The troubling figures of coffee in Colombia to be discussed at the National Coffee Forum

July 31, 2023

The production of coffee in Colombia was reduced by more than one fifth between 2015 and 2022, affecting employment in this sector, which is key to the economy. To address this and other issues, the National Coffee Forum will be held on August 1st in Pereira.

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Coffee is not only important in Colombia, it has also conquered palates around the world. In fact, after water, it is the second most consumed beverage in the world and the favorite of Europeans. It is also the most traded non-mineral raw material at a global level.

However, behind this delicious aroma lies a worrying reality. Despite the growth of the sector, it is the large processors and traders who extract the profits from the market. Germany, Switzerland, Italy, France and the United States are among the main coffee exporting countries worldwide, according to the value of exports in 2022.

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The significant reduction in coffee production in Colombia in recent years has had a devastating impact on employment and the country’s economy.

Coffee producers continue to be poor and face unfavorable conditions in the current context. Such is the case of Colombia, where, in spite of the large growth in the profits of the big brands and the good performance of coffee prices in recent years, the return to normality of the market has led producers and workers to demand the intervention of the State to halt the decline of the sector.

Faced with this critical situation, the National Coffee Forum, to be held on August 1st in the city of Pereira, is presented as a crucial event to address the problems of the sector.

The objective is to find solutions to stop the decline of Colombian coffee and to protect employment and the country’s economy. Dignidad Cafetera has said that among the topics to be discussed are the crisis of the National Coffee Fund, the crisis of the coffee cooperatives, the purchase guarantee, production costs, the multipurpose cadastre and the reforms promoted by the government, among others.

Below we show you why it is important to invest in the diversification of a sector that is determinant for the Colombian economy.

Coffee in Colombia generates income, employment and identity

Colombia, the third largest coffee producer in the world, has seen how its coffee agro-industry has become a vital source of employment and development for more than 540,000 families throughout the country.

With a presence in more than 600 municipalities and 23 departments, this activity has consolidated itself as an economic and social engine. According to data from the National Administrative Department of Statistics (DANE), in the last two years, coffee cultivation contributed 8% to the agricultural GDP and 2.7% to the GDP of the food industry, together contributing 0.6% to the national GDP.

In addition, coffee is positioned as one of Colombia’s main export products, ranking third after oil and coal. Between 2021 and 2022, DANE figures show that coffee accounted for approximately 7.8% of the country’s total exports, consolidating its position as an important source of income for the national economy.

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The coffee production chain not only generates direct employment in agricultural activities, but its influence extends to diverse sectors of the economy, from transportation to technical and professional services.

For this reason, it has become an important employer. This sector generates around 2.5 million direct and indirect jobs, according to figures from the Ministry of Agriculture.

The coffee sector faces difficulties

Despite the growth in the value of coffee exports, coffee production in Colombia suffered a marked deterioration in recent years, which has negatively impacted employment in the sector.

Between 2015 and 2019, coffee sector exports fell by 21%, decreasing from US$2.8 billion to US$2.213 billion (DANE). However, after the pandemic, a remarkable recovery in exports was observed.

In 2020, external coffee sales reached US$2.317 billion and, by 2022, the figure rose to more than US$4.5 billion, an impressive growth of 96%.

On the contrary, the most recent report of the National Federation of Coffee Growers (FNC) revealed alarming figures: in 2022, annual coffee production reached 11 million bags, 25% less than the 14.7 million bags reported in 2019.

Likewise, the FNC revealed that in the country the planted area was reduced by 134 thousand hectares since 2013, which has represented the loss of more than 50 thousand jobs.

Coffee employment is the hardest hit

According to figures from DANE’s Gran Encuesta Integrada de Hogares (GEIH), the coffee agroindustry employed approximately 560 thousand people last year, which is equivalent to 16% of employment in the agricultural sector and 2.5% of national employment.

With respect to the sector, the official statistics consultation platform of Colombia Productiva, MARO, shows that this sector has lost 47,500 jobs in the last seven years.

According to this statistical portal, while in 2015 the coffee chain employed more than 613 thousand people, in 2022 it employed only 566 thousand, 8% less.

How the market segments are faring

Of the coffee value chain, 99% of direct employment is generated in agricultural activities. Coffee cultivation in Colombia suffered a serious setback between 2015 and 2022, as it went from employing more than 600 thousand people to less than 562 thousand, which represents a drop of 7.7%, according to MARO data.

The second activity that generates employment in the coffee chain, after cultivation, is threshing. Between 2015 and 2022, this activity employed an average of 2,500 workers. The demand for labor in this subsector had a 56% growth, as it went from 1,900 to 2,900 workers, in this period.

With a lower participation in the coffee labor market, the products derived from transformation processes of higher added value, such as roasted, ground or decaffeinated coffee, reduced their labor demand by 29%. These went from employing 3,100 direct workers, in 2015, to 2,200 workers in 2022.

Finally, labor demand in the production of other coffee derivatives is not statistically significant in the DANE figures. It is estimated to employ less than a thousand people directly.

The decrease in the planted area and the effects of natural phenomena such as La Niña, as well as the impact of the pandemic and the increase in the cost of inputs, are the main concerns of the sector.