What is the National Coffee Fund (FoNC)?
It is a parafiscal account of resources considered public, mainly fed on the coffee contribution (coffee tax) paid for each pound of coffee exported (green, roasted, soluble or in extract).
Why does the FNC
manages the FoNC?
As legitimate representative of coffee growers and because of its democratic structure, effectiveness and transparency in resource management, since 1928 and every 10 years the Colombian Government has signed a new contract with the FNC for it to manage the FoNC.
What is the FoNC for?
The Fund’s main goal is to contribute to maximizing coffee producers’ income. It must meet the objectives set forth in the applicable regulations, that is, to promote and encourage an efficient, sustainable and globally competitive coffee farming.
The FoNC is the main source of financing for the public goods and services that benefit coffee farmers themselves, such as:
Promotion and advertising
Rural Extension Service
We do research and transfer technology
When was the FoNC created?
As a special account, the FoNC was created on November 22, 1940 through Decree 2078, and its management and administration by the FNC was formalized through a contract signed with the Government in December of that year.
The history of coffee parafiscality dates back to 1927, when a special-allocation tax on coffee exports was established, as the resources collected could only be used for the benefit of Colombian coffee farming and coffee promotion and marketing in the country and abroad, among other activities.
From that same year, the Colombian Congress entrusted the FNC with the administration, collection and investment of the coffee tax, whose specific regulation was formalized through a contract signed in April 1928 that could be extended for 10-year periods.
What is the coffee contribution (tax)?
It is the contribution (tax) paid by producers to the National Coffee Fund to obtain collective benefits.
This contribution is 6 cents (US ¢) per each pound of green coffee exported, US ¢ 1.08 for roasted coffee, US ¢ 0.48 for soluble coffee, and US ¢ 0.36 for coffee extract.
What remuneration does the FNC receive for managing the FoNC?
The Government authorized that, with resources from the FoNC, the FNC receives as remuneration an annual sum that does not exceed the equivalent of 3 US cents per pound of the country’s total exports.
It should be noted that this is an upper limit, which does not mean that this is the sum really charged. The current ceiling is 2.5%, a rate that was in force for 10 years and that, adjusted to inflation, today corresponds to the abovementioned 3%.
In those 10 years, the upper limit was not charged, it was not adjusted to 3%, and the FNC assumed the full impact of exchange rate.
What is the highest
FoNC governing body?
The National Coffee Growers Committee, made up of the highest coffee grower representatives and those of the national Government. This governing body also acts as a coordinating body for the country’s coffee policy.
Who oversees the FoNC management?
The Comptroller General of the Republic (CGR) through the methods, systems and procedures of fiscal, investment and transfer control provided in the law, as well as for other state assets and funds administered by the FNC.
Since 1940, the fiscal control of the FoNC has been guided by the accounting standards set by the CGR. The FoNC was first overseen by the Banking Superintendence, and since 1972, directly by the CGR itself through demanding annual audits.