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Cold Economics For Colombia's Coffee Growers

The country faces dramatic debt levels among small-scale coffee farmers, as prices fall on world markets. Some have suggested a fixed minimum price for this key Colombian export.

Small Colombian coffee growers cannot live solely off the production of coffee anymore
Small Colombian coffee growers cannot live solely off the production of coffee anymore
Santiago Montenegro

-Analysis-

BOGOTÁ — What to do about Colombia's coffee sector? The question arises at a time of low prices on global markets. For good reason, for a long time until the early 1990s, the Coffee Congress was considered almost as important as the National Congress. In those years coffee was by far the country's most important export — a place that has been taken by products like oil, minerals, and cocaine. Since that time, other big changes have occurred, including a shift in production areas from central and north-central zones like Antioquia, to the southern departments of Cauca, Huila, and Nariño. Also, more growers have joined the sector for whom coffee is not the main economic activity or source of income.

While coffee production was fundamentally the work of peasants until some 50 years ago, now many professionals living in cities have turned it into a secondary and often part-time activity or supplementary source of income. Half a century ago, the vast majority of rural families lived exclusively off the production of coffee and subsistence crops. But coffee growers are today fewer in number and are concentrated in the south of the country. One must consider these factors when analyzing policy options and aid to the coffee sector. In the face of low prices on world markets, the director of the Coffee Growers' Federation has proposed withdrawing Colombian coffee from the New York stock market or fixing a minimum sale price. This could be a very costly option and make Colombia lose market share.

The most urgent option is to restore an internal price stabilization mechanism.

The former finance minister, Mauricio Cárdenas, has suggested returning to a pact among producers like it used to happen until the early 1990s, though again its implementation would be very difficult. He has also proposed an interesting information tactic, to show consumers that producers like those in Colombia only receive 3% of the final price, even though they hold the most important position in the production chain.

Perhaps the most urgent option is to restore an internal price stabilization mechanism, like a stabilization fund that saves money in boom times and dispenses it when market prices drop. Two other options used in the past are to subsidize the internal purchase price and refinance or partly condone, the debts of growers. According to media, their debts to the Agrarian Bank stand today at 1.2 trillion Colombian pesos (a little over 338 million euros). As these options are also highly costly, they could be implemented if two objectives are met. One is to concentrate aid to peasant farmers and smallholders, and the second is aid against a program of increased productivity. As most production is now in the south of the country, these measures are also, ultimately, important in containing cocoa farming, which is also expanding in the southern departments.

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When Did Putin "Turn" Evil? That's Exactly The Wrong Question

Look back over the past two decades, and you'll see Vladimir Putin has always been the man revealed by the Ukraine invasion, an evil and sinister dictator. The Russian leader just managed to mask it, especially because so many chose to see him as a typically corrupt and greedy strongman who could be bribed or reasoned with.

Putin arrives for a ceremony to accept credentials from 24 foreign ambassadors at the Grand Kremlin Palace on Sept. 20.

Sergiy Gromenko*

-OpEd-

KYIV — The world knows that Vladimir Putin has power, money and mistresses. So why, ask some, wasn't that enough for him? Why did he have to go start another war?

At its heart, this is the wrong question to ask. For Putin, military expansion is not an adrenaline rush to feed into his existing life of luxury. On the contrary, the shedding of blood for the sake of holding power is his modus operandi, while the fruits of greed and corruption like the Putin Palace in Gelendzhik are more like a welcome bonus.

In the last year, we have kept hearing rhetorical questions like “why did Putin start this war at all, didn't he have enough of his own land?” or “he already has Gelendzhik to enjoy, why fight?” This line of thinking has resurfaced after missile strikes on Ukrainian power grids and dams, which was regarded by many as a simple demonstration of terrorism. Such acts are a manifestation of weakness, some ask, so is Putin ready to show himself weak?

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However, you will not arrive at the correct answer if the questions themselves are asked incorrectly. For decades, analysts in Russia, Ukraine, and the West have been under an illusion about the nature of the Russian president's personal dictatorship.

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