The International Coffee Organization took the unusual step
of lending its support to national coffee bodies after the strike by Colombian growers
escalated into clashes with police armed with tear gas and stun grenades.
The ICO, an intergovernmental group, on Wednesday took the unusual step of releasing a statement
in support of the Colombian Coffee Federation, terming it a "role model" for producer
The 85-year-old federation, which represents some 500,000
growers, "has ensured sustainability and a better life for coffee growers in
Colombia throughout its existence," said the ICO, which typically reserves its
comments to trade and prices.
The statement represented an effort to support national
coffee groups amid market discontent which, while most obvious in Colombia,
where coffee farmers have gone on strike over the slump in prices, has been
evident in other countries too.
Earlier this week, the agriculture ministry in Brazil -
where growers have blamed speculators for the plunge of more than one-half since
May 2011 in arabica coffee prices, as quoted on New York's Ice exchange – floated
the potential for options, backed by government minimum price guarantees, to
support farmers' returns.
'What is the point'
"There could be many people questioning what is the point"
of national coffee groups, Mauricio Galindo, the ICO operating director told
Bodies such as the federation, whose functions include
promotion of farming best practice and of coffee exports, lack the powers of
guaranteed pricing that some institutions, such as Colombia's National Coffee
Fund, have had historically.
However, attempts by such funds to smooth out price
volatility by intervention – paying out extra when prices fall, and making below-market
payouts when values fall – had proved of little success.
In Columbia itself, there was "no way the fund could cope"
in 2001 when prices fell below 42 cents a pound in New York, from 145 cents a
pound two years earlier, and the fund was left paying a multiple of market
The comments follow the escalation of a strike and protests
by Colombian coffee workers, at whom police fired rubber bullets, tear gas and
stun grenades on Tuesday, according to local press.
The United Nations, under whose auspices the ICO was formed 50 years ago, has called for talks between coffee
workers, who are demanding higher subsidies, and the government "to arrive at
The ICO said that the drop in coffee prices was a concern
for "the global coffee community", but stopped short of pitching blame for the market
slide on any one actor.
"This is a market situation that cannot be controlled by any
single player in the market," the organisation said.
Colombian growers – who have claimed a cost of production of
$366 a bag - have been particularly badly affected by the slide in prices as
they have suffered a series of weak harvests too, undermined by a replanting
programme, poor weather and outbreaks of roya fungus.
The ICO estimates Colombian production in 2012-13 at 8.0m
bags, below figures above 12m bags reached some five years before.