The Central American Bank for Economic Integration approved a loan, which will be used to finance a program to renovate the country's coffee farm.
The financing is destined to the renovation of the coffee park of the country, through the substitution of plants damaged by plagues and diseases or with greater age that allows to revert the losses of productivity by the aging of the plantations and the effects of the rust, estimating the renovation of approximately 19.9% of the coffee park of Guatemala, informed the financial entity.
A bill being discussed in the Guatemalan Congress proposes extending the term of the trust for renewal of coffee plantations and supporting producers until 2051.
The legal initiative for the Economic Reactivation of Coffee proposes altering the expiration date of the trust, currently foreseen until 2026, so that the coffee growers can have access to the resources until the year 2051.
The Ministry of Finance has confirmed the transfer of another $3.4 million for the trust fund for Guatemalan coffee growers.
Jorge Oliveros, coordinator of the project area at the National Coffee Association (Anacafé), confirmed that "... they received the transfer for Q25 million ($3.4 million) for the coffee trust, which increased the availability of the balance in favor of producers."
$14 million will be allocated to renovating 50 thousand hectares of coffee plantations, with varieties less vulnerable to climate change and more resistant to diseases such as rust.
The head of the Colombian Ministry of Finance reported that "... a consignment of 39 billion pesos ($13.8 million) was approved for the renovation of coffee plantations. 150 pesos ($0.05) will be paid for each renewed tree, either by sowing or offshoots, resources that will be enough for the renewal of 253 million trees; that means 50 thousand hectares that can be renewed."
The Guatemalan union of the sector announced that the reactivation plan they are preparing is based on the renovation of coffee plantations within a period of five years.
The National Coffee Association (Anacafé), is working in conjunction with the ministries of Public Finance, Agriculture, Livestock and Food and the Inter-American Development Bank, on a plan for economic reactivation of the sector, which could be ready in the coming weeks.
The coffee growers' association intends to promote planting of the Robusta variety, which generates better yields at a lower cost of production than Arabica coffee.
As a new measure to increase productivity of the sector, the National Coffee Association is proposing sowing the grain in areas where it has not been used un until now, such as conflict areas or those in the lower parts of the country.
While the government's promised trust funds remain inaccessible, producers are negotiating credit lines in China and India in order to finance the renewal of coffee plantations.
Ricardo Arenas, president of the National Coffee Association (Anacafé), explained to Elperiodico.com.gt that"... in light of the difficulties in obtaining the support of the Government, they are knocking on doors in different places. This is because 'there are countries that have a lot of money which is not providing them with a return' and therefore would be willing to give it to some bank in the system under the right conditions."
With trust funds planned for this year still not liberated, the union is negotiating with entities such as the CABEI and the IDB to obtain new sources of funding.
The National Coffee Association (Anacafe) estimated at $955 million the amount needed to renew 60% of coffee plantations, and although "it may seem very high," Alexander Keller, vice president of Anacafé, says that"...
The Coffee Growing Foundation for the Rural Development of Guatemala is putting out to tender a supply of 1,135,000 seedling plants which are resistant to coffee rust.
Guatemala Government Purchase 4399196:
"Minimum requirements for the coffee plants:
-Substrate used: appropriate conditions of aeration and water infiltration for good root development.
While waiting for the trust funds to be released, the resources sector is seeking the renewal at least 60% of plantations and exploring new markets in order to increase exports.
The producers union says it need funds to renovate at least 60% of the plantations costing between $3000 and $4000, and to seek new markets internationally and generate higher value added.
More access to loans, promoting the designation of origin and improving brand positioning of Guatemalan Coffees is part of the strategy proposed by the union.
Among the measures the National Coffee Association intends to implement is the exchange of rust resistant varieties with companies such as Starbucks, with whom an agreement was signed to improve the quality of the grain.
It has been reported that in the past two years the proportion of healthy kernal in a sample of pergamino coffee went up to 81%, while residues from threshing decreased from 20% to 19%.
From a statement issued by the National Federation of Coffee Growers of Colombia (FNC):
The coffee renovation program undertaken by coffee growers in Colombia has also had a positive effect on the quality and consistency of the coffee produced in the country.
60% of coffee plantations were renewed between early 2009 and June 2014, reducing the average age of plantations from 12 to 7 years.
The negative effects of the climate phenomenon La Niña and the rust blight in Colombian coffee plantations between 2009 and 2012 led the industry to implement a policy of conversion of plantations, a process that was completed in June 2014 with the renovation of 575 thousand hectares of coffee nationwide.
$300 million will be required for pest control alone, and more than $1 billion to renovate the plantations that have been affected.
The figures which have been gathered unofficially indicated that in excess of 1.7 million quintals of coffee have been destroyed by the fungus known as rust in Honduras, Nicaragua and El Salvador.
The president of the Coffee Exporters Association of Honduras (Adecafeh), Omar Acosta says that the loss in Honduras could reach two million quintals, "The Ihcafé says that no damage has been done, butwe do not understand why they are lying. They should have a plan for the country because it is a serious problem, we all know that there is a strong impact from rust and we believe there is a damage of between 25% and 30% of the crop, which amounts to two million quintals. "
The term of the trust, which expires in 2015 – will have to be extended so that the $37 million that is available can be loaned to producers for the renovation of coffee plantations.
S21.com.gt reports that "Because of the crisis faced by the sector in the country's coffee production in 2001-2002, the government at that time created a trust fund of $100 million, which was to be administered by the central bank, and would serve to provide credit to farmers to boost their crops. Regarding this, the National Coffee Association (Anacafe) believes that reviving the trust and extending its expiration date could save the sector. "