El Salvador: Another Attempt to Renew Coffee Plantations

A proposal has been made to create a trust for $25 million to restructure debts of cooperatives and finance the renovation of the plantations.

The main use of the trust funds would be the restructuration of producer´s debts, which have been growing since rust started to affect most of the plantations. The initiative appears to be valid, but has not yet been formalized through a bill nor have the financial conditions of cooperatives that would participate in it been verified.

Siegfried Benitez, representative of the Coffee Forum, told Laprensagrafica.com that "... "We are looking at the possibility, for example, to start lobbying the Assembly for support to create a trust through Banco de Fomento (Agriculture, BFA). Changes still need to be made, in addition to an analysis of the financial situation of each cooperative interested in participating, so the bill is not yet ready. The idea is to start with cooperatives who are already with the BFA and then incorporate others who are with private banks.'"

"... It is estimated that the coffee debt exceeds $200 million. In September 2013, when the impact of rust in the crop was devastating, lawmakers approved a decree to postpone the payment of FICAFE and the FEC until December 31, 2018. Even with this measure, a group of coffee producers have been able to pay all of the fees on time."

Source: laprensagrafica.com