Coffee: Controversial Law Reform Approved

The National Assembly of Nicaragua approved the bill that establishes that when the price per quintal of grain exceeds $100, producers must contribute one dollar to a commission that will watch over the incentives of the sector.

Wednesday, August 21, 2019

The changes to the Law on the Transformation and Development of Coffee Farming were surrounded by controversy, since the previous law mandated that the National Commission for the Transformation and Development of Coffee Farming (Conatradec) should be composed of nine representatives of the private sector, all proposed by the same producers or businessmen.

But, with the approved modifications, the President of the Republic will have the authority to appoint them directly, without taking into account the proposals of the private guilds.

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From the National Assembly of Nicaragua statement:

August 20, 2019. The National Assembly approved today the reform to the "Law for the Transformation and Development of Coffee Farming" that will allow coffee producers a relief in their exports, the maintenance of their coffee plantations and to have a greater participation in Conatradec.

According to the reform, coffee producers will be exempted from the contribution for each quintal exported when the international price is equal to or less than 100 or 70 dollars of the varieties of Arabica or Robustas coffee, respectively.

The other modification, according to the reform, consists of the fact that the Trust Fund will guarantee financing through Credit Certificates for the Transformation of Coffee Culture (CCTC) for the renovation and rehabilitation of coffee plantations, extending it for the maintenance of coffee plantations.

Regarding the National Commission for the Transformation and Development of Coffee Cultivation (Conatradec), the reform establishes a modification in its conformation, broadening the participation of representatives of the productive sector, mainly of small and medium producers, cooperated and non-cooperated.

The coffee producer and deputy Juan Ramon said that the coffee growers support the reform since in the board of directors of Conatradec will be replaced 7 positions occupied by producers of bananas, peanuts and sorghum to be incorporated cooperative and non-cooperative coffee producers who are the real actors of coffee farming.

He also considered the reform very important for the sector "which has to do with practical actions for the phytosanitary and nutritional treatment of coffee plantations is the incorporation of maintenance, which are the tasks that are done immediately after the harvest until the start of the new harvest period.”

Likewise, Congressman Douglas Alemán, who spoke as secretary of the Board of Directors of the National Union of Farmers and Livestock (UNAG) said that his organization supports the reform considering that this will be the coffee producers, mainly small and medium, true experts in the activity who represent the sector.

He added that the reform also responds to a daily demand of coffee growers such as obtaining resources for the maintenance of coffee plantations. "When this maintenance is not carried out, these plantations become susceptible to the introduction of diseases such as the case of rust that occurred in previous years," he said.

On the other hand, Congressman Wálmaro Gutiérrez, president of the Production, Economy and Budget Commission, made it clear that for the consultation process of the reform initiative to rule on it, the representatives of the organizations that bring together more than 61 thousand coffee producers participated, therefore, it is the support of coffee producers.

More on this topic

Coffee: Export Tax Remains Solid

October 2019

The Ortega administration rejected the request of Nicaraguan coffee growers, who requested that the tax of one dollar per quintal exported be waived for the 2020-2021 harvest.

The decision to start charging from next year was published by the Ministry of Development, Industry and Commerce (Mific) in the October 15, 2019 edition of La Gaceta.

Coffee: Law Reform Moves Forward, Despite Opposition

August 2019

Although several sectors disapprove of the initiative, in Nicaragua the Legislative Commission in charge of the reform endorsed the bill that seeks to remove the power of businessmen to propose their representatives to the Coffee Commission.

On August 14, the Production and Economy Commission of the National Assembly ruled positively on the initiative presented by President Ortega to modify the Law for the Transformation and Development of Coffee Farming.

Coffee: Law Reform Tailored to the Government

August 2019

The Nicaraguan government seeks to deprive the business sector of the power to propose its representatives to the National Commission for the Transformation and Development of Coffee Farming.

President Daniel Ortega presented an initiative to the National Assembly to modify the Law for the Transformation and Development of Coffee Farming, which among the changes includes that the Members of the Superior Council of Private Enterprise (Cosep) do not have the power to propose their representatives to the National Commission for the Transformation and Development of Coffee Farming (Conatradec).

Nicaragua: New Law For Coffee Sector

December 2013

Establishes a tax of $1 per quintal while the price is below $140, going up to $4 per quintal if prices exceed $185.

The recently passed law for the Transformation and Development of Coffee Plantations states that the proceeds from this tax will be used to create a fund for the development of domestic production.

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