is purchased at the retail level. FNC took a great step to meet this challenge by introducing the National Coffee Fund in the early 1940s. This Fund ensures the Purchase Guarantee Policy based on a formula and offers the farmer a minimum amount for their product. The farmers may gain much more profit from high-quality products such as herbal coffee.
Colombia is the world’s second-largest coffee exporter, with approximately 6 million bags exported each year. Colombian coffee production accounts for 7 to 8% of the country’s gross domestic product. With a maximum potential annual growth of 2.5 percent in coffee exports, maintaining a reasonable economic growth rate would require a significant expansion of other exports. With a 3.2 percent annual population growth rate, a growth rate of 6% is needed to achieve a sufficient income per capita income.
The Caldas Regional Development Program is Colombia’s only concerted attempt to diversify economic activity in the coffee field. This effort aimed to boost overall growth while reducing reliance on coffee. Alternative investments were not as appealing to local farmers as coffee investments were under this scheme.
The fundamental issue with Colombian coffee diversification is that price support has not resulted in an adjustment of production to unlimited marketing possibilities. The most basic requirement for a coffee diversification strategy is to develop a program of coffee reductions and alternative jobs for the displaced resources.
Coffee has long been the economic pillar of Colombia, bringing premium rates on the global market and accounting for roughly half of all legal exports. The coffee trade, on the other hand, has always been susceptible to price volatility. After an extreme Brazilian frost killed that country’s coffee crop in 1975, Colombian coffee export prices skyrocketed, causing the country to experience high inflation levels. Low coffee prices have hindered economic growth in the past.
By the mid-1990s, coffee had fallen to about one-eighth of legal exports, but the country was still second only to Brazil in terms of production. At elevations of 3,300 to 6,300 feet, the labor-intensive crop thrives (1,000 and 1,900 meters).
It is grown on farms or estates (fincas) in the central parts of the three Andean ranges, with a few on the Santa Marta Mountain slopes. The majority of holdings are small. Colombian coffee has historically been grown under nitrogen-fixing leguminous shade trees. Still, with the advent of the high-yielding caturra variety, plantings have been majorly made in the open sunlight.
Colombia exports coffee as a major commodity. 2.35 billion in annual shipments account for 5.43 percent of the country’s overall exports of $43.2 billion. In response to problems with leaf rust attacks caused by climate change, Colombian coffee producers were forced to take action and change their production structure. Coffee production reached a record-breaking amount of 14.6 million bags a few years ago, thanks to these revamped plantations.
Colombian coffee is known throughout the world for its high quality and delicious flavor; in reality, Colombian coffee and that of a few other countries are widely considered to be among the best in the world.