Financing for the Coffee Sector

In Costa Rica, a new bill has been presented to grant resources at a preferential rate to producers, aimed particularly at the smaller ones.

Wednesday, April 11, 2018

According to the bill, which received a positive ruling in committee and now must go to the Plenary, the fund will be financed by a contribution of 5% from the liquid surplus of the Coffee Institute of Costa Rica (Icafé), resources from the Ministry of Agriculture and Livestock and funds recovered from the Trust Fund for Coffee Producers Affected by Rust and the Coffee Plantation Renewal Plan.

The legislative project establishes that the loans will be granted at a preferential interest rate, although this has not yet been defined in the plan. 

See "Coffee market figures in Central America"

In relation to the proposed law, Edgar Rojas, deputy executive director of the Icafé, explained to Nacion.com that " ... the plan will have the integral benefit of giving sustainability to national coffee ...On the one hand, access to financing for coffee producers, under a new scheme of guarantee and counterguarantees which will facilitate a greater accessibility to resources in order to renew their crops, with tolerant varieties to coffee plagues and diseases without putting at risk their assets."

Rojas added that " ... it will be the framework for the creation of a social responsibility fund that will strengthen the coverage of the insurance model for the coffee harvesting labor force. "

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More on this topic

Progress in Financing Plan for Coffee Growers

September 2018

In Honduras it has been reported that the $80 million that will be granted to the coffee sector is in the stage of consultation, risk analysis and verification of loan conditions.

Representatives of the Honduran Coffee Institute (Ihcafé) reported that two banking entities presented their proposals to manage the financing, which will be under the modality of syndicated credit, which consists of several institutions lending the funds, but only one will manage them and establish the conditions.

$280 million Approved for Coffee Sector

September 2018

In order to deal with the difficulties caused by the low international price of the grain, the Honduran government plans to make resources available to 120,000 coffee producers.

The Honduran presidency reported through a statement that one of the decrees, approved by the National Congress at the proposal of the Executive, creates the Special Guarantee Fund for the Coffee Sector with an initial contribution of 300 million lempiras ($12.7 million) from the Honduran Bank for Production and Housing (Banhprovi), which will provide 2,400 million lempiras ($101.9 million) in reciprocal guarantees, which will serve to propitiate operations of twice that value ($203.8 million).

Coffee: A Research Center for El Salvador

June 2018

In Congress, work is being done on a bill that would create a research institute, long awaited for by local coffee growers.

The deputies announced that they are working in the Assembly together with the Coffee Table, on the request by producers to create an institution that will carry out research to improve the sector's productivity.

El Salvador: Protection for Local Coffee

January 2018

Through a proposed law the Ministry of Agriculture aims to protect national production by increasing tariffs on grain imports.

According to figures from the Salvadoran Coffee Council, of every 4 hundredweight consumed in the country approximately 3 are imported. The proportion is reflected in data from the 2015-2016 cycle, a period in which about 270 thousand hundredweight was purchased abroad, which contrasts with the 100 thousand hundredweight of local product consumed.  

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