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On a day considered historic, the Coffee Price Stabilization Fund (FEPC) was launched on February 19, 2020 with the aim of shielding Colombian coffee growers against the ups and downs of international coffee prices.
At its inaugural session, the FEPC National Committee, made up of the Ministers of Finance and Public Credit; Agriculture and Rural Development; and Commerce, Industry and Tourism, and the National Planning director, as well as the 15 highest coffee grower representatives, approved the regulations of the Fund, the operation of its governing body, and the functions of the Technical Secretariat.
This novel price protection instrument started with a budget of COP 218 billion, with resources allocated by the Government from the national budget and by coffee farmers themselves through the National Coffee Fund (FoNC), the parafiscal account fed on the coffee contribution (a tax paid for each pound of coffee exported).
Other financing sources contemplated are contributions by third-party industry actors interested in sustainability of Colombian coffee farming and the Nation’s royalties.
To adopt the necessary mechanisms that contribute to stabilizing Colombian coffee growers’ income.
The commodity subject to stabilization is Colombian mild Arabica coffee.
Domestic prices of Colombian coffee denominated in Colombian pesos and published by the FNC.
The FEPC’s governing body is the National Committee, made up of national Government representatives and the FNC highest representatives. Its main duties are to:
The stabilization mechanisms aim to fulfill the FEPC’s purpose, that is, to contribute to stabilizing Colombian coffee growers’ income.
To achieve this, the FEPC will provide two types of stabilization mechanisms: