Reducing income tax for coffee growers from 7% to 5% is one of the most outstanding elements of the decree approved by the Guatemalan Congress.
During the session of April 3, 2019, the Plenary of Congress approved Decree 4-2019, Law for the Economic Reactivation of Coffee that extends until October 23, 2051 the trust of the sector, informed the Legislative by means of a statement.
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."
The trust has become operational which gives loans with a term until 2026 and interest at 2% per year for smallholders and 3% for medium and large producers.
From a statement issued by the National Coffee Association of Guatemala:
With the amendment of the public deed which created the "Trust for financial support for producers in the coffee sector" with assets of $100 million; the National Coffee Association (Anacafé) can say: mission accomplished.
The contribution of $9 per quintal to be made by coffee producers to the trust has been accepted by some and rejected by others.
Arguing that the retention of $9 per quintal is not beneficial for producers, two deputies have submitted a draft law that seeks to eliminate it.
The proposal "has caused discrepancies between those involved in this area, as many agree with it, and there is a good percentage that do not approve of the initiative."
Months after its legislative approval, the Coffee Trust is to receive funds to support the sector affected by rust.
Last Friday the Comptroller General of the Republic ratified a contract for the Coffee Trust. For months several administrative obstacles had delayed approval of the trust which will be used to provide support to producers affected by the coffee rust fungus.
While everyone waits for the trust to manage to complete its last administrative tasks, it has been revealed that the maximum interest rate to be charged for its loans will not be more than 6%.
The $40 million Coffee Trust which was approved by the Costa Rican Congress last year, and is awaiting final approval from the Comptroller's Office, will open four credit programs with maximum interest rates of 6%.
A year after the declaration of a state of emergency by the government because of the rust blight, 25,000 farmers are still waiting for the bureaucracy to enable the operation of a $40 million trust fund.
The money has already been deposited in an account with the Ministry of Agriculture and Livestock (MAG), but the Comptroller General of the Republic must endorse the trust no later than January 17th.
At the moment Guatemala has no funds available to implement the increase of $100 million in the Coffee Trust approved by Congress.
This was announced by Finance Chief Pavel Centeno. He explained that the trust " ... will be used specifically to the change plantations impacted by rust and not be given to those who were late making the payments already requested ", reported Prensalibre.com.
Loans using resources from the trust will have a yearly interest rate of 2% for micro and small producers and 3% for medium and large producers.
From a press release issued by the Congress of Guatemala:
With a qualified majority and under a National Emergency status, the Congress has approved Law Decree 12-2013 authorizing the extension of the contractual term of the Trust for Coffee known as "Fideicomiso apoyo Financiero para los Productores del Sector Cafetalero Guatemalteco" for 10 more years" , meaning that its term will expire on October 23, 2026.
The trust that the government of Costa Rica created to support coffee farmers afflicted by rust has now been capitalized by Congress.
An article in Prensalibre.com reports that "The Congress of Costa Rica passed on the second and final debate yesterday a special government budget of about $126 million, which includes $40 million to combat coffee rust and help producers. "
The law creating a trust to support Costa Rican coffee growers is already in place but the budget of $40 million is still in line waiting for congressional approval.
The law, which has already been published in the the official newspaper La Gaceta, was declared of public interest meaning that it will prevail over anyone opposition.
Elfinancierocr.com reports: "The primary purpose of the trust is the comprehensive care of the needs facing coffee producers, whose production could be up to "two double hundred hectoliters of coffee "(100 bushels) during 2012-2013, and the coffee crops of 2013-2014 ".
They have asked Congress for a 10 year extension, and for the grain trust to be increase by $100 million, in order to renew coffee plantations and slow progression of the rust disease.
The request was made during the XXIV National Coffee Congress organized by the National Coffee Association, (Anacafé). Nils Leporowsky, president of Anacafé, asked Congress to expand the financial tool that was created in 2001, when the grain was going through the worst crisis in prices.
The coffee sector now has a trust fund which can be used to attend to crops affected by the rust plague; it will be administered by the Ministry of Agriculture.
Some 40,000 small coffee producers will benefit from the plan of actions which include among other things, the phytosanitary management of the epidemic, strengthening the coffee tree renewal plan and an outreach program.
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. "
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