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.
Tuesday, August 6, 2019
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).
Current law requires that Conatradec must be composed of nine representatives from the private sector, all proposed by the same producers or businessmen. But if the changes are approved, the President of the Republic would have the power to appoint them directly, without taking into account the proposals of private unions.
Michale Healy, president of the Union of Agricultural Producers of Nicaragua (Upanic), told Elnuevodiario.com.ni that "... Conatradec should disappear, because the government never let it work. What should be done is to create a buffer fund for the debts that coffee growers have today and not use the money collected as treasury funds, because in the end they are going to be stolen as they were stolen in the 80's another $40 million."
José Ángel Buitrago, president of the Nicaraguan Association of Coffee Exporters of Nicaragua, stated that "... producers lack the capacity to continue contributing one dollar per quintal to the Fund for the Transformation and Development of Coffee Farming. The reform that the Executive pretends to make would deepen the problems of the coffee producers."
According to CentralAmericaData's "Crop Monitoring", last year the main regional crop sold abroad was coffee, with $2,671 million, the main export destinations being USA, Germany, Belgium, Italy, Japan and Canada, which together represented 70% of the volume exported by the region, equivalent to approximately $2,050 million.
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.
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.
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.
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.
The tax promoted by the government of Nicaragua on coffee producers has also been rejected by exporters of the grain.
The bill promoted by the government to charge producers between $1 and $5 per quintal of coffee in order to finance the National Development and Transformation of Coffee Plantations will not directly affect the export sector as it is only producers who have to pay the tax, however, they believe that this is not the time to establish such fees.
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